Sky Quarry Seeks Massive Share Increase, Reverse Split Authority

TL;DR

**SKYQ is gearing up for massive dilution and a reverse split, signaling a desperate need for capital and a potential stock price pump; tread carefully.**

AI Summary

Sky Quarry Inc. (SKYQ) is holding its 2025 Annual Meeting on November 4, 2025, to address several critical proposals impacting its capital structure and governance. The company, an oil production, refining, and environmental remediation firm focused on recycling waste asphalt shingles and remediating oil-saturated sands, seeks to significantly increase its authorized common stock from 100,000,000 shares to 2,000,000,000 shares. This 1,900% increase aims to provide flexibility for future capital raises, acquisitions, or strategic initiatives. Additionally, shareholders will vote on granting the Board discretion to implement a reverse stock split in a range from 1-for-2 to 1-for-25, which could be used to increase the stock price and meet listing requirements. The company also proposes to expand its 2020 Stock Plan by increasing authorized shares for issuance from 1,666,667 to 4,000,000, a 140% increase, to attract and retain talent. Marcus Laun, Interim CEO and President, is soliciting proxies for these votes, emphasizing the importance of shareholder participation.

Why It Matters

Sky Quarry's proposals for a 1,900% increase in authorized shares and a potential 1-for-25 reverse stock split are critical for its future financial flexibility and market perception. For investors, these actions could signal dilution risk if new shares are issued, but also potential for capital raises to fund its ECOSolv technology and PR Spring Facility retrofit. Employees could benefit from the expanded 2020 Stock Plan, which increases shares for compensation by 140%, enhancing retention. Customers and the broader market might see Sky Quarry's sustainable refining and environmental remediation efforts, like recycling waste asphalt shingles, accelerate with improved funding, positioning it competitively against traditional oil and gas firms and other cleantech innovators.

Risk Assessment

Risk Level: high — The proposal to increase authorized common stock from 100,000,000 to 2,000,000,000 shares (a 1,900% increase) presents a significant dilution risk for existing shareholders. Furthermore, granting the Board discretion for a reverse stock split up to 1-for-25 often indicates a company struggling with a low stock price, potentially to meet exchange listing requirements, which can be a red flag for financial health.

Analyst Insight

Investors should carefully evaluate the potential for significant dilution from the proposed increase in authorized shares and the implications of a reverse stock split, which often precedes further declines. Consider reducing exposure or holding off on new investments until the company demonstrates clear, profitable execution of its ECOSolv technology and PR Spring Facility retrofit.

Key Numbers

• 2,000,000,000 shares — Proposed authorized common stock (Increased from 100,000,000 shares, a 1,900% increase)
• 1-for-25 — Maximum reverse stock split ratio (Board discretion to implement up to April 30, 2027)
• 4,000,000 shares — Proposed shares for 2020 Stock Plan (Increased from 1,666,667 shares, a 140% increase)
• 23,314,603 shares — Common Stock outstanding (As of the September 10, 2025 Record Date)
• November 4, 2025 — Annual Meeting Date (Date for shareholder vote on key proposals)
• September 10, 2025 — Record Date (Date for determining stockholders entitled to vote)
• 5,930 acres — Asphalt bitumen leases (Owned by subsidiary 2020 Resources in PR Spring region)
• 99% — Solvent recovery rate (For ECOSolv technology in closed-loop distillation)
• 95% — Oil separation rate (Achieved in bench testing using ECOSolv technology)
• 11,657,302 shares — Quorum requirement (Majority of outstanding shares needed for Annual Meeting)

Key Players & Entities

• Sky Quarry Inc. (company) — Registrant and environmental remediation company
• Marcus Laun (person) — Interim CEO and President, designated proxy
• SEC (regulator) — U.S. Securities and Exchange Commission
• Tanner LLC (company) — Independent registered public accounting firm
• Colonial Stock Transfer (company) — Transfer agent for Sky Quarry Inc.
• Broadridge (company) — Vote processing agent
• 2020 Resources (company) — Wholly-owned subsidiary with PR Spring Facility assets
• Foreland (company) — Wholly-owned subsidiary operating Eagle Springs Refinery
• Delaware (regulator) — State of incorporation for Sky Quarry Inc.
• PR Spring Facility (company) — Key asset for asphalt shingle recycling and bitumen mining

FAQ

Risk Factors

• Significant Increase in Authorized Shares [medium — financial]: The company proposes to increase authorized common stock from 100,000,000 to 2,000,000,000 shares, a 1,900% increase. This is intended to provide flexibility for future capital raises, acquisitions, or strategic initiatives. However, such a substantial increase could dilute existing shareholders if not managed effectively.
• Potential for Reverse Stock Split [medium — financial]: Shareholders will vote on granting the Board discretion to implement a reverse stock split in a range from 1-for-2 to 1-for-25. This measure is intended to increase the stock price and potentially meet listing requirements, but a reverse split can also signal financial distress to the market.
• Development Stage Operations [high — operational]: Sky Quarry is described as a development-stage environmental remediation company. Its success is contingent on the successful retrofitting of the PR Spring Facility within twelve months and the effective deployment of its ECOSolv technology, which has shown promising results in bench testing (95% oil separation rate, 99% solvent recovery rate).
• Environmental Remediation and Recycling Compliance [medium — regulatory]: As an environmental remediation firm, Sky Quarry is subject to various environmental regulations related to waste management, oil production, and solvent use. Compliance with these regulations is critical for its operations and may involve significant costs and potential liabilities.
• Dependence on Virgin Crude Oil Prices [low — market]: The company's business model aims to reduce dependence on virgin crude oil. However, the economic viability of its recycled products and remediation services may still be influenced by fluctuations in the price of virgin crude oil.

