374Water Inc.

Overview

374Water Inc. (the “Company”, “374Water”, “We”, or “Our”) is a global industrial technology and services company providing innovative solutions addressing global organic waste destruction/treatment and waste management issues within the municipal, federal, and industrial markets. 374Water offers our proprietary AirSCWO system, which is designed to efficiently destroy and mineralize a broad spectrum of non-hazardous and hazardous organic wastes producing safe dischargeable water streams, safe mineral effluent, safe vent gas, and recoverable heat energy. Importantly, our AirSCWO system is designed to eliminate recalcitrant organic wastes without creating waste byproducts, as well as to simplify existing, complex waste processing and disposal practices utilized throughout our target markets. Our AirSCWO system is designed to effectively convert solid and liquid wastes such as sewage sludge, biosolids, food waste, hazardous and non-hazardous waste, and forever chemicals (e.g., “per-and polyfluoroalkyl substances” or “PFAS”) into recoverable resources including water, minerals, and heat energy, by focusing on waste as a valuable resource.

In fiscal year 2024, 374Water outlined a new strategic plan and tactical roadmap. Throughout the year, we executed our plan reaching critical milestones we believe position the Company’s business outlook well for fiscal year 2025. 2024 achievements include ruggedizing and optimizing our AirSCWO system to effectively process a variety of organic waste streams; deploying our first commercial scale AirSCWO system to the City of Orlando’s Iron Bridge Water Reclamation Facility; completing federal and industrial waste destruction demonstrations; growing our backlog and demand in the municipal, federal and industrial markets; relocating our laboratory facility to a significantly larger state-of-the-art Biosafety Level 1 Laboratory to meet increasing lab-scale waste destruction demand and expedite the advancement of our AirSCWO technology “AS”); pursuing Waste Destruction Services (“WDS”) operations with potential partner Treatment, Storage, and Disposal Facility (“TSDF”) operators; relocating our manufacturing operations; and strengthening our leadership team and organization.

As we begin 2025, we believe 374Water is well positioned with a robust plan to scale revenue, operations, and capitalize our business. During 2025, we expect to complete our commercial-scale demonstration under our contract with the City of Orlando; deploy a permanent AirSCWO system to The Orange County Sanitation District (“OC San”) in Fountain Valley, CA; deploy an AS system to Detroit, MI in partnership with the Defense Innovation Unit for a demonstration of AirSCWO’s waste destruction effectiveness for specific Department of Defense applications;; deploy an AirSCWO system to St. Cloud, MN, as part of a Legislative-Citizen Commission on Minnesota Resources (LCCMR) initiative to demonstrate its effectiveness destroying Minnesota waste; further scale our manufacturing capacity to meet client demand for AirSCWO systems of various sizes; continue to improve our AirSCWO technology and develop larger size AirSCWO systems; negotiate waste destruction service agreements with one or more TSDFs; and begin accepting Third-party waste streams for our initial TSDF WDS hub(s).

Our Technology

374Water has developed AirSCWO, a proprietary waste destruction/treatment system which harnesses the power of supercritical water oxidation (“SCWO”). AirSCWO leverages the unique properties of water in its supercritical phase (above 374 o C and above a barometric pressure of 221 Bar). The supercritical phase of water has unique properties, which when combined with air, destroys “waste” by oxidizing organic matter and yielding recoverable energy, minerals, and water. Our AirSCWO technology platform sits at the heart of our waste destruction solutions. The effectiveness of AirSCWO has been demonstrated on a wide variety of organic waste streams at commercial and lab bench scale with waste destruction results at or above 99.99%.

Our AirSCWO technology has treated a wide variety of non-hazardous and hazardous solid and liquid organic wastes. Our technology can effectively process solid wastes, which can be pre-processed into slurries for treatment, including wastewater sludges and biosolids, spent granular activated carbon (“GAC”), spent ion exchange resins (“IX”), and hard-to-degrade plastics, to name a few. In addition, our technology can process liquid wastes such as aqueous film forming foam (“AFFF”) used in firefighting, landfill leachate, light-non-aqueous phase liquid (“L-NAPL”), military wastes, industrial solvents, oily sludges, pharmaceuticals, foamate streams, pesticides, and other industrial wastes, to name a few. AirSCWO has been shown to treat (destroy) wastes to levels at or below regulatory standards, reduce or eliminate disposal costs, remove operational bottlenecks, and reduce liabilities and other risks associated with waste management.

