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What changed in 374Water Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of 374Water Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+227 added−233 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-28)

Top changes in 374Water Inc.'s 2025 10-K

227 paragraphs added · 233 removed · 152 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

69 edited+21 added−33 removed34 unchanged
Biggest changeThe 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.
Biggest changeFederal agencies have stockpiles of contaminated waste streams such as AFFF (firefighting foam), chemicals, narcotics, biosolids, filtration media (GAC and IX) , hydrocarbons and other wastes which must be stored, treated, disposed of, or preferably destroyed. Federal agencies are actively and aggressively seeking the best destruction solutions to eliminate these contaminated waste streams.
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. 10 Table of Contents Our focus areas in creating a working environment that draws out the best in our employees and support the Company objectives are as follows: 1) Attract, identify, develop and retain high-performing talent across all parts of the company. 2) Develop and support the growth of leadership. 3) Enable the development of a high-performance culture where staff performance can be supported, rewarded, enhanced and managed effectively. 4) Develop a market-based total reward approach, which is valued by staff, and supports retention of our employees 5) Provide excellent core HR services across all business areas to enable the effective operation of the organization.
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. 10 Table of Contents Our focus areas in creating a working environment that draws out the best in our employees and supports the Company objectives are as follows: 1) Attract, identify, develop and retain high-performing talent across all parts of the company. 2) Develop and support the growth of leadership. 3) Enable the development of a high-performance culture where staff performance can be supported, rewarded, enhanced and managed effectively. 4) Develop a market-based total reward approach, which is valued by staff, and supports retention of our employees. 5) Provide excellent core HR services across all business areas to enable the effective operation of the organization.
These differentiators include: · Continuous waste processing design, with scalable throughput and high energy efficiency; · Effective destruction of emerging contaminants such as PFAS, 1,4 Dioxane, microplastics, pharmaceuticals, and other CECs; · The generation of recoverable and usable heat energy, paired with highly efficient energy recapture technology, to minimize overall energy demand and maximize reusable energy; and · On-site waste treatment solutions reducing haulage and transportation needs, associated greenhouse gas emissions, hauling liability, and waste disclosures. 5 Table of Contents 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%.
These differentiators include: · Continuous waste processing design, with scalable throughput and high energy efficiency; · Effective destruction of emerging contaminants such as PFAS, 1,4 Dioxane, microplastics, pharmaceuticals, and other CECs; · The generation of recoverable and usable heat energy, paired with highly efficient energy recapture technology, to minimize overall energy demand and maximize reusable energy; and · On-site waste treatment solutions that reducing haulage and transportation needs, associated greenhouse gas emissions, hauling liability, and waste disclosures. 5 Table of Contents 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%.
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.
Laboratory & Testing Services 374Water provides extensive AirSCWO waste destruction laboratory and testing services to municipal, federal, and industrial clients. Our laboratory also serves as 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.
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.
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: AFFF is a significant source of PFAS. Full-scale removal and disposal of AFFF firefighting foam, is now underway at the State and Municipal government levels.
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.
As part of our growth strategy, we are engaging with TSDF market participants 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.
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.
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 throughput, and lower operating costs than our competition, we expect competition to increase.
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.
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 such as PFAS, microplastics, and pharmaceuticals, leading to widespread adoption of treatment methods like GAC and IX to filter these contaminants.
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.
We are responsible for all of the disclosures 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.
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.
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. 11 Table of Contents 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.
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 supercritical phase of water has unique properties, which when combined with air, destroys organic “wastes” by oxidizing organic matter and yielding recoverable energy, minerals, and water. Our AirSCWO technology platform sits at the heart of our waste destruction solutions.
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.
We must caution, however, that these 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.
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.
AirSCWO has been shown to treat (destroy) wastes to levels at or below regulatory standards, significantly reduce or eliminate disposal costs, remove operational process bottlenecks, and reduce liabilities and other risks associated with waste management.
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.
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, and 374Water Acquisition Corp., a newly-formed wholly-owned subsidiary of PowerVerde, Inc.
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.
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 has demonstrated that our systems can run continuously at commercial scale with periodic stops for routine maintenance.
This may have an effect on our future revenue and profitability. 9 Table of Contents 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.
This may have an effect on our future revenue and profitability. 9 Table of Contents Government Regulations Our operations and AirSCWO system may be subject to various U.S. federal, state and local laws and regulations and requirements governing the protection of the environment, public health and safety, and other matters.
We believe our AirSCWO solutions provide unique value propositions that support rapid market acceptance across various verticals and applications.
We believe our AirSCWO solutions provide unique value propositions that support rapid market adoption across various verticals and applications.
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.
We may be required to obtain permits for our facilities before we can operate our facilities, and we may incur one-time and recurring costs to achieve or maintain compliance with any EPA regulations and similar laws.
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.
Our principal executive offices are located at 100 Southcenter Court, Suite 200, Morrisville, North Carolina, 27560, telephone number (440) 601-9677. Our website address is www.374water.com.
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.
We may incur training costs, monitoring costs, and remediation costs in relation to such regulations. Additionally, our AirSCWO systems may be regulated pursuant to the United States Occupational Safety and Health Act (“OSHA”) and thereby be subject to inspections thereunder.
Our post-treatment systems are installed downstream of our AirSCWO system to improve performance and byproduct valorization. 4 Table of Contents 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 post-treatment systems are installed downstream of our AirSCWO system to improve performance and byproduct valorization. 4 Table of Contents Waste Destruction Services (“WDS”) During 2024, we announced the launch of our WDS business. Along with select capital sales and service contracts, WDS provides our customers with a fit-to-need waste destruction service without significant capital investment.
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.
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.
While we are still developing the technology, we believe 374Water’s AirSCWO technology is a paradigm-shift across sectors of waste management. 3 Table of Contents 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 believe 374Water’s AirSCWO technology is a paradigm-shift across sectors of waste management. 3 Table of Contents Products and Services AirSCWO Solutions 374Water’s ability to provide scaled waste destruction solutions is a significant differentiator across waste treatment and destruction providers.
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.
In addition, our technology can process liquid wastes such as AFFF used in firefighting, landfill leachate, light-non-aqueous phase liquid (“L-NAPL”), military wastes, industrial solvents, oily sludges, pharmaceuticals, foam fractionate streams, pesticides, and other industrial wastes, to name a few.
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.
The effectiveness of AirSCWO has been demonstrated on a wide variety of organic waste streams at commercial and laboratory scale with waste destruction results at or above 99.95%. Our AirSCWO technology has treated a wide variety of non-hazardous and hazardous slurries and liquid organic wastes.
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.
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. Following the acquisition of PowerVerde, Inc. in 2008, Vyrex Corporation’s name was changed to PowerVerde, Inc.
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 have made a significant investment in our people and recognize and value our team as our most important asset in achieving our strategic goals.
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.
Primary demand drivers for waste destruction include excessive costs and operational burden of current disposal practices, the desire for waste destruction at the point of generation, outdated and/or inadequate waste disposal infrastructure, poor waste disposal processes or options, increasing quantity/complexity of waste streams, public health, existing and anticipated State and Federal regulations, liability threat from contaminant of emerging concern (“CECs”), resource scarcity, corporate sustainability targets, commodity prices, climate change, and energy security.
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.
As these materials become saturated with PFAS and other pollutants, we believe technologies like AirSCWO are essential for safely 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 or industrial wastewater.
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 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.).
(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.
(the “Company”, “374Water”, “We”, or “Our”) is a cleantech and environmental services company developing supercritical water oxidation technology (“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 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.
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 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, 2025, we employed 48 full-time employees and 7 contractors.
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.
As of the first quarter of 2026, our manufacturing capabilities have included: 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.
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”).
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”).
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.
Manufacturing As of December 31, 2025, 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 at the Iron Bridge Regional Water Reclamation Facility in Oviedo, Florida.
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.
Our AirSCWO technology 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 inert and recoverable resources including water, minerals, and heat energy Our vision is a world without waste and our mission is to destroy organic waste for a cleaner tomorrow.
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.
Our WDS business is based on a partner model with: (1) Wastewater facilities, (2) 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 established our first WDS operations in 2025 at the City of Orlando’s Iron Bridge Water Reclamation Facility.
In 2024 the DOE spent $455M on PFAS- c ontaminated 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.
Department of Energy: The DoE spends approximately $8 billion annually to treat hazardous waste. In 2024 the DOE spent $455M on PFAS- c ontaminated 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.
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.
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.
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.
We are working directly with U.S. military services to demonstrate the efficacy of destruction and performance scale of the AirSCWO system. Additional destruction 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.
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.
We continue to increase capacity and decrease the duration frequency of maintenance downtime, to increase process efficiency in our AirSCWO systems. The technology we continue to refine and innovate is designed to address business operations and environmental challenges, which we believe have been inadequately addressed and poorly resourced until now.
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.
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.
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.
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.
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. 11 Table of Contents 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.
References to our website and any information contained therein or connected thereto are 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.
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.
We have a fully equipped and skilled field team capable of installing, integrating, and operating our AirSCWO systems in a vast range of settings and for different applications.
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.
Driven by stringent regulations and battery recycling, the market is projected to grow at a CAGR of 6.74% over the next ten years. 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.
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.
This 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.
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.
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 primarily transport, transform, concentrate, and/or partially destroy wastes often shifting - not eliminating - the burden and liability. 374Water’s AirSCWO technology aims to achieve maximum destruction of organic wastes with the intent of eliminating residual pollutants, operational burden, and liability.
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.
Our goal is to provide customers with the flexibility to manage and destroy a broader spectrum of waste materials. 8 Table of Contents 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 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.
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.
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.
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 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.
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.
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.
These waste destruction evaluations demonstrate the destruction efficacy of our AirSCWO solution to support operations and solutions design. Our lab also provides us with rapid analysis, characterization, and treatment parameters to support full-scale waste destruction operations. We use our lab-scale system as guidance to continually optimize our AirSCWO process for improved performance and customized operations for unique client wastes.
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 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.
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.
Those residual streams are ideal applications for our AirSCWO technology as current treatment and disposal methods are becoming increasingly costly, scrutinized by regulators, and operationally infeasible. Landfills: Landfill Leachate is a liquid that forms when water percolates through waste material in a landfill, picking up various dissolved and suspended substances.
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.
