Financial Data and Key Metrics Changes - For Q1 2025, the company generated revenue of $543,000, an increase from $315,000 in the prior year quarter, primarily from equipment manufacturing services and treatability study services [24] - Total operating expenses increased by 6% to $3,900,000 compared to $1,900,000 in the prior year quarter, driven by increases in professional fees, general and administrative expenses, and compensation [25] - The net loss for Q1 2025 was $3,700,000, compared to a net loss of $2,000,000 in the prior year quarter [25] - Cash and cash equivalents as of March 31, 2025, were $6,900,000, down from $10,700,000 as of December 31, 2024 [26] Business Line Data and Key Metrics Changes - The revenue increase was primarily attributable to a full-scale demonstration for a customer, resulting in an increase in services revenue of $376,000, offset by a decrease in equipment manufacturing revenue of approximately $162,000 [24] Market Data and Key Metrics Changes - The company is targeting a $450 billion waste destruction and management market, with a goal of achieving $250 million to $500 million in annual revenue in five years [6][22] - The U.S. government has made significant commitments to the removal and destruction of PFAS and other contaminants, which positions the company to secure a meaningful share of this work [20] Company Strategy and Development Direction - The company aims to create a national network of treatment storage and disposal facilities (TSDF) to unlock material contracts and address the growing demand for advanced waste destruction solutions [28] - The commercial model includes waste destruction as a service, capital sales, and leases, providing multiple revenue streams [28] Management's Comments on Operating Environment and Future Outlook - Management believes the demand for advanced environmental technologies is accelerating, positioning the company for leadership in the sector [27] - The company is entering a pivotal phase for scaling its technology and business, with a focus on municipal, federal, and industrial markets [22][29] Other Important Information - The company has secured a waste destruction services contract with the University of North Carolina at Chapel Hill, which could be worth over $5 million in future revenues [9] - The company is advancing partner negotiations to establish regional waste destruction service operations across North America [9] Q&A Session Summary Question: What is the revenue forecast for a typical destruction as a service deal? - Management indicated that the revenue potential will depend on the type of material processed and the size of the AirSquove unit, with projections for the AirSquove 30 unit being between $12 million and $20 million annually [33] Question: When is the Department of Defense demo expected to ramp up? - The mobilization for the Department of Defense demo is expected to start in June, with on-site work beginning in July, followed by several months to complete the demonstrations [35] Question: When will the aqueous foam destruction for North Carolina start and finish? - The company is in the process of arranging to pick up the initial 1,000 gallons and expects to start the work within the next month [37]

Business Overview - 374Water operates in a global addressable market exceeding $450 billion[8], driven by increasing regulatory demands from the EPA regarding drinking water and industrial emissions[8] - The company's AirSCWO (AS) systems are designed to handle both non-hazardous and hazardous organic wastes, producing safe water, mineral effluents, vent gas, and recoverable heat energy[8] - 374Water anticipates a potential revenue stream of $250 million to $500 million within 5+ years[8, 22] Operational Highlights - A Waste Destruction Services term sheet was signed with a leading environmental and waste management solutions provider for operations at a RCRA TSDF in the second half of 2025[9] - Demonstrations of the AirSCWO technology have shown waste destruction results at or above 99.99% across various organic waste streams[9] Financial Performance - First quarter 2025 revenue reached $0.5 million, compared to $0.3 million in the same period of 2024[24] - Gross profit for the first quarter of 2025 was $0.1 million, a significant improvement from a gross loss of $0.3 million in the first quarter of 2024[24] - Cash and cash equivalents stood at $6.9 million as of March 31, 2025, down from $10.7 million at the end of 2024[24] Future Projections - 2025 revenue is projected to be in the range of $4 million to $6 million[22], derived from a mix of contracted and highly probable future signed contracts[23]

