UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER
ENDED FEBRUARY 28, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-9015
INTERNATIONAL CAVITATION TECHNOLOGIES, INC.
(Exact name of Registrant as specified in charter)
COLORADO 84-0768695
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
Address of principal executive offices, including Zip Code:
12407 South Memorial Drive, Bixby, OK 74008
Issuer's telephone number, including area code: (918) 369-5950
Former Address: 57 West 200 South, Suite 310, Salt Lake City, Utah 84101
Indicate by check whether the Issuer (1) has filed all reports required to be
filed by section 13 or 15(d) of the Exchange Act during the past 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. (1)
Yes [ ] No [X ] (2) Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At March 31, 1999, there were
9,309,375 shares of the Registrant's Common Stock outstanding.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
With the exception of the May 31, 1998 Balance Sheet, the financial statements
included herein have been prepared by the Company, without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. The May 31,
1998 Balance Sheet was audited and was included along with all required footnote
disclosures in the May 31, 1998 Form 10-K. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments necessary to present
fairly the financial position and results of operations for the periods
presented have been made.
These financial statements should be read in conjunction with the accompanying
notes, and with the historical financial information of the Company.
<PAGE>
INTERNATIONAL CAVITATION TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
FEBRUARY 28, 1999 AND MAY 31, 1998
<TABLE>
<CAPTION>
February 28, 1999 May 31, 1998
(Unaudited)
----------------- -------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,823 $ -
Accounts receivable 98,744 -
Advances to affiliates 1,500 -
---------- ----------
Total current assets 103,067 -
---------- ----------
PROPERTY AND EQUIPMENT:
Construction in progress 29,311 -
---------- ----------
OTHER ASSETS:
Purchase option deposit 327,004 -
Patent costs, net of amortization
of $1,769 at February 28, 1999 37,120 -
---------- ----------
364,124 -
---------- ----------
$ 496,502 $ -
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 22,400 $ 18,546
Accounts payable - related party - 145
Deferred income 98,744 -
Notes payable - related party 380,664 -
---------- ----------
Total current liabilities 501,808 18,691
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
50,000,000 shares authorized,
9,309,375 and 676,375 shares
issued and outstanding at
February 28, 1999 and
May 31, 1998, respectively 9,309 676
Additional paid-in capital 818,742 524,550
Accumulated (deficit) (833,357) (543,917)
---------- ----------
(5,306) (18,691)
---------- ----------
$ 496,502 $ -
========== ==========
</TABLE>
- See accompanying notes to consolidated condensed financial statements -
<PAGE>
INTERNATIONAL CAVITATION TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED UNAUDITED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED FEBRUARY 28, 1999 AND 1998
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended February 28, Ended February 28,
-------------------- --------------------
1999 1998 1999 1998
--------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES $ 14,400 $ - $ 14,400 $ -
COSTS ASSOCIATED WITH REVENUES 91,871 - 91,871 -
--------- -------- -------- --------
GROSS PROFIT (LOSS) (77,471) - (77,471) -
--------- -------- -------- --------
EXPENSES:
General & administrative 152,913 1,728 210,716 15,076
Amortization 755 - 1,769 -
--------- -------- -------- --------
153,668 1,728 212,485 15,076
--------- -------- -------- --------
LOSS FROM OPERATIONS (231,139) (1,728) (289,956) (15,076)
--------- -------- -------- --------
OTHER INCOME:
Interest income - - 516 -
--------- -------- -------- --------
- - 516 -
--------- -------- -------- --------
LOSS BEFORE INCOME TAXES (231,139) (1,728) (289,440) (15,076)
INCOME TAX EXPENSE - - - -
--------- -------- --------- --------
NET LOSS $(231,139) $ (1,728) $(289,440) $(15,076)
========= ======== ========= ========
NET LOSS PER SHARE $ (0.02) $ (0.01) $ (0.05) $ (0.08)
========= ======== ========= ========
AVERAGE WEIGHTED SHARES
OUTSTANDING 9,308,602 290,458 5,470,451 178,486
========= ======== ========= ========
</TABLE>
- See accompanying notes to consolidated condensed financial statements -
<PAGE>
INTERNATIONAL CAVITATION TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED FEBRUARY 28, 1999 AND THE YEAR ENDED MAY 31, 1998
<TABLE>
<CAPTION>
Common Stock Additional
--------------- Paid-In Accumulated
Shares Amount Capital (Deficit)
--------- ------ ---------- -----------
<S> <C> <C> <C> <C>
Balance, May 31, 1997 122,500 $ 122 $ 506,032 $( 512,833)
Issued for debt relief,
503,875 shares at
$0.0180 per share 503,875 504 8,568 -
Issued pursuant to
stock option plan at
$0.20 per share 50,000 50 9,950 -
