Arq, Inc.

Previous wording

Our primary products are comprised of AC, which is produced from a variety of carbonaceous raw materials. Our AC products include both powdered activated carbon ("PAC") and granular activated carbon ("GAC"). Additionally, we own the Five Forks Mine, a lignite mine located in Saline, Louisiana, that currently supplies the primary raw material for the manufacturing of our products. Additionally, we control bituminous coal waste reserves and own a manufacturing facility, both located in Corbin, Kentucky (the "Corbin Facility"), and a process to recover and purify the bituminous coal fines for sale or further conversion to GAC products. Using the Corbin Facility's manufacturing process, we convert coal waste into a purified, microfine carbon powder known as Arq powder TM("Arq Powder"). On August 6, 2025, we announced that we had completed our commissioning activities related to the Red River Plant expansion (the "Red River Project"), and anticipate using Arq Powder as a feedstock to manufacture high-quality GAC products for sale in the APT and other markets during the second half of 2025.

Current wording

Our primary products are comprised of AC, which is produced from a variety of carbonaceous raw materials. Our AC products include both powdered activated carbon ("PAC") and granular activated carbon ("GAC"). Additionally, we own the Five Forks Mine, a lignite mine located in Saline, Louisiana, that currently supplies the primary raw material for the manufacturing of our products. We also control bituminous coal waste reserves and own a manufacturing facility, both located in Corbin, Kentucky (the "Corbin Facility"), and a process to recover and purify the bituminous coal fines for sale or further conversion to GAC products. Using the Corbin Facility's manufacturing process, we convert coal waste into a purified, microfine carbon powder known as Arq powder TM("Arq Powder"). On August 6, 2025, we announced that we had reached initial commercial production levels at our Red River Plant's GAC Facility (the "Red River Project"), enabling us to use Arq Powder and other bituminous coal fines as a feedstock to manufacture high-quality GAC products for sale in the APT and other markets. The initial production ramp-up of the Red River Project was adversely impacted during the third quarter of 2025 by previously disclosed design flaws in our GAC Facility, both alone as well as in combination with the inherent variability of the Arq Powder feedstock used to manufacture our GAC products. As a result of these adverse impacts, we now expect to reach GAC nameplate capacity around mid-year 2026. We now also expect our final investment decision with respect to a potential second GAC line at our Red River Plant to coincide with reaching GAC nameplate capacity in mid-year 2026.

Previous wording

We believe Arq Powder has additional potential to enable us to access new markets and applications. We intend to secure customer interest in Arq Powder as an additive into other markets, such as components for asphalt. These products utilizing Arq Powder are expected to have a lower carbon footprint compared to similar products utilizing conventional materials and have demonstrated other beneficial performance attributes during lab-scale customer testing. These applications are currently in various stages of proof of concept testing or preliminary customer testing.

Current wording

In addition to its use as a feedstock for our GAC products, we believe Arq Powder has additional potential to enable us to access new markets and applications. We intend to secure customer interest in Arq Powder as an additive into other markets, such as components for asphalt, or for use in the purified coal and synthetic graphite industries. In addition, we are exploring uses for certain rare earth minerals and critical elements that can be isolated during the manufacturing process at our Corbin Facility for use in a variety of applications. These applications are currently in various stages of proof of concept testing or preliminary customer testing.

Previous wording

For the three and six months ended June 30, 2025, we experienced an increase in demand for our products from certain coal-fired dispatch and electricity power generation customers compared to the same period in 2024. This was primarily due to higher natural gas prices in 2025, resulting in several large utility customers opting to use coal versus natural gas as a primary source for power generation, and the year to date impact of moderate to severe temperatures during the winter and spring seasons, resulting in higher demand for power generation compared to 2024. We expect that natural gas prices will remain relatively consistent through 2025 due to increased demand for liquid natural gas exports, offset by increases in anticipated natural gas inventory levels.

Current wording

For the three and nine months ended September 30, 2025, we experienced an increase in demand for our products from certain coal-fired dispatch and electricity power generation customers compared to the same period in 2024. This was primarily due to higher natural gas prices in 2025, resulting in several large utility customers opting to use coal versus natural gas as a primary source for power generation, and the year to date impact of moderate to severe temperatures during the winter and summer seasons, resulting in higher demand for power generation compared to 2024. Additionally, demand for power generation has and continues to grow driven by macroeconomic trends, such as increased consumption related to data and computer centers, electric vehicles, and other large scale power consumers. We expect that natural gas prices will remain relatively consistent through 2025 due to increased demand for liquid natural gas exports, offset by increases in anticipated natural gas inventory levels.