Our AirSCWO system is designed to be a continuous flow waste destruction process with a unique system design that includes highly efficient energy recapture technology, to minimize overall energy demand and maximize reusable energy. Our AirSCWO system testing so far has demonstrated that our system can run continuously at commercial scale with periodic stops for routine maintenance and checkups. We continue to shorten the duration and lessen the frequency of such maintenance downtime, to increase process efficiency in our AirSCWO systems for our clients. Our technology addresses multiple applications in diverse market verticals on a global scale. The technology we continue to refine and innovate is designed to address business operations and environmental challenges, that we believe have been inadequately addressed and poorly resourced until now. While we are still developing the technology, we believe 374Water’s AirSCWO technology is a paradigm-shift across sectors of waste management.

Products and Services

AirSCWO Solutions

374Water’s ability to provide scaled waste destruction solutions is a significant differentiator across waste treatment and destruction providers. We intend to offer four (4) commercial-scale AirSCWO system models and corresponding pre- and post-treatment technologies to fully support end customers' organic waste destruction needs. These AirSCWO models include the AirSCWO1 (“AS1”), AirSCWO6 (“AS6”), AirSCWO30 (“AS30”) and AirSCWO 100+.

The highly mobile AS1 system is designed to process over 700 kg per day of wet waste and is ideal for onsite demonstrations, event cleanups, and down-scaled WDS deployments. We are currently finalizing the design and construction of our first AS1 system, which will then be deployed following for various demonstrations.

The mobile AS6 system is designed to process up to six (6) metric tons per day of wet waste, and is well-suited for smaller municipal, federal, and industrial sites and may be utilized for both permanent onsite destruction and mobile WDS customer needs. We currently have two of the AS6 systems, oneis already operating in Orlando, FL and the second is scheduled for delivery to OC San in 2025.

The AS30 system is currently still in the design phase. We intend for the AS30 system to be able to process up to 30 metric tons per day of wet waste. We believe that, once developed, manufactured and ready for deployment, this unit will be ideal for mid-sized municipal, federal, and industrial sites, as well as regional TSDF and landfill WDS facilities. We hope to begin manufacturing one or more AS30s in 2025, depending on the level of customer demand and having sufficient capital.

Finally, our largest bespoke AirSCWO100+ systems will be designed to process up to 100 or more metric tons of wet waste per day and will be permanent installations. We have currently not begun the process of designing and building the AirSCWO 100+ system, and we expect such work to begin in the coming years. As these are bespoke systems, we expect our timeframe for building these will be impacted by the level of customer demand. We believe these systems will be well suited for large municipal wastewater treatment, industrial, and TSDF facilities.

All AirSCWO systems are designed to be flexible solutions to meet the specific needs of municipal, federal, and industrial customers. Our AirSCWO systems are designed to augment or replace conventional waste management infrastructure or be the sole waste destruction solution. In addition, our AirSCWO systems are designed to operate in parallel, thereby allowing customers to easily and efficiently expand or contract waste destruction capacity needs, as necessary.

Pre- and Post-Treatment Solutions

We offer, as part of a broader solution package, ancillary equipment to pre-treat the inlet waste stream and post-treat the byproduct stream, depending on the application. Such solutions may be developed by the Company, or by its strategic partners, to provide a complete solution and integrated treatment train.

Our pre-treatment packaged systems are designed to condition waste streams to meet the AirSCWO inlet requirements (e.g., water percentage, total dissolved solids, particulate size, calorific content, etc.). Our pre-treatment systems are installed upstream of our AirSCWO system to ensure system waste destruction processing performance.

Our post-treatment packaged systems are designed to enhance the system outputs value (e.g., carbon dioxide utilization or sequestration, minerals recovery and upgrade, water purification, and energy recovery/recycling, etc.). Our post-treatment systems are installed downstream of our AirSCWO system to improve performance and byproduct valorization.

