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UNITED STATES
\nSECURITIES AND EXCHANGE COMMISSION
\nWashington, D.C. 20549

FORM 10-K

(Mark One)

\n \n \n \n

☒	根据 1934 年《证券交易法》第 13 条或第 15(d) 条提交的年度报告

\n \n \n \n

☐	根据 1934 年《证券交易法》第 13 条或第 15(d) 条提交的过渡报告。来自从 _____ 到 _____ 的过渡期。

对于财政年度\n结束于 6 月 30 日, 2026

委员会文件\n编号 000-53239

$\"\"$

Cavitation Technologies, Inc.

(注册人确切名称\n如其章程中所指定)

\n \n \n \n \n \n \n

内华达州	20-4907818
(注册或组织所在司法管辖区)	(I.R.S. 雇主识别号)

10019 CANOGA AVENUE, CHATSWORTH, CALIFORNIA 91311
\n(主要行政办公室地址，包括邮政编码)

(818) 718-0905
\n(注册人电话号码，包括区号)

根据该法第 12(b) 条注册的证券：

NONE

根据该法第 12(g) 条注册的证券：

\n \n \n \n \n \n \n

每类证券的名称：	注册交易所的名称：
普通股，面值 $0.001	场外交易（公告板）

Indicate by check mark\nif the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark\nif the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark\nwhether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during\nthe preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such\nfiling requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark\nwhether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation\nS-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit\nsuch files). Yes ☒ No ☐

Indicate by check mark\nif disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best\nof registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K,\nor any amendment to this Form 10-K. ☐

Indicate by check mark\nwhether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an\nemerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting\ncompany” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

\n \n \n \n \n \n \n \n \n \n \n

大型加速申报公司 ☐	加速申报公司 ☐	非加速申报公司 ☒	较小报告公司 ☒
			新兴增长公司 ☐

如果是一家新兴增长公司，通过打勾标记来表明注册人是否选择不使用根据《交易所法案》第13(a)条提供的任何新或修订的财务会计准则的延长过渡期。 ☐

通过打勾标记来表明注册人是否已由负责准备或出具其审计报告的注册公共会计师事务所，根据《萨班斯-奥克斯利法案》（15 U.S.C. 7262(b)）第404(b)条，就其管理层对其财务报告内部控制有效性的评估提交了报告并进行了认证。是 ☐ 否 ☒

如果证券是根据《法案》第12(b)条注册的，通过打勾标记来表明注册人包含在提交文件中的财务报表是否反映了针对先前已发布财务报表的错误的更正。 ☐

通过打勾标记来表明这些错误更正中是否有任何更正需要根据 §240.10D-1(b) 条，对注册人相关恢复期内收到的任何基于激励的薪酬进行恢复分析。☐

通过打勾标记来表明注册人是否为空壳公司（根据《法案》第12b-2条的定义）。是 ☐ 否 ☒

根据注册人最近完成的第二个财政季度的最后一个营业日，参照普通股最后出售的价格，或参照此类普通股的平均买入价和卖出价，说明注册人非关联方持有的投票和非投票普通股的总市值：$14,600,418 截至2025年12月31日，基于每股0.05美元的收盘价和2.9200835亿股流通的非关联股。

注册人在2026年9月28日拥有 323,820,459\n股流通普通股。

引用并入的文件：

无

CAVITATION TECHNOLOGIES,\nINC.

FORM 10-K 年度报告

截至\n2026年6月30日

	页码
第一部分
项目 1. 业务	1
项目 1A. 风险因素	8
项目 1B. 未解决的员工评论	8
项目 1C. 网络安全	8
项目 2. 资产	8
项目 3. 法律诉讼	9
项目 4. 矿山安全披露	9

第二部分
项目 5. 注册人普通股市场、相关股东事项及发行人普通股证券的回购	10
项目 6. 保留	10
项目 7. 管理层讨论与分析财务状况和经营成果	10
项目 7A. 关于市场风险的定量和定性披露	18
项目 8. 财务报表和补充数据	18
第 9 项. 会计和财务披露方面的变更及与会计师的分歧	19
第 9A 项. 控制和程序	19
第 9B 项. 其他信息	20
第 9C 项. 关于阻碍检查的外国司法管辖区的披露	20

第三部分
第 10 项. 董事、高管及公司治理	21
第 11 项. 高管薪酬	22
第 12 项. 某些受益所有者及管理层和有关股东事项的证券所有权	24
第 13 项. 某些关系和关联交易，以及董事独立性	25
第 14 项. 主要会计费用和服务	27

第四部分
第 15 项. 附件、财务报表附表	28
第 16 项. 10-K 摘要	29

签名	30

关于前瞻性陈述的警示性说明

本年度报告 Form 10-K 及其附件包含“前瞻性”陈述，该术语具有 1995 年《私人证券诉讼改革法》规定的含义。此类前瞻性陈述涉及我们对未来时期运营的预期结果和发展、我们资产的计划勘探和开发、与业务相关的计划以及未来可能发生的事项。这些陈述基于对未来结果的预测、尚无法确定的金额估计以及管理层的假设，涉及分析和其他信息。我们在本年度报告中使用了诸如“预期”、“相信”、“打算”、“预期”、“计划”、“目标”、“预计”或“估计”等词语。当使用这些词语以及其他类似词语或短语，或陈述某事件、行动或结果“将”、“可能”、“可能”或“应该”导致、发生、采取或实现时，即识别出“前瞻性”陈述。此类前瞻性陈述受某些风险和不确定性（包括已知和未知的）以及假设的影响。

管理层在本年度报告中包含了基于其在行业中的经验、对我们经营结果的评估、与第三方的讨论和谈判，以及对竞争对手向证券交易委员会提交的信息或其他公开信息的审查而得出的预测和估计。我们提醒读者不要过度依赖任何此类前瞻性陈述，这些陈述仅截至作出之日有效。除法律要求外，我们声明不承担随后修改任何前瞻性陈述以反映此类陈述日期之后的事件或情况，或反映预期或未预期事件发生的义务。我们通过上述警示性陈述对本年度报告中包含的所有前瞻性陈述作出限定。

第一部分

第 1 项. 业务

Cavitation Technologies, Inc.（以下简称“公司”、“CTi”、“我们”、“我们”和“我们的”）是一家内华达州公司，最初以 Bio Energy, Inc. 的名称注册。我们是一家工艺和产品开发公司，开发了、获得了专利并商业化了基于环保技术的系统，旨在服务于可再生燃料、水处理、葡萄酒和烈酒增强、藻类油提取、水油乳液和原油产量提升等大型、不断增长的全球市场。我们的系统旨在以更短的加工时间、更低的运营成本和更高的产量，在环保的方式下处理工业液体。我们获得专利的 Nano Reactor® 和 LPN™ 是我们业务的关键组成部分，我们利用这些组件产生了所有之前的收入。

植物油精炼

我们技术的第一个商业应用是 CTi Nano Neutralization® System ，该系统已被用于改善食用油精炼工艺。我们的环保工艺已被证明可以降低精炼成本，提高出油率，并限制化学精炼过程中使用的化学添加剂数量。这项获得专利的工艺（US Patent # 7,762,715 和 # 8,042,989）旨在整合到新的和现有的大豆、油菜籽、菜籽和棕榈植物油精炼厂中。

Desmet Belgium Group\n（前身为 Desmet Ballestra）协议

Desmet 及其关联公司是一家全球工程和设备供应公司，从事油脂和脂肪加工设施（包括植物油精炼、生物燃料、油化学、种子压榨、表面活性剂和洗涤剂市场）的工艺设备开发、设计和供应。Desmet 基于全球最新采购的技术向这些市场提供服务。Desmet 与全球主要精炼商建立了关系。全球植物油精炼厂的重要组成部分包括 Archer Daniels Midland Company、Cargill, Inc. 和 Bunge Limited 等主要精炼商。Desmet 在北美、南美、欧洲和亚洲拥有超过 40 名销售人员。自 1946 年成立以来，Desmet 报告称已建立了一个全球网络，包括 1,300 名员工、17 个全球办公室和 8 个代表处，以及各种应用中超过 6,000 条生产线。Desmet 为上述每个市场运营一个独立的部门，Desmet Oils & Fats 部门已向 150 个国家约 1,900 家油厂供应了小型和大型工厂，覆盖了超过 6,300 个工艺段。

2012 年 5 月 14 日，我们与 Desmet Ballestra Group s.a.（Desmet）签署了一项全球 R&D, Marketing and Technology License Agreement ，Desmet 是一家比利时公司，积极向大豆和其他植物油精炼商营销 NANO Neutralization® System,，其关键组件是我们的 Nano Reactor®。该协议为 Desmet（被许可方）提供了在全球范围内用于植物油和脂肪以及油化学应用的 NANO Neutralization® System 的有限、独家许可，以及开发、设计和供应该系统的权利，该系统集成了 Nano Reactor® 设备。该协议于 2015 年 5 月到期。

2016年1月22日，Desmet 与公司签署了一份新的三年期许可协议，条款与2015年8月1日生效的2012年5月协议基本相同。作为协议的一部分，Desmet 在特定条件下提供了每月5万美元的预付款，用于抵扣未来销售的毛利分成。该协议于2018年8月到期。

2018年10月1日，Desmet 与公司签署了一份新的三年期许可协议，条款与2016年1月的协议基本相同。作为协议的一部分，Desmet 在特定条件下向我们提供了每月5万美元的预付款，预付款期限至2021年10月1日，用于抵扣未来销售的毛利分成。该协议于2021年10月到期。

2021年10月1日，Desmet 与公司签署了一份新的三年期许可协议，条款与2018年10月的协议基本相同。作为协议的一部分，Desmet 向公司提供了每月4万美元的预付款，预付款期限至2024年11月1日，这笔款项作为反应堆销售的付款，但公司不再享有未来销售的毛利分成。该协议于2024年2月终止并被取代。

2024年2月15日，Desmet 与公司终止了2021年10月的协议，并签署了一份新的类似三年期协议（“2024年2月协议”）。作为2024年2月协议的一部分，Desmet 将向公司提供每月2.5万美元的预付款，预付款期限至2027年2月，受限于某些条件，这笔款项将作为未来反应堆销售的付款。此外，Desmet 还放弃了截至2021年10月协议项下已预付款项的追偿权，总额最高达49.8万美元。

2024年10月，我们与 Desmet 签署了一份专利转让及回授协议，将某些与植物油精炼相关的专利、知识产权和商标转让给 Desmet。作为专利转让的对价，Desmet 向公司支付了88万美元现金。该交易为公司持续运营和业务发展提供了资金。该协议实际上取代了与 Desmet 的2024年2月协议，包括终止每月2.5万美元的预付款。

2024年10月协议的关键点包括：

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	保留许可：我们在水和废水处理、回收、再循环和净化（包括油田废水）领域，以及酒精饮料的制造、蒸馏、酿造、增强、销售和营销方面，保留了对所转让专利的全球、独家、可转让且免版税的许可，以进行实践和使用（“许可领域”）。

	·	回授许可：我们获得了对所转让专利和相关技术信息进行实践和使用的全球、独家、可转让且免版税的许可，范围与保留许可一致。

	·	商标使用：我们在与许可领域相关的业务、系统和产品中，保留了使用“Nano Reactor®”商标的独家权利。

在保留许可和回授许可下，公司将拥有针对 Nano Reactor® 设备以及包含或利用 Nano Reactor® 设备的 Nano Reactor® 系统和产品的全球、独家、可转让且免版税的许可和权利，但仅限于在一种或多种许可领域内的用途和应用。

作为本协议的结果，公司预计 Desmet 将开始自行制造 Nano 反应堆，公司向 Desmet 出售 Nano 反应堆在未来期间将显著减少。我们将继续拥有并运营与植物油精炼无关的应用中的大量专利和知识产权组合。以下是管理层未来的计划，旨在产生收入并维持公司及其当前状况的运营：

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	1.	二叠纪盆地水处理与修复
	2.	农业水修复与消毒
	3.	与 Alchemy Beverages, Inc. 的商业合作
	4.	新技术：Hydro-Plasma
	5.	非热等离子体 (Xyra Corp.)

1. 二叠纪盆地水处理与修复

Enviro Watertek, LLC

2019 年 4 月，公司与 Delaware Water Company, LLC (Delaware) 成立了一家有限责任公司 Enviro WaterTek LLC (“Enviro” ,“EW”)。Enviro 由公司拥有 50% 的股份，由 Delaware 拥有 50% 的股份，公司按权益法核算其在 Enviro 中的投资。从 2019 年到 2024 年，Enviro 的业务微不足道。本协议涵盖了我们首次进入采出水处理工业领域。过去十年间，水力压裂行业经历了显著增长，达到每日超过 5800 万桶的用水量。我们新设计的低压 Nano 反应堆 (LPN™) 专门开发用于与我们的专有化学配方一起集成到采出水处理系统中，并显示出优于行业标准工艺和设备的可测量且可量化的优势。我们与 EW 的协议规定了 LPN™ 的销售以及基于采出水处理量和利用量的经常性收入流。我们与 EW 的协议期限为十五年。

2020 年 3 月，全球 COVID-19 疫情对石油和天然气行业产生了负面影响，并因此削弱了我们快速加速 LPN™ 销售和经常性收入流的能力。我们目前的运营仅限于系统试验，尚未产生任何有意义的收入。该系统的处理能力约为每天 17,000 桶采出水 (BPD)。

2023 年 6 月，公司确定对 EW 的投资已减值，因此公司记录了约 110 万美元的减值费用。在 2026 财年和 2025 财年，没有发生反应堆销售和使用费的交易。

目前，我们在德克萨斯州一家主要的水修复公司安装了我们的系统，该系统已运行超过六个月，需要更多测试。我们继续寻求额外的客户，主要在二叠纪盆地。

我们在行业中的差异化优势：

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	水修复过程中不使用化学品，显著降低了运营成本。
	·	在24小时内集成到现有流程中，而不会中断正在进行的操作。
	·	紧凑型系统，能耗极低。
	·	处理后的水可以再利用或安全处置。

2. 农业中的水修复和消毒

2024年，我们在加拿大Hacienda Farms（B&F Greenhouse Services, Inc.）安装了我们的第一个系统。该系统目前正在试验中，以提高水中的氧气含量，消除藻类，并控制细菌生长，而无需使用强效化学品。这项创新技术旨在改善水质并促进更健康的作物生长。

Hacienda Farms严重依赖来自伊利湖的水，由于藻类和细菌污染等问题，这带来了重大的水修复挑战。此外，Hacienda Farms一直面临水中钠含量过高的问题，这会影响植物对钙的吸收，以及影响根部健康的真菌问题，最终降低作物产量。这些水质问题需要先进的修复解决方案，以确保其温室运营的可持续性和生产力。我们的技术通过控制微生物、加速营养生长和根系生长以及增加整体植物生物量来解决这些问题。这不仅提高了作物产量，还支持了可持续的农业实践。

