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What changed in Sky Quarry Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Sky Quarry Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+334 added−269 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Sky Quarry Inc.'s 2025 10-K

334 paragraphs added · 269 removed · 216 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

70 edited+29 added−20 removed38 unchanged
Biggest changeWe believe that the ASR Facility design will be capable of remediating waste asphalt shingles into their basic components - asphalt cement, shingle granules, sand aggregate, limestone and fiberglass - utilizing the ECOSolv separation process. These components will be sold for use as binding material and tar coat to the asphalt paving industry or to roofing shingle manufacturers.
Biggest changeStrategically, we are reviewing the opportunity to process waste asphalt shingle pellets from the front-end modules that could potentially be shipped initially to the PR Spring Facility for secondary remediation while “back end” modules could be used for the distillation process to separate the solvents. 9 Remediating waste asphalt shingles into their basic components of asphalt cement, shingle granules, sand aggregate, limestone and fiberglass could be sold for use as binding material and tar coat, to the asphalt paving industry, or to roofing shingle manufacturers.
RAP usage during the 2022 paving season reduced the need for an estimated 26.9 million barrels of asphalt binder and more than 93 million tons of aggregate. RAP storage for future use also reduced the needed landfill space by 68.2 million cubic yards.
RAP usage during the 2022 paving season reduced the need for an estimated 26.9 million barrels of asphalt binder and more than 93 million tons of aggregate. RAP storage for future use also reduced the landfill space needed by 68.2 million cubic yards.
The OSHA hazard communication standard, the EPA community right-to-know regulations under the Title III of the Comprehensive Environmental Response, Compensation, and Liability Act and similar state laws require that we organize and/or disclose information about hazardous materials used or produced in our operations.
The OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of the Comprehensive Environmental Response, Compensation, and Liability Act and similar state laws require that we organize and/or disclose information about hazardous materials used or produced in our operations.
The crude oil is processed through various refining units into products and where they are stored in the refinery’s approximately 73,800 barrels of refined product specific tankage. Revenue Streams Foreland produces diesel, vacuum gas oil, naphtha and asphalt paving liquids, which is then sold through short-term and long-term contracts to our established long-term customers and on the spot market.
The crude oil is processed through various refining units into products and where they are stored in the refinery’s approximately 73,800 barrels of refined product specific tankage. Revenue Streams Foreland produces diesel, vacuum gas oil (VGO), naphtha and asphalt paving liquids, which is then sold through short-term and long-term contracts to our established long-term customers and on the spot market.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the first registered offering of our securities, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. 11
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the first registered offering of our securities, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. 14
All of the crude oil is delivered to the refinery by truck. Refined products are transported by third parties to wholesale, bulk, and retail customers primarily across Nevada, Utah and California and other North American jurisdictions. 5 Crude oil is received into the refinery tank farm and crude oil terminals, which include over 29,500 barrels of oil storage.
All the crude oil is delivered to the refinery by truck. Refined products are transported by third parties to wholesale, bulk, and retail customers primarily across Nevada, Utah and California and other North American jurisdictions. Crude oil is received into the refinery tank farm and crude oil terminals, which include over 29,500 barrels of oil storage.
See “ Risk Factors—General Risks Related to Our Business—We depend on several significant customers, and a loss of one or more significant customers could adversely affect our results of operations .” Competition We compete with a multitude of foreign, regional, and local competitors that vary by market.
See “ Risk Factors—General Risks Related to Our Business—We depend on several significant customers, and a loss of one or more significant customers could adversely affect our results of operations .” 10 Competition We compete with a multitude of foreign, regional, and local competitors that vary by market.
The development of oil sands domestically has the potential to turn the United States into a major supplier of heavy oil to world markets. To date, oil sands development has been limited by the absence of viable technology that can extract heavy oil and bitumen from the oil sands deposits in an economical and environmentally responsible manner.
The development of oil sands domestically has the potential to turn the United States into a major supplier of heavy oil to world markets. To date, oil sands development has been limited by the absence of viable technology that can extract heavy oil and bitumen from the oil 6 sands deposits in an economical and environmentally responsible manner.
The target deposit is topographically high, which has resulted in erosion of much of the non-reservoir overburden. The mine pits have been proposed in an ideal location where the target resource is very shallow and thick with minimal overburden and outcropping at the surface in some locations.
The target deposit is topographically high, which has resulted in erosion of much of the non-reservoir overburden. The mine pits have been proposed in an ideal location where the target resource is very shallow and thick with minimal 8 overburden and outcropping at the surface in some locations.
We will also pursue both earned and paid placements in newsletters and media outlets at local and national levels to further enhance visibility to amplify our message. Customers Our customers generally include refineries that use our products for feedstock to process into finished petroleum products.
We will also pursue both earned and paid placements in newsletters and media outlets at local and national levels to further enhance visibility to amplify our message. Customers Our customers generally include refineries that use our products for feedstock to process them into finished petroleum products.
The term “waters of the United States” has been broadly defined to include inland water bodies, including wetlands and intermittent streams. The OPA assigns joint and several strict liability to each responsible party for oil removal costs and a variety of public and private damages.
The term “waters of the United States” has been broadly defined to include inland water bodies, including wetlands and intermittent streams. The OPA assigns joint and strict liability to each party responsible for oil removal costs and a variety of public and private damages.
Projects scheduled to start or already under construction include a brand-new highway, new interchanges, widened freeways and highways, new paths for pedestrians and cyclists, maintenance to keep roads and bridges in good condition and improved access to a new state park.
Projects scheduled to start or are already under construction include a brand-new highway, new interchanges, widened freeways and highways, new paths for pedestrians and cyclists, maintenance to keep roads and bridges in good condition and improved access to a new state park.
Any existing or new legislation applicable to our operations could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, to respond to regulatory inquiries or investigations, and to defend individual or class litigation.
Any existing or new legislation applicable to our operations could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, to respond to regulatory 13 inquiries or investigations, and to defend individual or class litigation.
On September 16, 2020, we also acquired 2020 Canada (formerly, USO (Canada) Ltd.), which was incorporated on April 26, 2018 and is currently inactive. On September 30, 2022, we acquired Foreland (formerly, Petro Source Resources), which was incorporated on May 29, 1998.
On September 16, 2020, we also acquired 2020 Canada (formerly, USO (Canada) Ltd.), which was incorporated on April 26, 2018, and is currently inactive. 4 On September 30, 2022, we acquired Foreland (formerly, Petro Source Resources), which was incorporated on May 29, 1998.
Raw Materials and Suppliers The primary raw materials used in the manufacture of our current products are crude oil and other petroleum fuel operational inputs. The cost of these raw materials is a key factor in pricing our products.
Raw Materials and Suppliers Currently, the primary raw materials used in the manufacture of our current products are crude oil and other petroleum fuel operational inputs. The cost of these raw materials is a key factor in pricing our products.
We have developed a process for separating oil from oily sands and other oil-bearing solids utilizing a proprietary solvent, which we refer to as our ECOSolv technology or the ECOSolv process. The solvent is used in a closed-loop distillation and evaporation circuit which results in over 99% of the solvent being recoverable for continuous reuse and requires no water.
We have developed a process for separating oil from oily sands and other oil-bearing solids utilizing a proprietary solvent, which we refer to as our ECOSolv technology or the ECOSolv process. The solvent is used in a closed-loop distillation and evaporation circuit which results in up to 99% of the solvent being recoverable for continuous reuse and requires no water.
Please see “ Risk Factors—General Risks Related to Our Business—We depend on several principal suppliers for the majority of our crude oil. A disruption in supply or a change in our relationship with any one of them could adversely affect our business, financial condition and results of operations ” for a description of the risks related to our supplier relationships.
Please see “ Risk Factors—General Risks Related to Our Business—We depend on several principal suppliers for most of our crude oil. A disruption in supply or a change in our relationship with any one of them could adversely affect our business, financial condition and results of operations ” for a description of the risks related to our supplier relationships.
While we believe that there is an ample supply of most of the raw materials that we need, in the absence of firm and long-term contracts, we may not be able to obtain a sufficient supply of these raw materials from our existing suppliers or alternates in a timely fashion or at a reasonable cost.
While we believe that there is an ample supply of most of the raw materials that we need, in the absence of firm and long-term contracts, we may not be able to obtain a sufficient supply of these raw materials from our existing suppliers or alternatives in a timely fashion or at a reasonable cost.
During the years ended December 31, 2024 and 2023, we conducted no mining operations. As of the date hereof, the PR Spring lands are classified as an exploration stage property and hold no mineral reserves or proven minerals reserves, as those terms are defined in Subpart 1300 of Regulation S-K.
During the years ended December 31, 2025 and 2024, we conducted no mining operations. As of the date hereof, the PR Spring lands are classified as an exploration stage property and hold no mineral reserves or proven minerals reserves, as those terms are defined in Subpart 1300 of Regulation S-K.
Reference Acres Lease Expiry Date Annual Fee Right-of-Way Grant N-41035 19.7 12/31/2054 $ 2,850 Right-of-Way Grant N-42414 20.3 12/31/2044 1,400 We are seeking to develop the 5,930 acres of land in PR Spring, Utah for the production of heavy oil/bitumen and asphalt paving aggregate from bituminous asphaltic sands deposits and are in the process of retrofitting our existing mining and processing facilities to utilize our ECOSolv technology.
Reference Acres Lease Expiry Date Annual Fee Right-of-Way Grant N-41035 19.7 12/31/2054 $ 2,850 Right-of-Way Grant N-42414 20.3 12/31/2044 1,400 12 We are seeking to develop the 5,930 acres of land in PR Spring, Utah to produce heavy oil/bitumen and asphalt paving aggregate from bituminous asphaltic sands deposits and are in the process of retrofitting our existing mining and processing facilities to utilize our ECOSolv technology.
These events could cause us to divert significant resources and funds to addressing these issues, and possibly require us to change our business practices. Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
These events could cause us to divert significant resources and funds to address these issues and possibly require us to change our business practices. Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.
The worldwide growing demand for heavy crude oil and the recent decline in crude oil production in countries such as Venezuela, Russia and the Ukraine makes the high quality, low sulfur, heavy oil found in oil sands deposits in the United States a valuable resource that has been underdeveloped to date.
The worldwide growing demand for heavy crude oil and the recent decline in crude oil production in countries such as Venezuela, Russia and the Ukraine make the high quality, low sulfur, heavy oil found in oil sands deposits in the United States a valuable resource that has been underdeveloped to date.
If we fail to secure a sufficient supply of key raw materials in a timely fashion, it would result in a significant delay in delivering our products. Furthermore, failure to obtain a sufficient supply of these raw materials at a reasonable cost could also harm our revenue and gross profit margins.
If we fail to secure a sufficient supply of key raw materials in a timely fashion, it will result in a significant delay in delivering our products. Furthermore, failure to obtain a sufficient supply of these raw materials at a reasonable cost could also harm our revenue and gross profit margins.
The PR Spring Facility, once operational, is expected to produce asphalt paving aggregate, a low-sulfur heavy oil product from remediated asphalt shingles and in the future from mined bitumen sands, to be sold to and refined by the Eagle Springs Refinery, and cleaned sand.
The PR Spring Facility, once operational, is expected to produce asphalt paving aggregate, a low-sulfur heavy oil product from remediated asphalt shingles and in the future from mined bitumen sands, to be sold to and refined by the Eagle Springs Refinery.
The samples were processed using our ECOSolv process and resulted in an end product containing, on average, 20.8% bitumen and less than 1% solvent, implying a hydrocarbon recovery factor of up to 95% and solvent recovery of up to 99%.
The samples were processed using our ECOSolv process and resulted in a product containing, on average, 20.8% bitumen and less than 1% solvent, implying a hydrocarbon recovery factor of up to 95% and solvent recovery of up to 99%.
The refinery’s major processing units include crude oil distillation, catalytic cracker, naphtha hydrotreating, and reforming units, which produce diesel, vacuum gas oil, naphtha, asphalt paving oil and other associated refined products. Feedstock crude oil, consisting largely of heavy sulfur-heavy oil, is sourced from local producers in Nevada and Utah as well as other North American sources.
The refinery’s major processing units include crude oil distillation, catalytic cracker, naphtha hydrotreating, and reforming units, which produce diesel, VGO, naphtha, asphalt paving oil and other associated refined products. Feedstock crude oil, consisting largely of heavy sulfur-heavy oil, is sourced from local producers in Nevada and Utah as well as other North American sources.
According to an industry survey by National Asphalt Pavement Association (“NAPA”), the use of reclaimed asphalt pavement (“ RAP”) has risen by 75.2% since NAPA began collecting data in 2009, while total asphalt mixture tonnage has grown by 23.3% during the same period.
According to an industry survey by National Asphalt Pavement Association (“NAPA”), the use of reclaimed asphalt pavement (“RAP”) has risen by 75.2% since NAPA began collecting data in 2009, while total asphalt mixture tonnage has grown by 23.3% during the same period.
Although there are no proven oil reserves at the PR Spring facility, we believe that we will be able to economically operate the facility solely with the use of waste asphalt shingles. We have invested approximately $4.7 million since September 16, 2020 at the PR Spring facility, all of which is related to the retrofit of the facility.
Although there are no proven oil reserves at the PR Spring facility, we believe that we will be able to economically operate the facility solely with the use of waste asphalt shingles. We have invested approximately $6.3 million since September 16, 2020, at the PR Spring facility, all of which is related to the retrofit of the facility.
According to Grand View Research, the U.S. residential and commercial roofing materials market size was estimated at $15.72 billion in 2023 and is anticipated to grow at a compound annual growth rate of 4.5% from 2024 to 2030.
According to Grand View Research, the U.S. residential and commercial roofing materials market size was estimated at $16 billion in 2024 and is anticipated to grow at a compound annual growth rate of 4.5% from 2024 to 2030.
In addition to securing additional crude oil from local producers, management anticipates that the heavy oil produced at the PR Spring Facility will be refined at the Eagle Springs Refinery, resulting in increased production and revenues and higher efficiencies across the production chain.
In addition to securing additional crude oil from regional producers, management anticipates that the heavy oil produced at the PR Spring Facility once operational will be refined at the Eagle Springs Refinery resulting in increased production and revenues and higher efficiencies across the production chain.
The solvent has demonstrated oil separation rates of over 95% in bench testing using samples of both mined crushed ore and ground asphalt shingles. Bench testing was conducted in house, and through unaffiliated third parties which were completed August 30, 2022 and May 3, 2022.
