NASDAQ:SCWO 374Water Q1 2024 Earnings Report $0.29 -0.01 (-2.57%) Closing price 04:00 PM EasternExtended Trading$0.29 0.00 (-1.13%) As of 07:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast 374Water EPS ResultsActual EPS-$0.02Consensus EPS -$0.02Beat/MissMet ExpectationsOne Year Ago EPSN/A374Water Revenue ResultsActual Revenue$0.32 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/A374Water Announcement DetailsQuarterQ1 2024Date5/15/2024TimeAfter Market ClosesConference Call DateFriday, May 17, 2024Conference Call Time1:00PM ETUpcoming Earnings374Water's Q1 2025 earnings is scheduled for Tuesday, May 13, 2025, with a conference call scheduled on Thursday, May 15, 2025 at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Earnings HistoryCompany ProfilePowered by 374Water Q1 2024 Earnings Call TranscriptProvided by QuartrMay 17, 2024 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:00Greetings, and welcome to the 374 Water First Quarter 20 24 Earnings Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Heather Crowell, Investor Relations. Thank you. Operator00:00:28Ms. Crowell, you may begin. Speaker 100:00:32Hello, everyone, and welcome to 374 Water's Q1 2024 Earnings Conference Call. My name is Heather Crowell, and I'm here today with our President and Chief Executive Officer, Chris Gannon and our Chief Financial Officer, Adrian Anderson. During today's call, we may make projections and other forward looking statements under the Safe Harbor provisions contained in the Private Securities Litigation Reform Act of 1995 regarding future events or the future financial performance of the company. These statements may discuss our business, economic and market outlook, growth expectations, new products and their performance, cost structure and business strategy. Forward looking statements are based on information currently available to us and on management's beliefs, assumptions, estimates and or projections. Speaker 100:01:24Forward looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors. We refer you to documents the company files from time to time with the SEC, specifically the company's Form 10 ks and Form 10 Q. These documents identify important factors that could cause actual results to differ materially from those contained in our projections or forward looking statements. All statements made during today's call are made only as of today, May 17, 2024, and the company expressly disclaims any intent or obligation to update any forward looking statements made during this call to reflect subsequent events or circumstances, unless otherwise required by law. Our earnings release and transcript will be available on the Investor Relations page of our website. Speaker 100:02:13Now, I will turn the call over to President and Chief Executive Officer, Chris Gannon. Chris? Speaker 200:02:19Thank you, Heather. Good morning, everyone, and thank you for joining us today. Before we begin with our strategic, commercial and financial update, I would like to thank the Board for appointing me as CEO. I look forward to working with all our stakeholders including customers, demonstration and test partners, shareholders, the board, my leadership team and our talented employees as we enter the next phase of 374 Waters growth. I am excited to take the helm at such a pivotal time for the company and I look forward to our future. Speaker 200:03:00During my 1st month here, I have immersed myself in the company and gained a good understanding of our markets and customers, our technology, our historical product development and commercialization and go to market strategy as well as the opportunities and challenges that lie ahead. I would like to start by outlining how I will approach my role at 374 Water. In short, my focus is to build shareholder value over the near and long term. To do this, I will create stability, engage with market participants, build shareholder trust and ensure that we have the resources available to meet our objectives. We have begun a strategic planning process and have enlisted the assistance of industry experts to provide additional guidance as it relates to the municipal, federal, military and industrial verticals. Speaker 200:04:03This strategic planning process is a crucial foundational step for our company as it will inform our go forward approach to our products, to our markets and to our operations. We will utilize the strategic plan or playbook to communicate with all key constituents going forward. You can expect me to lay out this overarching strategy during our future calls together. I will now turn to a brief discussion of our technology and the market opportunities we see available to us and then I will discuss our near term areas of focus. First, let's discuss our Airsquo technology, which sits at the cutting edge of clean tech innovation as it provides an important solution to the ever increasing wastewater treatment and waste management challenges faced globally. Speaker 200:05:02At the heart of our ARESCLO system sits our supercritical water oxidation technology, which eliminates a broad spectrum of organic waste, leaving clean water, safe minerals and recoverable heat energy. Our technology has been shown to effectively process biosolids, PFAS, firefighting foams like HFFF, residuals from water and waste treatment, landfill leachate, oily sludge, granulated activated carbon, ion exchange resins and foam fractionates to name just a few. Our Eresco system also includes our pretreatment solutions like our biosolids dewatering skid as well as post treatment solutions like pH control and filtration systems. In the future, I will go into more depth on these and other pre and post treatment solutions that we are