8-K: 374Water Secures $15.1 Million At-The-Market Equity Offering Facility with Lake Street Capital Markets

374Water Inc. has entered into a new At-The-Market (ATM) sales agreement to potentially raise up to $15.1 million through the sale of common stock, while simultaneously terminating its previous larger ATM facility.

Summary

• On June 6, 2025, 374Water Inc. (the "Company") entered into an At-The-Market (ATM) issuance Sales Agreement with Lake Street Capital Markets, LLC (the "Sales Agent").
• Under the new ATM Sales Agreement, the Company may offer and sell shares of its common stock with an aggregate offering price of up to $15,100,000.
• The Company will not sell more than 28,700,000 shares of common stock under this agreement.
• The common stock will be offered and sold pursuant to the Company's existing effective shelf registration statement on Form S-3 (Registration No. 333-268942).
• The Company is not obligated to sell any common stock and may suspend or terminate the agreement at any time.
• The Sales Agent will receive a commission equal to three percent (3.0%) of the gross sales price of the shares sold.
• The Company intends to use the net proceeds for working capital and general corporate purposes.
• Concurrently, the Company mutually terminated its prior Open Market Sale AgreementSM, dated December 21, 2022, with Jefferies LLC, which had governed the sale of up to $100,000,000 shares of common stock.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While the new ATM provides access to capital and flexibility, the significantly reduced size compared to the previous facility and the inherent dilution risk temper the overall positive impact. It's a standard financing move, but the scale change is notable.

Positives

• The new ATM Sales Agreement provides 374Water Inc. with a flexible mechanism to access capital as needed for working capital and general corporate purposes.
• The Company is not obligated to sell any shares, allowing it discretion over the timing and amount of capital raised.
• The ATM facility leverages an existing effective shelf registration statement, streamlining the process for potential share issuance.

Negatives

• The new ATM program is significantly smaller, at $15.1 million, compared to the previously terminated $100 million facility, which could suggest reduced capital needs or challenges in securing a larger facility.
• The sale of additional common stock will result in dilution for existing shareholders.

Risks

• Potential dilution of existing shareholders' equity due to the issuance of new common stock under the ATM program.
• Market price volatility of the Company's common stock could impact the actual proceeds received from share sales.
• The Company's ability to raise the full $15.1 million is subject to market conditions and demand for its shares.
• The Company's financial condition, business operations, and prospects could be materially adversely affected by a 'Material Adverse Change' as defined in the agreement, which could hinder its ability to utilize the ATM facility or impact share price.
• Non-compliance with applicable laws, including environmental, ERISA, anti-corruption, money laundering, and sanctions laws, could lead to material adverse changes or liabilities.

Future Outlook

The Company intends to use the net proceeds from any sales of common stock under the ATM Sales Agreement for working capital and general corporate purposes. The agreement provides flexibility for future capital needs.

Management Comments

• The report was signed by Christian Gannon, Chief Executive Officer of 374Water Inc.

Industry Context

At-The-Market (ATM) equity offerings are a common and flexible financing tool used by publicly traded companies, particularly those with fluctuating capital needs or seeking to minimize market impact by selling shares gradually. The shift from a larger to a smaller ATM facility could reflect current market conditions, the company's immediate capital requirements, or a strategic adjustment in its financing approach.

Stakeholder Impact

• Shareholders: Potential dilution of ownership percentage and earnings per share due to the issuance of new common stock.
• Company: Enhanced liquidity and financial flexibility for working capital and general corporate purposes.

Next Steps

• The Company may, from time to time, offer and sell shares of its common stock through Lake Street Capital Markets, LLC under the terms of the ATM Sales Agreement.
• The Company will file required reports and documents with the SEC, including summaries of shares sold and net proceeds in its periodic reports or prospectus supplements.

Key Dates

Keywords

374Water Inc., SCWO, At-The-Market, ATM, Equity Offering, Capital Raise, Common Stock, SEC Filing, Form 8-K, Dilution, Working Capital, Lake Street Capital Markets