UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended June 30, 2010
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
Commission File Number: 0-29901
Cavitation Technologies, Inc.
(Exact name of Registrant as Specified in its Charter)
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Nevada
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20-4907818
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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10019 CANOGA AVENUE, CHATSWORTH, CALIFORNIA 91311
(Address, including Zip Code, of Principal Executive Offices)
(818) 718-0905
(Registrant’s telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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Title of Each Class:
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Name of Each Exchange on Which Registered:
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None
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Over the Counter (Bulletin Board)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
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No
x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
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No
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Indicate by check mark whether 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 the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
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No
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes
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No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.101 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large Accelerated Filer
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Accelerated Filer
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Non-Accelerated Filer
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Smaller Reporting Company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
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No
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State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant by reference to the price at which the common equity was last sold, or of the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completely second fiscal quarter: $26,216,684 as of December 31, 2009 based on the closing price of $0.23 per share and 70,186,388 non-affiliate shares outstanding.
The registrant had 133,690,665 shares of common stock outstanding September 28, 2010.
Documents incorporated by reference: None.
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (the “Amendment”) amends the Annual Report on Form 10-K for Cavitation Technologies, Inc., referred to herein as the “Company,” “we,” “us" or “our” as initially filed with the Securities and Exchange Commission (“SEC”) on September 28, 2010 (the “Original Report”) for the fiscal year ending June 30, 2010. The Company is filing this Amendment for the purpose of amending and supplementing:
Item 1. Business; Item 9A(T). Controls and Procedures; Item 11. Executive Compensation; Item 15. Exhibits, Financial Statement Schedules.
All other items presented in the Original Report are unchanged. This Amendment does not reflect events occurring after the date of the Original Report or modify or update any of the other disclosures contained therein in any way other than the amendments referred to above. Accordingly, this Amendment should be read in conjunction with the Original Report and the Company’s other filings with the SEC.
In addition, as required by Rule 12b-15 of the Securities Exchange Act of 1934, this Amendment contains new certifications by our Principal Executive Officer and our Principal Financial Officer, filed as exhibits hereto.
This 10-K/A reflects all share numbers with regard to the 3 for 1 forward split which occurred October 12, 2009.
CAVITATION TECHNOLOGIES, INC.
FORM 10-K/A ANNUAL REPORT
FOR THE YEAR ENDED JUNE 30, 2010
TABLE OF CONTENTS
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Page
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PART I
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Item 1. Business
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4
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PART II
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Item 9A(T). Controls and Procedures
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7
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PART III
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Item 10. Directors, Executive Officers and Corporate Governance
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8
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Item 11. Executive Compensation
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9
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Item 13. Certain Relationships and Related Transactions, and Director Independence
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10
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PART IV
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Item 15. Exhibits, Financial Statement Schedules
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10
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Signatures
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13
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PART I
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K and the exhibits attached hereto contain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. We use words like “expects,” “believes,” “intends,” “anticipates,” “plans,” “targets,” “projects” or “estimates” in this annual report. When used, these words and other, similar words and phrases or statements that an event, action or result “will,” “may,” “could,” or “should” result, occur, be taken or be achieved, identify “forward-looking” statements. Such forward-looking statements are subject to certain risks and uncertainties, both known and unknown, and assumptions.
Our management has included projections and estimates in this annual report, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the Securities and Exchange Commission or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law. We qualify all the forward-looking statements contained in this annual report by the foregoing cautionary statements.
ITEM 1. BUSINESS
The following discussion includes forward-looking statements, including but not limited to, management’s expectations of competition; revenues, margin, expenses and other operating results or ratios; operating efficiencies; economic conditions; cost savings; capital expenditures; liquidity; capital requirements; acquisitions and integration costs; operating models; exchange rate fluctuations and rates of return. We disclaim any duty to update any forward-looking statements.