developing as we continue to create modular solutions to meet individual customer needs. We are making great strides in improving the reliability of our commercial scale Airflow 6 system. Speaker 200:06:20We are actively running, developing and demonstrating our technology at our development partners, Kokomo, Indiana facility and are seeing positive results. Before I continue, I would like to take a moment to express our sincere thanks to the Merrill Brothers organization as they are incredible partners. I cannot overstate how important this collaboration has been to accelerate our technology development process. We look forward to continued work together. In addition to our work in Kokomo, we are planning for multiple upcoming technology demonstrations in 2024, which I will discuss shortly and I'll update you during future calls. Speaker 200:07:08Now I will briefly discuss the waste management, water treatment and other markets we are focused on. The opportunities we see there and the recent public policy changes which we believe will accelerate the demand side of the Air Squell equation. From a market size perspective, we see a truly global opportunity measured in the 100 of 1,000,000,000 of dollars. Looking across municipal, federal, military and industrial markets, we see monumental environmental challenges ahead and the corresponding opportunity to utilize our Air Squad technology to address them. In April 2024, the EPA released a new groundbreaking and stringent national primary drinking water regulation and a CERCLA designation for per and Polyfluorinated Substances or PFOS for short, which are also known as forever chemicals. Speaker 200:08:12The new drinking water rules sets enforceable maximum contaminant levels at parts per trillion. The CERCLA designation is a first of its kind rule designating 2 PFOS chemicals as hazardous substances providing the EPA with future enforcement capabilities. This initiative is part of a broader effort backed by significant federal funding to mitigate PFAS pollution and safeguard public health. The Environmental Business Journal estimates the cost of removing PFAS in the U. S. Speaker 200:08:50At over $200,000,000,000 Meanwhile, in Europe, the European Environmental Agency has also been proactive in addressing PFOS contamination. Their regulations aim to not only reduce PFOS emissions and exposure, but also establish rigorous environmental standards and waste management practices throughout Europe. This global regulatory environment is creating an unprecedented demand for technologies that it can effectively and safely manage and treat PFOS. This environment offers substantial opportunities for companies like ours as we anticipate these regulations will drive substantial investment from government and industry. 374 Water is positioned as an attractive alternative to traditional waste management solutions where these forever chemicals remain present in the environment. Speaker 200:09:52Our company is working hand in hand with appropriate federal and state regulators and providing the data necessary to inform the EPA's PFAS destruction guidance. With this background in mind, I'd like to discuss the markets where we participate. First, the U. S. Municipal market, which consists of wastewater treatment plants that treat biosolids, sludges and leachates, water utilities which produce spent granulated activated carbon, ion exchange and foam fractionated waste and state and local firefighting units which have stockpiles of AFFF. Speaker 200:10:35All these organizations have waste streams, which must be disposed of or destroyed. As an example of the opportunity in this space, the U. S. Wastewater treatment plants treat 34,000,000,000 gallons of wastewater daily, which translates into 292,000,000 tons of solid waste produced annually. Current disposal options such as land application, landfill, incineration and deep well injection are inadequate and all have environmental, health and liability repercussions. Speaker 200:11:13I will discuss these issues more fully in future calls. 2nd, we are focused on the federal market. We continue to pursue opportunities with the Department of Defense for AFFF, Organic Chemical and Other Waste Destruction Department of Energy Sites Contaminated with PFAS, Manufacturing Waste and radiological waste and the Federal Aviation Agency for destruction of PFAS. Let's discuss the PFAS opportunity with the Department of Defense. In 2021, the Pentagon estimated PFOS remediation cost at $29,000,000,000 Under the new regulations, we expect this number to substantially increase. Speaker 200:12:02374 Water is involved in this emerging market and we will be fulfilling demonstration contracts with each of the military services over the coming year. In addition, we are a participant in the Defense Innovation Unit's advanced PFOS destruction demonstration scheduled for 2025. Beyond PFOS, there are many additional Air Squo applications with federal customers within the DoD, the Department of Energy and other agencies for organic chemical and other waste destruction. As such, I believe the outlook for our federal government business is strong. Finally, we see significant opportunities in the industrial markets. Speaker 200:12:48This is a broad category and we see Air Squo applications in landfill leachate, oil and gas, pharmaceutical, chemical and petrochemical, automotive, aerospace, electronics, healthcare and food and beverage to name a few. While it is still early in my tenure, it is becoming clear how we will evolve and position our business. I see tremendous opportunities ahead for 374 Water to grow into a leading clean technology products and services player. To ensure we build a strong foundation for the future, in the short term, we will be focusing on 1st, meeting our contractual obligations with Orange County Sanitation in the City of Orlando as well as completing multiple military waste destruction demonstrations throughout 2024. We believe success here will drive demand across the municipal market and federal government and defense markets. Speaker 200:13:562nd, we are expanding the application of our Airscope technology and we'll continue to invest in our product development efforts. We are pursuing opportunities within the industrial markets as they are all affected by PFAS contamination, have difficult to treat waste streams and lack sustainable treatment solutions that eliminate waste without creating potential future liability. 