Cavitation (CVAT) 10-Q 19 Feb 21 2021 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2020	Feb. 14, 2021
Cover [Abstract]
Entity Registrant Name	Cavitation Technologies, Inc.
Entity Central Index Key	0001376793
Document Type	10-Q
Document Period End Date	Dec. 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	Q2
Document Fiscal Year Focus	2021
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity File Number	000-53239
Entity Incorporation State Country Code	NV

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Current assets:
Cash and cash equivalents	$ 892,000	$ 759,000
Account receivable	34,000	104,000
Inventory	67,000	47,000
Total current assets	993,000	910,000
Property and equipment, net	188,000	76,000
Operating lease right-of-use asset, net	277,000	308,000
Other assets	10,000	10,000
Total assets	1,468,000	1,304,000
Current liabilities:
Accounts payable and accrued expenses	377,000	316,000
Accrued payroll and payroll taxes due to officers	667,000	693,000
Related party payable	1,000	1,000
Customer advances	506,000	368,000
Operating lease liability, current portion	55,000	54,000
Total current liabilities	1,606,000	1,432,000
Operating lease liability, non-current	228,000	258,000
Note payable, non-current	254,000	104,000
Total Liabilities	2,088,000	1,794,000
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and June 30, 2020 respectively	0	0
Common stock, $0.001 par value, 1,000,000,000 shares authorized, 196,997,906 shares issued and outstanding as of December 31, 2020 and June 30, 2020, respectively	197,000	197,000
Additional paid-in capital	23,291,000	23,291,000
Accumulated deficit	(24,108,000)	(23,978,000)
Total stockholders' deficit	(620,000)	(490,000)
Total liabilities and stockholders' deficit	$ 1,468,000	$ 1,304,000

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Jun. 30, 2020
Statement of Financial Position [Abstract]
Preferred Stock, par value	$ 0.002	$ 0.002
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	$ 0.002	$ 0.002
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

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Revenue	$ 72,000	$ 25,000	$ 489,000	$ 376,000
Cost of revenue	2,000	0	12,000	12,000
Gross profit	70,000	25,000	477,000	364,000
Operating expenses:
General and administrative expenses	283,000	575,000	593,000	874,000
Research and development expenses	5,000	4,000	11,000	6,000
Total operating expenses	288,000	579,000	604,000	880,000
Loss from operations	(218,000)	(554,000)	(127,000)	(516,000)
Interest expense	(3,000)	0	(3,000)	0
Net loss	$ (221,000)	$ (554,000)	$ (130,000)	$ (516,000)
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 STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
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			(516,000)	(516,000)
Ending balance, shares at Dec. 31, 2019	196,997,906
Ending balance, value at Dec. 31, 2019	$ 197,000	23,284,000	(24,622,000)	(1,141,000)
Beginning balance, shares at Sep. 30, 2019	196,997,906
Beginning balance, value at Sep. 30, 2019	$ 197,000	23,090,000	(24,068,000)	(781,000)
Fair value of warrants granted for services		194,000		194,000
Net loss			(554,000)	(554,000)
Ending balance, shares at Dec. 31, 2019	196,997,906
Ending balance, value at Dec. 31, 2019	$ 197,000	23,284,000	(24,622,000)	(1,141,000)
Beginning balance, shares at Jun. 30, 2020	196,997,906
Beginning balance, value at Jun. 30, 2020	$ 197,000	23,291,000	(23,978,000)	(490,000)
Net loss			(130,000)	(130,000)
Ending balance, shares at Dec. 31, 2020	196,997,906
Ending balance, value at Dec. 31, 2020	$ 197,000	23,291,000	(24,108,000)	(620,000)
Beginning balance, shares at Sep. 30, 2020	196,997,906
Beginning balance, value at Sep. 30, 2020	$ 197,000	23,291,000	(23,887,000)	(399,000)
Net loss			(221,000)	(221,000)
Ending balance, shares at Dec. 31, 2020	196,997,906
Ending balance, value at Dec. 31, 2020	$ 197,000	$ 23,291,000	$ (24,108,000)	$ (620,000)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net loss	$ (130,000)	$ (516,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	13,000	19,000
Fair value of warrants issued for services	0	194,000
Amortization of right of use Asset	31,000	30,000
Change in operating assets and liabilities:
Accounts receivable	70,000	224,000
Inventory	(20,000)	(12,000)
Accounts payable and accrued expenses	61,000	(56,000)
Accrued payroll and payroll taxes due to officers	(26,000)	0
Customer advances	138,000	232,000
Operating lease liability	(29,000)	(27,000)
Net cash provided by operating activities	108,000	88,000
Cash flows from investing activities:
Deposit for the purchase of property and equipment	(125,000)	0
Net cash used in investing activities	(125,000)	0
Cash flows from financing activities:
Proceeds from issuance of a note payable	150,000	0
Cash provided by financing activities	150,000	0
Net increase in cash	133,000	88,000
Cash, beginning of period	759,000	649,000
Cash, end of period	892,000	737,000
Supplemental disclosures of cash flow information:
Cash paid for interest	0	0
Cash paid for income taxes	$ 0	$ 0

