374Water Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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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.
Mar 31, 2026 · Filed May 14, 2026
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 2025-09-30; filed 2025-11-12.
0001654954-25-012910
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001654954-26-004903
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 39 previous paragraphs and 29 current paragraphs.
11 unchanged; 8 reworded; 9 added; 20 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (9)
Current report
At a special meeting of stockholders held on December 15, 2025, the stockholders of 374Water, approved an amendment to the Company’s Amended and Restated Certificate of Incorporation, to, at the discretion of the Company’s Board of Directors, effect a reverse stock split with respect to the Company’s issued and outstanding common stock, at a ratio of 1-for-8 to 1-for-20, with the ratio within such range to be determined at the discretion of the Company’s Board of Directors (or any of its delegated authorized persons) without further approval or authorization of our stockholders.
Current report
On December 15, 2025, after the approval from the stockholders, the Company filed a Certificate of Amendment of the Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the issued and outstanding shares of the Company’s common stock. The Certificate of Amendment took effect on December 26, 2025.
Current report
Our business has been focused on the development and commercialization of our SCWO systems. During the three months ended March 31, 2026 and 2025, we generated $551,155 and $543,100 in revenue from equipment manufacturing and services, respectively. During the three months ended, March 31, 2026, we completed our full-scale demonstration with the City of Orlando resulting in approximately $482,000 of service revenue, approximately $42,750 from destruction services and $26,000 from treatability studies. During the three months ended March 31, 2025, we completed a full-scale demonstration for a customer resulting in service revenues of $376,000, approximately $33,000 in treatability studies and approximately $134,000 in equipment revenue from manufacturing on our sold unit.
Current report
Our general and administrative expenses increased to $1,441,899 during the three months ended March 31, 2026, as compared to $942,440 in the same period of 2025, an increase of approximately $499,000, primarily due to expensing $184,000 of deferred offering costs previously capitalized on the balance sheet due to a shift in capital raise strategy through the issuance of convertible debt notes by the Company, $158,000 in franchise tax expense due to the increase in our authorized shares, and $147,000 of stock issued for services provided by the Board of Directors.
Current report
Our compensation and related expenses increased to $2,539,450 during the three months ended March 31, 2026, as compared to $1,675,865 in the same period of 2025, an increase of approximately $864,000, primarily due to an increase in stock-based compensation expense of approximately $496,000 and an increase in payroll wages of $368,000 related to increased headcount.
Current report
Our research and development expenses decreased to $449,834 during the three months ended March 31, 2026, as compared to $533,587 in the same period of 2025, a decrease of approximately $84,000, primarily due to a decrease in stock-based compensation of approximately $25,000 and a decrease in subcontractor labor related to the manufacturing of our sold AirSCWO6 unit.
Current report
Since inception, we have financed our operations principally through the sale of debt and equity securities and operating cash flows. On December 23, 2025, the Company entered into an ATM issuance sales agreement (the “Sales Agreement”) with Lake Street Capital Markets, LLC (“Lake Street”) as sales agent, pursuant to which the Company could offer and sell, from time to time, shares of the Company’s common stock having an aggregate offering price of up to $50 million in an at-the-market equity offering program (“ATM”). The Sales Agreement replaced the Company’s prior ATM agreement with Lake Street that was entered on June 6, 2025. During the year ended December 31, 2025, we raised approximately $8,909,000 of net proceeds using our ATM. The Company is evaluating strategies to obtain the required additional funding for future operations and has not yet raised any capital with the ATM in 2026.
Current report
As of the date of our 2025 Form 10-K , the aggregate market value of our outstanding common stock held by non-affiliates, or the public float, was approximately $39,144,000, which was calculated based on 11,184,116 outstanding shares of the Company’s common stock held by non-affiliates at a price of $3.50 per share, the closing price of our common stock on March 25, 2026, as reported on Nasdaq. Pursuant to General Instruction I.B.6 of Form S-3, or the “baby shelf” rules, in no event will we sell securities registered on our Form S-3 registration statement, including under our ATM, with a value of more than one-third of the aggregate market value of shares of our common stock held by non-affiliates in any 12-month period, so long as the aggregate market value of shares of our common stock held by non-affiliates is less than $75 million. After giving effect to the approximate $13,000,000 offering limit imposed by General Instruction I.B.6 of Form S-3 and deducting the shares sold within the preceding 12 months, approximately $3,700,000 shares of common stock remain available at this time for sale under our Form S-3, including through our ATM.
