MERC discloses going concern, covenant breach; Q2 loss widens as liquidity falls 56%

Filed August 6, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 31, 2025 · ~2 min read

Key Changes

• high

  Substantial doubt disclosed about ability to continue as going concern due to Jan 2027 Canadian Facility maturity ($85.5M drawn) and probable Q4 2026 German Facility covenant breach ($230M drawn); company projects insufficient cash flow to settle either obligation absent refinancing.

  Notes: Going Concern verify on EDGAR →
• high

  German Facility leverage ratio breached as of Q1 2026; waiver obtained through Q3 2026 but management expects probable breach again in Q4 2026. Waiver increased interest margin to 2.50%-4.25%, capped utilization at €300M, prohibited distributions to parent, and added cross-default provisions to senior notes and Canadian Facility.

  Notes: German Facility Covenant Breach view on EDGAR →
• high

  Aggregate liquidity collapsed 56% to $191.7M (June 30, 2026) from $438.1M a year earlier; cash fell to $78.8M from $146.5M while available revolver capacity dropped to $112.9M from $291.6M. Company used $100.8M cash in operations during the six months.

  MD&A: Liquidity verify on EDGAR →