Previous wording

On April 10, 2024, the United States Environmental Protection Agency ("EPA") issued its first nationally enforceable PFAS National Primary Drinking Water Regulation, confirming a material tightening to an existing framework of guidance and regulations relating to the control and limitation of PFAS in municipal water. The regulatory changes were anticipated to phase in over an approximate five-year period; however, the EPA has indicated that it will pursue a rulemaking in the fall of 2025 to potentially extend the compliance date from 2029 to 2031. We expect the implementation of the announced regulations will drive a material increase in GAC demand in the water purification market.

Current wording

On April 10, 2024, the United States Environmental Protection Agency ("EPA") issued its first nationally enforceable PFAS National Primary Drinking Water Regulation, confirming a material tightening to an existing framework of guidance and regulations relating to the control and limitation of PFAS in municipal water. The regulatory changes were anticipated to phase in over an approximate five-year period; however, the EPA has indicated that it will potentially extend the compliance date from 2029 to 2031. We expect the implementation of the announced regulations will drive a material increase in GAC demand in the water purification market.

Previous wording

For the three and six months ended June 30, 2025, we recognized net loss of $2.1 million and $1.9 million, compared to net loss of $2.0 million and $5.4 million for the three and six months ended June 30, 2024. The most significant factors impacting results between periods for the three months ended June 30, 2025 and June 30, 2024 were increases in revenue due to improved pricing and demand for our products, offset by increased research and development expense attributed to pre-production testing of our GAC Facility. Additionally, our results for the three and six months ended June 30, 2025 were positively impacted by decreases in selling, general and administrative expenses.

Current wording

For the three and nine months ended September 30, 2025, we recognized net loss of $0.7 million and $2.6 million, compared to net income of $1.6 million and net loss of $3.8 million for the three and nine months ended September 30, 2024, respectively. The most significant factors impacting results between periods for the three months ended September 30, 2025 and September 30, 2024 were increases in revenue due to improved pricing and demand for our products, offset by increased cost of revenue due to fixed production costs associated with initial production at our GAC Facility. Additionally, our results for the three and nine months ended September 30, 2025 were impacted by increased research and development expense attributed to pre-production testing and development of our GAC Facility and depreciation expense, partially offset by decreases in selling, general and administrative expenses.

Previous wording

For the three months ended June 30, 2025, revenue increased from the comparable quarter in 2024 primarily driven by an increase in volumes sold and higher pricing, which contributed revenue increases of approximately $1.4 million and $1.6 million, respectively. The increase in volumes sold was due in part to higher natural gas prices compared to the same quarter in 2024, which contributed to increased utilization of coal-fired generation and increased demand for our products by customers in the power generation market. The average Henry Hub natural gas spot prices ($/MMBtu) for the three months ended June 30, 2025 and 2024 were $3.19 and $2.08, respectively.

Current wording

For the three months ended September 30, 2025, revenue increased from the comparable quarter in 2024 primarily driven by higher pricing, which contributed approximately $1.3 million of total revenue increase. The increase was offset by a decrease in volumes sold, causing a decrease of $0.9 million in revenue from the comparable quarter in 2024. The volume decreases were primarily attributable to the timing of sales between the three months ended June 30, 2025 and the three months ended September 30, 2025 in the water purification market. These decreases in volumes were largely offset by an overall increase in volumes sold to customers in the power-generation market, driven by continued higher natural gas prices between periods. The average Henry Hub natural gas spot prices ($/MMBtu) for the three months ended September 30, 2025 and 2024 were $3.03 and $2.11, respectively.

Previous wording

We expect that revenue and gross margin will continue to be positively impacted by our product price increases and our efforts to move our product mix to higher margin products. We anticipate that the product price increases will help offset fluctuations in volumes due to prices of competing alternative power generation sources or retirement of coal-fired power generating units impacting the demand for our AC and chemical products related to power generation. Additionally, our revenues continue to be impacted by electricity demand driven by seasonal weather and related power generation needs.

