Cavitation Technologies, Inc.
For the period ended Mar 31, 2026. Filed May 20, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 20, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-17.
0001683168-26-001098
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-20.
0001683168-26-004131
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 96 current paragraphs.
68 unchanged; 16 reworded; 12 added; 8 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Discount amortization
Current report
Discount amortization was $5,000 and $0 for the three months ended March 31, 2026 and 2025, the increase is primarily related to the valuation of the derivative conversion feature on the convertible notes payable issued during the current year and the subsequent amortization of the value of the conversion feature over the life of the convertible notes. There was no similar transaction in the prior period.
Current report
Change in fair value of derivative liability
Current report
The change in fair value of derivative liability was $20,000 and $0 for the three months ended March 31, 2026 and 2025, the increase is primarily related to the valuation of the derivative conversion feature on the convertible notes payable issued during the current year and the subsequent mark-to-market of these derivative liabilities at our reporting period end. There was no similar transaction in the prior period.
Current report
Net loss
Current report
Net loss was $219,000 and $230,000 for the three months ended March 31, 2026 and 2025, respectively, a decrease in loss of $11,000. The decrease in net loss is primarily due to the decrease in gross profit, offset by a decrease in operating expenses, research and development expenses and the mark-to-market derivative liability movements, as discussed above.
Current report
Interest expense was $14,000 and $5,000 for the nine months ended March 31, 2026 and 2025. The increase was due to issuance of notes payable during the current period with average interest rate of 8% per annum.
Current report
Discount amortization
Current report
Discount amortization was $5,000 and $0 for the nine months ended March 31, 2026 and 2025, the increase is primarily related to the valuation of the derivative conversion feature on the convertible notes payable issued during the current year and the subsequent amortization of the value of the conversion feature over the life of the convertible notes. There was no similar transaction in the prior period.
Current report
Change in fair value of derivative liability
Current report
Change in fair value of derivative liability was $20,000 and $0 for the nine months ended March 31, 2026 and 2025, the increase is primarily related to the valuation of the derivative conversion feature on the convertible notes payable issued during the current year and the subsequent mark-to-market of these derivative liabilities at our reporting period end. There was no similar transaction in the prior period.
Current report
Net cash provided (used) by financing activities amounted to $323,000 and $(3,000). The increase was due to proceeds received from issuance of notes payable and common stock units during the current period with no similar transactions in the prior period.
Removed paragraphs (8)
Previous report
Serves as the “brain,” monitoring remittance flows, detecting anomalies, automating Know your Customer (“KYC” and Anit Money Laundering (“AML”) and transforming raw transactions into insights.
Previous report
Uses post-quantum cryptography (PQC) and decentralized infrastructure to protect every transaction, ensuring resilience against future quantum attacks.
Previous report
Xyra is building its own regulated infrastructure, obtaining and operating under Money Transmitter Licenses (MTLs) across multiple jurisdictions**.** At the core of this framework is the issuance offully asset-backed, quantum-secure stablecoins, creating instant, compliant fiat-to-stablecoin rails for remittances, cross-border B2B, and tokenized settlements.
Previous report
Every remittance becomes an engagement point, with AI delivering real-time rewards, loyalty features, and personalized incentives to boost retention. AI also optimizes margins and creates new revenue streams, turning loyalty into a direct driver of income for the ecosystem.
Previous report
Converts verified remittance and financial data into programmable, globally tradable tokens, turning information flows into yield-bearing digital assets.
Previous report
Gain on patent assignment
Previous report
Interest expense was $11,000 and $3,000 for the six months ended December 31, 2025 and 2024. During the current period the SBA loan was reconciled and reinstated from delinquent to good standing, resulting in additional interest expense of $8,000 due to curing the delinquency with the SBA.
Previous report
Net income (loss)
Reworded paragraphs (16)
Previous wording
Revenue was $0 and $76,000 for the three months ended December 31, 2025, and 2024, respectively, a decrease of $76,000 or 100.0%. In the prior year, the Company delivered one purchase order placed prior to the assignment of our vegetable oil refining patents to Desmet.
Current wording
Revenue was $3,000 and $122,000 for the three months ended March 31, 2026, and 2025, respectively, a decrease of $119,000 or 97.5%. In the prior year, the Company delivered one purchase order placed prior to the assignment of our vegetable oil refining patents to Desmet.
Previous wording
Cost of revenue was $0 and $13,000 for the three months ended December 31, 2025 and 2024, respectively, a decrease of $13,000 or 100.0%. The decrease is directly related to the decrease in revenue, as discussed above.
Current wording
Cost of revenue was $0 and $25,000 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $25,000 or 100.0%. The decrease is directly related to the decrease in revenue, as discussed above.
Previous wording
General and administrative expenses was $715,000 and $564,000 for the six months ended December 31, 2025, and 2024, respectively, an increase of $151,000 or 26.8%. The increase is primarily due to the following:
Current wording
General and administrative expenses was $234,000 and $283,000 for the three months ended March 31, 2026, and 2025, respectively, a decrease of $49,000 or 17.3%. The decrease is primarily due to the following:
Previous wording
Research and development expenses was $4,000 and $16,000 for the three months ended December 31, 2025 and 2024, respectively, a decrease of $12,000 or 75.0%. 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 $0 and $42,000 for the three months ended March 31, 2026 and 2025, respectively, a decrease of $42,000 or 100.0%. 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 December 31, 2025 and 2024, interest expense is primarily related to the SBA loan.
