Cavitation Technologies, Inc. is a Nevada corporation originally incorporated
under the name Bio Energy, Inc. We have developed, patented, and commercialized
proprietary technology that may be used in liquid processing applications. Our
patented Nano Reactor® is the critical component of our CTi Nano Neutralization®
System which has been shown to reduce operating costs and increase yields in
refining vegetable oils. We have 3 issued patents for device/apparatus and another
8 for processes in the US, as well as 1 patent issued for process in Singapore.
We have also filed 6 patent applications in the US and another 9 internationally
to employ our proprietary technology in applications including vegetable and
oil refining, waste water treatment, algae oil extraction, and alcoholic beverage
enhancement.
In addition, we have commercialized our CTi Nano Neutralization® System
in the refining process of certain vegetable oils which has proven to reduce
costs and increase yields for our customers.
Vegetable Oil Refining
Our first commercial application for our technology is the CTi Nano Neutralization®
System. Our environmentally friendly process has been shown to reduce refining
costs, increase oil yield, and limit the amount of chemical additives used in
chemical refining vegetables oils. This patented process (US Patent # 8,911,808)
is designed to be incorporated into new and existing soybean, rapeseed, and
canola oil chemical refineries.
Our first pilot test of our CTi NANO Neutralization System was conducted in
2010 at Carolina Soya, a 200 metric ton/day crude soy oil refining plant in
Estill, South Carolina. Our second system, which became operational in fiscal
2011, is a 450 metric tons per day plant that has been in continuous operation
since. We have successfully shipped over 24 systems both domestically and abroad.
The global demand for vegetable oils has grown consistently at a rate of about
5.5% p.a. from 84.5 million metric tons in 1999 to over 175 million metric tons
in 2015-2016 (https://www.statista.com/statistics/263937/vegetable-oils-global-consumption/).
It is also a highly competitive commodity market in which the lowest-cost producer
has the advantage.
Desmet Ballestra Agreement
On May 14, 2012 we signed a global R and D, Marketing and Technology License
Agreement with Desmet Ballestra Group s.a. (Desmet), a Belgian company that
is actively marketing the NANO Neutralization System, the key component of which
is the Company’s reactor to soybean and other vegetable oil refiners.
The Agreement provided Desmet (licensee) a limited, exclusive license and right
to develop, design and supply Nano Reactor® systems which incorporate Nano
Reactor® devices on a global basis but was limited to oils and fats and
oleo chemical applications. We, as the licensor, remained the owner of the current
patents and patent applications but Desmet would be the co-owner of any new
process patent applications jointly developed. Desmet provided, under certain
conditions, limited monthly advance payments of $125,000 against future sales
to us through May 2015. This Agreement terminated May 2015.
On January 22, 2016, we signed a similar three-year agreement with Desmet effective
August 1, 2015. As part of the agreement, Desmet is to provide, under certain
conditions, limited monthly advance payments of $50,000 against future sales
to us. The agreement may be terminated by Desmet every August 1 should Desmet
and its affiliates fail to convert a minimum of six Nano Reactors System to
sold status during the period of June 1 to May 31. The agreement may also be
terminated in case were to lose its rights under the patents and patent applications
being used in our CTi NANO Neutralization System.
Desmet, together with its affiliates, is a global engineering and equipment
supply firm engaged in the development, design and supply of process equipment
for oils and fats processing facilities including vegetable oil refining, biofuel,
oleo chemical, seed crushing, surfactant and detergent markets. Desmet supplies
these markets with services based on the latest globally sourced technologies.
Desmet has relationships with major refiners globally A significant portion
of global vegetable oil refineries include major refiners such as Archer Daniels
Midland Company, Cargill, Inc. and Bunge Limited. Desmet has more than 40 sales
representatives selling in North America, South America, Europe, and Asia. Since
its founding in 1946, Desmet reports that it 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. Desmet operates a separate division
for each of the above markets and the Desmet Oils & Fats division has supplied
small and large plants to approximately 1,700 oil millers in 150 countries,
covering over 6,000 process sections. We have developed a relationship with
the North American arm of Desmet which operates in each of these markets and
provides us with other potential opportunities such as palm oil refining.
We and Desmet have worked together to determine the appropriate sales approach
and installation process. Our CTi Nano Neutralization System is designed to
be used as an add-on process to an existing neutralization system within soybean
and other vegetable oil refineries. Desmet is now focused on marketing our CTi’s
Nano Neutralization® System to vegetable oil refiners to help them increase
profits through cost savings and improved oil yields. Desmet purchases our CTi
Nano Neutralization Reactor Systems from us and installs them at the refinery
as part of an integrated neutralization system. Based on successful commercial
implementations, Desmet guarantees minimum economic benefits to a facility that
installs our CTi Nano Neutralization® Systems. We are therefore substantially
dependent on Desmet to identify prospects, complete sales contracts, install
the system and manage relationships with end-users. We focus on developing additional
Nano Reactor® applications and managing the intellectual property issues
associated with new developments.
Customers/ Dependence on One Customer
We continue to sell our Nano Reactors and technology only to one customer, Desmet
and they are responsible for installing and servicing the systems.