Current wording

We expect that revenue will continue to be positively impacted by our product price increases. As production of our GAC products at our Red River Plant increases, we expect that gross margin will improve as the impact of fixed production costs on our gross margin lessens. Further, we continue to focus on improving our product mix to higher margin products. Our revenues continue to be impacted by electricity demand driven by seasonal weather and power generation needs.

Previous wording

A summary of the components of selling, general and administrative expenses for the three months ended June 30, 2025 and 2024, exclusive of cost of revenue items (presented above), is as follows:

Current wording

A summary of the components of selling, general and administrative expenses for the three months ended September 30, 2025 and 2024 is as follows:

Previous wording

General and administrative expenses decreased for the three months ended June 30, 2025 compared to the corresponding quarter in 2024 by approximately $0.4 million, primarily due to a decrease in rent and occupancy expenses due to the allocation of expense related to our lease of the Corbin site to Cost of revenue, exclusive of depreciation and amortization due to initial production runs during the quarter. Additional decreases during the three months ended June 30, 2025 were due to lower expenses associated with advertising, third-party services, and licenses and fees, partially offset by an increase in travel expense due to increased personnel site visits to our plant locations during the three months ended June 30, 2025.

Current wording

General and administrative expenses decreased for the three months ended September 30, 2025 compared to the corresponding quarter in 2024 by approximately $1.4 million, primarily due to a decrease in rent and occupancy expenses due to the allocation of expense related to our lease of the Corbin Facility to Cost of revenue, exclusive of depreciation and amortization due to initial production runs during the quarter. Additional decreases during the three months ended September 30, 2025 were due to lower expenses associated with third-party services, state franchise taxes, sales and use taxes, and director fees.

Previous wording

Research and development expense increased for the three months ended June 30, 2025 compared to the corresponding quarter in 2024 primarily due to expenses related to feedstock consumed during initial testing of the GAC Facility during the three months ended June 30, 2025.

Current wording

Research and development expense increased for the three months ended September 30, 2025 compared to the corresponding quarter in 2024 by 1.8 million, primarily due to feedstock consumed and other expenses incurred related to outside services engaged during the three months ended September 30, 2025 related to pre-commencement testing of the GAC Facility prior to reaching commercial production on August 6, 2025.

Previous wording

Depreciation, amortization depletion and accretion expense increased by approximately $0.8 million for the three months ended June 30, 2025 compared to the corresponding quarter in 2024, primarily due to decreased absorption in inventory of $0.9 million, partially offset by decreased depreciation expense related to a lower finance lease asset base.

Current wording

Depreciation, amortization depletion and accretion expense increased by approximately $1.0 million for the three months ended September 30, 2025 compared to the corresponding quarter in 2024, primarily due to a significant amount of plant and equipment placed in service upon commissioning of our GAC Facility, partially offset by decreased depreciation expense related to a lower finance lease right of use asset base.

Previous wording

A summary of the components of other (expense) income, net for the three months ended June 30, 2025 and 2024 is as follows:

Current wording

A summary of the components of other (expense) income for the three months ended September 30, 2025 and 2024 is as follows:

Previous wording

Earnings from equity method investments for the six months ended June 30, 2025 and 2024 represented cash distributions from Tinuum Group. Tinuum Group continues to wind down their services into 2025.

Current wording

Earnings from equity method investments for the three months ended September 30, 2025 and 2024 represented cash distributions from Tinuum Group. Tinuum Group continues to wind down its operations in 2025.

Previous wording

Interest expense decreased for the three months ended June 30, 2025 compared to the corresponding quarter in 2024 primarily due to lower average interest rates on the Company's outstanding debt facilities, partially offset by higher average outstanding balances in the current period.

Current wording

Interest expense decreased for the three months ended September 30, 2025 compared to the corresponding quarter in 2024 primarily due to lower average interest rates on the Company's outstanding debt facilities, partially offset by higher average outstanding balances in the current quarter.

Previous wording

The decrease in Other for the three months ended June 30, 2025 as compared to the corresponding quarter in 2024 was primarily driven by lower interest income of $0.2 million due to lower average balances in our cash sweep accounts during the current quarter compared to the prior year quarter.