3rd, we are in active discussions with major treatment, storage and disposal facility or TSDF operators to form strategic partnerships. We believe these partnerships will be critical for both parties as we scale our technology and as the TSDFs improve and expand their service offerings to include safe destruction technology. Finally, we will invest in our internal engineering and operations capabilities to increase the pace of technology and product commercialization. Speaker 200:15:00In the near term, we will transition to a dedicated manufacturing facility to greatly increase our production velocity as well as scale our engineering capability to develop and test our technology more rapidly. Further, recognizing the need for rapid innovation and problem solving, we plan to expand our engineering and field teams to increase our capacity, develop innovative solutions and respond to the market needs. At the same time, we will build out our leadership team to navigate the massive market opportunities ahead. As part of our engineering and R and D efforts, we developed a smaller version of our Air Squo system, which allows us to perform rapid treatability studies of many waste streams in a laboratory environment. We use this system to qualify the treatability of waste streams and the process parameters needed for our commercial scale Air Squo system. Speaker 200:16:05In addition to being a vital R and D tool, this is a revenue generating business for our company and a sales tool for demonstrating our capabilities. I will discuss our laboratory business and our capabilities there during future calls. Now I would like to spend a moment on our pipeline. While we will not address our pipeline in specific terms, our decision to move to a new manufacturing facility can be considered an indication there is significant market demand for our technology. While we have a lot of work to do, the future is bright and I'm excited to be here. Speaker 200:16:45With that, I will turn the call over to Adrienne to update you on our financials. Speaker 300:16:52Thanks, Chris. Today, I'll discuss our financial results, which reflect the current stage of our business evolution as we begin scaling our business and enhancing our cash position to support sustained growth. Q1 2024 results are indicative of a period where strategic investments take precedence as we are taking the necessary steps to lay down a robust foundation as we chart our path to profitable growth. With that, I will touch on a few key metrics. During the quarter, the company generated revenue of approximately $315,000 which compares to $801,000 for the 3 months ending March 31, 2023. Speaker 300:17:41As we start to reach the end of the assembly and fabrication work on our sold unit, our direct costs declined, which has a direct correlation to our decline in revenue of $468,000 this period under our percentage of completion revenue recognition method. Total OpEx increased marginally from $1,800,000 in the Q1 of 2023 to $1,900,000 in this period's quarter, driven primarily by an increase in research and development expenses. As of March 31, 2024, we have working capital of $11,700,000 consisting of $13,300,000 of current assets comprised primarily of cash, receivables and inventory, offset by $1,600,000 of current liabilities comprised of accounts payable and accrued expenses arising from the normal course of business. We currently have no outstanding debt obligations. We are actively working on optimizing our operational efficiencies and exploring new market opportunities, all aimed at long term value creation, while remaining steadfast in our commitment to innovation and excellence. Speaker 300:19:03A primary financial goal for the company is to extend its runway while scaling the business and we are pleased to have Chris at the helm to achieve these objectives. Speaker 200:19:15Thank you, Adrianne, and thank you everyone for joining our call today. We look forward to providing updates during future earnings calls. In addition, I hope to share time with everyone at our Annual Shareholder Meeting in June. Bye for now. Operator00:19:30This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.Read morePowered by Conference Call Audio Live Call not available Earnings Conference Call374Water Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K) 374Water Earnings Headlines374Water Applauds EPA Announcement of Major Actions to Combat PFAS ContaminationMay 6 at 8:31 AM | globenewswire.com374Water Inc. Nominates James Pawloski as Independent Director Ahead of Annual MeetingMay 2, 2025 | nasdaq.comElon just did WHAT!?As you may recall, Biden and the Fed were working on a central bank digital currency, or CBDC. Had they gotten away with it, the Fed and U.S. banks could have seized control of our financial lives forever. But Trump stopped them cold on January 23rd, 2025, when he outlawed CBDCs… Paving the way for Elon Musk's secret master plan.May 6, 2025 | Brownstone Research (Ad)374Water to Host First Quarter 2025 Results Conference Call on Thursday, May 15, 2025 at 4:30 p.m. Eastern TimeMay 1, 2025 | globenewswire.com374Water Appoints James Pawloski as an Advisor to the CompanyApril 30, 2025 | globenewswire.com374Water, Inc. appoints Jones to board of directorsApril 19, 2025 | markets.businessinsider.comSee More 374Water Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like 374Water? Sign up for Earnings360's daily newsletter to receive timely earnings updates on 374Water and other key companies, straight to your email. Email Address About 374Water374Water (NASDAQ:SCWO) provides a technology that transforms wet wastes into recoverable resources in the United States. The company transforms wet wastes, including sewage sludge, biosolids, food waste, hazardous and non-hazardous waste, and forever chemicals. It offers AirSCWO systems, a waste stream treatment system based on supercritical water oxidation that are used to treat various hazardous and non-hazardous waste streams. It serves Industrial, agricultural, defense, oil and gas, waste management, sanitation project, environmental remediation and compliance, and municipal markets. 374Water Inc. is based in Durham, North Carolina.View 374Water ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2 Upcoming Earnings ARM (5/7/2025)AppLovin (5/7/2025)Fortinet (5/7/2025)MercadoLibre (5/7/2025)Cencora (5/7/2025)Carvana (5/7/2025)Walt Disney (5/7/2025)Emerson Electric (5/7/2025)Johnson Controls International (5/7/2025)Lloyds Banking Group (5/7/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 4 speakers on the call. Operator00:00:00Greetings, and welcome to the 374 Water First Quarter 20 24 Earnings Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Heather Crowell, Investor Relations. Thank you. Operator00:00:28Ms. Crowell, you may begin. Speaker 100:00:32Hello, everyone, and welcome to 374 Water's Q1 2024 Earnings Conference Call. My name is Heather Crowell, and I'm here today with our President and Chief Executive Officer, Chris Gannon and our Chief Financial Officer, Adrian Anderson. During today's call, we may make projections and other forward looking statements under the Safe Harbor provisions contained in the Private Securities Litigation Reform Act of 1995 regarding future events or the future financial performance of the company. These statements may discuss our business, economic and market outlook, growth expectations, new products and their performance, cost structure and business strategy. Forward looking statements are based on information currently available to us and on management's beliefs, assumptions, estimates and or projections. Speaker 100:01:24Forward looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors. We refer you to documents the company files from time to time with the SEC, specifically the company's Form 10 ks and Form 10 Q. These documents identify important factors that could cause actual results to differ materially from those contained in our projections or forward looking statements. All statements made during today's call are made only as of today, May 17, 2024, and the company expressly disclaims any intent or obligation to update any forward looking statements made during this call to reflect subsequent events or circumstances, unless otherwise required by law. Our earnings release and transcript will be available on the Investor Relations page of our website. Speaker 100:02:13Now, I will turn the call over to President and Chief Executive Officer, Chris Gannon. Chris? Speaker 200:02:19Thank you, Heather. Good morning, everyone, and thank you for joining us today. Before we begin with our strategic, commercial and financial update, I would like to thank the Board for appointing me as CEO. I look forward to working with all our stakeholders including customers, demonstration and test partners, shareholders, the board, my leadership team and our talented employees as we enter the next phase of 374 Waters growth. I am excited to take the helm at such a pivotal time for the company and I look forward to our future. Speaker 200:03:00During my 1st month here, I have immersed myself in the company and gained a good understanding of our markets and customers, our technology, our historical product development and commercialization and go to market strategy as well as the opportunities and challenges that lie ahead. I would like to start by outlining how I will approach my role at 374 Water. In short, my focus is to build shareholder value over the near and long term. To do this, I will create stability, engage with market participants, build shareholder trust and ensure that we have the resources available to meet our objectives. We have begun a strategic planning process and have enlisted the assistance of industry experts to provide additional guidance as it relates to the municipal, federal, military and industrial verticals. Speaker 200:04:03This strategic planning process is a crucial foundational step for our company as it will inform our go forward approach to our products, to our markets and to our operations. We will utilize the strategic plan or playbook to communicate with all key constituents going forward. You can expect me to lay out this overarching strategy during our future calls together. I will now turn to a brief discussion of our technology and the market opportunities we see available to us and then I will discuss our near term areas of focus. First, let's discuss our Airsquo technology, which sits at the cutting edge of clean tech innovation as it provides an important solution to the ever increasing wastewater treatment and waste management challenges faced globally. Speaker 