1. Organization and Summary of

1. Organization and Summary of Significant Accounting Policies	6 Months Ended
	Dec. 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. (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. 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 six months ended December 31, 2020 are not indicative of the results that may be expected for the fiscal year ending June 30, 2021. 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, 2020 filed on October 13, 2020. The condensed consolidated balance sheet as of June 30, 2020 has been derived from the audited financial statements included in the Form 10-K for that year. Going Concern The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplates continuation of the Company as a going concern. During the six months ended December 31, 2020, the Company incurred a loss of $130,000 and at December 31, 2020, the Company had a stockholders’ deficit of $620,000 and a working capital deficit of $613,000. These factors, among others, raise substantial 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, 2020, raised substantial doubt about the Company’s 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. As of December, 31 2020 we had cash and cash equivalents on hand of $892,000 and are not generating sufficient funds to cover operations. In addition to the cash on hand, management believes we may 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 partners, including the extension or renewal of our existing global R and D, Marketing and Technology License Agreement with Desmet Ballestra Group (Desmet), agreement with Alchemy Beverages, Inc (ABI), and agreement with Enviro Watertek, LLC (EWT). 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. Covid-19 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. This outbreak could decrease spending, adversely affect demand for the Company’s products, and harm the Company’s business and results of operations. During the six months ended December 31, 2020, the Company believes the COVID-19 pandemic did not materially impact its operating results due to the nature of the Company’s business and its operations. The Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity. As of December 31, 2020, the Company has been following the recommendations of local health authorities to minimize exposure risk for its employees, including the temporary closure of its corporate office and having employees work remotely. Most vendors have transitioned to electronic submission of invoices and payments. Principles of Consolidation The condensed 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, the valuation allowance for deferred tax assets, and assumptions used in 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. Income Taxes The Company follows the asset and liability method of accounting for income taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at anticipated future tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. The Company recorded no provision for income taxes during the three and six months ended December 31, 2020 and 2019 due to available Federal net operating loss (NOL) carryforwards of approximately $9 million that are available to reduce taxable income. Earnings Per Share The Company’s computation of earnings per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income 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 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 December 31, 2020 and 2019, the Company had 11,000,000 stock options and 87,696,511 stock warrants outstanding (and out of the money) 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 - 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. Accounts Receivable – accounts receivable at December 31, 2020 and June 30, 2020, were all due from Desmet. Accounts Payable and Accrued Expenses – three vendors accounted 54%,11% and 10% of accounts payable and accrued expenses as of December 31, 2020. Two vendors accounted 64% and 14% of accounts payable and accrued expenses as of June 30, 2020 . Revenues – revenues during the three and six months period ended December 31, 2020, were all from Desmet (see Note 2). Revenues for the three months ended December 31, 2019 were all derived from EWT. During the six months ended December 31, 2019, 94% of recorded revenues, were derived from Desmet. 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 December 31, 2020 and June 30, 2020, the fair values of cash and cash equivalents, accounts receivable, inventory and accounts payable and accrued expenses approximate their carrying values due to their short-term nature. 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 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. Contracts with Customers

