EPS of $0.00 increased by 11.1% from previous year
Net income of -227.00K
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Cavitation Technologies Inc (CVAT) QQ1 2025 Results Analysis: Severe liquidity constraint and ongoing losses in Industrial Machinery
Executive Summary
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.
Key Performance Indicators
Operating Income
-226.00K
QoQ: -161.25% | YoY:9.60%
Net Income
-227.00K
QoQ: -160.53% | YoY:9.56%
EPS
0.00
QoQ: -161.54% | YoY:11.11%
Revenue Trend
Margin Analysis
Key Insights
Revenue: Not disclosed for QQ1 2025 (No revenue figure reported)\n- Operating Income: -$226,000 (YoY: +9.60%, QoQ: -161.25%)\n- Net Income: -$227,000 (YoY: +9.56%, QoQ: -160.53%)\n- EBITDA: -$226,000\n- EPS: -$0.0008 (Diluted)\n- R&D Expenses: $8,000\n- General & Administrative Expenses: $218,000\n- Operating Cash Flow: -$175,000\n- Free Cash Flow: -$175,000\n- Cash at End of Period: $2,000\n- Cash Beg/End: $179,000 / $2,000 (change: -$177,000)\n- Total Assets: $77,000\n- Total Liabilities: $784,000\n- Total Stockholders’ Equity: -$707,000\n- Current Ratio / Quick Ratio / Cash Ratio: 0.0640 / 0.0640 / 0.00305\n- Net Debt: $162,000\n- Weighted Avg Shares: 284,289,740\n- ROA: -2.95%; ROE: 0.32%; ROCE: 0.39%
Financial Highlights
- Revenue: Not disclosed for QQ1 2025 (No revenue figure reported)\n- Operating Income: -$226,000 (YoY: +9.60%, QoQ: -161.25%)\n- Net Income: -$227,000 (YoY: +9.56%, QoQ: -160.53%)\n- EBITDA: -$226,000\n- EPS: -$0.0008 (Diluted)\n- R&D Expenses: $8,000\n- General & Administrative Expenses: $218,000\n- Operating Cash Flow: -$175,000\n- Free Cash Flow: -$175,000\n- Cash at End of Period: $2,000\n- Cash Beg/End: $179,000 / $2,000 (change: -$177,000)\n- Total Assets: $77,000\n- Total Liabilities: $784,000\n- Total Stockholders’ Equity: -$707,000\n- Current Ratio / Quick Ratio / Cash Ratio: 0.0640 / 0.0640 / 0.00305\n- Net Debt: $162,000\n- Weighted Avg Shares: 284,289,740\n- ROA: -2.95%; ROE: 0.32%; ROCE: 0.39%
Income Statement
Metric
Value
YoY Change
QoQ Change
Operating Income
-226.00K
9.60%
-161.25%
Net Income
-227.00K
9.56%
-160.53%
EPS
0.00
11.11%
-161.54%
Key Financial Ratios
currentRatio
0.06
returnOnAssets
-295%
returnOnEquity
32.1%
debtEquityRatio
-0.23
operatingCashFlowPerShare
$-0
freeCashFlowPerShare
$-0
priceToBookRatio
-3.88
priceEarningsRatio
-3.02
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript is available in the provided data set. Consequently, there are no management quotes or themes to summarize for QQ1 2025. If a transcript becomes available, highlight themes such as liquidity management, monetization timing of IP, progress on licensing or partnerships, and expectations for revenue catalysts.