Waste Destruction Services

During 2024, we announced the launch of our WDS business. Along with capital sales and service contracts, we intend for WDS to provide our customers with a fit-to-need waste destruction service without significant capital investment. Our WDS business is based on a partner model with: (1) Wastewater facilities, (2) Federal facilities, (3) Industrial facilities, and (4) RCRA Part B permitted TSDFs. These partnerships may take the form of operational joint ventures and/or service provider models.

We intend to establish our first WDS operations in 2025. These WDS facilities will utilize our AS6 system initially. In 2026, we intend to upgrade WDS facilities to our much larger capacity AS30 systems, subject to our successful development and manufacturing of our AS30 systems. We believe our initial AS6 WDS installation has the potential to generate between $3.0 million and $5.0 million in annual revenue, and we believe our AS30 system has the potential to generate $15.0 million to $25.0 million in annual revenue.

We also provide waste destruction demonstration services to existing and new clients. For these demonstration services we will utilize our AS1 and AS6 units.

We have begun establishing our transportation and logistics operations to accept and transport waste streams for destruction at WDS sites. We plan to eventually have a network of transportation and logistics partners to assist us as we grow our WDS operations nationally.

Laboratory & Testing Services

374Water provides extensive AirSCWO waste destruction laboratory and testing services to municipal, federal, and industrial clients. Our laboratory also serves an integral part of our R&D efforts.

Our lab conducts AirSCWO waste destruction treatability evaluations for prospective clients on a wide range of waste streams. These waste destruction evaluations demonstrate the destruction efficacy of our AirSCWO solution to support operations and solution designs. Our lab services are often the first experience our clients have in learning the power of AirSCWO to destroy organic wastes.

Our lab also provides us with rapid analysis, characterization, and treatment parameters to support full-scale waste destruction services. We use our bench-scale system for continuous optimization of our AirSCWO process for improved performance and customized reactor setups for unique client wastes.

Field Operations & Maintenance Services

Along with our capital sale, lease, and WDS solutions, we offer comprehensive professional services ranging from full system operation to on-demand support to maintenance. We have fully equipped and skilled field teams capable of installing, integrating, and operating our AirSCWO systems in a vast range of settings and for different applications.

The Company offers sales agreements which include the supply of spare and replacement parts, and maintenance and repair service contracts.

Markets and Industries

Waste Processing Technology Conversion

The municipal, federal, and industrial market verticals seek alternatives to existing waste treatment, processing, and disposal processes which are considered inadequate as they primarily transport, transform, concentrate, and/or partially destroy organic wastes instead of completely destroying these wastes.

Primary demand drivers for waste destruction include excessive cost of current disposal practices, the desire for waste destruction at the source of waste generation, aging, outdated and/or inadequate waste disposal infrastructure, poor waste disposal processes or options, population growth and urbanization, increasing quantity/complexity of waste streams, public health, underlying business economics, existing State and Federal regulations, the threat of additional regulations, threat from contaminant of emerging concern (“CECs”), resource scarcity, corporate sustainability targets, commodity prices, climate change, and energy security.

We believe our AirSCWO solutions provide unique value propositions that support rapid market acceptance across various verticals and applications. These differentiators include:

Municipal Market Vertical

The global municipal water and wastewater treatment market was estimated to be more than $347 billion annually in 2024, growing at a Compound Annual Growth Rate (CAGR”) of approximately 7.5%. The U.S. water and municipal wastewater management market, which is our near-term focus, includes approximately 152,000 water utilities, 16,000 wastewater treatment facilities, 3,000 capped and uncapped landfills, and more than 52,000 state and local firefighting units. All these facilities have waste streams which must be managed, disposed of, and/or destroyed. We believe our AirSCWO technology is well positioned to provide a compelling waste destruction solution to these markets.

**Water Utilities:**Water utilities are increasingly impacted by contaminants like PFAS, microplastics, and pharmaceuticals, leading to widespread adoption of treatment methods like GAC and IX to filter these contaminants. As these materials become saturated with PFAS and other pollutants, we believe technologies like AirSCWO are essential for safely disposing of and destroying the spent GAC and spent IX, offering a more complete solution for PFAS management.