The solvent has demonstrated oil separation rates of up to 95% in bench testing using samples of both mined crushed ore and ground asphalt shingles. Bench testing was conducted in house, and through unaffiliated third parties which were completed in May and August 2022.
While we believe we are well-positioned to lead in the waste asphalt shingle recycling sector due to our ability to recycle this material into multiple high value products, we recognize the challenges that come with the rapid growth of this emerging industry.
While we believe we are well-positioned to participate in the waste asphalt shingle recycling sector due to our know how to recycle this material into multiple high value products, we recognize the challenges that come with the rapid growth of this emerging industry.
Waste asphalt shingles amount to about 2.5% of the total building-related waste in the U.S. Over 96% of these waste shingles end up in landfills, occupying over 23 million cubic yards of space. This waste stream is expected to increase considering that, according to the Asphalt Roofing Manufacturers Association, four-out-of-five homes in the U.S. are roofed with asphalt shingles.
Over 96% of these waste shingles end up in landfills, occupying over 23 million cubic yards of space. 5 This waste stream is expected to increase considering that, according to the Asphalt Roofing Manufacturers Association, four-out-of-five homes in the U.S. are roofed with asphalt shingles.
For the year ended December 31, 2024, three customers accounted for approximately 35%, 23% and 22%, respectively, of our total net sales , and for the year ended December 31, 2023, these customers accounted for approximately 33 %, 17% and 14%, respectively, of our total net sales. These customers do not have any ongoing commitment to purchase our products.
For the year ended December 31, 2025, three customers accounted for approximately 33%, 31% and 24%, respectively, of our total net sales, and for the year ended December 31, 2024, these customers accounted for approximately 35%, 23% and 22%, respectively, of our total net sales. These customers do not have any ongoing commitment to purchase our products.
We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable space will be available to accommodate any such expansion of our operations. Employees As of December 31, 2024, we had 26 full-time employees and 3 part-time employees and/or contractors.
We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable space will be available to accommodate any such expansion of our operations. Employees As of December 31, 2025, we had 26 full-time employees.
Our ECOSolv process is protected as a trade secret. 8 Properties Our corporate headquarters are located in Woods Cross, Utah, where we lease office space at 707 W. 700 S, Suite 101. We currently lease the following additional principal properties. We hold mineral leases (or the operating rights under leases) covering approximately 5,930.3 net acres within the State of Utah.
Our ECOSolv process is protected as a trade secret. Properties Our corporate headquarters are in Woods Cross, Utah, where we lease office space at 707 W. 700 S, Suite 101. We hold mineral leases (or the operating rights under leases) covering approximately 5,880 net acres within the State of Utah.
They are using RAS in aggregate base courses and for granular base stabilization on local roads. Paving contractors in many states are using RAS for parking lots, private driveways and in hot mix asphalt (“HMA”) for varied purposes such as patching and temporary roads. The most promising future market may be local governments.
Paving contractors in many states are using RAS for parking lots, private driveways and in hot mix asphalt (“HMA”) for varied purposes such as patching and temporary roads. The most promising future market may be local governments.
Eagle Springs Refinery On September 30, 2022, we acquired Foreland, which is engaged in the refining of heavy crude oil into diesel and other petroleum products (naphtha, vacuum gas oil, and paving asphalt liquids) at its Eagle Springs Refinery located near Ely, Nevada.
Eagle Springs Refinery On September 30, 2022, we acquired Foreland Refinery Corp, which is engaged in the refining of heavy crude oil into diesel and other petroleum products (naphtha, VGO, and paving asphalt liquids) operating as the Eagle Springs Refinery located near Ely, Nevada.
For so long as we are an emerging growth company, we will not be required to: · have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; · comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); · submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and · disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. 10 In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards.
For so long as we are an emerging growth company, we will not be required to: · have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; · comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); · submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and · disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
Intellectual Property We hold the following patents and patent applications: ID Type Patent Name Filing Date Issue Date Expiry Date Patent 2578873 Removal of hydrocarbons from particulate solids (Canada) 10/15/2024 12/11/2012 12/11/2032 Patent 8758601B2 Removal of hydrocarbons from particulate solids (U.S.) 09/18/2012 06/24/2014 09/18/2032 Patent 10184084B2 Oilsands processing using inline agitation and an inclined plate separator (U.S.) 12/04/2015 01/22/2019 12/04/2035 Application 3028202 (1) Method for producing pipeline specification bitumen from oil sands mining and extraction facilities using non-miscible solvents and centrifuge processing (Canada) 12/20/2018 Application 2017/ 0306242 A1 (1) Method for producing pipeline specification bitumen from oil sands mining and extraction facilities (U.S.) 10/26/2017 (1) Patent applications are currently under review and may not be renewed if they have no practical application under the new solvent-based recovery system being contemplated.
Currently, we believe PR Spring represents a significant opportunity to both unlock value in terms of the previous facility owners’ sunk costs with the plant’s investment and the available hydrocarbon resource near the facility to be processed. 11 Intellectual Property We hold the following patents and patent applications: ID Type Patent Name Filing Date Issue Date Expiry Date Patent 2578873 Removal of hydrocarbons from particulate solids (Canada) 10/15/2024 12/11/2012 12/11/2032 Patent 8758601B2 Removal of hydrocarbons from particulate solids (U.S.) 09/18/2012 06/24/2014 09/18/2032 Patent 10184084B2 Oilsands processing using inline agitation and an inclined plate separator (U.S.) 12/04/2015 01/22/2019 12/04/2035 Application 3028202 (1) Method for producing pipeline specification bitumen from oil sands mining and extraction facilities using non-miscible solvents and centrifuge processing (Canada) 12/20/2018 Application 2017/ 0306242 A1 (1) Method for producing pipeline specification bitumen from oil sands mining and extraction facilities (U.S.) 10/26/2017 (1) Patent applications are currently under review and may not be renewed if they have no practical application under the new solvent-based recovery system being contemplated.
Competitive Strengths We have identified several competitive strengths that we believe will support our position in the emerging waste asphalt shingle recycling industry. These include our ability to optimize margins through diversified revenue streams, establishing long-term contracts, and our ability to rapidly scale our operations.
In our development stage emerging waste asphalt shingles business, we have identified several competitive strengths that we believe will support our position. These include our ability to optimize margins through diversified revenue streams, establishing long-term contracts, and our ability to scale our operations.
The following chart depicts our organizational structure: Industry Waste Asphalt Shingle Market According to a report by the United States Environmental Protection Agency titled “Advancing Sustainable Materials Management: Assessing Trends in Materials Generation and Management in the United States” dated December 2020, about 15.1 million tons of waste shingles are generated annually.
Waste Asphalt Shingle Market According to a report by the United States Environmental Protection Agency titled “Advancing Sustainable Materials Management: Assessing Trends in Materials Generation and Management in the United States” dated December 2020, about 15.1 million tons of waste shingles are generated annually. Waste asphalt shingles amount to about 2.5% of the total building-related waste in the U.S.
We anticipate that the products to be derived from the recycling of waste asphalt shingles will include liquid asphalt cement, shingle granules and sand aggregate, limestone and fiberglass, which can be sold back to asphalt paving companies or shingle manufacturers.
We anticipate that the products derived from the recycling of waste asphalt shingles will include liquid asphalt cement, shingle granules and sand aggregate, limestone and fiberglass, which can be sold back to asphalt paving companies or shingle manufacturers. ASR Facilities Our historical growth plans have included the strategy of decentralized modular asphalt shingle recycling facilities referred to as ASR Facilities.
We estimate the remaining capital costs for the completion of the retrofit will be approximately $4.0 million. We intend to finish retrofitting the PR Spring Facility in fiscal 2025.
We estimate the remaining capital costs for the completion of the retrofit will be approximately $4.0 million. We intend to finish retrofitting the PR Spring Facility in the next twelve months from when the necessary funding is obtained.
For the year ended December 31, 2024, three vendors accounted for 20%, 13%, and 11% respectively, of our supply of crude oil and other petroleum fuel operational inputs, and for the year ended December 31, 2023, five vendors accounted for 18%, 15%, 13%, 12% and 10%, respectively, of our supply of crude oil and other petroleum fuel operational inputs.
For the year ended December 31, 2025, we did not owe any vendors for our supply of crude oil and other petroleum fuel operational inputs, and for the year ended December 31, 2024, three vendors accounted for 20%, 13% and 11%, respectively, of our supply of crude oil and other petroleum fuel operational inputs.
We source raw materials from multiple regional and national suppliers, and we continue to explore partnership or supplier opportunities to optimize our costs. 6 We have historically purchased certain key raw materials from a limited number of suppliers.
We source raw materials and crude oil feedstock mostly from regional producers and suppliers, and we continue to explore partnerships and opportunities to optimize our supply costs. We have historically purchased certain key raw materials from a limited number of suppliers.
According to a Statista reported dated August 28, 2024, tipping fees in the US 2022 and 2023 ranged from $43 to $83 per ton, however based on our internal research we believe that tipping fees can be as high as $145-$160 per ton, in certain locations. 7 We believe that this approach will generate revenue from shingle collection while eliminating the high upfront costs associated with traditional oil extraction methods such as drilling.
According to a Statista report dated August 28, 2024, tipping fees in the US in 2022 and 2023 ranged from $43 to $83 per ton, however based on our internal research we believe that tipping fees can be as high as $145-$160 per ton, in certain locations.
We intend to finish retrofitting the PR Spring Facility in fiscal of 2025 to recycle waste asphalt shingles using our ECOSolv technology to produce and sell oil as well as asphalt paving aggregate mined from our bitumen deposit.
Currently, we intend to finish retrofitting our oil sands remediation facility located in PR Spring in eastern Utah in the next twelve months from when the necessary funding is obtained to recycle waste asphalt shingles using our ECOSolv technology, to produce and sell oil as well as asphalt paving aggregate mined from our bitumen deposit.
We purchase raw materials on the basis of purchase orders.
We purchase raw materials with the use of purchase orders.
Foreland is engaged in the refining of heavy crude oil into diesel and other petroleum products (naphtha, vacuum gas oil, and paving asphalt liquids) at its Eagle Springs Refinery located near Ely, Nevada.
Foreland is engaged in the refining of heavy crude oil into diesel and other petroleum products (naphtha, VGO, and paving asphalt liquids) at its Eagle Springs Refinery located near Ely, Nevada. The following chart depicts our organizational structure: Industry Oil Refining and Sales Market The process of converting crude oil into usable products is known as refining.
We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. 9 Government Regulation We are subject to regulation by multiple U.S. government agencies, including the U.S. Environment Protection Agency, or the EPA.
We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
NAPA further reported that the usage of 175 million tons of WMA mix, representing slightly less than 40% of the estimated market, resulted in reduced greenhouse gas emissions on a scale equal to the annual emissions of approximately 40,000 passenger vehicles. 2 States and local agencies around the U.S. are beginning to see the advantage of using RAS in road infrastructure projects on county, city and state roads.
NAPA further reported that the usage of 175 million tons of WMA mix, representing slightly less than 40% of the estimated market, resulted in reduced greenhouse gas emissions on a scale equal to the annual emissions of approximately 40,000 passenger vehicles.
The PR Spring oil sands deposit is located along the southeast flank of the Uinta Basin, formed during the late Cretaceous and Early Tertiary period. The deposit is within the Eocene-aged Green River Formation of the Douglas Creek Member.
Once production from the bitumen deposit begins production royalties will be paid at 8% and 10% of gross sales per year. The PR Spring oil sands deposit is located along the southeast flank of the Uintah Basin, formed during the late Cretaceous and Early Tertiary period. The deposit is within the Eocene-aged Green River Formation of the Douglas Creek Member.
Reference Gross Acres Net Acres Lease Expiry Date (1) Annual Rent (2) Annual Advance Minimum Royalty (3) Production Royalty Rate (4) ML-49579 50.4 50.4 12/31/2024 $ 500 $ 5,000 6.5% ML-49927 4,319.9 4,319.9 05/31/2025 4,320 43,200 6.5% ML-51705 1,560.0 1,560.0 01/31/2030 1,560 15,600 8% Total 5,930.3 5,930.3 $ 6,380 $ 63,800 (1) Leases may be extended past expiry date by continued payment of annual rent and annual advance minimum royalty.
Gross Net Lease Expiry Date Annual Rent Annual Advance Minimum Royalty Production Royalty Rate Reference Acres Acres (1) (2) (3) (4) ML-49927 4,319.90 4,319.90 1/31/2030 $ 4,320 $ 410,400 10% ML-51705 1,560.00 1,560.00 1/31/2030 1,560 15,600 8% Total 5,879.90 5,879.90 $ $5,880 $ $426,000 Mineral leases may be extended past expiry date by continued payment of annual rent and annual advance minimum royalty.
Together, these innovations strive to extend the longevity, environmental impact, and durability of paving asphalt and to reduce the demand for virgin materials and promoting circular economy principles. 3 Recent favorable economic developments are expected to further boost overall activity and revenue in the construction industry where Federal and State government departments are investing in infrastructure projects such as highway or roadway repair, bridge and road construction and rehabilitation.
Recent favorable economic developments are expected to further boost overall activity and revenue in the construction industry where Federal and State government departments are investing in infrastructure projects such as highway or roadway repair, bridge and road construction and rehabilitation.
Under that same infrastructure package, California will receive $28.2 billion to build and repair more than 14,220 miles of highways and 1,536 bridges over five years. Oil Refining and Sales Market The process of converting crude oil into usable products is called refining.
Under that same infrastructure package, California will receive $28.2 billion to build and repair more than 14,220 miles of highways and 1,536 bridges over five years. As of the date of this report, the infrastructure law referenced above is still the federal framework controlling these investments.
We also plan to develop a modular asphalt shingle recycling facility design to grind and mill the shingle feedstock, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturers. 4 The ECOSolv Process Under the ECOSolv process, mined oil sands or waste asphalt shingle (“WAS”) pellets are crushed and then mixed with a proprietary hydrocarbon-based waterless solvent and heated and agitated in a mixing vessel into a slurry.
We also plan to develop a modular asphalt shingle recycling facility design to grind and mill the shingle feedstock, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturers.
We expect to complete the build-out of our Asphalt Shingle Recycling (“ASR “) Facility in fiscal 2025, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturing centers.
We intend to continue to develop regional model asphalt shingle recycling facilities, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturing centers.
Reserves We do not have any proven reserves on our bitumen leases at the PR Spring Facility, primarily due to the fact that our ECOSolv process, which we will use to produce oil from the bitumen leases, has not been used in a commercial setting.