PART I: FINANCIAL INFORMATION [Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company reported a net loss of **$3.7 million** for Q1 2025, with assets decreasing to **$16.0 million**, indicating substantial doubt about its going concern [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$16.0 million** by March 31, 2025, from **$19.2 million** at year-end 2024, primarily due to reduced cash and equity Condensed Consolidated Balance Sheet Highlights (in USD) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $6,883,845 | $10,651,644 | | Total Current Assets | $11,582,523 | $14,887,807 | | Total Assets | $15,978,163 | $19,183,833 | | **Liabilities & Equity** | | | | Total Current Liabilities | $2,848,223 | $3,127,676 | | Total Liabilities | $3,401,433 | $3,709,052 | | Total Stockholders' Equity | $12,576,730 | $15,474,781 | | Total Liabilities and Stockholders' Equity | $15,978,163 | $19,183,833 | [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenues increased to **$543,100** in Q1 2025, but net loss widened to **$3.7 million** due to significantly higher operating expenses Statement of Operations Summary (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $543,100 | $315,278 | | Gross margin (deficit) | $138,283 | $(302,020) | | Total Operating Expenses | $3,923,793 | $1,899,183 | | Loss from Operations | $(3,785,510) | $(2,201,203) | | Net Loss | $(3,698,414) | $(2,024,465) | | Net Loss per Share | $(0.03) | $(0.02) | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to **$3.5 million** in Q1 2025, resulting in a period-end cash balance of **$6.9 million** Cash Flow Summary (in USD) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | $(3,494,477) | $(2,508,653) | | Net Cash Used In Investing Activities | $(297,322) | $(590) | | Net Cash Provided by Financing Activities | $24,000 | $0 | | **Net Decrease in Cash** | **$(3,767,799)** | **$(2,509,243)** | | **Cash at End of Period** | **$6,883,845** | **$7,936,161** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the AirSCWO business, substantial doubt about going concern due to recurring losses, customer concentration, and a legal settlement - The company's AirSCWO system is designed to destroy organic wastes, including PFAS, and convert them into recoverable resources like water, minerals, and energy[22](index=22&type=chunk) - Recurring net losses (**$3.7M** in Q1 2025) and significant cash used in operations (**$3.5M**) raise substantial doubt about the company's ability to continue as a going concern, necessitating additional capital for the next twelve months[62](index=62&type=chunk)[63](index=63&type=chunk) - Two customers accounted for approximately **94%** of total revenues for the three months ended March 31, 2025[37](index=37&type=chunk) - The company accrued **$335,000** for a legal settlement with its former CEO, which was officially settled on April 2, 2025[96](index=96&type=chunk) - Subsequent to the quarter's end, the company appointed Stephen Jones to its Board of Directors and approved a significant equity compensation grant to its Chief Technology Officer[100](index=100&type=chunk)[101](index=101&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **72%** revenue increase to **$543,100**, but net loss widened to **$3.7 million** due to a **107%** rise in operating expenses Results of Operations Comparison (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $543,100 | $315,278 | $227,822 | 72% | | Gross margin | $138,283 | $(302,020) | $440,303 | (146)% | | Total operating expenses | $3,923,793 | $1,899,183 | $2,024,610 | 107% | | Net loss | $(3,698,414) | $(2,024,465) | $(1,673,949) | 83% | - Compensation expenses rose **112%** to **$1.7 million** due to increased headcount and a **$538,000** increase in stock-based compensation[112](index=112&type=chunk) - Professional fees increased **205%** to **$771,901**, mainly from legal fees for a litigation settlement and recruiting fees[113](index=113&type=chunk) - General and administrative expenses grew **193%** to **$942,440**, driven by costs for a new manufacturing facility, higher depreciation, and increased travel and investor relations expenses[111](index=111&type=chunk) - The company's plan for 2025 includes completing the City of Orlando demonstration, deploying systems for the Department of Defense and Orange County Sanitation District, scaling manufacturing, and launching Waste Destruction Services (WDS) hubs[108](index=108&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that this item is not applicable - This section is not applicable for the company[125](index=125&type=chunk) [Controls and Procedures](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed ineffective due to a material weakness from insufficient finance and accounting resources, with a remediation plan underway - The company's disclosure controls and procedures were deemed not effective as of the end of the reporting period[126](index=126&type=chunk) - The ineffectiveness is due to a material weakness in internal controls caused by a lack of full-time resources in the finance and accounting department[126](index=126&type=chunk)[129](index=129&type=chunk) - A remediation plan is being established to hire additional full-time personnel to enhance financial and accounting resources[129](index=129&type=chunk) PART II: OTHER INFORMATION [Legal Proceedings](index=20&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding a legal settlement for **$335,000** with the former CEO is incorporated by reference