Arq (ARQ) 8-KArq Announces $15 Million PIPE Transaction

On May 15, 2024, Arq, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors named therein (the “Purchasers”) for the private placement (the “Private Placement”) of an aggregate of 2,142,858 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $7.00 per Share. The aggregate gross proceeds for the Private Placement are expected to be approximately $15 million, before deducting offering expenses, and the Private Placement is expected to close on May 16, 2024, subject to customary closing conditions.

The Purchase Agreement contains customary representations, warranties, and agreements by the Company, indemnification obligations of the Company and the Purchasers, including for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), and other obligations of the parties. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such Purchase Agreement and are made as of specific dates; are solely for the benefit of the parties (except as specifically set forth therein); may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Purchase Agreement, instead of establishing matters as facts; and may be subject to standards of materiality and knowledge applicable to the contracting parties that differ from those applicable to the investors generally. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company.

In addition, on May 15, 2024 the Company and the Purchasers entered into a registration rights agreement (the "Registration Rights Agreement"), pursuant to which the Company agreed to file the registration statement (the “Registration Statement”) with the SEC within 10 calendar days after closing of the Private Placement (subject to certain exceptions) covering the Shares, to use its commercially reasonable efforts to have such Registration Statement declared effective within the time period set forth in the Registration Rights Agreement, and to keep the Registration Statement effective until the date that all registrable securities covered by the Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold by a non-affiliate of the Company without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.

The Private Placement is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. The Purchasers represented that they were accredited investors within the meaning of Rule 501(a) of Regulation D and were acquiring the Shares as principal for their own accounts and not with a view to or for distributing or reselling the Shares. The Shares sold and issued in the Private Placement are not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements.

The Company’s board of directors granted Purchasers an exemption under the Company’s Tax Asset Protection Plan, as amended (the “Plan”), dated May 5, 2017 for the acquisition or ownership of the Shares in the Private Placement, so that such acquisition and ownership of the Shares in the Private Placement will be deemed an Exempt Transaction under the Plan.

The foregoing descriptions of the Purchase Agreement and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement and the Registration Rights Agreement filed as Exhibits 10.1 and 10.2 respectively, to this Current Report on Form 8-K and incorporated herein by reference.