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374Water Releases First Quarter 2024 Results and Provides Business Update By Investing.com

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New CEO Chris Gannon unveils Product Development, Commercialization and Go-to-Market Objectives

DURHAM, NC / ACCESSWIRE / May 15, 2024 / 374Water Inc. (NASDAQ:SCWO), a global leader in cutting-edge, sustainable waste management technologies, today provides a business update and reports its financial results for the first quarter ended March 31, 2024.

“In just under a month, we have hit the ground running developing a strategic plan to unlock the value inherent in this enterprise. I have immersed myself in our technology and our market opportunities to chart the best path forward in our product development, commercialization, and go-to-market approach,” said Chris Gannon, CEO of 374Water. “We have a massive opportunity in front of us to take advantage of regulatory tailwinds driving demand for technologies like our AirSCWO system. Over the ensuing months, we will provide more detail and clarity on our go forward strategy, with a focus on four key areas: (1) executing on our municipal biosolid/sludge and federal/DOD contractual obligations which is an important proof point; (2) expanding the application of our AirSCWO systems to industrial and other waste streams; (3) securing new manufacturing and engineering facilities; and (4) expanding our compliment of talented engineers and field personnel, as well as our leadership team.”

Financial Highlights

  • For the three-month period ended March 31, 2024, the Company generated revenue of $315,000 which compares to $801,000 for the three months ending March 31, 2023, a 61% decrease.
    • Our revenue is primarily based on progress toward completion of our sold unit and also includes the sale of treatability services. Costs associated with our sold unit have started to decline as we reach the end of our fabrication and testing, which have had a direct correlation to the reduced revenue recognized this year. This has had a direct impact on our change in revenue year-over-year.
  • Total Operating Expenses for the quarter ended March 31, 2024, increased marginally to $1.9 million from $1.8 million in the prior year quarter driven primarily by an increase in R&D expense.
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Capital Structure

  • As of March 31, 2024, the Company had working capital of $11.7 million. We are actively working on optimizing our operational efficiencies and exploring new market opportunities, all aimed at long-term value creation while remaining steadfast in our commitment to innovation and excellence. A primary financial goal for the Company is to extend its runway while scaling the business.

Business Highlights

  • On April 23, 2024 the Company announced the appointment of Chris Gannon as its new President and Chief Executive Officer. Mr. Gannon brings deep executive leadership experience in multiple disciplines and industries, including environmental technology development, highly engineered product, advanced manufacturing, and global customer support and service with customers in the municipal, industrial, commercial, defense, and medical spaces.
  • In March 2024, the Company announced a new contract with the City of Orlando, highlighted by the deployment of an AirSCWO 6 service unit, which will be integrated into Orlando’s Iron Bridge Water Pollution Control Facility. This AirSCWO 6 unit is expected to deploy in 2024.
  • 374Water continued its progress on an expected 2024 deployment to Orange County Sanitation District. The Company is underway with factory acceptance testing and once achieved, will begin mobilizing the unit to Orange County.
  • The Company continues to focus on executing demonstrations and securing demonstration partners within the municipal biosolids, federal and military PFAS, and industrial markets.
  • The Company is in active discussions with major TSDF operators to not only serve as technology development and commercialization partners, focused initially on PFAS intensive waste streams, but also serve as long-term waste destruction partners. The Company places a priority these partnerships as we continue to scale our commercial grade technology to meet growing demand for AirSCWO technology.
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Earnings Conference Call

Management will hold a conference call at 10:00 am Pacific Time (1:00 pm Eastern Time) on Friday, May 17, 2024, to provide a more detailed business update and discussion of quarterly results. Participants who wish to join the conference by telephone can access the call by dialing (Toll Free) 888-506-0062 or (International) 973-528-0011. Participants may join the live webcast by accessing it at the webcast registration link here: https://www.webcaster4.com/Webcast/Page/3040/50613.

A webcast replay will be available through May 31, 2024 on the Investors Section of the Company’s website at https://374water.com/investor-relations/.

For more on AirSCWO or about our team, visit 374Water.com or follow us on LinkedIn.

About 374Water

374Water Inc. (NASDAQ:SCWO) is a global cleantech company with innovative solutions to wastewater treatment and waste management issues. 374Water’s AirSCWO technology transforms organic “wastes” into minimal impact, value-added products, effectively shifting the waste management paradigm from disposal to resource recovery. 374Water is leading a new era of creating value in sustainability, eliminating PFAS and protecting our communities. Follow us on LinkedIn.

Cautionary Language

This press release contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,” and other words of similar meaning.