Current report
We received $103,061 of cash from financing activities for the three months ended March 31, 2026 compared to $24,000 cash received by financing activities for the corresponding period in 2025 an increase of $79,061. This increase was primarily due to $800,000 of proceeds received from the issuance of convertible notes, offset by $696,939 of repayments on debt obligations, during the three months ended March 31, 2026 compared to the $24,000 of financing activities during the three months ended March 31, 2025.
Removed paragraphs (20)
Previous report
Forward Looking Statements
Previous report
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 report
During the third quarter of 2025, the company continued to undertake activity to highlight the versatility, scalability and effectiveness of our AirSCWO technology. In particular we showcased the ability to provide Waste Destruction Services (WDS) in projects (i) involving the destruction of six (6) PFAS impacted waste streams for the Defense Innovation Unit at a Clean Earth facility in Michigan, and (ii) in collaboration with the Colorado School of Mines and the Department of Defense where we treated foam fractionate from PFAS impacted sediment on the Peterson Space Force Base in Colorado.
Previous report
In addition, we announced a collaboration agreement with Crystal Clean pursuant to which the Company will establish a full service WDS operation at a Crystal Clean transport, storage and disposal facility (TSDF). Under the agreement, the Company and Crystal Clean will actively market WDS to customers for processing hazardous and non-hazardous organic wastes with our AirSCWO unit.
Previous report
During 2025, we continued to execute our plan towards reaching critical business milestones. Other year to date achievements include (i) 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;; (ii) securing a waste destruction services contract for aqueous film forming firefighting form (“AFFF”) with the University of North Carolina at Chapel Hill Collaboratory; and (iii) strengthening our leadership team and organization.
Previous report
Our business has been focused on the development and commercialization of our supercritical water oxidation (SCWO) systems and full-scale demonstrations. During the nine months ended September 30, 2025, we generated $760,417 in revenue from services, specifically full-scale demonstrations and treatability studies compared to $81,490 of revenues during the three months ended September 30, 2024. The approximate $679,000 increase in revenues is primarily due to an increase in our service revenues of approximately $643,000 from the completion of full-scale demonstrations, and $36,000 in equipment revenues.
Previous 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.
Previous report
Our research and development expenses increased to $755,944 during the three months ended September 30, 2025, as compared to $424,579 in the same period of 2024, an increase of approximately $331,000 primarily due to an increase in labor and contract labors as we build up our resources to continue our efforts to commercialize our systems.
Previous report
Our compensation and related expenses increased to $2,097,580 during the three months ended September 30, 2025, as compared to $1,212,602 in the same period of 2024, an increase of approximately $885,000 primarily because of an increase in payroll expense and fringe benefits of approximately $500,000 and stock-based compensation of approximately $385,000 due to increased head count and the granting of time-based restricted stock units to the executive team in August 2025 with vesting commencing March 2025.
Previous report
Our general and administrative expenses increased to $1,462,625 during the three months ended September 30, 2025, as compared to $644,334 in the same period of 2024, an increase of approximately $818,000 primarily from an increase in travel and related expenses of approximately $249,000 due to our increased head count, an increase in depreciation expense of approximately $123,000 due to the capitalization of our owned unit in the fourth quarter 2024, an increase in stock-based compensation to our board of directors of $144,000 due to fully vested grants made during the three months ended September 30, 2025, and an increase of approximately $302,000 in other general administrative expenses due to increased headcount and infrastructure.
Previous report
Nine Months Ended September 30, 2025, as Compared to the Nine Months Ended September 30, 2024
Previous 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 $1,898,484 during the nine months ended September 30, 2025 compared to $433,589 in the previous period. The approximate $1,465,000 increase in revenues is primarily due to an increase in service revenues of approximately $1,516,000 from the completion of two full-scale demonstrations and mobile bench-scale demonstration, which generated approximately $1,199,000 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 $128,000 during the nine months ended September 30, 2024, an increase of approximately $46,000. These increases were offset with a decrease in our equipment revenue of approximately $51,000.
Previous 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 nine months ended September 30, 2025.
Previous report
Our research and development expenses increased to $1,820,701, during the nine months ended September 30, 2025, as compared to $1,526,294 in the same period of 2024, an increase of approximately $294,000, primarily due to an increase in labor and contract labor of $183,000 as we build up our resources to continue our efforts to commercialize our systems and an increase in stock-based compensation of approximately $111,000.