Our industrial efforts are focused on fielding inbound requests for engagement, lab and full-scale waste destruction demonstrations across multiple industrial sub-verticals. During 2026, we intend to generate ongoing revenue from WDS operations and capital sale partnerships.
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.
We have designed an intellectual property strategy to advance our competitive edge and disruptive position in the market. As of December 31, 2025, we have four (4) pending U.S. non-provisional applications, six (6) provisional filings, and three (3) pending Patent Cooperation Treaty (PCT) applications.
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.
Our modular AS systems, used for both WDS operations and permanent or semi-permanent onsite customer integrations is designed to scale between six (6) and ten (10) tons per day and is well-suited for smaller municipal, federal, and industrial sites.
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.
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 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.
We rely on patents, trade secret laws, and contractual safeguards to protect our proprietary technology, processing techniques, and other know-how used in the design and operations of our systems. We have a robust, and growing, intellectual property (“IP”) portfolio consisting of U.S. and international patents and trademarks.
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 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.
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.
We believe our AirSCWO technology, along with our developing partnerships and business model position 374Water to provide a compelling waste destruction solution to these markets. Department of Defense: To date, the DoD has determined that 574 military installations will require PFAS-focused environmental remediation. Recent site clean-up estimates exceed $29 billion for PFAS contamination and other organic wastes in the aggregate.
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+.
We intend to offer multiple commercial-scale AirSCWO system models and corresponding pre- and post-treatment technologies to fully support end customers' organic waste destruction needs. Our fleet and product offering currently includes a mobile, trailered AS system for rapid deployment into non-permanent or low-infrastructure settings.
We expect to finalize one or more of these TSDF agreements and begin operations in 2025. 7 Table of Contents 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.
Finally, we are actively pursuing strategic partnerships with industrial partners, TSDFs, to establish WDS operations. 7 Table of Contents Our product marketing approach includes maintaining a strategic presence at water, wastewater, federal, and industrial industry events.
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.
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.
(6) Aqueous Film Forming Foam 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.
Table 1 below shows near-term target markets, their subsegments, and the relevant applications associated with those markets. 6 Table of Contents Sales and Marketing Our business development and sales team offer our products through capital sales, joint development agreements, and waste destruction services to municipal, federal, and industrial customers.
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.
Municipal sludge is typically treated in large biological treatment processes which generates a final residue known as biosolids and is generally high in organic material. Sludge and biosolids management is a key part of any wastewater treatment process.
We are following FAA and airport interest in environmental remediation closely, working with partners and ready for AAAF destruction opportunities.
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 waste management market for specific sectors (O&G, Chemicals, Battery Recycling and Pharmaceuticals & Healthcare) is estimated at $144.5 billion in 2025, with the United States accounting for 33.4% of this total valuation.
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 our approach is effective at calling potential customers and partners to action as decisions are increasingly based on triple-bottom line metrics and providing essential services to communities and customers. We are actively exploring partnerships and strategic transactions to further support and advance our R&D and market reach.
Removed
In fiscal year 2024, 374Water outlined a new strategic plan and tactical roadmap.
Added
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. 374Water made significant commercial and technological progress throughout the 2025 fiscal year.
Removed
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.
Added
We continue to make technological breakthroughs in processing solids and slurries, as well as liquid waste streams across three main market sectors – industrial, municipal, and federal.
Removed
As we begin 2025, we believe 374Water is well positioned with a robust plan to scale revenue, operations, and capitalize our business.
Added
Throughout the year we established our Waste Destruction Services (“WDS”) hub at the City of Orlando’s Iron Bridge Water Reclamation Facility, deployed a commercial AirSCWO system to Detroit, MI, for a six week Department of Defense (“DoD”) Destruction Demonstration of six PFAS-impacted waste streams, deployed our mobile AirSCWO lab to Peterson Space Force Base in Colorado, and tested waste streams from several clients, including major oil and gas companies, multi-national chemical and pharmaceutical companies, the United States DoD and defense contractors, and resource recovery companies, at our laboratory in the Research Triangle, North Carolina.
Removed
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.
Added
Recent business highlights underscore the Company’s continued effort to increase capacity to address multiple significant markets, and include winning an award for and commencing the destruction of 1,000 gallons of Aqueous Film Forming Foam (“AFFF”) from the University of North Carolina at Chapel Hill Collaboratory; completion of WDS field demonstrations of an AS system at Clean Earth’s Detroit, MI in partnership with the DoD, led by the Defense Innovation Unit (“DIU”) in collaboration with Environmental Security Technology Certification Program ("ESTCP”), to evaluate commercial-scale technology solutions to destroy per- and polyfluoroalkyl (“PFAS”) contaminated wastes; a collaboration agreement with Crystal Clean to locate 374Water’s AirSCWO technology at one of their RCRA-permitted facilities to destroy various PFAS waste streams; and an agreement with the city of Olathe, KS for the sale of an AirSCWO system and pre-treatment equipment with an associated service agreement for the treatment of PFAS-impacted wastewater and other waste streams.
Removed
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).
Added
As we begin 2026, we have already secured additional contracts for Waste Destruction Services, made technological advances to better address the demand and needs of customers and partners across market segments, and continue to capitalize our business to establish 374Water as a leader in developing waste destruction industry and the unique abilities of AirSCWO to unlock tremendous value.
Removed
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+13 added−18 removed205 unchanged
Biggest changeIn general, under the “baby shelf” rules if our public float is less than $75 million at the time we file our annual report of Form 10-K to update our Form S-3 and our public float remains less than $75 million, we may not sell more than the equivalent of one-third of our public float during any 12 consecutive months pursuant to the baby shelf rules.
Biggest changeAfter 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, as of the date of filing this Annual Report, approximately $3,700,000 shares of common stock remain available at this time for sale under our Form S-3, including through our at-the-market equity offering. and our public float remains less than $75 million, we may not sell more than the equivalent of one-third of our public float during any 12 consecutive months pursuant to the baby shelf rules.
As our management team moves forward with its business strategies, unexpected setbacks, obstacles and challenges may occur, resulting in delays, changes in strategy, abandonment of certain projects and plans, and the creation of new strategies and plans that may look very different from our current business strategies.
As our new management team moves forward with its business strategies, unexpected setbacks, obstacles and challenges may occur, resulting in delays, changes in strategy, abandonment of certain projects and plans, and the creation of new strategies and plans that may look very different from our current business strategies.
Risks Related to our Common Stock and Capital Structure · The market price of our common stock historically has been highly volatile and is likely to continue to be volatile, and you could lose all or part of your investment. · If we cannot maintain full compliance with Nasdaq listing standards, or if we cannot cure any violations within the time afforded under the Nasdaq listing standards, then we may face penalties that could significantly impact our stock price, including delisting of our stock from Nasdaq. · The interests of our principal stockholders, officers and directors, who collectively beneficially own a significant amount of our common stock, may not coincide with yours and such stockholders will have the ability to control decisions with which you may disagree. · Because we are a “smaller reporting company,” we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company. · We do not intend to pay dividends on our common stock for the foreseeable future. · If securities or industry analysts do not publish research about our business, or publish negative reports about our business, our share price and trading volume could decline. · Future sales or potential sales of our common stock in the public market could cause our share price to decline. · The market price of our common shares has been, and may continue to be, particularly volatile, and our shareholders may be unable to resell their shares at a profit. · We incur costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. · Provisions in our Amended and Restated Certificate of Incorporation and Bylaws and of Delaware law may prevent or delay an acquisition of the Company, which could decrease the trading price of our common stock. · We may not regain compliance with the continued listing requirements of The Nasdaq Capital Market. 13 Table of Contents RISK FACTORS Risks Related to Our Business and General Economic Conditions A sustainable market for our products may never develop.
Risks Related to our Common Stock and Capital Structure · The market price of our common stock historically has been highly volatile and is likely to continue to be volatile, and you could lose all or part of your investment. · If we cannot maintain full compliance with Nasdaq listing standards, or if we cannot cure any violations within the time afforded under the Nasdaq listing standards, then we may face penalties that could significantly impact our stock price, including delisting of our stock from Nasdaq. · The interests of our principal stockholders, officers and directors, who collectively beneficially own a significant amount of our common stock, may not coincide with yours and such stockholders will have the ability to control decisions with which you may disagree. · Because we are a “smaller reporting company,” we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company. · We do not intend to pay dividends on our common stock for the foreseeable future. · If securities or industry analysts do not publish research about our business, or publish negative reports about our business, our share price and trading volume could decline. · Future sales or potential sales of our common stock in the public market could cause our share price to decline. · The market price of our common shares has been, and may continue to be, particularly volatile, and our shareholders may be unable to resell their shares at a profit. · We incur costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. · Provisions in our Amended and Restated Certificate of Incorporation and Bylaws and of Delaware law may prevent or delay an acquisition of the Company, which could decrease the trading price of our common stock. 13 Table of Contents RISK FACTORS Risks Related to Our Business and General Economic Conditions A sustainable market for our products may never develop.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, these factors include: · Inability to obtain additional capital; · Failure to meet or exceed financial or operational projections we may provide to the public; · Failure to meet or exceed the financial or operational projections of the investment community; · Significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; · Additions or departures of key management personnel; · Significant lawsuits, including shareholder litigation; · If securities or industry analysts issue an adverse or misleading opinion regarding our common stock; · Changes in market valuations of similar companies; · General market or macroeconomic conditions; · Sales of shares of our common stock by us or our shareholders in the future; and · Trading volume of our common stock. 26 Table of Contents In addition, companies trading in the stock market in general, and on the Nasdaq Capital Market, have experienced extreme price and volume fluctuations, and we have in the past experienced volatility that has been unrelated or disproportionate to our operating performance.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, these factors include: · Inability to obtain additional capital; · Failure to meet or exceed financial or operational projections we may provide to the public; · Failure to meet or exceed the financial or operational projections of the investment community; · Significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; · Additions or departures of key management personnel; · Significant lawsuits, including shareholder litigation; · If securities or industry analysts issue an adverse or misleading opinion regarding our common stock; · Changes in market valuations of similar companies; · General market or macroeconomic conditions; · Sales of shares of our common stock by us or our shareholders in the future; and · Trading volume of our common stock. 27 Table of Contents In addition, companies trading in the stock market in general, and on the Nasdaq Capital Market, have experienced extreme price and volume fluctuations, and we have in the past experienced volatility that has been unrelated or disproportionate to our operating performance.