2. Contracts with Customers	6 Months Ended
	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Contracts with Customers	Note 2 – Contracts with Customers 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. 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 accordance with ASC 606, the Company recognizes the revenue from the sale of reactors at the time of shipment of the Nano reactor hardware as such shipment is deemed to be the Company’s only performance obligation and the Company has no more continuing obligation. Desmet 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 receives a share in gross profit, as defined, from the sale of Desmet’s integrated neutralization system to its customers of which the reactors are an integral component. Such amount is subject to adjustment based on certain factors including cost overruns. The Company has no control with regards to the sale and installation of Nano Reactor® Nano Neutralization® System During the three months ended December 31, 2020, the Company recorded sales of $36,000 from Nano Reactor® During the six months ended December 31, 2020, the Company recorded sales of $276,000 from Nano Reactor® Nano Reactor® As of December 31, 2020 and June 30, 2020 and 2019, accounts receivable from Desmet related to the sale of Nano Reactor® amounted to $34,000 and $104,000, respectively. As of December 31, 2020 and June 30, 2020, advances received from Desmet related to the Company’s share in gross profit amounted to $506,000 and $368,000, respectively. These advances will only be recognized as revenues once the condition for revenue recognition have been met. Enviro Watertek, LLC Agreement In April 2019, we entered into a licensing and service contract agreement with Enviro Watertek, LLC (“EWT”). This agreement covers our industrial treatment of produced and frack water. Our agreement with EWT provides for sales of Nano Reactors® plus recurring revenue stream based on processing frack water volumes and utilization over a 15 year term but can be terminated by either party every anniversary. There was no sale of reactors or usage fees earned during the three and six months ended December 31, 2020. During the three and six months ended December 31, 2019, the Company recorded revenues of $25,000 from the usage of reactors previously sold to EWT in fiscal 2020.

3. Operating Lease

3. Operating Lease	6 Months Ended
	Dec. 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: Six Months Ended December 31, 2020 Lease cost Operating lease cost (included in general and administrative in the Company’s unaudited condensed consolidated statements of operations) $ 37,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 35,000 Weighted average remaining lease term – operating leases (in years) 3.6 Average discount rate – operating leases 4% Maturity of the Company’s lease liabilities are as follows: At December 31, 2020 Operating leases Long-term right-of-use assets $ 277,000 Short-term operating lease liabilities $ 55,000 Long-term operating lease liabilities 228,000 Total operating lease liabilities $ 283,000 Year ending June 30 Operating Lease 2021(remaining 6 months) $ 36,000 2022 72,000 2023 75,000 2024 78,000 2025 and thereafter 47,000 Total lease payments 308,000 Less: Imputed interest/present value discount (25,000 ) Present value of lease liabilities $ 283,000

4. Related Party Transactions

4. Related Party Transactions	6 Months Ended
	Dec. 31, 2020
Related Party Transactions [Abstract]
Related Party Transactions	Note 4 – Related Party Transactions Accrued Payroll and Payroll Taxes Due to Officers In prior periods, the Company accrued salaries and estimated payroll taxes due to current and former officers of the Company. As of December 31, 2020 and June 30, 2020, total accrued payroll and payroll taxes-related parties amounted to $667,000 and $693,000, respectively.