Reserves We do not have any proven reserves on our bitumen leases at the PR Spring Facility, primarily because we have not yet produced oil from the bitumen leases and sold the product in a commercial setting.
PR Spring Asphalt Bitumen Leases 2020 Resources holds a 100% undivided interest in three contiguous asphalt bitumen leases covering approximately 5,930 acres in the PR Spring region of Uintah County, Utah.
PR Spring Asphalt Bitumen Leases 2020 Resources holds a 100% undivided interest in contiguous asphalt bitumen leases covering approximately 5,880 acres in the PR Spring region of Uintah County, Utah. The leases were issued by the State of Utah’s School and Institutional Trust Land Administration and require payment of annual rent of $5,880 per year.
We believe that this will provide us with a steady supply of waste shingle feedstock, allow for quality control and collection of tipping fees. Discussions with other suitable facilities with existing waste shingle stockpiles are underway.
We have determined that we should focus on processing waste shingles and work with partners and other companies to own and operate ASR facilities. We believe that this will provide us with a steady supply of waste shingle feedstock, allow for quality control and collection of tipping (waste disposal) fees.
We also hold two leased land rights of way rentals in Nye County, Nevada, totaling approximately 40 acres. Our Eagle Springs Refinery is sited on one of these leases.
The production royalty is payable on the market price of products produced from the mineral leased substances, without deduction of costs for mining, overhead, labor, distribution or general and administrative activities. We also hold two leased land rights of way rentals in Nye County, Nevada, totaling approximately 40 acres. Our Eagle Springs Refinery is sited on one of these leases.
Bench testing for oil recovery from waste asphalt shingles was performed using samples containing 22% to 25% weight saturation asphalt bitumen content.
Separation of the sand is done by mechanical drying units, which evaporate and capture the solvent for reuse, leaving behind clean sand. Bench testing for oil recovery from waste asphalt shingles was performed using samples containing 22% to 25% weight saturation asphalt bitumen content.
The solvent “washes” the sand clean and separates the sand from the pre-oil liquid asphalt. The freed ‘pre-oil’ is then processed during the separation stage and various products can be produced - WTI market bitumen, heavy oil or heavy crude oil.
The freed ‘pre-oil’ is then processed during the separation stage and various products can be produced – West Texas Intermediate (WTI) market bitumen, heavy oil or heavy crude oil. The solvent is extracted by separation, distillation and evaporation processes and is captured for re-use in the closed loop system, leaving clean heavy oil behind ready for sale.
Item 1. Business Overview We are an oil production, refining, and development-stage environmental remediation company formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soils, providing sustainable refined crude products.
Springs) formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soil, providing sustainable refined crude products. We anticipate several benefits from the recycling and production of oil from asphalt shingles reducing the dependence on landfills for the disposal of waste and reducing dependence on foreign oil.
Our design contemplates a modular, scalable, purpose-built facility capable of remediating waste asphalt shingles and separation into their base components of bitumen / asphalt cement, shingle granules, sand aggregate, limestone and fiberglass. 1 Corporate History and Structure We were incorporated in Delaware on June 4, 2019 as “Recoteq, Inc.” On April 22, 2020, we changed our name to “Sky Quarry Inc.” We have three (3) wholly-owned subsidiaries: 2020 Resources, 2020 Canada and Foreland.
Our design contemplates a modular, scalable, purpose-built facility capable of remediating waste asphalt shingles and separation into their base components of bitumen / asphalt cement, shingle granules, sand aggregate, limestone and fiberglass.
(2) Annual rent may be credited against production royalties payable during the year. (3) Annual advance minimum royalty may be credited against production royalties payable during the year. (4) The production royalty is payable on the market price of products produced from the leased substances, without deduction of costs for mining, overhead, labor, distribution or general and administrative activities.
Annual rent on mineral leases may be credited against production royalties payable during the year. Annual advance on mineral leases of minimum royalty may be credited against production royalties payable during the year.
We are subject to the requirements of the Federal Occupational Safety and Health Act, or OSHA, and comparable state laws.
The Company intends to vigorously defend against these claims. For additional information, see Item 3, “Legal Proceedings.” Government Regulation We are subject to regulation by multiple U.S. government agencies, including the U.S. Environment Protection Agency, or the EPA. We are subject to the requirements of the Federal Occupational Safety and Health Act, or OSHA, and comparable state laws.
Energy Information Administration reported that U.S. oil production established a new record in August 2024 with an average of 13.4 million barrels per day (b/d). More crude oil was produced in the United States during August 2024 than during December 2023, when the previous monthly record of 13.3 million b/d was set.
In August 2024, U.S. crude oil production set a monthly record, averaging approximately 13.4 million barrels per day (b/d), surpassing the prior record set in late 2023. Annual average production for 2025 is estimated at approximately 13.6 million b/d, representing the highest annual output in U.S. history.
We have completed the design of the ASR Facility “front end” module, which are used to grind and mills the shingle feedstock and in the process extracts and separates the granules and sand, and presses the remaining bitumen and solids into pellets for ease of transportation.
Discussions with other suitable facilities with existing waste shingle stockpiles are underway. We have reviewed and analyzed several designs for ASR Facilities with a “front end” module, which could be used to grind, and mill shingle feedstock processing extracts and separating the granules and sand.
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We expect the recycling and production of oil from asphalt shingles to reduce the dependence on landfills for the disposal of waste and to also reduce dependence on foreign and domestic virgin crude oil extraction for industrial uses.
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Item 1. Business Overview We operate a regional refinery (the Eagle Springs Refinery) producing diesel, vacuum gas oil (VGO), naphtha and liquid paving asphalt from crude oil suppliers in the Uintah basin near Nevada and Utah. In addition to our goal of growing the refinery, we have a separate division in the development-stage (P.R.
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Refining is part of the midstream sector, one of the three main components of the oil and gas industry. The most commonly made product from one barrel of crude oil is motor fuel, particularly gasoline and diesel. Processed crude oil has a wide array of uses.
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Recent Developments Plant Outages and Maintenance Our facilities require ongoing maintenance and from time-to-time certain repairs, improvements and retrofitting, which may require us to temporarily shut down or operate at a diminished capacity. Our Eagle Springs refinery operated by Foreland Refinery Corporation experienced a shut down during the fourth quarter of 2025 in connection with a boiler repair.
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Apart from being turned into transportation fuels, it is also a major feedstock in the petrochemical industry and the building block for plastics as well as products associated with infrastructure markets. According to Statista, in 2023, global oil production reached an all-time high of 96.4 million barrels per day. Additionally, the U.S.
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Currently, repairs have been completed, and the refinery is being prepared to resume operations, subject to the procurement of feedstock. The unscheduled repairs and outages at Foreland’s Eagle Springs Refinery have had a negative impact on our final financial results for the third and fourth quarters of 2025, and financial results for the first quarter of 2026.
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In 2025, U.S. crude oil production is projected to average 13.5 million barrels per day (b/d).
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We expect the facility to be operational by the end of the second quarter of 2026. Stock Split On March 5, 2026, we filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of Delaware to (i) effect on the corporate level a one-for-eight (1-for-8) reverse stock split of shares of our Common Stock.
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According to a 2022 report produced by the International Energy Agency, global oil consumption, given current government policies, will rise from 94 million barrels per day in 2021 to an estimated 103 million barrels per day by 2030 and then remain at or near that level until 2050.
Added
The Reverse Stock Split was effective on March 15, 2026, at 11:59pm Eastern Time. Corporate History and Structure We were incorporated in Delaware on June 4, 2019, as “Recoteq, Inc.” On April 22, 2020, we changed our name to “Sky Quarry Inc.” We have three (3) wholly-owned subsidiaries: 2020 Resources, 2020 Canada, and Foreland.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur business operations may be materially adversely affected by negative impacts to the global economy, capital markets, or other geopolitical conditions resulting from economic uncertainty, armed conflicts, acts of terrorism, political unrest or health epidemics. 21 During the last several years, the global supply and demand for crude oil has experienced periodic downturns and sustained volatility, impacted by such factors as the COVID-19 pandemic and recovery, Russia’s invasion of Ukraine and the related sanctions imposed on Russia, the ongoing conflict in Israel and the Gaza Strip and the ensuing conflict in the Middle East, the global response to such conflicts, supply chain constraints and rising interest rates and costs of capital.
Biggest changeDuring the last several years, the global supply and demand for crude oil has experienced periodic downturns and sustained volatility, impacted by such factors as the COVID-19 pandemic and recovery, Russia’s invasion of Ukraine and the related sanctions imposed on Russia, the ongoing conflict in Israel and the Gaza Strip and the ensuing conflict in the Middle East (including Iran) and the U.S. intervention in Venezuela, the global response to such conflicts, 25 supply chain constraints and rising interest rates and costs of capital may result in further volatility in commodity prices the oil industry and the boarder economy.
The loss of or a sustained decrease in demand by any one of these customers could result in a substantial loss of revenues and could have a material adverse effect on our results of operations. In addition, should any of these large customers default in their obligations to pay, our results of operations and cash flows could be adversely affected.
The loss of or a sustained decrease in demand by any one of these customers could result in a substantial loss of revenues and could have a material adverse effect on our results of operations. In addition, should any of these large customers default on their obligations to pay, our results of operations and cash flows could be adversely affected.
These covenants may limit our ability to, among other things, consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets.
These covenants may limit our ability to, among other things, consolidate, merge, sell, or otherwise dispose of all or substantially all our assets.
A breach of any of the covenants with our lenders could result in a default under the terms of the financings in which the lender could elect to declare all amounts outstanding thereunder to be immediately due and payable and foreclose on substantially all of our assets which are secured by such financing arrangements.
A breach of any of the covenants with our lenders could result in a default under the terms of the financings in which the lender could elect to declare all amounts outstanding thereunder to be immediately due and payable and foreclose on substantially all our assets which are secured by such financing arrangements.
Under certain of such laws and regulations, we could be held strictly liable for the removal or remediation of previously released hazardous materials or property contamination, regardless of whether we were responsible for the release or contamination and even if our operations met previous standards in the industry at the time they were conducted.
Under certain such laws and regulations, we could be held strictly liable for the removal or remediation of previously released hazardous materials or property contamination, regardless of whether we were responsible for the release or contamination and even if our operations met previous standards in the industry at the time they were conducted.
In the event we are covered by analysts, and one or more of such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage of us, the market price and market trading volume of our common stock could be negatively affected.
In the event we are covered by analysts, and one or more such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage of us, the market price and market trading volume of our common stock could be negatively affected.
The market price of our common stock could also be subject to wide fluctuations in response to a broad and diverse range of factors, including the following: · actual or anticipated variations in our periodic operating results; · increases in interest rates that lead investors of our common stock to demand a higher investment return; · changes in earnings estimates; 22 · changes in market valuations of similar companies; · actions or announcements by our competitors; · adverse market reaction to any increased indebtedness we may incur in the future; · additions or departures of key personnel; · actions by stockholders; · speculation in the media, online forums, or investment community; and · our ability to maintain the listing of our common stock on Nasdaq.
The market price of our common stock could also be subject to wide fluctuations in response to a broad and diverse range of factors, including the following: · actual or anticipated variations in our periodic operating results; · increases in interest rates that lead investors of our common stock to demand a higher investment return; · changes in earnings estimates; · changes in market valuations of similar companies; · actions or announcements by our competitors; · adverse market reaction to any increased indebtedness we may incur in the future; · additions or departures of key personnel; · actions by stockholders; · speculation in the media, online forums, or investment community; and · our ability to maintain the listing of our common stock on Nasdaq.
For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to: · not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; 24 · being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and · being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to: · not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; · being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and · being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
If our oil sands do not contain economically recoverable heavy oil and bitumen and/or we are unable to commercially extract such quantities, we 18 may be forced to abandon or curtail our planned oilsands operations at our PR Spring Facility and, as a result, our operating results could be adversely affected. The price of oil has historically been volatile.
If our oil sands do not contain economically recoverable heavy oil and bitumen and/or we are unable to commercially extract such quantities, we may be forced to abandon or curtail our planned oilsands operations at our PR Spring Facility and, as a result, our operating results could be adversely affected. The price of oil has historically been volatile.
For example, perceived recessionary risks may cause companies and individuals to reduce travel for either professional or personal reasons and drive higher prices in the supply chains we rely upon. We are exposed to the impact of rising inflation rates, which could negatively affect our results of operations and our ability to invest and hold our cash.
For example, perceived recessionary risks may cause companies and individuals to reduce travel for either professional or personal reasons and drive higher prices in the supply chains we rely upon. 18 We are exposed to the impact of rising inflation rates, which could negatively affect our results of operations and our ability to invest and hold our cash.
These factors include, but are not limited to, price fluctuations, proximity and capacity of processing equipment, equipment and labor availability and government regulations (including, without limitation, regulations relating to prices, taxes, royalties, allowable production, importing and exporting of base components of asphalt cement, shingle granules, sand aggregate, limestone and fiberglass, land use and environmental protection).
These factors include, but are not limited to, price fluctuations, proximity and capacity of processing equipment, equipment and labor availability and government regulations (including, without limitation, regulations relating to prices, taxes, royalties, allowable production, importing and exporting of base components of asphalt cement, shingle granules, sand 20 aggregate, limestone and fiberglass, land use and environmental protection).
These factors include: · the level of consumer and industrial demand for oil; · the domestic and foreign supply of oil; · the ability of the members of the Organization of Petroleum Exporting Countries, or OPEC, to agree to and maintain oil price and production controls; · domestic governmental regulations and taxes; · adverse weather conditions; · market uncertainty due to political conditions in oil and gas producing regions; and · worldwide economic conditions.
These factors include: · the level of consumer and industrial demand for oil; 22 · the domestic and foreign supply of oil; · the ability of the members of the Organization of Petroleum Exporting Countries, or OPEC, to agree to and maintain oil price and production controls; · domestic governmental regulations and taxes; · adverse weather conditions; · market uncertainty due to political conditions in oil and gas producing regions; and · worldwide economic conditions.
We depend on several principal suppliers for the majority of our crude oil. A disruption in supply or a change in our relationship with any one of them could adversely affect our business, financial condition and results of operations. We have historically purchased certain key raw materials from a limited number of suppliers.
We depend on several principal suppliers for the majority of our crude oil. A disruption in supply or a change in our relationship with any one of them could adversely affect our business, financial condition and results of operations. 16 We have historically purchased certain key raw materials from a limited number of suppliers.
