Cavitation Technologies Inc. (CVAT) reported QQ2 2025 revenue of 76,000 USD with a gross profit of 63,000 USD, yielding a robust gross margin of 82.9%. However, operating income registered a loss of 299,000 USD as operating expenses exceeded revenue by a wide margin, resulting in a negative operating margin of -3.93%. The company posted a pretax income of 579,000 USD and net income of 579,000 USD, supported primarily by total other income of 878,000 USD rather than core operating performance. EBITDA stood at 581,000 USD, with an EBITDA margin of 7.64%. The stark divergence between minimal top-line revenue and positive net income underscores a heavy reliance on non-operating items and one-off effects rather than sustainable operating cash flows. Diluted earnings per share were 0.002 USD, on a weighted average diluted share count of 284.3 million. The quarter also featured a negative equity position (total stockholders’ deficit of 23,000 USD) despite a cash cushion of 681,000 USD at period end, signaling structural balance sheet weaknesses amid a modest liquidity profile (current ratio ~1.14). Net cash from operating activities was -201,000 USD, while investing activities consumed 880,000 USD, contributing to a net cash increase of 679,000 USD driven by non-operating items or financing activities not shown in the cash flow line items. Management commentary is not provided in the transcript data, limiting direct attribution of the headline drivers to stated guidance. This report outlines the implications for investors, the sustainability of earnings, and the roadmap for CVAT going forward.