5. Notes Payable

5. Notes Payable	6 Months Ended
	Dec. 31, 2020
Debt Disclosure [Abstract]
Note Payable	Note 5 – Notes Payable December 31, 2020 June 30, 2020 Note Payable - PPP $ 104,000 $ 104,000 Note Payable - EIDL 150,000 – Total $ 254,000 $ 104,000 A. On April 16, 2020, the Company received loan proceeds in the amount of $104,000 pursuant to the Paycheck Protection Program (“PPP”) 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 Company applied ASC 470, Debt As of December 31, 2020 and June 30, 2020, the outstanding balance of the note payable amounted to $104,000. The Company is currently in the process of applying for forgiveness of the entire PPP loan with respect to these qualifying expenses, however, the Company cannot assure that such forgiveness of any portion of the PPP loan will occur. As for the potential loan forgiveness, once the PPP loan is, in part or wholly, forgiven and a legal release is received, the liability would be reduced by the amount forgiven and a gain on extinguishment would be recorded. B. In July 2020, the Company received a loan of $150,000 from the Small Business Association under its Economic Injury Disaster Loan (EIDL) assistance program. The EIDL loan is payable over 30 years, bears interest at a rate of 3.75% per annum and secured by all tangible and intangible property of the Company. As of December 31, 2020, the outstanding balance of the note payable amounted to $150,000.

6. Stockholders' Deficit

6. Stockholders' Deficit	6 Months Ended
	Dec. 31, 2020
Equity [Abstract]
Stockholders' Deficit	Note 6 - 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 six months ended December 31, 2020 is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Outstanding at June 30, 2020 11,000,000 $ 0.03 6.07 - Granted – – – - Forfeited – – – - Exercised – – – - Expired – – – Outstanding at December 31, 2020, vested and exercisable 11,000,000 $ 0.03 5.57 There was no intrinsic value of the outstanding options as of December 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 December 31, 2020. Options Outstanding Options Exercisable Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Remaining Life (Years) $ 0.03 11,000,000 5.57 $ 0.03 11,000,000 5.57 Stock Warrants A summary of the Company's warrant activity and related information for the six months ended on December 31, 2020 is as follows: Warrants Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Outstanding at June 30, 2020 87,696,511 $ 0.07 5.64 Granted – Exercised – Expired – Outstanding at December 31, 2020 vested and exercisable 87,696,511 $ 0.07 5.14 There was no intrinsic value of the outstanding warrants as of December 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 December 31, 2020. Warrants Outstanding Warrants Exercisable Weighted Average Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Remaining Life (Years) $ $0.03 - 0.05 68,736,518 7.3 $ 0.03 - 0.05 68,736,518 7.3 $ 0.12 18,959,993 2.9 $ 0.12 18,959,993 2.9 87,696,511 87,696,511

7. Commitments and Contingencie

7. Commitments and Contingencies	6 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	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 Global Technology Manager both waived their rights to receive royalty payments that have accrued, or that may accrue, on any gross revenue generated through December 31, 2020 and in the foreseeable future. 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 December 31, 2020, no patents have been granted in which this person is the legally named inventor.