Previous report
Our compensation and related expenses increased to $5,769,832 during the nine months ended September 30, 2025, as compared to $3,010,273 in the same period of 2024, an increase of approximately $2,760,000, primarily from increased payroll and fringe benefit expenses of $1,613,000 due to a significant increase in operational headcount and our executive team and an increase in our stock-based compensation of approximately $1,147,000.
Previous report
Our professional fees increased to $1,678,467 during the nine months ended September 30, 2025, as compared to $1,367,702 in the same period of 2024, an increase of approximately $311,000 primarily from an increase in recruiting services of approximately $544,000 due to headcount increases in our operations department and the addition of new directors to our board of directors, and an increase in accounting, auditing and consulting fees of approximately $17,000, offset by a decrease in legal fees of approximately $264,000, primarily due to a legal matter with our former CEO that was settled in April 2025.
Previous report
Our general and administrative expenses increased to $3,589,754 during the nine months ended September 30, 2025, as compared to $1,788,117 in the same period of 2024, an increase of approximately $1,802,000. This increase is primarily because of an increase in depreciation expense of approximately $337,000 due to the capitalization of our owned unit in the fourth quarter of 2024, an increase in investor and public relations services of $268,000, an increase in rent expense of approximately $84,000 from our North Carolina lab lease which commenced in October 2024, an increase in travel and related expenses of approximately $483,000 due to our increased headcount and operational deployments, an increase in relocation expenses of approximately $100,000 as we moved our manufacturing and operations locations to Florida and an increase of approximately $530,000 in general administrative expenses due to our increased headcount and infrastructure.
Previous report
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. At September 30, 2025, approximately $13.1 million remains available to be sold in the Company’s at-the-market offerings, subject to various limitations. During the nine months ended September 30, 2025, we raised approximately $1.9 million 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 through debt or equity financing.
Previous report
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 report
We received $1,845,649 of cash from financing activities for the nine months ended September 30, 2025 compared to receiving $11,912 in financing activities for the corresponding period in 2024, an increase of $1,833,737. The increase in cash received from financing activities was primarily due to an increase of $1,899,184 of proceeds from the sale of common stock, an increase of $600,000 from a secured promissory note, an increase in $24,000 of proceeds received from the exercise of a stock option, offset by $39,467 of payments on a note payable used for equipment financing and a financing liability as well as $649,980 for the repurchase of a warrant.
Reworded paragraphs (8)
Previous wording
The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere herein.
Current wording
The following discussion and analysis should be read in conjunction with “Cautionary Note Regarding Forward-Looking Statements” and the financial statements and notes thereto appearing elsewhere in this Form 10-Q as well as the risk factors included in the 2025 Form 10-K.
Previous wording
In preparing the condensed consolidated financial statements, we have made estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, costs, and expenses, and the disclosure of contingent assets and liabilities as in our condensed consolidated financial statements. Actual results may differ from these estimates. A summary of our critical accounting estimates and policies is included in our 2024 Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” During the three months ended September 30, 2025, there have been no significant changes to these estimates and policies previously disclosed in our 2024 Form 10-K. For disclosure regarding recent accounting pronouncements and the anticipated impact they will have on our operations, please refer to Note 2 of the unaudited condensed consolidated financial statements included in this Form 10-Q.
Current wording
In preparing the condensed consolidated financial statements, we have made estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, costs, and expenses, and the disclosure of contingent assets and liabilities as in our condensed consolidated financial statements. Actual results may differ from these estimates. A summary of our critical accounting estimates and policies is included in our 2025 Form 10-K under "Management’s Discussion and Analysis of Financial Condition and Results of Operations."
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 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 treats solid and liquid wastes such as forever chemicals (e.g., “per-and polyfluoroalkyl substances” or “PFAS”), hazardous and non-hazardous waste, sewage sludge, and biosolids, into recoverable resources including water, minerals, and heat energy.
Current wording
374Water Inc. is a cleantech and environmental services company developing supercritical water oxidation (“SCWO”) for the destruction of organic waste streams within the municipal, federal, and industrial markets. 374Water offers our proprietary AirSCWO technology, 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. Our AirSCWO technology is designed to effectively convert solid and liquid wastes such as sewage sludge, biosolids, food waste, hazardous and non-hazardous waste, including ‘forever chemicals’ (e.g., “per-and polyfluoroalkyl substances” or “PFAS”) into inert and recoverable resources including water, minerals, and heat energy.