Introduction
Hydrodynamic Technology, Inc. was incorporated January 29, 2007 as a California corporation. It is a wholly owned subsidiary of Cavitation Technologies, Inc. (referred to herein, unless otherwise indicated, as “the Company,” “CTi,” “we,” “us,” and “our”) a Nevada corporation originally incorporated under the name Bio Energy, Inc. Cavitation Technologies, Inc. ("the Company") designs and engineers environmentally friendly NANO technology based systems. These systems have potential commercial applications in markets such as vegetable oil refining, renewable fuels, water purification, alcoholic beverage enhancement, algae oil extraction, and crude oil yield enhancement.
Our investment in research and development (R&D) since inception on January 29, 2007 through June 30, 2010 is $4,623,400 most of which is in the form of shares issued to service providers. This investment in R&D has led to potential commercial products including the
Green D+Plus NANO Neutralization System
– a vegetable oil refining system, and the
Bioforce 9000 NANO Reactor System
which performs transesterification during the production of crude biodiesel. Both the
Green D+ Plus
S
ystem and the
Bioforce 9000NANO Reactor System
employ our proprietary, continuous flow-through, hydrodynamic
NANO
Technology
in the form of our multi-stage NANO Series of reactors. Our reactor process can create particles in some cases smaller than one micron (nano particles) and bond these particles at the molecular level. The Reactor has no moving parts, operates continuously, and is easily scalable to high volumes. To date the Company has sold no products and has recorded no revenue from product sales.
Vegetable Oil Refining
Our
Green D+ Plus NANO Refining System
uses a patented
NANO Refining Technology
that is designed to be used in the vegetable oil refining process to refine crude or de-gummed vegetable oils such as soybean, rapeseed, and canola into high quality de-gummed oils at lower costs.
Distribution Methods
We intend to license our technology/systems globally through a distribution network of strategic partners who are recognized leaders in their field and who design, build, install and recommend our systems. In January 2010 we signed a global
Technology License, Marketing & Collaboration Agreement
with the
n.v. Desmet Ballestra Group s.a.
(Desmet) who will market our
Green D + Plus Nano Refining System.
Salient terms and conditions of the agreement include: 1. We as licensor will grant licenses to Desmet (licensee), for use of the
Green D + Plus Nano Refining
technology. 2. Desmet will be the primary interface with the end-user (site user). 3. In order to maintain exclusivity, Desmet must license a minimum number of units in each of the first three years of the agreement. 4. The performance test conducted by Cavitation Technologies, Inc. with regard to each system/license must demonstrate during a test period that the system’s performance achieved contractual performance. 5. For services provided, we will pay Desmet a variable commission. 6. The initial term of the agreement is three years and will automatically extend provided Desmet meets the terms of the agreement. The agreement is currently in good standing. Article 9.01(b) describes the minimum number of units to be purchased and Article 7.01(b) describes the variable commission. As a result of the November 2010 agreement, the minimum number of units remains unchanged while the variable commission increased.
Desmet is a global leader in providing equipment to the approximate $70B/yr. edible oil extraction and refining industry. Since its founding in 1946, Desmet has built a global network that includes 1,300 employees, 17 global and 8 representative offices, and more than 5,700 lines in a variety of applications. Specifically, Desmet will manage the global marketing, sales, and project execution of our
Green D + Plus Nano Refining Systems
. We rely exclusively on our strategic partnership with Desmet to market, and distribute our products to new customers. We will focus on developing additional Nano Reactor applications and managing the intellectual property issues associated with these new developments. Desmet also presents us with potential opportunities in the palm oil industry and in enzymatic refining.
In April 2010 we signed a memorandum of understanding with a vegetable oil refining plant located in Minnesota for pilot testing a 40 GPM
NANONeutralization System
on a production line that processes 200 ton/day of de-gummed oil. The material terms and conditions of the memo included: 1. The plant was to conduct a test to demonstrate the ability of our system to significantly reduce operating costs in soybean oil refining. 2. The Minnesota plant pays all costs of installation. 3. We have the right to access the equipment, operating data, and to collect pre-process and post-process samples. 4. We received a small one-time payment of $15,000.00 to cover use of our equipment. 5. The agreement terminated May 24, 2010. We are discussing a potential sale with this company.