1. Organization and Summary o_2

1. Organization and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Dec. 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 six months ended December 31, 2020 are not indicative of the results that may be expected for the fiscal year ending June 30, 2021. 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, 2020 filed on October 13, 2020. The condensed consolidated balance sheet as of June 30, 2020 has been derived from the audited financial statements included in the Form 10-K for that year.
Going Concern	Going Concern The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplates continuation of the Company as a going concern. During the six months ended December 31, 2020, the Company incurred a loss of $130,000 and at December 31, 2020, the Company had a stockholders’ deficit of $620,000 and a working capital deficit of $613,000. These factors, among others, raise substantial 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, 2020, raised substantial doubt about the Company’s 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. As of December, 31 2020 we had cash and cash equivalents on hand of $892,000 and are not generating sufficient funds to cover operations. In addition to the cash on hand, management believes we may 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 partners, including the extension or renewal of our existing global R and D, Marketing and Technology License Agreement with Desmet Ballestra Group (Desmet), agreement with Alchemy Beverages, Inc (ABI), and agreement with Enviro Watertek, LLC (EWT). 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.
COVID-19	Covid-19 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. This outbreak could decrease spending, adversely affect demand for the Company’s products, and harm the Company’s business and results of operations. During the six months ended December 31, 2020, the Company believes the COVID-19 pandemic did not materially impact its operating results due to the nature of the Company’s business and its operations. The Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity. As of December 31, 2020, the Company has been following the recommendations of local health authorities to minimize exposure risk for its employees, including the temporary closure of its corporate office and having employees work remotely. Most vendors have transitioned to electronic submission of invoices and payments.
Principles of Consolidation	Principles of Consolidation The condensed 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, the valuation allowance for deferred tax assets, and assumptions used in 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.
Income Taxes	Income Taxes The Company follows the asset and liability method of accounting for income taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at anticipated future tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. The Company recorded no provision for income taxes during the three and six months ended December 31, 2020 and 2019 due to available Federal net operating loss (NOL) carryforwards of approximately $9 million that are available to reduce taxable income.
Earnings Per Share	Earnings Per Share The Company’s computation of earnings per share (EPS) includes basic and diluted EPS. Basic EPS is calculated by dividing the Company’s net income 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 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 December 31, 2020 and 2019, the Company had 11,000,000 stock options and 87,696,511 stock warrants outstanding (and out of the money) 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 - 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. Accounts Receivable – accounts receivable at December 31, 2020 and June 30, 2020, were all due from Desmet. Accounts Payable and Accrued Expenses – three vendors accounted 54%,11% and 10% of accounts payable and accrued expenses as of December 31, 2020. Two vendors accounted 64% and 14% of accounts payable and accrued expenses as of June 30, 2020 . Revenues – revenues during the three and six months period ended December 31, 2020, were all from Desmet (see Note 2). Revenues for the three months ended December 31, 2019 were all derived from EWT. During the six months ended December 31, 2019, 94% of recorded revenues, were derived from Desmet.
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 December 31, 2020 and June 30, 2020, the fair values of cash and cash equivalents, accounts receivable, inventory and accounts payable and accrued expenses approximate their carrying values due to their short-term nature.
Segment	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 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.

3. Operating Lease (Tables)

3. Operating Lease (Tables)	6 Months Ended
	Dec. 31, 2020
Lessee Disclosure [Abstract]
Lease cost table	Six Months Ended December 31, 2020 Lease cost Operating lease cost (included in general and administrative in the Company’s unaudited condensed consolidated statements of operations) $ 37,000 Other information Cash paid for amounts included in the measurement of lease liabilities $ 35,000 Weighted average remaining lease term – operating leases (in years) 3.6 Average discount rate – operating leases 4%
Schedule of lease liability maturities	Year ending June 30 Operating Lease 2021(remaining 6 months) $ 36,000 2022 72,000 2023 75,000 2024 78,000 2025 and thereafter 47,000 Total lease payments 308,000 Less: Imputed interest/present value discount (25,000 ) Present value of lease liabilities $ 283,000

5. Notes Payable (Tables)

5. Notes Payable (Tables)	6 Months Ended
	Dec. 31, 2020
Debt Disclosure [Abstract]
Schedule of notes payable	December 31, 2020 June 30, 2020 Note Payable - PPP $ 104,000 $ 104,000 Note Payable - EIDL 150,000 – Total $ 254,000 $ 104,000

