Arq, Inc. Signs Significant Fifth Amendment to Credit, Security and Guaranty Agreement with MidCap Funding IV Trust

Arq, Inc. (Nasdaq Global Market: ARQ) has executed a material amendment to its Credit, Security and Guaranty Agreement (the “Agreement”) with MidCap Funding IV Trust as Agent, alongside certain subsidiaries and lenders, as detailed in its latest Form 8-K filing. The Fifth Amendment, effective as of March 31, 2026, introduces several critical changes and updates to the original credit agreement dated December 27, 2024.

Key Highlights for Investors

• Amendment No. 5 Signed: The company and its subsidiaries, including ARQ LLC, Wharncliffe Asset Management LLC, Mine Four LLC, ARQ Series B, LLC, ARQ Solutions (ES), Inc., Adequity LLC, ARQ Solutions, LLC, ADA Analytics, LLC, and others, have entered into this amendment with MidCap Funding IV Trust and lenders managed by Apollo Capital Management.
• Nature of the Amendment: The Fifth Amendment modifies the terms of the existing Credit, Security and Guaranty Agreement. While the full text of the amendment is filed as Exhibit 10.1, certain schedules and exhibits have been omitted for confidentiality. However, the company undertakes to provide these upon request by the SEC.
• Material Terms and Changes: The summary of material terms suggests changes that may impact borrowing base calculations, financial covenants, or other operational or financial terms of the credit facility. Such amendments can directly affect liquidity, leverage, and the capital structure of Arq, Inc.
• Extended Maturity and Additional Flexibility: The agreement and the associated facilities remain in effect until at least August 2026, providing additional runway and flexibility for Arq, Inc. to manage its financing needs.
• Financial Covenants and Definitions Updated:
  • Borrowing Base: Defined as the sum of (i) 85% of the aggregate net amount of Eligible Accounts, plus (ii) other eligible collateral as specified. The precise composition and eligibility criteria for the borrowing base may have been updated.
  • Minimum Liquidity, Leverage Ratio, and Other Key Ratios: The amendment includes updates to definitions and calculations for the Total Leverage Ratio, Minimum Liquidity, and other key financial metrics, as reflected in the Table of Contents.
• Price Sensitive Information:
  • Liquidity, Leverage, and Covenants: Changes to borrowing base definitions, financial covenants, and related terms directly impact the company’s ability to access credit and meet obligations. If the company’s liquidity position improves, this may be viewed positively by the market. Conversely, tighter covenants or limits could be seen as risk factors.
  • Control Provisions and Change in Control: The amendment reiterates specific change-in-control provisions, which, if triggered, could result in acceleration of obligations under the credit facility. This is material for shareholders, as it could affect the company’s capital structure and strategic flexibility.

Shareholder Considerations

• Potential Impact on Share Price:
  • The amendment may enhance Arq, Inc.’s financial flexibility, which could be viewed favorably by investors, especially if it improves access to working capital or reduces borrowing costs.
  • Any adverse changes in covenants or borrowing base eligibility could constrain growth or increase risk, potentially impacting share price negatively.
• Confidentiality and Disclosure: Portions of the amendment and related schedules are confidential, but the company commits to providing them to the SEC upon request. Investors should monitor for any subsequent disclosures or regulatory updates.

Signatories

The amendment is duly executed on behalf of Arq, Inc. by Chief Executive Officer Robert Rasmus and Chief Accounting Officer & Treasurer Stacia Hansen, as well as by authorized signatories of MidCap Funding IV Trust and its investment manager, Apollo Capital Management.

Conclusion

The execution of this Fifth Amendment to the Credit, Security and Guaranty Agreement is a material event for Arq, Inc., as it modifies the terms of its primary credit facility and impacts ongoing financial operations. Shareholders and potential investors should review the full text of the amendment (available as Exhibit 10.1) for further details, and monitor for any subsequent disclosures that may provide additional insight into the financial impact of these changes.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are urged to review the complete SEC filings and consult their financial advisors before making any investment decisions. The information herein is based on the company’s public disclosures as of the date of the filing and may be subject to change.

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