Cavitation Technologies, Inc.

Previous wording

The Company generated revenues from the sale of theNano Reactor® to customers/distributor. Additionally, the Company generates revenues from its equity method investment, specifically fees from usage of reactors or usage fees.

Current wording

No revenue was generated from sales ofNano Reactor® to customers/distributors . Additionally, the Company did not generate any revenues from its equity method investment, specifically fees from usage of reactors or usage fees.

Previous wording

General and administrative expenses was $283,000 and $170,000 for the three months ended March 31, 2025 and 2024, respectively, an increase of $113,000 or 66.5%. The increase is primarily due to the following:

Current wording

General and administrative expenses was $245,000 and $218,000 for the three months ended September 30, 2025 and 2024, respectively, an increase of $27,000 or 12.4%. The increase is primarily due to the following:

Previous wording

Research and development expenses was $42,000 and $9,000 for the three months ended March 31, 2025 and 2024, respectively, an increase of $33,000 or 366.7%. During the prior year, the Company began another R&D project consisting of the design and manufacture of an experimental installation for plasma activation of water by generating a plasma discharge in a water stream. The research and development expenditure is dependent on progress made on the development.

Current wording

Research and development expenses was $7,000 and $8,000 for the three months ended September 30, 2025 and 2024, respectively, a decrease of $1,000 or 12.5%. During the prior year, the Company began another R&D project consisting of the design and manufacture of an experimental installation for plasma activation of water by generating a plasma discharge in a water stream. The research and development expenditure is dependent on progress made on the development.

Previous wording

Interest expense was $2,000 and $2,000 for the three months ended March 31, 2025 and 2024, interest expense is primarily related to the SBA loan.

Current wording

Interest expense was $9,000 and $1,000 for the three months ended September 30, 2025 and 2024, interest expense is related to the SBA loan. During the current period the SBA loan was reconciled and reinstated from delinquent to in good standing, resulting in additional interest expense of $8,000 due to us curing the delinquency with the SBA.

Previous wording

Net loss was $230,000 for the three months ended March 31, 2025 and net income was $331,000 for the three months ended March 31, 2024, an increase in loss of $561,000. The increase in loss is primarily due to decrease in revenues and an increase in general and administrative and research and development expenses, all discussed in detail above.

Current wording

Net loss was $258,000 and $227,000 for the three months ended September 30, 2025 and 2024, an increase in loss of $31,000. The increase in loss is primarily due to increase in general and administrative expenses and interest expense, discussed in detail above.

Previous wording

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in accompanying condensed consolidated financial statements, during the nine months ended March 31, 2025, the Company incurred loss from operations of $753,000, used cash in operations of $624,000 and had accumulated deficit of $26,725,000 as of March 31, 2025. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s June 30, 2024, financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that may result from the inability of the Company to continue as a going concern.

Current wording

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in accompanying condensed consolidated financial statements, during the three months ended September 30, 2025, the Company incurred a loss from operations of $258,000, used cash in operations of $219,000 and had accumulated deficit of $27,18,000 as of September 30, 2025. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s June 30, 2025, financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that may result from the inability of the Company to continue as a going concern.

Previous wording

As of March 31, 2025, the Company has cash in the amount of $432,000. The Company’s ability to continue as a going concern is dependent upon its ability to continue to implement its business plan. Currently, management’s plan is to increase revenues by using its Reserved Grant Back License to apply the technology to; (i)water and wastewater processing, recovery, recycling and purification (including oilfield wastewater) and; (ii) manufacture, distillation, brewing, enhancements, sale and marketing of alcoholic beverages, together the Licensed Fields. The Company will have a worldwide, exclusive, transferable and royalty-free license and right to design, build, use, export, improve, sell and market Nano Reactor® devices and Nano Reactor® devices and systems (and products) that incorporate or utilize Nano Reactor® devices, in each case within the Licensed Fields, and to continue to use the Nano Reactor® trademark in connection with its business, systems and products within the Licensed Fields. While the Company believes in the viability of its strategy to increase revenues, there can be no assurances to that effect. The Company believes it has enough cash to sustain operations through June 30, 2025.

Current wording

As of September 30, 2025, the Company has cash in the amount of $30,000. The Company’s ability to continue as a going concern is dependent upon its ability to continue to implement its business plan. Currently, management’s plan is to increase revenues by using its Reserved Grant Back License to apply the technology to; (i)water and wastewater processing, recovery, recycling and purification (including oilfield wastewater) and; (ii) manufacture, distillation, brewing, enhancements, sale and marketing of alcoholic beverages, together the Licensed Fields. The Company has a worldwide, exclusive, transferable and royalty-free license and right to design, build, use, export, improve, sell and market Nano Reactor® devices and Nano Reactor® devices and systems (and products) that incorporate or utilize Nano Reactor® devices, in each case within the Licensed Fields, and to continue to use the Nano Reactor® trademark in connection with its business, systems and products within the Licensed Fields. While the Company believes in the viability of its strategy to increase revenues, there can be no assurances to that effect. The Company believes it has enough cash to sustain operations through December 31, 2025.

Previous wording

Net cash used in operating activities was $624,000 for the nine months ended March 31, 2025 and net cash generated by operating activities was $165,000 for the nine months ended March 31, 2024. The increase in cash used in operating activities is primarily due to cash used in operating expenses and changes in working capital.

Current wording

Net cash used in operating activities was $219,000 and $175,000 for the three months ended September 30, 2025 and 2024. The increase in cash used in operating activities is primarily due to cash used in operating expenses and an increase in the movement in cash used for working capital purposes.

Previous wording

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 for allowance for impairment analysis for property and equipment, accrual of potential liabilities, valuation allowance for deferred tax assets, and assumption in valuing our stock options, warrants, and common stock issued for services, among other items. Actual results could differ from these estimates.

Current wording

The preparation of the unaudited condensed 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 for allowance for impairment analysis for property and equipment, accrual of potential liabilities, valuation allowance for deferred tax assets, and assumption in valuing our stock options, warrants, and common stock issued for services, among other items. Actual results could differ from these estimates.