CHATSWORTH, Calif., Oct. 28, 2024 (GLOBE NEWSWIRE) — Cavitation Technologies, Inc. (“CTi” or the “Company”) (OTCQB: CVAT), a leading ESG company designing and manufacturing innovative flow-through nano-technology systems for fluid processing applications worldwide, provides a corporate update and letter to shareholders.
Dear Shareholders,
Our fiscal year, ending on June 30, 2024, has been challenging, but it has allowed the company to clearly define both near- and long-term strategies, develop new technologies, and position us to pursue multiple opportunities in water treatment and remediation applications. We have also continued joint efforts with Alchemy Beverages, Inc. to monetize their alcoholic beverages and small kitchen appliance Barmuze.
In 2024, the market valuation of our company was reduced to approximately $3 million, which limited our ability to fund operations and pursue opportunities in water remediation. It is no secret that the overall Micro Cap Market has been struggling since 2023, with many companies in that space seeing significant declines in capitalization. Access to capital has been challenging due to high interest rates and limited liquidity. Nevertheless, I believe that entering Fiscal Year 2025 our company has the capability to execute the business model we have developed in recent years. Additionally, as CEO, I have consistently purchased our company stock and have not sold a single share during my entire tenure because I believe that the unique technologies we have developed over the past decade position our company for exponential growth, and I truly believe that we are greatly undervalued.
Transaction with Desmet Group, SA
Our relationship with Desmet has been invaluable for over a decade. Desmet has provided the capital necessary for our company to continue operations and develop new, unique technologies. We are very grateful to Desmet for its past collaboration and recognition of the value of our unique technology.
In 2024, we are at a crossroads: either substantially dilute our existing shareholders or sell some assets that are outside of what we view as our bigger opportunities going forward. Since those opportunities require additional funding, we concluded that the best route was to sell some intellectual property rights related to vegetable oil refining to Desmet.
As consideration for the patent assignments, Desmet has agreed to pay the Company in aggregate for patents and some purchased orders approximately $1.1 million (USD) in cash and forgiveness of approximately $400,000 (USD) in advances. This transaction will provide the necessary capital for continuous operations and business development of our company while avoiding toxic financing.
Under the agreement signed with Desmet (the “Agreement”), the Company assigned ownership of various U.S. and non-U.S. patents, along with associated technical information included in existing licenses to Desmet (the “Assigned Patents”). The Company also assigned two U.S. trademark registrations—CTi’s “Nano Neutralization®” and “Nano Reactor®” marks (the “Assigned Marks”).
Key points of the Agreement include:
- Reserved License: CTi retained a worldwide, exclusive, transferable, and royalty-free license to practice and use the Assigned Patents in the fields of water and wastewater processing, recovery, recycling, and purification (including oilfield wastewater), as well as the manufacture, distillation, brewing, enhancement, sale, and marketing of alcoholic beverages (the “Licensed Fields”).
- Grant-Back License: CTi received a worldwide, exclusive, transferable, and royalty-free license to practice and use the Assigned Patents and associated technical information, consistent with the scope of the Reserved License.
- Trademark Usage: CTi retained exclusive rights to use the “Nano Reactor®” mark for its businesses, systems, and products related to the Licensed Fields.
Under both the Reserved License and the Grant-Back License, the Company will have a worldwide, exclusive, transferable, and royalty-free license and right to design, build, use, export, improve, sell, and market Nano Reactor® devices, as well as Nano Reactor® systems and products that incorporate or utilize Nano Reactor® devices. These rights are limited to uses and applications within one or more of the Licensed Fields.
CTi will continue to own and operate a large portfolio of patents and intellectual property rights in applications non-related to vegetable oil refining.
Water Treatment and Remediation in the Permian Basin
From 2020 to 2022, our joint venture with Enviro Watertek, LLC restarted water treatment operations in the Permian Basin. Although our technology demonstrated commercial viability (approximately 3 million barrels treated), our partner was unable to expand and attract new customers due to significant shifts in the oil & gas industry. It has taken several years to rearrange and adapt our technology to fit new customers’ operations.
Currently, we have installed our system at a major water remediation company in Texas, where it has been in place for over six months, with more testing required. We continue to pursue additional customers, primarily in the Permian Basin.
What differentiates us in the industry:
- No chemical usage in water remediation, significantly reducing operational costs.
- Integration into existing processes within 24 hours, without disrupting ongoing operations.
- Compact systems with minimal energy consumption.
- Post-treatment water can be either reused or safely disposed of.
