Good afternoon, everyone, and thank you for joining us at H.C. Wainwright's 26th Annual Global Investment Conference. My name is Kyle Meury, and I'm an analyst on our corporate access team. We're very excited to have you all here today, and I'm pleased to welcome Chris Gannon, CEO of 374 Water. Thank you.
Thanks so much. As was mentioned, I am the CEO of 374Water. Our technology or our company is focused on destroying the world's toughest wastes, and I'm gonna define that for you. When you look at our technology, and this is what it looks like right there, it's in a shipping container today. Essentially, what we're designing is a proprietary system called AirSCWO, which is designed to destroy and mineralize both non-hazardous and hazardous organic waste, and I believe we do that better than anyone. In terms of the industries where we're focused on, you can think of it as in terms of some traditional industries or waste streams that our system can destroy outright.
Biosolids, from wastewater treatment facilities, landfill leachate that's coming out of landfills, a whole host of organic industrial waste, military waste, and so forth. In addition, our technology is very effective at destroying emerging contaminants like long and short-chain PFAS, forever chemicals. That's the thousands of those chemicals that do not degrade in the environment. Our technology, again, can destroy those. Pesticides, pharmaceuticals, and then microplastics, and later in the presentation, we'll talk about more of those. A brief history. Our company was founded out of Duke University, and then spun out. We were initially funded by the Bill and Melinda Gates Foundation, and then had other rounds of financing.
In 2021, very notably, we signed up an agreement with the Merrell Brothers, which is the third largest waste management and transportation business in the country. They have invested in our company and our technology and have been an early development partner with us. We were on site at their company for roughly two years, and we've just recently left that organization to move down to the City of Orlando. During that time, we actually completed a reverse merger with a company called PowerVerde to become public, and then we uplisted to the Nasdaq. I joined the company this year as well, and I'm in the process of bringing on additional leadership and other team members to further scale our business.
In terms of our technology, again, it's called SCWO or AirSCWO. It is based on the use of supercritical water oxidation, which is basically a thermal process where we're heating up waste to above the supercritical point of water, which is above three hundred and seventy-four degrees, therefore our kinda quirky name, and two hundred and twenty-one bar of pressure. Once we get up to that level of pressure and temperature, water actually takes on some very interesting and unique properties with the ability to actually destroy organic material or break them down into their core elements. So if you think about the periodic table, what we're doing is we're taking everything back to that stage.
So going back to the left side of the page here, in terms of our process flow diagram, we're taking a waste stream or anything that we can suspend in a fluid. We're heating that up slightly, and we're injecting it into what we call our reactor. A reactor is just a long pipe that it can sustain very high heat and high pressure. We're injecting that into our supercritical water, as well as ambient air that we're also injecting in. When we do that, within a matter of seconds, the organic materials within that waste stream are effectively eliminated. They're broken apart, and they no longer exist.
What comes out the back end of our system is a mixture of water, some mineral effluent, some safe vent gas, like CO2, that can be sequestered, and an immense amount of heat energy. So within our reactor, we're creating this exothermic process. That exothermic process is generating heat when we're breaking apart, again, those elements. And that heat, we can also then recycle or capture. We can use that to power our system, because, again, it's based on heat, or we can convert that excess energy into electricity. In terms of some of the materials that our system has destroyed, again, it's organic materials that we are focused on destroying, and so by the very nature of it being organic, if we can suspend it in a fluid and get it into our system, we can destroy it.
Examples of that are biosolids or sludges. There are 16,000 waste treatment facilities across the country. All of them would be eligible or candidates for our technology. Something that's going on within that industry is that about 55% of the waste that's being generated is being land applied. What they're finding is that waste or the sludge that's being land applied to any all sorts of different farmland and other areas is highly contaminated with PFAS, and in that, the ability to land apply is going away state by state, gradually. In addition, about 25% of the waste that is generated there is being thrown into landfills. Well, that's causing further landfill leachate and other issues. That ability to put it into landfills is also going away.
So they're at a very much of a pinch point in that industry, where they're looking for a solution to this waste issue. And that's where we step in, because we can completely, again, destroy the organic waste that exists. Landfill leachate, again, is another example. If in the water and wastewater space as well, there is granular activated carbon and ion exchange that gets to a point where it is spent or used up and needs to be disposed of. We again can process that and totally destroy it. Some other areas that I think are relevant: pharmaceutical waste, food waste, again, that's an organic. Hazardous waste, we can also destroy, and we'll get into the federal government, but ammunition waste would be another example.
As we look at our overall market opportunity, we believe the market is roughly $250 billion globally. We today, though, are focused on the U.S. market, which is measured in the hundreds of billions of dollars as well. When we think about that market, we break it down into the municipal, federal, and industrial markets for our sake of discussion. On the municipal side, we have contracts with the City of Orlando in Orange County, and have multiple steps forward with those units or our technology to scale our technology with them. On the federal government side, we have a roughly $900 million pipeline of opportunity in front of us. Most of that is with the military, or various military branches.