Net loss - - - (31,084)
--------- ------ ---------- -----------
Balance, May 31, 1998 676,375 676 524,550 (543,917)
Issuance of Stock for
5,750,000 shares of Ion
Collider Technologies
on September 30, 1998 8,625,000 8,625 294,192 -
Issuance of 8,000 shares of
stock in exercise of
stock option plan 8,000 8 - -
Net loss for the nine months
ended February 28, 1999 - - - (289,440)
--------- ------ ---------- ----------
Balance, February 28, 1999 9,309,375 $9,309 $ 818,742 $ (833,357)
========= ====== ========== ==========
</TABLE>
- See accompanying notes to consolidated condensed financial statements -
<PAGE>
INTERNATIONAL CAVITATION TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED UNAUDITED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 1999 AND 1998
Page 1 of 2
<TABLE>
<CAPTION>
For the Nine Months Ended February 28,
1999 1998
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (289,440) $ (15,076)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities -
Amortization 1,769 -
Changes in operating assets -
Increase in accounts receivable (98,744) -
Increase in advances to subsidiaries (1,500) -
Increase in construction in
progress (29,311) -
Changes in operating liabilities -
Increase in accounts payable
and accrued expenses 3,709 20,076
Increase in deferred revenue 98,744 -
---------------- ----------------
Net cash provided by (used in)
operating activities (314,773) 5,000
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase option deposit (327,004) -
Patent costs (38,889) -
---------------- ----------------
Net cash used in
investing activities (365,893) -
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowing from
related parties 380,664 -
Proceeds from sale of common stock 302,825 -
---------------- ----------------
Net cash provided by
financing activities 683,489 -
---------------- ----------------
NET INCREASE IN CASH 2,823 5,000
CASH, BEGINNING OF THE YEAR - -
---------------- ----------------
CASH, END OF THE YEAR $ 2,823 $ 5,000
================ ================
</TABLE>
- See accompanying notes to consolidated condensed financial statements -
<PAGE>
INTERNATIONAL CAVITATION TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FEBRUARY 28, 1999 and 1998
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements as of
February 28, 1999 and 1998 and for the three and nine months then ended have
been prepared in accordance with instructions to Form 10QSB and, accordingly, do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. Also included is the
May 31, 1998, balance sheet which has previously been reported on in the
Company's Form 10KSB for the fiscal year ended May 31, 1998. In the opinion of
management, all adjustments considered necessary for fair presentation have been
included. The results for the three and nine month periods are not necessarily
indicative of results for the full year. For further information see
Management's Discussion and Analysis of Financial Condition and Operating
Results.
NOTE 2 - SIGNIFICANT EVENTS
Organization
- ------------
International Cavitation Technologies, Inc. (the "Company") was incorporated as
Yellow Gold Of Cripple Creek, Inc. under the laws of the State of Colorado on
August 24, 1936. The Company was involved in various mining activities over the
years, none of which proved successful. During the year 1953, the Company
discontinued all operations and had no significant revenues from any activity
prior to September 1998 and was classified as a development stage company per
SFAS No. 7. For the period during the development stage of the Company from
August 1953 through August 31, 1998, the Company had accumulated losses of
$543,917.
On December 2, 1998, the shareholders voted to change the Company's name to
International Cavitation Technologies, Inc. from Yellow Gold Of Cripple Creek,
Inc.
Acquisition of Ion Collider Technologies, Ltd.
- ----------------------------------------------
On September 30, 1998, the Company acquired all of the outstanding common stock
and common stock purchase warrants of Ion Collider Technologies, Ltd. ("ICT"), a
Colorado corporation in exchange for the issuance, after taking into the one-
for-one reverse stock split described in Note 5 below, of 8,625,000 shares of
its common stock and 3,000,000 common stock purchase warrants. Each warrant is
exercisable to purchase one share of the Company's common stock for $.291666 per
share anytime until June 1, 2008.
ICT owns four patents and one pending patent related to the use of ion collider
technology to separate particles from liquid, enhance the recovery of crude oil,
increase the amount of hydrocarbons recoverable from underground reservoirs, and
water clarification.
The Company's goal is to oversee the commercial implementation of its various
patented processes. It anticipates that revenues will be generated from
licensing fees, royalties from the use of this technology by third parties, and
for services rendered in the commercial application of these patented
technologies.
