374Water Inc.
For the period ended Jun 30, 2025. Filed Aug 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 12, 2025
SCWO$2.44+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001654954-25-005746
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001654954-25-009437
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 30 previous paragraphs and 37 current paragraphs.
15 unchanged; 13 reworded; 7 added; 2 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Cost of revenues include all direct material, labor and subcontractor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation. The increase in our cost of revenues is directly attributable to the increase in our revenues as well as a $230,000 increase in our estimated accrued loss provision on our equipment contract during the six months ended June 30, 2025.
Current report
Our professional fees slightly increased to $649,338 during the three months ended June 30, 2025, as compared to $615,987 in the same period of 2024, an increase of approximately $33,000 primarily because of an increase in recruiting services of approximately $439,000 due to increased headcount in our operations department and the replacement of a board of director, an increase in accounting and audit related fees of approximately $15,000, offset by a decrease in legal fees of approximately $421,000. .
Current report
Six* *Months Ended June 30, 2025, as Compared to the Six Months Ended June 30, 2024
Current report
Our business has been focused on the development and commercialization of our supercritical water oxidation (SCWO) systems and bench and full-scale demonstrations. Our revenues increased to $1,138,067 during the six months ended June 30, 2025 compared to $352,099 in the previous period. The approximate $786,000 increase in revenues is primarily due to an increase in service revenues of approximately $873,000 from the completion of two full-scale demonstrations, which generated approximately $474,000 of revenues, the completion of one month of demonstration and wastewater processing under our City of Orlando contract, which generated approximately $271,000 of revenues, and the completion of bench scale treatability studies, which generated approximately $174,000 of revenues compared to approximately $46,000 during the six months ended June 30, 2024, an increase of approximately $128,000. These increases were offset with a decrease in our equipment revenue of approximately $87,000.
Current report
Cost of revenues include all direct material, labor and subcontractor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation. The increase in our cost of revenues is directly attributable to the increase in our revenues as well as a $230,000 increase in our estimated accrued loss provision on our equipment contract recording during the six months ended June 30, 2025.
Current report
Our professional fees increased to $1,421,239 during the six months ended June 30, 2025, as compared to $868,692 in the same period of 2024, an increase of approximately $553,000 primarily from an increase in recruiting services of approximately $634,000 due to headcount increases in our operations department and the replacement of a board of director, and an increase in accounting and auditing fees of approximately $78,000, offset by a decrease in legal fees of approximately $159,000, .
Current report
Our general and administrative expenses increased to $2,127,129 during the six months ended June 30, 2025, as compared to $1,143,459 in the same period of 2024, an increase of approximately $984,000. This increase is primarily because of an increase in depreciation expense of approximately $214,000 due to the capitalization of our owned unit in the fourth quarter of 2024, an increase in investor and public relations services of $97,000, an increase in rent expense of approximately $57,000 from our North Carolina lab lease which commenced in October 2024, an increase in travel and related expenses of approximately $233,000 due to our increased headcount, an increase in relocation expenses of approximately $161,000 as we moved our manufacturing and operations locations to Florida and an increase of approximately $222,000 in general administrative expenses.
Removed paragraphs (2)
Previous report
374Water has a robust plan to scale revenue, operations, and capitalize our business. During 2025, we expected to complete our commercial-scale demonstration under our contract with the City of Orlando; mobilize an AS system to Detroit, MI in partnership with the Defense Innovation Unit to demonstrate AirSCWO’s waste destruction effectiveness for specific U.S. Department of Defense applications; deploy an AirSCWO system to the Orange County Sanitation District (“OC San”) in Fountain Valley, CA; further scale our manufacturing capacity to meet client demand for AirSCWO systems of various sizes; continue to improve our AirSCWO technology; and begin accepting third party waste streams for our initial Waste Destruction Services (“WDS”) hub(s) at partner Treatment, Storage, and Disposal Facilities (“TSDF”).