Water Remediation and Disinfection in Agriculture
In 2024, we installed our first system at Hacienda Farms (B&F Greenhouse Services, Inc.) in Canada. The system is currently undergoing trials to increase oxygen levels in the water, eliminate algae, and control bacterial growth, all without the use of harsh chemicals. This innovative technology is designed to improve water quality and promote healthier crop growth.
B&F Farms, located in Wheatley, Ontario, relies heavily on water from Lake Erie, which poses significant water remediation challenges due to issues like algae and bacterial contamination. Additionally, B&F has been dealing with high sodium levels in the water, which affect calcium absorption in plants, and fungal issues that harm root health, ultimately reducing crop yields. These water quality challenges necessitate advanced remediation solutions to ensure the sustainability and productivity of their greenhouse operations.
Our technology addresses these problems by controlling microorganisms, accelerating vegetative and root growth, and increasing overall plant biomass. This not only improves crop production but also supports sustainable farming practices.
The overall market for water treatment in Canada is valued at approximately $2.51 billion, with continuous expansion due to the demand for sustainable solutions in agriculture and industrial applications.
Business Venture with Alchemy Beverages, Inc.
Over the past several years, we have worked closely with Alchemy Beverages, Inc. (ABI) to develop the smart kitchen appliance Barmuze and alcoholic beverages. CTi, as a major shareholder, continues to provide technical support. Significant work has been done on Barmuze branding, including launching a new website and creating animations throughout the year to showcase how the appliance works. ABI is actively pursuing the commercial production of Barmuze, licensing the technology to third parties, and looking forward to the opportunity to develop its own alcohol brands.
On the beverage side, ABI is exploring the potential to create its own alcohol brands, leveraging our cutting-edge technology to transform any alcohol into a smooth, top-shelf experience. With the spirits industry projected to reach $631.92 billion by 2029, and a production capacity of 30,000 bottles per day, ABI is ready to turn any spirit into the next global sensation.
ABI is in the final stages of completing its financial audit, engaging focus groups for Barmuze acceptance, refining marketing and distribution strategies, and securing additional capital for production.
New Technologies: Hydro-Plasma
Along with improving our existing technologies, we’ve developed HydroPlasma – an innovative process combining cavitation and cold plasma technology to enhance water treatment efficiency.
- Breaks down both organic and inorganic compounds.
- Highly scalable – from 15 to 40 GPM.
- Eliminates microorganisms and diseases.
- Multiple industrial applications.
- Patent pending technology.
This cutting-edge technology creates reactive agents, such as hydroxyl radicals and hydrogen peroxide, that break down pollutants, bacteria, and viruses in water more effectively than traditional methods. It’s an environmentally friendly and scalable solution, with applications in water treatment, agriculture, sulfur removal from bunker fuel, and more. www.hydroplasma.tech
The global cold plasma market is projected to grow from $1.5 billion in 2021 to $3.1 billion by 2027, fueled by increasing demand for sustainable water solutions. Our technology has the potential to revolutionize water treatment on a global scale. To accelerate this development, we have established partnerships with New Mexico State University, the University of Guadalajara, and the Brackish Groundwater National Desalination Research Facility (BGNDRF), NM, to collaborate on water remediation programs.
In closing, I want to express my gratitude to our employees, business partners, and shareholders for their continued dedication and support. As a small technology company, we face daily challenges, but we remain committed to pursuing our goals, increasing shareholder value, and dedicating ourselves to the success of Cavitation Technologies, Inc.
About Cavitation Technologies, Inc.
Founded in 2007, the company designs and manufactures innovative flow-through devices and systems, as well as developing processing technologies for use in edible oil refining, renewable fuel production, water treatment, and alcoholic beverage enhancement. The Company’s patented Nano Reactor® systems and various technologies have over 40 patents issued and filed both domestically and abroad. https://www.cvatinfo.com.
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Forward-Looking Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by terminology such as ”may,” ”should,” ”potential,” ”continue,” ”expects,” ”anticipates,” ”intends,” ”plans,” ”believes,” ”estimates,” and similar expressions. These forward-looking statements are based largely on the Company’s expectations and are subject to a number of risks and uncertainties, certain of which are beyond the Company’s control. Actual results could differ materially from these forward-looking statements as a result of a variety of factors including, among others, our ability to perform the installation as anticipated, the state of the economy, the competitive environment and other factors described in our most recent Form 10-K and our other filings with the SEC, including subsequent periodic reports on Forms 10-Q and 8-K. In light of these risks and uncertainties there can be no assurances that the forward-looking statements contained in this press release will in fact transpire or prove to be accurate. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.
Cavitation Technologies, Inc.
818-718-0905
[email protected]