200:05:02At the heart of our ARESCLO system sits our supercritical water oxidation technology, which eliminates a broad spectrum of organic waste, leaving clean water, safe minerals and recoverable heat energy. Our technology has been shown to effectively process biosolids, PFAS, firefighting foams like HFFF, residuals from water and waste treatment, landfill leachate, oily sludge, granulated activated carbon, ion exchange resins and foam fractionates to name just a few. Our Eresco system also includes our pretreatment solutions like our biosolids dewatering skid as well as post treatment solutions like pH control and filtration systems. In the future, I will go into more depth on these and other pre and post treatment solutions that we are developing as we continue to create modular solutions to meet individual customer needs. We are making great strides in improving the reliability of our commercial scale Airflow 6 system. Speaker 200:06:20We are actively running, developing and demonstrating our technology at our development partners, Kokomo, Indiana facility and are seeing positive results. Before I continue, I would like to take a moment to express our sincere thanks to the Merrill Brothers organization as they are incredible partners. I cannot overstate how important this collaboration has been to accelerate our technology development process. We look forward to continued work together. In addition to our work in Kokomo, we are planning for multiple upcoming technology demonstrations in 2024, which I will discuss shortly and I'll update you during future calls. Speaker 200:07:08Now I will briefly discuss the waste management, water treatment and other markets we are focused on. The opportunities we see there and the recent public policy changes which we believe will accelerate the demand side of the Air Squell equation. From a market size perspective, we see a truly global opportunity measured in the 100 of 1,000,000,000 of dollars. Looking across municipal, federal, military and industrial markets, we see monumental environmental challenges ahead and the corresponding opportunity to utilize our Air Squad technology to address them. In April 2024, the EPA released a new groundbreaking and stringent national primary drinking water regulation and a CERCLA designation for per and Polyfluorinated Substances or PFOS for short, which are also known as forever chemicals. Speaker 200:08:12The new drinking water rules sets enforceable maximum contaminant levels at parts per trillion. The CERCLA designation is a first of its kind rule designating 2 PFOS chemicals as hazardous substances providing the EPA with future enforcement capabilities. This initiative is part of a broader effort backed by significant federal funding to mitigate PFAS pollution and safeguard public health. The Environmental Business Journal estimates the cost of removing PFAS in the U. S. Speaker 200:08:50At over $200,000,000,000 Meanwhile, in Europe, the European Environmental Agency has also been proactive in addressing PFOS contamination. Their regulations aim to not only reduce PFOS emissions and exposure, but also establish rigorous environmental standards and waste management practices throughout Europe. This global regulatory environment is creating an unprecedented demand for technologies that it can effectively and safely manage and treat PFOS. This environment offers substantial opportunities for companies like ours as we anticipate these regulations will drive substantial investment from government and industry. 374 Water is positioned as an attractive alternative to traditional waste management solutions where these forever chemicals remain present in the environment. Speaker 200:09:52Our company is working hand in hand with appropriate federal and state regulators and providing the data necessary to inform the EPA's PFAS destruction guidance. With this background in mind, I'd like to discuss the markets where we participate. First, the U. S. Municipal market, which consists of wastewater treatment plants that treat biosolids, sludges and leachates, water utilities which produce spent granulated activated carbon, ion exchange and foam fractionated waste and state and local firefighting units which have stockpiles of AFFF. Speaker 200:10:35All these organizations have waste streams, which must be disposed of or destroyed. As an example of the opportunity in this space, the U. S. Wastewater treatment plants treat 34,000,000,000 gallons of wastewater daily, which translates into 292,000,000 tons of solid waste produced annually. Current disposal options such as land application, landfill, incineration and deep well injection are inadequate and all have environmental, health and liability repercussions. Speaker 200:11:13I will discuss these issues more fully in future calls. 2nd, we are focused on the federal market. We continue to pursue opportunities with the Department of Defense for AFFF, Organic Chemical and Other Waste Destruction Department of Energy Sites Contaminated with PFAS, Manufacturing Waste and radiological waste and the Federal Aviation Agency for destruction of PFAS. Let's discuss the PFAS opportunity with the Department of Defense. In 2021, the Pentagon estimated PFOS remediation cost at $29,000,000,000 Under the new regulations, we expect this number to substantially increase. Speaker 200:12:02374 Water is involved in this emerging market and we will be fulfilling demonstration contracts with each of the military services over the coming year. In addition, we are a participant in the Defense Innovation Unit's advanced PFOS destruction demonstration scheduled for 2025. Beyond PFOS, there are many additional Air Squo applications with federal