Arq, Inc. Announces Fourth Amendment to Credit, Security and Guaranty Agreement

GREENWOOD VILLAGE, CO, March 3, 2026 — Arq, Inc. (“Arq” or the “Company”), a specialty chemical company previously known as Advanced Emissions Solutions, Inc., announced that it has entered into Amendment No. 4 to its Credit, Security and Guaranty Agreement with MidCap Funding IV Trust and a group of lenders. This amendment introduces significant changes to the Company’s financial covenants, particularly the minimum liquidity requirements and the borrowing base for inventory, which could have direct implications for investors and shareholders.

Key Points of the Report

• Material Definitive Agreement: The Company filed an 8-K to disclose that on February 27, 2026, it entered into the fourth amendment of its major credit agreement with its primary lenders.
• Changes to Minimum Liquidity Requirements:
  • From December 10, 2025, through March 31, 2026, Arq is required to maintain a minimum liquidity of \$2.0 million.
  • Effective April 1, 2026, and at all times thereafter, the minimum liquidity threshold increases to \$5.0 million.
• Changes to Borrowing Base for Inventory:
  • From December 10, 2025, through March 31, 2026, 50% of the revolving loan limit can be used for inventory.
  • From April 1, 2026, and thereafter, this percentage decreases to 40%.
• Other Affirmations: The Company reaffirmed that all representations and warranties in the original Credit Agreement remain true and correct, except as amended.
• Signatories: The amendment was executed by Apollo Capital Management GP, LLC, as general partner of MidCap Funding IV Trust (Agent and Lender), and by Stacia Hansen, Chief Accounting Officer and Treasurer of Arq, Inc. and its subsidiaries.

Important Information for Shareholders

• Liquidity Requirements: The step-up in minimum liquidity, from \$2 million to \$5 million, is a material financial covenant that could impact the Company’s operational flexibility and working capital. Failure to meet these thresholds could result in a default under the credit agreement, which is a potentially price-sensitive risk.
• Borrowing Base Reduction: The reduction in the eligible percentage of inventory for the borrowing base from 50% to 40% after March 31, 2026, may limit the Company’s ability to draw on its revolving credit facility, affecting liquidity and possibly constraining growth or operational initiatives.
• Secured Debt Covenant: These amendments reflect lender demands for increased liquidity and reduced leverage, which may indicate a more cautious outlook from creditors regarding Arq’s financial position or market conditions.

Potential Share Price Impact

• Positive: The execution of this amendment shows Arq’s proactive engagement with its lenders to manage financial risk and maintain access to credit facilities.
• Negative: The stricter liquidity requirements and borrowing base limitations may signal increased risk, potential cash flow constraints, or expectations of higher volatility in the Company’s operations. These factors could impact investor sentiment and the Company’s share price.
• Market Attention: Investors should closely monitor Arq’s liquidity levels and compliance with these covenants in upcoming quarters, as any breach could have significant repercussions.

Other Notable Information

• Company Profile: Arq, Inc. (Nasdaq: ARQ) is a Colorado-based company listed on the Nasdaq Global Market, classified under Miscellaneous Chemical Products (SIC 2890).
• Corporate Actions: The Company is not an emerging growth company and has not elected to use any extended transition period for new or revised accounting standards.

Conclusion

The amendment to Arq’s Credit, Security and Guaranty Agreement is a significant event for shareholders, as it directly impacts the Company’s liquidity management and access to credit. The step-up in minimum liquidity requirements and the reduced inventory borrowing base, effective April 1, 2026, may affect Arq’s flexibility and operational capacity. Investors are advised to monitor future filings for updates on the Company’s compliance with these new covenants.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, an offer, or solicitation to buy or sell any securities. Investors should conduct their own due diligence or seek advice from a qualified financial advisor before making investment decisions. The author and publisher assume no responsibility or liability for any actions taken based on the information provided.

View Arq, Inc. Historical chart here