DURHAM, NC - 374Water Inc. (NASDAQ:SCWO), a cleantech company specializing in waste treatment technologies, has entered into an agreement for a registered direct offering, selling shares and warrants to raise approximately $12.2 million. The company disclosed the transaction details today, which involve the sale of 9,783,496 shares of common stock along with warrants to purchase an additional 14,675,244 shares.
The warrants, exercisable immediately upon issuance, are priced at $1.125 per share and will remain valid for five years from the date they can first be exercised. Each share of common stock is bundled with 1.5 warrants for the purchase price of $1.25. The company expects the gross proceeds before fees and expenses to be around the $12.2 million mark.
This infusion of capital is scheduled to be finalized by November 18, 2024, pending customary closing conditions. D. Boral (OTC:BOALY) Capital LLC is serving as the exclusive placement agent for the offering, while Orrick, Herrington & Sutcliffe LLP and Sichenzia Ross Ference Carmel LLP are providing legal counsel to 374Water Inc. and D. Boral Capital LLC, respectively.
The offering is made possible by a shelf registration statement on Form S-3, previously filed with and declared effective by the SEC on December 30, 2022. The terms of the public offering will be detailed in a prospectus supplement to be filed with the SEC.
374Water Inc., known for its AirSCWO technology, is focused on addressing waste management and wastewater treatment challenges in various markets, including municipal, federal, and industrial sectors. The technology aims to eliminate a wide range of organic wastes, thereby producing safe by-products and recoverable energy, and assisting customers in meeting regulatory requirements.
The company's statement includes forward-looking remarks regarding the expected completion of the offering and the fulfillment of closing conditions. These statements are subject to risks and uncertainties, and there is no guarantee that the anticipated outcomes will be achieved.
The information for this article is based on a press release statement from 374Water Inc.
In other recent news, 374Water Inc. has initiated operations of its AirSCWO technology at the Iron Bridge Regional Water Reclamation Facility in Orlando, marking a significant step in commercial biosolids processing. This technology is designed to efficiently process biosolids and PFAS contaminated wastes, aligning with the city's sustainability goals. The successful integration of the AirSCWO system into the Iron Bridge facility allows 374Water to demonstrate its ability to destroy persistent organic pollutants, including PFAS.
Furthermore, the Florida Department of Environmental Protection supported the installation with a grant under the Bilateral Infrastructure Law emerging contaminant funding. CEO Chris Gannon highlighted the operational success in Orlando as crucial for showcasing the technology's capacity to manage municipal, federal, and industrial organic waste streams at scale.
These recent developments follow a previous update in July 2024 regarding the deployment of the AirSCWO technology after its extended residency at the Merrell Bros' facility in Kokomo, IN. The company also anticipates additional commitments across the United States, including a deployment to Orange County Sanitation (CA) in 2025.
InvestingPro Insights
As 374Water Inc. (NASDAQ:SCWO) moves forward with its registered direct offering to raise approximately $12.2 million, it's crucial to consider the company's financial position and market performance. According to InvestingPro data, SCWO has a market capitalization of $182.44 million, which puts the size of this offering into perspective.
An InvestingPro Tip reveals that SCWO holds more cash than debt on its balance sheet. This solid financial footing could be further strengthened by the incoming capital from the offering, potentially enhancing the company's ability to fund its cleantech initiatives and expand its AirSCWO technology.
However, investors should note that SCWO's stock has taken a significant hit over the last week, with a 1-week price total return of -15.95%. This recent downturn might explain the timing of the offering, as the company seeks to capitalize on investor interest despite short-term market volatility.
Another relevant InvestingPro Tip indicates that analysts anticipate a sales decline in the current year. This projection, coupled with the company's revenue of just $0.31 million in the last twelve months, underscores the importance of the capital raise for SCWO's growth strategy and operational needs.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 11 more InvestingPro Tips available for SCWO, providing a deeper understanding of the company's financial health and market position.
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