Current wording

Other income increased for the three months ended September 30, 2025 compared to the corresponding quarter in 2024 primarily due to a gain of $0.7 million related to an insurance claim related to mining equipment at our Five Forks Mine recognized in the three months ended September 30, 2025, partially offset by lower interest income of $0.2 million due to lower average balances in our cash sweep accounts during the current quarter compared to the prior year quarter.

Previous wording

For the three months ended June 30, 2025 and 2024, we had pretax loss of $2.1 million and $1.9 million, respectively. For the three months ended June 30, 2025, we had an effective tax rate of zero and recorded no income tax benefit due to the recording of a full valuation allowance on our deferred tax assets. For the three months ended June 30, 2024, we had an effective tax rate of 2% as a result of recording income tax expense for an out of period state income tax assessment, but we recorded no federal income tax benefit for this quarter due to the recording of a full valuation allowance on our deferred tax assets.

Current wording

For the three months ended September 30, 2025 and 2024, we had pretax loss of $0.7 million and pretax income of $1.6 million, respectively. For the three months ended September 30, 2025, we had an effective tax rate of zero and recorded no income tax benefit due to the recording of a full valuation allowance on our deferred tax assets. For the three months ended September 30, 2024, we recorded no income tax expense based on our forecast of pretax loss for the year ended December 31, 2024.

Previous wording

For the six months ended June 30, 2025, revenue increased from the comparable period in 2024 primarily driven by increased volumes and higher pricing, which contributed revenue increases of approximately $3.8 million and $4.5 million, respectively. The increase in product sales volumes was in part due to demand from power generation customers primarily due to higher natural gas prices compared to the same period in 2024, which contributed to increased utilization of coal-fired generation and increased demand for our products. The average Henry Hub natural gas spot prices ($/MMBtu) for the six months ended June 30, 2025 and 2024 were $3.67 and $2.11, respectively. An additional increase in revenues of approximately $0.4 million for the six months ended June 30, 2025 from the corresponding period in 2024 was due to favorable product mix.

Current wording

For the nine months ended September 30, 2025, revenue increased from the comparable period in 2024 primarily driven by higher pricing and increased volumes, which contributed revenue increases of approximately $5.7 million and $3.0 million, respectively. The increase in product sales volumes was in part due to demand from power generation customers primarily resulting from higher natural gas prices compared to the same period in 2024, which contributed to increased utilization of coal-fired generation and increased demand for our products. The average Henry Hub natural gas spot prices ($/MMBtu) for the nine months ended September 30, 2025 and 2024 were $3.45 and $2.11, respectively. In addition, revenue increased $0.3 million from the comparable period in 2024 from favorable product mix.

Previous wording

Gross margin, exclusive of depreciation and amortization, remained consistent for the six months ended June 30, 2025 compared to the corresponding period in 2024. Gross margin for the six months ended June 30, 2025 was primarily impacted by favorable pricing mix as described above, offset by increases due to pre-production costs associated with the GAC Facility and increased allocation of expenses to Cost of revenue, exclusive of depreciation and amortization from initial production phases during the six months ended June 30, 2025.

Current wording

Gross margin, exclusive of depreciation and amortization, decreased for the nine months ended September 30, 2025 compared to the corresponding period in 2024. Gross margin for the nine months ended September 30, 2025 was primarily impacted by increases to Cost of revenue, exclusive of depreciation and amortization due to fixed production costs associated with the GAC Facility and amounts recognized upon completion of the Red River Project, as described above.

Previous wording

A summary of the components of our operating expense for the six months ended June 30, 2025 and 2024 is as follows:

Current wording

A summary of the components of our operating expense for the nine months ended September 30, 2025 and 2024 is as follows:

Previous wording

A summary of the components of selling, general and administrative expenses for the six months ended June 30, 2025 and 2024, exclusive of cost of revenue items (presented above), is as follows:

Current wording

A summary of the components of selling, general and administrative expenses for the nine months ended September 30, 2025 and 2024 is as follows:

Previous wording

Payroll and benefits decreased for the three months ended June 30, 2025 compared to the corresponding quarter in 2024 by approximately $0.9 million, primarily due to $0.5 million related to capitalization of payroll and benefits associated with our Corbin Facility, which became operational in January 2025, as well as decreased salaries and wages. Additionally, payroll and benefits expense decreased by approximately $0.4 million for the three months ended June 30, 2025 compared to the corresponding quarter in 2024 primarily due to reduced incentive compensation.