Customers
We have one customer. In June 2010 we completed a pilot test of our 40 GPM
NANO Neutralization System
at a 200 tons/day commercial crude vegetable oil refining plant in South Carolina. The system has been integrated and is operating at the plant. We have received monthly payments of $5,000.00 from this facility for use of our system since May 2010. Because there is no written agreement with this client, amounts received were recorded as Deferred Revenue in our balance sheet as of September 30, 2010. The company is uncertain as to how long these payments will continue. Although there is no written agreement, our understanding of the material elements of this verbal agreement are that this facility will continue to pay us $5,000 monthly for the continued use of our system. The amount was based on the rental value of the equipment. The amount is expected to remain unchanged as long as we continue to receive payments which is uncertain.
The global target market for our
Green D+ Plus System
includes approximately 300 major (greater than 200 tons per day processing capability) vegetable oil refining plants. The global demand for processed vegetable oils has grown consistently from 84.7 million metric tons in 1999 to 126 million metric tons in 2008.
Biodiesel
Our fully automated
Bioforce 9000 NANO Reactor Skid System
performs the transesterification process during the production of biodiesel; that is, it fully converts all mono-, di-, and tri-glycerides contained in feedstock (such as animal fats and vegetable oils) into methyl esters (crude biodiesel). Given the conditions of the global biodiesel market and given the limited resources of our company, we do not intend to focus significant resources to the development of this market in the foreseeable future. Instead, we plan to focus the bulk of our resources on developing our
Green D+ Plus
line of business.
Sources and availability of raw materials and the names of principal suppliers
We have historically sourced reactor components from various domestic and international suppliers including Canyon Engineering and Strategic IR with whom we have no long term contracts, agreements, or commitments. They provide parts as directed. We believe it would take approximately 60 days to find a new supplier, if necessary.
Competition
We have a variety of competitors, large and small. The markets in which we intend to compete are highly competitive commodity markets where the low-cost producer has the advantage. Competitors in the edible oil refining industry include well-known companies which have longer operating histories and stronger financial capabilities than we. We differentiate ourselves by the designs, processes, and applications described in our approved patent and patents pending applications. We intend to compete by offering solutions that we believe can reduce operating expenses vis-à-vis current technology and help our clients remain or become a low-cost producer.
Patents
Our success will depend in part on our ability to obtain patents, maintain trade secrets, and operate without infringing on the proprietary rights of others both in the United States and other countries. Our
Cavitation Generator
patent was issued during fiscal 2011, and is being amortized over an estimated useful life of four years. The patent has a duration through February 27, 2029. In addition, we have nine US and nine PCT/ international patent applications pending which apply to the design of the Company’s Reactor and the processes related thereto.
We plan to continue to apply for new and improved patents on a regular basis. Our approved patent and patents pending apply to potential commercial applications in markets such as vegetable oil refining, renewable fuels production, water purification, crude oil yield enhancement, and alcoholic beverage enhancement. There can be no assurances that patents issued to the Company will not be challenged, invalidated, or circumvented, or that the rights granted hereunder will provide proprietary protection or competitive advantage to the Company
Governmental Approval and Regulations and Environmental Compliance
Due to the nature of our products, we have incurred no costs with respect to environmental compliance with federal, state, and local laws. To our knowledge, our products do not require governmental approval, and we do not foresee that governmental regulations will have a material impact on our business.
Royalty Agreements
On July 1, 2008, our wholly owned subsidiary entered into Patent Assignment Agreements with our President and CEO where certain devices and methods involved in the hydrodynamic cavitation processes invented by the President and CEO have been assigned to the Company. In exchange, the Company agreed to pay a royalty of 5% of gross revenues to each of the CEO and President for licensing of the technology and leasing of the related equipment embodying the technology. These agreements were subsequently assigned to Cavitation Technologies on May 13, 2010.
On April 30, 2008 our wholly owned subsidiary entered into an employment agreement with Varvara Grichko who became a member of the Board of Directors in September 2010. Mrs. Grichko shall receive an amount equal to 5% of actual gross royalties received from the royalty stream in the first year in which the Company receives royalty payments from the patent which Mrs. Grichko was the legally named inventor, and 3% of actual gross royalties received by the Company from the patent in each subsequent year.