Previous report
Our professional fees increased to $771,901 during the three months ended March 31, 2025, as compared to $252,705 in the same period of 2024, primarily because of increased legal fees as a result of a litigation settlement and recruiting fees related to the increase in our headcount.
Reworded paragraphs (13)
Previous wording
Readers are cautioned that the statements in this 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 are intended to identify such forward-looking statements. Although we believe 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 our 2024 Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025 (the “2024 Form 10-K”), 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 us and our ability to achieve our objectives. All forward- looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above.
Current wording
Readers are cautioned that the statements in this Report that are not descriptions of historical facts may be “forward-looking statements” that are subject to risks and uncertainties including, without limitation, statements regarding our business, results of operations and financial condition, our business and growth strategy, plans and prospects, our working capital levels and liquidity, including our ability to service any indebtedness and our reliance on government contracts, our relationship with significant suppliers, manufacturers and vendors, our ability to obtain new customers and retain existing significant customers, and develop, commercialize and scale our products, our research and development expenses, our timing and likelihood of success, macroeconomic, industry, market and technology trends, the governmental laws and regulations that we are subject to, potential exposure to litigation, and plans and objectives of management for future operations and results. 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 are intended to identify such forward-looking statements. Although we believe 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 our 2024 Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025 (the “2024 Form 10-K”), 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 us and our ability to achieve our objectives. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above.
Previous wording
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 eliminates recalcitrant organic wastes without creating waste byproducts. Our AirSCWO system effectively converts 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.
Current wording
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 eliminates recalcitrant organic wastes without creating waste byproducts. Our AirSCWO system effectively converts 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.
Previous wording
In the first quarter of fiscal year 2025, 374Water continued to build on the strategic plan implemented in 2024. During the first quarter, we continued to execute our plan towards reaching critical business milestones. Our first quarter 2025 achievements to date include (i) continuing ruggedizing and optimizing our AirSCWO system to effectively and continuously process a variety of organic waste streams; (ii) preparing our first commercial scale AirSCWO system at the City of Orlando for the Iron Bridge Water Reclamation Facility bio-sludge test; (iii) completing various federal waste destruction demonstrations; (iv) secured a waste destruction services contract for aqueous film forming firefighting form (“AFFF”) with the University of North Carolina at Chapel Hill Collaboratory; and (v) strengthening our leadership team and organization.
Current wording
During the first half of 2025, we continued to execute our plan towards reaching critical business milestones. Our first half of 2025 achievements to date include (i) continuing ruggedizing and optimizing our AirSCWO system to effectively and continuously process a variety of organic waste streams; (ii) completing first phase of demonstration and bio-sludge processing using our first commercial scale AirSCWO system at the City of Orlando Iron Bridge Water Reclamation Facility; (iii) completing various federal waste destruction demonstrations; (iv) securing a waste destruction services contract for aqueous film forming firefighting form (“AFFF”) with the University of North Carolina at Chapel Hill Collaboratory; and (v) strengthening our leadership team and organization.
Previous wording
Our business has been focused on the development and commercialization of our supercritical water oxidation (SCWO) systems. We generated $543,100 and $315,278 in revenue from equipment manufacturing services and services, specifically a full-scale demonstration and treatability studies during the three months ending March 31, 2025 and March 31, 2024, respectively. During the three months ended March 31, 2025, we completed a full-scale demonstration for a customer resulting in an increase in our service revenues of $376,000, offset by a decrease in equipment manufacturing revenue of approximately $162,000. 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 period on equipment manufacturing services.
Current wording
Our business has been focused on the development and commercialization of our supercritical water oxidation (SCWO) systems and bench and full-scale demonstrations. During the six months ended June 30, 2025, we generated $594,967 in revenue from equipment manufacturing and services, specifically full-scale demonstrations and treatability studies, compared to $36,821 of revenues during the three months ended June 30, 2024. The approximate $558,000 increase in revenues is primarily due to an increase in equipment revenues of approximately $85,000, an increase in our bench scale treatability studies of approximately $202,000 and an increase in our full-scale demonstration service revenues as we completed one month of demonstration and wastewater processing under our City of Orlando contract resulting in approximately $271,000 of revenues during the three months ended June 30, 2025.
