EX-99.1 2 scwo_ex991.htm PRESS RELEASE scwo_ex991.htm

EXHIBIT 99.1

 

374Water Q3 2022 Revenue Increases 4,756% as the Company Pioneers a New Era of Sustainability

 

DURHAM, NC / 374Water Inc. (NASDAQ:SCWO), a global cleantech and social impact company, today provides a business update and reports its financial results for the quarter ended September 30, 2022.

 

The third quarter was marked by meaningful progress. Q3 and YTD Highlights:

 

 

·

Revenue for the third quarter of 2022 was $0.9 million compared to $19,000 for the same quarter of 2021, an increase of 4,756%.

 

 

 

 

·

Entered into a Memorandum of Understanding (MOU) with Forever Water Ecuador to promote and distribute 374Water's innovative and sustainable AirSCWO™ wastewater and waste management technology in Ecuador. According to Ecuadorian government statistics, 14% of the population lack access to basic sanitation services, which heightens the need for sanitation infrastructure investment. This joint effort will provide long-term and sustainable waste management solutions to the urban and rural underserved regions of Ecuador.

 

 

 

 

·

Participated in the Goldman Sachs Water Symposium

 

 

 

 

·

374Water and its manufacturing partner Merrell Bros., advanced the development of the AirSCWO™ 6 system - a decentralized, prefabricated, compact, and modular solution for sustainable wet waste management. Manufacturing of the first commercial units, which have already been sold, is underway and expected to be completed in Q4 2022.

 

Kobe Nagar, CEO of 374Water Inc. commented, "Strong momentum since commercializing our technology in February 2022, continues. In Q3, we announced an MOU with Forever Water Ecuador to help solve sanitation in Latin America. Additionally, we progressed development of The AirSCWO™ 6 system for Orange County Sanitation District (OC San), expected to be completed in the 4th quarter of 2022, and to become operational in 2023. Mr. Nagar continued, "The market opportunity development is enormous and we are dedicated to delivering our newly commercial units that treat waste and eliminate pollutants. In fact, PFAS, the ‘forever chemical' is estimated to be present in more than 57,000 sites in the U.S. alone, representing a trillion dollar market opportunity. PFAS is just a single vertical for our solutions. Considering OC San, our partnerships with Merrell Bros, ESC, MOUs with Ecuador and Midway and numerous addressable verticals, set ourselves to drive substantial shareholder value in the near and long term."

 

Third Quarter ended September 30, 2022 Financial Results

 

Revenue for the third quarter of 2022 was $0.9 million compared to $19,000 for the same quarter of 2021, an increase of 4,756%. The increase in revenue during 2022 was primarily as a result of recognizing a portion of the revenue associated with the sale of our first AirSCWO™ system.

 

 
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General and administrative expenses were $387,018 in the third quarter of 2022, compared to $143,147 in the third quarter of 2022. The change in the quarter is primarily associated with our increased insurance costs, marketing and business development expenses, dues and subscriptions, and stock-based compensation expenses.

 

Research and development expenses were $118,253 in the third quarter of 2022, compared to $115,936 in the third quarter of 2021. The change in the quarter is primarily associated with the increase in engineering expenses attributed to the design of the AirSCWO™ 30 - which has a capacity of 30 wet tonne / day, a 5x scale up of the AirSCWO™ 6 system.

 

Net loss was $(912,826), or $(0.01) per basic and diluted share, compared to a net loss of $ (551,959) million, or $(0.01) per basic diluted share, in the third quarter of 2021.

Total cash and investments were $8,402,255 as of September 30, 2022, compared to $11,131,175 at December 31, 2021. Total current assets were $9,864,788 and current liabilities were $1,262,157 as of the same date, compared to $ 11,349,641 and $86,371 respectively, in the year-ended reporting period.

 

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

 

Cautionary Language

 

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

 

About 374Water

 

374Water Inc. (Nasdaq:SCWO), is a global cleantech, social impact company whose mission is to preserve a clean and healthy environment that sustains life. We are pioneering a new era of sustainable waste management that supports a circular economy and enables organizations to achieve their environmental, social, and governance (ESG) and sustainability goals. Follow us on LinkedIn and Twitter.