Our actual capital requirements will depend on many factors, including: · continued progress and cost of our research and development programs; · the time and costs involved in obtaining regulatory approvals and permitting, if any; · regulatory actions with respect to our technology; · costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing intellectual property rights; · costs of developing sales, marketing and distribution channels and our ability to sell our products; · competing technological and market developments; · market acceptance of our products; · costs for recruiting and retaining employees and consultants; and · unexpected legal, accounting and other costs and liabilities related to our business. 21 Table of Contents Our financial results depend on successful project execution and may be adversely affected by cost overruns, failure to meet customer schedules or other execution issues.
Our actual capital requirements will depend on many factors, including: · continued progress and cost of our research and development programs; · the time and costs involved in obtaining regulatory approvals and permitting, if any; · regulatory actions with respect to our technology; · costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing intellectual property rights; · costs of developing sales, marketing and distribution channels and our ability to sell our products; · competing technological and market developments; · market acceptance of our products; · costs for recruiting and retaining employees and consultants; and · unexpected legal, accounting and other costs and liabilities related to our business. 22 Table of Contents Our financial results depend on successful project execution and may be adversely affected by cost overruns, failure to meet customer schedules or other execution issues.
Moreover, the following can limit our ability to protect our intellectual property and technology: · intellectual property laws in certain jurisdictions may be relatively ineffective; · detecting infringements and enforcing proprietary rights may divert management’s attention and company resources; · contractual measures such as non-disclosure agreements and confidentiality provisions may afford only limited protection; · any patents we may receive will expire, thus providing competitors access to the applicable technology; · competitors may independently develop products that are substantially equivalent or superior to our products or circumvent our intellectual property rights; and · competitors may register patents in technologies relevant to our business areas. 23 Table of Contents In addition, various parties may assert infringement claims against us.
Moreover, the following can limit our ability to protect our intellectual property and technology: · intellectual property laws in certain jurisdictions may be relatively ineffective; · detecting infringements and enforcing proprietary rights may divert management’s attention and company resources; · contractual measures such as non-disclosure agreements and confidentiality provisions may afford only limited protection; · any patents we may receive will expire, thus providing competitors access to the applicable technology; · competitors may independently develop products that are substantially equivalent or superior to our products or circumvent our intellectual property rights; and · competitors may register patents in technologies relevant to our business areas. 24 Table of Contents In addition, various parties may assert infringement claims against us.
In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms possibly less favorable to us, and thereby cause our stock price to fall. Our research and development expenses may increase in the future.
In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms possibly less favorable to us, and thereby cause our stock price to fall. Our research and development expenses will increase in the future.
Developments such as the adoption of new environmental laws and regulations, stricter enforcement of existing laws and regulations, violations by us of such laws and regulations, discovery of previously unknown or more extensive contamination, litigation involving environmental impacts, our inability to recover costs associated with any such developments, or financial insolvency of other responsible parties could in the future have a material adverse effect on our financial condition and results of operations. 18 Table of Contents If we become subject to claims relating to handling, storage, release or disposal of hazardous materials, we could incur significant cost and time to comply.
Developments such as the adoption of new environmental laws and regulations, stricter enforcement of existing laws and regulations, violations by us of such laws and regulations, discovery of previously unknown or more extensive contamination, litigation involving environmental impacts, our inability to recover costs associated with any such developments, or financial insolvency of other responsible parties could in the future have a material adverse effect on our financial condition and results of operations. 19 Table of Contents If we become subject to claims relating to handling, storage, release or disposal of hazardous materials, we could incur significant cost and time to comply.
In addition, defending claims is costly and can impose a significant burden on our management. 17 Table of Contents If any of our current or future products and services that we make or sell (including items that we source from third parties) are defectively designed or manufactured, contain defective components, are misused, have safety or quality issues, have inadequate operating guidelines, malfunctions or if someone claims any of the foregoing, whether or not meritorious, we may become subject to substantial and costly litigation.
In addition, defending claims is costly and can impose a significant burden on our management. 18 Table of Contents If any of our current or future products and services that we make or sell (including items that we source from third parties) are defectively designed or manufactured, contain defective components, are misused, have safety or quality issues, have inadequate operating guidelines, malfunctions or if someone claims any of the foregoing, whether or not meritorious, we may become subject to substantial and costly litigation.
Many climate change predictions, if true, present several potential challenges to water and wastewater service providers, such as increased precipitation and flooding, potential degradation of water quality and changes in demand for water services. 19 Table of Contents We may incur liabilities to customers as a result of warranty claims or failure to meet performance guarantees, which could reduce our profitability.
Many climate change predictions, if true, present several potential challenges to water and wastewater service providers, such as increased precipitation and flooding, potential degradation of water quality and changes in demand for water services. 20 Table of Contents We may incur liabilities to customers as a result of warranty claims or failure to meet performance guarantees, which could reduce our profitability.
A delay or non-existent launch of our technology or an insufficient investment (or overspend on such expenditure) could have a material adverse effect on our business, results of operations and financial position. 22 Table of Contents Risks Related to Our Intellectual Property We may have difficulty in protecting our intellectual property and may incur substantial costs to defend ourselves in patent infringement litigation.
A delay or non-existent launch of our technology or an insufficient investment (or overspend on such expenditure) could have a material adverse effect on our business, results of operations and financial position. 23 Table of Contents Risks Related to Our Intellectual Property We may have difficulty in protecting our intellectual property and may incur substantial costs to defend ourselves in patent infringement litigation.
If investors consider our Common Stock less attractive as a result of our election to use the scaled-back disclosure permitted for smaller reporting companies, there may be a less active trading market for our Common Stock and our share price may be more volatile. 27 Table of Contents We do not intend to pay dividends on our common stock for the foreseeable future.
If investors consider our Common Stock less attractive as a result of our election to use the scaled-back disclosure permitted for smaller reporting companies, there may be a less active trading market for our Common Stock and our share price may be more volatile. 28 Table of Contents We do not intend to pay dividends on our common stock for the foreseeable future.
Reduction or elimination of government spending under our contracts would imperil the sales of our products and may cause a negative effect on our revenues, results of operations, cash flow and financial condition. 15 Table of Contents We have identified material weaknesses in our internal control over financial reporting, which may have a material adverse effect on our results of operations and financial condition for future periods.
Reduction or elimination of government spending under our contracts would imperil the sales of our products and may cause a negative effect on our revenues, results of operations, cash flow and financial condition. 16 Table of Contents We have identified material weaknesses in our internal control over financial reporting, which may have a material adverse effect on our results of operations and financial condition for future periods.
There is no assurance that we will be able to secure additional or alternate sources for our components quickly or at all. 25 Table of Contents As we scale production of our AirSCWO systems, we will also need to accurately forecast, purchase, warehouse and transport components at high volumes to our manufacturing facilities.
There is no assurance that we will be able to secure additional or alternate sources for our components quickly or at all. 26 Table of Contents As we scale production of our AirSCWO systems, we will also need to accurately forecast, purchase, warehouse and transport components at high volumes to our manufacturing facilities.
In addition, our ability to raise capital in the public capital markets, including through our at-the-market equity offerings, may in the future be limited by, among other things, SEC rules and regulations impacting the eligibility of smaller companies to use Form S-3 for primary offerings of securities.
In addition, our ability to raise capital in the public capital markets, including through our at-the-market (“ATM”) equity offering, may in the future be limited by, among other things, SEC rules and regulations impacting the eligibility of smaller companies to use Form S-3 for primary offerings of securities.
Sales by such significant stockholder are out of our control, and there is no assurance that such stockholder will not continue to engage in such sales. 28 Table of Contents If we cannot find ways to successfully manage our stock price, our business and financial condition may be negatively impacted.
Sales by such significant stockholder are out of our control, and there is no assurance that such stockholder will not continue to engage in such sales. 29 Table of Contents If we cannot find ways to successfully manage our stock price, our business and financial condition may be negatively impacted.
These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary Note Regarding Forward-Looking Statements” and the risks of our businesses described elsewhere in this Report for the year ended December 31, 2024.
These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary Note Regarding Forward-Looking Statements” and the risks of our businesses described elsewhere in this Report for the year ended December 31, 2025.
The resolution of any dispute that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, which could adversely impact our business. 24 Table of Contents We may need to depend on certain technologies that are licensed to us.
The resolution of any dispute that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, which could adversely impact our business. 25 Table of Contents We may need to depend on certain technologies that are licensed to us.
SUMMARY RISK FACTORS Risks Related to Our Business and General Economic Conditions · A sustainable market for our products may never develop. · Our ability to treat hazardous wastes on a commercially viable basis is unproven, which could have a detrimental effect on our ability to generate or sustain revenues. · We have a limited operating history with no material revenues. · Our business and results of operations may be adversely affected if we are unable to recruit and retain qualified management. · Our products may have defects, which could damage our reputation, decrease market acceptance of our products, cause us to lose customers and revenue and result in costly litigation or liability. · Our management team may not be able to successfully implement our business strategies. · Our ability to generate revenue will depend in part on government contracts which expose us to the uncertainties of governmental budgetary and funding constraints and local, national and international political conditions and events. · We have identified material weaknesses in our internal control over financial reporting. · Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business. · We may be unable to obtain required licenses from third parties for product development. · If we fail to manage growth or to prepare for product scalability effectively, it could have an adverse effect on our employee efficiency, product quality, working capital levels and results of operations. · We may be adversely affected by the effects of inflation. · We face competition in our industry, and we may be unable to attract customers and maintain a viable business. · We are required to obtain permits in different areas of the world in order to utilize our products in such regions.
SUMMARY RISK FACTORS Risks Related to Our Business and General Economic Conditions · A sustainable market for our products may never develop. · Our ability to treat hazardous wastes on a commercially viable basis is unproven, which could have a detrimental effect on our ability to generate or sustain revenues. · We have a limited operating history with no material revenues. · We have experienced management turnover, including turnover of our top executives, which creates uncertainties and could have an adverse effect on our business. · Our products may have defects, which could damage our reputation, decrease market acceptance of our products, cause us to lose customers and revenue and result in costly litigation or liability. · Our management team may not be able to successfully implement our business strategies. · Our ability to generate revenue will depend in part on government contracts which expose us to the uncertainties of governmental budgetary and funding constraints and local, national and international political conditions and events. · We have identified material weaknesses in our internal control over financial reporting. · Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business. · We may be unable to obtain required licenses from third parties for product development. · If we fail to manage growth or to prepare for product scalability effectively, it could have an adverse effect on our employee efficiency, product quality, working capital levels and results of operations. · We may be adversely affected by the effects of inflation. · We face competition in our industry, and we may be unable to attract customers and maintain a viable business. · We are required to obtain permits in different areas of the world in order to utilize our products in such regions.
