374Water Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
View on SEC.govAbout this filing
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, 2026 · Filed Aug 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 2026-03-31; filed 2026-05-14.
0001654954-26-004903
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001654954-26-007650
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 29 previous paragraphs and 47 current paragraphs.
18 unchanged; 10 reworded; 18 added; 1 removed; 0 previous and 1 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 (18)
Current report
Revenues
Current report
Our business has been focused on the development and commercialization of our SCWO systems. During the three months ended June 30, 2026 and 2025, we generated revenue of $2,262,040 and $594,967, respectively, from equipment manufacturing and services. This increase is primarily due to $2.0 million of revenue recognized on our OC San contract that had been previously reversed or not recognized due to variable consideration constraints that were eliminated upon us meeting a factory acceptance test during the three months ended June 30, 2026, offset by a decrease in service revenues of approximately $247,000.
Current report
Operating expenses
Current report
Our compensation and related expenses decreased to $1,831,323 during the three months ended June 30, 2026, as compared to $1,996,387 in the same period of 2025, a decrease of approximately $165,000, primarily due to a decrease in payroll wages and related expenses due to decreased headcount and a reduction of executive salaries.
Current report
Our research and development expenses decreased to $284,589 during the three months ended June 30, 2026, as compared to $531,170 in the same period of 2025, a decrease of approximately $247,000, primarily due to a decrease in research and development activities as the Company focuses on reducing expenses.
Current report
Other income (expenses), net
Current report
Other expenses, net increased to $1,074,373 during the three months ended June 30, 2026, as compared to other income, net of $57,502 in the same period of 2025, an increase in other expenses, net, of approximately $1,132,000. This increase is primarily due to a loss on debt extinguishment recognized of approximately $1,022,000 during the three months ended June 30, 2026 related to a modification of terms on outstanding convertible notes payable, as well as interest expense of approximately $90,000 recognized on the outstanding convertible notes payable.
Current report
Net Loss
Current report
Our net loss decreased to $2,696,235, during the three months ended June 30, 2026, as compared to our net loss of $4,580,448 in the same period of 2025, a decrease of approximately $1,884,000. This decrease is primarily attributable to the increase in revenues and decrease in operating expenses, offset by an increase in other expenses, as more fully described above.
Current report
Six Months Ended June 30, 2026, as Compared to the Six Months Ended June 30, 2025
Current report
Revenues
Current report
Our business has been focused on the development and commercialization of our SCWO systems. During the six months ended June 30, 2026 and 2025, we generated $2,813,195 and $1,138,067 in revenue from equipment manufacturing and services, respectively. This increase is primarily due to $2.0 million of revenue recognized on our OC San contract that had been previously reversed or unrecognized due to variable consideration constraints that were eliminated upon us meeting a factory acceptance test during the three months ended June 30, 2026, offset by a decrease in service revenues of approximately $100,000.
Current report
Operating expenses
Current report
Our professional fees decreased to $666,972 during the six months ended June 30, 2026, as compared to $1,421,239 in the same period of 2025, a decrease of approximately $754,000, primarily due to decreased legal fees as the Company focuses on reducing expenses.
Current report
Other income (expenses), net
Current report
Other expenses, net increased to $1,047,706 during the six months ended June 30, 2026, as compared to other income, net of $144,598 in the same period of 2025, an increase in other expenses of approximately $1,192,000. This increase is primarily attributable to a loss on debt extinguishment recognized of approximately $1,022,000 during the six months ended June 30, 2026 related to a modification of terms on outstanding convertible notes payable, as well as interest expense of approximately $103,000 recognized on the outstanding convertible notes payable.
Current report
Net Loss
Current report
Our net loss decreased to $7,267,858, during the six months ended June 30, 2026, as compared to our net loss of $8,278,862 in the same period of 2025, a decrease of approximately $1,011,000. This decrease is primarily attributable to the increase in revenues, offset by an increase in operating expenses and other expenses, as more fully described above.
Removed paragraphs (1)
Previous 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.
Reworded paragraphs (10)
Previous wording
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.
Current wording
During the three and six months ended June 30, 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.
Previous wording
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 wording
Our general and administrative expenses increased to $1,337,470 during the three months ended June 30, 2026, as compared to $1,184,689 in the same period of 2025, an increase of approximately $153,000, 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, $58,000 in franchise tax expense due to the increase in our authorized shares, and $276,000 of stock issued for services provided by the Board of Directors, offset by approximately $365,000 of reductions in all other general and administrative expenses as the Company focuses on reducing expenses.
Previous 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.
Current wording
Our professional fees decreased to $151,453 during the three months ended June 30, 2026, as compared to $649,338 in the same period of 2025, a decrease of approximately $498,000, primarily due to decreased legal fees as the Company focuses on reducing expenses.
Previous wording
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 wording
Our compensation and related expenses increased to $4,370,773 during the six months ended June 30, 2026, as compared to $3,672,252 in the same period of 2025, an increase of approximately $699,000, primarily due to an increase in stock-based compensation expense of approximately $578,000 and an increase in payroll wages and related of $120,000.
Previous wording
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 wording
Our research and development expenses decreased to $734,423 during the six months ended June 30, 2026, as compared to $1,064,757 in the same period of 2025, a decrease of approximately $330,000, primarily due to a decrease in stock-based compensation of approximately $100,000 from stock issued for services and a decrease in research and development activities as the Company focuses on reducing expenses.
Previous 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.
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 June 30, 2026, the Company had a working capital of approximately $2,420,000, an accumulated deficit of $57,204,456 and a cash balance of $1,776,259. For the six months ended June 30, 2026, the Company incurred a net loss of $7,267,858 and used $2,297,376 of net cash in operations for the period. These conditions raise substantial doubt regarding our ability to continue as a going concern.
Previous wording
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 wording
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 of common stock remain available at this time for sale under our Form S-3, including through our ATM.
Previous 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.
Current wording
We used $2,297,376 cash in operating activities for the six months ended June 30, 2026 compared to $7,621,070 of cash used in operating activities for the corresponding period in 2025, a decrease of approximately $5,324,000. The decrease in cash used in operating activities was primarily due to the decrease in net loss of approximately $1,011,000, increase in noncash expenses of $2,061,000, and increase in cash inflows from changes in operating assets and liabilities of approximately $2,252,000.
Previous 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.
Current wording
We used $1,253,440 in investing activities for the six months ended June 30, 2026 compared to using $901,823 of cash in investing activities for the corresponding period in 2025, an increase of approximately $352,000. The increase in cash used by investing activities for the six months ended June 30, 2026 was primarily due to an increase in purchases of property and equipment and equipment-in-process of $352,000.
Previous wording
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.
Current wording
We received $2,128,393 of cash from financing activities for the six months ended June 30, 2026 compared to $20,264 for the corresponding period in 2025, an increase of approximately $2,108,000. This increase was primarily due to $2,960,000 of proceeds received from the issuance of convertible notes, offset by approximately $836,000 of repayments on debt obligations, offset by a decrease in proceeds from stock option exercises of approximately $17,000.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our general and administrative expenses increased to $2,779,369 during the six months ended June 30, 2026, as compared to $2,127,129 in the same period of 2025, an increase of approximately $652,000, primarily due to the expensing of $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, $217,000 in franchise tax expense due to the increase in our authorized shares, and $424,000 of stock-based compensation for services provided by the Board of Directors, offset by approximately $173,000 reductions in other general and administrative expenses as the Company focuses on reducing expenses.