Sky Quarry Registers 14.5M Shares for Resale, Eyes $8.1M from Future Sales

TL;DR

**Sky Quarry's S-1/A signals potential dilution and selling pressure from a major investor, making it a risky bet despite its green tech ambitions.**

AI Summary

Sky Quarry Inc. (SKYQ) filed an S-1/A on September 11, 2025, registering up to 14,517,227 shares of common stock for resale by Varie Asset Management, LLC, the Selling Stockholder. This includes 120,000 shares from a $150,000 convertible note issued May 22, 2025, at $1.25/share, 198,413 shares from a $125,000 note issued July 22, 2025, at $0.63/share, and 364,584 shares from a $175,000 note issued August 29, 2025, at $0.48/share. Additionally, 60,000, 50,000, and 70,000 shares are issuable from warrants tied to these notes, respectively. The filing also covers up to 13,654,230 shares potentially issued under a July 9, 2025, purchase agreement, which could bring Sky Quarry up to $8,125,000 in gross proceeds from future sales to the Selling Stockholder. Sky Quarry itself is not selling shares in this offering but may receive proceeds from warrant exercises and future stock sales to the Selling Stockholder. The company is a development-stage environmental remediation firm focused on recycling waste asphalt shingles and remediating oil-saturated sands using its ECOSolv technology, which has demonstrated up to 95% oil separation in bench testing completed by August 30, 2022. Sky Quarry plans to retrofit its PR Spring, Utah facility within 12 months for shingle recycling and oil production.

Why It Matters

This S-1/A filing signals Sky Quarry's intent to bolster its capital structure through a significant resale offering by Varie Asset Management, LLC, and potential future stock sales, which could inject up to $8,125,000 into the company. For investors, the substantial number of shares (14,517,227) being registered for resale by a single entity, Varie Asset Management, LLC, could introduce significant selling pressure on SKYQ's stock, which closed at $0.559 on September 10, 2025. The company's focus on sustainable oil production from waste asphalt shingles and oil-saturated sands positions it in a competitive and growing environmental remediation market, potentially impacting the waste management and energy sectors. Employees and customers could benefit from the capital infusion enabling the completion of the PR Spring facility retrofit and the development of regional recycling centers, enhancing the company's operational capacity and market reach.

Risk Assessment

Risk Level: high — The risk level is high due to the substantial potential for dilution from the 14,517,227 shares registered for resale by Varie Asset Management, LLC, representing a significant portion of the company's common stock. The conversion prices for the convertible notes ($1.25, $0.63, and $0.48 per share) are at or above the recent closing price of $0.559 on September 10, 2025, indicating potential for immediate conversion and sale. Furthermore, the company is a 'development-stage' entity, with its PR Spring facility still requiring retrofitting within the next twelve months, implying significant operational risks and an uncertain path to profitability.

Analyst Insight

Investors should exercise extreme caution and thoroughly evaluate the potential for significant dilution from the 14,517,227 shares registered for resale. Consider the impact of the Selling Stockholder's potential sales on SKYQ's stock price, especially given the current trading price of $0.559, and monitor the company's progress on its PR Spring facility retrofit and its ability to generate revenue from its ECOSolv technology.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Key Numbers

• 14,517,227 — Shares of Common Stock (Maximum shares registered for resale by Varie Asset Management, LLC)
• $150,000 — Principal Amount of May Convertible Note (Issued to Selling Stockholder on May 22, 2025)
• $125,000 — Principal Amount of July Convertible Note (Issued to Selling Stockholder on July 22, 2025)
• $175,000 — Principal Amount of August Convertible Note (Issued to Selling Stockholder on August 29, 2025)
• $8,125,000 — Aggregate Gross Proceeds (Maximum potential proceeds from future stock sales to Selling Stockholder under Purchase Agreement)
• $0.559 — Closing Price of Common Stock (On The Nasdaq Capital Market on September 10, 2025)
• 12% — Interest Rate (Annual interest rate on all convertible promissory notes)
• 95% — Oil Separation Rate (Demonstrated by ECOSolv technology in bench testing by August 30, 2022)
• 120,000 — Shares from May Convertible Note (Issuable upon conversion at $1.25 per share)
• 13,654,230 — Shares from Purchase Agreement (Maximum shares Sky Quarry may elect to issue and sell to the Selling Stockholder)