Wastewater Treatment Facilities: Wastewater facilities treat sludge wastes. Sludge is a semi-solid by-product obtained from the treatment of residential and commercial (i.e., municipal) or industrial wastewater. Municipal sludge is typically treated in large biological treatment processes that allow for the wastewater to reside for extended periods in an air or oxygen rich environment (aerobic digestion) or in an oxygen deficit environment (anaerobic digestion) that promotes biological breakdown of organic solids. This process generates a final residue known as biosolids, as it mainly consists of biological bacteria. Sludge and biosolids management are a key part of any wastewater treatment process. Those high strength streams are ideal for our AirSCWO technology since they contain significant calorific content that facilitates the oxidation or destruction process.

Landfills: Landfill Leachate is a liquid that forms when water percolates through waste material in a landfill, picking up various dissolved and suspended substances. This contaminated liquid is a result of rainfall, surface runoff, and decomposing waste within the landfill, which can include organic material, chemicals, heavy metals, pathogens, and biosolids.

State and Local Fire Departments: Full-scale removal and disposal of PFAS-AFFF firefighting foam, is now underway at the State and Municipal government levels. Sixteen U.S. states currently operate AFFF take-back programs to enable fire departments to safely dispose of firefighting foam. These programs enable fire departments and agencies to return obsolete, used or unused AFFF stocks, which are then safely stored and processed for disposal.

Federal Market Vertical

The U.S. federal waste management market is estimated at $15 billion. The federal market includes 722 Department of Defense (“DoD”) sites, 53 Department of Energy (“DoE”) sites, and 150 airports under the oversight of the Federal Aviation Agency (“FAA”). Federal agencies have stockpiles of contaminated waste streams such as AFFF (firefighting foam), chemicals, narcotics, biosolids, filtration media, hydrocarbons and other wastes which must be stored, treated, destroyed and disposed. Federal agencies are actively seeking solutions to eliminate these contaminated waste streams. We believe our AirSCWO technology is well positioned to provide a compelling waste destruction solution to these markets.

Department of Defense: The DoD has identified 722 military installations that will require PFAS-focused environmental remediation. Recent site clean-up estimates exceed $29 billion for PFAS contamination and other organic wastes in the aggregate. The Army Corp of Engineers has begun to award task order contracts to remove and dispose of PFAS-contaminated fire-fighting equipment foam at US military facilities. We also see growing demand for the destruction of PFAS-contaminated filtration media, such as GAC and IX, waste streams that are used in the filtration of wastewater and soil washing at DoD facilities. We are working directly with U.S. military services to demonstrate the efficacy of destruction and performance scale of the AirSCWO system. Additional destruction demonstrations and projects are contracted into 2026. We expect Bipartisan Congressional support for funding the remediation of PFAS-contaminated military facilities will continue; although there is no short-term certainty whether the funds will be cut or increased.

Department of Energy: The DoE spends approximately $8 billion annually to treat hazardous waste. In 2024 the DOE spent $455M on PFAS-contaminated wastes including the treatment of radioactive, PFAS-contaminated biosolids. Landfills, fire departments, water treatment plants, Cold War-era liquid waste discharges, and fire training facilities are the top five PFAS-contaminated sites. DOE has identified 53 contaminated facilities that require further investigation and remediation.

Federal Aviation Agency: Like the DoD, the use of AFFF to extinguish fires at civil airports is coming to an end with the FAA directing airports to migrate to the new Military Standard Fluorine Free Foam (“F3”). To facilitate this process the FAA Reauthorization Act of 2024 included $350 million for the PFAS Replacement Program for Airports to support the transition to F3. While the focus of this five-year program is for equipment replacement, funds from this grant can also be spent on AFFF clean up and disposal. We are following FAA and airport interest in environmental remediation closely, working with partners and ready for AAAF destruction opportunities.