As of June 30, 2010, we had not paid any amounts related to these royalties.
Employees
We have four total and full-time employees and have engaged approximately 40 consultants and independent contractors over the past two years. We work closely with employees and consultants comprised of experienced professionals who are chemists, civil, chemical, and mechanical engineers with expertise in hydrodynamic cavitation, nano technology, water treatment, and biotechnology. These individuals hold Ph.Ds in Chemistry and Biology as well as degrees in Civil, Chemical, and Mechanical Engineering.
We are a public company with stock traded on the Over the Counter Bulletin Board with ticker symbol CVAT. Our stock is also traded on the Berlin and Stuttgart Stock Exchanges with the symbol WTC. Our single location is our headquarters in Chatsworth, CA.
Item 9A(T). Controls and Procedures
Report of Management on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act. Our management has evaluated, under the supervision and with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“the Exchange Act”). Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, and summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (2) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our Principal Executive Officer and Principal Financial Officer do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive and financial officer have determined that our disclosure controls and procedures are effective at doing so at that reasonable assurance level, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
We have included the entire definition of internal control over financial reporting, as set forth in Exchange Act Rule 13a-15(f) as follows: The Company’s internal control over financial reporting is designed under the supervision of our principal executive and principal financial officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the Company’s assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control.
In assessing the effectiveness of our internal control over financial reporting, we use the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in
Internal Control — Integrated Framework
. Based on our assessment using those criteria, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we concluded that for the period ending June 30, 2010, our internal controls over financial reporting are effective.
This report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the new Financial Reform bill enacted in July 2010 which permanently exempts non-accelerated filers such as our company to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
Our conclusion about the effectiveness of our Internal Controls over Financial Reporting changed from “ineffective” to “effective” as we implemented internal controls which we evaluated as working properly and effectively. Changes to our design and operations of our controls primarily related to the increased use of outside consultants and implementation of new internal control procedures.
Steps we have taken include:
a. With the assistance of an outside consultant, we were able to design, implement, and test processes and procedures for Internal Controls over Financial
Reporting.
b. With the help of another outside consultant, we were able to raise our knowledge and expertise of GAAP to a level that is consistent with our conclusion
that our internal controls are effective.
c. We updated and implemented new internal control procedures which address our risk assessment process, entity level control evaluations, and testing of
key controls over financial reporting.
d. We continue to monitor our internal control processes and procedures on a regular basis
Part III
Item 10 Directors, Officers, and Corporate Governance
Code of Ethics
The Company has not yet adopted a Code of Ethics due to, among other things, its continuing search for qualified outside directors and committee members. The Company expects it will adopt a Code of Ethics prior to its next annual filing on Form 10-K and will undertake in such Form 10-K filed with the Commission to provide any person without charge, upon request, a copy of such code of ethics and explain the manner in which such request may be made.
Item 11. Executive Compensation
The following table summarizes the compensation earned by each named executive officer of the Company for the past two fiscal years, determined on the basis of rules adopted by the SEC relating to smaller reporting companies.
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Non-Equity
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Non-Qualified
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All
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Stock
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Option
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Incentive Plan
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Deferred
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Other
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Year
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Salary
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Awards (2)
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Awards
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Compensation
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Compensation
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Compensation
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Totals
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Roman Gordon
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2010
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$
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195,000
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$
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800,000
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(3)
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$
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-
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$
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-
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$
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-
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$
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-
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$
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995,000
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Chief Executive Officer
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2009
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$
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172,857
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$
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-
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$
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-
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$
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-
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$
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-
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$
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-
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$
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172,857
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Igor Gorodnitsky
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2010
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$
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195,000
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(1)
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$
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800,000
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(4)
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$
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-
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$
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-
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$
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-
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$
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-
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$
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995,000
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President
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2009
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$
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172,857
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(1)
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$
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-
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$
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-
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$
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-
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$
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-
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$
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-
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$
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172,857
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R.L. Hartshorn
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2010
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$
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-
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$
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263,750
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(5)
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$
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-
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$
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-
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$
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-
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$
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-
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$
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263,750
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Chief Financial Officer
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2009
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$
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-
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$
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184,349
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(5)
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$
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29,585
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(6)
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$
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-
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$
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-
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$
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-
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$
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213,934
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(1)
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In 2009, Mr. Gorodnitsky earned a salary of $172,857. On June 1, 2010, the Company issued a note payable to Mr. Gorodnitsky in the amount of $278,922 as payment for all deferred salary amounts owed to him for services provided through November 30, 2009. During 2010, Mr. Gorodnitsky earned a salary of $195,000, of which a total of $49,152 was unpaid and recorded as accrued payroll as of June 30, 2010.