Key Players & Entities

• Sky Quarry Inc. (company) — Registrant and environmental remediation company
• Varie Asset Management, LLC (company) — Selling Stockholder of 14,517,227 shares
• Marcus Laun (person) — President of Sky Quarry Inc.
• Louis A. Bevilacqua, Esq. (person) — Legal counsel from Bevilacqua PLLC
• Steven J. Davis, Esq. (person) — Legal counsel from SD Law Group APC
• Securities and Exchange Commission (regulator) — Regulatory body for S-1/A filing
• The Nasdaq Capital Market (company) — Stock exchange where SKYQ is listed
• Jumpstart Our Business Startups Act of 2012 (regulator) — Legislation defining 'emerging growth company'
• Delaware (regulator) — State of incorporation for Sky Quarry Inc.
• PR Spring (company) — Location of Sky Quarry's oil sands remediation facility in eastern Utah

FAQ

Risk Factors

• Reliance on Future Financing [high — financial]: Sky Quarry Inc. is a development-stage company with a history of losses and no significant revenue. The company's ability to continue as a going concern is dependent on its ability to secure additional funding through equity issuances, such as the proposed sale of up to $8,125,000 in shares to Varie Asset Management, LLC. Failure to secure this or other financing could materially impact its operations and ability to execute its business plan.
• Technology Commercialization Risk [high — operational]: The company's ECOSolv technology, while showing promise in bench testing with up to 95% oil separation, has not yet been proven at a commercial scale. Retrofitting the PR Spring, Utah facility for shingle recycling and oil production within 12 months presents significant operational and execution risks. Delays or failures in scaling the technology could prevent the company from generating revenue.
• Market Acceptance and Competition [medium — market]: The success of Sky Quarry's business model depends on the market acceptance of recycled asphalt shingles and remediated oil sands products. The company faces competition from established waste management and oil recovery companies. The economic viability of its processes and products in the broader market remains unproven.
• Environmental Regulations [medium — regulatory]: As an environmental remediation firm, Sky Quarry is subject to stringent and evolving environmental regulations. Compliance with these regulations, including those related to waste disposal, emissions, and oil recovery, is critical. Changes in environmental laws or the company's failure to comply could result in significant fines, operational disruptions, or reputational damage.
• Dilution from Convertible Notes and Warrants [medium — financial]: The S-1/A filing registers shares issuable from convertible notes and warrants. The conversion of $450,000 in principal from three notes issued between May and August 2025, at conversion prices ranging from $0.48 to $1.25, along with associated warrants, will result in significant dilution to existing shareholders. The potential issuance of up to 13,654,230 shares under the purchase agreement further exacerbates this dilution risk.

Industry Context

Sky Quarry operates in the environmental remediation and waste management sectors, with a specific focus on recycling asphalt shingles and processing oil-saturated sands. This niche involves significant technological innovation and regulatory oversight. The industry is characterized by a need for cost-effective and environmentally sound solutions, with increasing demand driven by stricter environmental regulations and a growing emphasis on circular economy principles. Competition exists from established waste management firms and specialized remediation companies.

Regulatory Implications

As an environmental remediation company, Sky Quarry faces substantial regulatory scrutiny. Compliance with federal, state, and local environmental laws governing waste handling, emissions, and resource extraction is paramount. Any failure to adhere to these regulations could lead to significant penalties, operational shutdowns, and reputational damage, impacting its ability to commercialize its ECOSolv technology.

What Investors Should Do

1. Monitor technology commercialization progress
2. Assess future funding needs and sources
3. Analyze market adoption and competitive landscape
4. Evaluate regulatory compliance and environmental risks

Key Dates

• 2022-08-30: Bench testing of ECOSolv technology completed — Demonstrated up to 95% oil separation, providing initial validation for the core technology.
• 2025-05-22: Issuance of $150,000 convertible note — Provided initial funding to the company from Varie Asset Management, LLC, with shares registered for resale.
• 2025-07-09: Purchase Agreement executed — Allows Sky Quarry to potentially raise up to $8,125,000 through future stock sales to Varie Asset Management, LLC, crucial for ongoing operations and development.
• 2025-07-22: Issuance of $125,000 convertible note — Further financing from Varie Asset Management, LLC, increasing the total principal amount of notes and associated share registration.
• 2025-08-29: Issuance of $175,000 convertible note — The third convertible note issued to Varie Asset Management, LLC, bringing the total principal to $450,000, with shares registered for resale.
• 2025-09-11: S-1/A filing — Registered up to 14,517,227 shares for resale by Varie Asset Management, LLC, and outlined potential future capital raises, signaling a move towards potential liquidity for early investors and ongoing funding needs.

Glossary

S-1/A

An amendment to a registration statement filed with the U.S. Securities and Exchange Commission (SEC) for the purpose of registering securities for sale. (This filing details the shares being registered for resale by Varie Asset Management, LLC, and potential future capital raises for Sky Quarry Inc.)