Commencing January 1, 1999, the Company is entitled to 90% of gross income
generated by Big Blue, Inc. in connection with the use of this technology. See
Note 4 for further details.
Amortization of Patent Costs
- ----------------------------
Patent costs are being amortized on a straight-line basis over their remaining
lives. As of February 28, 1999, the patents had remaining unamortized lives of
between 16 and 18 years.
Income Taxes
- ------------
Due to the change in ownership, which occurred in connection with the
acquisition of ICT, the Company can no longer utilize any of its net operating
loss carryforwards of approximately $186,000 at May 31, 1998.
Earnings (Loss) per Share
- -------------------------
Earnings (loss) per share computation are calculated on the weighted-average of
common shares and common share equivalents outstanding during the year. Common
stock warrants are considered to be common stock equivalents and are used to
calculate earnings per common and common equivalent except when they are
anti-dilutive.
NOTE 3 - GOING CONCERN
The Company's consolidated condensed financial statements are prepared in
accordance with generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and the liquidation of
liabilities in the normal course of business. However, the Company and its
subsidiary do not have significant cash and have not had significant operations.
Furthermore, one of its subsidiaries principal assets is a nonrefundable option
to purchase certain stock or assets which, if purchased in full, will require
significant but as yet undetermined amounts of cash to realize. See Note 4 for
further details on this option. The Company's ability to continue as a going
concern is dependent upon its ability to develop a market for its technology and
to obtain adequate financing in the interim to cover its operating expenses. All
of these factors raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements do not include any adjustments
related to the recoverability and classification of recorded assets, or the
amount and classification of liabilities that might be necessary in the event
the Company cannot continue in existence. Management is in the process of
raising additional capital and believes that there is a substantial market for
the Company's technology.
NOTE 4 - RELATED PARTY TRANSACTION
During the year ended May 31, 1998, but prior to its acquisition of ICT, an
officer advanced $9,217 for working capital to pay for ongoing professional fees
to keep the Company current in its annual and quarterly filings. Of the $9,217,
$9,072 of the debt was assigned to another officer/director, who exchanged the
debt for 503,875 shares of stock. During the first quarter fiscal year 1999, a
stockholder forgave a payable in the amount of $16,396.
On September 30, 1998, the ICT's shareholders entered into an agreement with
Yellow Gold whereby Yellow Gold acquired all 5,750,000 shares of the Company's
outstanding common stock and all of its common stock warrants outstanding in
exchange for 8,625,000 shares of common stock in Yellow Gold and 3,000,000
common stock purchase warrants.
Subsequent to this transaction, ICT's former shareholders owned approximately
93% of Yellow Gold's outstanding common stock.
During the nine months ended February 28, 1999, the Company borrowed from
related parties cash totaling $380,664.
On September 21, 1998, the Company entered into an asset purchase agreement with
Big Blue, Inc., Universal Environmental Technologies, Inc., Excalibur Oil
Corporation, and Soil Savers, Inc. (the "Seller's). The Seller's are affiliated
by common ownership with the Company. On December 31, 1998, this agreement was
amended. This agreement, as amended, gives the Company the option to purchase
the assets of the Seller's for $340,717 or the stock of the Seller's for
$340,717 plus 50,000 shares of the Company's common stock. This option expires
on December 31, 1999. During the nine months ended February 28, 1999, the
Company paid a non-refundable deposit of $327,004 towards this purchase option.
This agreement requires Big Blue to pay the Company 90% of gross income
commencing January 1, 1999, with the understanding that the Company will pay all
of Big Blue's administrative costs incurred on and after that date until the
option expires or is exercised. In connection with this agreement, during the
two months ended February 28, 1999, the Company earned $14,400 of revenues and
incurred $91,871 in cost associated with this licensing agreement. In addition,
the Company recognized a receivable and offsetting deferred revenue in the
amount of $98,744 representing 90% of fees billed by Big Blue to a third party
for which the required services had not yet been performed.
NOTE 5 - REVERSE STOCK SPLIT
On October 6, 1997, the shareholders of the Company approved a reverse stock
split of one-for-forty shares. On December 2, 1998, the shareholders of the
Company approved a reverse stock split of one-for-four shares. The financial
statements have been adjusted to reflect these reverse stock splits.