加拿大水处理市场的整体规模约为25.1亿美元，由于农业和工业应用中对可持续解决方案的需求，市场持续扩大。

3. 与Alchemy Beverages, Inc.的商业合作

在2014财年，我们的一位股东兼前高管Roman Gordon成立了公司Cameo USA LLC（Cameo）。自成立以来，Cameo没有任何收入、没有运营，也没有任何资产或负债。2018年6月4日，Gordon先生将其在Cameo的100%权益转让给了Cavitation Technologies, Inc.。由于Gordon先生在Cameo投资估值方面没有合理的、可客观支持的基础，因此未对Cameo的转让进行估值。

2018年6月29日，我们将Cameo出售给了Alchemy Beverages Inc.（“ABI”）。此外，我们已同意向ABI提供某些与我们的微型低压纳米反应器（MLPN）相关的许可权，用于开发和制造小型家用电器，以增强酒精饮料。作为交换，ABI同意向我们发行其已发行普通股的19.9%（最多2000万股ABI股票）。ABI是一家私人公司，从事酒精饮料、设备和家用电器的生产和销售。在该协议之前，ABI与CTI是独立的，与我们或我们的管理层没有任何关系。

根据许可协议，ABI将拥有Cameo以及我们专利和待批专利技术在全球范围内的独家营销和分销权，用于酒精饮料的加工。我们同意协助ABI安装和维护MLPN，并将根据我们的许可协议，在适用专利的有效期内，从所有净收入中获得1%至3%的特许权使用费。此外，我们还将根据许可协议获得租赁、咨询和制造费用。

过去几年中，我们与ABI密切合作，开发了智能厨房电器Barmuze和酒精饮料。在Barmuze品牌建设方面做了大量工作，包括推出新网站，并在全年内制作动画以展示该电器的工作原理。ABI正在积极推进Barmuze的商业化生产，将技术授权给第三方，并考虑开发自有酒精品牌的机会，利用我们的尖端技术将任何酒精转化为顺滑、顶级的体验。

ABI正在完成其财务审计，预计将在2027财年第一季度结束前完成，正在为Barmuze进行接受度焦点小组，完善营销和分销策略，并为生产筹集更多资金。公司还计划在2026财年早期获得额外融资。

截至2026年6月30日及本报告日期，ABI尚未通过Cameo品牌产生任何销售额。预计Barmuze的最早销售额和收入将在2027年上半年出现。此外，ABI正在努力开发自己的酒精饮料系列，并将技术授权给其他品牌。更多信息，请访问www.alchemybeveragesinc.com和www.barmuze.com。

在2026财年和2025财年，我们与Alchemy Beverages, Inc.的协议未产生任何销售额或特许权使用费。对ABI的投资未被赋予任何价值，这近似于其公允价值。

4. 新技术：水等离子体

在改进我们现有技术的同时，我们还开发了水等离子体技术，这是一种结合空化和冷等离子体技术的创新工艺，以提高我们的水处理效率，其特点包括：

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	分解有机和无机化合物。
	·	高度可扩展——从15到40加仑/分钟。
	·	消灭微生物和疾病。
	·	有多种工业应用。
	·	该技术正在申请专利。

这项尖端技术会产生反应性物质，如羟基自由基和过氧化氢，这些物质比传统方法更有效地分解水中的污染物、细菌和病毒。这是一种环保且可扩展的解决方案，应用于水处理、农业、从重油中去除硫等。

全球冷等离子体市场预计从2021年的15亿美元增长到2027年的31亿美元，这得益于对可持续水解决方案需求的增加。我们的技术有潜力在全球范围内革新水处理。为了加速这一发展，我们已与新墨西哥州立大学、瓜达拉哈拉大学以及新墨西哥州的咸水地下水国家脱盐研究设施（BGNDRF）建立了合作关系，共同开展水修复项目。

为了开发这些市场，我们可能需要额外的资金，并可能尝试筹集额外的债务和/或股权融资以资助运营和额外的营运资金。然而，我们无法保证能够成功获得此类融资，或获得满足我们业务需求的足够金额，也无法保证我们能够履行未来的合同义务。

该技术的测试目前正在进行中。在完成多次试验后，如果成功，预计将在2027财年上半年产生销售额和收入。

5. Xyra Corp：非热等离子体

2025年8月，我们成立了全资子公司Xyra Corp，并将我们的技术授权给Xyra Corp，我们的全资子公司。Xyra专注于在加密技术市场中识别和把握机会。Xyra持有Cavitation Technologies Inc.专利的 Cavitation Non-Thermal Plasma™ （CNTP）系统独家授权，该系统最初用于加密货币挖矿和高密度数据中心的浸没冷却。这项技术解决了下一代计算环境中流体降解、污染和系统停机等关键痛点。同样的技术现在构成了Xyra的基础设施核心，使其具备罕见的双重优势：精确的流体管理，以保持物理计算层的高效和安全，并在全球范围内提供由人工智能驱动、量子安全的汇款和代币化通道。

Xyra推出了首个由人工智能驱动、量子安全的汇款和代币化网络，专为全球经济设计。该平台解决了当今过时的跨境系统的低效问题，进入数千亿美元的市场，同时推出了首个直接与汇款流程挂钩的信用卡发行。

量子安全技术

Xyra愿景的核心是一个由相互连接的支柱构建的统一生态系统：

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

§	人工智能智能层
	作为“大脑”，监控汇款流程，检测异常，自动化了解你的客户（“KYC”）和反洗钱（“AML”），并将原始交易转化为洞察力。

§	量子安全层
	使用后量子密码学（PQC）和去中心化基础设施保护每一笔交易，确保对未来的量子攻击具有弹性。

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

§	稳定币网络与许可合规
	Xyra正在构建自己的受监管基础设施，在多个司法管辖区获得并运营货币传输商许可证（MTL）. 该框架的核心是发行完全资产支持、量子安全的稳定币，为汇款、跨境B2B和代币化结算创建即时、合规的法币到稳定币通道。

§	奖励与忠诚度引擎
	每一笔汇款都成为一个参与点，人工智能提供实时奖励、忠诚度功能和个性化激励措施，以提高用户留存率。人工智能还优化利润率并创造新的收入来源，将忠诚度转化为生态系统直接的收入驱动因素。

§	资产代币化层
	将经过验证的汇款和金融数据转换为可编程、全球可交易的代币，将信息流转化为产生收益的数字资产。

客户依赖

我们在2026财年收入极少。在签订专利转让和回授协议之前，我们通过战略合作伙伴Desmet销售我们的工业产能 Nano\nReactor® 和 Nano Neutralization® 系统 ，我们2025财年结束（截至2025年6月30日）的大部分收入来自向Desmet销售反应器。在2026财年和2025财年，我们没有从与EW的许可协议中获得任何收入。

原材料来源和主要供应商的名称

我们历来从国内和国际供应商处采购反应堆部件。我们与任何供应商都没有长期合同、协议或承诺。我们认为，如果有必要，找到新供应商大约需要30天。

竞争

我们的竞争对手在生产水和压裂水处理应用领域从本地服务提供商到拥有大量财务资源、工程专业知识和已建立并经过验证技术的跨国全球公司不等。我们认为， LPN™ 是一种概念性新技术，尚未在水处理应用领域推出。 LPN™ 在商业上已证明在处理生产水和压裂水方面效果显著，显著减少了该过程中的危险化学品使用量，同时实现了工业再利用或处置的可接受水质，尽管该技术的接受度较为缓慢。

专利

截至2026年6月30日，我们的专利组合包括16项美国已授权专利和11项国际已授权专利。我们的专利涵盖了我们技术在植物油精炼、生物柴油生产、工艺和工业水处理、碳氢化合物升级以及酒精饮料增强方面的多种工艺和应用。2024年10月，我们以88万美元的现金对价将与植物油精炼相关的专利转让给了Desmet。

我们保留了在全球范围内、独占性、可转让且无需支付特许权使用费的许可，以在水和废水处理、回收、再利用和净化（包括油田废水）领域，以及酒精饮料的制造、蒸馏、酿造、增强、销售和营销（“授权领域”）中使用和实践转让的专利。我们还获得了全球范围内、独占性、可转让且无需支付特许权使用费的许可，以在保留许可范围内使用转让的专利和相关技术信息，此外，我们保留了在授权领域内使用“Nano Reactor®”标志的独占权利，用于我们的业务、系统和产品。

我们持续开发新技术和应用，因为我们已为低压纳米反应器 LPN™ 提交了专利申请。 LPN™ 是一种高效均质器和乳化器，可用于多种流体加工应用。

特许权使用费协议

2008年7月1日，我们的全资子公司与两家公司签订了专利转让协议，其中包括我们前总裁以及现任技术高级经理的前首席执行官（CEO），其中涉及我们水力空化过程中的某些设备和方法由前总裁和前CEO/现任技术高级经理发明，并已转让给子公司。作为交换，该子公司同意就技术许可和相关设备的租赁向前总裁和前CEO/现任技术高级经理支付5%的毛收入作为特许权使用费。这些协议随后于2010年5月13日由我们从子公司处承接。我们的前CEO/现任技术高级经理和前总裁均放弃了就截至2026年6月30日通过任何毛收入产生的或可能产生的特许权使用费的索取权。

2008年4月30日及\n2010年11月22日修订后，我们全资子公司与其前化学\n和分析部门主管（“发明人”）签订了一份雇佣协议，规定在第一年，我们收到任何由发明人合法命名的专利的实际毛收入的5%，并在随后的每一年，我们收到任何此类专利的实际毛收入的3%。自签订该雇佣协议以来，并在该雇佣协议期限内，我们尚未就任何由发明人合法命名的专利确认任何收入。

政府批准\n和法规及环境合规

由于我们产品的性质，我们没有因遵守联邦、州和地方法规而产生任何成本。据我们所知，我们的产品不需要政府批准，我们预计政府法规不会对我们的业务产生重大影响。

员工

截至2026年6月30日，\n我们有两名全职员工，并在过去一年中聘请了多位顾问和独立承包商。我们的技术团队由经验丰富的专业人士组成，他们分别是化学家、土木、化学和机械工程师，精通水力空化、纳米技术和水处理。这些人员拥有土木、化学和机械工程学位。

研究与开发支出

在截至2026年6月30日和2025年6月30日的财年中，我们分别在研究与开发活动上花费了11,000美元和95,000美元。

第1A项风险因素

对小型报告公司不适用。

第1B项未解决的工作人员意见

无。

第1C项网络安全

风险管理与策略

我们存储和/或传输与我们的研究与开发以及日常运营相关的敏感数据的方式是\n我们运营和计划运营的重要组成部分。我们认识到评估、识别和管理与网络安全威胁相关的重大风险的重要性，如《S-K条例》第106(a)项中定义的那样。这些风险包括但不限于：运营风险、知识产权盗窃、欺诈、勒索、对员工的伤害以及违反数据隐私或安全法律。

识别和评估网络安全风险已\n整合到我们的整体风险管理系统和流程中。我们业务、技术运营、隐私和合规问题相关的网络安全风险通过我们内部信息技术治理、风险和合规政策的审查来识别。为了防御、检测和应对网络安全事件，我们，以及其他措施：可能会对系统和应用程序进行主动的隐私和网络安全审查，审计相关数据，进行员工培训，监控与数据保护和信息安全相关的新兴法律法规，并实施适当的更改。

我们的风险管理计划还评估第三方风险，并对第三方风险进行管理，以识别和缓解我们供应商、供应商和其他与我们使用第三方服务提供商相关的业务伙伴的风险。在确定适用的第三方服务提供商的选择和监督时，会评估网络安全风险，并在处理和/或处理我们的员工、业务或客户数据时评估潜在的第四方风险。

治理概览

由于我们运营的性质以及人员和管理层数量有限，我们没有专门的网络安全领导职位。我们的首席执行官参与我们所有运营的各个方面，并将在发生网络安全事件时向董事会报告。在任何补救措施中，将使用实体外部的第三方。

我们尚未经历过任何历史网络事件。

第2项. 财产

我们的公司总部位于加利福尼亚州查茨沃思，位于一个约5,000平方英尺的设施内，包括办公空间和用于研发的区域。我们对该物业的租赁协议于2025年1月结束。我们继续按月租赁该物业。我们的月租金约为7,000美元。我们预计如果需要，不会在商业合理条件下难以获得替代设施。

第3项. 法律诉讼

公司可能在日常业务中涉及某些法律诉讼。如果管理层认为该事件可能发生且相关损失金额可以合理估计，公司将为或有事项计提准备金。与或有事项相关的法律费用在发生时计入费用。

公司目前不知晓任何待决的诉讼。

第4项. 矿山安全披露

不适用。

第二部分

第5项. 注册人的普通股市场、相关股东事项和发行人购买权益证券

普通股

我们的普通股在OTCQB市场交易，代码为CVAT。

股东

截至2026年9月28日，我们的普通股有1,031名记录在册的股东。这不反映通过各种经纪公司持有股票的个人或实体数量。

股息政策

我们在前两个财政年度均未就我们的普通股宣布或支付过股息。我们目前打算将未来收益（如有）用于资助日常运营和业务的增长与发展，因此预计在可预见的未来不会就我们的普通股宣布或支付现金股息。未来是否宣布或支付股息将由董事会自行决定，并将取决于我们的财务状况、经营成果、资本需求以及董事会认为相关的其他因素。

未注册证券的发行

无。

发行人购买权益证券

无。

第6项. \n[保留]

项目7. 管理层对财务状况和经营成果的讨论与分析

以下讨论和分析应与我们的财务报表及相关附注一起阅读。本讨论包含基于当前预期的前瞻性声明，这些声明涉及风险和不确定性，例如其计划、目标、期望和意图。实际结果和某些事件的时间可能与这些前瞻性声明中预期的大相径庭。

要约收购

2026年8月14日，我们与欧洲担保服务有限公司（“购买方”）签订了一份最终的要约收购协议（“协议”），根据该协议，购买方同意收购或寻求收购我们所有已发行的普通股（“CTI股份”），总现金购买价格为3500万美元（扣除某些债务和我们应付负债）（“净价格”）。根据协议，购买方将在TO满足证券交易委员会（SEC）的监管要求后的10个工作日内开始收购CTI股份的要约（“要约”），并且要约期至少为60个工作日，以便股东有机会审查该协议、要约和要约文件。

