374Water Inc. (NASDAQ:SCWO), a global cleantech and social impact company, today provides a business update and reports its financial results for the quarter ended September 30, 2022.
The third quarter was marked by meaningful progress. Q3 and YTD Highlights:
Kobe Nagar, CEO of 374Water Inc. commented, "Strong momentum since commercializing our technology in February 2022, continues. In Q3, we announced an MOU with Forever Water Ecuador to help solve sanitation in Latin America. Additionally, we progressed development of The AirSCWO™ 6 system for Orange County Sanitation District (OC San), expected to be completed in the 4th quarter of 2022, and to become operational in 2023. Mr. Nagar continued, "The market opportunity development is enormous and we are dedicated to delivering our newly commercial units that treat waste and eliminate pollutants. In fact, PFAS, the ‘forever chemical' is estimated to be present in more than 57,000 sites in the U.S. alone, representing a trillion dollar market opportunity. PFAS is just a single vertical for our solutions. Considering OC San, our partnerships with Merrell Bros, ESC, MOUs with Ecuador and Midway and numerous addressable verticals, set ourselves to drive substantial shareholder value in the near and long term."
Third Quarter ended September 30, 2022 Financial Results
Revenue for the third quarter of 2022 was $0.9 million compared to $19,000 for the same quarter of 2021, an increase of 4,756%. The increase in revenue during 2022 was primarily as a result of recognizing a portion of the revenue associated with the sale of our first AirSCWO™ system.
General and administrative expenses were $387,018 in the third quarter of 2022, compared to $143,147 in the third quarter of 2022. The change in the quarter is primarily associated with our increased insurance costs, marketing and business development expenses, dues and subscriptions, and stock-based compensation expenses.
Research and development expenses were $118,253 in the third quarter of 2022, compared to $115,936 in the third quarter of 2021. The change in the quarter is primarily associated with the increase in engineering expenses attributed to the design of the AirSCWO™ 30 - which has a capacity of 30 wet tonne / day, a 5x scale up of the AirSCWO™ 6 system.
Net loss was $(912,826), or $(0.01) per basic and diluted share, compared to a net loss of $ (551,959) million, or $(0.01) per basic diluted share, in the third quarter of 2021.
Total cash and investments were $8,402,255 as of September 30, 2022, compared to $11,131,175 at December 31, 2021. Total current assets were $9,864,788 and current liabilities were $1,262,157 as of the same date, compared to $ 11,349,641 and $86,371 respectively, in the year-ended reporting period.
For more on AirSCWO™ or about our team, visit 374Water.com or follow us on LinkedIn and Twitter.
Cautionary Language
This press release contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning.
About 374Water
374Water Inc. (Nasdaq:SCWO), is a global cleantech, social impact company whose mission is to preserve a clean and healthy environment that sustains life. We are pioneering a new era of sustainable waste management that supports a circular economy and enables organizations to achieve their environmental, social, and governance (ESG) and sustainability goals. Follow us on LinkedIn and Twitter.
374Water Investor Contact:
James Carbonara
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374Water Media Contact:
Ashley Willis
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PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
374Water Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, 2022 (Unaudited) and December 31, 2021
| 2022 | 2021 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash | $ | 2,407,983 | $ | 11,131,175 | ||||
Accounts receivable | 164,600 | - | ||||||
Investments | 5,994,272 | - | ||||||
Prepaid expenses | 1,297,933 | 218,466 | ||||||
Total Current Assets | 9,864,788 | 11,349,641 | ||||||
Long-Term Assets: | ||||||||
Equipment, net | 124,593 | 959 | ||||||
Intangible asset, net | 980,753 | 1,028,114 | ||||||
Other assets | 35,170 | 34,742 | ||||||
Total Long-Term Assets | 1,140,516 | 1,063,815 | ||||||
Total Assets | $ | 11,005,304 | $ | 12,413,456 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 1,043,660 | $ | 62,981 | ||||
Deferred revenue | 200,109 | - | ||||||
Other liabilities | 18,388 | 23,390 | ||||||
Total Current Liabilities | 1,262,157 | 86,371 | ||||||
Total Liabilities | 1,262,157 | 86,371 | ||||||
Stockholders' Equity | ||||||||
Preferred Stock: 1,000,000 Convertible Series D preferred shares authorized; par value $0.0001 per share, nil issued and outstanding at September 30, 2022 and 27,272 issued and outstanding at December 31, 2021 | - | 3 | ||||||
Common stock: 200,000,000 common shares authorized, par value $0.0001 per share, 126,680,895 and 125,317,746 shares outstanding at September 30, 2022 and December 31, 2021, respectively | 12,667 | 12,531 | ||||||