Our failure to manage growth effectively may lead to operational and financial inefficiencies that will have a negative effect on our profitability. 16 Table of Contents We may be adversely affected by the effects of inflation.
Our failure to manage growth effectively may lead to operational and financial inefficiencies that will have a negative effect on our profitability. 17 Table of Contents We may be adversely affected by the effects of inflation.
Based on the closing price of our common stock on June 30, 2024, we will remain a smaller reporting company through at least the end of fiscal year 2025.
Based on the closing price of our common stock on June 30, 2025, we will remain a smaller reporting company through at least the end of fiscal year 2026.
These and other provisions of our Amended and Restated Certificate of Incorporation, Bylaws and Delaware law may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of us, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their shares of our common stock at a price above the prevailing market price.
These and other provisions of our Amended and Restated Certificate of Incorporation, Bylaws and Delaware law may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of us, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their shares of our common stock at a price above the prevailing market price. 30 Table of Contents ITEM 1B.
The interests of our principal stockholders, officers and directors, who collectively beneficially own a significant amount of our common stock, may not coincide with yours and such stockholders will have the ability to control decisions with which you may disagree. At December 31, 2024, our principal stockholders, officers and directors beneficially owned approximately 43.5% of our common stock.
The interests of our principal stockholders, officers and directors, who collectively beneficially own a significant amount of our common stock, may not coincide with yours and such stockholders will have the ability to control decisions with which you may disagree. At December 31, 2025, our principal stockholders, officers and directors beneficially owned approximately 34% of our common stock.
For the fiscal year ended December 31, 2024, we and our independent registered public accounting firm have identified material weaknesses in our internal controls over financial reporting related due to our ongoing personnel limitations.
For the fiscal year ended December 31, 2025, we and our independent registered public accounting firm have identified material weaknesses in our internal controls over financial reporting related to our ongoing personnel limitations and changes.
If we do not obtain required licenses, we could encounter delays in product development or find that the development, manufacture or sale of products requiring these licenses could be prevented in the U.S. or abroad.
If we do not obtain required licenses, we could encounter delays in product development or find that the development, manufacture or sale of products requiring these licenses could be prevented in the United States or abroad.
We may not be able to obtain product liability or other insurance to fully cover such risks, and our efforts to implement appropriate design, testing and manufacturing processes for our products or systems may not be sufficient to prevent such occurrences, which could have a material adverse effect on our business, results of operations and financial condition.
We may not be able to obtain product liability or other insurance to fully cover such risks, and our efforts to implement appropriate design, testing and manufacturing processes for our products or systems may not be sufficient to prevent such occurrences, which could have a material adverse effect on our business, results of operations and financial condition. 15 Table of Contents Our management team may not be able to successfully implement our business strategies.
We have in the past and may in the future be involved in litigation matters or other legal proceedings that are expensive and time consuming. We have in the past and may in the future become involved in litigation matters, including class action lawsuits and lawsuits relating to intellectual property and product liability.
We have in the past and may in the future be involved in litigation matters or other legal proceedings that are expensive and time consuming. We have in the past and may in the future become involved in litigation matters, including class action lawsuits and lawsuits relating to intellectual property, product liability, and the termination of former executive officers.
The market price of our common shares has significantly declined over the past twelve months, and may continue to fluctuate or decline in the future.
The market price of our common shares has significantly declined over the past three years , and may continue to fluctuate or decline in the future.
We have an at-the-market equity offering pursuant to which, we can issue up to an aggregate of $100 million of common stock, subject to applicable law and our previous at-the-market equity offering sales.
We have an ATM equity offering pursuant to which, we can issue up to an aggregate of $50 million of common stock, subject to applicable law, limitation and our previous ATM sales.
Since our business is still in its nascent stages, there is no historical basis upon which to evaluate our ability to successfully execute on our business strategies, achieve our business goals and objectives, and recognize revenue and turn a profit over time.
Since our business is still young, there is limited historical basis upon which to evaluate our ability to successfully execute on our business strategies at scale, achieve our business goals and objectives, and recognize revenue and turn a profit over time.
If we are not able to deliver the results we expect, or if our business strategies do not result in the successes we intend, our business, operations and financial condition will be materially and adversely impacted. Furthermore, we may seek to augment or replace members of our management team.
If we are not able to deliver the results we expect, or if our business strategies do not result in the successes we intend, our business, operations and financial condition will be materially and adversely impacted.
Further, we are subject to all the risks inherent in a new business, including, but not limited to: intense competition; lack of sufficient capital; loss of protection of proprietary technology and trade secrets; difficulties in commercializing our products, managing growth and hiring and retaining key employees; adverse changes in costs and general business and economic conditions; and the need to achieve product acceptance, to enter and develop new markets and to develop and maintain successful relationships with customers, third party suppliers and contractors. 14 Table of Contents Our business and results of operations may be adversely affected if we are unable to recruit and retain qualified management.
Further, we are subject to all the risks inherent in a new business, including, but not limited to: intense competition; lack of sufficient capital; loss of protection of proprietary technology and trade secrets; difficulties in commercializing our products, managing growth and hiring and retaining key employees; adverse changes in costs and general business and economic conditions; and the need to achieve product acceptance, to enter and develop new markets and to develop and maintain successful relationships with customers, third party suppliers and contractors. 14 Table of Contents We have experienced management turnover, including turnover of our top executives, which creates uncertainties and could have an adverse effect on our business.
We have yet to generate material revenues from our business and we have so far deployed our AirSCWO technology only in the City of Orlando, Florida. Therefore, the commercial value of our systems is uncertain. There can be no assurance that we will ever generate significant revenues or become profitable.
We have yet to generate material revenues from our business. Therefore, the commercial value of our systems is uncertain. There can be no assurance that we will ever generate significant revenues or become profitable.
In addition to the impacts to our business stemming from the tariffs imposed by the Trump administration, we may also be materially impacted by retaliatory tariffs and other penalties that may be imposed by such countries against the United States.
The outlook on further trade policy actions, including trade agreements and potential retaliatory tariffs is unclear. In addition to the impacts to our business stemming from the tariffs imposed by the Trump administration, we may also be materially impacted by retaliatory tariffs and other penalties that may be imposed by such countries against the United States.
Give the early-stage of our Company, we have limited full-time accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures. We just recently hired a full-time Chief Financial Officer.
Given the early stage of our Company and significant changes in executive team, we have limited full-time accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures. We recently experienced significant changes in our Chief Financial Officer position.
Between January 1, 2022 and December 31, 2024, the closing price per share of our common shares has ranged from a high of $4.94 (on April 3, 2023) to a low of $0.67 (on December 30, 2024).
Between January 1, 2023 and December 31, 2025, the closing price per share of our common shares has ranged from a high of $49.40 (on April 3, 2023) to a low of $1.76 (on December 29, 2025).
Business” above, our management team has a number of business strategies intended to grow our operations, increase our customer base and footprint across various markets, and develop a full-scale commercialization of our AirSCWO systems.
We have recently replaced our management team, including our Chief Executive Officer and Chief Financial Officer. As described in “Item 1. Business” above, our management team has a number of business strategies intended to grow our operations, increase our customer base and footprint across various markets, and develop a full-scale commercialization of our AirSCWO systems.
Moreover, these rules and regulations will entail significant legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept low policy limits and coverage.
For example, we expect that these rules and regulations may make it difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept low policy limits and coverage.
Our management team may not be able to successfully implement our business strategies. If our management team is unable to execute on its business strategies, then our development, including the establishment of revenues and our sales and marketing activities would be materially and adversely affected. As described in “Item 1.
If our management team is unable to execute on its business strategies, including as a result of changes in our executive leadership as part of our company restructuring, then our development, including the establishment of revenues and our sales and marketing activities would be materially and adversely affected.
If our share price is volatile, we may also become the target of securities litigation, which could result in substantial costs and divert our management’s attention and resources from our business.
If our share price is volatile, we may also become the target of securities litigation, which could result in substantial costs and divert our management’s attention and resources from our business. We incur costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
United States trade policies and other factors beyond the Company’s control, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations. In February 2025, President Trump issued executive orders announcing sweeping tariffs on products originating from Canada, Mexico and China.
United States trade policies and other factors beyond the Company’s control, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations.
The Sarbanes-Oxley Act and rules subsequently implemented by the SEC, have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.
As a public reporting company, we incur significant legal, accounting and other expenses. The Sarbanes-Oxley Act and rules subsequently implemented by the SEC, have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
While we are still working to further expand our financial reporting and related personal to support our Chief Financial Officer and internal controls processes, there is no assurance that the actions we are taking or plan to take will give us the results we expect, that our remediation plan will be effective, or that our remediation plan will be completed on the timelines that we expect.
However, there is no assurance that the actions we are taking or plan to take will give us the results we expect, that our remediation plan will be effective, or that our remediation plan will be completed on the timelines that we expect. See “Item 9A. Controls and Procedures” for further discussion about the material weakness and our remediation activities.
Our products contain materials and parts purchased globally from hundreds of suppliers, including single-source direct suppliers, which exposes us to potential component shortages or delays.
Our products contain materials and parts purchased globally from hundreds of suppliers, including single-source direct suppliers, which exposes us to potential component shortages or delays. 21 Table of Contents There continues to be significant uncertainties regarding these recent changes in U.S. trade policies, legislation, treaties, and tariffs, and potential future developments.
China has also retaliated with tariffs on U.S.-origin farm products and trade and investment restrictions on certain U.S. companies. 20 Table of Contents There continues to be significant uncertainties regarding these recent changes in U.S. trade policies, legislation, treaties, and tariffs, and potential future developments.
For example, Canada has imposed 25% tariffs on specific U.S.-origin products, including steel and aluminum. China has also retaliated with tariffs on certain U.S.-origin products and trade and investment restrictions on certain U.S. companies. The potential imposition of increased tariffs are in addition to existing duties and other tariffs, including existing tariffs on steel and aluminum.