Current wording

Payroll and benefits decreased for the nine months ended September 30, 2025 compared to the corresponding period in 2024 by approximately $3.4 million, primarily due to $1.6 million driven by the allocation of expense related to payroll and benefits associated with our Corbin Facility to Cost of revenue, exclusive of depreciation and amortization, as well as overall decreased salaries and wages, an additional $1.5 million due to decreased accrued incentive compensation related to a revision to anticipated metric achievement and approximately $0.2 million due to lower employer payroll tax expenses driven by decreases in other payroll expenses.

Previous wording

Legal and professional fees increased for the six months ended June 30, 2025 compared to the corresponding period in 2024 primarily due to legal fees incurred related to litigation costs during the six months ended June 30, 2025.

Current wording

Legal and professional fees decreased for the nine months ended September 30, 2025 compared to the corresponding period in 2024 primarily due to decreased consulting expenses, partially offset by legal fees incurred related to litigation costs during the nine months ended September 30, 2025.

Previous wording

General and administrative expenses decreased for the six months ended June 30, 2025 compared to the corresponding period in 2024 by approximately $1.2 million. This decrease was due to lower rent and occupancy expenses of $0.4 million during the six months ended June 30, 2025, primarily due to allocation of expenses related to lease of the Corbin site to the Cost of revenue, exclusive of depreciation and amortization, as initial production runs began during the period. Additional decreases were due to lower expenses related to third-party services, state franchise taxes, sales and use taxes, advertising, and licenses and fees.

Current wording

General and administrative expenses decreased for the nine months ended September 30, 2025 compared to the corresponding period in 2024 by approximately $2.6 million. This decrease was primarily due to lower rent and occupancy expenses of $1.0 million during the nine months ended September 30, 2025, which was primarily due to allocation of expenses related to lease of the Corbin Facility site to Cost of revenue, exclusive of depreciation and amortization, as initial production runs began during the period. Additional decreases were due to lower expenses related to third-party services, state franchise taxes, sales and use taxes, licenses and fees, director fees, and advertising.

Previous wording

Research and development expense increased for the six months ended June 30, 2025 compared to the corresponding period in 2024, primarily due to expenses related to feedstock consumed during initial testing of the GAC Facility during the six months ended June 30, 2025, partially offset by expenses incurred by conducting product qualification testing with potential lead-adopters as part of our ongoing GAC contracting process and increased research and development payroll costs during the six months ended June 30, 2024.

Current wording

Research and development expense increased for the nine months ended September 30, 2025 compared to the corresponding period in 2024 by approximately $2.8 million. The increase was primarily due to expenses related to feedstock consumed and outside services engaged during initial testing of the GAC Facility of $2.9 million and $0.6 million, respectively, during the nine months ended September 30, 2025. The increases were partially offset by expenses incurred in connection with conducting product qualification testing with potential lead-adopters as part of our ongoing GAC contracting process and increased research and development payroll costs during the nine months ended September 30, 2024, which expenses and costs were not repeated during the current period.

Previous wording

Depreciation, amortization, depletion and accretion expense increased by approximately $1.3 million for the six months ended June 30, 2025 compared to the corresponding period in 2024, primarily due to decreased absorption in inventory of $1.6 million, partially offset by decreased depreciation expense related to a lower finance lease asset base and decreased amortization on intangible assets that were fully amortized during six months ended June 30, 2025.

Current wording

Depreciation, amortization, depletion and accretion expense increased by approximately $2.3 million for the nine months ended September 30, 2025 compared to the corresponding period in 2024, primarily due to decreased absorption in inventory of $1.9 million driven by lower inventory balances, partially offset by decreased amortization on intangible assets that were fully amortized during nine months ended September 30, 2025.

Previous wording

Loss on sale of assets for the six months ended June 30, 2025 related to the disposal of construction assets no longer in use.

Current wording

Loss on sale of assets for the nine months ended September 30, 2025 related to the disposal of construction assets no longer in use. Gain on sale of assets for the nine months ended September 30, 2024 related to a gain on the sale of equipment.