Previous wording
Our compensation and related expenses increased to $1,675,865 during the three months ended March 31, 2025, as compared to $790,190 in the same period of 2024, primarily because of increased payroll and fringe benefit expenses due to increase in headcount and our executive team and an increase in our stock based compensation of approximately $538,000.
Current wording
Our compensation and related expenses increased to $1,996,387 during the three months ended June 30, 2025, as compared to $1,007,005 in the same period of 2024, an increase of approximately $989,000 primarily because of increased payroll and fringe benefit expenses of $734,000 due to a significant increase in headcount and our executive team and an increase in our stock-based compensation of approximately $255,000.
Previous wording
Our general and administrative expenses increased to $942,440 during the three months ended March 31, 2025, as compared to $321,141 in the same period of 2024, primarily because of increased costs incurred related to relocating to our own short-term manufacturing facility in Florida of approximately $131,000, an increase in depreciation expense of $98,000 due to the capitalization of our owned unit in the fourth quarter 2024, and an increase in travel and related expenses of $70,000 due to our increased headcount, increase of $73,000 of investor relation expenses and $249,000 of general expenses due to increased headcount and expenses associated with our physical locations.
Current wording
Our general and administrative expenses increased to $1,184,689 during the three months ended June 30, 2025, as compared to $822,818 in the same period of 2024, an increase of approximately $362,000 primarily because of an increase in depreciation expense of approximately $116,00 due to the capitalization of our owned unit in the fourth quarter 2024, an increase in travel and related expenses of approximately $164,000 due to our increased headcount, and an increase of approximately $82,000 in general administrative expenses.
Previous wording
Our research and development expenses decreased to $533,587 during the three months ended March 31, 2025, as compared to $535,147 in the same period of 2024, primarily due to a temporary reduction in personal in this department during the current period, offset by an increase in stock based compensation of approximately $49,000. We anticipate our research and development expenses to increase as we build up our resources to continue our efforts to commercializing our systems.
Current wording
Our research and development expenses decreased to $1,064,757, during the six months ended June 30, 2025, as compared to $1,101,715 in the same period of 2024, primarily due to a temporary reduction in personnel in this department during the current period to focus on our revenue generating activities, partially offset by an increase in stock based compensation of approximately $38,000. We anticipate our research and development expenses to increase as we build up our resources to continue our efforts to commercialize our systems.
Previous wording
In accordance with ASU No. 2014-15 Presentation of Financial Statements – Going Concern (subtopic 205-40), the Company’s management evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. At March 31, 2025, the Company had working capital of $8,734,300 and an accumulated deficit of $32,086,032. For the three months ended March 31, 2025, the Company incurred a net loss of $3,698,414 and used $3,494,477 of net cash in operations for the period. These conditions raise substantial doubt regarding our ability to continue as a going concern.
Current wording
In accordance with ASU No. 2014-15 Presentation of Financial Statements – Going Concern (subtopic 205-40), the Company’s management evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. At June 30, 2025, the Company had working capital of $4,643,965 and an accumulated deficit of $36,666,480. For the six months ended June 30, 2025, the Company incurred a net loss of $8,278,862 and used $7,621,070 of net cash in operations for the period. These conditions raise substantial doubt regarding our ability to continue as a going concern.
Previous wording
Since inception, we have financed our operations principally through the sale of debt and equity securities and operating cash flows. We have an at-the-market (ATM) equity offering under which we may issue up to $100 million of common stock, subject to applicable law. During the three months ended March 31, 2025 and 2024, we did not use the ATM to raise capital. The Company is evaluating strategies to obtain the required additional funding for future operations.