根据协议，要约将包含一个初始要约价格，该价格是通过将净价格除以协议签署日已发行的CTI股份总数确定的。然而，初始要约价格可能会进行调整，最终要约价格将根据要约开始后45个工作日的记录日已发行的CTI股份总数确定。最终要约价格将包含在修订后的要约和要约文件中，并提交给证券交易委员会并分发给我们的股东。在确定最终要约价格并把修订后的要约分发给我们的股东后，购买方将根据需要延长要约期，以便股东至少有30个工作日的时间审查修订后的要约、最终要约价格以及公司董事会在要约期间内发布的最终建议。

协议包含双方的常规和特殊常规陈述和保证，并在协议附录I中列出了购买方在购买根据修订后的要约提交的股份之前必须满足或放弃的条件（“要约条件”）。这些要约条件可以概括如下：

\n\n \n\n \n\n \n\n \n\n\n \n\n \n\n \n\n

	1.	购买方将根据与ABI签订的单独要约收购协议，通过单独的要约收购协议收购Alchemy Beverages Inc.（“ABI”）的普通股（“ABI股份”），ABI是一家私人特拉华州公司，本公司持有其约17%的已发行普通股（“ABI股份”）。

	2.	我们的股东将已提交足够数量的CTI股票至修订后的要约，这将使购买方，加上购买方及其关联方或投资者之前购买的任何CTI股票，能够获得截至记录日流通的至少90%的CTI股票；

	3.	没有任何政府机构采取行动来阻止或禁止购买方根据修订后的要约提交的CTI股票的收购；

	4.	根据协议条款，协议的终止尚未发生；

	5.	我们根据协议日期作出的陈述和保证将为真实和正确，我们将已履行协议中的承诺，对于任何单独或合计不会对交易产生重大不利影响的差异或失败；

\n \n\n \n\n \n\n

	6.	根据协议定义，未发生重大不利影响；以及

	7.	各方将根据美国法律和法规以及CFIUS的要求，将本协议、要约文件和其他信息提交给美国外国投资委员会（“CFIUS”）进行审查。在审查期结束或对交易的任何调查结束后，CFIUS将采取不利行动以阻止协议下的交易。

在要约期届满（可能延长）后，并且在购买方满足或放弃要约条件的情况下，协议规定购买方将以最终要约价格收购根据修订后的要约提交的所有流通的CTI股票（且未被有效撤回）；

本协议以及购买方根据协议条款将作出的现金要约收购CTI股票，无需我们股东的事先批准。该拟议交易仍需监管审查和批准，尚未最终确定或完成。

我们业务概览

我们是一家内华达州公司，最初以Bio Energy, Inc.的名称成立。2007年1月29日，我们作为一家加利福尼亚州公司成立了全资子公司Hydrodynamic Technology, Inc.。

我们已开发、获得专利并商业化了专有技术，可用于处理各种工业和消费类流体，如上文详细所述。

在截至2026年6月30日的财年中，我们实现了3,000美元的收入，并发生了1,404,000美元的净亏损。

通货膨胀

全球通胀仍然是2026年和2025年财政政策的因素，美国的利率仍处于较高水平，尽管已经有一些利率下降，但美国政府实施贸易关税的全球市场不确定性导致了市场波动。\n此外，对所有进口到美国的商品征收关税的影响预计会对所有进口商品产生显著的通胀影响。\n俄罗斯和乌克兰以及其他地缘政治冲突，以及相关的国际反应，加剧了通胀压力，\n包括导致商品和服务价格上涨以及全球供应链中断，这已经导致并可能继续导致食品、材料和服务的短缺。这种短缺已经导致并可能继续导致劳动力、燃料、食品、材料和服务的通胀成本增加，而且可能继续导致成本增加以及某些材料的稀缺性。我们无法预测未来通胀率或其他负面经济因素的任何趋势\n或相关运营成本的增加及其对我们业务的影响。在我们以及我们服务的客户无法从通胀或其他原因中收回更高的运营成本，或减轻这些成本对我们和他们业务的影响的程度上，\n我们的收入和毛利可能会减少，我们的财务状况和经营成果可能会受到不利影响。

管理层的经营计划

2024年10月，我们将与植物油精炼相关的专利转让给Desmet Belgium，获得88万美元的总收入，然而，我们保留了在全球范围内、独占性、可转让的、免版税的许可，以在水和废水处理、回收、再利用和净化（包括油田废水）领域，以及酒精饮料的制造、蒸馏、酿造、增强、销售和营销（“许可领域”）中使用和实践转让的专利，我们还获得了全球范围内、独占性、可转让的、免版税的许可，以使用和实践转让的专利及相关技术信息，符合保留许可的范围，并且我们还保留了在许可领域内使用“Nano Reactor®”标志的独占权利，用于我们的业务、系统和产品。

根据保留许可和回授许可，公司将在全球范围内、独占性、可转让的、免版税的许可和权利下，设计、建造、使用、出口、改进、销售和推广Nano Reactor®设备，以及包含或使用Nano Reactor®设备的Nano Reactor®系统和产品，限于一个或多个许可领域的使用和应用。

由于此协议，公司预计Desmet将开始自行制造Nano反应器，公司向Desmet销售Nano反应器将在未来期间大幅减少。我们将继续拥有并运营一大套与植物油精炼无关的专利和知识产权。以下为管理层未来的计划，以产生收入并维持公司的运营和当前状况：

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	1.	二叠纪盆地的水处理和修复
	2.	农业中的水修复和消毒
	3.	与Alchemy Beverages, Inc.的合作业务
	4.	新技术：水等离子体
	5.	非热等离子体（Xyra公司）

截至2026年6月30日止年度，我们产生了140.4万美元的净亏损，并在运营中使用了75.5万美元的现金。截至2026年6月30日，我们的营运资本赤字为55.4万美元，股东权益赤字为69.3万美元。

管理层计划从上述新技术的商业应用中在未来产生收入。

此前，我们通过与比利时Desmet（此前称为Desmet Ballestra）之前的协议获得的特许权使用费和反应器销售获得收入。

截至2026年6月30日止年度，我们从反应器展示中获得了3,000美元的收入。这些资金不足以按月支付运营费用。我们预计，我们将从新技术和上述其他市场中获得收入。

我们与Enviro WaterTek, LLC和Alchemy Beverages, Inc.的协议中没有产生收入。

我们预计可能需要额外资金，我们可能会尝试筹集额外的债务和/或股权融资以资助运营并提供额外的营运资本。然而，无法保证此类融资能够完成或获得足够的金额以满足我们的需求，也无法保证我们能够履行未来的合同义务。如果管理层无法获得此类融资，我们可能会缩减运营。

关键会计政策和收入确认

我们对财务状况和经营成果的讨论和分析基于我们按照美国通用会计原则编制的合并财务报表。编制这些合并财务报表需要管理层做出某些估计和假设，这些估计和假设会影响资产和负债的报告金额以及收入和费用的报告金额。以下描述的会计政策和估计是我们认为在编制合并财务报表时最关键的内容。以下是对会计政策和估计的回顾，其中包括管理层在估计时使用当时可用信息所做的重大判断。然而，如果使用了不同的信息或假设，这些估计可能会发生重大变化。

附带的合并财务报表第1号注释包括我们财务报表编制中使用的重大会计政策、估计和方法的摘要。会计估计是编制财务报表的重要组成部分，基于管理层利用其对过去和当前事件的知识和经验以及对未来事件的假设做出的判断，我们认为这些判断和估计是合理的。这些判断和估计反映了固有不确定性的事项，这些事项会影响我们资产和负债的账面价值、或有负债的披露以及报告期间费用的报告金额。

收入确认

公司遵循会计准则汇编（ASC）606的指导， 与客户签订的合同产生的收入。ASC 606创建了一个五步模型，要求实体在考虑合同条款时进行判断，这包括（1）识别与客户签订的合同或协议，（2）识别合同或协议中的履约义务，（3）确定交易价格，（4）将交易价格分配到单独的履约义务，（5）在每个履约义务得到履行时确认收入。只有在公司很可能收到其为客户转移服务所应得的对价时，公司才会对合同应用这五步模型。

我们 Nano Reactor® 和 LPN™的销售产生的收入在产品从我们的制造设施发出时确认，因为这是这些合同中的唯一履约义务，我们对客户没有持续义务。

对于许可费收入，公司在满足相关许可协议中的履约义务时确认收入。

公司还确认某些反应器的使用费收入。使用费根据客户的实际使用情况确认。

此外，公司还确认纳米反应器的短期租赁收入。租赁收入在协议期限内确认，并且在可收回性确定时确认。

衍生金融工具

公司评估其金融工具，以确定这些工具是否为衍生工具或是否包含符合嵌入式衍生工具特征的特征。对于作为负债核算的衍生金融工具，衍生工具最初按公允价值记录，并在每个报告日重新估值，公允价值的变化在损益表中报告。衍生工具的分类，包括这些工具是否应作为负债或作为权益记录，在每个报告期末进行评估。衍生工具负债根据在资产负债表日后的12个月内是否可能要求净现金结算，在资产负债表中分类为流动或非流动。

某些可转换票据具有可变定价的转换特征，这符合衍生负债，使用基于三级输入的可变期权定价模型对其进行估值。公司根据每个报告日的公允价值调整其衍生负债，公允价值的任何增减均在损益表中记录。

基于股份的薪酬

公司定期在非融资交易中向员工和非员工发行股票期权和认股权证，以支付服务费用和融资成本。\n公司根据财务会计准则委员会提供的权威指南对向员工发行和行权的股票期权和认股权证进行会计处理，其中奖励的价值在授予日计量，并在行权期内确认。公司根据财务会计准则委员会的权威指南对向非员工发行和行权的股票期权和认股权证进行会计处理，其中股票补偿的价值基于计量日确定，该日为a)达成业绩承诺的日期，或b)完成获得股权工具所需业绩的日期。非员工的基于股票的补偿费用通常在行权期内按直线法摊销。在某些情况下，如果非员工没有未来的业绩要求，期权授予将立即行权，并在计量日当期记录全部基于股票的补偿费用。

近期会计规定

参见财务报表第1号附注，其中讨论了近期的会计规定。

经营成果

Below is a summary comparing\nfiscal 2026 and fiscal 2025.

	For the Years Ended
	June 30,
	2026		2025	$ Change		% Change

Revenue	$	3,000		$	203,000		$	(200,000	)	(98.5	)
Cost of revenue		–			(38,000	)		38,000		100.0
Gross profit		3,000			165,000			(162,000	)	(98.2	)

General and administrative expenses		1,380,000			1,057,000			323,000		30.6
Research and development expenses		11,000			95,000			(84,000	)	(88.4	)
Total operating expenses		1,391,000			1,152,000			239,000		20.7

Loss from operations		(1,388,000	)		(987,000	)		(401,000	)	40.6

Gain on patent assignment		–			880,000			(880,000	)	(100.0	)
Interest and other expense, net		(40,000	)		(6,000	)		(34,000	)	(566.7	)
Change in fair value of derivative liability		24,000			–			24,000		100.0
Net loss	$	(1,404,000	)	$	(113,000	)	$	(1,291,000	)	(1,142.5	)

Revenue

The Company generated\nrevenues from the sale of the Nano Reactor® to customers/distributor. Additionally, the Company generates revenues from\nshort term rental of nano reactors.

Revenue was $3,000 and\n$203,000 for the years ended June 30, 2026, and 2025, respectively, a decrease of $200,000 or 98.5%. Revenue for the current year represented\nincome received for the rental of a nano reactor to one customer. In the prior year, the Company completed and delivered one purchase\norder placed by Desmet prior to the assignment of our vegetable oil refining patents to Desmet.

Cost of Sales

Cost of revenue was $0\nand $38,000 for the years ended June 30, 2026 and 2025, respectively, a decrease of $38,000 or 100.0%. In the current year, no sales of\nreactors took place. In the prior year the cost of sales related to the sale of reactors to third parties.

General and administrative\nexpenses

General and administrative\nexpenses increased by $323,000 or 30.6%. The increase is primarily attributable to the following:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n\n \n \n \n

	·	Stock based compensation increased by $193,000. In the current year common stock was awarded to various consultants who aided in the development of new products and markets and for assistance in the tender offer process, discussed above. In the prior year common stock purchase warrants granted to certain of the Company’s employees and consultants and common stock issued to consultants for services rendered,
	·	Consulting fees increased by $34,000, primarily due to an increase in payments to consultants assisting with the development of new products for the new markets, as discussed above.
	·	Travel expenses increased by $26,000 due to an increase in travel by our officer during the current year to promote new products and related to the tender offer currently in progress.
	·	Rent expense, net increased by $7,000 due to an increase in the monthly rental rate after the expiration of our term lease, which now operates on a month-to-month basis.
	·	Salary expenses increased by $22,000 due to salary earned by our executive\nofficer from our subsidiary, Xyra Corp.
	·	Professional fees increased by $3,000 due to an increase in legal\nfees related to the tender offer and an increase in audit fees , offset by a decrease in patent attorney fees.
	·	Other operating expenses increased by $38,000. These expenses consist of numerous individually insignificant expenses.

Research and development\nexpenses

Research and development\nexpenses decreased by $84,000. During the current year, management scaled back research into cold plasma technology due to cash constraints.\nDuring the prior year, the Company began another R&D project consisting of the design and manufacture of an experimental installation\nfor plasma activation of water by generating a plasma discharge in a water stream. The research and development expenditure is dependent\non progress made on the development.

Gain on patent\nassignment

Gain on patent assignment\nwas $880,000 for the year ended June 30, 2025 as a result of sale and assignment of certain patents to Desmet in October 2024. There was\nno similar transaction during the current period.

Interest and other\nexpense, net

Interest and other income\n(expense), net increased by $34,000. The increase was due to interest accrued on the bridge note, note payable, convertible notes payable\nand notes payable to related parties, all issued during the current fiscal year and the amortization of debt discount related to the bridge\nnote and convertible note payable. The proceeds received from these notes was used to fund operations during the current fiscal year.

Change in fair\nvalue of derivative liability

Change in fair value\nof derivative liability was $24,000 and $0 for the years ended June 30, 2026 and 2025, the increase is primarily related to the valuation\nof the conversion feature on the convertible notes payable issued during the current year accounted as derivative liabilities and the\nsubsequent mark-to-market of these derivative liabilities at our reporting period end. There was no similar transaction in the prior period.

Net Loss

Net\nloss was $1,404,000 and $113,000 for the years ended June 30, 2026 and 2025, respectively, an increase in loss of $1,291,000. The increase\nin net loss is primarily due to the decrease in revenue, the increase in operating expenses, the prior year gain on the patent assignment,\nthe increase in interest expense, offset by the mark-to-market derivative liability movement, as discussed above.