Current wording
Interest expense was $3,000 and $2,000 for the three months ended March 31, 2026 and 2025, the increase is primarily related to interest incurred on convertible notes and related party notes advanced to the Company.
Previous wording
Results of Operations for the Six Months Ended December 31, 2025 compared to the Six Months Ended December 31, 2024
Current wording
Results of Operations for the Nine Months Ended March 31, 2026 compared to the Nine Months Ended March 31, 2025
Previous wording
The following is a comparison of our results of operations for the six months ended December 31, 2025 and 2024.
Current wording
The following is a comparison of our results of operations for the nine months ended March 31, 2026 and 2025.
Previous wording
Revenue was $3,000 and $76,000 for the six months ended December 31, 2025, and 2024, respectively, a decrease of $73,000 or 96.1%. In the prior year, the Company delivered one purchase order placed prior to the assignment of our vegetable oil refining patents to Desmet.
Current wording
Revenue was $6,000 and $198,000 for the nine months ended March 31, 2026, and 2025, respectively, a decrease of $192,000 or 97.0%. In the prior year, the Company delivered one purchase order placed prior to the assignment of our vegetable oil refining patents to Desmet.
Previous wording
Cost of revenue was $0 and $13,000 for the six months ended December 31, 2025 and 2024, respectively, a decrease of $13,000 or 1000.0%. The decrease is directly related to the decrease in revenue, as discussed above.
Current wording
Cost of revenue was $0 and $38,000 for the nine months ended March 31, 2026 and 2025, respectively, a decrease of $38,000 or 100.0%. The decrease is directly related to the decrease in revenue, as discussed above.
Previous wording
General and administrative expenses was $470,000 and $346,000 for the three months ended December 31, 2025, and 2024, respectively, an increase of $124,000 or 35.8%. The increase is primarily due to the following:
Current wording
General and administrative expenses was $949,000 and $847,000 for the nine months ended March 31, 2026, and 2025, respectively, an increase of $102,000 or 12.0%. The increase is primarily due to the following:
Previous wording
Research and development expenses was $12,000 and $24,000 for the six months ended December 31, 2025 and 2024, respectively, a decrease of $12,000 or 50.0%. 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 $11,000 and $66,000 for the nine months ended March 31, 2026 and 2025, respectively, a decrease of $55,000 or 83.3%. 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
Gain on patent assignment was $0 and $880,000 for the six months ended December 31, 2025 and 2024 as a result of the prior year sale and assignment of certain patents to Desmet. There was no similar transaction during the current year.
Current wording
Gain on patent assignment was $0 and $880,000 for the nine months ended March 31, 2026 and 2025 as a result of the prior year sale and assignment of certain patents to Desmet. There was no similar transaction during the current year.
Previous wording
Net loss was $734,000 and net income was $352,000 for the six months ended December 31, 2025 and 2024, respectively, an increase in loss of $1,086,000. The increase in net loss is primarily due to the prior year gain on the patent assignment, the increase in operating expenses, and the decrease in revenue, as discussed above.
Current wording
Net loss was $953,000 and net income was $122,000 for the nine months ended March 31, 2026 and 2025, respectively, an increase in loss of $1,075,000. The increase in net loss is primarily due to the prior year gain on the patent assignment, the increase in operating expenses, an increase in interest expense and the decrease in revenue, offset by the mark-to-market derivative liability movement, as discussed 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 six months ended December 31, 2025, the Company incurred loss from operations of $723,000 and used cash in operations of $401,000. In addition, we had an stockholders’ deficit of $248,000 as of December 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, 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.
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 nine months ended March 31, 2026, the Company incurred loss from operations of $954,000 and used cash in operations of $527,000. In addition, we had a stockholders’ deficit of $467,000 as of March 31, 2026. 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 December 31, 2025, the Company has cash in the amount of $31,000. 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 December 31, 2025.
Current wording
As of March 31, 2026, the Company has cash in the amount of $45,000. 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, 2026.
Previous wording
Net cash used in operating activities was $401,000 for the six months ended December 31, 2025 and net cash used in operating activities was $376,000 for the six months ended December 31, 2024. The increase in cash used in operating activities is primarily due to net loss incurred and changes in working capital.
Current wording
Net cash used in operating activities was $527,000 for the nine months ended March 31, 2026 and net cash used in operating activities was $624,000 for the nine months ended March 31, 2026. The decrease in cash used in operating activities is primarily due to changes in working capital and stock based compensation expense.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Gain on patent assignment was $0 and $880,000 for the three months ended December 31, 2025 and 2024, respectively. The prior year gain on patent assignment was as a result of sale and assignment of certain patents to Desmet. There were no similar transaction during the period ended December 31, 2025.
Previous report — wording carried elsewhere
Net loss was $476,000 and net income was $579,000 for the three months ended December 31, 2025 and 2024, respectively, an increase in loss of $1,055,000. The increase in net loss is primarily due to the prior year gain on the patent assignment, the increase in general and administrative expenses, offset by the decrease in revenue and the decrease in research and development expenses, as discussed above.