Arq Amends Credit Agreement for Fourth Time, Tightening Liquidity and Borrowing Terms

summarizeSummary

Arq, Inc. entered into a fourth amendment to its revolving credit agreement, which includes more restrictive borrowing base calculations and a substantially increased minimum liquidity covenant, effective April 1, 2026.

check_boxKey Events · Financing and Capital Events · ARQ

• Fourth Credit Agreement Amendment

  Arq, Inc. and its subsidiaries entered into the fourth amendment to their Credit, Security and Guaranty Agreement, originally dated December 27, 2024, with MidCap Funding IV Trust. This follows previous amendments on May 6, 2025, December 9, 2025, and January 28, 2026.

• Reduced Borrowing Base Eligibility

  Effective April 1, 2026, the percentage of eligible inventory and accounts receivable that can be included in the borrowing base will decrease. For instance, eligible inventory will drop from 50% to 40% of the Revolving Loan Limit, and individual account debtor concentration will decrease from 40% to 25%.

• Increased Minimum Liquidity Covenant

  The minimum liquidity required for the company will increase from $2.0 million to $5.0 million, effective April 1, 2026, and at all times thereafter. This represents a significant increase in the cash the company must maintain.

auto_awesomeAnalysis · ARQ · Industrial Applications And Services

This fourth amendment to Arq's credit agreement in just over a year signals ongoing financial pressure and increased oversight from its lenders. The reduction in eligible inventory and accounts receivable for the borrowing base will restrict the company's future access to capital. Concurrently, the significant increase in the minimum liquidity covenant from $2.0 million to $5.0 million starting April 1, 2026, will demand more stringent cash management and could limit operational flexibility. Investors should view these tighter terms as a material indicator of the company's financial health and its ability to secure favorable financing.