NOTE 6 - NON-QUALIFIED STOCK OPTION PLAN
During the fiscal year ended May 31, 1998, the Company adopted a Non-Qualifying
Stock Option Plan to provide the Company with ongoing legal and professional
expertise in its regulatory filing requirements and ongoing negotiations for
viable business and merger opportunities. The Company set aside 125,000 shares
(after taking into consideration the reverse stock split taken on December 2,
1998) for such a plan. The price of the options are to be determined by the
Board of Directors and are set to expire in five years.
During the fiscal year ended May 31, 1998, 50,000 shares were optioned and
exercised at $.05 per share for services rendered.
During the quarter ending February 28, 1999, 8,000 share were optioned and
exercised at $.01 per share for cash.
NOTE 7 - LEASE COMMITMENTS
Effective August 1, 1998, ICT assumed two automobile leases from Big Blue. These
autos are being used by the Company's officers in the course of conducting their
corporate activities. Minimum future rental payments under non-cancelable
operating leases having remaining terms in excess of one year as of February 28,
1999 for each of the next five years and in the aggregate are:
<TABLE>
<CAPTION>
Fiscal year ended May 31,
<S> <C>
1999 $ 3,628
2000 14,510
2001 11,848
2001 3,742
2002 -
--------
Total future minimum
rental payments $ 33,728
========
</TABLE>
NOTE 8 - USE OF ESTIMATES IN FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting period. In these financial statements, assets,
liabilities and earnings involve extensive reliance on management's estimates.
Actual results could differ from those estimates.
NOTE 9 - YEAR 2000 COMPLIANCE
The Company has assessed the issues associated with the programming code in
existing computer systems with respect to a two-digit year value as the Year
2000 approaches and believes that its internal systems are in full compliance.
In addition, the Company has communicated with suppliers and customer with whom
it does significant business to determine their Year 2000 Compliance readiness
and the extent to which the Company is vulnerable to any third party Year 2000
issues. The total cost to the Company of these Year 2000 Compliance activities
has not been and is not anticipated to be material to its financial position or
results of operations in any given year. This is based on the Company
management's best estimates, which were derived utilizing numerous assumptions
of future events including the continued availability of certain resources,
third party modification plans and other factors. However, there can be no
guarantee that these estimates will be achieved and actual results could differ
from those plans.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Prior to September of 1998, the Company was in the development stage.
The following discussion is intended to assist in an understanding of the
Company's financial position as of February 28, 1999 and its results of
operations for the three months and the nine months ended February 28, 1999 and
1998. The Consolidated Condensed Financial Statements and Notes included in this
report contain additional information and should be referred to in conjunction
with this discussion. It is presumed that the readers have read or have access
to Yellow Gold Of Cripple Creek, Inc.'s 1997 annual report on Form 10-KSB.
COMPARISION OF THE THREE MONTHS ENDED FEBRUARY 28, 1999 AND 1998
During the three months ended February 28, 1999, the Company reported a net loss
of $231,139, a $229,411 increase from a net loss of $1,728 for the corresponding
period in 1998. This increase is due primarily to the following factors:
Revenues. During the three months ended February 28, 1999, the Company generated
$14,400 in revenues earned in connection with its licensing agreement with Big
Blue. No revenues were earned during the corresponding period in 1988.
Cost Associated with Revenues. During the three months ended February 28, 1999,
the Company incurred $91,871 in cost associated with revenues. These costs were
incurred in connection with its licensing agreement with Big Blue. No costs
associated with revenues were incurred during the comparable period in 1998.
General and Administrative Expenses. General and administrative expenses
increased $151,185, from $1,728 during the three months ended February 28, 1998
to $152,913 for the comparable period in 1999. This change was due primarily to
the merger and resumption of operations.
Depreciation, Depletion and Amortization. Amortization increased $755, from $0
for the three months period ended February 28, 1998 to $755 for the comparable
period in 1999. This reflects the amortization of patent costs in 1999.
COMPARISON OF THE NINE MONTHS ENDED FEBRUARY 28, 1999 AND 1998
During the nine months ended February 28, 1999, the Company reported a net loss
of $289,440, a $274,364 increase from a net loss of $15,076 for the
corresponding period in 1998. This increase was primarily due to the following
factors:
Revenues. During the nine months ended February 28, 1999, the Company generated
$14,400 in revenues earned in connection with its licensing agreement with Big
Blue. No revenues were earned during the corresponding period in 1988.
Cost Associated with Revenues. During the three months ended February 28, 1999,
the Company incurred $91,871 in cost associated with revenues. These costs were
incurred in connection with its licensing agreement with Big Blue. No costs
associated with revenues were incurred during the comparable period in 1998.
