Arq, Inc. Announces Pricing of $25 Million Public Offering of Common Stock

Rhea-AI Summary

Arq (NASDAQ: ARQ), a producer of activated carbon and environmentally efficient carbon products, has announced the pricing of a public offering of 4,770,000 shares of common stock at $5.25 per share. The offering, expected to close around September 23, 2024, aims to raise approximately $25 million in gross proceeds. Arq has also granted underwriters a 30-day option to purchase up to an additional 715,500 shares.

The company plans to use the net proceeds for general corporate purposes, including working capital, capital expenditures, research and development, commercial expenditures, debt service, and potential acquisitions. Specifically, funds may be directed towards the continued construction of granular activated carbon facilities at Arq's Red River and Corbin manufacturing facilities in Louisiana and Kentucky, respectively.

Canaccord Genuity and Roth Capital Partners are acting as joint bookrunners for the offering. The offering is being made through a shelf registration statement and prospectus filed with the SEC.

Positive

• Successful pricing of a $25 million public offering, indicating investor interest
• Potential for additional capital through the 30-day option for underwriters
• Funds allocated for expansion of granular activated carbon facilities, supporting growth
• Diverse use of proceeds, including working capital and potential acquisitions

Negative

• Potential dilution of existing shareholders due to the issuance of new shares
• Increased outstanding shares may negatively impact earnings per share

Insights

Financial Analyst

Arq's $25 million public offering is a significant move that could impact its financial position and growth prospects. Pricing at $5.25 per share suggests moderate investor interest. The dilution effect on existing shareholders is notable, with 4,770,000 new shares being issued, potentially increasing to 5,485,500 if the overallotment option is exercised.

The company's focus on using proceeds for capital expenditures, particularly for granular activated carbon facilities, indicates a strategic expansion of production capabilities. This could enhance Arq's market position in the growing activated carbon industry, potentially leading to increased revenues. However, investors should monitor the execution of these expansion plans and their impact on the company's cash flow and profitability in the coming quarters.

Environmental Technology Expert

Arq's focus on activated carbon and environmentally efficient carbon products aligns with the growing demand for sustainable materials and purification solutions. The company's investment in granular activated carbon facilities in Louisiana and Kentucky demonstrates a commitment to expanding its production capacity in key markets.

The environmental tech sector is experiencing rapid growth, driven by increasing regulations and consumer demand for eco-friendly products. Arq's strategic expansion could position it to capitalize on these trends. However, investors should consider the competitive landscape and Arq's ability to differentiate its products in a market with established players. The success of this offering and subsequent investments will likely hinge on Arq's ability to innovate and efficiently scale its operations.

GREENWOOD VILLAGE, Colo., Sept. 20, 2024 (GLOBE NEWSWIRE) -- Arq, Inc. (NASDAQ: ARQ) (“Arq” or the “Company”), a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials, today announced the pricing of an underwritten public offering of 4,770,000 shares of its common stock, par value $0.001 per share (“common stock”), at a price to the public of $5.25 per share. All of the shares in the offering are being sold by Arq. The gross proceeds to Arq from the offering, before deducting the underwriting discounts and commissions and other offering expenses, are expected to be approximately $25 million. The offering is expected to close on or about September 23, 2024, subject to customary closing conditions. In addition, Arq has granted the underwriters a 30-day option to purchase up to an additional 715,500 shares of its common stock in the underwritten public offering.

Arq intends to use the net proceeds from this offering for general corporate purposes, which may include working capital, capital expenditures, including continued construction of granular activated carbon facilities at Arq’s Red River and Corbin manufacturing facilities located in Coushatta, Louisiana and Corbin, Kentucky, respectively, research and development expenditures, commercial expenditures, debt service costs and repayment, acquisitions of new technologies, products or businesses, and investments.

Canaccord Genuity and Roth Capital Partners are acting as joint bookrunners for the offering.