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(2)
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Stock awards are disclosed at the expense recorded based on their aggregate grant date fair values as calculated under ASC 718,
Share-Based Payment
. All share amounts disclosed include the impact of a 3 for 1 forward stock split which was effective as of October 29, 2009.
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(3)
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In July 2009, the Company issued Mr. Gordon 3,000,000 shares of restricted common stock as payment for services. On the date of grant, the shares had an aggregate fair value of $800,000. The shares vest through January 2, 2011 and are being expensed in the financial statements over that time. During the year ended June 30, 2010, the Company recorded a total of $521,673 of expense associated with this grant. The remaining $278,327 will be recorded over the vesting term during the year ended June 30, 2011.
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(4)
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In July 2009, the Company issued Mr. Gorodnitsky 3,000,000 shares of restricted common stock as payment for services. On the date of grant, the shares had an aggregate fair value of $800,000. The shares vest through January 2, 2011 and are being expensed in the financial statements over that time. During the year ended June 30, 2010, the Company recorded a total of $521,673 of expense associated with this grant. The remaining $278,327 will be recorded over the vesting term during the year ended June 30, 2011.
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(5)
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In July 2009, the Company issued Mr. Hartshorn 750,000 shares of restricted common stock as payment for services. On the date of grant, the shares had an aggregate fair value of $200,000. The shares vest through January 2, 2011 and are being expensed in the financial statements over that time. During the year ended June 30, 2010, the Company recorded a total of $130,418 of expense associated with this grant. The remaining $69,582 will be recorded over the vesting term during the year ended June 30, 2011. In addition, as compensation during the year ended June 30, 2010, Mr. Hartshorn was also issued an aggregate total of 350,000 shares of common stock with an aggregate grant date fair value of $63,750. During the year ended June 30, 2009, Mr. Hartshorn was issued an aggregate total of 402,000 shares of common stock with an aggregate grant date fair value of $184,349.
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(6)
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On July 21, 2008, Mr. Harshorn was granted 71,655 and 102,366 stock options to purchase shares of our common stock with an exercise price of $0.33 and $.67 per share, respectively. The grant date fair value of these options amounted to $29,585.
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Item 13. Certain Relationships and Related Transactions, and Director Independence.
Other than compensation agreements and other arrangements with our executive officers and directors and the transactions described below, during our last two fiscal years, there has not been, and there is not currently proposed, any transaction or series of similar transactions to which we 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 our total assets at year-end for the last two completed fiscal years and in which any of our directors, executive officers, holders of more than five percent of any class of our voting securities or any member of the immediate family of the foregoing persons had or will have a direct or indirect material interest.
In accordance with item 404 (a) of regulation S-K, the company has had no related party transactions during the fiscal years ended June 30, 2010 or 2009, with the exception that:
On July 1, 2008, our wholly owned subsidiary entered into Patent Assignment Agreements with our President and CEO where certain devices and methods involved in the hydrodynamic cavitation processes invented by the President and CEO have been assigned to the Company. In exchange, the Company agreed to pay a royalty of 5% of gross revenues to each of the CEO and President generated from licensing of the technology and leasing of the related equipment embodying the technology. These agreements were subsequently assigned to Cavitation Technologies on May 13, 2010.