from Note 8 - Information regarding legal proceedings is incorporated by reference from the 'Legal Settlement' section in Note 8 of the financial statements[133](index=133&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks to its business, financial condition, and stock price, including unproven technology, capital needs, and potential Nasdaq delisting [Risks Related to Business and Economic Conditions](index=22&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20General%20Economic%20Conditions) Key business risks include unproven commercial viability of AirSCWO technology, limited operating history, and identified material weaknesses in internal controls - A sustainable market for the company's products may never develop, and the technology's commercial viability is unproven as it has not been utilized on a full-scale commercial basis[141](index=141&type=chunk)[142](index=142&type=chunk) - The company has a limited operating history with no material revenues, making evaluation of its business difficult[143](index=143&type=chunk) - Material weaknesses have been identified in the company's internal control over financial reporting due to personnel limitations[156](index=156&type=chunk)[159](index=159&type=chunk) [Risks Related to Financial Position and Capital Requirements](index=28&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Requirements) Recurring losses and negative cash flows raise substantial doubt about the company's going concern ability, necessitating additional financing which may cause dilution - The company does not generate sufficient revenue and will require additional capital to continue as a going concern, as current cash resources are insufficient for the next twelve months[196](index=196&type=chunk)[197](index=197&type=chunk) - The company has inadequate capital and needs substantial additional funds to execute its business plan; future financing may not be available or could be on unfavorable terms, leading to potential dilution[201](index=201&type=chunk)[202](index=202&type=chunk)[205](index=205&type=chunk) [Risks Related to Intellectual Property](index=30&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company faces risks in protecting its intellectual property, potential infringement claims, and reliance on third-party licensed technologies - The company may have difficulty protecting its intellectual property and could incur substantial costs in patent litigation[207](index=207&type=chunk)[208](index=208&type=chunk) - The company may become subject to claims of infringing on the intellectual property of others, which could lead to costly litigation and prohibit product development[214](index=214&type=chunk)[216](index=216&type=chunk) - The company depends on technologies licensed from third parties, and any loss of these rights could prevent the sale of its products[221](index=221&type=chunk)[222](index=222&type=chunk) [Risks Related to Reliance on Third Parties](index=32&type=section&id=Risks%20Related%20to%20our%20Reliance%20on%20Third%20Parties) The company is highly dependent on third-party suppliers and manufacturers, facing risks of component shortages, delays, and price changes without long-term contracts - The company's products contain materials from numerous global suppliers, exposing it to potential component shortages, delays, and price changes[225](index=225&type=chunk)[226](index=226&type=chunk) - The company is dependent on third-party manufacturers and suppliers; if they are unable or unwilling to provide components, the company's ability to sell its products could be impaired[228](index=228&type=chunk)[229](index=229&type=chunk) [Risks Related to Common Stock and Capital Structure](index=33&type=section&id=Risks%20Related%20to%20our%20Common%20Stock%20and%20Capital%20Structure) Common stock volatility and potential Nasdaq delisting due to non-compliance with minimum bid price and independent director requirements pose significant risks - The company may not regain compliance with Nasdaq's continued listing requirements, including the **$1.00** minimum bid price rule, and faces a potential delisting[253](index=253&type=chunk)[254](index=254&type=chunk)[256](index=256&type=chunk) - The company also fails to comply with Nasdaq's independent director requirement and is in a cure period to regain compliance[257](index=257&type=chunk)[259](index=259&type=chunk) - The market price of the common stock has been highly volatile and has declined significantly, partly due to large sales by a single significant stockholder[231](index=231&type=chunk)[247](index=247&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[261](index=261&type=chunk) [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[261](index=261&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company states that this item is not applicable - Not applicable[262](index=262&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No other material information was reported, and no Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers - During the fiscal quarter ended March 31, 2025, no directors or officers informed the company of the adoption, modification, or termination of a Rule 10b5-1 trading arrangement[264](index=264&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including the CTO's employment agreement, CEO/CFO certifications, and XBRL data - Exhibits filed include the employment agreement for Rajesh Melkote (CTO), CEO/CFO certifications (SOX 302 & 906), and XBRL files[266](index=266&type=chunk)