Furthermore, if our current secured financial obligations are repaid, we may need to pledge all of our assets as collateral to secure additional financing in the future. Acquisition opportunities may present themselves that in hindsight did not achieve the positive results anticipated by our management. From time to time, acquisition opportunities may become available to us.
Furthermore, if our current secured financial obligations are repaid, we may need to pledge all our assets as collateral to secure additional financing in the future. Acquisition opportunities may present themselves that in hindsight did not achieve the positive results anticipated by our management. From time to time, acquisition opportunities may become available to us.
If the performance of the acquired assets or entity does not produce positive results for us, the terms of the acquisition, whether it is interest rate on debt, or additional dilution of stockholders, may prove detrimental to our financial results or the performance of your particular shares. Environmental and regulatory compliance may impose substantial costs on us.
If the performance of the acquired assets or entity does not produce positive results for us, the terms of the acquisition, whether it is interest rate on debt, or additional dilution of stockholders, may prove detrimental to our financial results or the performance of your shares. Environmental and regulatory compliance may impose substantial costs on us.
Our activities are or will be subject to extensive laws and regulations governing our remediation, and recycling activities, as well as those governing exports, taxes, labor standards, occupational health, waste disposal, land use, protection and remediation of the environment, protection of endangered and protected species, operational safety, 14 toxic substances and other matters.
Our activities are or will be subject to extensive laws and regulations governing our remediation, and recycling activities, as well as those governing exports, taxes, labor standards, occupational health, waste disposal, land use, protection and remediation of the environment, protection of endangered and protected species, operational safety, toxic substances and other matters.
Competitors include larger companies which, in particular, may have access to greater resources, may be more successful in the recruitment and retention of qualified employees and may conduct their own marketing operations, which may give them a competitive advantage. Actual or potential competitors may be strengthened through the acquisition of additional assets and interests.
Competitors include larger companies which may have access to greater resources, may be more successful in the recruitment and retention of qualified employees and may conduct their own marketing operations, which may give them a competitive advantage. Actual or potential competitors may be strengthened through the acquisition of additional assets and interests.
We are also a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are also a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our 29 securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
The United States has recently experienced historically high levels of inflation. Additionally, recent trade disputes between the United States and other countries resulting in the imposition of increased tariffs on products 15 imported into the U.S., and the ongoing conflicts between Russia and Ukraine and in the Middle East, have contributed to higher inflation.
The United States has recently experienced historically high levels of inflation. Additionally, recent trade disputes between the United States and other countries resulting in the imposition of increased tariffs on products imported into the U.S., and the ongoing conflicts between Russia and Ukraine and in the Middle East, have contributed to higher inflation.
We do not have any supply agreements with landfills and/or private waste haulers to supply us with waste asphalt shingles. As our PR Spring facility is located in a remote location, we may not be able to economically source or have waste asphalt shingles delivered to us form waste haulers, shingles manufacturers or other 3 rd parties.
We do not have any supply agreements with landfills and/or private waste haulers to supply us with waste asphalt shingles. As our PR Spring facility is in a remote location, we may not be able to economically source or have waste asphalt shingles delivered to us form waste haulers, shingles manufacturers or other 3 rd parties.
We anticipate that our operating expenses will increase for the near future, and there is no assurance that we will be profitable in the near future, if at all. You should consider our business, operations, and prospects in light of the risks, expenses, and challenges facing the Company in its early stages.
We anticipate that our operating expenses will increase for the near future, and there is no assurance that we will be profitable soon, if at all. You should consider our business, operations, and prospects in light of the risks, expenses, and challenges facing the Company in its early stages.
A 13 change of vendors, a disruption in supply or a significant change in pricing with any of these suppliers could have a material adverse effect on our business, financial condition and results of operations. Our future success is dependent on the continued service of our management team .
A change of vendors, a disruption in supply or a significant change in pricing with any of these suppliers could have a material adverse effect on our business, financial condition and results of operations. Our future success is dependent on the continued service of our management team .
If decommissioning is required before economic depletion of our properties or if our estimates of the costs of decommissioning exceed the value of the reserves remaining at any particular time to cover such decommissioning costs, we may have to draw on funds from other sources to satisfy such 19 costs.
If decommissioning is required before economic depletion of our properties or if our estimates of the costs of decommissioning exceed the value of the reserves remaining at any particular time to cover such decommissioning costs, we may have to draw on funds from other sources to satisfy such costs.
We have outstanding debt that is past due and we are not currently making full payments to certain of our lenders pursuant to outstanding loan and merchant cash advance agreements which could result in our lenders declaring the loans to be in default.
We have outstanding debt that is past due and we are not currently making full payments to certain of our lenders pursuant to outstanding loans and merchant cash advance agreements which could result in our lenders declaring the loans to be in default.
Since we do not expect to pay any cash dividends for the foreseeable future, investors may be forced to sell their stock in order to obtain a return on their investment. We do not anticipate declaring or paying in the foreseeable future any cash dividends on our capital stock.
Since we do not expect to pay any cash dividends for the foreseeable future, investors may be forced to sell their stock in order to obtain a return on their investment. 27 We do not anticipate declaring or paying in the foreseeable future any cash dividends on our capital stock.
Our operations are or will be subject to stringent federal, state and local laws and regulations relating to improving or maintaining environmental quality. Environmental laws often require parties to pay for remedial action or to pay damages regardless of fault.
Our operations are or will be subject to stringent federal, state and local laws and regulations relating to improving or maintaining environmental quality. Environmental laws often require parties to pay for remedial action or to pay 17 damages regardless of fault.
As a result, there can be no assurance that we will be able to compete successfully or that competitive pressures will not adversely affect our business, results of operations and financial condition.
As a result, there can be no assurance that we will be able to compete successfully or that competitive pressures will not adversely affect our business, results of operations and financial 21 condition.
Any technological advancements, regulatory changes or changes in consumer preferences causing a significant shift toward alternative products could reduce demand for the conventional petroleum-based fuels we currently produce. Additionally, a shift toward electric, hydrogen, natural gas or other alternative-power vehicles could fundamentally change our customers’ shopping habits or lead to new forms of fueling destinations or new competitive pressures.
Any technological advances, regulatory changes or changes in consumer preferences causing a significant shift toward alternative products could reduce demand for the conventional petroleum-based fuels we currently produce. Additionally, a shift toward electric, hydrogen, natural gas or other alternative-power vehicles could fundamentally change our customers’ shopping habits or lead to new forms of fueling destinations or new competitive pressures.
In its report on our consolidated financial statements for the years ended December 31, 2024 and 2023, our independent registered public accounting firm included an explanatory paragraph stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our ability to continue as a going concern.
In its report on our consolidated financial statements for the years ended December 31, 2025 and 2024, our independent registered public accounting firm included an explanatory paragraph stating that our recurring losses from operations and net capital deficiency raise substantial doubt about our ability to continue as a going concern.
We have entered into financing arrangements that contain covenants that could limit our ability to engage in certain transactions. We have entered into financing arrangements with lenders that contain covenants that could limit our ability to engage in specified types of transactions.
We entered into financing arrangements that contain covenants that could limit our ability to engage in certain transactions. We entered into financing arrangements with lenders that contain covenants that could limit our ability to engage in specified types of transactions.
Accordingly, we have concluded that substantial doubt exists regarding our ability to continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2024, have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
Accordingly, we have concluded that substantial doubt exists regarding our ability to continue as a going concern. Our audited consolidated financial statements for the year ended December 31, 2025, have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
In connection with certain acquisitions, we could acquire, or be required to provide indemnification against, environmental liabilities that could expose us to material losses. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety impacts of our operations.
In connection with certain acquisitions, we could acquire, or be required to provide indemnification against, environmental liabilities that could expose us to material losses. In addition, claims for damages to people or property, including natural resources, may result from the environmental, health and safety impacts of our operations.
We cannot assure you that the necessary funds will be available on a timely basis, on favorable terms, or at all, or that such funds, if raised, would be sufficient. The level and timing of future expenditures will depend on a number of factors, many of which are outside our control.
We cannot assure you that the necessary funds will be available on a timely basis, on favorable terms, or at all, or that such funds, if raised, would be sufficient. The level and timing of future expenditures will depend on several factors, many of which are outside our control.
We will be required to continually enhance and update our technologies in order to maintain their efficacy and to avoid obsolescence. As such, our business may carry with it a greater degree of technological risk than other projects that employ commercially proven technologies.
We will be required to continually enhance and update our technologies to maintain their efficacy and to avoid obsolescence. As such, our business may carry with it a greater degree of technological risk than other projects that employ commercially proven technologies.
Unfavorable economic conditions can lead consumers to forgo our services and consumer demand for our services may not grow as we expect. We believe perceived recessionary risks will continue to impact our results of operation in 2025.
Unfavorable economic conditions can lead consumers to forgo our services and consumer demand for our services may not grow as we expect. We believe perceived recessionary risks will continue to impact our results of operation in 2026.
There is an inherent risk of incurring significant environmental costs and liabilities in the performance of our operations due to our handling of petroleum hydrocarbons and other hazardous substances and wastes, as a result of air emissions related to our operations.
There is an inherent risk of incurring significant environmental costs and liabilities in the performance of our operations due to our handling of petroleum hydrocarbons and other hazardous substances and waste, as a result of air emissions related to our operations.
If an active and liquid trading market is not sustained, you may have difficulty selling any shares of our common stock that you purchase at a price above the price you purchase them or at all.
If an active and liquid trading market is not sustained, you may have difficulty selling any shares of our common stock that you purchase at a price above the price you purchased them for or at all.
We may also experience such volatility, which may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock. The market price of our common stock is likely to be volatile due to a number of factors.
We may also experience such volatility, which may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock. The market price of our common stock is likely to be volatile due to several factors.
If we are not able to successfully compete in the marketplace, we could be forced to curtail or even abandon our current business plan, which could cause any investment in us to become worthless. Decommissioning costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.
If we cannot successfully compete in the marketplace, we could be forced to curtail or even abandon our current business plan, which could cause any investment in us to become worthless. Decommissioning costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.
Our future financial condition and results of operations will depend, in part, upon the price for oil. Oil prices historically have been volatile and likely will continue to be volatile in the future, especially given current world geopolitical conditions. Our cash flows from operations will be highly dependent on the prices that we receive for oil.
Our future financial condition and results of operations will depend, in part, upon the price for oil. Oil prices historically have been volatile and likely will continue to be volatile in the future, especially given current world geopolitical conditions. Our cashflows from operations will be highly dependent on the prices that we receive for oil.
At such time as we commence operations at our PR Spring Facility and ASR Facility, we intend to obtain and maintain additional insurance coverage for our operations, including limited insurance coverage for sudden environmental damages. Accordingly, we could incur substantial costs to comply with environmental laws and regulations which could affect our ability to operate as planned.
When we commence operations at our PR Spring Facility and ASR Facility, we intend to obtain and maintain additional insurance coverage for our operations, including limited insurance coverage for sudden environmental damages. Accordingly, we could incur substantial costs to comply with environmental laws and regulations which could affect our ability to operate as planned.
In particular, we are required to assess the effectiveness of our internal control over financial reporting at the end of each fiscal year pursuant to Section 404 of the Sarbanes-Oxley Act.
We are required to assess the effectiveness of our internal control over financial reporting at the end of each fiscal year pursuant to Section 404 of the Sarbanes-Oxley Act.
The stock market in general has recently been highly volatile. Furthermore, there have been recent instances of extreme stock price run-ups followed by rapid price declines and stock price volatility following a number of recent initial public offerings, particularly among companies with relatively smaller public floats.
The stock market in general has recently been highly volatile. Furthermore, there have been recent instances of extreme stock price run-ups followed by rapid price declines and stock price volatility following several recent initial public offerings, particularly among companies with relatively smaller public floats.
To effect these acquisitions, we will likely be required to obtain lender financing or issue additional shares of stock in exchange for the shares of the target entity.
To make these acquisitions, we will likely be required to obtain lender financing or issue additional shares of stock in exchange for the shares of the target entity.
We cannot predict the extent to which investor interest in us will sustain a trading market or how active and liquid that market may remain.
We cannot predict the extent to which investors’ interest in us will sustain a trading market or how active and liquid that market may remain.
This price volatility also affects the amount of our cash flows available for capital expenditures and our ability to borrow money or raise additional capital. The price for oil is subject to a variety of additional factors that are beyond our control.
This price volatility also affects the amount of our cashflows available for capital expenditures and our ability to borrow money or raise additional capital. The price of oil is subject to a variety of additional factors that are beyond our control.
First, as noted above, our common stock is likely to be more sporadically and thinly traded compared to the shares of such larger, more established companies. The price for our common stock could, for example, decline precipitously in the event that a large number of shares are sold on the market without commensurate demand.
First, as noted above, our common stock is likely to be more sporadically and thinly traded compared to the shares of such larger, more established companies. The price for our common stock could, for example, decline precipitously if a large number of shares are sold on the market without commensurate demand.
In order to sell the finished asphalt cement, shingle granules, sand aggregate, limestone and fiberglass that we are able to produce from the asphalt shingle recycling process, if any, we must be able to make economically viable arrangements for the storage, transportation and distribution of these products.
To sell the finished asphalt cement, shingle granules, sand aggregate, limestone and fiberglass that we can produce from the asphalt shingle recycling process, if any, we must be able to make economically viable arrangements for the storage, transportation and distribution of these products.
A significant issuance of our common stock to any of these recipients would have a dilutive effect on the value of your shares, will increase general and administrative expense and will have an adverse effect on our earnings, and may require us to make subjective estimates and assumption, all of which could materially impact our results of operations.
A significant issuance of our common stock to any of these recipients would have a dilutive effect on the value of your shares, would increase general and administrative expenses, would have an adverse effect on our earnings, and may require us to make subjective estimates and assumption, all of which could have a material impact on our results of operations.
A delisting of our common stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.
A delisting of our common stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our common stock, including through our ATM program and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.
The Consumer Price Index for All Urban Consumers, a widely followed inflation gauge published by the U.S. Bureau of Labor Statistics, increased by 2.8% from February 2024 to February 2025. The general effects of inflation on the global economy can be wide-ranging, evidenced by rising wages and rising costs of consumer goods and necessities.
The Consumer Price Index for All Urban Consumers, a widely followed inflation gauge published by the U.S. Bureau of Labor Statistics, increased by 2.4% from January 2025 to January 2026. The general effects of inflation on the global economy can be wide-ranging, evidenced by rising wages and rising costs of consumer goods and necessities.