We incur costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. As a public reporting company, we incur significant legal, accounting and other expenses.
Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will entail significant legal and financial compliance costs and will make some activities more time-consuming and costly.
Removed
Our success depends, in large part, on our ability to hire and retain highly qualified people and if we are unable to do so, our business and operations may be impaired or disrupted.
Added
Our success depends, in large part, on the continued services of our senior management team and on our ability to attract, motivate, develop, and retain a sufficient number of other highly qualified personnel.
Removed
Competition for highly qualified people is intense and there is no assurance that we will be successful in attracting or retaining replacements to fill vacant positions, successors to fill retirements or employees moving to new positions, or other highly qualified personnel.
Added
The loss of any one or more members of our senior management team, for any reason, could impair our ability to execute our business strategy and have a material adverse effect on our business, financial condition, and results of operations. Recently, we have experienced significant changes in our executive leadership as part of our Company restructuring.
Removed
For example, we have recently hired a new Chief Executive Officer and Chief Financial Officer and have made other key senior management hires. In addition, we may lose key members of our management team, and we may not be able to attract new management talent with sufficient skill and experience.
Added
Effective as of October 8, 2025, Christian Gannon stepped down as the Company’s President and Chief Executive Officer and Peter Mandel stepped down as the Company’s General Counsel. The Board of Directors (the “Board”) appointed Stephen J. Jones, a former director of the Company, as the Company’s Interim President and Chief Executive Officer effective as of October 8, 2025.
Removed
See “Item 9A. Controls and Procedures” for further discussion about the material weakness and our remediation activities.
Added
On February 23, 2026, Danny Bogar was appointed as the Company’s President and Chief Executive Officer and Stephen Jones resigned as Interim President and Chief Executive Officer.
Removed
Effective February 4, 2025, all products of Chinese origin became subject to an additional 10% tariff pursuant to these executive orders, and effective March 4, all products of Chinese origin were subject to an additional 10% tariff, raising the tariff rate to 20%.
Added
On March 2, 2026, the Company appointed Adrienne Anderson as its Interim Chief Financial Officer to replace Russell Kline, whose employment as the Company’s Chief Financial Officer was terminated effective as of March 2, 2026.
Removed
While most of the tariffs on Mexican- and Canadian-origin products have been delayed until April 2, 2025, certain tariffs are already effective and there is no guarantee that the tariffs will be further delayed or negated. Additionally, these tariffs are in addition to existing duties and other tariffs, including the existing and upcoming additional tariffs on steel and aluminum.
Added
Although we have endeavored to implement these management transitions in a non-disruptive manner, such transitions can be inherently difficult to manage and may hamper our ability to meet our financial and operational goals. Such changes may also give rise to uncertainty among our customers, investors, vendors, employees and others concerning our future direction and performance.
Removed
For example, Canada has already retaliated, imposing 25% tariffs on $30 billion worth of U.S.-origin products immediately, and there are plans to expand these tariffs with additional retaliatory tariffs, pending the current delay in the effectiveness of the tariffs against Canadian-origin products.
Added
Any of the foregoing could result in significant disruptions to our operations and may adversely affect our financial condition, results of operations, cash flows and ability to execute on our business plans.
Removed
Since our stock price has been trading below $1.00 per share, we are also subject to delisting from the Nasdaq stock exchange if we cannot improve our stock price and regain full compliance with the Nasdaq listing standards.
Added
On March 2, 2026, the Company appointed Adrienne Anderson as its Interim Chief Financial Officer to replace Russell Kline, whose employment as the Company’s Chief Financial Officer was terminated effective as of March 2, 2026.
Removed
We may not regain compliance with the continued listing requirements of The Nasdaq Capital Market.
Added
We are working to further expand our financial reporting personnel and replace our former CFO to strengthen our internal controls processes.
Removed
As previously reported on our Current Report on Form 8-K filed on January 15, 2025, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s common stock has been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). 29 Table of Contents In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until July 14, 2025, to regain compliance with the Minimum Bid Price Requirement.
Added
In 2025, President Trump issued executive orders announcing sweeping tariffs on products originating from certain countries and jurisdictions, including Canada, Mexico and China and in some cases threatened to impose additional tariffs. In February 2026, the U.S.
Removed
If at any time before July 14, 2025, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance.
Added
Supreme Court ruled that many of the tariffs recently imposed by the United States government exceeded its authority, thereby invalidating many, but not all, of such tariffs. Subsequent to the U.S. Supreme Court’s ruling, the Trump administration raised potential alternative means through which the administration could impose tariffs and subsequently imposed a global tariff under a different law.
Removed
The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement, including initiating a reverse stock split.
Added
As of the date of this Annual Report, 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.
Removed
However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq Listing Rules.
Added
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 at-the-market equity offering, 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.
Removed
Further, as previously reported on our Current Report on Form 8-K filed on March 13, 2025, the Company notified the Staff of Nasdaq that the Company no longer complies with Nasdaq’s independent director requirement (“Independent Director Requirement”) as set forth in Nasdaq Listing Rule 5605(b)(1), which requires a majority of the Company’s Board of Directors (the “Board”) to be comprised of Independent Directors as defined in Nasdaq Listing Rule 5605(a)(2).
Removed
On that same date, the Company received a letter from Nasdaq confirming the foregoing (the “Letter”). Consistent with Nasdaq Listing Rule 5605(b)(1)(A), the Letter provides that the Company is eligible for a cure period in which to regain compliance with Nasdaq Listing Rule 5605(b)(1).
Removed
This cure period will expire at the earlier of the Company’s next annual meeting of stockholders or March 9, 2026; or if the Company’s next annual meeting is held before September 8, 2025, then the Company must evidence compliance no later than September 8, 2025.
Removed
The Company intends to elect an additional Independent Director to the Board as soon as practicable and prior to the expiration of this cure period. However, there can be no assurance that the Company will successfully regain compliance with Nasdaq Listing Rule 5605(b)(1) within the applicable cure period.
Removed
The Minimum Bid Price Requirement and Independent Director Requirement deficiencies have no immediate effect on the listing or trading of the Company’s common stock, which will continue to be listed and traded on The Nasdaq Capital Market under the symbol “SCWO,” subject to the Company’s compliance with the other Nasdaq listing requirements. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+1 added−0 removed5 unchanged
Biggest changeIn addition, management updates the Audit Committee regarding any material or significant cybersecurity incidents, as well as incidents with lesser impact potential as necessary. The Audit Committee reports to the full Board annually regarding cybersecurity. Ongoing Risks We have not experienced any material cybersecurity incidents.
Biggest changeThe Audit Committee oversees management’s implementation of our cybersecurity risk management program and receives updates on the cybersecurity risk management program from management at least annually. In addition, management updates the Audit Committee regarding any material or significant cybersecurity incidents, as well as incidents with lesser impact potential as necessary.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. 30 Table of Contents Our cybersecurity risk management program includes the following: · risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; · a security team led and supervised by our information technology manager, which is principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; · the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security control, as well as processes to oversee and identify any cybersecurity risks associated with our use of third-party service providers; · cybersecurity awareness training of our employees, incident response personnel, and senior management; and · a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
Our cybersecurity risk management program includes the following: · risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; · a security team led and supervised by our information technology manager, which is principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; · the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security control, as well as processes to oversee and identify any cybersecurity risks associated with our use of third-party service providers; · cybersecurity awareness training of our employees, incident response personnel, and senior management; and · a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information. Cybersecurity Governance Our Chief Administrative Officer (“CAO”) is primarily responsible for assessing and managing our material risks from cybersecurity threats.
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information. 31 Table of Contents Cybersecurity Governance Our Senior Manager of Information Technology is primarily responsible for assessing and managing our material risks from cybersecurity threats.
Our CAO leads our security team and coordinates with our Chief Executive Officer, Chief Financial Officer and Information Technology Manager to fully integrate our cybersecurity risk management programs with our overall enterprise risk management program. Our Information Technology Manager CAO is responsible for overseeing and managing all potential and actual incidents that are identified by our security team.
They lead our security team and coordinate with our Chief Operations Officer (COO), Chief Financial Officer (CFO), and Chief Technology Officer (CTO) to fully integrate our cybersecurity risk management programs with our overall enterprise risk management program. Our Information Technology Manager is responsible for overseeing and managing all potential and actual incidents that are identified by our security team.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
The Audit Committee reports to the full Board annually regarding cybersecurity. Ongoing Risks We have not experienced any material cybersecurity incidents. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Our security team regularly updates our systems with updates, anti-virus signatures, policies and security best practices. At least annually, our CAO reports to the Audit Committee of the Board updates to the Company’s cybersecurity risk management program and any material cyber incidents. Our Sr Information Technology Manager has extensive expertise and experience on cybersecurity matters, including identification, remediation, and management..
Our security team regularly updates our systems with updates, anti-virus signatures, policies and securitybest practices. At least annually, our COO and CTO report to the Audit Committee of the Board updates to the Company’s cybersecurity risk management program and any material cyber incidents.
Our Board considers cybersecurity risks as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Audit Committee oversees management’s implementation of our cybersecurity risk management program and receives updates on the cybersecurity risk management program from management at least annually.
Our Senior Manager of Information Technology Manager has extensive expertise and experience on cybersecurity matters, including identification, remediation, and management. Our Board considers cybersecurity risks as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
Added
Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Item 2. Properties

Properties — owned and leased real estate

1 edited+2 added−0 removed1 unchanged
Biggest changeMonthly rental payments required under the lease are subject to annual increases and range from $14,235 to $16,503 over the initial term of the lease.
Biggest changeMonthly rental payments required under the lease are subject to annual increases and range from $14,235 to $16,503 over the initial term of the lease. On January 26, 2026, the Company executed a license agreement with the City of Orlando for use of their space at Iron Bridge Water Reclamation (the “License Agreement”).
Added
The License Agreement grants the Company a temporary, revocable, nonexclusive license to use approximately 15,000 square feet of the facility for the following (i) installation and operation of AirSCWO units to process city wastewater sludge, (ii), processing of certain approved third-party materials under a waste destruction services program, subject to approval by the City of Orlando, and maintenance of equipment , manufacturing of AirSCWO units and inventory storage.
