374Water Inc (NASDAQ:SCWO, FRA:8LL) announced on Thursday that the US Department of Defense’s Defense Innovation Unit has issued a Success Memo to its demonstration partner Arcadis, validating the performance of 374Water’s AirSCWO technology for PFAS destruction and opening a pathway toward commercial-scale federal procurement.
The memo follows a demonstration and evaluation program conducted under the DoD’s Environmental Security Technology Certification Program.
According to 374Water, the program validated the technical and economic viability of a regional AirSCWO hub and formally completed the prototype project under 10 U.S.C. §4022.
Shares of 374Water jumped 11.7% on Thursday morning.
The Success Memo establishes conditions under which federal agencies can proceed directly to follow-on production awards under the federal Other Transaction Authority framework, potentially allowing agencies to deploy the technology without repeating a full demonstration cycle.
“The DIU Success Memo confirms, in writing, that AirSCWO performs as advertised, and that federal agencies can procure it as a commercial product,” said Howard Teicher, vice president of government at 374Water.
“The OTA is expected to significantly accelerate the Federal government's PFAS remediation efforts, and with our partnership with Arcadis and the commercial infrastructure to perform 374Water is leading the way to destroy forever chemicals forever.”
The company said the DoD program evaluated AirSCWO across a range of real-world waste streams generated by municipalities, industry and government agencies, while also testing a hub-and-spoke model in which centralized destruction facilities receive concentrated waste from multiple installations and industrial customers.
374Water said the DoD has identified 574 military installations where PFAS contamination requires remediation, while the Departments of Energy and Transportation are also involved in PFAS remediation projects.
The company is seeking to apply the model through its Waste Destruction Services platform in Orlando, Florida. The facility, which operates under a license agreement with the City of Orlando, has added 88,000 gallons of onsite tank storage and increased AirSCWO capacity to support higher throughput.
374Water is targeting between $3 million and $5 million in annual recurring revenue at the facility’s initial scale and said negotiations are underway to more than double its installed capacity.
“Over the past several months, we have been focused on building the AirSCWO operating platform, and the vision is taking shape,” 374Water CEO Danny Bogar.
“We have established our long-term Waste Destruction Services hub in Orlando, creating a scalable platform for recurring revenues. We continue to earn market validation under the highest scrutiny, most recently through the Orange County Sanitation District acceptance test and now this Success Memo from the DoD's Defense Innovation Unit.”
Arcadis Senior Vice President Dr. Craig Divine said the memo provides federal entities with streamlined contracting options for the technology.
“This Success Memo is a milestone for both Arcadis and 374Water,” Divine said.
“The AirSCWO technology coupled with this Success Memo offers the whole of the US Military, and in fact any Federal entity, streamlined contracting options and the ability to permanently destroy AFFF and other PFAS wastes.”