Liquidity and Capital\nResources

Our cash balance at June\n30, 2026 and 2025 was $17,000 and $249,000, respectively, a decrease of $232,000, primarily due to the decrease in revenue and the cash\nused in operating activities of $755,000 not being fully offset by the proceeds of financing operations of $523,000.

We utilized cash of $755,000\nto fund operating activities, due to a reduction in revenues and the increase in operating expenses discussed above.

We generated cash of\n$523,000 in financing activities, primarily from the issuance of common stock units, and the issuance of notes payable, notes payable\n– related parties and convertible notes payable during the current fiscal year.

Going concern

During the year ended\nJune 30, 2026, the Company incurred net loss of $1,404,000 and used cash in operations of $755,000 and as of June 30, 2026, we had\nan accumulated deficit of $28,364,000. The Company has had a history of operating losses. These factors, among others, raise substantial\ndoubt about our ability to continue as a going concern within one year of the date that the financial statements are issued. In addition,\nthe Company’s independent registered public accounting firm, in its report on our June 30, 2026 financial statements, has raised\nsubstantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include\nany adjustments that might result from the outcome of this uncertainty to continue as a going concern.\nThe Company does not believe it has enough cash and access to cash to sustain operations through June, 2027.

Management’s plan\nis to generate income from the application of new technologies as discussed above.

We may also attempt to\nraise additional debt and/or equity financing to fund operations and to provide additional working capital. There is no assurance that\nsuch financing will be available in the future or obtained in sufficient amounts necessary to meet our needs, that we will be able to\nachieve profitable operations or that we will be able to meet our future contractual obligations. Should management fail to obtain such\nfinancing, the Company may curtail its operations.

Off-balance Sheet\nArrangements

We have no off-balance\nsheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, revenues or expenses,\nresults of operations, liquidity, capital expenditures or capital resources.

ITEM 7A. QUANTITATIVE\nAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable for Smaller\nReporting Companies.

ITEM 8. FINANCIAL STATEMENTS\nAND SUPPLEMENTARY DATA

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

		Page
Report of the Independent Registered Public\n Accounting Firm (PCAOB #572)		F-1
Consolidated Balance Sheets as of June 30, 2026 and June 30, 2025		F-2
Consolidated Statements of Operations for the years ended June 30, 2026 and June 30, 2025		F-3
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended June 30, 2026 and 2025		F-4
Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025		F-5
Notes to the Consolidated Financial Statements		F-6

REPORT OF INDEPENDENT\nREGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
\nCavitation Technologies, Inc.

Chatsworth, CA

Opinion on the Consolidated\nFinancial Statements

We have audited the accompanying\nconsolidated balance sheets of Cavitation Technologies, Inc. (the “Company”) as of June 30, 2026 and 2025, the related consolidated\nstatements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes\n(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements\npresent fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of their\noperations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States\nof America.

Going Concern

The accompanying\nconsolidated financial statements have been prepared assuming that the Company will continue as a going concern. During the year\nended June 30, 2026, the Company incurred a net loss and used cash in operations and had a stockholders’ deficit as of that\ndate. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s\nplans in regard to these matters are also described in Note 1 to the financial statements. These consolidated financial statements\ndo not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial\nstatements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight\nBoard (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.\nfederal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits\nin accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance\nabout whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not\nrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we\nare required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing\nprocedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing\nprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures\nin the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,\nas well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for\nour opinion.

Critical Audit Matter

Critical audit matters\nare matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to\nthe board of directors and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially\nchallenging, subjective, or complex judgments.

Derivative Liability

As discussed in Notes 6 and 7, the Company issued\nconvertible notes payable with a conversion feature that can be adjusted based on the Company’s stock price which results in the\nconversion feature being recorded as a derivative liability pursuant to ASC 815 for derivatives and hedging. The derivative liabilities\nwere initially recognized at fair value on the respective issuance dates and are subsequently remeasured at fair value at each reporting\ndate, with changes in fair value recognized in earnings.

The Company estimated the fair value of the derivative\nliability using a variable option pricing model. The valuation requires management to make significant estimates and assumptions, including\nthe expected volatility of the Company's common stock, expected term, risk-free interest rate, expected dividend yield, and, where applicable,\nassumptions regarding the probability and timing of future events.

We identified the accounting and valuation of\nthe derivative liability as a critical audit matter due to the significant judgements and assumptions used by management. As a result,\na high degree of auditor judgement and effort was required in performing audit procedures to evaluate the accounting treatment.

The primary procedures we performed to address this critical audit\nmatter included:

\n\n \n \n \n\n \n \n \n\n \n \n \n

	·	Inspection of convertible note agreement and testing Management’s\napplication of the relevant accounting guidance, which included the classification of the conversion feature.
	·	Evaluating the valuation model management selected to determine the\nfair value and evaluating the reasonableness of management’s significant valuation assumptions.
	·	Performing a recalculation of the fair value estimate.

We have served as the\nCompany’s auditor since 2013.

/s/ Weinberg & Company, P.A.

Los Angeles, California

October 6, 2026

F-1

CAVITATION TECHNOLOGIES,\nINC.

CONSOLIDATED BALANCE SHEETS


	June 30, 2026			June 30, 2025
ASSETS

Current assets:
Cash and cash equivalents	$	17,000			$	249,000
Accounts receivable		–				10,000
Prepaid expenses		17,000				27,000
Total current assets		34,000				286,000

Equity method investment		1,000				1,000
Other assets		10,000				10,000
Total assets	$	45,000			$	297,000

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts payable and accrued expenses	$	174,000			$	75,000
Accrued interest		19,000				3,000
Accrued payroll – related party		129,000				–
Bridge note payable, net of discount		103,000				–
Promissory notes payable – related party		115,000				–
Convertible note payable, net of discount		34,000				–
Derivative liability		14,000				–
Total current liabilities		588,000				78,000

Note payable, non-current		150,000				150,000
Total liabilities		738,000				228,000

Commitments and contingencies		–

Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 10,000,000 shares\n authorized, no shares issued and outstanding as of June 30, 2026 and 2025		–				–
Common stock, $0.001\n par value, 1,000,000,000\n shares authorized, 317,220,739\n and 289,156,340\n shares issued and outstanding as June 30, 2026 and 2025, respectively		317,000				289,000
Additional paid-in capital		27,354,000				26,740,000
Accumulated deficit		(28,364,000	)			(26,960,000	)
Total stockholders' equity (deficit)		(693,000	)			69,000
Total liabilities and stockholders' equity (deficit)	$	45,000			$	297,000

See accompanying notes\nto the consolidated financial statements

F-2

CAVITATION TECHNOLOGIES,\nINC.

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Years Ended
	June 30,
	2026			2025

Revenue	$	3,000			$	203,000

Cost of revenue		–				(38,000	)
Gross profit		3,000				165,000

General and administrative expenses		1,380,000				1,057,000
Research and development expenses		11,000				95,000
Total operating expenses		1,391,000				1,152,000

Loss from operations		(1,388,000	)			(987,000	)

Other Income (Expense)
Gain on patent assignment		–				880,000
Interest and other expense, net		(40,000	)			(6,000	)
Change in fair value of derivative liability		24,000				–
Net loss	$	(1,404,000	)		$	(113,000	)

Net loss per share
Basic and diluted	$	(0.00	)		$	(0.00	)

Weighted average shares outstanding,
Basic and diluted		303,333,883				286,001,131

See accompanying notes\nto the consolidated financial statements

F-3

CAVITATION\nTECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

YEARS ENDED JUNE 30,\n2026 AND 2025


	Common Stock		Additional Paid-in			Accumulated
	Shares		Amount			Capital		Deficit		Total
Balance at June 30, 2024		284,289,740		$	284,000		$	26,083,000		$	(26,847,000	)	$	(480,000	)
Fair value of common stock issued for services		200,000			–			6,000			–			6,000
Fair value of common stock and warrants issued to settle\n accrued payroll and payroll taxes – related parties		4,666,600			5,000			185,000			–			190,000
Fair value of warrants granted for services		–			–			195,000			–			195,000
Extinguishment of accrued payroll and payroll taxes – related parties treated as contribution of capital		–			–			271,000			–			271,000
Net loss		–			–			–			(113,000	)		(113,000	)
Balance at June 30, 2025		289,156,340			289,000			26,740,000			(26,960,000	)		69,000
Proceeds from sale of common stock units for cash		8,269,399			8,000			240,000			–			248,000
Fair value of common stock issued for services		8,300,000			8,000			386,000			–			394,000
Common stock issued upon cashless exercise of warrants		11,495,000			12,000			(12,000	)		–			–
Net loss		–			–			–			(1,404,000	)		(1,404,000	)
Balance at June 30, 2026		317,220,739		$	317,000		$	27,354,000		$	(28,364,000	)	$	(693,000	)

See accompanying notes\nto the consolidated financial statements

F-4

CAVITATION TECHNOLOGIES,\nINC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n


	Years Ended June 30,
	2026			2025
Operating activities:
Net loss	$	(1,404,000	)		$	(113,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Debt discount amortization		15,000				–
Change in fair value of derivative liability		(24,000	)			–
Fair value of warrants granted for services		–				195,000
Fair value of common stock issued for services		394,000				6,000
Gain on patent assignment		–				(880,000	)
Effect of changes in:
Accounts receivable		10,000				(10,000	)
Prepaid expenses		10,000				(11,000	)
Operating lease right-of-use assets		–				42,000
Accounts payable and accrued expenses		99,000				–
Accrued payroll – related parties		129,000				11,000
Accrued interest		16,000				–
Operating lease liabilities		–				(46,000	)
Net cash used in operating activities		(755,000	)			(806,000	)

Investing activities:
Proceeds from patent assignment		–				880,000
Net cash provided by investing activities		–				880,000

Financing activities:
Proceeds from convertible notes payable		60,000				–
Proceeds from common stock units		248,000				–
Proceeds from promissory notes payable – related\n party		115,000				–
Proceeds from bridge note payable		100,000				–
Repayment of notes payable		–				(4,000	)
Cash provided by (used in) financing activities		523,000				(4,000	)

Net (decrease) increase in cash and cash equivalents		(232,000	)			70,000

Cash and cash equivalents, beginning of period		249,000				179,000
Cash and cash equivalents, end of period	$	17,000			$	249,000

*Supplemental disclosures of cash flow information:*
Cash paid for interest	$	9,000			$	6,000
Cash paid for income taxes	$	–			$	–

*Non-Cash Investing and Financing Activities*
Conversion feature of convertible notes payable accounted as derivative liability	$	38,000			$	–
Fair value of common stock and warrants issued to\n settle accrued payroll and payroll taxes – related parties	$	–			$	190,000
Extinguishment of accrued payroll and payroll taxes – related parties treated as contribution of capital	$	–			$	271,000

See accompanying notes\nto the consolidated financial statements

F-5

CAVITATION TECHNOLOGIES,\nINC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2026 AND 2025

Note 1 – Organization\nand Summary of Significant Accounting Policies

Cavitation Technologies, Inc. (“the Company,”\n“CTi,” “we,” “us,” “CVAT,” and “our”) is a Nevada corporation originally incorporated\nin January 2007 under the name Bio Energy, Inc. The Company had originally developed, patented, and commercialized proprietary technology,\nwhich has subsequently been sold to Desmet Ballestra in October 2024, pursuant to a patent assignment and license back agreement.

On\nAugust 9, 2025, the Company incorporated a wholly owned subsidiary, Xyra Corp. (“Xyra”). Xyra will be focused on\nidentifying and capitalizing on opportunities in the crypto technologies market. Xyra holds an exclusive license for Cavitation\nTechnologies Inc. patented Cavitation Non-Thermal Plasma™ (CNTP) systems, developed initially for immersion cooling in\ncrypto mining and high-density data centers.

Tender Offer

On August 14, 2026 the Company entered into a\ndefinitive tender offer agreement (the “Agreement”) with European Guarantee Services S.à.r.l. (“Purchaser”),\npursuant to which the Purchaser agreed to acquire or seek to acquire all of the outstanding shares of common stock of Company (the “CTI\nShares”) for a total purchase price of $35 million in cash (less certain indebtedness and accrued liabilities of the Company) (the\n“Net Price”). Under the Agreement, the Purchaser will commence an offer to purchase the CTI Shares (the “Offer”)\nwithin 10 business days after the TO has met the regulatory requirements of the SEC and will remain open during an offer period of at\nleast 60 business days to give shareholders an opportunity to review this Agreement, the Offer and the offer documents.

Under the Agreement, the Offer will contain an\nInitial Offer Price per Share determined by dividing the Net Price by the total number of CTI Shares outstanding as of the date of the\nAgreement. However, the Initial Offer Price will be subject to adjustment and a Final Offer Price per Share will be determined based on\nthe total number of CTI Shares outstanding as of a Record Date, a date that is 45 business days after the commencement of the Offer. The\nFinal Offer Price will be included in an amended Offer and offer documents that will be filed with the SEC and disseminated to shareholders\nof the Company. Following a determination of the Final Offer Price and dissemination of the amended Offer to the Company’s shareholders,\nthe Purchaser will extend the offer period as may be necessary in order to give shareholders at least 30 business days to review the amended\nOffer, the Final Offer Price, and a final recommendation issued by Company’s board of directors before the offer period during which\nshareholders may tender their Shares pursuant to the amended Offer (as extended) expires.

The Agreement contains both customary and special\ncustomary representations, and warranties of the parties and sets forth, in Annex I to the Agreement, a list of the conditions (the “Offer\nConditions”) that must be satisfied or waived by Purchaser before the Purchaser becomes obligated to purchase Shares that are tendered\npursuant to the amended Offer. These Offer Conditions may be summarized as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	1.	Purchaser will have acquired shares of common stock of Alchemy Beverages Inc. (“ABI”), a private Delaware corporation in which the Company owns about 17% of the outstanding shares of common stock in ABI (the “ABI Shares”), pursuant to a separate tender offer that will be made by Purchaser for ABI Shares under a separate tender offer agreement executed between ABI and Purchaser;

	2.	Shareholders of the Company will have tendered a sufficient number of CTI Shares to the amended Offer that will enable Purchaser, together with any CTI Shares previously purchased by Purchaser and its affiliates or investors, to acquire at least 90% of the CTI Shares outstanding as of the Record Date;

	3.	No action has been taken by any government entity to restrain or prohibit the consummation of Purchaser’s acquisition of CTI Shares tendered pursuant to the amended Offer;

F-6

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	4.	No termination of the Agreement in accordance with the terms thereof will have occurred;

	5.	The representations and warranties given by the Company as of the date of the Agreement shall be true and correct, and Company will have performed its covenants under the Agreement, in each case for any discrepancy or failure that, individually or in the aggregate, will not have a material adverse effect on the transaction;

	6.	No adverse material effect, as defined in the Agreement, will have occurred; and

	7.	The Parties will have submitted this Agreement, the offer documents and other information to the Committee on Foreign Investment in the United States (“CFIUS”) for review in accordance with U.S. laws and regulations and CFIUS, upon the conclusion of the review period, or any investigation into the transaction, will have taken adverse action to block the transactions under the Agreement.