A shelf registration statement on Form S-3 (File No. 333-281762) relating to the shares was previously filed with the Securities and Exchange Commission (the “SEC”) and became effective on September 4, 2024. The offering is being made only by means of a written prospectus and prospectus supplement that form a part of the registration statement. A preliminary prospectus supplement and accompanying prospectus relating to the offering has been filed with the SEC and is available on the SEC’s website at www.sec.gov. A final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and available on the SEC’s website at www.SEC.gov. A copy of the final prospectus supplement and the accompanying prospectus, when available, may be obtained by contacting: Arq, Inc., 8051 E. Maplewood Ave., Suite 210, Greenwood Village, Colorado 80111, telephone: (720) 598-3500; Canaccord Genuity LLC, Attn: Syndication Department, 1 Post Office Square, 30th Floor, Boston, MA 02109, or by email at prospectus@cgf.com; Roth Capital Partners, LLC, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660, (800) 678-9147.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Arq

Arq is a diversified, environmental technology company with products that enable a cleaner and safer planet while actively reducing our environmental impact. As the only vertically integrated producer of activated carbon products in North America, we deliver a reliable domestic supply of innovative, hard-to-source, high-demand products. We apply our extensive expertise to develop groundbreaking solutions to remove harmful chemicals and pollutants from water, land and air. Learn more at: www.arq.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a “safe harbor” for such statements in certain circumstances. When used in this press release, the words “can,” “will,” "may," “intends,” “expects,” "continuing," “believes,” similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements. All statements that address activities, events or developments that the Company intends, expects or believes may occur in the future are forward-looking statements. These forward-looking statements include, but are not limited to, statements or expectations regarding: anticipated gross proceeds from the offering; the anticipated use of net proceeds from the offering; the total number of shares to be issued in the offering; and the expected closing date of the offering. The forward-looking statements included in this press release involve risks and uncertainties. Actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to, stock market conditions, our ability to satisfy the closing conditions in the underwriting agreement, our ability to complete the offering, timing of new and pending regulations and any legal challenges to or extensions of compliance dates of them; the U.S. government’s failure to promulgate regulations that benefit our business; changes in laws and regulations, accounting rules, prices, economic conditions and market demand; impact of competition; availability, cost of and demand for alternative energy sources and other technologies; technical, start up and operational difficulties; competition within the industries in which we operate; our inability to commercialize our products on favorable terms; our inability to effectively and efficiently commercialize new products; changes in construction costs or availability of construction materials; our inability to effectively manage construction and startup of the Red River GAC Facility or Corbin Facility; our inability to obtain required financing or financing on terms that are favorable to us; our inability to ramp up our operations to effectively address recent and expected growth in our business; loss of key personnel; ongoing effects of the inflation and macroeconomic uncertainty, including from the ongoing pandemic and armed conflicts around the world, and such uncertainty’s effect on market demand and input costs; availability of materials and equipment for our business; intellectual property infringement claims from third parties; pending litigation; as well as other factors relating to our business strategy, goals and expectations concerning the Arq Acquisition (including future operations, future performance or results); our ability to maintain relationships with customers, suppliers and others with whom it does business and meet supply requirements, or its results of operations and business generally; risks related to diverting management’s attention from our ongoing business operations; costs related to the Arq Acquisition; opportunities for additional sales of our AC products and end-market diversification; the timing and scope of new and pending regulations and any legal challenges to or extensions of compliance dates of them; our ability to meet customer supply requirements; the rate of coal-fired power generation in the U.S., the timing and cost of capital expenditures and the resultant impact to our liquidity and cash flows as described in our filings with the SEC, with particular emphasis on the risk factor disclosures contained in those filings. You are cautioned not to place undue reliance on the forward-looking statements made in this press release and to consult filings we have made and will make with the SEC for additional discussion concerning risks and uncertainties that may apply to our business and the ownership of our securities. The forward-looking statements contained in this press release are presented as of the date hereof, and we disclaim any duty to update such statements unless required by law.

Investor Contact
Anthony Nathan, Arq
Marc Silverberg, ICR
investors@arq.com

FAQ

What is the price per share for Arq's (ARQ) public offering?

Arq (ARQ) has priced its public offering at $5.25 per share of common stock.

How many shares is Arq (ARQ) offering in its September 2024 public offering?

Arq (ARQ) is offering 4,770,000 shares of common stock in its September 2024 public offering.

What are the expected gross proceeds from Arq's (ARQ) public offering?

The expected gross proceeds from Arq's (ARQ) public offering are approximately $25 million.

How does Arq (ARQ) plan to use the proceeds from its public offering?

Arq (ARQ) plans to use the proceeds for general corporate purposes, including working capital, capital expenditures, R&D, debt service, and potential acquisitions, with a focus on expanding granular activated carbon facilities.

When is Arq's (ARQ) public offering expected to close?

Arq's (ARQ) public offering is expected to close on or about September 23, 2024, subject to customary closing conditions.