As of the date hereof, we have outstanding debt in the amount of approximately $5,959,952 that is currently past due. Foreland is party to a loan agreement with LendSpark Corporation, or LendSpark, and a merchant cash advance agreement with Libertas Funding LLC, or Libertas. At present, Foreland is making reduced payments to both LendSpark and Libertas.
As of the date hereof, we have outstanding debt in the amount of approximately $7,618,831 that is currently past due. Foreland is party to a loan agreement with LendSpark Corporation, or LendSpark, and a merchant cash advance agreement with Libertas Funding LLC, or Libertas. At present, Foreland is making reduced payments to both LendSpark and Libertas.
For the year ended December 31, 2024, three customers accounted for approximately 35%, 23% and 22%, respectively, of our total net sales , and for the year ended December 31, 2023, these customers accounted for approximately 33 %, 17% and 14%, respectively, of our total net sales. These customers do not have any ongoing commitment to purchase our products.
For the year ended December 31, 2025, three customers accounted for approximately 31%, 33% and 24%, respectively, of our total net sales, and for the year ended December 31, 2024, these customers accounted for approximately 35%, 23% and 22%, respectively, of our total net sales. These customers do not have any ongoing commitment to purchase our products.
In addition, the supply of fuel and our wholesale purchase costs could be adversely affected in the event of a shortage or oversupply of product, which could result from, among other things, the Russian invasion of Ukraine and the sanctions imposed on Russia and other countries, interruptions of fuel production at oil refineries, new supply sources, and sustained increases or decreases in global demand for diesel fuels.
In addition, the supply of fuel and our wholesale purchase costs could be adversely affected in the event of a shortage or oversupply of product, which could result from, among other things, the Russian invasion of Ukraine and the sanctions imposed on Russia and other countries, conflict in the Middle East (including Iran) and the US intervention in Venezuela, interruptions of fuel production at oil refineries, new supply 23 sources, and sustained increases or decreases in global demand for diesel fuels.
General Risks Related to our Business Our recurring losses from operations raise substantial doubt regarding our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations. We sustained losses from operations of $7,523,186 and $1,367,881 for the years ended December 31, 2024 and 2023, respectively.
General Risks Related to our Business Our recurring losses from operations raise substantial doubt regarding our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations. We sustained losses from operations of $9,248,500 and $7,523,186 for the years ended December 31, 2025 and 2024, respectively.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock. 16 Risks Related to Asphalt Shingle Recycling The nature of our WAS recycling operations may involve various risks.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
If the inflation rate continues to increase, this will result in, for example, increases in the cost of fuel, labor and other costs, which will adversely affect our expenses, such as employee compensation which accounts for a significant portion of our operating expenses.
If the inflation rate continues to increase, this will result in, for example, increases in the cost of fuel, labor and other costs, which will adversely affect our expenses, such as employee compensation, which accounts for a significant portion of our operating expenses. Our fuel purchase and labor contracts generally do not provide meaningful price protection against increases in costs.
For the year ended December 31, 2024, three vendors accounted for 20%, 13%, and 11% respectively, of our supply of crude oil and other petroleum fuel operational inputs, and for the year ended December 31, 2023, five vendors accounted for 18%, 15%, 13%, 12% and 10%, respectively, of our supply of crude oil and other petroleum fuel operational inputs.
For the year ended December 31, 2025, one vendor accounted for 17% of our supply of crude oil and other petroleum fuel operational inputs, and for the year ended December 31, 2024, three vendors accounted for 20%, 13%, and 11%, respectively, of our supply of crude oil and other petroleum fuel operational inputs.
The recovery of oil from our bitumen deposit and the process of recycling WAS is dependent on the viability of our proprietary technology, which we refer to as the ECOSolv process. However, the ECOSolv technology has never been used on a commercial scale. If the ECOSolv technology does not perform as expected, our WAS business plan is likely to fail.
The recovery of oil from our bitumen deposit and the process of recycling waste asphalt shingle is dependent on the viability of our proprietary technology, which we refer to as the ECOSolv process. However, the ECOSolv technology has never been used on a commercial scale.
We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares. Claims of U.S. civil liabilities may not be enforceable against our management .
We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares. Item 1B. Unresolved Staff Comments.
In addition, the perception that new issuances of our securities could occur, or the perception that locked-up parties will sell their securities when the lock-ups expire, could adversely affect the market price of our common stock. 23 Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock.
Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock.
Therefore, our revenues and cash flows are typically higher in the second and third quarters of our fiscal year. As a result, our results from operations may vary widely from period to period, affecting our cash flow.
Therefore, our revenues and cashflows are typically higher in the second and third quarters of our fiscal year. As a result, our results from operations may vary widely from period to period, affecting our cash flow. Our operations are subject to stringent environmental laws and regulations that may expose us to significant costs and liabilities that could exceed current expectations.
If we are not able to obtain additional capital on acceptable terms, or at all, we may be forced to curtail or abandon our growth plans, which could adversely impact us, our business, development, financial condition, operating results or prospects.
If we cannot obtain additional capital on acceptable terms, or at all, we may be forced to curtail or abandon our growth plans, which could adversely impact us, our business, development, financial condition, operating results or prospects. 28 If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.
Our anticipated operations in asphalt shingle recycling and reclamation involves many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome. Furthermore, the marketability of any products produced from waste asphalt shingles will be affected by numerous factors beyond our control.
Risks Related to Asphalt Shingle Recycling The nature of our waste asphalt shingle recycling operations may involve various risks. Our anticipated operations in asphalt shingle recycling and reclamation involves many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome.
The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment. The market price of our stock may be highly volatile, and you could lose all or part of your investment.
The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.
If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares. The Securities and Exchange Commission, or the SEC, has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
The Securities and Exchange Commission, or the SEC, has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
In the event of foreclosure, it is likely that our ability to continue operations would be compromised, which could result in significant losses for our stockholders and could require us to pursue bankruptcy protection. 12 We have a limited operating history upon which you can evaluate our performance, have a history of losses and have only been operating the Eagle Springs Refinery since September 30, 2022.
In the event of foreclosure, it is likely that our ability to continue operations would be compromised, which could result in significant losses for our stockholders and could require us to pursue bankruptcy protection.
These factors include: · consumer and/or industrial demand; · supply of asphalt shingles; · domestic governmental regulations and taxes; · the price and availability of solvent materials and feedstocks; · adverse weather conditions; · worldwide economic conditions. 17 The market for asphalt cement, shingle granules, sand aggregate, limestone and/or fiberglass may be highly competitive, and intensely competitive pressures could force us to abandon or curtail our business plan related to asphalt shingle recycling and reclamation.
The market for asphalt cement, shingle granules, sand aggregate, limestone and/or fiberglass may be highly competitive, and intensely competitive pressures could force us to abandon or curtail our business plan related to asphalt shingle recycling and reclamation.
Accordingly, as of December 31, 2024 and December 31, 2023, we did not have any fuel hedging contracts outstanding to hedge our fuel costs. Additionally, we do not typically enter long-term labor agreements with our pilots or ground service personnel to fix our employee-related costs.
Additionally, we do not typically enter long-term labor agreements with our ground service personnel to fix our employee-related costs.
Our fuel purchase, labor and airport operations contracts generally do not provide meaningful price protection against increases in costs. Our current policy is not to enter into transactions to hedge our fuel costs, although we review this policy from time to time based on market conditions and other factors.
Our current policy is not to enter into transactions to hedge our fuel costs, although we review this policy from time to time based on market conditions and other factors. Accordingly, as of December 31, 2025, and December 31, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel costs.
The viability of our asphalt shingle recycling and reclamation business plan, business operations, and future operating results and financial condition are and will be exposed to fluctuating prices for our end-products. Prices for asphalt cement, shingle granules, sand aggregate, limestone and fiberglass, and their related products are affected by supply and demand, which can fluctuate significantly.
If the ECOSolv technology does not perform as expected, our waste asphalt shingle business plan is likely to fail. The viability of our asphalt shingle recycling and reclamation business plan, business operations, and future operating results and financial condition are and will be exposed to fluctuating prices for our end-products.
Because of the speculative nature of asphalt shingle recycling, there is a risk that our business may not succeed.
Price fluctuations can have a material effect on our ability to raise capital and fund our activities, our potential future earnings, and our financial condition. Because of the speculative nature of asphalt shingle recycling, there is a risk that our business may not succeed.
These payments continue to decrease the outstanding balances owed under the agreements; however, making less than the full required payments constitutes a breach of the respective agreements. As part of these agreements, Foreland has pledged all of its assets as collateral. Consequently, LendSpark or Libertas could declare a default and initiate foreclosure proceedings on Foreland’s assets.
As part of these agreements, Foreland has pledged all of its assets as collateral. Consequently, LendSpark, Libertas or KFBV could declare a default and initiate foreclosure proceedings on Foreland’s assets. Such an action would have a materially adverse impact on our operations, as Foreland currently represents all our revenue-generating activities.
Accordingly, our prospects must be considered in light of the risks that any new company encounters.
We have a limited operating history upon which you can evaluate our performance, have a history of losses and have only been operating the Eagle Springs Refinery since September 30, 2022. Accordingly, our prospects must be considered in light of the risks that any new company encounters.
Removed
Such an action would materially adversely impact our operations, as Foreland currently represents all of our revenue-generating activities.
Added
These payments continue to decrease the outstanding balances owed under the agreements; however, making less than the full payments required constitutes a breach of the respective agreements. The Company and Foreland are also party to loan agreements with KF Business Ventures LTD., or KFBV, and ACMO USOS LLC.
Removed
Factors that influence supply and demand include operational issues, natural disasters, weather, political instability or conflicts, and economic conditions. Price fluctuations can have a material effect on our ability to raise capital and fund our activities, our potential future earnings, and our financial condition.
Added
On March 4, 2026, KFBV filed a complaint against us in the Third Judicial District Court of Salt Lake County, Utah, seeking, among other things, repayment and judicial foreclosure/ possession of collateral.
Removed
New technologies have been developed and governmental mandates have been implemented to improve fuel efficiency, which may result in decreased demand for petroleum-based fuel.
Added
Although the Company intends to vigorously defend against the claims asserted in this action, the litigation is in its early stages and no 15 assurance can be given as to the timing or outcome of the proceeding. An unfavorable outcome could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information, please see the section entitled “Risk Factors” in this Annual Report on Form 10-K.
Biggest changeFor more information, please see the section entitled “Risk Factors” in this Annual Report on Form 10-K. Governance Our Board of Directors has primary responsibility for oversight of our cybersecurity and other information technology risks, including our plans to mitigate cybersecurity risks and to respond to data breaches. The Board of Directors receives regular reports on cybersecurity matters.
To address these risks, we intend to leverage the support of third-party information technology and security providers who maintain SOC1/SOC2 compliance standards, including to perform a risk assessment designed to identify, assess, and manage cybersecurity risks, as well as provide cybersecurity response plan and procedures.
To address these risks, we leverage the support of third-party information technology and security providers who maintain SOC1/SOC2 compliance standards, including to perform a risk assessment designed to identify, assess, and manage cybersecurity risks, as well as provide cybersecurity response plans and procedures.
Item 1C: Cybersecurity We recognize the importance of assessing, identifying, and managing material risks related to cybersecurity threats. Our approach to cybersecurity risk management is aligned with our risk profile and business. We collaborate with partners who maintain SOC1/SOC2 compliance standards, and we use security frameworks to protect against business email compromise, malware, and ransomware.
Item 1C: Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks related to cybersecurity threats. Our approach to cybersecurity risk management is aligned with our risk profile and business. We collaborate with partners who maintain SOC1/SOC2 compliance standards.
Added
These reports include a range of topics, including our cybersecurity risk profile, the current cybersecurity and emerging threat landscape, the status of ongoing cybersecurity initiatives, incident reports, and the results of internal and external assessments of our information systems.
Added
The Board of Directors also annually reviews the adequacy and effectiveness of our information and 30 technology security policies and the internal controls regarding information and technology security and cybersecurity and periodically receives updates on the results of cybersecurity audits and applicable mitigation activities. In addition, our Board of Directors periodically receives presentations on cybersecurity matters from external experts.
Added
Management is working with a professional IT consulting firm to develop cybersecurity compliance standards and monitor necessary controls and processes used to identify cybersecurity matters and regular reporting to the Board of Directors.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently a party to any legal proceedings, the outcome of which, if determined adversely, we believe would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations. Item 4. Mine Safety Disclosures Not applicable. 26 PART II
Biggest changeExcept as described below, we are not currently a party to any legal proceedings, the outcome of which, if determined adversely, we believe would individually or in aggregate have a material adverse effect on our business, financial condition or results of operations.
Added
KF Business Ventures On March 4, 2026, KF Business Ventures, LP (“KF Business”), a California limited partnership, filed a complaint against Company, Foreland Refining Corp., a Texas corporation and wholly owned subsidiary of the Company, and 2020 Resources LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, in the Third Judicial District Court of Salt Lake County, Utah.
Added
The complaint arises from several contractual arrangements between KF Business and the defendants. First, KF Business alleges that the Company breached an Advisory Agreement dated December 2, 2024, pursuant to which the Company agreed to pay KF Business $10,500 plus $10,500 of the Company’s Common Stock per month in exchange for business advisory services.
Added
KF Business alleges that the Company has failed to pay $126,000 in cash and 41,096 shares of Common Stock owed through February 2026, with monthly payments continuing to accrue. Second, KF Business alleges that the Company breached a Secured Promissory Note dated December 2, 2024, in the original principal amount of $1,200,000 (as amended, the “Sky Quarry KF Business Note”).
Added
The Sky Quarry KF Business Note was subsequently amended in April 2025 and July 2025 to extend the payment deadline to November 24, 2025, and to modify the interest rate to 30% per annum. KF Business alleges that the Company failed to make payment when due.
Added
Third, KF Business alleges that Foreland Refining Corp. breached a Secured Promissory Note dated July 24, 2025 (the “Foreland Refining KF Business Note”), in the principal amount of $1,000,000, bearing interest at 30% per annum, with all unpaid principal and interest due on November 24, 2025. KF Business alleges that Foreland Refining Corp. failed to make payment when due.
Added
Fourth, KF Business alleges that the Company and 2020 Resources LLC breached a Guaranty Agreement dated July 24, 2025, pursuant to which the Company and 2020 Resources LLC guaranteed payment of the Sky Quarry KF Business Note and the Foreland Refining KF Business Note.