Added
The initial term of the License Agreement commences February 1, 2026 for five years with two optional five-year renewal terms. The initial monthly licensee fee is $8,000 for the first two years, with annual increases of 2.5% thereafter. The License Agreement includes provisions for the termination for convenience with 180 days’ written notice by either party.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−4 removed2 unchanged
Biggest changePeriod Beginning Period Ending High Low January 1, 2023 March 31, 2023 $ 4.74 $ 2.59 April 1, 2023 June 30, 2023 $ 4.94 $ 2.27 July 1, 2023 September 30, 2023 $ 2.25 $ 1.23 October 1, 2023 December 31, 2023 $ 1.81 $ 1.01 January 1, 2024 March 31, 2024 $ 1.50 $ 1.06 April 1, 2024 June 30, 2024 $ 1.62 $ 1.08 July 1, 2024 September 30, 2024 $ 1.75 $ 0.96 October 1, 2024 December 31, 2024 $ 1.94 $ 0.67 Dividends We have never declared or paid any cash dividends on our common stock, nor do we intend to declare or pay any cash dividends on our common stock in the foreseeable future.
Biggest changePeriod Beginning Period Ending High Low January 1, 2024 March 31, 2024 $ 15.00 $ 10.60 April 1, 2024 June 30, 2024 $ 16.20 $ 10.80 July 1, 2024 September 30, 2024 $ 17.50 $ 9.60 October 1, 2024 December 31, 2024 $ 19.40 $ 6.70 January 1, 2025 March 31, 2025 $ 6.99 $ 3.12 April 1, 2025 June 30, 2025 $ 5.48 $ 2.51 July 1, 2025 September 30, 2025 $ 4.07 $ 1.88 October 1, 2025 December 31, 2025 $ 7.00 $ 1.76 Dividends We have never declared or paid any cash dividends on our common stock, nor do we intend to declare or pay any cash dividends on our common stock in the foreseeable future.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on The Nasdaq Capital Market under the symbol “SCWO”. As of March 27, 2025, there were 368 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common stock is traded on The Nasdaq Capital Market under the symbol “SCWO”. As of March 27, 2026, there were 154 holders of record of our common stock.
The sales set forth below were made pursuant to an exemption from registration requirements under Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. Except as otherwise noted below, no placement agent fees or commissions were paid on these offerings, and net proceeds were used for working capital.
The sales set forth below were made pursuant to an exemption from registration requirements under Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.
The private placement proceeds were raised to assist in the Company’s efforts towards meeting Nasdaq uplisting requirements. Issuer Purchases of Equity Securities As of December 31, 2024, the Company did not have any purchases of equity securities from stockholders. ITEM 6. [RESERVED]
The fair value of the shares was estimated to be $105,000 based on the closing price of the Company’s stock at time the milestone was achieved. Issuer Purchases of Equity Securities As of December 31, 2025, the Company did not have any purchases of equity securities from stockholders. ITEM 6. [RESERVED]
Removed
In connection with the Merger with PowerVerde in April 2021, 374Water closed on a private placement of 436,783 shares of Series D Convertible Preferred Stock (the “Preferred Stock”) with a par value of $0.0001, yielding gross proceeds of $6,551,745 (the “Private Placement”) and the settlement of a $50,000 liability for Preferred Stock shares.
Added
Except as otherwise noted below, no placement agent fees or commissions were paid on these offerings, and net proceeds were used for working capital. 33 Table of Contents On October 25, 2025, we issued an aggregate of 22,105 shares of common stock to a service provider for the settlement of $105,000 accounts payable balance for certain milestones meet pursuant to contract terms.
Removed
The Private Placement proceeds were used for working capital, primarily for development, manufacture and commercialization of 374Water Inc.’s AirSCWO Nix systems. The Preferred Stock has a stated value of $15 per share, is convertible into common stock at $0.30 per share and has voting rights based on the underlying shares of common stock.
Removed
Upon liquidation of the Company, the Preferred Stockholders have liquidation preference before any assets can be distributed to common stockholders.
Removed
All of the Preferred Stock was sold pursuant to an exemption from registration requirements under Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. 32 Table of Contents In December 2021, 374Water closed on a private placement of 2,500,000 shares of Common Stock (the “Common Shares”) with a par value of $0.0001 and at an exercise price of $2.00 yielding $5,000,000.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

25 edited+37 added−26 removed23 unchanged
Biggest changeOur professional fees increased to $2,231,005 during the year ended December 31, 2024, as compared to $508,795 in the same period of 2023, primarily attributed to an increase in legal fees related to a legal settlement, a legal complaint filed by our former chief executive officer for which we have accrued an estimated legal settlement of $335,000, and general legal expenses incurred in 2024 related to our previously disclosed change in executive leadership.
Biggest changeWe have recently experienced significant changes in our executive team which will likely lead to decreased payroll related expenses Our professional fees increased to $2,801,024 during the year ended December 31, 2025, as compared to $2,231,005 in the same period of 2024, an increase of approximately $570,000.
Recoverability of assets held and used is measured by a comparison of the carrying amount to the future undiscounted expected net cash flows to be generated by the asset. As of December 31, 2024 and 2023, there were no impairments. Inventory Inventories are stated at the lower of cost or net realizable value.
Recoverability of assets held and used is measured by a comparison of the carrying amount to the future undiscounted expected net cash flows to be generated by the asset. As of December 31, 2025 and 2024, there were no impairments. Inventory Inventories are stated at the lower of cost or net realizable value.
Based on our evaluation, we estimated an inventory allowance of $50,000 and $0 at December 31, 2024 and December 31, 2023, respectively. 33 Table of Contents Revenue Recognition The Company follows the revenue standards of Codification (ASC) Topic 606: “Revenue from Contracts with Customers (Topic 606).” The core principle of this Topic is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Based on our evaluation, we estimated an inventory allowance of $50,000 and $50,000 at December 31, 2025 and December 31, 2024, respectively. 34 Table of Contents Revenue Recognition The Company follows the revenue standards of Codification (ASC) Topic 606: “Revenue from Contracts with Customers (Topic 606).” The core principle of this Topic is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
GAAP contains other applicable guidance on the accounting for onerous contracts, and those requirements should be used to identify and measure onerous contracts. The Company’s outstanding equipment manufacturing contract on our sold unit is a fixed price contract (“Equipment Sale Contract”).
The revenue standard does not provide guidance on the accounting for onerous contracts or onerous performance obligations. GAAP contains other applicable guidance on the accounting for onerous contracts, and those requirements should be used to identify and measure onerous contracts. The Company’s outstanding equipment manufacturing contract on our sold unit is a fixed price contract (“Equipment Sale Contract”).
We have financed our operations since inception principally through the sale of debt and equity securities and revenues. As of December 31, 2024, we had working capital of $11,760,131 compared to working capital of $13,528,176 as of December 31, 2023.
We have financed our operations since inception principally through the sale of debt and equity securities and revenues. As of December 31, 2025, we had working capital of $1,669,083 compared to working capital of $11,760,131 as of December 31, 2024.
Our research and development expenses increased to $2,143,471 during the year ended December 31, 2024, as compared to $1,496,129 in the same period of 2023, primarily due to the increase in engineering expenses and expenses stemming from our continued efforts to commercialize our systems.
Our research and development expenses increased to $2,524,519 during the year ended December 31, 2025, as compared to $2,143,471 in the same period of 2024, an increase of approximately $381,000, primarily due to the increase in engineering expenses and expenses stemming from our continued efforts to commercialize our systems.
In November 2024, we completed a registered direct offering of 9,783,496 shares of our common stock and warrants to purchase 14,675,244 shares of our common stock. The warrants have an exercise price of $1.125 per share and were sold at the rate of one- and one-half warrant for every share of common stock purchased in the public offering.
In November 2024, we completed a registered direct offering of 978,350 shares of our common stock and warrants to purchase 1,467,524 shares of our common stock. The warrants have an exercise price of $11.25 per share and were sold at the rate of one- and one-half warrant for every share of common stock purchased in the public offering.
The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term.
The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term. The risk-free rate is based on the U.S.
The decrease in cash provided by financing activities was due to more capital being raised in 2023 via our ATM compared to the cash raised in 2024 through our ATM and director offering completed in November 2024. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for smaller reporting companies.
The decrease in cash provided by financing activities was due to more capital being raised in 2024 via a direct offering of common stock and warrants compared to capital raised by the ATM offerings in 2025. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for smaller reporting companies.
During the year ended December 31, 2024, cash used by investing activities was $653,544, an increase of $2,505,261, as compared to cash provided by investing activities of $1,851,717 during the year ended December 31, 2023.
During the year ended December 31, 2025, cash used by investing activities was $1,898,212, an increase of approximately $1,245,000, as compared to cash used by investing activities of $653,544, during the year ended December 31, 2024.
During the year ended December 31, 2024, cash used in operations was $10,589,735, an increase of $1,554,748 as compared to $9,034,987 during the year ended December 31, 2023.
During the year ended December 31, 2025, cash used in operations was $14,326,205, an increase of approximately $3,736,000 as compared to $10,589,735 during the year ended December 31, 2024.
Services revenues, from treatability studies, are recognized when all five revenue recognition criteria have been completed which is generally when the Company has delivered a completed treatability study report to the customer.
Services revenues, from treatability studies, are recognized when all five revenue recognition criteria have been completed which is generally when the Company has delivered a completed treatability study report to the customer. 35 Table of Contents Change in Accounting Estimate Our equipment revenue contract with OC San is a fixed price contract that includes billings based on the achievement of deliverables or milestones.
The change in this accounting policy did not have a significant impact on the current or prior period financial statements. 35 Table of Contents Overview 374Water Inc. 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.
(the “Company”, “374Water”, “We”, or “Our”) is a cleantech and environmental services company developing supercritical water oxidation technology (“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 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.
Substantial net losses are expected until we are able to generate sufficient cash flows from the sale of our AirSCWO systems, treatability studies and Waste Destruction Services, as to which there can be no assurance. 37 Table of Contents Liquidity and Capital Resources We have an at-the-market (ATM) equity offering under which we may issue up to $100 million of common stock, which is currently effective and under which we commenced selling shares at the end of January 2023, and which will remain available to us in the future.
Substantial net losses are expected until we are able to generate sufficient cash flows from the sale of our AirSCWO systems, treatability studies and Waste Destruction Services, as to which there can be no assurance. 38 Table of Contents Liquidity and Capital Resources In March 2026, we issued three separate convertible notes and received cash proceeds of $800,000.
