Strategic Optimization Review Update

Arq's strategic optimization review remains ongoing as the Company works to increase profitability and maximize the value of its asset base. The review has extended beyond the Red River Plant GAC facility to a broader operational assessment of the existing business, focused on maximizing furnace throughput and reducing unit costs, work that has already identified meaningful near-term opportunities to increase capacity and profitability.

The GAC component of the review is not fully complete but the Company has received cost estimates from two independent engineering consultants to finish the conversion and fix the issues previously discussed. Those estimates still include a wide range of contingencies that are subject to ongoing revision, with a construction and commissioning timeframe of around 12 months. The Company is continuing to evaluate and refine the GAC optimization process to ensure that the project will generate targeted returns.

GAC market fundamentals remain favorable ahead of the U.S. Environmental Protection Agency's April 2027 PFAS monitoring deadline, when water companies with PFAS contamination above the new 4 parts per trillion threshold must begin reporting PFAS numbers publicly. Against that backdrop, the Company is advancing a new high-value strategy "PAC for PFAS™": a highly engineered PAC product capable of removing PFAS contaminants in certain situations. The Company believes that this new product can support compliance for utilities marginally outside the threshold without the capital cost of new GAC equipment, and address PFAS and taste and odor at once for those already using PAC. Customer testing is ongoing, but the Company believes that PAC for PFAS™ could offer an attractive interim solution for customers and for Arq, which could lead to material near-term growth in volume and pricing from 2027 onward, ahead of any future GAC products.

Arq also remains in discussions with multiple parties to monetize its Corbin Facility and its related technologies, which represent additional optionality and a potential funding source. In asphalt, paving tests with a leading U.S. asphalt company continue, and recent trials at the NCAT Test Track, which simulates multiple years of wear in a fraction of the time, indicate that the inclusion of Corbin Wetcake as an additive has positive impacts on multiple performance metrics.