 

374Water Investor Contact:

James Carbonara

ir@374water.com

374Water Media Contact:

Ashley Willis

media@374water.com

 

 
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PART I FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

 

374Water Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

September 30, 2022 (Unaudited) and December 31, 2021

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

 $ 2,407,983

 

 

 $ 11,131,175

 

Accounts receivable

 

 

 164,600

 

 

 

 -

 

Investments

 

 

 5,994,272

 

 

 

 -

 

Prepaid expenses

 

 

 1,297,933

 

 

 

 218,466

 

Total Current Assets

 

 

 9,864,788

 

 

 

 11,349,641

 

Long-Term Assets:

 

 

 

 

 

 

 

 

Equipment, net

 

 

 124,593

 

 

 

 959

 

Intangible asset, net

 

 

 980,753

 

 

 

 1,028,114

 

Other assets

 

 

 35,170

 

 

 

 34,742

 

Total Long-Term Assets

 

 

 1,140,516

 

 

 

 1,063,815

 

Total Assets

 

 $ 11,005,304

 

 

 $ 12,413,456

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 $ 1,043,660

 

 

 $ 62,981

 

Deferred revenue

 

 

 200,109

 

 

 

 -

 

Other liabilities

 

 

 18,388

 

 

 

 23,390

 

Total Current Liabilities

 

 

 1,262,157

 

 

 

 86,371

 

Total Liabilities

 

 

 1,262,157

 

 

 

 86,371

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Preferred Stock: 1,000,000 Convertible Series D preferred shares authorized; par value $0.0001 per share, nil issued and outstanding at September 30, 2022 and 27,272 issued and outstanding at December 31, 2021

 

 

 -

 

 

 

 3

 

 

 

 

 

 

 

 

 

 

Common stock: 200,000,000 common shares authorized, par value $0.0001 per share, 126,680,895 and 125,317,746 shares outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

 12,667

 

 

 

 12,531

 

Additional paid-in capital

 

 

 15,894,426

 

 

 

 15,474,566

 

Accumulated (deficit)

 

 

 (6,159,975 )

 

 

 (3,160,015 )

Accumulated other comprehensive loss

 

 

 (3,971 )

 

 

 -

 

Total Stockholders' Equity

 

 

 9,743,147

 

 

 

 12,327,085

 

Total Liabilities and Stockholders' Equity

 

 $ 11,005,304

 

 

 $ 12,413,456

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 
3

 

 

 

374Water, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the three and nine months ended September 30, 2022 and 2021

(Unaudited)

 

 

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 $ 922,718

 

 

 $ 19,000

 

 

 $ 2,226,477

 

 

 $ 33,600

 

Cost of Goods Sold

 

 

 812,386

 

 

 

 -

 

 

 

 1,962,879

 

 

 

 -

 

Gross Profit

 

 

 110,332

 

 

 

 19,000

 

 

 

 263,598

 

 

 

 33,600

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

 118,253

 

 

 

 115,936

 

 

 

 726,602

 

 

 

 269,796

 

Compensation and related expenses

 

 

 435,297

 

 

 

 227,790

 

 

 

 1,135,979

 

 

 

 405,456

 

Product and development expenses

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 1,399,833

 

Professional Fees

 

 

 82,752

 

 

 

 84,514

 

 

 

 375,313

 

 

 

 245,152

 

General and administrative

 

 

 387,018

 

 

 

 143,147

 

 

 

 1,027,287

 

 

 

 206,931

 

Total Operating Expenses

 

 

 1,023,320

 

 

 

 571,387

 

 

 

 3,265,181

 

 

 

 2,527,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Operations

 

 

 (912,988 )

 

 

 (552,387 )

 

 

 (3,001,583 )

 

 

 (2,493,568 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Award income

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Interest income

 

 

 162

 

 

 

 428

 

 

 

 1,617

 

 

 

 751

 

Other income

 

 

 -

 

 

 

 -

 

 

 

 7

 

 

 

 -

 

Total Other Income (Expense)

 

 

 162

 

 

 

 428

 

 

 

 1,624

 

 

 

 751

 

Net Loss before Income Taxes

 

 

 (912,826 )

 

 

 (551,959 )

 

 

 (2,999,959 )

 

 

 (2,492,817 )