Previous wording

A summary of the components of other income (expense), net for the six months ended June 30, 2025 and 2024 is as follows:

Current wording

A summary of the components of other income (expense) for the nine months ended September 30, 2025 and 2024 is as follows:

Previous wording

Interest expense decreased slightly for the six months ended June 30, 2025 compared to the corresponding quarter in 2024 primarily due to lower average interest rates on the Company's outstanding debt facilities, partially offset by higher average outstanding balances in the current period.

Current wording

Interest expense decreased for the nine months ended September 30, 2025 compared to the corresponding quarter in 2024 primarily due to lower average interest rates on the Company's outstanding debt facilities, partially offset by higher average outstanding balances in the current period.

Previous wording

The decrease in Other for the six months ended June 30, 2025 was primarily driven by a decrease in interest income of $0.5 million due to lower balances in the Company's cash sweep accounts during the current period compared to the prior year period.

Current wording

The decrease in Other income for the nine months ended September 30, 2025 was primarily driven by a decrease in interest income of $0.7 million due to lower balances in the Company's cash sweep accounts during the current period compared to the prior year period, partially offset by a gain related to an insurance claim related to equipment at our Five Forks Mine during the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2025 and 2024, we had pretax losses of $1.9 million and $5.4 million, respectively. For the six months ended June 30, 2025, we had an effective tax rate of zero and recorded no income tax benefit due to the recording of a full valuation allowance. For the six months ended June 30, 2024 we had an effective tax rate of 1% as result of recording out of period state income tax expense related to a state assessment, but we recorded no federal income tax benefit for this period due to the recording of a full valuation allowance on our deferred tax assets.

Current wording

For the nine months ended September 30, 2025 and 2024, we had pretax losses of $2.6 million and $3.7 million, respectively. For the nine months ended September 30, 2025, we had an effective tax rate of zero and recorded no income tax benefit due to the recording of a full valuation allowance on our deferred tax assets. For the nine months ended September 30, 2024 we had an effective tax rate of 1% as result of recording out of period state income tax expense related to a state assessment, but we recorded no federal income tax benefit for this period due to the recording of a full valuation allowance on our deferred tax assets.

Previous wording

To supplement our financial information presented in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), we provide certain supplemental financial measures, including EBITDA and Adjusted EBITDA, which are measurements that are not calculated in accordance with U.S. GAAP. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA reduced by non-cash gains, increased by GAC Facility pre-production feedstock, share-based compensation expense, other non-cash losses and non-recurring costs and fees. EBITDA and Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income (loss) in accordance with U.S. GAAP as a measure of performance. See below for a reconciliation from net income (loss), the nearest U.S. GAAP financial measure, to EBITDA and Adjusted EBITDA.

Current wording

To supplement our financial information presented in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), we provide certain supplemental financial measures, including EBITDA and Adjusted EBITDA, which are measurements that are not calculated in accordance with U.S. GAAP. EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and Adjusted EBITDA is defined as EBITDA reduced by non-cash gains, increased by GAC Facility pre-production feedstock, share-based compensation expense, other non-cash losses and non-recurring costs and fees. EBITDA and Adjusted EBITDA should be considered in addition to, and not as a substitute for, net (loss) income in accordance with U.S. GAAP as a measure of performance. See below for a reconciliation from net (loss) income, the nearest U.S. GAAP financial measure, to EBITDA and Adjusted EBITDA.

Previous wording

The following table reconciles net loss, our most directly comparable as-reported financial measure calculated in accordance with U.S. GAAP, to EBITDA (loss) and Adjusted EBITDA.

Current wording

The following table reconciles net (loss) income, our most directly comparable as-reported financial measure calculated in accordance with U.S. GAAP, to EBITDA and Adjusted EBITDA.

Previous wording

(2)Represents non-cash stock-based compensation expenses that are included within "Cost of revenue, exclusive of depreciation and amortization" and "Selling, general and administrative" expenses in the Condensed Consolidated Statements of Operations. Previously reported Adjusted EBITDA (loss) for the three and six months ended June 30, 2024 has been revised to include non-cash stock-based compensation expense as an adjustment to Adjusted EBITDA (loss).

Current wording

(1)Represents non-cash stock-based compensation expenses that are included within "Cost of revenue, exclusive of depreciation and amortization" and "Selling, general and administrative" expenses in the Condensed Consolidated Statements of Operations. Previously reported Adjusted EBITDA for the three and nine months ended September 30, 2024 has been revised to include non-cash stock-based compensation expense.