EX-99.1 2 scwo_ex991.htm PRESS RELEASE EXHIBIT 99.1 374Water Reports First Quarter 2025 Financial Results DURHAM, NC – May 15, 2025 - 374Water Inc. (NASDAQ: SCWO) ("374Water") (the "Company"), a global leader in waste destruction technology for the municipal, federal, and industrial markets, today reported its financial and operational results for the first quarter ended March 31, 2025. "The first quarter of 2025 was focused on our robust, actionable backlog and pipeline and accelerating our proprietary Air ...

Core Insights - 374Water Inc. reported its financial and operational results for Q1 2025, focusing on the commercial rollout of its AirSCWO technology and expanding its waste destruction services [1][2][4] Financial Performance - Revenue for Q1 2025 was $0.5 million, an increase from $0.3 million in the prior year, primarily driven by equipment manufacturing services and full-scale demonstrations [12][20] - Total operating expenses rose 106% to $3.9 million compared to $1.9 million in the previous year, attributed to increased general and administrative expenses, professional fees, and compensation [12][20] - The net loss for Q1 2025 was $3.7 million, compared to a net loss of $2.0 million in the prior year [12][20] Operational Developments - The company is advancing its AirSCWO technology, with significant progress in ruggedizing and optimizing the system, and plans for multiple deployments throughout 2025 [5][6] - A contract was awarded by the State of North Carolina to destroy 1,000 gallons of AFFF containing PFAS, with potential for an additional 29,000 gallons in a subsequent phase [2][4] - The company has appointed new executives, including Raj Melkote as Chief Technology Officer and Stephen Jones to the Board of Directors, to enhance its commercial strategy [3][12] Market Context - The U.S. EPA's recent actions to combat PFAS contamination are expected to create strong demand for 374Water's AirSCWO platform, as companies seek to limit liability and comply with new regulations [4][6] - The company is establishing Waste Destruction Services operations at a partner facility, which will support its commercial rollout [12][6] Upcoming Initiatives - The company anticipates completing various waste destruction demonstrations and launching its AS1 and AS6 units, with plans to accept third-party waste streams [5][12] - Key upcoming events include the completion of a 90-day biosolids destruction demonstration at Orlando's facility and the anticipated Department of Defense project in Detroit [12][6]

Core Viewpoint - 374Water Inc. supports the EPA's actions to combat PFAS contamination, which is expected to create demand for its AirSCWO technology designed to destroy organic wastes, including PFAS [1][3][4] Company Overview - 374Water Inc. is a global leader in organic waste destruction technology, focusing on municipal, federal, and industrial markets [1][6] - The company's AirSCWO technology efficiently destroys a wide range of organic wastes, producing safe dischargeable water, mineral effluent, and recoverable heat energy [6] Industry Context - The EPA's strategy aims to prevent PFAS from entering drinking water systems and hold polluters accountable, emphasizing the federal government's commitment to public health [2][5] - The planned actions by the EPA include implementing a PFAS testing strategy, providing annual updates to PFAS destruction guidance, and establishing a "polluter pays" framework [8]

DURHAM, N.C., May 01, 2025 (GLOBE NEWSWIRE) -- 374Water Inc. (NASDAQ: SCWO) ("374Water") (the "Company"), a global leader in waste destruction technology for the municipal, federal, and industrial markets, will hold a conference call on Thursday, May 15, 2025 at 4:30 p.m. Eastern time to discuss its results for the first quarter ended March 31, 2025. A press release detailing these results will be issued prior to the call. 374Water CEO Chris Gannon and CFO Russell Kline will host the conference call, follow ...

Former President & CEO of Regeneration and Recovery Solutions at Veolia North America Nominated as Independent Director at Upcoming Annual Meeting Annual Meeting of Stockholders to be Held at 10:00 a.m., Eastern Time, on June 11, 2025 DURHAM, N.C., April 30, 2025 (GLOBE NEWSWIRE) -- 374Water Inc. (NASDAQ: SCWO) ("374Water") (the "Company"), a global leader in waste destruction technology for the municipal, federal, and industrial markets, today announced the appointment of James Pawloski as an advisor to th ...

Core Insights - 374Water Inc. has appointed Stephen J. Jones to its Board of Directors, enhancing its leadership team and fulfilling Nasdaq's independent director requirement [1][2][4] - Mr. Jones brings extensive experience in environmental services and industrial gases, having held leadership roles at Covanta Holding Corporation and Air Products and Chemicals, Inc. [2][3] - The company aims to leverage Mr. Jones' industry knowledge and relationships to accelerate the commercial rollout of its AirSCWO technology for waste destruction [4][5] Company Overview - 374Water Inc. is a global leader in waste destruction technology, focusing on municipal, federal, and industrial markets [1][5] - The company's AirSCWO technology efficiently destroys and mineralizes a wide range of organic wastes, producing safe dischargeable water, mineral effluent, vent gas, and recoverable heat energy [5][6] - 374Water is dedicated to innovative waste treatment solutions, aiming to create a greener future and eliminate harmful pollutants [6]

Core Viewpoint - 374Water Inc. has reached a settlement with its co-founder and former CEO, Yaacov (Kobe) Nagar, regarding an employment claim, which both parties view as a positive step towards future collaboration [1][2][3] Company Overview - 374Water Inc. is a global leader in organic waste destruction technology, focusing on municipal, federal, and industrial markets [1][4] - The company's AirSCWO technology is designed to efficiently destroy and mineralize a wide range of organic wastes, producing safe dischargeable water, mineral effluent, vent gas, and recoverable heat energy [4] - 374Water's destruction capacity ranges from 1 ton per day to over 200 tons per day, offering both capital sale and lease options, as well as turn-key waste destruction services [4] Settlement Details - The terms of the settlement with Mr. Nagar are confidential, but both parties express satisfaction with the resolution and a commitment to a productive future [2][3] - The CEO of 374Water, Chris Gannon, emphasized the value of Mr. Nagar's contributions and the excitement for future collaboration [3]