Investor Contact:
Heather Crowell
ir@374water.com

Media Contact:
Christian Rizzo
media@374water.com

374Water Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, 2024 (Unaudited) and December 31, 2023

March 31,

2024

December 31,

2023

Assets

Current Assets:

Cash

$ 7,936,161 $ 10,445,404

Accounts receivable, net of allowance

84,324 64,792

Unbilled accounts receivable

1,771,609 1,494,553

Other accounts receivable

34,161 39,749

Inventory, net

2,601,658 2,276,677

Prepaid expenses

921,365 581,085

Total Current Assets

13,349,278 14,902,260

Long-Term Assets:

Property, and Equipment, net

223,339 230,971

Intangible asset, net

971,691 988,029

Total Long-Term Assets

1,195,030 1,219,000

Total Assets

$ 14,544,308 $ 16,121,260

Liabilities and Stockholders’ Equity

Current Liabilities:

Accounts payable and accrued expenses

$ 755,721 $ 572,297

Accrued contract loss provision

600,000 500,000

Accrued legal settlement

135,000 135,000

Unearned revenue

132,768 130,000

Other liabilities

10,408 36,787

Total Current Liabilities

1,633,897 1,374,084

Total Liabilities

1,633,897 1,374,084

Commitments and contingencies (Note 9)

Stockholders’ Equity

Preferred stock: 50,000,000 convertible Series D preferred shares authorized; par value $0.0001 per share, nil issued and

outstanding at March 31, 2024 and December 31, 2023

Common stock: 200,000,000 common shares authorized, par value $0.0001 per share, 132,670,446 and 132,667,107 shares

outstanding at March 31, 2024 and December 31, 2023, respectively

13,266 13,266

Additional paid-in capital

30,872,643 30,684,943

Accumulated deficit

(17,977,969 ) (15,953,504 )

Accumulated other comprehensive loss

2,471 2,471

Total Stockholders’ Equity

12,910,411 14,747,176

Total Liabilities and Stockholders’ Equity

$ 14,544,308 $ 16,121,260
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374Water, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the three months ended March 31, 2024 and 2023 (Unaudited)

2024 2023

Revenue

$ 315,278 $ 801,458

Cost of goods sold

617,298 720,146

Gross margin

(302,020 ) 81,312

Operating Expenses

Research and development

535,147 355,905

Compensation and related expenses

651,604 718,760

Professional fees

252,705 99,572

General and administrative

459,727 585,659

Total Operating Expenses

1,899,183 1,759,896

Loss from Operations

(2,201,203 ) (1,678,584 )

Other Income

Interest income

104,620 37,859

Other income

72,118 382

Total Other Income

176,738 38,241

Net Loss before Income Taxes

(2,024,465 ) (1,640,343 )

Provision for Income Taxes

Net Loss

$ (2,024,465 ) $ (1,640,343 )

Other comprehensive income

Foreign currency translation gain

824

Unrealized gain on marketable securities

18,967

Total other comprehensive loss

19,791

Total comprehensive loss

(2,024,465 ) (1,620,552 )

Net Loss per Share – Basic and Diluted

$ (0.02 ) $ (0.01 )

Weighted Average Common Shares Outstanding – Basic and Diluted

132,668,777 127,146,695

374Water Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2024 and 2023 (Unaudited)

Cash Flows from Operating Activities

2024 2023

Net loss

$ (2,024,465 ) $ (1,640,343 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization expense

24,560 29,105

Issuance of common stock for services

4,500

Stock-based compensation

183,200 214,924

Gain on foreign currency translation

824

Increase in inventory reserve

50,000

Changes in operating assets and liabilities:

Accounts receivable

(19,532 ) (26,188 )

Unbilled accounts receivable

(277,056 ) (754,290 )

Other receivables

5,588 (308,374 )

Inventory

(374,981 ) (127,309 )

Prepaid expenses

(340,280 ) 23,285

Accounts payable and accrued expenses

183,424 (581,582 )

Accrued contract loss provision

100,000

Unearned revenue

2,768 5,000

Other liabilities

(26,379 ) (13,528 )

Net Cash Used In Operating Activities

(2,508,653 ) (3,178,176 )

Cash Flows from Investing Activities

Purchase of equipment

(7,303 )

Increase in intangible assets

(590 ) (2,705 )

Cash Used In Investing Activities

(590 ) (10,008 )

Cash Flowfrom Financing Activities

Proceeds from the sale of common stock

8,294,708

Cash Provided by Financing Activities

8,294,708

Net (Decrease) Increase in Cash

(2,509,243 ) 5,106,224

Cash, Beginning of the Period

10,445,404 4,046,937

Cash, End of the Period

$ 7,936,161 $ 9,153,161

SUPPLEMENTAL CASH FLOW DISCLOSURES:

Cash paid for interest

$ $

Cash paid for taxes

$ $
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SOURCE: 374Water Inc.



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