Added
In connection with these obligations, KF Business holds security interests in certain collateral pursuant to (i) a security agreement, which granted KF Business a security interest in two natural gas turbine power generators owned by 2020 Resources LLC, and (ii) an security agreement, which granted KF Business a security interest in various assets of 2020 Resources LLC, including accounts, equipment, inventory, and intellectual property.
Added
The complaint asserts fifteen causes of action, including breach of contract, breach of the implied covenant of good faith and fair dealing and quasi contract/unjust enrichment/quantum meruit, and judicial foreclosure and replevin in connection with the security agreements.
Added
KF Business seeks relief, including damages in an aggregate amount of $2,200,000 in principal under the promissory notes, plus interest at 30% per annum, $126,000 in unpaid advisory fees 31 and 41,096 shares of the Company’s Common Stock, along with attorneys’ fees, costs, pre- and post-judgment interest, and judicial foreclosure and possession of collateral.
Added
The Company intends to vigorously defend against the claims asserted in this action. The litigation is in its early stages and no assurance can be given as to the timing or outcome of the proceeding. An unfavorable outcome could have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows. Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market For Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Price and Dividend Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “SKYQ”.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is quoted on the Nasdaq Capital Market under the symbol “SKYQ”. Holders of Record As of March 31, 2026, we had 7,513 holders of record of our common stock.
Removed
The following table sets forth the high and low closing prices for our common stock as reported from October 10, 2024 through December 31, 2024.
Added
The actual number of holders of our common stock is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Removed
Quarterly Price Ranges Common Stock Quarter Ended High Low December 31, 2024 $ 4.24 $ 0.83 As of March 24, 2025, the closing sales price of our common stock on the Nasdaq Capital Market was $0.70. As of March 24, 2025, there were approximately 7,837 stockholders of record of our common stock.
Added
Currently, we do not anticipate paying any future dividends. Securities Authorized for Issuance under Equity Compensation Plan The following table sets forth information concerning securities authorized under equity compensation plans as of December 31, 2025.
Removed
At this time, we do not anticipate paying any future dividends. Issuer Purchases of Equity Securities None . Item 6. [ Reserved] 27
Added
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders(1) 500,000 Equity compensation plans not approved by security holders -0- -- -- Total 500,000 (1) An amendment to the Company’s 2020 Stock Plan was approved by the Company’s board of directors on September 2, 2025 and ratified by the Company’s stockholders at the Company’s 2025 annual meeting on November 4, 2025. 32 Recent Sales of Unregistered Securities None that have not already been disclosed in a prior Quarterly Report on Form 10-Q or Current Report on Form 8-K.
Added
At-the Market Offerings On January 12, 2026, we entered into a Controlled Equity Offering SM Sales Agreement (the “ Sales Agreement ”) with Cantor Fitzgerald & Co.
Added
(“Cantor”), pursuant to which we, from time to time, may offer and sell shares (the “ ATM Shares ”) of our common stock, through or to Cantor, acting as principal and/or sales agent, having an aggregate sales price of up to $4,700,000 (the “ ATM Offering ”).
Added
Subject to the terms and conditions of the Sales Agreement, Cantor will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the ATM Shares from time to time, based upon the Company’s instructions.
Added
The Company has provided Cantor with customary indemnification and contribution rights in favor of Cantor, and Cantor will be entitled to a commission of up to 3.0% of the gross proceeds from each sale of the ATM Shares effectuated pursuant to the Sales Agreement.
Added
Sales of the ATM Shares, if any, under the Sales Agreement may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended, or by any other method permitted by the Sales Agreement and applicable law.
Added
The Company has no obligation to sell any of the ATM Shares and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement. Through March 31, 2026, the Company sold 419,874 shares of common stock through the ATM Offering, generating net proceeds of $1,306,941. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2024 2023 Amount % of Net Sales Amount % of Net Sales Net sales $ 23,364,188 100.0 % $ 50,731,889 100.0 % Cost of goods sold (24,759,530) (106.0) % (48,391,724) 95.4 % Gross profit (1,395,342) (6.0) % 2,340,165 4.6 % Operating expenses General and administrative 6,121,955 26.2 % 3,702,743 7.3 % Depreciation and amortization 5,889 0.0 % 5,303 0.0 % Total operating expenses 6,127,844 26.6 % 3,708,046 7.3 % Loss from operations (7,523,186) (32.2) % (1,367,881) (2.7) % Other income (expense) Loss on extinguishment of debt (241,311) (0.4) % (205,425) (0.4) % Interest expense (6,516,512) (27.9) % (3,639,520) (7.2) % Loss on issuance of private placement (1,935,934) (8.3) % - - % Gain on warrant valuation 1,477,870 6.3 % - - % Gain (loss) on sale of assets (25,075) (0.1) % 564,811 1.1 % Other income 35,637 0.2 % 26,008 0.1 % Total other expense, net (7,205,325) (30.8) % (3,254,126) (6.4) % Net loss before provision for income taxes (14,728,511) (63.0) % (4,622,007) (9.1) % Provision for income taxes - - % 185,535 0.4 % Net loss $ (14,728,511) (63.0) % $ (4,436,472) (8.7) % Net sales.
Biggest changeYear Ended December 31, 2025 2024 Amount % of Net Sales Amount % of Net Sales Net sales $ 12,491,089 100% $ 23,364,188 100% Cost of goods sold (15,589,637) -125% (24,759,530) -106% Gross loss (3,098,548) -24.8% (1,395,342) -6.0% Operating expenses General and administrative 6,140,135 49.2% 6,121,955 26.2% Depreciation and amortization 9,817 0.1% 5,889 0.0% Total operating expenses 6,149,952 49.2% 6,127,844 26.2% Loss from operations (9,248,500) -74.0% (7,523,186) -32.2% Loss on extinguishment of debt (103,881) -0.8% (241,311) -1.0% Interest expense (3,162,864) -25.3% (6,516,512) -27.9% Loss on issuance of private placement - 0.0% (1,935,934) -8.3% Gain on warrant valuation 361,581 2.9% 1,477,870 6.3% Gain (loss) on sale of assets 1,652 0.0% (25,075) -0.1% Other income (expense) (46,387) -0.4% 35,637 0.2% Total other expense, net (2,949,899) -23.6% (7,205,325) -30.8% Net loss before provision for income taxes (12,198,399) -97.7% (14,728,511) -63.0% Provision for income taxes - 0.0% - 0.0% Net loss $ (12,198,399) -97.7% $ (14,728,511) -63.0% Net sales.
Under the terms of the invoice purchase and security agreement, Alterna provides an advance of 85% of the amount of the purchased receivables to Foreland and during the time the receivables remain outstanding, is granted a continuing senior security interest in all assets of Foreland, to the extent and in the amount of the purchased receivables.
Under the terms of the invoice purchase and security agreement, Alterna provides an advance of 85% of the amount of the receivables purchased to Foreland and during the time the receivables remain outstanding, is granted a continuing senior security interest in all assets of Foreland, to the extent and in the amount of the receivables purchased.
Despite our efforts to increase production capacity at the refinery, as well as ongoing maintenance and refurbishment activities, and the high 31 debt payments, we are not yet generating sufficient cash flow to cover operational costs. The need for cash is driven by both regular operating expenses and loans.
Despite our efforts to increase production capacity at the refinery, as well as ongoing maintenance and refurbishment activities, and the high debt payments, we are not yet generating sufficient cash flow to cover operational costs. The need for cash is driven by both regular operating expenses and loans.
They are initially measured at the present value of lease payments, adjusted for any lease incentives or initial direct costs incurred by the lessee. Subsequently, the right of use assets are typically amortized over the lease term, and the lease liability is reduced as lease payments are made.
They are initially measured at the present value of lease payments, adjusted for any lease incentives or initial direct costs incurred by the lessee. 42 Subsequently, the right of use assets are typically amortized over the lease term, and the lease liability is reduced as lease payments are made.
However, there is no guarantee that we will be able to raise sufficient capital, grow revenues, and generate the cash flow needed to meet our operating expenses and capital requirements effectively. We will continue to require additional cash to meet ongoing operational and capital needs.
However, there is no guarantee that we will be able to raise sufficient capital, grow revenues, and generate the cash flow needed to meet our operating expenses and capital requirements effectively. 38 We will continue to require additional cash to meet ongoing operational and capital needs.
Our net cash provided by financing activities for the year ended December 31, 2024 consisted of proceeds from lines of credit of $36,645,980, proceeds from notes payable of $19,483,052, proceeds on issuance of preferred stock of $308,000, proceeds on issuance of common stock of $6,550,722, proceeds of exercise of warrants of $4,790,919, offset by payments on lines of credit of $38,446,951, payments on notes payable of $17,032,996, debt discount on note payable of $2,546,660, preferred stock offering costs of $40,874, payments on finance leases of $34,417, and common stock offering costs of $2,061,665.
Our net cash provided by financing activities for the year ended December 31, 2024 consisted of proceeds from lines of credit of $36,645,980, proceeds from notes payable of $19,483,052, proceeds on issuance of preferred stock of $308,000, proceeds on issuance of common stock of $6,550,722, proceeds of exercise of warrants of $4,790,919, offset by payments on lines of credit of $38,446,951, payments on notes payable of $17,032,995, debt discount on note payable of $2,546,660, preferred stock offering costs of $40,874, payments on finance leases of $34,417, and common stock offering costs of $2,061,665.
During fiscal year 2024 the Company recognized $770,915 in costs associated with the refinery refurbishment, which included internal fuel, repairs and maintenance, and lab and safety related costs.
During fiscal year 2024 the Company recognized $770,915 in costs associated with the refinery refurbishment, which included internal fuel, repairs and maintenance, and lab and safety 36 related costs.
This issuance is strategically aligned with the Company’s goal to enhance its equity base, 34 provide additional capital to support growth and operations, and bolster its financial position.
This issuance is strategically aligned with the Company’s goal to enhance its equity base, provide additional capital to support growth and operations, and bolster its financial position.
In connection with the Foreland Refinery acquisition and PR Spring facility retrofit program, we believe we will continue to have material capital expenditures and face long term cash needs. We anticipate that these needs will be satisfied through the issuance of our debt and/or equity securities until such time as our cash flows from operations will satisfy our cash needs.
In connection with the Foreland Refinery acquisition and PR Spring facility retrofit program, we believe we will continue to have material capital expenditures and face long term cash needs. We anticipate that these needs will be satisfied through the issuance of our debt and/or equity securities until such time as our cashflows from operations will satisfy our cash needs.
Management believes net profits will be achieved from increased revenues with purchasing more crude generating higher production volumes, improving gross margins from improving costs of goods as a percentage of sales, as well as improve general and administrative expenses as a percentage of sales by increasing revenues, reduced repairs and maintenance and maintenance fuel one-time costs as a result of the 2024 refurbishment program.
Management believes net profits will be achieved from increased revenues with purchasing more crude generating higher production volumes, improving gross margins from improving costs of goods as a percentage of sales, as well as improving general and administrative expenses as a percentage of sales by increasing revenues, reduced repairs and maintenance and maintenance fuel one-time costs as a result of the 2024 and 2025 refurbishment program.
We have developed a process for separating oil from oily sands and other oil-bearing solids utilizing a proprietary solvent, which we refer to as our ECOSolv technology or the ECOSolv process. The solvent is used in a closed-loop distillation and evaporation circuit which results in over 99% of the solvent being recoverable for continuous reuse and requires no water.
We have developed a process for separating oil from oily sands and other oil-bearing solids utilizing a proprietary solvent, which we refer to as our ECOSolv technology or the ECOSolv process. The solvent is used in a closed-loop distillation and evaporation circuit which results in up to 99% of the solvent being recoverable for continuous reuse and requires no water.
The agreement is senior secured by the sale-ready and pre-sale petroleum product inventory on hand at Foreland and matures on December 21, 2025. Funds drawn under the agreement accrue interest at a per annum rate equal to the sum of the Wall Street Journal Prime Rate plus 2.25%.
The agreement is senior secured by the sale-ready and pre-sale petroleum product inventory on hand at Foreland and matured on December 21, 2025. Funds drawn under the agreement accrue interest at a per annum rate equal to the sum of the Wall Street Journal Prime Rate plus 2.25%.
As a result, the goodwill impairment risk is mitigated, it is more likely than not that goodwill is not impaired, and no further qualitative analysis is deemed necessary as of December 31, 2024. The Company will continue to monitor the financial performance of its reporting units and reassess its goodwill as needed. Leases .
As a result, the goodwill impairment risk is mitigated, it is more likely than not that goodwill is not impaired, and no further qualitative analysis is deemed necessary as of December 31, 2025. The Company will continue to monitor the financial performance of its reporting units and reassess its goodwill as needed. Leases .
Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors.
Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors.
The following discussion and analysis of the results of financial condition and results of operations for the years ended December 31, 2024 and 2023 should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this Form 10-K.
The following discussion and analysis of the results of financial condition and results of operations for the years ended December 31, 2025 and 2024, should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this Form 10-K.
As a result of our financial condition, we have included in our consolidated financial statements as of December 31, 2024 and December 31, 2023, a note indicating that there is significant doubt about our ability to continue as a going concern.
As a result of our financial condition, we have included in our consolidated financial statements as of December 31, 2025, and December 31, 2024, a note indicating that there is significant doubt about our ability to continue as a going concern.
During the year ended December, 2024, we recorded a one-time expense related to the initial measurement of our warrant liability, recognized a loss on issuance of private placement warrants, totaling $1,935,934. This loss arises from the difference between the fair value of the warrants issued and the proceeds received from the private placement.
During the year ended December 31, 2024, we recorded a one-time expense related to the initial measurement of our warrant liability and recognized a loss on issuance of private placement warrants, totaling $1,935,934. This loss arose from the difference between the fair value of the warrants issued and the proceeds received from the private placement.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table sets forth key components of our results of operations during the years ended December 31, 2024 and 2023, both in dollars and as a percentage of our net sales.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table sets forth key components of our results of operations during the years ended December 31, 2025 and 2024, both in dollars and as a percentage of our net sales.
As of December 31, 2024, the Company has performed an assessment of its goodwill for impairment in accordance with applicable accounting standards ASC 350, and ASC 820.
As of December 31, 2025, the Company has performed an assessment of its goodwill for impairment in accordance with applicable accounting standards ASC 350, and ASC 820.
As a percentage of net sales, depreciation and amortization was 0.0% and 0.0% for the years ended December 31, 2024 and 2023, respectively. In both years, depreciation and amortization consisted solely of depreciation of the Foreland plant, property and equipment. Total other income (expense).