Following the expiration of the offer period (as\nmay be extended), and subject to the satisfaction, or waiver by Purchaser, of the Offer Conditions, the Agreement provides that Purchaser\nwill acquire, at the Final Offer Price, all of the outstanding CTI Shares that are tendered pursuant to the amended Offer (and not validly\nwithdrawn).

Neither this Agreement nor the cash tender offer\nfor the CTI Shares that will be made by Purchaser under the terms of the Agreement will require the prior approval of the shareholders\nof Company. The proposed transaction remains subject to regulatory review and approval and has not yet been finalized or consummated.

Going Concern

The accompanying consolidated financial\nstatements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of\nliabilities and commitments in the normal course of business. As reflected in accompanying consolidated financial statements, during\nthe year ended June 30, 2026, the Company incurred net loss of $1,404,000,\nused cash in operations of $755,000\nand as of June 30, 2026, the Company had a stockholders’ deficit of $693,000.\nIn addition, the Company has had a history of operating losses. These factors, among others, raise substantial doubt about the\nCompany’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any\nadjustments that may result from its inability to continue as a going concern.

As of June 30, 2026, the Company has cash in\nthe amount of $17,000. The Company’s\nability to continue as a going concern is dependent upon its ability to continue to implement its business plan. Currently, management’s\nplan is to increase revenues by using its Reserved Grant Back License to apply the technology to; (i) water and wastewater processing,\nrecovery, recycling and purification (including oilfield wastewater) and (ii) manufacture, distillation, brewing, enhancements, sale\nand marketing of alcoholic beverages, together the Licensed Fields. The Company has a worldwide, exclusive, transferable and royalty-free\nlicense and right to design, build, use, export, improve, sell and market Nano Reactor® devices and systems (and products) that\nincorporate or utilize Nano Reactor® devices, in each case within the Licensed Fields, and to continue to use the Nano Reactor®\ntrademark in connection with its business, systems and products within the Licensed Fields. In addition, the Company will continue to\ndevelop its (i) water treatment and remediation in the Permian Basin; (ii) water remediation and disinfection in agriculture; (iii) business\nventure with Alchemy Beverages, Inc. to develop a smart home kitchen appliance for alcoholic beverages; (iv) hydro plasma technology,\nand (v) non thermal plasma for immersion cooling in crypto mining and high-density data centers, in order to generate revenues and\nsustain operations. While the Company believes in the viability of its strategy to increase revenues, there can be no assurances to that\neffect. The Company does not believe it has enough cash and access to cash to sustain operations through June 2027.

The Company may also attempt to raise additional\ndebt and/or equity financing to fund operations and to provide additional working capital. There is no assurance that such financing will\nbe available in the future or obtained in sufficient amounts necessary to meet the Company’s needs, that the Company will be able\nto achieve profitable operations or that the Company will be able to meet its future contractual obligations. Should management fail to\nobtain such financing, the Company may curtail its operations.

F-7

Principles of Consolidation

The consolidated financial statements include\nthe accounts of Cavitation Technologies, Inc. and its wholly owned subsidiaries Hydrodynamic Technology, Inc and Xyra Corp. Intercompany\ntransactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial\nstatements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions\nthat affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement\ndate, and reported amounts of revenue and expenses during the reporting period. Significant estimates include valuation of our equity\nmethod investments, and derivative liabilities, assumptions used in valuing our stock warrants and common stock issued for services and\nvaluation allowance for our deferred tax asset, among other items. Actual results could differ from these estimates.

Revenue Recognition

The Company\nfollows the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)\n606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 creates a five-step model that requires entities to exercise\njudgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying\nour performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price\nto the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies\nthe five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for\nthe services it transfers to its clients. Revenue from sale of our Nano Reactors is recognized when products are shipped from our manufacturing\nfacilities as this is our sole performance obligation under these contracts and we have no continuing obligation to the customer.

For the license fee revenue, revenue is recognized\nwhen the Company satisfies the performance obligation based on the related license agreement and\ncollectability is certain.

The Company\nalso recognizes revenues from usage fees of certain reactors. Usage fees are recognized based on actual usage by the customer and collectability\nis certain.

In addition, the Company also recognizes revenues\nfrom short term rental of nano reactors. Rental revenue is recognized over the term of the agreement and when collectability is certain.\nDuring the year ended June 30, 2026, the Company recognized revenues\nof $3,000 pursuant to a short-term rental agreement with a customer.

Derivative Financial Instruments

The Company evaluates its financial instruments\nto determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments\nthat are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each\nreporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments,\nincluding whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative\ninstrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the\nderivative instrument could be required within 12 months of the balance sheet date.

F-8

The Company uses Level 3 inputs for its\nvaluation methodology for the derivative liabilities as their fair values were determined by using a variable option pricing model. The\nCompany’s derivative liabilities are adjusted to reflect fair value at each reporting date, with any increase or decrease in the\nfair value being recorded in the statement of operations.

Fair Value Measurement

FASB ASC 820-10 requires entities to disclose\nthe fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet for which it is\npracticable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument\ncould be exchanged in a current transaction between willing parties.

In addition to defining fair value, the standard\nexpands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes\nthe inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair\nvalue measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair\nvalue measurement in its entirety. These levels are:

Level 1 - inputs are based upon unadjusted quoted\nprices for identical instruments traded in active markets.

Level 2 - inputs are based upon significant observable\ninputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not\nactive, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated\nby observable market data for substantially the full term of the assets or liabilities.

Level 3 - inputs are generally unobservable and\ntypically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The\nfair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and\nsimilar techniques.

As of June 30, 2026 and June 30, 2025, the carrying\nvalue of certain accounts such as accounts receivable, accounts payable, accrued expenses and accrued payroll approximate their fair value\ndue to the short-term nature of such instruments. The carrying value of our note payable approximate their fair value due to interest\nrate of the note.

The Company’s derivative liabilities at June 30, 2026 were determined\nusing level 3 inputs.

F-9

Cash and Cash Equivalents

The Company considers highly liquid\ninvestments with original maturities of three months or less to be cash equivalents. At June 30, 2026 and 2025, the Company had no\ncash equivalents.

The Company maintains its cash with one domestic\nfinancial institution. From time to time, cash balances in this domestic bank may exceed federally insured limits provided by the Federal\nDeposit Insurance Corporation (“FDIC”) of up to $250,000.

As of June 30, 2026, Company had no deposits in\nexcess of federally insured limits. The Company believes that no significant concentration of credit risk exists with respect to its cash\nbalances because of its assessment of the creditworthiness and financial viability of its financial institutions.

Accounts receivable and\nallowance for credit losses

Trade accounts receivable are recorded at the\ninvoiced amount, do not bear interest, and are generally unsecured with payment terms ranging from 30 to 60 days.

The allowance for credit losses is a valuation\naccount deducted from the amortized cost basis of trade accounts receivable to present the net amount expected to be collected. Management\nestimates lifetime expected credit losses upon initial recognition of the receivable, rather than waiting for a loss event to occur. The\nallowance is updated at each reporting date, with changes recognized immediately in earnings as credit loss expense (within selling, general,\nand administrative expenses).

Write-Off Policy

Trade receivables are written off against\nthe allowance when management determines that the balance is fully uncollectible. Indicators of uncollectability include the exhaustion\nof standard corporate collection efforts, a customer's cessation of business operations, or a formal legal determination. Subsequent\nrecoveries of amounts previously written off are credited to the allowance.

Equity Method Investment

The Company\naccounts for investments in entities in which the Company has significant influence over the entity’s financial and operating policies,\nbut does not control, using the equity method of accounting. The equity method investments are initially recorded at cost, and subsequently\nincreased for capital contributions and allocations of net income, and decreased for capital distributions and allocations of net loss.\nEquity in net income (loss) from the equity method investment is allocated based on the Company’s economic interest. Equity method\ninvestments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.\nIf it is determined that a loss in value of the equity method investment is other than temporary, an impairment loss is measured based\non the excess of the carrying amount of an investment over its estimated fair value. Impairment analyses are based on current plans, intended\nholding periods, and available information at the time the analysis is prepared. As of June 30, 2026 and 2025, the remaining de minimus\nvalue of its investments was $1,000, respectively.

F-10

Income Taxes

The Company follows the asset and liability method\nof accounting for income taxes. The Company recognizes deferred tax assets and liabilities to reflect the estimated future tax effects,\ncalculated at anticipated future tax rates, of future deductible or taxable amounts attributable to events that have been recognized on\na cumulative basis in the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely\nthan not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects\nof the changes in tax laws and rates as of the date of enactment.

Leases

The Company\naccounts for its leases in accordance with the guidance of FASB ASC 842, Leases. The Company determines whether a contract is, or contains,\na lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease\nliabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities\nare recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company\nuses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid\nlease payments. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

In January 2025, the lease agreement expired and\nis currently on a month-to-month basis. Total lease expense recorded for the years ended June 30, 2026 and 2025 amounted to $36,000 and\n$29,000, respectively and is reported as part of General and administrative expenses in the accompanying Consolidated Statements of Operations.

Share-Based Compensation

We periodically issue stock options, warrants\nand common stock to employees and non-employees for services and capital raising transactions. We account for share-based payments under\nthe guidance of FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards\nmade to employees, officers, directors, and consultants, including employee stock options, based on estimated fair values. We estimate\nthe fair value of stock option and warrant awards to employees and directors on the date of grant using an option-pricing model, and the\nvalue of the portion of the award that is ultimately expected to vest is recognized as expense over the required service period in our\nStatements of Operations. We estimate the fair value of restricted stock awards to employees and directors using the market price of our\ncommon stock on the date of grant, and the value of the portion of the award that is ultimately expected to vest is recognized as expense\nover the required service period in our Statements of Operations. Recognition of compensation expense for non-employees is in the same\nperiod and manner as if the Company had paid cash for the services.

Advertising Costs

Advertising costs, including marketing expense,\nincurred in the normal course of operations are expensed as incurred. Advertising expenses amounted to $12,000 and $16,000 for the years\nended June 30, 2026 and 2025 respectively and was reported as part of General and administrative expenses in the accompanying Consolidated\nStatements of Operations.

F-11

Research and Development\nCosts

Research\nand development expenses relate primarily to the development, design, testing of preproduction prototypes and models, compensation, and\nconsulting fees related to the Company’s cold plasma technology, and are expensed as incurred. Total research and development costs\nrecorded during the years ended June 30, 2026 and 2025 amounted to $11,000 and $95,000, respectively.

Warranty Policy

The Company provides a limited warranty with\nevery set of reactors sold, typically 2 to 5 years. The Company has not experienced significant claims under its warranty policy,\nand management determined no\naccrual for warranty reserve was necessary at June 30, 2026 and 2025.

Net Loss Per Share

The Company’s\ncomputation of net loss per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income available\nto common stockholders divided by the weighted average common shares outstanding for the period. Diluted income per share reflects the\npotential dilution, using the treasury stock method, that could occur if securities or other contracts to issue common stock were exercised\nor converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company as if they had\nbeen converted at the beginning of the periods presented, or issuance date, if later. In computing diluted income per share, the treasury\nstock method assumes that outstanding options and warrants were exercised and the proceeds are used to purchase common stock at the average\nmarket price during the period. Options and warrants may have a dilutive effect under the treasury stock method only when the average\nmarket price of the common stock during the period exceeds the exercise price of the options and warrants. Potential common shares that\nhave an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation\nof diluted EPS.

There were no adjustments to net loss\nrequired for purposes of computing diluted earnings per share. At June 30, 2026 and 2025 the Company excluded the outstanding securities\nsummarized below, which entitle the holders thereof to acquire shares of common stock, from its calculation of its diluted earnings per\nshare, as their effect would have been anti-dilutive as the exercise price of these warrants were greater than the stock price of the\nCompany common stock.

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of anti-dilutive shares
	June 30, 2026		June 30, 2025
Warrants		31,571,784		49,041,323
Convertible notes		1,295,639		–
		32,867,423		49,041,323

Concentrations

During the year ended June 30, 2026 we recorded\n100% of our revenue from one rental customer and for the year ended June 30, 2025 we recorded 98% of our revenue from Desmet Ballestra (Desmet) (see Note 2).

As of June 30, 2026, two vendors accounted for\n18% and 15% of the Company’s accounts payable. As of June 30, 2025, two vendors accounted for 18% and 7% of the Company’s\naccounts payable.

At June 30, 2026, we had no\nreceivables. As of June 30, 2025, one customer accounted for 100% of the Company’s\naccounts receivable.

F-12

Segments

The Company operates in one segment for the development\nand distribution of our products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s Chief Operating\nDecision Maker (CODM) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating\nresources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting,\nestablishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products\nand services and major customers. All material operating units qualify for aggregation under “Segment Reporting” due to their\nsimilar customer base, single sales team, marketing department, customer service department, operations department, finance and accounting\ndepartment to support its operations and similarities in economic characteristics; nature of products and services; and procurement, manufacturing\nand distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting”\ncan be found in Note 12.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03,\nIncome Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement\nExpenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial\nstatements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim\nperiods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU\n2024-03.

Other recent accounting pronouncements issued\nby the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and\nExchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated\nfinancial statements.

Reclassification of prior year presentation

As of June 30, 2026, the Company reclassified\n$15,000\nof accrued interest, which was previously included in accounts payable and accrued expenses at June 30, 2025, to note payable –\nnon-current. In addition, $3,000 of accrued\ninterest that was previously included in accounts payable and accrued expenses was reclassified to accrued interest payable in the current-year\npresentation.

These reclassifications were made to conform\nthe prior-year amounts to the current-year presentation and had no effect on total liabilities, net loss, or stockholders’ equity\n(deficit).

Note 2 – Contracts with Desmet Ballestra

Research and Development, Marketing and Technology License Agreements\n(“TLA”)

In October 2021, the Company signed a three-year\nglobal Research and Development, Marketing and Technology License Agreement (“TLA”) with Desmet Ballestra (“Desmet”)\nfor the sale and licensing of the Company’s nano reactors. This agreement was a continuation of the similar TLA agreements the Company\nsigned with Desmet in fiscals 2012, 2016 and 2018.