Industrial Market Vertical

The global industrial organic waste market is estimated at $128 billion as of 2024, growing at a CAGR of 6.15%, driven by key sectors such as battery recycling, pharmaceuticals, and oil & gas, all of which generate significant organic waste. The rapid growth in battery recycling is largely fueled by the rise in electric vehicle demand, while the oil & gas and pharmaceutical industries continue to contribute substantial amounts of organic waste. Additionally, numerous lawsuits and stringent regulations related to PFAS contamination, along with ongoing cleanup efforts, further drive the need for innovative waste destruction solutions, creating a compelling opportunity for AirSCWO to address these challenges effectively. We believe our AirSCWO technology is well positioned to provide a compelling waste destruction solution to these markets.

Treatment, Storage, and Disposal Facility Market Vertical

The United States Resource Conservation and Recovery Act (the “RCRA”) Part B permitted TSDF market includes more than 860 sites in the U.S. As part of our growth strategy, we are engaging with TSDF market participates to establish one or more waste destruction sites to service customers within our three core markets, municipal, federal, and industrial, and provide a WDS offering which we believe will enable us to generate recurring service revenues. We seek to partner with TSDFs who are known to our customers, have experience in non-hazardous and hazardous waste treatment, and have appropriate local, state and federal operating permits. We believe our AirSCWO technology is well positioned to provide a compelling waste destruction solution to TSDF market participants.

374Water is targeting high value markets that we expect will contribute to the Company’s revenue and thereby help fuel our growth plans. Table 1 below shows near-term target markets, their subsegments, and the relevant applications associated with those markets.

Table1: Representative target markets, their subsegments and applications

Sales and Marketing

Our business development and sales team offer our products through capital sale, lease, and waste destruction services to municipal, federal, and industrial customer throughout North America. Our municipal efforts focus on building trust and strong working relationships with state and local municipal water and wastewater leaders directly responsible for waste handling and processing operations. Our federal efforts focus on establishing credibility and strong relationships with Government experts, Congressional leaders, and Civilian and Military officials directly responsible for addressing PFAS waste streams in the DoD, DoE, and FAA. Government officials have personally visited our facilities and observed firsthand the destruction of multiple PFAS-contaminated waste streams. Our industrial efforts are focused on outreach, lab and full-scale waste destruction demonstrations across multiple industrial sub-verticals.

During 2025, we intend to begin generating revenue from our backlog and pipeline as we believe we are now well positioned to begin delivering our commercial-scale AirSCWO solutions. Municipal officials remain eager to begin waste destruction operations and have expressed interest in capital purchase and WDS models. Federal government officials have plans to remove and destroy PFAS and other wastes from numerous military and civilian facilities and have appropriated hundreds of millions of dollars to perform waste destruction work. We believe we are well positioned to secure government work. We have increased our focus on pursuing industrial waste destruction opportunities. We have received feedback from various stakeholders in the industrial sector that there may be strong interest in our AirSCWO technology and systems, and as such, we believe there is a significant opportunity to generate material industrial revenue in the future. Finally, we are actively pursuing strategic partnerships with TSDFs to establish WDS operations. We expect to finalize one or more of these TSDF agreements and begin operations in 2025.

Our product marketing approach includes maintaining a strategic presence at water, wastewater, federal, and industrial industry events. Our marketing approach is multi-pronged with three areas of focus: (1) development of information, (2) education of end users, and (3) thought leadership. We believe this approach is appropriate because business purchase decisions are based on bottom-line revenue impact and, increasingly, the environmental impact of those decisions.

We are actively exploring partnerships and other strategic transactions to further support and advance our growth. These initiatives are aimed at unlocking new opportunities, strengthening our market position, and accelerating the adoption of our groundbreaking solutions. We believe that combining our technology and expertise with that of complementary partners will allow us to expand our reach and drive the advancement and adoption of our waste destruction technology.

In the future, we intend to further expand our sales and marketing teams to more fully service the municipal, federal and industrial markets across North America. In addition, we plan to further expand these efforts into international markets in 2026.

