Cavitation Technologies’ QQ1 2025 results depict a material deterioration in balance sheet health and a noticeable cash burn, set against an extremely low cash position. Net income came in at -$227,000 for the quarter, with operating expenses totaling $226,000 and a small R&D outlay of $8,000 coupled with GA&A of $218,000. Operating cash flow was negative at -$175,000, and free cash flow was -$175,000, with cash at period-end of only $2,000, highlighting an acute liquidity runway challenge. The company carried total liabilities of $784,000 against total assets of $77,000, yielding a negative stockholders’ equity of -$707,000. Liquidity ratios remain severely depressed (current ratio and quick ratio both at 0.0640; cash ratio at 0.00305), implying an outsized dependence on external financing to meet near-term obligations.
Given the lack of reported revenue in QQ1 2025 and the swing from Q4 2024’s reported net income of $375,000 to QQ1 2025’s loss, investors face substantial execution and liquidity risk. Management commentary is not available in the provided transcript data, limiting visibility into strategic pivots or near-term monetization plans. Nonetheless, Cavitation Technologies’ core IP in nano-reactor/neutralization systems remains a potential long-run growth vector, especially if the company can monetize its technology through licensing or strategic partnerships in oil refining, renewable fuels, water treatment, or other targeted markets. Management and investors should monitor: (i) any licensed revenue or milestone payments, (ii) cash runway and financing arrangements, (iii) IP monetization progress, and (iv) any additional disclosures around working capital optimization and cost discipline.