customers within the DoD, the Department of Energy and other agencies for organic chemical and other waste destruction. As such, I believe the outlook for our federal government business is strong. Finally, we see significant opportunities in the industrial markets. Speaker 200:12:48This is a broad category and we see Air Squo applications in landfill leachate, oil and gas, pharmaceutical, chemical and petrochemical, automotive, aerospace, electronics, healthcare and food and beverage to name a few. While it is still early in my tenure, it is becoming clear how we will evolve and position our business. I see tremendous opportunities ahead for 374 Water to grow into a leading clean technology products and services player. To ensure we build a strong foundation for the future, in the short term, we will be focusing on 1st, meeting our contractual obligations with Orange County Sanitation in the City of Orlando as well as completing multiple military waste destruction demonstrations throughout 2024. We believe success here will drive demand across the municipal market and federal government and defense markets. Speaker 200:13:562nd, we are expanding the application of our Airscope technology and we'll continue to invest in our product development efforts. We are pursuing opportunities within the industrial markets as they are all affected by PFAS contamination, have difficult to treat waste streams and lack sustainable treatment solutions that eliminate waste without creating potential future liability. 3rd, we are in active discussions with major treatment, storage and disposal facility or TSDF operators to form strategic partnerships. We believe these partnerships will be critical for both parties as we scale our technology and as the TSDFs improve and expand their service offerings to include safe destruction technology. Finally, we will invest in our internal engineering and operations capabilities to increase the pace of technology and product commercialization. Speaker 200:15:00In the near term, we will transition to a dedicated manufacturing facility to greatly increase our production velocity as well as scale our engineering capability to develop and test our technology more rapidly. Further, recognizing the need for rapid innovation and problem solving, we plan to expand our engineering and field teams to increase our capacity, develop innovative solutions and respond to the market needs. At the same time, we will build out our leadership team to navigate the massive market opportunities ahead. As part of our engineering and R and D efforts, we developed a smaller version of our Air Squo system, which allows us to perform rapid treatability studies of many waste streams in a laboratory environment. We use this system to qualify the treatability of waste streams and the process parameters needed for our commercial scale Air Squo system. Speaker 200:16:05In addition to being a vital R and D tool, this is a revenue generating business for our company and a sales tool for demonstrating our capabilities. I will discuss our laboratory business and our capabilities there during future calls. Now I would like to spend a moment on our pipeline. While we will not address our pipeline in specific terms, our decision to move to a new manufacturing facility can be considered an indication there is significant market demand for our technology. While we have a lot of work to do, the future is bright and I'm excited to be here. Speaker 200:16:45With that, I will turn the call over to Adrienne to update you on our financials. Speaker 300:16:52Thanks, Chris. Today, I'll discuss our financial results, which reflect the current stage of our business evolution as we begin scaling our business and enhancing our cash position to support sustained growth. Q1 2024 results are indicative of a period where strategic investments take precedence as we are taking the necessary steps to lay down a robust foundation as we chart our path to profitable growth. With that, I will touch on a few key metrics. During the quarter, the company generated revenue of approximately $315,000 which compares to $801,000 for the 3 months ending March 31, 2023. Speaker 300:17:41As we start to reach the end of the assembly and fabrication work on our sold unit, our direct costs declined, which has a direct correlation to our decline in revenue of $468,000 this period under our percentage of completion revenue recognition method. Total OpEx increased marginally from $1,800,000 in the Q1 of 2023 to $1,900,000 in this period's quarter, driven primarily by an increase in research and development expenses. As of March 31, 2024, we have working capital of $11,700,000 consisting of $13,300,000 of current assets comprised primarily of cash, receivables and inventory, offset by $1,600,000 of current liabilities comprised of accounts payable and accrued expenses arising from the normal course of business. We currently have no outstanding debt obligations. We are actively working on optimizing our operational efficiencies and exploring new market opportunities, all aimed at long term value creation, while remaining steadfast in our commitment to innovation and excellence. Speaker 300:19:03A primary financial goal for the company is to extend its runway while scaling the business and we are pleased to have Chris at the helm to achieve these objectives. Speaker 200:19:15Thank you, Adrianne, and thank you everyone for joining our call today. We look forward to providing updates during future earnings calls. In addition, I hope to share time with everyone at our Annual Shareholder Meeting in June. Bye for now. Operator00:19:30This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.Read morePowered by