Provision for Income Taxes

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 $ (912,826 )

 

 $ (551,959 )

 

 $ (2,999,959 )

 

 $ (2,492,817 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation

 

 

 -

 

 

 

 -

 

 

 

 (850 )

 

 

 -

 

Change in unrealized loss on marketable securities

 

 

 (3,122 )

 

 

 -

 

 

 

 (3,122 )

 

 

 -

 

Total other comprehensive loss

 

 

 (3,122 )

 

 

 -

 

 

 

 (3,972 )

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive loss

 

 

 (915,948 )

 

 

 (551,959 )

 

 

 (3,003,931 )

 

 

 (2,492,817 )

Net Loss per Share - Basic and Diluted

 

 $ (0.01 )

 

 $ (0.01 )

 

 $ (0.02 )

 

 $ (0.03 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Basic and Diluted

 

 

 126,680,895

 

 

 

 98,391,746

 

 

 

 126,621,412

 

 

 

 84,283,229

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 
4

 

 

374Water Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the nine months ended September 30, 2022 and 2021 (Unaudited)

 

 

 

2022

 

 

2021

 

Cash Flows from Operating Activities

 

 

 

 

 

 

Net loss

 

 $ (2,999,959 )

 

 $ (2,492,817 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

 50,052

 

 

 

 16,314

 

Stock based compensation

 

 

 419,995

 

 

 

 86,152

 

Warrant issued for product development agreement

 

 

 -

 

 

 

 1,399,833

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

 (164,600 )

 

 

 19,663

 

Prepaid expenses

 

 

 (1,079,467 )

 

 

 (26,185 )

Accounts payable and accrued expenses

 

 

 980,679

 

 

 

 (78,558 )

Deferred revenue

 

 

 200,109

 

 

 

 -

 

Other liabilities

 

 

 (5,002 )

 

 

 22,007

 

 

 

 

 

 

 

 

 

 

Cash Provided by (Used In) Operating Activities

 

 

 (2,598,193 )

 

 

 (1,053,591 )

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

Purchase of marketable securities

 

 

 (5,998,243 )

 

 

 -

 

Purchase of equipment

 

 

 (125,011 )

 

 

 (2,319 )

Proceeds from reverse acquisition

 

 

 -

 

 

 

 29,536

 

Increase in other asset

 

 

 (1,745 )

 

 

 (19,826 )

 

 

 

 

 

 

 

 

 

Cash Provided by (Used In) Investing Activities

 

 

 (6,123,999 )

 

 

 7,391

 

 

 

 

 

 

 

 

 

 

Cash Flow from Financing Activities

 

 

 

 

 

 

 

 

Repayments to (advances) from stockholders

 

 

 -

 

 

 

 (15,108 )

Proceeds from sale of series D preferred shares

 

 

 -

 

 

 

 6,551,745

 

Proceeds from exercise of options and warrants

 

 

 -

 

 

 

 1,285,344

 

 

 

 

 

 

 

 

 

 

Cash Provided by Financing Activities

 

 

 -

 

 

 

 7,821,981

 

 

 

 

 

 

 

 

 

 

Net Increase in Cash

 

 

 (8,723,192 )

 

 

 6,775,781

 

Cash, Beginning of the Period

 

 

 11,131,175

 

 

 

 71,799

 

Cash, End of the Period

 

 $ 2,407,983

 

 

 $ 6,847,580

 

 

 

 

 

 

 

 

 

 

NON-CASH FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Conversion of preferred stock to common stock

 

 $ 133

 

 

 $ -

 

License

 

 

 -

 

 

 

 1,073,529

 

Accounts payable settled with Series D Preferred Stock

 

 

 -

 

 

 

 50,000

 

NET LIABILITIES ASSUMED IN REVERSE ACQUISITION

 

 

 

 

 

 

 

 

Cash

 

 

 -

 

 

 

 29,536

 

Prepaid expense

 

 

 -

 

 

 

 14,483

 

Accounts receivable

 

 

 -

 

 

 

 1,000

 

Account payable

 

 

 -

 

 

 

 (46,150 )

Accrued expenses

 

 

 -

 

 

 

 (83,094 )

Net liability assumed

 

 

 -

 

 

 

 (84,225 )

 

 
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