Manufacturing

As of December 31, 2024, our products, including our AirSCWO, pre-treatment, and post-treatment systems are designed, manufactured, assembled, and tested in our state-of-the-art facility located in at the Iron Bridge Regional Water Reclamation Facility in Oviedo, Florida. By mid 2025, our manufacturing capabilities are expected to include: CNC Plasma cutting of pipe and sheet stock, 5 axis milling, pipe bending, CAD/CAM, sheet metal forming, MIG, TIG, Stick welding, electrical design and panel build, as well as full system integration and testing.

We obtain raw materials, as well as processed, and pre-assembled components from various suppliers to support our manufacturing operations. A limited number of these suppliers are single source to maintain consistent quality and support product development. We have qualified redundant source(s) to ensure consistent supply for many critical materials and manufactured components.

In the future, we intend to further expand our manufacturing operations to meet our growing customer demand.

Research, Development & Engineering

We focus our research, development and engineering (“RD&E”) activities on improving the performance of and expanding the use cases of our AirSCWO technology. Our investments in RD&E are mainly focused on (1) enhancing the throughput, durability, and operability of our AirSCWO technology; (2) developing pre- and post-treatment systems; (3) applying our technology to new markets; and (4) fundamental research into new applications of our technology in existing and new markets.

We believe our focus on throughput, durability and operability will allow us to provide solutions that can scale to meet the demands of customers. In addition to throughput, we also dedicate our RD&E effort to expanding the markets and use cases our AirSCWO system can support, for example applying our AirSCWO technology to new markets such as oil and gas, battery recycling and pharmaceuticals. Our goal is to provide customers with the flexibility to manage and destroy a broader spectrum of waste materials.

We recognize the importance of carefully stewarding resources to support our ongoing R&D program. We maintain advanced analytical and testing capabilities to evaluate our solutions at all company and deployment sites. We have developed complex analytical tools which allow us to be less reliant on full-scale testing that is costly and often uses considerable amounts of water and consumable energy. Our advanced numerical modeling and analytical tools allow for three-dimensional, multi-phase, multi-physics, and multi-scale, computational fluid dynamics, fluid structure interactions, thermodynamics, and system analysis. Leading-edge modeling and analytical techniques coupled with extensive state-of-the-art experimental capabilities allow us to further refine our existing AirSCWO, pre-treatment, and post-treatment technologies, as well as develop new derivatives of our technology for new complex systems and applications.

Our engineering team, many of whom carry accreditation from world-recognized engineering organizations, specialize in a range of technical fields critical to support our current product lines and advance our incubation initiatives, including core engineering competencies of supercritical water oxidation, fluid mechanics, solid mechanics with expertise in computational fluid dynamics and finite element analysis, multi-phase flow, dynamics and controls, material science and coatings, pumps and rotating equipment, etc.

Through our RD&E investment, we are aiming to make it more economical for our customers to handle waste disposal on a larger scale, driving down costs and contributing to more sustainable waste management practices. We aim to be a leading waste destruction solution through this combination of higher throughput, versatility and cost-efficiency.

Intellectual Property

We seek patent protection for new technologies, inventions, and improvements that are likely to be incorporated into our AirSCWO, pre-treatment, and post-treatment solutions. We rely on patents, trade secret laws, and contractual safeguards to protect our proprietary technology, processing techniques, and other know-how used in the production and functioning of our solutions.

We have a robust, and growing, intellectual property (“IP”) portfolio consisting of U.S. and international patents and trademarks. We have designed an intellectual property strategy to advance our competitive edge and disruptive position in the market. As of December 31, 2024, we have three (3) pending U.S. non-provisional applications, five (5) provisional patents, and three (3) pending Patent Cooperation Treaty (PCT) applications. Additionally, we have filed and intend to file additional patent applications in 2025.

Duke University License Agreement

On April 16, 2021, we entered into a License Agreement (the “License Agreement”) with Duke, pursuant to which Duke has granted us a license (with the right to grant sublicenses) to make, have made, import, use, market, offer for sale and sell certain licensed products and to sell, use and/or provide certain licensed processes, for water and waste treatment. Under the terms of the License Agreement, the Company is required to make royalty payments based on a percentage of licensed product sales, as defined in the License Agreement which is triggered by the sale of licensed products. The Company is also required to pay royalties on a percentage of sublicensing fees.

