Reported Company:

374Water Inc

Researcher Company:

Bleecker Street Research

Price at Report Date:

Close Price Day after report date:

1.395

% Decline Day after Report Date:

% Decline vs Yesterdays Date:

-1.7921

Summary

Bleecker Street Research published a scathing report on 374Water (NASDAQ: SCWO) on 06/29/2023, criticizing the company’s business model, management, and technology. The report argues that 374Water’s Supercritical Water Oxidation technology, used to treat wastewater, is not commercially viable. It highlights concerns about the company’s financial instability, unproven technology, and management history, suggesting that the company is overvalued and predicting a significant decline in its stock value.

Who is 374Water Inc?

374Water is a company focused on developing and commercializing Supercritical Water Oxidation (SCWO) technology, which it claims can convert wastewater into clean water. The company went public through a reverse merger in 2021 and is marketing its SCWO units, which are packaged in modified shipping containers. Despite its ambitious claims, 374Water has faced skepticism regarding the commercial viability of its technology.

Key Points from Report

A Flawed Business Model

• Unproven Technology: The SCWO process is not new and has struggled with poor unit economics and operational challenges historically.
• Limited Commercial Success: The company has only one commercial product with less than $1 million in revenue and minimal customer interest.

Questionable Management

• Past Controversies: The COO, a former executive at a company involved in a Ponzi scheme, raises concerns about leadership integrity.
• Desperate Contracts: 374Water has signed contracts that appear more aimed at boosting its stock price rather than establishing a sustainable business.

Financial Instability

• High Valuation, Low Revenue: With a nearly $300 million valuation but minimal revenue, the company’s financial position is precarious.
• Reliance on Stock Dilution: The company has been using at-the-market offerings to raise funds, diluting shareholder value.

On 7/12/2023 Bleecker Street Added to their research

Recent Developments Worsen Outlook

• Increased Cash Burn: 374Water’s latest financials show an alarming increase in cash burn, with quarterly expenses far outpacing revenue.
• Delayed Deliveries: The company has faced delays in delivering its SCWO units, further straining customer relationships and raising doubts about its operational capabilities.

Management Under Pressure

• Executive Departures: Recent resignations of key executives signal internal turmoil and potential loss of confidence in the company’s direction.
• Stock Price Decline: Following the updated report, 374Water’s stock has seen a significant drop, reflecting investor concerns.

These updates reinforce the ongoing challenges at 374Water, underscoring the financial and operational risks highlighted in the original report. Investors should consider these new developments when evaluating the company’s future prospects.

Activ8 Finance Analysis

The reports from Bleecker Street Research raise significant red flags for 374Water, highlighting concerns about the viability of its SCWO technology, leadership integrity, and financial stability. The latest updates, including increased cash burn and executive departures, exacerbate these issues, indicating deeper operational problems. From an Activ8 Finance perspective, these developments suggest that 374Water’s stock could be highly vulnerable to further declines.