Previous wording
Our professional fees decreased to $257,228 during the three months ended September 30, 2025, as compared to $499,010 in the same period of 2024, a decrease of approximately $242,000 primarily due to decreases in recruiter and legal fees incurred during the three months ended September 30, 2025 compared to 2024.
Current wording
Our professional fees decreased to $515,519 during the three months ended March 31, 2026, as compared to $771,901 in the same period of 2025, a decrease of approximately $256,000, primarily due to decreased legal fees as a result of a litigation settlement and the resolution of other legal matters.
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 September 30, 2025, the Company had working capital of $1,904,259 and an accumulated deficit of $41,015,504. For the nine months ended September 30, 2025, the Company incurred a net loss of $12,627,886 and used $10,205,171 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. 2014-15Presentation 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 unaudited condensed consolidated financial statements are issued. At March 31, 2026, the Company had working capital deficit of $1,521,955, an accumulated deficit of $54,508,221 and a cash balance of $447,453. For the three months ended March 31, 2026, the Company incurred a net loss of $4,571,623 and used $2,508,341 of net cash in operations for the period. These conditions raise substantial doubt regarding our ability to continue as a going concern.
Previous wording
Presently, the Company will need additional debt or equity financing or a combination of both to continue its operations and meet its financial obligations for at least the next twelve months from the date these unaudited condensed interim consolidated financial statements were issued and beyond. We may consume available resources more rapidly than currently anticipated, resulting in the need for additional funding. We expect to incur continuing losses and negative cash flows from operations for the foreseeable future. We do not believe we have sufficient cash on hand or cash flows from operations to fund our obligations over the next twelve months and will need additional capital from debt or equity financing to fund our operations.
Current wording
Presently, the Company will need additional debt or equity financing or a combination of both to continue its operations and meet its financial obligations for at least the next twelve months from the date these unaudited condensed interim consolidated financial statements included in this Form 10-Q were issued and beyond. We may consume available resources more rapidly than currently anticipated, resulting in the need for additional funding. We expect to incur continuing losses and negative cash flows from operations for the foreseeable future until we are able to manufacture our AirSCWO units on a commercial scale.
Previous wording
We used $10,205,171 of cash in operating activities for the nine months ended September 30, 2025 compared to $7,497,734 of cash used in operating activities for the corresponding period in 2024, an increase of $2,707,437. The increase in cash used in operating activities was primarily due to the increase in our net loss of $4,969,284, partially offset by an increase in net operating cash inflows from changes in operating assets and liabilities of $626,871 and an increase in noncash expenses of $1,634,976. The cash used in operations was primarily to fund operations as well as our working capital requirements.
Current wording
We used $2,508,341 cash in operating activities for the three months ended March 31, 2026 compared to $3,494,477 of cash used in operating activities for the corresponding period in 2025, a decrease of $986,136. The decrease in cash used in operating activities was primarily due to the increase in noncash expenses of $616,346 and increase in operating cash inflows, net, from operating assets and liabilities of $1,242,999, offset by an increase in our net loss of $873,209. The cash used in operations was primarily to fund operations as well as our working capital requirements.
Previous wording
We used $1,358,794 in cash in investing activities for the nine months ended September 30, 2025 compared to $999,207 of cash used in investing activities for the corresponding period in 2024, a decrease of $359,587. The decrease in cash used by investing activities for the nine months ended September 30, 2025 was primarily due to a $335,214 decrease in equipment-in-process and intangible assets purchases, partially offset by an increase or property and equipment purchases of $694,801.
Current wording
We used $345,949 in investing activities for the three months ended March 31, 2026 compared to using $297,322 of cash used in financing activities for the corresponding period in 2025 an increase of $48,627. The increase in cash used by investing activities for the three months ended March 31, 2026 was primarily due to a $48,627 increase in purchases of property and equipment.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
During the three months ended March 31, 2026, there have been no significant changes to these estimates and policies previously disclosed in our 2025 Form 10-K. For disclosure regarding recent accounting pronouncements and the anticipated impact they will have on our operations, please refer to Note 2 of the unaudited condensed consolidated financial statements included in this Form 10-Q.