Previous wording

(1)Represents expenses related to feedstock utilized in pre-production testing of our GAC Facility during the three months ended June 30, 2025 included within "Research and development" expense in the Condensed Consolidated Statements of Operations.

Current wording

(2)Represents expenses related to feedstock utilized in pre-production testing of our GAC Facility during the three and nine months ended September 30, 2025 included within "Research and development" expense in the Condensed Consolidated Statements of Operations.

Previous wording

Cash and restricted cash decreased from $22.2 million as of December 31, 2024 to $15.4 million as of June 30, 2025. The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024, respectively:

Current wording

Cash and restricted cash decreased from $22.2 million as of December 31, 2024 to $15.5 million as of September 30, 2025. The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024:

Previous wording

Cash flows used in operating activities for the six months ended June 30, 2025 was $5.3 million, which represented a net increase of $2.9 million from cash used in operating activities for the six months ended June 30, 2024 of $2.4 million. The net increase was primarily attributable to net changes in working capital resulting in an increase of $7.8 million in cash outflows between periods, primarily due to increases in inventory and receivables balances. This increase was partially offset by a decrease in net loss of $3.5 million.

Current wording

Cash flows provided by operating activities for the nine months ended September 30, 2025 was zero, which represented a net decrease of $5.2 million from cash provided by operating activities for the nine months ended September 30, 2024 of $5.3 million. The net decrease in cash flow from operating activities was primarily attributable to net changes in working capital resulting in a decrease of $8.4 million in cash flow between periods, primarily due to increases in prepaid and other current asset balances and decreases in accounts payable and accrued expense balances. These decreases were partially offset by an increase in Depreciation, amortization, depletion and accretion of $2.3 million and a decrease in net loss for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 of $1.2 million.

Previous wording

Cash flows used in investing activities decreased for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 by $23.3 million primarily as a result of a decrease in property, plant and equipment additions of $23.2 million from construction activities related to the expansion of our Red River Plant.

Current wording

Cash flows used in investing activities decreased for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 by $34.3 million primarily as a result of a decrease in property, plant and equipment additions of $34.4 million from construction activities related to the commissioning of our Red River Plant.

Previous wording

Cash flows provided by financing activities for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 decreased by $10.3 million primarily due to net proceeds of $15.8 million from common stock placements completed in 2024, offset by an increase in net borrowings on debt facilities of $4.7 million and a decrease in repurchase of common stock to satisfy tax withholdings of $0.6 million.

Current wording

Cash flows provided by financing activities for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 decreased by $39.0 million primarily due to net proceeds of $42.4 million from common stock placements completed in 2024, offset by an increase in net borrowings on debt facilities of $2.1 million and a decrease in repurchase of common stock to satisfy tax withholdings of $1.0 million.

Previous wording

During the six months ended June 30, 2025, we continued to incur capital spend for additional equipment, labor, and project costs towards the completion of the Red River Project. On August 6, 2025, we announced completion of the commissioning phase of the Red River Project and achieved the first commercial production of our new GAC products. To meet this target, we incurred additional cost in excess of our originally forecasted amounts for additional equipment testing and project costs, which were funded with cash on hand, borrowing availability under the Revolving Credit Facility, and ongoing cost reduction initiatives.

Current wording

During the nine months ended September 30, 2025, we continued to incur capital spend for additional equipment, labor, and project costs towards the completion of the Red River Project. On August 6, 2025, we announced completion of the commissioning phase of the Red River Project and achieved the first commercial production of our new GAC products. We incurred additional cost in excess of our originally forecasted amounts, which were funded with cash on hand, borrowing availability under the Revolving Credit Facility, and ongoing cost reduction initiatives.

Previous wording

In January 2025, we commissioned the Corbin Facility. In April 2025, after a review of required commissioning material and inventory requirements for the remainder of 2025, we elected to reduce operations at our Corbin Facility. We plan to resume normal Corbin operations in the second half of the third quarter.

Current wording

In January 2025, we commissioned the Corbin Facility. In April 2025, after a review of required commissioning material and inventory requirements for the remainder of 2025, we elected to temporarily reduce operations at our Corbin Facility. We resumed operations at the Corbin Facility in August 2025.