Competition

The markets for our products and services are highly competitive, with companies offering a variety of competitive products and services. We expect competition in our markets to intensify in the future as new and existing competitors introduce additional and enhanced products and services. Our AirSCWO systems have proven capable of successfully processing a wide variety of challenging organic non-hazardous and hazardous solid and liquid wastes. While we believe technology will continue to prove more efficient and economical with higher treatment volumes, and lower operating costs than our competition, we expect competition to increase. We compete with other SCWO technology providers, other emerging technology providers (e.g., plasma and electrochemical oxidation), as well as anaerobic digestion, landfilling, drying and incineration, lagoon and spray-fields, lime stabilization, and others.

We compete primarily based on our product offering, quality of service and price. From time-to-time, our competitors may reduce the price of their services in an effort to win a competitively bid contract. Our ability to maintain and increase prices in certain markets may be impacted by our competitors’ pricing policies. This may have an effect on our future revenue and profitability.

Government Regulations

Our operations and AirSCWO system may be subject to various United States federal, state and local laws and regulations and requirements governing the protection of the environment, public health and safety, and other matters.

For example, the construction and operation of our AirSCWO systems may require obtaining air permits from various states or, alternatively, obtaining a formal determination from a state that a permit is not required. The federal Clean Air Act, as amended (“CAA”), and comparable state laws and regulations, regulate emissions of various air pollutants through the issuance of permits and the imposition of other requirements. The U.S. Environmental Protection Agency (“EPA”) has developed, and continues to develop, stringent regulations governing emissions of air pollutants at specified sources. We may be required to obtain permits for our facilities before we can operate our facilities, and we may incur capital and recurring costs to achieve or maintain compliance with any EPA regulations and similar laws. These laws and regulations may increase our compliance costs, and federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with air permits or other requirements of the federal CAA and associated state laws and regulations. Obtaining or renewing permits has the potential to delay the development, production, and deployment of our products, including our AirSCWO systems.

We may also be required to obtain state and local treatment works approval to install our AirSCWO systems if a unit is connected to a system, which is permitted pursuant to the United States National Pollutant Discharge Elimination Systems Act (“NPDES”), which governs the discharge of pollutants into navigable waters of the U.S.

In the event our AirSCWO systems are used to treat metals, the resulting mineral stream may constitute heavy metals under the RCRA. These regulations impose detailed requirements for the handling, storage, treatment and disposal of hazardous waste. If the mineral stream resulting from treatment of metals with our AirSCWO systems were deemed to be hazardous waste under the RCRA, such waste would be subject to the requirements of the RCRA. If the operators of our AirSCWO units are treating hazardous waste, such operators may be required to obtain special hazardous waste technician training. We may incur training costs, monitoring costs, and remediation costs in relation to such regulations.

Additionally, we are currently evaluating whether our AirSCWO systems may be regulated pursuant to the United States Occupational Safety and Health Act (“OSHA”) and thereby be subject to inspections thereunder. For instance, OSHA's hazard communication standard requires that information be maintained about hazardous materials used or produced in operations and that this information be provided to employees, state and local government authorities and citizens, which could result in increased compliance costs. We intend that our operations and AirSCWO systems will be in material compliance with, and in many cases surpass, minimum standards required by applicable laws and regulations.

Human Capital and Culture

As of December 31, 2024, we employed 27 full-time employees and 10 contractors. Our current plans are to increase our workforce to approximately 60 full-time resources in 2025.

We have made a significant investment to build out the company’s leadership team, and recognize and value our people as our most important asset in achieving our strategic goals. We are working towards a human resources strategy that will help drive the right culture, leadership, talent management, performance, reward and recognition, personal development, and ways of working to ensure the Company achieves its objectives and our people benefit from an exceptional experience.