Cash Flows The following table presents our cash flows for the periods presented: Year Ended December 31, 2024 2023 $ Change Cash used in operating activities $ (10,589,735 ) $ (9,034,987 ) $ (1,554,748 ) Cash provided by (used in) investing activities (653,544 ) 1,851,717 (2,505,261 ) Cash provided by financing activities 11,449,519 13,578,938 (2,129,419 ) Effect of exchange rates on cash — 2,799 (2,799 ) Net cash increase (decrease) 206,240 6,398,467 (6,192,227 ) 38 Table of Contents As of December 31, 2024, cash on hand was $10,651,644, an increase of $206,240, or 2%, as compared to $10,445,404 as of December 31, 2023.
Cash Flows The following table presents our cash flows for the periods presented: Year Ended December 31, 2025 2024 $ Change Cash used in operating activities $ (14,326,205 ) $ (10,589,735 ) $ (3,736,470 ) Cash used in investing activities (1,898,212 ) (653,544 ) (1,244,668 ) Cash provided by financing activities 8,771,455 11,449,519 (2,678,064 ) Net cash increase (decrease) (7,452,962 ) 206,240 (7,659,202 ) 39 Table of Contents As of December 31, 2025, cash on hand was $3,198,682, a decrease of $7,452,962, or 70%, as compared to $10,651,644 as of December 31, 2024.
The increase in cash used in operating activities was primarily due to the decrease in cash used in operating assets and liabilities of $1,969,352 and increase in non-cash expenses of $806,492, offset by the increase in our net loss of $4,330,592 The cash used in operations was primarily to fund operations as well as our working capital requirements.
The increase in cash used in operating activities was primarily due to the increase in our net loss of approximately $8,541,000, offset by non-cash expenses of $2,850,000 and operating cash inflows of $1,954,000 from changes in assets and liabilities.
Our compensation and related expenses increased to $3,685,007 during the year ended December 31, 2024, as compared to $2,854,494 in the same period of 2023.
Our general and administrative expenses increased to $5,207,949 during the year ended December 31, 2025, as compared to $2,784,522 in the same period of 2024, an increase of approximately $2,423,000.
Our other income decreased to $369,144 during the year ended December 31, 2024, as compared to $539,354 in the same period of 2023, which is a result of the interest income we earned on our interest-bearing cash accounts that we opened in June 2023. We had previously held any excess funds in an investment account.
Our other income decreased to $172,012 during the year ended December 31, 2025, as compared to $369,144 in the same period of 2024, a decrease of approximately $197,000, due to us earning less interest on cash held in interest bearing accounts.
This decrease in working capital is due primarily to the at-the-market offering and the direct offering resulting in less proceeds than the at-the-market common stock offering completed in 2023. Our primary need for liquidity is to fund working capital requirements of our business, capital expenditures, parts and materials to continue developing our AirSCWO systems and for general corporate purposes.
Our primary need for liquidity is to fund working capital requirements of our business, capital expenditures, parts and materials to continue developing our AirSCWO systems and for general corporate purposes. Our primary source of liquidity is funds generated by financing activities and from private placements.
In 2023, we received $1,963,432 in proceeds from the sale of investments, which were not received in 2024. During the year ended December 31, 2024, cash provided by financing activities was $11,449,519, a decrease of $2,129,419 compared to the same period in 2023.
During the year ended December 31, 2025, cash provided by financing activities was $8,771,455, a decrease of approximately $2,678,000 compared to the same period in 2024.
Results of Operations The following table sets forth, for the periods presented, the consolidated statements of operations data, which is derived from the accompanying consolidated financial statements: Year Ended December 31, 2024 2023 $ Change % Change Revenues $ 445,445 $ 743,952 $ (298,507 ) -40 % Cost of revenues (1,358,152 ) (1,852,208 ) 494,056 -27 % Gross deficit (912,707 ) (1,108,256 ) 195,549 -18 % Operating expenses: Research and development 2,143,471 1,496,129 647,342 43 % Compensation and related expenses 3,685,007 2,854,494 830,513 29 % Professional fees 2,231,005 508,795 1,722,210 338 % General and administrative 3,831,068 2,675,202 1,155,866 43 % Total operating expenses 11,890,551 7,534,620 4,355,931 58 % Loss from operations (12,803,258 ) (8,642,876 ) (4,160,382 ) 48 % Other income, net 369,144 539,354 (170,210 ) -32 % Loss before income taxes (12,434,114 ) (8,103,522 ) (4,330,592 ) 53 % Provision for income taxes — — — 0 % Net loss $ (12,434,114 ) $ (8,103,522 ) $ (4,330,592 ) 53 % 36 Table of Contents Year Ended December 31, 2024, as Compared to the Year Ended December 31, 2023 Our business has been focused on the development and commercialization of 374Water’s supercritical water oxidation (SCWO) systems.
Results of Operations The following table sets forth, for the periods presented, the consolidated statements of operations data, which is derived from the accompanying consolidated financial statements: Year Ended December 31, 2025 2024 $ Change % Change Revenues $ 215,037 $ 445,445 $ (230,408 -52 % Cost of revenues (2,566,421 ) (1,358,152 ) (1,208,269 ) 89 % Gross deficit (2,351,384 ) (912,707 ) (1,438,677 ) 158 % Operating expenses: Research and development 2,524,519 2,143,471 381,048 18 % Compensation and related expenses 8,262,188 4,731,553 3,530,635 75 % Professional fees 2,801,024 2,231,005 570,019 26 % General and administrative 5,207,949 2,784,522 2,423,427 87 % Total operating expenses 18,795,680 11,890,551 6,905,129 58 % Loss from operations (21,147,064 ) (12,803,258 ) (8,343,806 ) 65 % Other income, net 172,012 369,144 (197,132 ) -53 % Loss before income taxes (20,975,052 ) (12,434,114 ) (8,540,938 ) 69 % Provision for income taxes — — — - % Net loss $ (20,975,052 ) $ (12,434,114 ) $ (8,540,938 ) 69 % 37 Table of Contents Year Ended December 31, 2025, as Compared to the Year Ended December 31, 2024 Our business has been focused on the development and commercialization of 374Water’s supercritical water oxidation (SCWO) systems.
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.
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. 374Water made significant commercial and technological progress throughout the 2025 fiscal year.
The increase in cash used by investing activities for the year ended December 31, 2024 compared with the corresponding period in 2023 was primarily due to a $448,952 increase in purchases of property and equipment as we continue making progress towards commercializing our AirSCWO systems and deploying our owned unit for full-scale demonstrations as well as a $92,877 increase in intangible assets from increased patent activity.
The increase in cash used by investing activities for the year ended December 31, 2025 compared with the corresponding period in 2024 was primarily due to an approximate $1,343,000 increase in purchases of property and equipment related to our owned Demo System used for waste deconstruction services and equipment-in-progress related to the building of an AS1, offset by a decrease of $99,000 of intangible asset purchases.
Onerous Contracts Onerous contracts are those where the costs to fulfill a contract exceed the consideration expected to be received under the contract. The revenue standard does not provide guidance on the accounting for onerous contracts or onerous performance obligations.
This resulted in the reduction of unbilled accounts receivable and reduction in equipment revenue in the amount of approximately $1.9 million. Onerous Contracts Onerous contracts are those where the costs to fulfill a contract exceed the consideration expected to be received under the contract.
The amount of interest we earn is directly related to the amount of interest-bearing cash held in the accounts which decreased in 2024. Our net loss increased to $12,434,114 during the year ended December 31, 2024, as compared to $8,103,522 in the same period of 2023. This is primarily due to increased expenses for the reasons described above.
Our net loss increased to $20,975,052 during the year ended December 31, 2025, as compared to $12,434,114 in the same period of 2024, an increase of approximately $8,541,000.
Removed
During 2024, we deployed our Demo System to the City of Orlando’s Iron Bridge Regional Water Reclamation Facility pursuant to a contract executed in March 2024 as part of a full-scale demonstration (the “Demo Contract”). Pursuant to the Demo Contract, the Company is responsible for system design, installation, commissioning and the start-up of the AirSCWO system at the facility.
Added
We have experienced delays in completing the equipment due to design changes and upgrades preventing us from meeting the next contractual milestone. Due to these delays, we have not been contractually able to bill for certain costs incurred related to the OC San contract.
Removed
Further, the Company will operate and maintain the AirSCWO system for a period of approximately three months and is required to treat no less than 193 metric tons of waste water during the three-month period. Lastly, the Company will decommission, disassemble and demobilize the AirSCWO system after the contract period.
Added
At December 31, 2025, we have incurred costs in excess of billings of approximately $1.9 million in connection with completing this contract.
Removed
The Company will receive $812,000 as consideration, of which $574,000 is subject to achieving the 193 metric ton performance requirement over the three-month period of operations and maintenance. In accordance with ASC 606-10-25-21, we have concluded that the Demo Contract includes one performance obligation as the various services required to be performed by the Company are interdependent and highly interrelated.
Added
Pursuant to the contract terms with OC San, we will be able to invoice and resume billing once the manufactured equipment passes a factory acceptance test which is based on a continuous run time of the equipment and volume of materials processed.
Removed
Therefore, the various services are not separate and distinct. We will recognize revenue on this Demo Contract over the three-month period of operations and maintenance which is the point in time that the City of Orlando receives the benefit simultaneous to Company’s performance. We will invoice the City of Orlando in accordance with the contract terms.
Added
The equipment recently met the continuous run time requirement but was not yet able to process the volume required. At contract inception, the variable consideration included in the contract price was not deemed to be constrained. We had anticipated delivering the equipment to OC San during the year ended December 31, 2025.
Removed
Invoices are due within thirty days of receipt.
Added
Due to the unexpected delays we have encountered in delivering the equipment, we reassessed the variable consideration at December 31, 2025. The changes in facts and circumstances have resulted in us fully constraining the variable consideration at December 31, 2025.
Removed
The City of Orlando has the right to cancel the Demo Contract for convenience with a twenty-day written notice but is responsible for paying the Company all amounts owed and outstanding for work performed prior to the effective termination date and costs and expenses incurred by the Company to uninstall, remove, relocate and deliver the AirSCWO system up to a limit of $68,000. 34 Table of Contents Contract costs 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.
Added
Treasury yield curve in effect at the time of grant for the period of the expected term. 36 Table of Contents Overview 374Water Inc.