General and Administrative Expenses. General and administrative expenses
increased $195,640, from $15,076 during the nine months ended February 28, 1998
to $210,716 for the comparable period in 1999. This change was due primarily to
the merger and resumption of operations.
Depreciation, Depletion and Amortization. Amortization increased $1,769, from $0
for the nine months period ended February 28, 1998 to $1,769 for the comparable
period in 1999. This reflects the amortization of patent costs in 1999.
Interest Income. Interest income of $516 was reported during the nine months
ended February 28, 1999. No interest income was earned during the comparable
period in 1998.
LIQUIDITY AND CAPITAL RESOURCES
This form 10-Q includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). All
statements, other than statements of historical facts, included in this Form
10-Q that address activities, events or developments that International
Cavitation Technologies, Inc. (the "Company"), a Colorado corporation formerly
named "Yellow Gold Of Crippled Creek, Inc.", expects or anticipates will or may
occur in the future, including such things as estimated future net expenditures
(including the amount and the nature thereof), business strategy and measures to
implement strategy, competitive strengths, goals, expansion and growth of the
Company's business and operations, plans, references to future success,
references to intentions as to future matters and other such matters are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future developments as
well as other factors it believes are appropriate to the circumstances. However,
whether actual results and developments will conform with the Company's
expectations and predictions is subject to a number of risks and uncertainties;
general economic, market or business conditions; the opportunities (or lack
thereof) that may be presented to and pursued by the Company; competitive
actions by other companies; changes in laws or regulations; and other factors,
many of which are beyond the control of the Company. Consequently, all of the
forward-looking statements made in this Form 10-Q are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized, or even if realized,
that they will have the expected consequences to or effects on the Company or
its business or operations.
The Company has incurred an accumulated deficit of $833,357 since inception and
expects to continue to incur additional losses through the year ended May 31,
1999. As of February 28, 1999, the Company anticipates that its current
resources will not be sufficient to finance the Company's currently anticipated
needs for operating and capital expenditures. The Company will attempt to
generate capital through a combination of collaborative agreements, strategic
alliances and public or private equity and debt financing. However, no assurance
can be provided that additional capital will be obtained through these
resources. If the Company is not able to obtain additional financing, it may be
forced to cease operations and, in all likelihood, all of the Company's security
holders will lose their entire investment.
The Company's working capital requirements will depend upon numerous factors,
including: progress of the Company's licensing agreements; the licensee's
ability to generate additional projects utilizing the Company's technology; the
licensee's ability to generate net income from these projects; timing and cost
of obtaining regulatory approvals; and collaborative arrangements with other
organizations.
Net cash used in operating activities for the nine months ended February 28,
1999 was $314,773, as compared to net cash provided by operating activities of
$5,000 during the corresponding period in 1998. The use of cash in operations
for the nine months ended February 18, 1999, can be attributed primarily to
$289,440 in operating losses.
Investing Activities
Net cash used in investing activities was $365,893 for the nine months ended
February 28, 1999, as compared to no activity during the same period in 1998.
This increase is primarily due to the Company placing a $327,004 deposit on a
purchase option, mentioned in further detail in Note 3 and Note 4, combined with
$38,825 in patent costs.
Financing Activities
Net cash flow provided by financing activities was $683,489 for the nine months
ended February 28, 1999 as compared to no activity during the same period in
1998. This increase is primarily due to an increase in borrowing from related
parties of $380,664 and proceeds from the sale of common stock of $302,825,
during the nine months ended February 28, 1999 as compared to the same period in
1998. The proceeds from common stock is principally a direct result of the
merger with ICT on September 30, 1998, at which time 8,625,000 shares of common
stock were issued with a book value of $300,471 as a direct result of the
reverse merger.
PART II OTHER INFORMATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
International Cavitation Technologies, Inc.
Date: April ____, 1999 /s/ David Shroff, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> FEB-28-1999
<CASH> 2,823
<SECURITIES> 0
<RECEIVABLES> 100,244
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 103,067
<PP&E> 29,311
<DEPRECIATION> 0
<TOTAL-ASSETS> 496,502
<CURRENT-LIABILITIES> 501,808
<BONDS> 0
0
0
<COMMON> 9,309
<OTHER-SE> (14,615)
<TOTAL-LIABILITY-AND-EQUITY> 496,502
<SALES> 14,400
<TOTAL-REVENUES> 14,400
<CGS> 91,871
<TOTAL-COSTS> 91,871
<OTHER-EXPENSES> 153,668
<LOSS-PROVISION> (231,139)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (231,139)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (231,139)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> 0
</TABLE>