Our focus areas in creating a working environment that draws out the best in our employees and support the Company objectives are as follows:

Our goal is to ensure we have the right talent in the right seat to enable the organization to execute on our strategic objectives. Our recruitment strategy is based on identifying top talent, predominantly via existing networks and referrals, and offering competitive remuneration packages that combine salary, benefits and equity. As we move forward our recruitment strategy will include partnerships with recruitment firms for technical positions and we will expand our sourcing strategy to include new platforms. We intend to apply a wide range of retention initiatives that include rewarding high-performance and opening opportunities for progression and career development. Identification of high-performing talent will be linked to succession planning and development of the future-workforce will be embedded in employee professional development schemes.

We are setting clear standards with respect to generating an open and transparent working environment in which everyone has a voice. This will include effective personal development discussions, and provide the opportunity to conduct performance reviews supported by clear performance objectives, transparent data, and open conversation.

Moving forward we will engage with a compensation partner to deliver a total reward strategy, which appropriately supports achievement of organizational priorities, and will help position us as an employer of choice, and which employees value and understand. The total rewards strategy will undergo periodic review to ensure we are able to attract and retain top talent in a financially sustainable way.

All of our human resource initiatives will be supported by key performance indicators, to monitor their effectiveness, gain insight into gaps that can be addressed quickly, and ensure our overall human resource strategy is adapted as required and maintained to a high degree.

Corporate Information

374Water Inc. is a Delaware corporation which was formed in September 2005 as PowerVerde, Inc. At that time, the Company was focused on developing, commercializing and marketing a series of unique electric generating power systems designed to produce electrical power with zero emissions or waste byproducts, based on a pressure-driven expander motor and related organic rankine cycle technology.

On April 16, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger”) with 374Water Inc., a privately held company based in Durham, North Carolina, (“374Water Private Company”) and 374Water Acquisition Corp., a newly-formed wholly-owned subsidiary of PowerVerde.

Following the Merger, 374Water offers a disruptive technology that transforms all wet wastes such as sewage sludge, biosolids, food waste, hazardous and non-hazardous waste, and forever chemicals (e.g., PFAS, PFOS and AFFF) into recoverable resources by focusing on waste as a valuable resource for water, energy, and minerals. We are pioneers in a new era of waste management that supports a circular economy and enables organizations to achieve their environment, social, and governance (ESG) goals. Our vision is a world without waste and our mission is to help create and preserve a clean and healthy environment that sustains life.

Our principal executive offices are located at 100 Southcenter Court, Suite 200, Morrisville, North Carolina, 27560, telephone number (440601-9677. Our website address is www.374water.com. References to our website and any information contained therein or connected thereto is not intended to be incorporated by reference into this report and should not be considered a part of this report, and the referenced websites are not intended to act as active hyperlinks.

FORWARD-LOOKING STATEMENTS

Prospective investors are cautioned that the statements in this annual report on Form 10-K (the “Report”) that are not descriptions of historical facts may be forward-looking statements that are subject to risks and uncertainties. This Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based on the beliefs of our management as well as on assumptions made by and information currently available to us as of the date of this Report. When used in this Report, the words “plan,” “will,” “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project” and similar expressions, as they relate to 374Water, are intended to identify such forward-looking statements. Although 374Water believes these statements are reasonable, actual actions, operations and results could differ materially from those indicated by such forward-looking statements as a result of the risk factors included in this Report or other factors. We must caution, however, that this list of factors may not be exhaustive and that these or other factors, many of which are outside of our control, could have a material adverse effect on 374Water and our ability to achieve our objectives. All forward-looking statements attributable to 374Water or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above.

INDUSTRY AND MARKET DATA

Certain industry data and market data included in this Annual Report were obtained from independent third-party surveys, market research, publicly available information, reports of governmental agencies, and industry publications and surveys. Third-party industry publications, research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. All of the industry data, market data and related estimates used in this Annual Report involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such data and estimates.

We are responsible for all of the disclosure in this Annual Report, and while we believe that each of the publications, research, surveys and studies included in this Annual Report are prepared by reputable sources, we have not independently verified market and industry data from third-party sources. In addition, while we believe our internal company research and estimates are reliable, such research and estimates have not been verified by independent sources. You should carefully consider the inherent risks and uncertainties associated with the market and other industry data contained in this Annual Report. Assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by independent parties and by us.