So we have certain contracted, co-contracted opportunities, and we have just other opportunities that once we get past our demonstrations, we unlock that opportunity for us. On the industrial market, we're very much at the front of that. We are just starting to pursue that market opportunity. That's many different verticals, such as oil and gas, pharmaceutical, pulp and paper, again, food and beverage, and so forth. Again, a very large opportunity there, and we're just now starting to pursue that, but we're very excited about that. Underlying all of that are treatment, storage, and disposal facilities. These are across the country, and what they do is they all accept waste from municipal, federal, and industrial customers to then process it, sometimes in some cases store it, and then ultimately dispose of it.
What they don't do effectively is they don't destroy it effectively. They don't have that capability. That's where we come in. So we are in discussions with all of the major players in that industry, and there are many very, very large players in that space regarding our destruction-as-a-service business model, where we would put on location at their facilities, our technology, and then we would enter into a revenue share with them. We're again in very advanced negotiations there and hope to announce something there as well soon. But all told, we have about a $1.6 billion opportunity ahead of us right now, and we are in the process of executing these various demonstrations to fully unlock those opportunities.
In terms of our AirSCWO system, we have four models of various sizes. Our smallest model is a one metric ton per day unit. That is a hypermobile unit. You can envision that as something that is being pulled around by an F-250 type of truck, F-350. The medium-size unit, which is a six metric ton per day unit, that is a unit that has actually been installed at the City of Orlando. We are about to begin our full-scale demonstrations there, both on the municipal side, biosolids, as well as on our federal government-related opportunities. Within the municipal side, City of Orlando and Orange County, both of those organizations have already earmarked capital to purchase our AirSCWO 30 units, which we will co-development with them, starting as early as next year.
They then want to move, and this is all public knowledge, all been put out there by them. They want to then move to the 100 metric ton per day units. Those are bespoke units that are built within a building. In terms of, you know, some key near-term catalysts that I would like to share with everyone and consider, we have a continuing elevation of our relationship with Orange County and the city situations that will occur over the next 4-6 months as well, and we're also in the process of raising additional capital to scale our business, which I also believe will be a catalyst of our stock. Again, in terms of the overall investment thesis, the market is absolutely massive.
The opportunity in the U.S., on both the municipal, the federal, and the industrial markets, is very significant. They are demanding a solution here for waste destruction. We believe we are the best positioned in the market to do just that. In terms of the regulatory environment, there are some really strong tailwinds which are further driving demand to our business, and those are related to the EPA regulations around drinking water standards, as well as CERCLA Superfund related regulations. Those are going to be strengthened, we're hearing more and more actually over the coming months, which will, I think, further drive demand for our technology. In terms of our AirSCWO technology, again, it's all about waste destruction, not just processing, which is what everyone else is doing.
When you think about that need, it's encompassing across many, many different verticals. We're seeing immense amount of inbound interest in our technology. We have a lab that we do our initial testing or demonstrations of our technology to prove out that we can destroy whatever waste that they send to us. We then move to a larger scale demonstration, and then we move to the capital sale or a lease or a service agreement. In terms of our technology, it is very scalable and customizable.
So we have some customers that we're in discussions around actually having a much more ruggedized technology that is not as, it doesn't destroy all of the waste, but gets it down to enough of a level that they can do whatever they need to do with it, versus just pure outright destruction. So again, very excited about the business and our opportunities here, and I think that it's well worth people spending some time to learn about our technology, because the opportunity here is truly enormous. That's it.
Awesome. We can open the floor for any questions-
Yep.
-if anyone's...
Right. Yeah?
What are the incumbent solutions that you're facing? I didn't quite understand the-
Yeah. So landfilling is one example of that, incineration, anaerobic digestion is also are areas that people are utilizing. Deep well injection is another way of disposing of certain contaminants. So those are the core ways, none of them are fully destroying PFAS as an example. And so again, people are looking for a solution to that. Please.
Sorry. You're basically not relying on symbolic. Have you heard of the hog farms? It's a huge unmet need of waste in the hog industry.
Sure, absolutely. Yeah, I mean, it-- you're talking about their fecal waste. Absolutely. Now, a lot of that's going through anaerobic digestion, right? And there's companies that are putting in place that type of technology. The problem is, they're using that to generate methane. So we could easily bolt onto the back end of, let's say, an anaerobic digester, take that waste once it's ready, and then we could dispose of it.
How does second time regulatory traditional methods?
Our processing is measured in a matter of seconds to fully destroy. So we have a continuous process. So once we get up and running and we start to process any that waste stream, it's a continuous flow.
But don't you just need to be in two seventy-four?
We're actually more up in the range of about 600 degrees Celsius, but yes, we maintain our temperature and our pressure in that realm throughout the process.
The pipe, going through the pipe.
Correct. Yeah, yeah. So with our AirSCWO 6, we have six injection points where we're injecting waste, supercritical water and air, right? And so but it is a continuous process. Yes.
