Business Context and Reporting Period
This Form 8-K Current Report was filed by 374Water Inc. on November 16, 2021. The filing primarily addresses a change in the company's independent registered public accounting firm. The company is incorporated in Delaware and its common stock trades on the OTC Markets under the symbol SCWO.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity for the current period. However, it references historical audit reports indicating significant financial stress:
- The 2020 audit report by the dismissed firm contained an explanatory paragraph regarding uncertainty as to the Company's ability to continue as a going concern.
- The 2019 audit report by the newly appointed firm included an Emphasis of Matter regarding the same going concern uncertainty.
Material Changes
The material change reported is the dismissal of D. Brooks and Associates CPAs, P.A. as the independent registered public accounting firm, effective immediately on November 16, 2021. The company confirmed there were no disagreements with the former firm regarding accounting principles, practices, or audit scope prior to dismissal.
Guidance, Outlook, and Management Commentary
The filing does not contain forward-looking guidance, revenue outlook, or management commentary on business operations. The primary commentary relates to the transition of audit services:
- Appointment of New Firm: On November 18, 2021, the Board approved the engagement of Cherry Bekaert LLP as the new independent registered public accounting firm.
- History with New Firm: Cherry Bekaert previously served as the auditor but resigned on June 26, 2020. The company confirmed no disagreements or reportable events occurred during their prior tenure.
- Consultations: The company confirmed no consultations with Cherry Bekaert regarding accounting principles or audit opinions between December 31, 2019, and November 16, 2021.
Investor Verification Checklist
- Verify the reasons for the dismissal of D. Brooks and Associates CPAs, P.A., given the lack of reported disagreements.
- Review the "Going Concern" explanatory paragraphs in the 2019 and 2020 financial statements to assess current solvency risks.
- Confirm the status of the new audit engagement with Cherry Bekaert LLP and any potential delays in future financial reporting.
- Examine the letter from D. Brooks and Associates (Exhibit 16.1) for any dissenting statements regarding the dismissal.