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Forward Guidance
No formal forward guidance was disclosed in the QQ1 2025 filing or accompanying transcript data. Given the liquidity constraints (cash $2k at period end; current ratio 0.0640) and the absence of disclosed revenue, the near-term guidance likely hinges on: (1) securing financing or strategic partnerships to fund operations, (2) monetizing Cavitation Technologies’ IP via licensing or collaborative agreements, and (3) reducing non-essential costs to extend runway. Investors should monitor: cash runway developments, any announced licensing milestones or partnerships, management commentary on commercialization plans, and any new capital raises or debt facilities that could alter the liquidity trajectory. In a best-case scenario, IP monetization could unlock a bridge to revenue generation; in a base-case scenario, continued funding will be required; in a worst-case scenario, solvency risk could escalate absent timely financing.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CVAT Focus
0.00%
0.00%
32.10%
-3.02%
CRVW
60.60%
-6.02%
-26.00%
-3.41%
TKOI
0.00%
0.00%
0.00%
0.00%
WARM
0.00%
0.00%
9.68%
-1.19%
CAPC
0.00%
0.00%
-31.70%
-0.20%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The investment case for CVAT is characterized by high risk and high uncertainty. Quantitatively, QQ1 2025 shows a negative net income (-$227k) and negative free cash flow (-$175k) with an extremely weak liquidity position (cash end-of-period $2k; current ratio 0.064). The negative equity position (-$707k) and total liabilities of $784k underscore balance-sheet distress. On a relative basis, profitability metrics are unfavorable, and the company faces substantial runway risk absent external financing or a tangible monetization event for its IP portfolio.
Qualitatively, the primary lever for a turnaround would be successful IP monetization through licensing agreements or strategic partnerships that generate revenue without substantial incremental capex. Management commentary, if provided via a post-QQ1 call or subsequent filings, will be critical to validate plans for cash preservation, cost discipline, and near-term monetization milestones. In the absence of clear monetization catalysts or financing commitments, the investment thesis remains highly speculative and appropriate only for risk-tolerant investors with a long horizon and an appetite for turnaround/speculative plays in the industrial tech space. Key factors to monitor include: (1) any licensing or collaboration announcements, (2) cash runway and liquidity facilities, (3) updates on cost-reduction strategies, and (4) progress in potential strategic reviews or asset monetization efforts.
Key Investment Factors
Growth Potential
Long-term upside from licensing Cavitation Technologies’ Nano Reactor and related IP across industries such as vegetable oil processing, renewable fuels, water treatment, and potentially alga/oil extraction. The growth thesis rests on monetization of IP and expansion into high-value process optimization markets, contingent on funding and successful partnerships.
Profitability Risk
Liquidity and solvency risk due to minimal cash, negative equity, and sizable current liabilities; reliance on external financing; potential dilution risks; execution risk in monetizing IP; sensitivity to commodity and energy markets affecting customer willingness to license or adopt technology; regulatory and patent-life uncertainties.
Financial Position
Distressed balance sheet with assets of $77k and liabilities of $784k, resulting in a negative equity position (-$707k). Current liabilities exceed current assets by a large margin, yielding a 0.0640 current ratio. Cash burn persists (operating cash flow -$175k; free cash flow -$175k) and cash at period-end is only $2k, indicating a fragile liquidity profile. Even with potential IP monetization, the company must secure capital or strategic collaborations to stabilize the balance sheet and sustain operations.
SWOT Analysis
Strengths
Proprietary cavitation-based processing IP with potential application across multiple industrial markets (oils, renewable fuels, water treatment, etc.).
Diversified potential end-markets may offer multiple monetization paths beyond a single product line.
Weaknesses
No reported revenue for QQ1 2025; financial results dominated by losses.
Severe liquidity constraints (cash end of period: $2k) and negative stockholders’ equity.
Weak balance sheet with high current liabilities and limited current assets; significant solvency risk.
Limited management visibility due to absence of transcript commentary in provided data.
Opportunities
Licensing and collaboration opportunities to monetize IP in large industrials (oil refining, renewable fuels, water treatment).
Potential to monetize through partnerships, joint ventures, or milestone-based payments without heavy capex.
Markets seeking efficiency gains in processing fluids could be receptive to nano-reactor technology if revenue visibility improves.
Threats
Macro and commodity price cycles affecting capex and licensing appetite.
Competitive technologies and alternative processing methods in industrial fluids.
Execution risk in achieving IP monetization without significant additional capital; potential dilution or debt burden moves to address liquidity.