On February\n15, 2024, Desmet and the Company terminated the October 2021 TLA agreement and entered into a new three-year Technology License Agreement\n(“February 2024 TLA”). The February 2024 TLA provides for a worldwide limited exclusive license to market, sell, supply and\nassistance to customers of Nano reactor systems and nano reactor devices for the treatment of certain oil and fats, oleochemicals, biodiesels,\nfatty acids and fatty alcohols. The February 2024 TLA may be terminated by Desmet on March 15 each year on at least one month’s\nwritten notice if the licensee and its affiliates failed to sell a minimum of 6 nano reactor systems during the preceding 12 month period.\nAs part of the February 2024 TLA, Desmet also agreed to provide advances of $25,000 per month, subject to limitations. The advances will\nthen be applied as payment against future sales of reactors to Desmet.

On October 9, 2024, the Company executed a Patent\nAssignment and License Back Agreement with Desmet with regards to the patents and intellectual property used in the production of reactors\nsold to Desmet. This agreement superseded certain terms of the February 2024 TLA, including, the termination of $25,000 monthly advances\nthe Company used to receive from Desmet.

During the year ended June 30, 2026 and 2025,\npursuant to these TLA agreements, the Company recognized revenues from sale of Nano Reactors to Desmet totaling $0\nand $198,000,\nrespectively.

Patent Assignment and License Back Agreement

On October 9, 2024, the Company entered into a patent assignment and license back agreement with Desmet, whereby the Company assigned certain of\nits U.S. and non-U.S. patents, technical information and related intellectual property (the “Assigned Patents”) that for\nseveral years have been licensed to Desmet, on a global basis, for its use in vegetable oil, fats and oleo applications, effectively\nterminating the February 2024 TLA Agreement.

The Company also assigned to Desmet, ownership of two U.S. trademark\nregistrations that it holds for its Nano Neutralization® and Nano Reactor® marks, respectively (the “Assigned Marks”).\nThe consideration for the assignment of the patents amounted to $880,000, which was collected in full. The Company has also agreed to\nprovide to Desmet any consultation, technical assistance and support services that Desmet may reasonably request in; (a) installing, operating\nor troubleshooting for any Nano Reactor® Device; (b) testing, startup or maintenance of any Nano Reactor® Device or any problems\nassociated therewith; and (c) providing training to representatives, contractors or employees of Desmet or any Site User, to be charged\nat a rate of $1,000 per day, plus reimbursement of reasonable expenses.

Pursuant to the patent assignment and license\nback agreement, the Company reserved for itself, and received a Grant Back License (“Reserved Grant Back License”) of a worldwide,\nexclusive, transferable and royalty-free license and right to practice and use the Assigned Patents and associated technical information\nin businesses, activities, projects, uses and applications in the field of; (i) water and wastewater processing, recovery, recycling and\npurification (including oilfield wastewater) and; (ii) manufacture, distillation, brewing, enhancements, sale and marketing of alcoholic\nbeverages, together the Licensed Fields (the “Licensed Fields”). Under the Reserved Grant Back License retained and received,\nthe Company will have a worldwide, exclusive, transferable and royalty-free license and right to design, build, use, export, improve,\nsell and market Nano Reactor® devices and Nano Reactor® devices and systems (and products) that incorporate or utilize Nano Reactor®\ndevices, in each case within the Licensed Fields, and to continue to use the Nano Reactor® trademark in connection with its business,\nsystems and products within the Licensed Fields.

The Company has expensed costs associated\nwith these patents in prior years and had no carrying value upon closing of this transaction. The Company followed the guidance of\nASC 610, Other Income, to account for this transaction. As a result, during the year ended June 30, 2025, the Company recognized the\nentire $880,000 as\nGain on Patent Assignment in the accompanying Consolidated Statement of Operations.

F-14

Note 3 – Commitments\nand Contingencies

Royalty Agreements

On July\n1, 2008, the Company’s wholly owned subsidiary entered into Patent Assignment Agreements with two parties, its President as well\nas its former Chief Executive Officer (CEO) and current Technology Senior Manager, where certain devices and methods involved in the hydrodynamic\ncavitation processes invented by the President and former CEO/ current Technology Senior Manager have been assigned to the Company. In\nexchange, the Company agreed to pay a royalty of 5% of gross revenues to each of the President and former CEO/ current Technology Senior\nManager for licensing of the technology and leasing of the related equipment embodying the technology. These agreements were subsequently\nassigned to Cavitation Technologies on May 13, 2010. The Company’s former CEO/ current Technology Senior Manager and President\nboth waived their rights to receive royalty payments that have accrued, or that may accrue, on any gross revenue generated through June\n30, 2026.

On\nApril 30, 2008 (as amended November 22, 2010), the Company’s wholly owned subsidiary entered into an employment agreement with the\nDirector of Chemical and Analytical Department (the “Inventor”) providing that the Inventor shall receive an amount equal\nto 5% of actual gross royalties received from the royalty stream in the first year in which the Company receives royalty payments from\nthe patent which the Inventor was the legally named inventor, and 3% of actual gross royalties received by the Company resulting from\nthe patent in each subsequent year. As of June 30, 2026, and 2025 no patents have been granted in which this person is the legally named\ninventor.

Other

From time to time the Company may be named in\nclaims arising in the ordinary course of business. Currently, there are no such legal proceedings that are pending against the Company\nor that involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on the\nCompany’s business or financial condition.

Note\n4 – Bridge Note Payable

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of bridge note payable
	June 30,			June 30,
	2026			2025
Principal
Bridge note payable	$	111,000			$	–

Debt Discount
Discount on issuance		(11,000	)			–
Discount amortization		3,000				–
Debt discount		(8,000	)			–

Bridge note payable, Net	$	103,000			$	–

F-15

On May 11, 2026, the Company entered into a\nbridge note with a lender for $111,000\nfor net proceeds of $100,000,\nafter direct expenses of $11,000,\nwhich was recorded as a debt discount to be amortized over the term\nof the note. The note matures on March\n11, 2027, ten months after issuance date. The Bridge note bears interest at 24%\nof the value of the bridge note ($27,000)\nregardless of repayment date, resulting in an effective interest rate of 30.16%\nbased on the repayment schedule. Additional tranches of funding are available up to a total of $500,000\nduring the 12\nmonths ending May\n11, 2027.

The bridge note is repayable in five instalments,\n$70,000 on October 30, 2026, $17,000 on each of November 30, 2026, December 30, 2026, January 30, 2027 and February 28, 2027.

In the event of default, the principal balance\nof the note will be increased by 150%, and after the expiry of 180 days, the note may be converted into shares of common stock at the\noption of the lender, at a conversion price of 65% of the lowest closing bid price of the Company’s common stock during the ten\nday trading period prior to conversion, with conversion limited to 4.99% of the total issued and outstanding common stock at the time\nof conversion.

The note may be prepaid up to 180 days from date\nof issuance with prepayment discounts ranging from 95% to 98% of the total amount outstanding, including the interest of $27,000.

Note\n5 – Promissory Notes Payable – Related Party

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of note payable- related party
	June 30,		June 30,
	2026		2025
Principal
Promissory note payable - related party	$	115,000		$	–

Between January 9, 2026 and May 4, 2026, the Company entered into\nfive promissory note agreements with an entity associated with the Company’s CEO, wherein the entity advanced the Company an aggregate\nof $115,000 to fund operations. The promissory notes are unsecured, bear interest at 8% per annum and mature six months after advance.

These promissory notes payable were subsequently\namended to extend the respective maturity dates by another six months with no changes to the other original terms of the agreement or\ncompensation paid to the noteholder.

Note\n6– Convertible Notes Payable

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of convertible notes
	June 30,			June 30,
	2026			2025
Principal
Convertible note payable	$	60,000			$	–

Debt Discount
Discount on issuance		(38,000	)			–
Discount amortization		12,000				–
Debt discount		(26,000	)			–

Net	$	34,000			$	–

F-16

In December 2025 and January 2026, Xyra Corp., the Company’s wholly owned subsidiary issued three one-year convertible notes,\namounting to $60,000,\nwith maturity dates from December\n5, 2026 to January\n30, 2027, with a stated annual interest rate of 8%. The Company, prior to the maturity date, has the option to extend the maturity date of the note by an\nadditional six months. The note may be prepaid at any time without penalty.

The holder has an option to convert the principal\nof the convertible note into Xyra common stock for a period of six months once notified by the Company, in writing, of a public listing\non any recognized U.S. national or regional stock exchange or on any of the markets operated by the OTC Markets Group. The conversion\nprice will be 50% of the 5-day average closing price immediately prior to conversion. Xyra, at its sole discretion may allow the conversion\nof unpaid interest into Xyra common stock for the same period allowed for the conversion of the principal.

Should Xyra not achieve a public offering by December 5, 2026, the\nholder has the option to convert the principal outstanding into common shares of the Company for a period of six months from December\n5, 2026. The conversion price will be the greater of 80% of $0.06 or the current CTI market price. The market price will be determined\nas the weighted average of the high and low trading prices of the Company stock over a 5-day period. The Company at its sole discretion\nmay allow the conversion of interest at any time after the maturity date and during any extended period exercised by Xyra.

The Company analyzed the conversion options for\nderivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the conversion options should be accounted\nas a derivative liability since it does not have an explicit limit to the number of shares to be delivered upon settlement of the conversion\noption (see Note 7). The cumulative fair value of the derivative liability upon issuance of the convertible notes payable at issuance\ndate amounted to $38,000, and accounted as a debt discount, which is being amortized to interest expense over the term of the corresponding\nnotes payable.

Note 7 – Derivative Liability

In December 2025 and January 2026, the Company\nissued convertible notes payable whose conversion options are being accounted as a derivative liability pursuant to ASC 815, Derivatives\nand Hedging (see Note 6). The derivative liability is remeasured to fair value at each reporting period, and the change in the fair value\nis recognized in earnings in the accompanying statements of operations. The Company estimated the fair value of the conversion option\nderivative liability using a variable option pricing model.

The following table provides a roll-forward of\nthe derivative liability measured at fair value on a recurring basis using unobservable level 3 inputs for the period ended June 30,\n2026, as follows:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n

Schedule of rollforward of derivative liability
	Fair Value of Derivative Liability
Fair value of derivative liability at issuance in December 2025 and\nJanuary 2026	$	38,000
Change in fair value of derivative liability		(24,000	)
Fair value of derivative liability at June 30, 2026	$	14,000

F-17

The following are the average inputs used by the Company in the valuation\nof the derivative liability:

\n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of assumptions used
Stock price	$	0.03 to 0.08
Risk free interest rate		3.48% to 4.01%
Expected volatility		174.5% to 236.5%
Expected life in months		12
Number of common stock issuable		1,206,140 to 1,295,639

Note\n8 – Note Payable

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n

Schedule of notes payable
	June 30,		June 30,
	2026		2025
Note payable - EIDL	$	150,000		$	150,000

In July 2020, the Company received a loan of\n$150,000\nfrom the SBA under its Economic Injury Disaster Loan (EIDL) assistance program. The EIDL loan is payable over 30 years, bears\ninterest at a rate of 3.75%\nper annum and secured by all tangible and intangible property of the Company.

Pursuant to the Company’s agreement with the SBA\nin the prior year that cured prior payment defaults and past due balances, monthly installment payments are first being applied to\naccrued and unpaid interest. As of June 30, 2026 and June 30, 2025, the outstanding balance of the note payable was $150,000\nand $150,000,\nrespectively.

The expected future principal payments of\nthe note payable at June 30, 2026, is as follows:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of future minimum payments on note payable
Year Ending	Amount
June 30, 2027	$	–
June 30, 2028		–
June 30, 2029		–
June 30, 2030		3,000
June 30, 2031 and thereafter		147,000
Total	$	150,000

Note 9 - Stockholders’\nDeficit

Preferred Stock

On March\n17, 2009, the Company filed an Amended and Restated Articles of Incorporation and created two new series of preferred stock, the first\nof which is designated Series A Preferred Stock and the second of which is designated as Series B Preferred Stock. The total number of\nshares of Common Stock which this corporation has authority to issue is 1,000,000,000 shares of Common Stock and 10,000,000 shares of\nPreferred Stock of which 5,000,000 shares are designated as Series A Preferred Stock, and 5,000,000 shares are designated as Series B\nPreferred Stock, with the rights, preferences and privileges of the Series B Preferred Stock to be designated by the Board of Directors.\nEach share of Common Stock and Preferred Stock has a par value of $0.001. As of June 30, 2026, and 2025, there are no shares of Series\nA or Series B Preferred Stock issued and outstanding.

F-18

Common Stock

Year Ending June 30, 2026

During the\nyear ended June 30, 2026, the Company conducted an offering and issued 8,269,399 shares of its common stock to accredited investors in\nexchange for cash of $248,000. As part of the offering, the Company also granted warrants to these investors to purchase 8,269,399 shares\nof common stock. The warrants are fully vested, exercisable at $0.05 and $0.06 per share and will expire in five years. In addition, certain\ninvestors also agreed to forfeit or retire an aggregate of 5,769,400 warrants granted to them in the prior year, which had an exercise\nprice of $0.09 per share.

During\nthe year ended June 30, 2026, the Company issued an aggregate of 8,300,000 shares of common stock to various consultants for services\nrendered. The common stock issued was valued at fair market value on the grant date at $394,000.

Year Ending June 30, 2025

In February 2025, the Company issued 4,666,600\nshares of common stock with a fair value of $90,000\nto settle accrued payroll and payroll taxes – related party (see Note 11).

On June 10, 2025, the Company issued 200,000 shares\nof common stock with a fair value of $6,000 for consulting services.

Stock Options

The Company has not adopted a\nformal stock option plan and does not have any stock options issued and outstanding as of and during the years ended June 30, 2026\nand 2025.

Warrants

Year ended June 30, 2026

On November\n25, 2025, certain warrant holders, including the Company’s CEO exercised warrants for an aggregate of 13,700,000 shares of common\nstock on a cashless basis in accordance with terms of the warrant agreements. As a result, the Company issued 11,495,000 shares of common\nstock.

F-19

Year ended June 30, 2025

In November 2024 and February 2025, the Company\ngranted 5 year warrants exercisable for 15,200,000 shares of common stock at exercise prices ranging from $0.013 to $0.017 per share\nto employees and certain consultants for services rendered. The estimated fair value amounted to $195,000 and was derived using the Black\nScholes Option Pricing Model using the following inputs (i) stock price at the date of grant ranging from $0.010 to $0.020; (ii) risk\nfree interest rate of 4.24% to 4.37% based on rates established by the Federal Reserve Bank; (iii) expected volatility 283% to 290% based\non historical volatility of the Company’s common stock commensurate with the expected life of the warrants; (iv) expected life of\n5 years based on the contractual life; and (v) dividend yield of 0% based on no dividends paid or expected to be paid.