We don't have any emissions that I have to worry about?
No, it's very minimal, and, you know, the CO2, very minimal amount. All of the typical waste that you would see in an incinerator, right, which is a lot of PFAS, we're destroying completely.
What about the source of energy?
Initially, the source, we would use electricity to start to power it, but once we're up and running at scale, our system is actually generating more energy than it's consuming. Within our reactor, we're creating an exothermic reaction. That exothermic reaction is releasing heat or heat energy, and we can then recapture that heat energy to help power our system and/or send excess to the facility if we're at a facility, or back to the grid, if we wanted to convert that heat energy to electricity. Yeah.
That's just add-on heat to steam to-
Correct. That's correct.
That's it.
That's right. Yeah, it's just an add-on to it.
Yeah.
Yeah. Mm-hmm. Yeah, the additional add-on is if we were to take the water that's coming out the other end of it. So let's take biosolids, for example, right? Biosolids goes in, and then you have water that comes out, which you could add another polishing step to get it to potable water or drinkable water standards. We have this you know, additional minerals that are coming out, which are benign, that could be thrown, you know, thrown away or put on the land for fertilizer. We have a little bit of emissions from a CO₂ perspective, and then again, we have all this heat energy. So there's a couple of add-ons on the back end of it that could be put in place, right?
I understand we could take the RNG, methane or digester, for example, first and then process the remaining.
Once they're ready to dispose of what's in their, let's say, anaerobic digester and then replace it, we could take that waste.
Left, the remaining waste.
... Correct, the methane, and then what you're still left with an immense amount of waste there that we could then process. So in biosolids, on the biosolids side related to human, you know, fecal matter, right, from those types of waste treatment facilities, what we're doing is we're dewatering that. So those facilities are functioning at roughly a 1%, you know, waste to water ratio. We want it to be up to around 15% to process through our technology. The reason we do is because we want to harness as much energy, get as much energy we can. We could easily process a, you know, 1% water biosolids mixture.
In the case of an anaerobic digester, right, we would actually have to add water to get to that concentration down to a level that makes sense to bring into our system. Does that make sense?
Yeah.
Okay. Mm-hmm. Go ahead.
In the various agencies, programs, et cetera.
Yeah.
Are you actually in a bid, you're a bid for these contracts, or are you?
Yeah
The only person doing this, it's easier?
Yeah, it's a great question. So on the municipal side, well, there's really very limited competition for us today. There's a couple companies out there that have technology that's trying to do what we're doing, but they're not where we're at in terms of scale or whatnot. On the municipal side, that is a capital purchase for the most part. But again, who am I bidding against? There's not really anybody to bid against, so they're gonna make a decision. So if I look at Orange County or the City of Orlando, that was not a bidding process, that was a just pure contract process. On the federal government side, we are similarly working towards getting what's called a golden ticket within there, where they can just buy direct from us. All right?
Full, full contract.
Essentially, they can make a decision to come to us, or they could use some other technology that doesn't accomplish the same thing, but, you know, again, they could buy from different sources, but we can consult with them directly. They're looking for more of a service contract related procurement vehicle. And so when we're talking to them, they're talking about a fleet of vehicles or fleet of AirSCWO systems that would be taken around from base to base. So there's 715 bases that are highly contaminated, have stored massive amount of different, you know, manufacturing waste, PFOS, you know, AFFF, which is firefighting foam. That's at the end of the year going away, you can't use it across the US anymore, but we have millions and millions of gallons of that.
They're looking for a disposal or a way to destroy that. That's where we come in. GAC or IX, that's again, using water or wastewater, plants and so forth. They have huge amounts of that as well that they want to see destroyed. Military, you know, munitions, again, if we can suspend it, we can take it into our technology, and we can destroy it, assuming it's organic.
What about the support sites, nuclear, you can accomplish that?
We believe we can do that, but we have not processed nuclear waste today. So that's on the list of things to do with the federal government. But where we're really focused right now is mostly on their forever chemicals that they have sitting on, again, across all of these different bases. Yeah.
Is that a recurring revenue model or equipment sale, then not?
With the federal government, it appears to be a recurring model.
Private service forms for the sign-in.
Correct. Yeah, correct. So they want a fleet of vehicles.
Yeah.
They don't want to run and manage them themselves, so you know, whether it is they buy them, and then we man them, and we run them, or we own the asset and then provide a direct service, that's still something we need to work out. Municipalities, they want to own the technology. The industrial customers, it's a mix of both. You know, some want to own what's in their four walls, others want a very much a you know, some type of lease or, you know, service, and then on the treatment, storage, and disposal facility side, we're negotiating with the players there for a revenue share model, very specifically, so we would still own the asset.
We would potentially man the asset, but, yeah, ultimately, we would, based on the destruction of whatever waste are coming into their facilities, we would then share, you know, in that revenue. Yeah.
Thank you, everyone.
Okay. Thanks.