As a percentage of net sales, depreciation and amortization was 0.1% and 0.0% for the years ended December 31, 2025 and 2024, respectively. In both years, depreciation and amortization consisted solely of depreciation of the Foreland plant, property and equipment. Total other income (expense).
The fair value of the warrants was calculated using a valuation model, which takes into account various assumptions such as the underlying stock price, volatility, and the time to expiration of the warrants. The issuance of these warrants was part of a broader capital-raising strategy aimed at securing financing to support the Company’s working capital, growth and strategic initiatives.
The fair value of the warrants was calculated using a valuation model, which considers various assumptions such as the underlying stock price, volatility, and the time to expiration of the warrants. The issuance of these warrants was part of a broader capital-raising strategy aimed at securing financing to support the Company’s working capital, growth and strategic initiatives.
Management believes that this one-time loss related to the warrant liability measurement should be evaluated separately from ongoing operations when assessing our financial performance. During the 2024 period, we incurred significant increase in interest expense, versus same period in 2023, related to our term debt.
Management believes that this one-time loss related to the warrant liability measurement should be evaluated separately from ongoing operations when assessing our financial performance. During the 2025 period, we incurred significant decrease in interest expense, versus same period in 2024, related to our term debt.
We believe that the future undiscounted net cash flows to be received from our long-lived assets exceed the assets’ carrying values and, accordingly, we have not recognized any impairment losses for the years ended December 31, 2024 and 2023. 35 Item 7A.
We believe that the future undiscounted net cash flows to be received from our long-lived assets exceed the assets’ carrying values and, accordingly, we have not recognized any impairment losses for the years ended December 31, 2025 and 2024.
In addition, a collateral monitoring fee of 0.17% on outstanding advances made is due monthly. Repayment of advances shall be payable from collection of Foreland accounts receivable, including those accounts arising from the sale of the inventory to its customers. As of December 31, 2024, the amount outstanding is $1,260,727.
In addition, a collateral monitoring fee of 0.17% on outstanding advances made is due monthly. Repayment of advances shall be payable from collection of Foreland accounts receivable, including those accounts arising from the sale of the inventory to its customers. As of December 31, 2025, the outstanding amount is $1,453,737.
The opinion on the December 31, 2024 audited financial statements from our independent registered public accounting firm also includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. From inception (June 4, 2019) through December 31, 2024, we have incurred accumulated net losses of $23,968,089.
The opinion on the December 31, 2025, audited financial statements from our independent registered public accounting firm also includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. From inception (June 4, 2019) through December 31, 2025, we have incurred accumulated net losses of $36,166,488.
The retrofit of PR Spring facility requires $3,500,000 to $4,000,000 in capital funding to complete the placement of several pieces of equipment, including vortex mixing tanks, conveyers and vapor recovery units, as well as tying this equipment to the facility including piping, MCC, emissions reduction, and HAZOP. We anticipate completing this work, including commissioning and startup in fiscal 2025.
The retrofit of PR Spring facility requires $3,500,000 to $4,000,000 in capital funding to complete the placement of several pieces of equipment, including vortex mixing tanks, conveyers and vapor recovery units, as well as tying this equipment to the facility including piping, MCC, emissions reduction, and HAZOP.
As noted in such financial statements, while several of the notes listed above are past their maturity date, we have not received any notices of default from the lenders. As of the date of this Form 10-K, approximately $8,238,705 of our outstanding debt is currently past due.
As noted in such financial statements, while several of the notes listed above are past their maturity date, we have not received any notice of default from the lenders. As of the date of this Form 10-K, approximately $7,618,831 of our outstanding debt is currently past due.
These payments are aimed at ensuring the Company can maintain its operations without incurring additional penalties or interest charges, and at enabling creditors to recover amounts due over time. The past due debt referred to above is owed to Libertas Funding LLC in the amount of $5,082,977 and is owed to LendSpark the amount of $1,747,212.
These payments are aimed at ensuring the Company can maintain its operations without incurring additional penalties or interest charges, and at enabling creditors to recover amounts due over time. The past due debt referred to above is owed to Libertas Funding LLC in the amount of $4,044,687 and is owed to LendSpark in the amount of $555,650.
As a percentage of net sales, general and administrative expenses were 26.2% and 7.3% for the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, the Company recorded share-based compensation expense of $632,205 and $634,783, respectively, as part of general and administrative expenses.
As a percentage of net sales, general and administrative expenses were 49.2% and 26.2% for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, the Company recorded share-based compensation expense of $659,134 and $632,205, respectively, as part of general and administrative expenses.
As such, shipping and handling fees billed to customers in a sales transaction are recorded in sales and shipping and handling costs incurred are recorded in cost of sales. Goodwill . Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Goodwill is accounted for in accordance with ASC 350, Intangibles-Goodwill and Other.
As such, shipping and handling fees billed to customers in a sales transaction are recorded in sales and shipping and handling costs incurred are recorded in cost of sales. 41 Goodwill . Goodwill represents the excess of the purchase price over the fair value of the net assets acquired.
The decrease in net sales was due to a combination of refinery shutdowns for repairs and refurbishment and the reduction in WTI pricing below the historical average of $85/barrel which correlates to the lower pricing for our end products, including Asphalt by 9%, VGO by 11%, and diesel by 22%. These percentage decreases total $3,962,812 in decreased revenue.
The decrease in net sales was due to a combination of refinery shutdowns for repairs and refurbishment and the reduction in WTI pricing below the historical average of $85/barrel which correlates to the lower pricing for our end products, including Asphalt by 19%, VGO by 13%, and diesel by 13%. These percentage decreases resulted in a $2,288,502 decrease in revenue.
Other expense, net, for the year ended December 31, 2024 consisted of gain on warrant valuation of $1,477,870 and other income of $35,637, offset by interest expense of $6,516,512, loss on issuance of private placement warrants of $1,935,934, loss on extinguishment of debt of $241,311, and loss on sale of assets of $25,075, as compared to other expense, net for the year ended December 31, 2023 which consisted of interest expense of $3,639,520 and a loss on extinguishment of debt of $205,425, offset by a gain on sale of assets of $564,811 and other income of $26,008.
Other net expense for the year ended December 31, 2025 consisted of gain on warrant valuation of $361,581, loss on extinguishment of debt of $103,881, and gain on sale of assets of $1,652, offset by interest expense of $3,162,864, as compared to other expense, for the year ended December 31, 2024 which consisted of interest expense of $6,516,512, a loss on extinguishment of debt of $241,311, loss on sale of assets of $25,075, and loss on issuance of private placement of $1,935,934, offset by a gain on warrant valuation of $1,477,870 and other income of $35,637.
We acquired goodwill in our acquisition of Foreland. We evaluate goodwill on an annual basis in the fourth quarter or more frequently if management believes indicators of impairment exist.
Goodwill is accounted for in accordance with ASC 350, Intangibles-Goodwill and Other. We acquired goodwill in our acquisition of Foreland. We evaluate goodwill on an annual basis in the fourth quarter or more frequently if management believes indicators of impairment exist.
A majority of the increase was due to an increase in general and administrative expenses related to increased personnel, insurance, repairs and maintenance, and maintenance fuel costs. Management plans to improve general and administrative expenses as a percentage of sales by increasing revenues, reduced repairs and maintenance and maintenance fuel one-time costs as a result of the 2024 refurbishment program.
Most of the increase in general and administrative expense was due to an increase in compensation expense. Management plans to improve general and administrative expenses as a percentage of sales by increasing revenues, reducing repairs and maintenance, and maintenance fuel one-time costs that occurred as a result of the 2024 refurbishment program. Depreciation and amortization.
Summary of Cash Flow The following table provides detailed information about our net cash flows from continuing operations for the years ended December 31: 2024 2023 Net cash provided by used in operating activities $ (7,491,578) $ (376,062) Net cash used in investing activities (1,481,253) (731,937) Net cash provided by financing activities 7,615,111 4,458,454 Effect of exchange rate on cash (8,203) (24,185) Increase (decrease) in cash and restricted cash (1,365,923) 3,326,270 Cash and restricted cash, beginning of the year 4,680,836 1,354,566 Cash and restricted cash, end of the year $ 3,314,913 $ 4,680,836 Our net cash used in operating activities for the years ended December 31, 2024 and 2023 was $7,491,578 and $376,062, respectively.
Summary of Cash Flow The following table provides detailed information about our net cash flows from continuing operations for the years ended December 31: 2025 2024 Net cash used in operating activities $ (3,272,777) $ (7,491,578) Net cash used in investing activities (368,059) (1,481,253) Net cash provided by financing activities 1,134,708 7,615,111 Effect of exchange rate on cash (3,080) (8,203) Decrease in cash and restricted cash (2,509,208) (1,365,923) Cash and restricted cash, beginning of the year 3,314,913 4,680,836 Cash and restricted cash, end of the year $ 805,705 $ 3,314,913 Our net cash used in operating activities for the years ended December 31, 2025 and 2024, was $3,272,777 and $7,491,578, respectively.
Our net cash used in investing activities for the years ended December 31, 2024 and 2023 was $1,481,253 and $731,937, respectively. Our net cash used in investing activities for the year ended December 31, 2024 consisted of purchases of property, plant and equipment of $691,491 and purchases of exploration and evaluation assets of $789,762.
Our net cash used in investing activities for the year ended December 31, 2024, consisted of purchases of property, plant and equipment of $691,491 and purchases of exploration and evaluation assets of $789,762. Our net cash provided by financing activities for the years ending December 31, 2025 and 2024, was $1,134,708 and $7,615,111, respectively.
The 2024 reduced production of 209,583 barrels over 2023 accounts for $19,916,672 in decreased revenue Management believes purchasing more crude generating higher production volumes at the refinery will be a driver for anticipated future revenue growth. Please refer to Note 23 to our audited financial statements for segmented financial information. Cost of goods sold.
The 2025 reduced production of 77,619 barrels over 2024 resulted in a $8,584,597 decrease in revenue. Management believes purchasing more crude and generating higher production volumes at the refinery will be a driver for anticipated future revenue growth. Please refer to Note 22 to our audited financial statements for segmented financial information. Cost of goods sold.
Liquidity and Capital Resources As of December 31, 2024, our cash on hand was $385,116. We had negative operating cash flows for the year ended December 31, 2024 and our monthly cash flow burn rate for the year ended December 31, 2024 was $624,298.
Liquidity and Capital Resources As of December 31, 2025, our cash on hand was $35,370. We had negative operating cash flows for the year ended December 31, 2025, and our monthly cashflow burn rate for the year ended December 31, 2025, was $272,731.
Managements plan to improve gross profit by increasing revenues, lower fixed operational costs and higher efficiencies resulting from higher production volumes. General and administrative expenses. Our general and administrative expenses increased by $2,419,212, or 65.3%, to $6,121,955 for the year ended December 31, 2024 from $3,702,743 for the year ended December 31, 2023.
Managements plan to improve gross profit by increasing revenues, lowering fixed operational costs and increasing efficiencies through higher production volumes. General and administrative expenses. Our general and administrative expenses increased by $18,180, or (0)%, to $6,140,135 for the year ended December 31, 2025, from $6,121,955 for the year ended December 31, 2024.
We had an income tax benefit of $0 and $185,535 for the years ended December 31, 2024 and 2023, respectively. The Company had a history of operating losses, thus the Company has concluded that it more than likely than not that the benefit of its deferred tax assets will not be fully realized. Net loss.
The Company has had a history of operating losses; thus, the Company has concluded that more than likely than not, the benefit of its deferred tax assets will not be fully realized. Net loss.
Depreciation and amortization. Our depreciation and amortization expense increased by $586, or 11.1%, to $5,889 for the year ended December 31, 2024 from $5,303 for the year ended December 31, 2023. In 2024 the increase in depreciation and amortization was primarily due to addition in fixed assets resulting from additions.
Our depreciation and amortization expense increased by $3,928, or 67%, to $9,817 for the year ended December 31, 2025, from $5,889 for the year ended December 31, 2024. In 2025 the increase in depreciation and amortization was primarily due to the depreciation of new fixed assets.
As a result of the foregoing, our gross profit decreased by $3,735,507, or 159.6%, to a gross loss of $1,395,342 for the year ended December 31, 2024 from $2,340,165 for the year ended December 31, 2023. As a percentage of net sales, gross profit (loss) was (6.0)% and 4.6% for the years ended December 31, 2024 and 2023, 29 respectively.
As a result of the foregoing, our gross loss increased by $1,703,206, or 122%, to a gross loss of $3,098,548 for the year ended December 31, 2025, from $1,395,342 for the year ended December 31, 2024. As a percentage of net sales, gross profit (loss) was (24.8)% and (6)% for the years ended December 31, 2025 and 2024, respectively.
Additionally, we are pursuing opportunities to reduce debt service through refinancing or repayment of existing obligations, establish strategic partnerships, and raise capital through equity or debt offerings, or a combination of these actions.
We anticipate completing this work, including commissioning and startup in the next twelve months from when the necessary funding is obtained. Additionally, we are pursuing opportunities to reduce debt service through refinancing or repayment of existing obligations, establish strategic partnerships, and raise capital through equity or debt offerings, or a combination of these actions.
Our net cash used in operating activities for the year ended December 31, 2023 consisted of a net loss of $4,436,472, plus primarily amortization of debt issuance costs of $2,568,523 and an increase in inventory of $1,004,383, offset primarily by a decrease in accounts payable and accrued expenses of $1,040,860.
Our net cash used in operating activities for the year ended December 31, 2024, consisted of a net loss of $14,728,511, primarily amortization of debt issuance costs of $4,465,636 and an increase in inventory of $712,055, offset primarily by a decrease in accounts payable and accrued expenses of $857,802.
Our net cash used in investing activities for the year ended December 31, 2023 consisted of purchases of property, plant and equipment of $1,028,781 and purchases of exploration and evaluation assets of $664,556, offset by proceeds from the sale of assets of $961,400.
Our net cash used in investing activities for the year ended December 31, 2025, consisted of proceeds from sale of assets of $14,060, purchases of property, plant and equipment of $133,636 and purchases of 39 exploration and evaluation assets of $248,483.