In February 2025, the Company issued\nwarrants to purchase 5,000,000\nshares of common stock with an estimated fair value of $100,000\nto settle accrued payroll – related party (see Note 11).

A summary of the Company’s\nwarrant activity and related information from as of June 30, 2026 and 2025 is as follows.

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of warrant activity
	Warrants			Weighted-Average Exercise Price			Weighted-Average Remaining Contractual Life (Years)

Outstanding at June 30, 2024		28,841,323			$	0.080		2.61
- Granted		20,200,000				0.015		4.76
- Exercised		–				–		–
- Expired		–				–		–
Outstanding at June 30, 2025		49,041,323			$	0.053		2.81
- Granted		8,269,399				0.055		4.45
- Exercised		(13,700,000	)			–		–
- Forfeited		(5,769,400	)			–		–
- Expired		(6,269,538	)			–		–
Outstanding at June 30, 2026		31,571,784			$	0.056		2.47

F-20

As of June\n30, 2026, the intrinsic value of these stock purchase warrants amounted to $61,000.

The following\ntable summarizes additional information concerning warrants outstanding and exercisable at June 30, 2026.

Schedule of warrants outstanding and exercisable
		Warrants Outstanding		Warrants Exercisable
				Weighted	Weighted			Weighted
				Average	Average			Average
Exercise		Number		Remaining	Exercise	Number		Remaining
Price		of Shares		Life (Years)	Price	of Shares		Life (Years)

$	0.013		2,000,000		3.39	$	0.013		2,000,000	3.39
$	0.017		4,500,000		3.67	$	0.017		4,500,000	3.67
$	0.030		5,000,000		3.51	$	0.030		5,000,000	3.51
$	0.045		2,499,999		4.85	$	0.045		2,499,999	4.85
$	0.060		5,769,400		4.28	$	0.060		5,769,400	4.28
$	0.090		11,802,385		0.03	$	0.090		11,802,385	0.03
			31,571,784		2.47	$	0.056		31,571,784	2.47

Note 10 - Income\nTaxes

For the\nyear ended June 30, 2026 the Company recorded no provision for income taxes due to the Company’s taxable net loss position. For\nthe year ended June 30, 2025 the Company recorded no provision for income taxes due to the application of the Company’s available\nFederal and State net operating loss (NOL) carryforwards that are available to reduce taxable income.

As of June\n30, 2026 and 2025, a reconciliation of the Company’s effective income tax rate to the U.S. statutory and its deferred tax assets\nare as follows:

Schedule of reconciliation\nof effective income tax
	Year ended Jun 30,
	2026			2025
Tax benefit (expense) at the federal statutory rate	$	294,000			21%		$	24,000		21%
State income taxes, net of Federal benefit		98,000			7%			8,000		7%
Prior year net operating loss true up		–			–%			9,000		8%
Valuation allowance		(392,000	)		(28%	)		(41,000	)	(36%	)
Income tax provision	$	–			–%		$	–		–%

Deferred\nincome taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for\ntax purposes. The components of deferred tax assets are presented below.

F-21

At\nJune 30, 2026, the Company had available Federal NOL carryforwards of approximately $12.0\nmillion that are available to reduce future taxable income. The Federal NOL carry forward of approximately $8.5 million expires\nthrough 2037, the remaining NOL of $3.5 million has no expiry date. The NOLs are subject to statutory limitations under Internal\nRevenue Code Section 382 regarding substantial changes in ownership of companies with loss\ncarry forwards.

At June 30, 2026 and 2025, significant\ncomponent of the Company’s deferred tax assets and liabilities are as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of deferred tax assets and liabilities
	June 30,			June 30,
	2026			2025
Net Operating loss carryforwards	$	3,163,000			$	2,956,000
Stock compensation expense		1,203,000				1,018,000
Total net deferred tax assets		4,366,000				3,974,000
Less valuation allowance		(4,366,000	)			(3,974,000	)
Net deferred tax assets	$	–			$	–

The provisions\nof ASC Topic 740, Accounting for Income Taxes, require an assessment of both positive and negative evidence when determining whether it\nis more likely than not that deferred tax assets are recoverable. For the years ended June 30, 2026 and 2025, based on all available objective\nevidence, including the existence of cumulative losses, the Company determined that it was more likely than not that the net deferred\ntax assets were not fully realizable. Accordingly, the Company established a full valuation allowance against its net deferred tax assets.\nThe Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support\nreversal of the valuation allowance.

Accounting rules prescribe a recognition threshold\nthat a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement,\nclassification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest\nand penalties as a component of interest and other expenses. To date, there have been no interest or penalties assessed or paid.

The Company measures and records uncertain tax\npositions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be\ntaken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized\nor continue to be recognized.

Our income tax filings are periodically examined\nby various U.S. federal and state jurisdictions. There are no open examinations by federal and state income tax jurisdictions. The Company’s\nU.S. federal income tax return remains open to examination for the years ended June 30, 2023 through June 30, 2026.

F-22

Note 11 – Related\nParty Transactions

Accrued Payroll and Payroll Taxes

The Company accrues salaries and estimated payroll\ntaxes due to a former officer and current shareholder and current officer and director of the Company. As of June 30, 2024, the total\naccrued payroll and payroll taxes amounted to $414,000.

In February 2025, the Company settled with\nthese former officer and current officer to extinguish the accrued payroll and payroll related taxes amounting to $425,000 and\nunpaid health insurance and cellphone reimbursements recorded in prior years totaling $36,000 for a total liability of $461,000. As\npart of the settlement, the Company issued 4,666,600\nshares of common stock with a fair value of $90,000\nand warrants to purchase 5,000,000\nshares of common stock. The warrants are fully vested, exercisable at $0.016\nper share and will expire in five years. The estimated fair value of these warrants amounted to $100,000 using\nthe Black Scholes Option Pricing Model using the following inputs (i) stock price at the date of grant of $0.020; (ii) risk free\ninterest rate of 4.37% based on rates established by the Federal Reserve Bank; (iii) expected volatility 290% based on historical\nvolatility of the Company’s common stock commensurate with the expected life of the warrants; (iv) expected life of 5 years\nbased on the contractual life; and (v) dividend yield of 0% based on no dividends paid or expected to be paid.

Pursuant to current accounting and SEC guidelines\nand regulations with regards to related party transactions, the Company accounted for the difference of $271,000 between the carrying\namount of the accrued payroll and other liability of $461,000 and the fair value of the common stock and warrants issued of $190,000 as\ncapital contribution.

As of June 30, 2025, there was no accrued payroll and payroll related\ntaxes. As of June 30, 2026, the total accrued salary and payroll related taxes amounted to $129,000.

Consulting Fees

The Company recognized consulting fees to a\nmember of the Company’s Board of Directors amounting to $5,000\nfor the years ended June 30, 2025. There was no\nconsulting fee recognized to directors and officers for the year ended June 30, 2026.

F-23

Note 12 – Segment Information

The Company operates and manages its business\nas one reportable and operating segment. The Company’s CODM reviews financial information presented and decides how to allocate\nresources based on net income (loss). Net income (loss) is used for evaluating financial performance.

Significant segment expenses include research\nand development, salaries, insurance, and stock-based compensation. Operating expenses include all remaining costs necessary to operate\nthe business, which primarily include external professional services and other administrative expenses. The following table presents\nthe significant segment expenses and other segment items regularly reviewed by our CODM:

Schedule of segment information
	Year Ended June 30,
	2026			2025
Revenue	$	3,000			$	203,000
Cost of revenue		–				(38,000	)
Gross profit		3,000				165,000

Research and development		(11,000	)			(95,000	)
Salaries		(493,000	)			(471,000	)
Consulting fees		(101,000	)			(67,000	)
Professional fees		(171,000	)			(168,000	)
Rent expense		(36,000	)			(29,000	)
Travel expense		(56,000	)			(30,000	)
Stock-based compensation		(394,000	)			(201,000	)
Other operating expenses		(129,000	)			(91,000	)
Total operating expenses		(1,391,000	)			(1,152,000	)

Net operating loss		(1,388,000	)			(987,000	)

Gain on patent assignment		–				880,000
Interest and other expense, net		(40,000	)			(6,000	)
Change in fair value of derivative liability		24,000				–
Net loss	$	(1,404,000	)		$	(113,000	)

F-24

Note\n13 – Subsequent events

Common Share issuances

During August 2026, The Company entered into agreements with five accredited\ninvestors, whereby gross proceeds of $140,000 was received for the issuance of 4,666,665 shares of common stock at an issue price of $0.03\nper share. In addition, three accredited investors agreed to cancel warrants issuable for 2,499,999 shares of common stock at an exercise\nprice of $0.045 per share.

Warrants exercised

On September 10, 2026, a warrant holder exercised a warrant for 3,000,000\nshares of common stock on a cashless basis. The warrant exercise price was $0.017 per share. The market price used in the calculation\nwas $0.0478 per share on September 10, 2026, resulting in the issuance of 1,933,055 shares of common stock.

Other than\ndisclosed above, the Company has evaluated subsequent events through the date the financial statements were issued and did not identify\nany additional subsequent events that would have required adjustment or disclosure in the financial statements.

F-25

ITEM 9. CHANGES IN AND DISAGREEMENTS\nWITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS\nAND PROCEDURES

Disclosure Controls\nand Procedures

In accordance with rule\n13a-15(a), our management must maintain disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities and Exchange\nAct of 1934, or the Exchange Act, to provide reasonable assurance that information required to be disclosed by us in reports that we file\nor submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and\nExchange Commission rules and forms, and accumulated and communicated to our management, including our principal executive officer and\nprincipal financial officer, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Rule\n13a-15(b) and (c), management must also evaluate the effectiveness of these disclosure control and procedures at the end of each fiscal\nyear. As of June 30, 2026, we carried out an evaluation, under the supervision and with the participation of our principal executive officer\nand principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon\nthat evaluation, our principal executive officer and principal financial officer concluded that these disclosure controls and procedures\nwere not effective as of June 30, 2026.

Report of Management on Internal Control\nover Financial Reporting

Management is responsible\nfor establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.\nOur internal control over financial reporting is designed under the supervision of our principal executive and principal financial officer,\nand effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial\nreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles\nand includes those policies and procedures that:

(i) pertain to the maintenance\nof records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable\nassurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that\nour receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii) provide reasonable\nassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material\neffect on the financial statements.

Under the supervision\nand with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted\nan evaluation of the effectiveness of our internal controls and procedures, (as defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated\nunder the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the year ended June 30, 2026. Management conducted an assessment\nof our internal control over financial reporting based on the framework and criteria established by the Committee of Sponsoring Organizations\nof the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Our management concluded that as of June\n30, 2026, our internal control over financial reporting was not effective, and that material weaknesses existed in the following areas\nas of June 30, 2026:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	1.	We do not employ full time in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With respect to material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;

	2.	We have ineffective controls over segregation of duties due to limited resources and number of employees; and

	3.	The Company did not maintain a functioning independent audit committee.

We are in the continuous\nprocess of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved\nsupervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. We intend to hire the necessary\nstaff to address the weaknesses once additional capital is obtained which will allow full operations to commence. Because of its inherent\nlimitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined\nto be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal\nControl over Financial Reporting

There have been no changes\nin our internal control over financial reporting during the year ended June 30, 2026 that materially affected, or are reasonably likely\nto materially affect, our internal control over financial reporting.

Attestation

Pursuant to Item 308(b)\nof Regulation S-K, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Wall Street Reform Act), this report does\nnot include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.\nThe Wall Street Reform Act permanently exempts small public companies from the requirement to obtain an external audit on the effectiveness\nof internal financial reporting controls.

ITEM 9B. OTHER\nINFORMATION

During the quarter\nended June 30, 2026, no director or officer adopted\nor terminated\nany Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation\nS-K.

We do not maintain insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by\nour directors, officers, and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules,\nand regulations applicable to us. We have failed to do so due to limited number of members of management, limited resources, and the limited\nequity awards granted to management.

ITEM 9C. DISCLOSURE\nREGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

Not applicable.

PART III

ITEM 10. DIRECTORS,\nEXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Person	Age	Position

Naum Voloshin	63	President, Principal Executive Officer, Principal Accounting Officer Secretary and Director
Peter N. Christos	69	Director
Jerry Bailey PhD	86	Director

Naum Voloshin.\nMr. Voloshin has over 30 years of experience in investment banking, business operations and marketing. Prior to joining CTi, Mr. Voloshin\nhas worked for several developmental stage companies in US, Europe and Asia. The scope of his duties was to provide management, financial\nreporting, funding, and marketing expertise.

Jerry Bailey PhD. Mr.\nBailey has over 50 years of experience in the international petroleum industry. He is a former President of Exxon - Arabian Gulf and prior\nto that, served in various operating capacities for major oil producers throughout the Middle East and in the U.S. onshore and offshore\nsectors. Dr. Bailey is currently the Chairman of Bailey Petroleum, LLC, a consulting firm for major oil and gas exploration and development\ncorporations. In addition, during his extensive career, Dr. Bailey has served in a variety of C-Suite and Board capacities for several\noil & gas enterprises. Dr. Bailey holds a BS Degree in Chemical Engineering from the University of Houston, an MS Degree in Chemical\nEngineering from the New Jersey Institute of Technology, a PhD Degree from Columbia Pacific University and is a graduate of Engineering\nDoctoral Studies from Lamar University.

Peter N. Christos. Mr.\nChristos has over 30 years of Wall Street experience in corporate finance, serving on the boards of numerous private and listed companies,\nmanaging, and advising large scale enterprises as well as early-stage start-ups.

Family Relationships

Roman Gordon is a founder\nand current Global Technology Manager of the Company. He was a former member of the Company’s Board of Directors and Chief Technology\nOfficer up to July 15, 2016. He is also the brother of Mr. Igor Gorodnitsky, our former President, Principal Executive Officer and member\nof the Company’s Board of Directors.

Section 16(a) Beneficial Ownership Reporting\nCompliance

Section 16(a) of the\nSecurities Exchange Act of 1934, as amended, requires our executive officers, directors, persons who own more than 10% of our common stock,\nand immediate family members living in the same household to file an Initial Statement of Beneficial Ownership on Form 3 and changes in\nownership on Form 4 with the Securities and Exchange Commission (the \"SEC\"). Such \"insiders\" are required by SEC rules\nto furnish us with copies of all Section 16(a) forms they file.

Based on a review of\nForms 3, 4, and 5 and amendments thereto furnished to us during the fiscal 2020 year, updated forms were filed for the year ended June\n30, 2026. There was no delinquent forms filed during the year.