Removed
As of December 31, 2024, we have capitalized $136,651 of costs incurred to date to fulfill the Demo contract which are presented as contract assets. We will expense these costs over the three-month demonstration period. General, selling, and administrative costs are charged to expenses as incurred.
Added
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.
Removed
At December 31, 2024 and 2023, the Company evaluated the total costs incurred on this Equipment Sale Contract to date and the estimated costs it anticipates incurring to complete the contract.
Added
We continue to make technological breakthroughs in processing solids and slurries, as well as liquid waste streams across three main market sectors – industrial, municipal, and federal.
Removed
Based on this analysis, we accrued a total accrued loss provision of $1,000,000 and $500,000 at December 31, 2024 and 2023, respectively, which has been presented on the accompanying consolidated balance sheets and is recorded within cost of revenues on the accompanying consolidated statements of operations.
Added
Throughout the year we established our Waste Destruction Services (“WDS”) hub at the City of Orlando’s Iron Bridge Water Reclamation Facility, deployed a commercial AirSCWO system to Detroit, MI, for a six week Department of Defense (“DoD”) Destruction Demonstration of six PFAS-impacted waste streams, deployed our mobile AirSCWO lab to Peterson AFB in Colorado, and tested waste streams from several clients, including major oil and gas companies, multi-national chemical and pharmaceutical companies, the United States DoD and defense contractors, and resource recovery companies, at our laboratory in the Research Triangle, North Carolina.
Removed
Prior to January 1, 2024, the Company had elected to estimate options granted for which the requisite service period would not be rendered, due to the option being forfeited or expiring. The forfeiture rate estimate was based on the percentage of cumulative forfeitures to the total award grants.
Added
Highlights from the year underscore the Company’s continued effort to increase capacity to address multiple significant markets, and include winning an award for and commencing the destruction of 1,000 gallons of Aqueous Film Forming Foam (“AFFF”) from the University of North Carolina at Chapel Hill Collaboratory; completion of WDS field demonstrations of an AS system at Clean Earth’s Detroit, MI in partnership with the DoD , led by the Defense Innovation Unit (“DIU”) in collaboration with Environmental Security Technology Certification Program ("ESTCP”), to evaluate commercial-scale technology solutions to destroy per- and polyfluoroalkyl (“PFAS”) contaminated wastes; a collaboration agreement with Crystal Clean to locate 374Water’s AirSCWO technology at one of their RCRA-permitted facilities to destroy various PFAS waste streams; and an agreement with the city of Olathe, KS for the sale of an AirSCWO system and pre-treatment equipment with an associated service agreement for the treatment of PFAS-impacted wastewater and other waste streams.
Removed
During the year ended December 31, 2023, the Company compared its actual forfeiture rate to its estimated forfeiture rate and made a cumulative adjustment of approximately $55,000 in the year ended December 31, 2023 to reduce its forfeiture rate estimate to approximately 5% of the total stock-based compensation recognized during the year.
Added
As we begin 2026, we have already secured additional contracts for Waste Destruction Services, made technological advances to better address the demand and needs of customers and partners across market segments, and continue to capitalize our business to establish 374Water as a leader in developing waste destruction industry and the unique abilities of AirSCWO to unlock tremendous value.
Removed
Effective January 1, 2024, the Company made a change in its accounting policy to recognize forfeitures on service-based stock award instruments as they occur.
Added
During 2026, we expect to design and scale our AirSCWO systems to handle larger capacities of slurries and liquid wastes; build out our Waste Destruction Services hub at the City of Orlando’s Iron Bridge Water Reclamation Facility; begin to receive and destroy significant volumes of PFAS wastes to our WDS hub; deploy our team and technology to Orange County Sanitation District (“OC San”) in Fountain Valley, CA; deploy our mobile AirSCWO system to St.
Removed
Due to the lack of history available to adequately estimate its forfeiture rate and the fact that the majority of its serviced based options include a one-year cliff vesting and monthly vesting after, the Company believes recognizing forfeitures as they occur will result in more accurate financial reporting.
Added
Cloud, MN, to demonstrate its effectiveness destroying PFAS-laden biosolids and other PFAS wastes; negotiate additional Treatment, Storage, and Disposal Facility (“TSDF”) partnerships to expand our WDS hubs; and grow our manufacturing, operations, and research and development (“R&D”) capacity as we lead the industry towards SCWO.
Removed
In fiscal year 2024, 374Water outlined a new strategic plan and tactical roadmap.
Added
We generated $215,037 and $445,445 in revenue from manufacturing assembly services and from full-scale demonstrations and treatability study services during the years ended December 31, 2025, and 2024, respectively. The approximate $230,000 decrease in revenues is primarily due to a decrease in equipment revenue of $1,881,000 offset by an increase in service revenues of approximately $1,651,000.
Removed
Throughout the year, we executed our plan reaching critical milestones which we believe position the Company’s business outlook well for fiscal year 2025. 2024 achievements include (i) ruggedizing and optimizing our AirSCWO system to effectively and continuously process a variety of organic waste streams; (ii) deploying our first commercial scale AirSCWO system to the City of Orlando’s Iron Bridge Water Reclamation Facility; (iii) completing various federal and industrial waste destruction demonstrations; (iv) growing our backlog and pipeline in the municipal, federal and industrial markets; (v) 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; (vi) relocating our manufacturing operations; and strengthening our leadership team and organization. 374Water has a robust plan to scale revenue, operations, and capitalize our business.
Added
The increase in service revenue is from the completion of two full-scale demonstrations and a mobile bench-scale demonstration, which generated approximately $1,331,000 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 an increase in our bench scale treatability studies of $49,000.
Removed
During 2025, we expect 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.
Added
The decrease in equipment revenues is due to a change in accounting estimate or reassessment of variable consideration included in our contract with OC San. Due to the unexpected delays we have encountered in delivering the equipment, we reassessed the variable consideration at December 31, 2025.
Removed
Department of Defense applications; deploy an AirSCWO system to the Orange County Sanitation District in Fountain Valley, CA; mobilize an AirSCWO system to St.
Added
The changes in facts and circumstances have resulted in us fully constraining the variable consideration at December 31, 2025. This resulted in the reduction of unbilled accounts receivable and reduction in equipment revenue in approximately $1.9 million, resulting in negative equipment revenue of approximately $1,653,000 compared to approximately $228,000 of equipment revenue for the year ended December 31, 2024.
Removed
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 begin accepting third-party waste streams for our initial WDS hub(s) at partner a TSDF.
Added
Our cost of revenues increased to $2,566,421 during the year ended December 31, 2025, as compared to $1,358,152 in the same period of 2024, an increase of approximately $1,208,000, primarily due to the increase in our service revenues, material and labor costs incurred to complete our sold AirSCWO system, and an increase in our accrued loss provision of $600,000.
Removed
We generated $445,445 and $743,952 in revenue from manufacturing assembly services and from treatability study services during the years ended December 31, 2024, and 2023, respectively. During 2024, we reached fewer milestones and thus incurred less direct contract costs.
Added
Our compensation and related expenses increased to $8,262,188 during the year ended December 31, 2025, as compared to $4,731,553 in the same period of 2024, an increase of approximately $3,531,000. The increase is primarily due to an increase in stock-based compensation of approximately $1,823,000.
Removed
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 year under our percentage of completion revenue recognition method.
Added
Remaining increase in payroll related expenses of $1,708,000 is due to a significant increase in operational headcount and our executive team during mid-late 2024 and 2025.
Removed
The Company has gained momentum on many promising leads which have been produced through early treatability studies but has not resulted in the sale of any additional AirSCWO units to this point. This has had a direct impact on our change in revenue year-over-year.
Added
The increase is primarily due to an increase in recruiting fees of $671,000 due to headcount increases in our operations department and the addition of new directors to our Board, offset by a decrease in legal, accounting, auditing and consulting fees of approximately $101,000.
Removed
The increase is primarily due to increased hiring as we build our executive team with four new executive hires, salary increases to certain key employees in 2024, and an accrual of bonuses for the executive team.
Added
This increase is primarily because of an increase in depreciation expense of approximately $396,000 due to the capitalization of our owned unit in the fourth quarter of 2024, an increase in investor and public relations services of $483,000, an increase in travel and related expenses of approximately $607,000 due to our increased headcount and operational deployments, an increase in stock-based compensation to our board of directors and other service providers of $261,000 and an increase of approximately $676,000 in general administrative expenses due to our increased headcount and infrastructure.
Removed
Further, we incurred additional professional fees for executive search services related to the finding and hiring of certain executives we have hired in 2024. Our general and administrative expenses increased to $3,831,068 during the year ended December 31, 2024, as compared to $2,675,202 in the same period of 2023.
Added
This increase in our net loss is primarily due to increased expenses for the reasons described above as well as decreased revenue due to the delay in delivery of our obligations under the OC San contract.
Removed
The increase is primarily because of an increase stock-based compensation, travel, and other general and administrative expenses as we continue to build out our executive team. We also incurred relocation related expenses as we moved to our short-term leased manufacturing facility in Florida.
Added
The convertible notes bear interest at 10%, mature three years from the issue date and are convertible into shares of common stock at a conversion rate of $5.00. Semi-annual interest payments are required on March 31, and September 30, each year commencing September 30, 2026.
Removed
During the years end December 31, 2024 and 2023, we raised approximately $0 and $13,441,000 million of net proceeds through this ATM. During the year ended December 31, 2024, the costs of the ATM of approximately $65,500 exceeded the proceeds of approximately $62,400 resulting in net issuance costs of approximately $3,100.
Added
The convertible notes include common stock warrant coverage equal to the shares that the issued convertible notes are convertible into. Therefore, a total of 160,000 common stock warrants were issued to the convertible note holders. The warrants are exercisable immediately for a period of three years at an exercise price of $7.50 per warrant share.
Removed
Our primary source of liquidity is funds generated by financing activities and from private placements.
Added
On June 6, 2025, the Company entered into an ATM issuance sales agreement (the “Prior 2025 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 $15.1 million.
Added
The 2025 Sales Agreement replaced the prior sales agreement entered into between the Company and Jefferies LLC dated as of December 21, 2022 (the “2022 Sales Agreement”).
Added
On December 23, 2025, the Company entered into a new ATM issuance sales agreement (the “2025 Sales Agreement”) with 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.
Added
The 2025 Sales Agreement replaces the Prior 2025 Sales Agreement, and sales under the Prior 2025 Sales Agreement have terminated.

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