On April 30, 2008 our wholly owned subsidiary entered into an employment agreement with Varvara Grichko who became a member of the Board of Directors in September 2010. Mrs. Grichko shall receive an amount equal to 5% of actual gross royalties received from the royalty stream in the first year in which the Company receives royalty payments from the patent which Mrs. Grichko was the legally named inventor, and 3% of actual gross royalties received by the Company from the patent in each subsequent year.
Director Independence
As our common stock is currently traded on the OTC Bulletin Board, we are not subject to the rules of any national securities exchange which require that a majority of a listed company’s directors and specified committees of the board of directors meet independence standards prescribed by such rules. For the purpose of preparing the disclosures in this Report on Form 10-K regarding director independence, we have used the definition of “independent director” set forth in the Marketplace Rules of The NASDAQ, which defines an “independent director” generally as a person other than an executive officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Consistent with these standards, we believe that James Fuller is an independent director.
Part IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this annual report on Form 10-K:
The financial statements are filed as part of this report under Item 8 “Financial Statements and Supplementary Data”.
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2.
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Financial Statement Schedules
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All other schedules are omitted because they are not applicable or the required information is presented in the financial statements and notes thereto.
The exhibits required by Item 601 of Regulation S-K are included in Item 15(b) below.
(b) – Exhibits.
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Incorporated by Reference
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Exhibit
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Filed
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Number
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Exhibit Description
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Herewith
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Form
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Pd. Ending
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Exhibit
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Filing Date
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3(i)(a)
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Articles of Incorporation of Bio Energy, Inc.
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SB-2
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N/A
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3.1
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October 19, 2006
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3(i)(b)
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Articles of Incorporation - Amended and Restated
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10-Q
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December 31, 2008
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3.1
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February 17, 2009
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3(i)(c)
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Articles of Incorporation - Amended and Restated
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8-K
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N/A
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3.1
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May 14, 2009
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3(ii)(a)
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By-laws - originally Bioenergy, Inc.
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SB-2
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N/A
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3.2
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October 19, 2006
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2.01
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Share Exchange Agreement between the Company and the shareholders of HydroDynamic Technology, Inc. dated October 22, 2008
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8K
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N/A
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2.01
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October 24, 2008
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10.1
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Patent Assignment Agreement between the Company and Roman Gordon dated July 1, 2008.
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10K/A
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June 30, 2009
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10.1
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October 20, 2011
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10.2
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Patent Assignment Agreement between the Company and Igor Gorodnitsky dated July 1, 2008.
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10K/A
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June 30, 2009
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10.2
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October 20, 2010
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10.3
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Assignment of Patent Assignment Agreement between the Company and Roman Gordon
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8K
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June 30, 2009
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10.3
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May 18, 2010
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10.4
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Assignment of Patent Assignment Agreement between the Company and Igor Gorodnitsky
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8K
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June 30, 2009
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10.4
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May 18, 2010
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10,.5
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Employment Agreement between the Company and Roman Gordon date March 17, 2008
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10K/A
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June 30, 2009
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10.3
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October 20, 2011
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10.6
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Employment Agreement between the Company and Igor Gorodnitsky dated March 17, 2008
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10K/A
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June 30, 2009
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10.4
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October 20, 2011
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10.7
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Consulting Agreement between the Company and R.L. Hartshorn dated September 22, 2009
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X
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10.8
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Employment and Confidentiality and Invention Assignment Agreement between the Company and Varvara Grichko dated April 30, 2008
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10K/A
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June 30, 2009
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10.6
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October 20, 2011
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10.9
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Line of Credit Agreement from Nat. Bank of Ca. - change in terms dated Aug 1, 2009
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X
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10.10
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Line of Credit Agreement from Nat. Bank of Ca. - change in terms dated Aug 1, 2010
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X
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10.11
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Convertible Note and Warrant Purchase Agreement between the Company and Lyudmila Yeschenko dated December 18, 2008
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10K/A
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June 30, 2009
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10.8
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October 20, 2011
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10.12
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Convertible Note and Warrant Purchase Agreement between the Company and Jeffrey Neustadt dated December 20, 2008
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10K/A
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June 30, 2009
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10.9
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October 20, 2011
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10.13
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Convertible Note and Warrant Purchase Agreement between the Company and Christopher Tucker dated December 20, 2008