Director Independence

Although our common stock\nis not listed on a national securities exchange, for purposes of independence we use the definition of independence applied by the NASDAQ\nstock market. The Board has determined that Mr. Bailey and Mr. Christos are “independent” in accordance with such definition.\nMr. Voloshin is not independent due to his current positions with the Company.

Code of Ethics

We have adopted a Code\nof Business Conduct and Ethics that applies to all officers, directors and employees. A copy may also be obtained free of charge by mailing\na request in writing to: Cavitation Technologies, Inc., 10019 Canoga Ave., Chatsworth, CA 91311 USA. If we make any substantive amendments\nto the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code to any executive officer or director, we will\npromptly disclose the nature of the amendment or waiver in a current report on Form 8-K.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets\nforth a summary of cash and non-cash compensation awarded, earned or paid for services rendered to us during the years ended June 30,\n2026 and 2025 by our “named executive officer,” consisting of our principal executive officer who is also our acting Chief\nFinancial Officer.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Year

Salary

Bonus

Stock Awards

Warrant Awards

Non-Equity Incentive

Plan

Compensation

Changes in

Pension Value

and

Non-Qualified

Deferred

Compensation

All

Other Compensation

Totals

Naum Voloshin

2026

225,775

⁽¹⁾

–

225,775

Principal Executive & Principal Accounting Officer

2025

187,200

–

39,200

–

226,400

\n \n \n \n

(1)	Includes accrued payroll of $129,000.

Outstanding Equity Awards at Fiscal Year-End

The table below reflects\nall outstanding equity awards made to each of the named executive officers that are outstanding as of June 30, 2026.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Restricted Stock Awards
Name	Restricted Stock grant date	Number of securities Underlying Restricted Stock Awards # Exercisable		Number of securities Underlying Restricted Stock Awards # Unexercisable	Restricted Stock Awards Grant Price
Naum Voloshin	6/21/2022	4,000,000	⁽¹⁾	–	0.05
Principal executive and Principal Accounting Officer	11/25/2025	7,500,000	⁽²⁾	–	0.0885

\n \n \n \n \n \n \n

(1)	The fair value of each restricted stock grant is the market value of the stock on the grant date.
(2)	The Company issued 7,500,000 shares of common stock to Mr. Voloshin upon the cashless exercise of warrants exercisable for 9,000,000 shares at exercise prices between $0.013 and $0.016 per share. The grant price was based on the average closing market price of the stock over a five day trading period between November 19, 2025 and November 25, 2025.

Employment Agreements

Our executive officers\nwork as at-will employees.

2026 Director Compensation

The following table sets\nforth information for the fiscal year ended June 30, 2026 regarding the compensation of our directors who at June 30, 2026 were not also\nnamed executive officers.

Fees

Non-equity

Earned

incentive

Non-qualified

All

or paid

Stock

Option

plan

deferred

other

in cash

Awards

compensation

Total

Name

($)

Earnings

($)

Jerry Bailey

–

Peter Christos

–

As of June 30, 2026,\nthe following table sets forth the number of aggregate outstanding option awards held by each of our directors who were not also named\nexecutive officers:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

			Aggregate
			Number of
Name			Warrant Awards

Jerry Bailey			1,400,000
Peter Christos			1,000,000

Equity Compensation\nPlan Information

We do not have an equity\ncompensation plan available for directors and officers of our Company.

Granting of Certain\nEquity Awards Close in Time to the Release of Material Nonpublic Information

We do not grant equity awards in anticipation\nof the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time\nthe public release of such information based on award grant dates. During the last completed fiscal year, we have not made awards to any\nnamed executive officer or director during the period beginning four business days before and ending one business day after the filing\nof a period report on Form 10-Q or Form 10-K or the filing or furnishing of a current report on Form 8-K, and we have not timed the disclosure\nof material nonpublic information for the purpose of affecting the value of executive compensation.

ITEM 12. SECURITY\nOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides information regarding\nthe beneficial ownership of our common stock as of September 26, 2026, (the “Evaluation Date”) by: (i) each of our current\ndirectors, (ii) each of our named executive officers, and (iii) all such directors and executive officers as a group. We know\nof no other person or group of affiliated persons who beneficially own more than five percent of our common stock. The table is based\nupon information supplied by our officers, directors and principal stockholders and a review of Schedules 13D and 13G, if any, filed with\nthe SEC. Unless otherwise indicated in the footnotes to the table and subject to community property laws where applicable, we believe\nthat each of the stockholders named in the table has sole voting and investment power with respect to the shares indicated as beneficially\nowned.

Applicable percentages\nare based on 323,820,459 shares outstanding as of the Evaluation Date, adjusted as required by rules promulgated by the SEC. These rules\ngenerally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect\nto those securities. In addition, the rules include shares of our common stock issuable pursuant to the exercise of stock options or warrants\nthat are either immediately exercisable or exercisable within 60 days of the Evaluation Date. These shares are deemed to be outstanding\nand beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they\nare not treated as outstanding for the purpose of computing the percentage ownership of any other person.

		Amount and
		Nature of
		Beneficial		Percent of
Name of Beneficial Owner		Ownership		Class (1)
Naum Voloshin	(2)		17,712,390		5.5%
President, Principal Executive Officer, Principal Accounting Officer and Director

Dr. Gerald Bailey	(3)		1,400,000		*
Director

Dr. Peter Christos	(4)		1,000,000		*
Director

Directors and Officers			20,112,390		6.2%
(as a group, three individuals)

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

*	Less than 1%
(1)	Unless otherwise set forth below, the mailing address of Executive Officers, Directors and 5% or greater holders is in care of the Company.
(2)	Consists of 17,712,390 shares of common stock, including 4,000,000 restricted shares granted to Mr. Voloshin on June 21, 2022.
(3)	Consists of warrants exercisable for 1,400,000 shares of common stock.
(4)	Consists of warrants exercisable for 1,000,000 shares of common stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,\nAND DIRECTORS INDEPENDENCE

Certain Related Party Transactions

Since the beginning of\nour last fiscal year, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which\nwe were or will be a party in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of\nour total assets at year-end for the last two completed fiscal years and in which any of our directors, executive officers, holders of\nmore than five percent of any class of our voting securities or any member of the immediate family of the foregoing persons had or will\nhave a direct or indirect material interest.

Accrued Payroll and Payroll Taxes

Year ended June 30, 2026

The Company accrued salaries and payroll taxes\ndue to a current shareholder and current officer and director of the Company. As of June 30, 2026, the total accrued salary and payroll\nrelated taxes amounted to $129,000.

Year ended June 30, 2025

The Company accrues salaries and estimated payroll\ntaxes due to a former officer and current shareholder and current officer and director of the Company.

In February 2025, the Company settled with these\nformer officer and current officer to extinguish the accrued payroll and payroll related taxes amounting to $425,000 and unpaid health\ninsurance and cellphone reimbursements recorded in prior years totaling $36,000 for a total liability of $461,000. As part of the settlement,\nthe Company issued 4,666,600 shares of common stock with a fair value of $90,000 and warrants to purchase 5,000,000 shares of\ncommon stock. The warrants are fully vested, exercisable at $0.016 per share and will expire in five years. The estimated fair value of\nthese warrants amounted to $100,000 using the Black Scholes Option Pricing Model using the following inputs (i) stock price at the\ndate of grant of $0.020; (ii) risk free interest rate of 4.37% based on rates established by the Federal Reserve Bank; (iii) expected\nvolatility 290% based on historical volatility of the Company’s common stock commensurate with the expected life of the warrants;\n(iv) expected life of 5 years based on the contractual life; and (v) dividend yield of 0% based on no dividends paid or expected to be\npaid.

As of June 30, 2025, there was no accrued payroll\nand payroll related taxes.

Consulting Fees

The Company recognized consulting fees to a\nmember of the Company’s Board of Directors amounting to $5,000 for the years ended June 30, 2025. There was no consulting fee\nrecognized to directors and officers for the year ended June 30, 2026.

Cameo USA LLC

In fiscal 2014, Roman\nGordon, one of the Company’s shareholders and a former officer, formed a company called Cameo USA LLC (Cameo). Since its formation,\nCameo has had no revenue, no operations, and has had no assets or liabilities. On June 4, 2018, Mr. Gordon contributed his 100% interest\nin Cameo to the Company. As Mr. Gordon had no basis in his investment in Cameo, there was no value assigned to the contribution of Cameo.\nSubsequent to the contribution of Cameo to the Company, Cameo was sold to Alchemy Beverages Inc.

Director Independence

As our common stock is\ncurrently traded on the OTC Bulletin Board, we are not subject to the rules of any national securities exchange which require that a majority\nof a listed company's directors and specified committees of the board of directors meet independence standards prescribed by such rules.\nFor the purpose of preparing the disclosures in this Report on Form 10-K regarding director independence, we have used the definition\nof \"independent director\" set forth in the Marketplace Rules of The NASDAQ, which defines an \"independent director\"\ngenerally as a person other than an executive officer or employee of the Company or any other individual having a relationship which,\nin the opinion of the Company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities\nof a director. Consistent with these standards, we believe that Dr. Jerry Bailey and Dr. Peter Christos are Independent directors.

ITEM 14. PRINCIPAL ACCOUNTING\nFEES AND SERVICES

Independent Registered Public Accounting\nFirm’s Fee Summary

The following table provides\ninformation regarding the fees billed to us by Weinberg & Company, P.A. for the years ended June 30, 2026 and 2025. All fees described\nbelow were approved by the Board:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	June 30, 2026		June 30, 2025

Audit Fees and Expenses (1)	$	87,000		$	60,000
All Other Fees	$	–		$	–

\n \n \n \n

(1)	Audit fees and expenses were for professional services rendered for the audit and reviews of the consolidated financial statements of the Company, professional services rendered for issuance of consents and assistance with review of documents filed with the SEC.

Pre-Approval Policies\nand Procedures

Consistent with SEC policies\nregarding auditor independence, the board of directors has responsibility for appointing, setting compensation and overseeing the work\nof the independent registered public accounting firm. In recognition of this responsibility, the board of directors has established a\npolicy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm.

Prior to the engagement\nof the independent registered public accounting firm for the next year’s audit, management will submit a list of services and related\nfees expected to be rendered during that year for audit services, audit-related services, tax services and other fees to the board of\ndirectors for approval.

PART IV

ITEM 15. EXHIBITS, FINANCIAL\nSTATEMENT SCHEDULES

(a) The following documents are filed as part\nof this annual report on Form 10-K:

1. Financial Statements

The financial statements\nare filed as part of this report under Item 8 “Financial Statements and Supplementary Data”.

2. Financial Statement Schedules

All other schedules are\nomitted because they are not applicable or the required information is presented in the financial statements and notes thereto.

3. Exhibits

The exhibits required by Item 601 of Regulation\nS-K are included in Item 15(b) below.

(b) Exhibits.

Incorporated by Reference

Exhibit

Filed

Period

Filing

Number

Exhibit Description

Herewith

Form

Ending

Exhibit

Date

3(i)(a)

Articles of Incorporation - original name of Bioenergy, Inc.

SB-2

N/A

3.1

October 19, 2006

3(i)(b)

Articles of Incorporation - Amended and Restated

10-Q

December 31, 2008

3.1

February 17, 2009

3(i)(c)

Articles of Incorporation - Amended and Restated

10-Q

June 30, 2009

3.1

May 14, 2009

3(i)(d)

Articles of Incorporation - Amended; increase in authorized shares

8-K

N/A

October 29, 2009

3(i)(e)

Articles of Incorporation - Certificate of Amendment; forward split

10-Q

December 31, 2009

3.1

November 16, 2009

10.1

Patent Assignment Agreement between the Company and Roman Gordon dated July 1, 2008.

8-K

June 30, 2009

10.1

May 18, 2010

10.2

Patent Assignment Agreement between the Company and Igor Gorodnitsky dated July 1, 2008.

8-K

June 30, 2009

10.2

May 18, 2010

10.3

Assignment of Patent Assignment Agreement between the Company and Roman Gordon

8-K

June 30, 2009

10.3

May 18, 2010

10.4

Assignment of Patent Assignment Agreement between the Company and Igor Gorodnitsky

8-K

June 30, 2009

10.4

May 18, 2010

10.5

Employment Agreement between the Company and Roman Gordon date March 17, 2008

10K/A

June 30, 2009

10.3

October 20, 2011

10.6

Employment Agreement between the Company and Igor Gorodnitsky dated March 17, 2008

10K/A

June 30, 2009

10.4

October 20, 2011

10.7

Employment Agreement with R.L. Hartshorn dated Sept. 22, 2009

10-Q

December 31, 2011

10.7

February 10, 2012

10.8

Employment and Confidentiality and Invention Assignment Agreement between the Company and Varvara Grichko dated April 30, 2008

10-Q

December 31, 2010

10.3

February 11, 2011

Incorporated by Reference

Exhibit

Filed

Period

Filing

Number

Exhibit Description

Herewith

Form

Ending

Exhibit

Date

10.9

Board of Director Agreement - James Fuller

10-Q

December 31, 2011

10.12

October 20, 2011

10.10

Technology and License Agreement with Desmet Ballestra dated 14 May 2012

10-K

June 30, 2012

10.1

October 15, 2012

10.11

Convertible Note Payable - Prolific Group LLC - $25,000

10-Q

December 31, 2011

10.4

February 10, 2012

10.12

Convertible Note Payable - Tripod Group LLC - $30,000

10-Q

December 31, 2011

10.41

February 10, 2012

14.1

Code of Business Conduct and Ethics*

10-K

June 30, 2011

14.1

September 28, 2011

31.1

Certificate of Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002

31.2

Certificate of Principal Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

\n \n \n \n

*	In accordance with Regulation S-K 406 of the Securities Act of 1934, we undertake to provide to any person without charge, upon request, a copy of our “Code of Business Conduct and Ethics”. A copy may be requested by sending an email to info@cavitationtechnologies.com.

See Item (a) 2 above.

ITEM 16. FORM 10-K SUMMARY

Not applicable.

SIGNATURES

PURSUANT TO THE REQUIREMENTS\nOF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN\nTHE CAPACITIES AND ON THE DATES INDICATED

SIGNATURE	TITLE	DATE

/s/ N. Voloshin	President; Member of Board of Directors	October 6, 2026
N. Voloshin	(Principal Executive Officer)

/s/ N. Voloshin	Chief Financial Officer	October 6, 2026
N. Voloshin	(Principal Financial Officer)

/s/ Dr. Gerald Bailey	Independent Director	October 6, 2026
Dr. Gerald Bailey

/s/ Peter N Christos	Independent Director	October 6, 2026
Peter N. Christos

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