6. Stockholders' Deficit (Table

6. Stockholders' Deficit (Tables)	6 Months Ended
	Dec. 31, 2020
Equity [Abstract]
Stock Option activity table	A summary of the stock option activity during the six months ended December 31, 2020 is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Outstanding at June 30, 2020 11,000,000 $ 0.03 6.07 - Granted – – – - Forfeited – – – - Exercised – – – - Expired – – – Outstanding at December 31, 2020, vested and exercisable 11,000,000 $ 0.03 5.57
Schedule of options outstanding and exercisable	The following table summarizes additional information concerning options outstanding and exercisable at December 31, 2020. Options Outstanding Options Exercisable Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Remaining Life (Years) $ 0.03 11,000,000 5.57 $ 0.03 11,000,000 5.57
Schedule of warrant activity	A summary of the Company's warrant activity and related information for the six months ended on December 31, 2020 is as follows: Warrants Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Outstanding at June 30, 2020 87,696,511 $ 0.07 5.64 Granted – Exercised – Expired – Outstanding at December 31, 2020 vested and exercisable 87,696,511 $ 0.07 5.14
Schedule of warrants outstanding and exercisable	The following table summarizes additional information concerning warrants outstanding and exercisable at December 31, 2020. Warrants Outstanding Warrants Exercisable Weighted Average Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Remaining Life (Years) $ $0.03 - 0.05 68,736,518 7.3 $ 0.03 - 0.05 68,736,518 7.3 $ 0.12 18,959,993 2.9 $ 0.12 18,959,993 2.9 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		6 Months Ended		12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2019
Net loss	$ (221,000)	$ (554,000)	$ (130,000)	$ (516,000)
Working capital deficiency	613,000		613,000
Stockholders deficit	(620,000)	(1,141,000)	(620,000)	(1,141,000)	$ (490,000)	$ (399,000)	$ (781,000)	$ (819,000)
Cash and cash equivalents	892,000	$ 737,000	892,000	737,000	$ 759,000			$ 649,000
Provision for income taxes			0	$ 0
Operating loss carryforwards	$ 9,000,000		$ 9,000,000
Accounts Payable and Accrued Expenses [Member] | Vendor 1 [Member]
Concentration risk percentage			54.00%		64.00%
Accounts Payable and Accrued Expenses [Member] | Vendor 2 [Member]
Concentration risk percentage			11.00%		14.00%
Accounts Payable and Accrued Expenses [Member] | Vendor 3 [Member]
Concentration risk percentage			10.00%
Sales Revenue Net [Member] | Desmet [Member]
Concentration risk percentage			100.00%	94.00%
Stock Options [Member]
Anti-dilutive securities			11,000,000
Warrants [Member]
Anti-dilutive securities			87,696,511

2. Contracts with Customers (De

2. Contracts with Customers (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues	$ 72,000	$ 25,000	$ 489,000	$ 376,000
Desmet Ballestra [Member]
Revenues	72,000		489,000	351,000
Advances from distributors	506,000		506,000		$ 368,000
Desmet Ballestra [Member] | Nano Reactor Sales [Member]
Revenues	36,000		276,000	207,000
Account receivables	34,000		34,000		$ 104,000	$ 104,000
Desmet Ballestra [Member] | Gross Profit Share [Member]
Revenues	$ 36,000		$ 213,000	144,000
Enviro Watertek [Member]
Revenues		$ 25,000		$ 25,000

3. Operating Lease (Details - L

3. Operating Lease (Details - Lease Cost) - USD ($)	6 Months Ended
	Dec. 31, 2020	Jun. 30, 2020
Lessee Disclosure [Abstract]
Operating lease cost	$ 37,000
Cash paid for amounts included in measurement of lease liabilities	$ 35,000
Weighted average remaining lease term- operating leases (in years)	3 years 7 months 6 days
Average discount rate- operating leases	4.00%
Long-term right-of-use assets	$ 277,000	$ 308,000
Short-term operating lease liabilities	55,000	54,000
Long-term operating lease liabilities	228,000	$ 258,000
Total operating lease liabilities	$ 283,000

3. Operating Lease (Details - O

3. Operating Lease (Details - Operating Lease Minimum payments)	Dec. 31, 2020USD ($)
Lessee Disclosure [Abstract]
2021 (6 months remaining)	$ 36,000
2022	72,000
2023	75,000
2024	78,000
2025 and thereafter	47,000
Total lease payments	308,000
Less: imputed interest/present value discount	(25,000)
Present value of lease liabilities	$ 283,000

4. Related Party Transactions (

4. Related Party Transactions (Details Narrative) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Related Party Transactions [Abstract]
Accrued payroll and payroll taxes due to officers	$ 667,000	$ 693,000

5. Notes Payable (Details)

5. Notes Payable (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Notes Payable	$ 254,000	$ 104,000
PPP [Member]
Notes Payable	104,000	104,000
EIDL [Member]
Notes Payable	$ 150,000	$ 0