Additional paid-in capital | 15,894,426 | 15,474,566 | ||||||
Accumulated (deficit) | (6,159,975 | ) | (3,160,015 | ) | ||||
Accumulated other comprehensive loss | (3,971 | ) | - | |||||
Total Stockholders' Equity | 9,743,147 | 12,327,085 | ||||||
Total Liabilities and Stockholders' Equity | $ | 11,005,304 | $ | 12,413,456 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
374Water, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the three and nine months ended September 30, 2022 and 2021
(Unaudited)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | $ | 922,718 | $ | 19,000 | $ | 2,226,477 | $ | 33,600 | ||||||||
Cost of Goods Sold | 812,386 | - | 1,962,879 | - | ||||||||||||
Gross Profit | 110,332 | 19,000 | 263,598 | 33,600 | ||||||||||||
Operating Expenses | ||||||||||||||||
Research and development | 118,253 | 115,936 | 726,602 | 269,796 | ||||||||||||
Compensation and related expenses | 435,297 | 227,790 | 1,135,979 | 405,456 | ||||||||||||
Product and development expenses | - | - | - | 1,399,833 | ||||||||||||
Professional Fees | 82,752 | 84,514 | 375,313 | 245,152 | ||||||||||||
General and administrative | 387,018 | 143,147 | 1,027,287 | 206,931 | ||||||||||||
Total Operating Expenses | 1,023,320 | 571,387 | 3,265,181 | 2,527,168 | ||||||||||||
Loss from Operations | (912,988 | ) | (552,387 | ) | (3,001,583 | ) | (2,493,568 | ) | ||||||||
Other Income (Expense) | ||||||||||||||||
Award income | - | - | - | - | ||||||||||||
Interest income | 162 | 428 | 1,617 | 751 | ||||||||||||
Other income | - | - | 7 | - | ||||||||||||
Total Other Income (Expense) | 162 | 428 | 1,624 | 751 | ||||||||||||
Net Loss before Income Taxes | (912,826 | ) | (551,959 | ) | (2,999,959 | ) | (2,492,817 | ) | ||||||||
Provision for Income Taxes | - | - | - | - | ||||||||||||
Net Loss | $ | (912,826 | ) | $ | (551,959 | ) | $ | (2,999,959 | ) | $ | (2,492,817 | ) | ||||
Other comprehensive loss | ||||||||||||||||
Change in foreign currency translation | - | - | (850 | ) | - | |||||||||||
Change in unrealized loss on marketable securities | (3,122 | ) | - | (3,122 | ) | - | ||||||||||
Total other comprehensive loss | (3,122 | ) | - | (3,972 | ) | - | ||||||||||
Total comprehensive loss | (915,948 | ) | (551,959 | ) | (3,003,931 | ) | (2,492,817 | ) | ||||||||
Net Loss per Share - Basic and Diluted | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | ||||
Weighted Average Common Shares Outstanding - Basic and Diluted | 126,680,895 | 98,391,746 | 126,621,412 | 84,283,229 | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
374Water Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2022 and 2021 (Unaudited)
| 2022 | 2021 | |||||||
Cash Flows from Operating Activities | ||||||||
Net loss | $ | (2,999,959 | ) | $ | (2,492,817 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization expense | 50,052 | 16,314 | ||||||
Stock based compensation | 419,995 | 86,152 | ||||||
Warrant issued for product development agreement | - | 1,399,833 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (164,600 | ) | 19,663 | |||||
Prepaid expenses | (1,079,467 | ) | (26,185 | ) | ||||
Accounts payable and accrued expenses | 980,679 | (78,558 | ) | |||||
Deferred revenue | 200,109 | - | ||||||
Other liabilities | (5,002 | ) | 22,007 | |||||
Cash Provided by (Used In) Operating Activities | (2,598,193 | ) | (1,053,591 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Purchase of marketable securities | (5,998,243 | ) | - | |||||
Purchase of equipment | (125,011 | ) | (2,319 | ) | ||||
Proceeds from reverse acquisition | - | 29,536 | ||||||
Increase in other asset | (1,745 | ) | (19,826 | ) | ||||
Cash Provided by (Used In) Investing Activities | (6,123,999 | ) | 7,391 | |||||
Cash Flow from Financing Activities | ||||||||
Repayments to (advances) from stockholders | - | (15,108 | ) | |||||
Proceeds from sale of series D preferred shares | - | 6,551,745 | ||||||
Proceeds from exercise of options and warrants | - | 1,285,344 | ||||||
Cash Provided by Financing Activities | - | 7,821,981 | ||||||
Net Increase in Cash | (8,723,192 | ) | 6,775,781 | |||||
Cash, Beginning of the Period | 11,131,175 | 71,799 | ||||||
Cash, End of the Period | $ | 2,407,983 | $ | 6,847,580 | ||||
NON-CASH FINANCING ACTIVITIES | ||||||||
Conversion of preferred stock to common stock | $ | 133 | $ | - | ||||
License | - | 1,073,529 | ||||||
Accounts payable settled with Series D Preferred Stock | - | 50,000 | ||||||
NET LIABILITIES ASSUMED IN REVERSE ACQUISITION | ||||||||
Cash | - | 29,536 | ||||||
Prepaid expense | - | 14,483 | ||||||
Accounts receivable | - | 1,000 | ||||||
Account payable | - | (46,150 | ) | |||||
Accrued expenses | - | (83,094 | ) | |||||
Net liability assumed | - | (84,225 | ) | |||||
| Last Trade: | US$0.69 |
| Daily Change: | 0.0024 0.35 |
| Daily Volume: | 250,121 |
| Market Cap: | US$97.920M |
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