Lender / Merchant Maturity Date Effective Interest Rate Principal Balance Libertas #6 December 6, 2024 58% $ 2,602,031 Libertas #5 November 29, 2024 58% 1,398,582 Private Lender A March 2, 2025 20% 1,216,818 LendSpark #3 March 4, 2025 68% 1,058,744 LendSpark #4 December 4, 2024 68% 668,468 Libertas #7 January 7, 2025 66% 591,175 Libertas #4 September 12, 2024 68% 301,049 Libertas #8 March 6, 2025 68% 190,140 ACMO USOS LLC March 15, 2021 15% 191,699 USA SBA March 1, 2026 1% 44,474 $ 8,283,179 Less: Unamortized debt issuance costs (1,796,686 ) $ 6,486,493 33 For a complete description of the terms of these loans, please see Note 13 to our audited consolidated financial statements for the years ended December 31, 2024 and 2023.
Lender Maturity Date Effective Interest Rate Principal Balance 2025 Libertas #6 December 6, 2024 58% $ 2,388,381 Libertas #5 November 29, 2024 58% 1,187,082 Private Lender A November 24, 2025 30% 1,131,507 Lendspark #3 March 4, 2025 68% 555,650 Libertas #7 January 7, 2025 66% 379,675 ACMO USOS LLC March 15, 2021 15% 191,699 Lendspark #4 December 4, 2024 68% 163,795 Libertas #4 September 12, 2024 68% 89,549 USA SBA March 1, 2026 1% 6,313 $ 6,093,651 Less: Unamortized debt issuance costs (917,708) $ 5,175,943 For a complete description of the terms of these loans, please see Note 13 to our audited consolidated financial statements for the years ended December 31, 2025 and 2024.
The solvent has demonstrated oil separation rates of over 95% in bench testing using samples of both mined crushed ore and ground asphalt shingles.
The solvent has demonstrated oil separation rates of up to 95% in bench testing using samples of both mined crushed ore and ground asphalt shingles. Bench testing was conducted in house, and through unaffiliated third parties which were completed in May and August 2022.
Management’s plan to improve our cost of goods sold as a percentage of net sales includes growing more revenue by acquiring more crude oil to process at our refinery, decreasing transportation which is anticipated to enhance gross margin. Gross profit (loss).
Management’s plan to improve our cost of goods sold as a percentage of net sales includes increasing the volume of oil refined to create better economy of scale and decreasing transportation costs which is anticipated to enhance gross margin. Gross profit (loss).
As a result of the cumulative effect of the factors described above, we had a net loss of $14,728,511 for the year ended December 31, 2024, as compared to a net loss of $4,436,472 for the year ended December 31, 2023, an increase of $10,292,039, or 232%.
As a result of the cumulative effect of the factors described above, we had a net loss of $12,198,399 for the year ended December 31, 2025, as compared to a net loss of $14,728,511 for the year ended December 31, 2024, a decrease of $2,530,112, or (17) %.
We continue to evaluate our capital structure to optimize costs and enhance financial stability, considering refinancing options and alternative capital sources where feasible. During the reporting period, the Company experienced an increase in interest expense of $2,876,992, primarily due to the high cost of its Merchant Capital Advances (“MCA”) debt.
We continue to evaluate our capital structure to optimize costs and enhance financial stability, considering refinancing options and alternative capital sources where feasible. During the reporting period, the Company experienced a decrease in other expenses of $4,255,426, primarily due to debt interest and loss on issuance of private placement.
Cost of goods sold decreased by $23,632,194, or 48.8%, to $24,659,971 for the year ended December 31, 2024 from $48,391,724 for the year ended December 31, 2023. During the years ended December 31, 2024 and 2023, the Company recorded depreciation expense related to Foreland refinery of $787,560. and $559,744, respectively, as part of cost of goods sold.
Cost of goods sold decreased by $9,169,893, or 37%, to $15,589,637 for the year ended December 31, 2025, from $24,759,530 for the year ended December 31, 2024. During the years ended December 31, 2025 and 2024, the Company recorded depreciation expense related to Foreland refinery of $1,182,590 and $787,560, respectively, as part of cost of goods sold.
The MCA debt is characterized by higher-than-market interest rates, which have contributed to a significant rise in 30 financing costs. The increased interest burden has impacted the Company’s overall financial performance during the period. Management continues to evaluate alternatives to optimize the capital structure and reduce reliance on higher-cost debt instruments moving forward.
The increased interest burden has impacted the Company’s overall financial performance during the period. Management continues to evaluate alternatives to optimize the capital structure and reduce reliance on higher-cost debt instruments moving forward. In addition, the Company is exploring potential refinancing options and strategic initiatives to mitigate the impact of these elevated interest costs.
We expect the recycling and production of oil from asphalt shingles to reduce the dependence on landfills for the disposal of waste and to also reduce dependence on foreign and domestic virgin crude oil extraction for industrial uses.
We anticipate several benefits from the recycling and production of oil from asphalt shingles reducing the dependence on landfills for the disposal of waste and reducing dependence on foreign oil.
As a percentage of net sales, cost of goods sold was 106.0% and 95.4% for the years ended December 31, 2024 and 2023, respectively. As with our net sales, the decrease in cost of goods sold was due to a reduction in revenues, lower volumes of refined products and lower pricing.
As with our net sales, the decrease in cost of goods sold was due to a reduction in revenues, lower volumes of refined products and lower pricing and did not decrease at the same rate as revenues due to fixed overhead cost.
We are in the process of retrofitting the PR Spring Facility which we expect to complete in fiscal 2025 to recycle waste asphalt shingles using our ECOSolv technology to produce and sell oil as well as asphalt paving aggregate mined from our bitumen deposit.
Currently, we intend to finish retrofitting our oil sands remediation facility located in PR Spring in eastern Utah in the next twelve months from when the necessary funding is obtained to recycle waste asphalt shingles using our ECOSolv technology, to produce and sell oil as well as asphalt paving aggregate mined from our bitumen deposit.
This increase in interest expense reflects the financial obligations of maintaining liquidity and funding operations, particularly during a phase of substantial investment in refinery refurbishment and related activities. Overall, while this loss impacts the Company’s reported results, it should be viewed in the context of its financing strategy and the overall long-term value it aims to create for shareholders.
This decrease in interest expense is primarily due to the conversion of existing debt to equity. Overall, while this loss impacts the Company’s reported results, it should be viewed in the context of its financing strategy and the overall long-term value it aims to create for shareholders.
We had total other expense, net of $7,205,325 for the year ended December 31, 2024, as compared to $3,254,126 for the year ended December 31, 2023.
Total other net expenses was $2,949,899 for the year ended December 31, 2025, as compared to $7,205,325 for the year ended December 31, 2024.
In addition, the Company is exploring potential refinancing options and strategic initiatives to mitigate the impact of these elevated interest costs. The funds raised through MCA debt have been instrumental in executing the capital program, which includes key investments in infrastructure upgrades and the acquisition of crude oil, both critical to supporting future growth and operations.
The funds raised through MCA debt have been instrumental in executing the capital program, which includes key investments in infrastructure upgrades and the acquisition of crude oil, both critical to supporting future growth and operations. The Company remains focused on maintaining liquidity and flexibility while working towards minimizing the long-term financial impact of current financing structures.
Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Form 10-K, particularly in the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” Overview We are an oil production, refining, and development-stage environmental remediation company formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soils.
Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Form 10-K, particularly in the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” Overview We operate a regional refiner (the Eagle Springs Refinery) producing diesel, VGO, naphtha and liquid paving asphalt from crude oil suppliers in the Uintah basin near Nevada and Utah.
Our net sales decreased by $27,367,701, or 53.9%, to $23,364,188 for the year ended December 31, 2024 from $50,731,889 for the year ended December 31, 2023.
Our net sales decreased by $10,873,009, or 47%, to $12,491,089 for the year ended December 31, 2025, from $23,364,188 for the year ended December 31, 2024.
The Company remains focused on maintaining liquidity and flexibility while working towards minimizing the long-term financial impact of current financing structures. Moving forward, the Company intends to manage debt levels prudently and explore ways to enhance capital efficiency, including the consideration of lower-cost financing alternatives as market conditions evolve. Provision for income taxes.
Moving forward, the Company intends to manage debt levels prudently and explore ways to enhance capital efficiency, including the consideration of lower-cost financing alternatives as market conditions evolve. Provision for income taxes. We had an income tax benefit of $0 and $0 in the years ended December 31, 2025 and 2024, respectively.
This debt was primarily used to finance the Company’s ongoing capital program and crude oil purchases. The decision to utilize this form of debt was driven by the need to fund critical capital expenditures required for operational expansion and procurement of necessary crude inventory.
The decision to utilize this form of debt was driven by the need to fund critical capital expenditures required for operational expansion and procurement of necessary crude inventory. The MCA debt is characterized by higher-than-market interest rates, which have contributed to a significant rise in financing costs.
Our net cash used in operating activities for the year ended December 31, 2024 consisted of a net loss of $14,728,511, plus amortization of debt issuance costs if $4,465,636, loss on issuance of warrants of $1,936,937, an decrease in accounts receivable of $2,393,572, shared based compensation of $632,205, depreciation and amortization of $793,449, amortization of right-of-use asset of $ 90,990, and an increase in operating lease liability of $69,777, offset primarily by an decrease in accounts payable and accrued expenses of $857,802, an increase in inventory of $712,055, an increase in prepaid expenses of $224,737, and gain on revaluation of warrant liabilities of $1,477,870.
Our net cash used in operating activities for the year ended December 31, 2025 consisted of a net loss of $12,198,399, plus amortization of debt issuance costs if $1,473,278, a decrease in accounts receivable of $1,119,209, shared based compensation of $659,134, depreciation and amortization of $1,192,407, amortization of right-of-use asset of $78,488, an increase in operating lease liability of $79,968, an increase in accounts payable and accrued expenses of $2,332,177, an decrease in inventory of $2,470,871, an increase in prepaid expenses of $82,633, and gain on revaluation of warrant liabilities of $361,581.
Our net cash provided by financing activities for the years ended December 31, 2024 and 2023 was $7,491,578 and $4,458,454, respectively.
Our net cash used in investing activities for the years ended December 31, 2025 and 2024, was $368,059 and $1,481,253, respectively.
Our net cash provided by financing activities for the year ended December 31, 2023 consisted of proceeds from lines of credit of $61,499,106, proceeds from notes payable of $17,721,772, proceeds on issuance of preferred stock of $614,804 and proceeds on issuance of 32 common stock of $28,739, offset by payments on lines of credit of $58,437,408, payments on note payable of $12,905,339, debt discount on note payable of $3,588,539 and preferred stock offering costs of $474,681.
Our net cash provided by financing activities for the year ended December 31, 2025, consisted of proceeds from lines of credit of $10,283,930, proceeds from notes payable of $3,025,752, offset by payments on lines of credit of $10,090,920, payments on notes payable of $,1,998,958, and payments of debt issuance costs of $85,470.
As of December 31, 2024, the amount outstanding is $2,092,084. Debt As of December 31, 2024, we had the following additional debt outstanding.
Convertible Promissory Note As of December 31, 2025, we had the following convertible notes outstanding.
We expect to complete the build-out of our ASR Facility in fiscal 2025, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturing centers. The Company has a single segment reporting approach given all revenues generated from Foreland Refining products.
The Company has a single segment reporting approach given all revenues generated from Foreland Refining products. The Company anticipates in the future the possibility of segmental reporting in connection with alternative revenue, streams, and cost centers.
Removed
The Company anticipates in the future the possibility of segmental reporting in connection with alternative revenue, streams, and cost centers. During the preparation of the financial statements for the year ended December 31, 2024, the Company determined that it was not properly presenting stock-based compensation and depreciation expense in its statements of operations.
Added
In addition to our goal of growing the refinery, we have a separate division in the development-stage (P.R. Springs) formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soils, providing sustainable refined crude products.
Removed
Historically, depreciation related to production assets (e.g., machinery, equipment) has been classified as an operating expense under the "Operating Expenses" section of the income statement. However, as part of an ongoing review of our financial reporting practices, it has been determined that this depreciation is more accurately classified as part of the cost of goods sold (COGS).
Added
Notice of Non-Compliance On March 28, 2025, we were notified by The Nasdaq Stock Market LLC (“Nasdaq”) that we were not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”) because the closing bid price of our Common Stock had closed below $1.00 per share for 30 consecutive business days.
Removed
This adjustment aligns with accounting standards and provides a clearer representation of the costs directly related to the production process. As part of the Company’s ongoing review of financial reporting practices, it was determined that share-based compensation is more appropriately classified as part of general and administrative expenses rather than share-based compensation.
Added
We were provided an initial 180-day compliance period, which was scheduled to expire on September 24, 2025. On September 25, 2025, we received a written notification from Nasdaq stating that the Company has been granted an additional 180-day period, or until March 23, 2026, to regain compliance with the Minimum Bid Price Requirement.
Removed
This change aligns the expense with its true nature, as the compensation is related to administrative functions, including executive compensation and employee benefits, which are typically reported in general and administrative expenses. The Company determined that these errors were immaterial to the previously issued consolidated financial statements, and as such no restatement was necessary.
Added
We effected the Reverse Stock Split (as defined below) to regain compliance with the Minimum Bid Price Requirement, but there can be no assurance that we will retain or maintain compliance with Nasdaq’s listing requirements. 34 On March 24, 2026, Sky Quarry Inc.
Removed
The 28 revisions discussed above were made to the December 31, 2023 consolidated statements of operations and comprehensive loss.
Added
(the “Company”) received a written notification (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) informing the Company that the Staff had determined to delist the Company’s Common Stock, par value $0.0001 (the “Common Stock”), from The Nasdaq Capital Market due to the Company’s continued non-compliance with Nasdaq Listing Rule 5550(a)(2) (the “Rule”), which requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price”), and that trading of the Common Stock will be suspended at the open of business on March 31, 2026.
Removed
This interest expense is primarily due to the high financing costs associated with the term notes, which were utilized to support ongoing working capital needs and operational expenses. These note terms, characterized by higher interest rates relative to traditional debt instruments, have resulted in a notable impact on our financial performance for the quarter.
Added
Subsequently, on March 30, 2026, the Company was notified by Nasdaq that the Company has regained compliance with the Rule, and that the matter was now closed (the “Compliance Notice”).
Removed
The inventory finance rider provides a standby security for certain letters of credit in place with certain crude oil suppliers to Foreland. The letters of credit are adjusted periodically to correlate with the price and quantities of purchased heavy crude oil.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Removed
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 36 Item 8. Consolidated Financial Statements and Supplemental Data 36 Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) F-4 Consolidated Statements of Cash Flows F-5 Notes to Consolidated Financial Statements F-7
Added
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).