5. Note Payable (Details Narrat

5. Note Payable (Details Narrative) - USD ($)	1 Months Ended	10 Months Ended
	Jul. 31, 2020	Apr. 16, 2020	Dec. 31, 2020	Jun. 30, 2020
Note payable			$ 254,000	$ 104,000
PPP [Member]
Proceeds from loan		$ 104,000
Maturity date		Mar. 27, 2020
Interest rate		1.00%
Note payable			104,000	104,000
EIDL [Member]
Proceeds from loan	$ 150,000
Interest rate	3.75%
Note payable			$ 150,000	$ 0

6. Stockholders' Deficit (Detai

6. Stockholders' Deficit (Details - Option activity) - Stock Options [Member] - $ / shares	6 Months Ended	12 Months Ended
	Dec. 31, 2020	Jun. 30, 2020
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 and vested	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, Exercisable and vested	$ 0.03
Weighted Average Remaining Contractual Life (Years)
Weighted average remaining contractual life, options outstanding	5 years 6 months 25 days	6 years 26 days
Weighted average remaining contractual life, Exercisable and vested	5 years 6 months 25 days

6. Stockholders' Deficit (Det_2

6. Stockholders' Deficit (Details - Options by exercise price) - $0.03 Exercise Price [Member]	6 Months Ended
	Dec. 31, 2020$ / sharesshares
Number of shares outstanding	11,000,000
Weighted average remaining life options outstanding	5 years 6 months 25 days
Weighted average exercise price options outstanding | $ / shares	$ 0.03
Number of shares exercisable	11,000,000
Weighted average remaining life options exercisable	5 years 6 months 25 days

6. Stockholders' Deficit (Det_3

6. Stockholders' Deficit (Details - Warrant activity) - Warrants [Member] - $ / shares	6 Months Ended	12 Months Ended
	Dec. 31, 2020	Jun. 30, 2020
Warrants
Warrants outstanding, beginning balance	87,696,511
Warrants granted	0
Warrants exercised	0
Warrants expired	0
Warrants outstanding, ending balance	87,696,511	87,696,511
Warrants Exercisable and vested	87,696,511
Weighted Average Exercise Price
Weighted average exercise price, warrants outstanding, beginning price	$ 0.07
Weighted average exercise price, warrants granted
Weighted average exercise price, warrants outstanding, ending price	0.07	$ 0.07
Weighted average exercise price, Exercisable and vested	$ 0.07
Weighted Average Remaining Contractual Life
Weighted average remaining contractual life	5 years 1 month 20 days	5 years 7 months 21 days
Weighted average remaining contractual life, Exercisable and vested	5 years 1 month 20 days

6. Stockholders' Deficit (Det_4

6. Stockholders' Deficit (Details - Warrants by exercise price) - shares	6 Months Ended	12 Months Ended
	Dec. 31, 2020	Jun. 30, 2020
$0.03-$0.05 [Member]
Number of warrant shares outstanding	68,736,518
Weighted average remaining life warrants outstanding	7 years 3 months 19 days
Weighted average exercise price warrants outstanding	0.03 - 0.05
Number of warrant shares exercisable	68,736,518
Weighted average remaining life warrants exercisable	7 years 3 months 19 days
$0.12 [Member]
Number of warrant shares outstanding	18,959,993
Weighted average remaining life warrants outstanding	2 years 10 months 25 days
Weighted average exercise price warrants outstanding	0.12
Number of warrant shares exercisable	18,959,993
Weighted average remaining life warrants exercisable	2 years 10 months 25 days
Warrants [Member]
Number of warrant shares outstanding	87,696,511	87,696,511
Weighted average remaining life warrants outstanding	5 years 1 month 20 days	5 years 7 months 21 days
Number of warrant shares exercisable	87,696,511

6. Stockholders' Deficit (Det_5

6. Stockholders' Deficit (Details Narrative)	Dec. 31, 2020USD ($)
Stock Options [Member]
Intrinsic value of options outstanding	$ 0
Warrants [Member]
Intrinsic value of warrants	$ 0