Industry Context

Sky Quarry operates in the oil production, refining, and environmental remediation sectors, with a specific focus on recycling waste asphalt shingles and remediating oil-saturated sands. The company aims to leverage its proprietary ECOSolv technology to create sustainable products and reduce reliance on virgin crude oil and landfill disposal. The industry is increasingly focused on circular economy principles and sustainable practices, presenting opportunities for innovative solutions like Sky Quarry's.

Regulatory Implications

As an environmental remediation and oil production company, Sky Quarry faces significant regulatory oversight concerning waste management, emissions, and resource extraction. Compliance with federal, state, and local environmental laws is crucial and could involve substantial costs and potential liabilities. The proposed increase in authorized shares and potential reverse stock split may also attract scrutiny from regulators and investors regarding corporate governance and financial stability.

What Investors Should Do

1. Review the rationale for the significant increase in authorized common stock (Proposal 2).
2. Evaluate the potential impact of a reverse stock split (Proposal 3).
3. Assess the proposed expansion of the 2020 Stock Plan (Proposal 4).
4. Understand the company's operational progress and technology validation.

Key Dates

• 2025-11-04: Annual Meeting — Shareholders will vote on critical proposals including the increase in authorized common stock, reverse stock split, and amendment to the 2020 Stock Plan.
• 2025-09-10: Record Date — Determined the shareholders entitled to vote at the Annual Meeting.
• 2027-04-30: Reverse Stock Split Discretion Expiration — The Board has discretion to implement a reverse stock split up to this date.
• 2022-08-30: ECOSolv Bench Testing Completion — Indicates the completion of in-house bench testing for the ECOSolv technology.
• 2022-05-03: ECOSolv Bench Testing Completion — Indicates the completion of third-party bench testing for the ECOSolv technology.
• 2019-06-04: Company Incorporation — Sky Quarry, Inc. was originally incorporated in Delaware.

Glossary

DEF 14A

A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information about the matters to be voted on at a company's annual meeting of shareholders. (This document contains the proposals and information relevant to Sky Quarry's 2025 Annual Meeting.)

Authorized Common Stock

The maximum number of shares of common stock that a corporation is legally permitted to issue, as specified in its charter. (Sky Quarry is seeking to dramatically increase this number to provide future financial flexibility.)

Reverse Stock Split

A corporate action in which a company reduces the number of its outstanding shares by consolidating them into a smaller number, typically to increase the per-share market price. (The company is considering this to potentially boost its stock price and meet listing requirements.)

2020 Stock Plan

A company-sponsored equity incentive plan that allows for the issuance of stock options, restricted stock, or other equity awards to employees and directors. (Sky Quarry proposes to increase the number of shares available under this plan to attract and retain talent.)

ECOSolv technology

Sky Quarry's proprietary solvent-based process for separating oil from oily sands and other oil-bearing solids, designed for closed-loop distillation with high solvent recovery. (This technology is central to the company's oil production and environmental remediation business model.)

Asphalt Shingle Recycling (ASR)

A process to reclaim valuable materials from waste asphalt shingles, such as bitumen and aggregate, reducing landfill waste and reliance on virgin materials. (This is a key operational focus for Sky Quarry, aiming to create sustainable refined products.)

Bitumen

A heavy, viscous form of petroleum, often used in asphalt for road construction. (Sky Quarry owns leases for asphalt bitumen and intends to produce it from recycled shingles and oil-saturated sands.)

Development Stage Company

A company that has a defined business plan but has not yet generated significant revenue or profits, often still in the process of developing its products or services. (Sky Quarry is described as being in the development stage, indicating ongoing investment and risk.)

Year-Over-Year Comparison

This analysis is based on a single DEF 14A filing. A comparison to a previous filing would require access to historical SEC filings (e.g., the prior year's DEF 14A or 10-K) to identify changes in revenue, net income, debt levels, risk factors, and executive compensation. Without prior filings, a year-over-year comparison cannot be provided.

Key Financial Figures

• $0.0001 — f the Company's common stock, par value $0.0001 per share (the "Common Stock"), at the

Filing Documents

• skyq_def14a.htm (DEF 14A) — 372KB
• skyqdef14a_1.jpg (GRAPHIC) — 480KB
• 0001096906-25-001533.txt ( ) — 1033KB

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 17 PROPOSAL NO. 2: INCREASE IN AUTHORIZED SHARES OF COMMON STOCK 20 PROPOSAL NO. 3: REVERSE STOCK SPLIT 21 PROPOSAL NO. 4: RATIFICATION OF AMENDMENT TO THE 2020 STOCK PLAN, AS AMENDED 24 PROPOSAL NO. 5: RATIFICATION OF THE SELECTION OF TANNER LLC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDED DECEMBER 31, 2025 28

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 29 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 30 OTHER MATTERS 30 HOUSEHOLDING 30 ANNEX A – Certificate of Amendment to Certificate of Incorporation 31 ANNEX B – 2020 Stock Plan, as amended 32 ABOUT SKY QUARRY, INC. Sky Quarry, Inc. ("Sky Quarry" or the "Company") is 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. 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 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 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 August 30, 2022 and May 3, 2022. Currently, we intend to finish retrofitting the PR Spring Facility in the next twelve months 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 intend to continue to develop regional model Asphalt Shingle Recycling ("ASR") Facilities, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturing centers. Our design co

View Full Filing

View this DEF 14A filing on SEC EDGAR