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10K/A
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June 30, 2009
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10.10
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October 20, 2011
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10.14
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Convertible Note and Warrant Purchase Agreement between the Company and Barnhart Holdings Ltd dated February 11, 2009
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10K/A
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June 30, 2009
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10.11
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October 20, 2011
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10.15
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Convertible Note and Warrant Purchase Agreement between the Company and Mark Escalante dated February 19, 2009
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10K/A
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June 30, 2009
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10.12
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October 20, 2011
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10.16
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Convertible Note and Warrant Purchase Agreement between the Company and Erena Karakis dated January 29, 2009
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10K/A
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June 30, 2009
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10.13
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October 20, 2011
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10.17
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Marketing and Collaboration Marketing Agreement between Company and Desmet Ballestra Group
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X
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10.18
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Memorandum of Understanding
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X
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10.19
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Warrant Purchase Agreement between Company and Cheryl Berns dated July 15 2009
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X
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10.20
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Common Stock and Warrant Purchase Agreement - G Electrical Service Co. September 28, 2009
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X
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10.21
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Common Stock and Warrant Purchase Agreement - Suzahnna Tepper dated October 16, 2009
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X
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10.22
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Common Stock and Warrant Purchase Agreement - Suzahnna Tepper dated October 16, 2009
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X
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10.23
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Common Stock and Warrant Purchase Agreement - G Electrical Service Co. dated October 16, 2009
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X
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10.24
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Common Stock and Warrant Purchase Agreement with Star Tech Electric Co. dated October 19, 2009
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X
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10.25
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Common Stock and Warrant Purchase Agreement - G Electrical Service Co. dated November 4, 2009
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X
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10.26
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Common Stock and Warrant Purchase Agreement - G Electrical Service Co. dated November 17, 2009
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X
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10.27
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Common Stock and Warrant Purchase Agreement - G Electrical Service Co. dated December 4, 2009
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X
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10.28
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Common Stock and Warrant Purchase Agreement with Star Tech Electric Co. dated December 4, 2009
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X
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10.29
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Common Stock and Warrant Purchase Agreement - Marina Vergilis dated February 4, 2010
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X
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10.30
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Common Stock and Warrant Purchase Agreement - Undiscovered Equities, Inc. on February 11, 2010
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X
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10.31
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Common Stock and Warrant Purchase Agreement with Star Tech Electric Co. on March 2, 2010
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X
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10.32
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Common Stock and Warrant Purchase Agreement with G Electrical Service Co. on March 2, 2010
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X
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10.33
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Common Stock and Warrant Purchase Agreement with Star Tech Electric Co. on March 2, 2010
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X
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10.34
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Common Stock and Warrant Purchase Agreement with AM-PM Appliance Service on March 2, 2010
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X
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10.35
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Common Stock and Warrant Purchase Agreement with Suzahnna Tepper June 1, 2010
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X
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10.36
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Promissory Note - Anna Mosk dated January 11, 2010
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14.1
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Code of Business Ethics
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X
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31.1
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Certificate of Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
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X
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31.2
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Certificate of Principal Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
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X
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32.1
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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.
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X
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32.2
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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.
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X
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
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SIGNATURE
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TITLE
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DATE
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/s/ Todd Zelek
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Chief Executive Officer and Director
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October 20, 2011
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Todd Zelek
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(Principal Executive Officer)
Chairman of the Board
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/s/ Igor Gorodnitsky
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President
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October 20, 2011
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Igor Gorodnitsky
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/s/ R.L. Hartshorn
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Chief Financial Officer
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October 20, 2011
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R.L. Hartshorn
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(Principal Financial Officer and Accounting
Officer)
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Date: October 19, 2011
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Date: October 20, 2011
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By: /s/ Todd Zelek, Chief Executive Officer
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By: /s/ R.L. Hartshorn, Chief Financial Officer
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Cavitation Technologies (QB) (USOTC:CVAT)
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De Abr 2024 a May 2024
Cavitation Technologies (QB) (USOTC:CVAT)
Gráfica de Acción Histórica
De May 2023 a May 2024