Current wording
Since inception, we have financed our operations principally through the sale of debt and equity securities and operating cash flows. We have an “at-the-market” (ATM) equity offering under which we may issue up to $15.1 million of common stock, subject to applicable law. During the six months ended June 30, 2025, we raised approximately $332,400 of net proceeds from the sale of shares of common stock through the ATM. The Company is evaluating strategies to obtain the required additional funding for future operations.
Previous wording
On November 18, 2024, we closed on an offering of shares of common stock and common stock warrants resulting in net proceeds of approximately $11,393,000.
Current wording
During 2024, we closed on an offering of shares of common stock and common stock warrants resulting in net proceeds of approximately $11,393,000.
Previous wording
We used $3,494,477 of cash in operating activities for the three months ended March 31, 2025 compared to $2,508,653 of cash used in operating activities for the corresponding period in 2024 an increase of $985,824. The increase in cash used in operating activities was primarily due to the increase in our net loss of $1,673,949, offset by an increase in noncash expenses of $706,811 and increase in operating cash outflows from operating assets and liabilities of $18,686. The cash used in operations was primarily to fund operations as well as our working capital requirements.
Current wording
We used $7,621,070 of cash in operating activities for the six months ended June 30, 2025 compared to $4,934,044 of cash used in operating activities for the corresponding period in 2024, an increase of $2,687,026. The increase in cash used in operating activities was primarily due to the increase in our net loss of $3,322,077 and increase in operating cash outflows from changes in operating assets and liabilities of $257,060 partially offset by an increase in noncash expenses of $892,111. The cash used in operations was primarily to fund operations as well as our working capital requirements.
Previous wording
We used $297,322 of cash in investing activities for the three months ended March 31, 2025 compared to receiving $590 of cash used in financing activities for the corresponding period in 2024 an increase of $296,732. The increase in cash used by investing activities for the three months ended March 31, 2025 was primarily due a $297,322 increase in purchases of property and equipment, offset by a decrease of $590 in purchases of intangible assets.
Current wording
We used $901,823 of cash in investing activities for the six months ended June 30, 2025 compared to $402,220 of cash used in investing activities for the corresponding period in 2024, an increase of $499,603. The increase in cash used by investing activities for the six months ended June 30, 2025 was primarily due to a $526,952 increase in purchases of property and equipment and equipment-in-process, partially offset by a decrease of $27,349 in purchases of intangible assets.
Previous wording
We received $24,000 of cash from financing activities for the three months ended March 31, 2025 compared to $0 cash provided by financing activities for the corresponding period in 2024 an increase of $24,000 This increase was from proceeds received from the exercise of a stock option during the three months ended March 31, 2025.
Current wording
We received $20,264 of cash from financing activities for the six months ended June 30, 2025 compared to using $25,658 in financing activities for the corresponding period in 2024, an increase of $45,922. The increase in cash received from investing activities was primarily due to $24,000 of proceeds received from the exercise of a stock option, partially offset by $1,955 of payments toward a note payable used for equipment financing during the six months ended June 30, 2025 compared to $25,658 of net equity issuance costs incurred during the six months ended June 30, 2024.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Our research and development expenses decreased to $531,170 during the three months ended June 30, 2025, as compared to $566,568 in the same period of 2024, a decrease of approximately $35,000 primarily due to a temporary reduction in personal in this department during the current period to focus on our revenue generating activities, partially offset by an increase in stock-based compensation of approximately $19,000. We anticipate our research and development expenses to increase as we build up our resources to continue our efforts to commercialize our systems.
Current report — wording carried from elsewhere
Our compensation and related expenses increased to $3,672,252 during the six months ended June 30, 2025, as compared to $1,797,695 in the same period of 2024, an increase of approximately $1,875,000, primarily from increased payroll and fringe benefit expenses of $1,113,000 due to a significant increase in headcount and our executive team and an increase in our stock-based compensation of approximately $762,000.