Selling Stockholder

An entity or individual that owns securities and intends to sell them to the public, often through a registration statement. (Varie Asset Management, LLC is the Selling Stockholder in this filing, seeking to resell shares acquired through convertible notes and potentially future purchase agreements.)

Convertible Note

A debt instrument that can be converted into equity (stock) of the issuing company under certain conditions, such as a specified conversion price or time period. (Sky Quarry has issued convertible notes totaling $450,000 to Varie Asset Management, LLC, which are convertible into common stock, leading to potential dilution.)

Development-stage company

A company that is still in the early stages of its business development, typically with limited operating history, minimal revenue, and often operating at a loss. (Sky Quarry is classified as a development-stage company, highlighting its significant risks and reliance on future funding and technology commercialization.)

ECOSolv technology

Sky Quarry's proprietary technology designed for environmental remediation, specifically for recycling waste asphalt shingles and separating oil from saturated sands. (This is the core technology the company aims to commercialize; its success is critical to Sky Quarry's future revenue generation.)

Warrants

A security that gives the holder the right, but not the obligation, to purchase a company's stock at a specific price (the exercise price) on or before a certain date. (Warrants are attached to the convertible notes, providing additional potential for share issuance and dilution upon exercise.)

Purchase Agreement

A contract between a seller and a buyer outlining the terms and conditions of a sale, including the quantity, price, and delivery of goods or securities. (Sky Quarry has a purchase agreement with Varie Asset Management, LLC, allowing for future sales of up to $8,125,000 in stock, a key potential funding source.)

Year-Over-Year Comparison

This is Sky Quarry Inc.'s initial S-1/A filing, so a direct comparison of key metrics like revenue growth, margin changes, or specific financial performance indicators from a previous filing is not possible. The filing primarily focuses on registering shares for resale by Varie Asset Management, LLC, and outlining the company's development-stage status, technology, and future financing potential. New risks highlighted include the reliance on future financing and the commercialization challenges of its ECOSolv technology.

Key Financial Figures

• $150,000 — missory note in the principal amount of $150,000 issued to the Selling Stockholder on Ma
• $1.25 — 2025, at an initial conversion price of $1.25 per share, which we refer to as the May
• $125,000 — missory note in the principal amount of $125,000 issued to the Selling Stockholder on Ju
• $0.63 — 2025, at an initial conversion price of $0.63 per share, which we refer to as the Jul
• $175,000 — missory note in the principal amount of $175,000 issued to the Selling Stockholder on Au
• $0.48 — 2025, at an initial conversion price of $0.48 per share, which we refer to as the Aug
• $8,125,000 — ely refer to as the Warrants) and up to $8,125,000 in aggregate gross proceeds under the P
• $0.559 — stock on The Nasdaq Capital Market was $0.559. We are an "emerging growth company,"
• $1.235 billion — ich our total annual gross revenues are $1.235 billion or more, (iii) the date that we become
• $700 million — that is held by non-affiliates exceeds $700 million as of the last business day of our most
• $1 billion — date on which we have issued more than $1 billion in non-convertible debt during the prec
• $250,000 — n stock for cash in a minimum amount of $250,000, and the conversion price of such secur
• $0.50 — ower price, subject to a floor price of $0.50 per share. The May Convertible Note con
• $1 — months at an initial exercise price of $1.25, which such exercise price is subjec
• $0 — months at an initial exercise price of $0.63, which such exercise price is subjec

Filing Documents

• skyq_s1z.htm (S-1/A) — 234KB
• skyq_ex107.htm (EX-FILING FEES) — 22KB
• skyq_ex4z2.htm (EX-4.2) — 33KB
• skyq_ex5z1.htm (EX-5.1) — 10KB
• skyq_ex10z2.htm (EX-10.2) — 44KB
• skyq_ex23z1.htm (EX-23.1) — 2KB
• skyqex5z1_1.jpg (GRAPHIC) — 13KB
• skyqex5z1_2.jpg (GRAPHIC) — 7KB
• skyqex5z1_3.jpg (GRAPHIC) — 4KB
• skyqs1z_1.jpg (GRAPHIC) — 7KB
• skyqs1z_2.jpg (GRAPHIC) — 12KB
• 0001096906-25-001507.txt ( ) — 407KB

Risk Factors

Risk Factors 8 Cautionary Note Regarding Forward-Looking Statements 10

Use of Proceeds

Use of Proceeds 11 Dividend Policy 12 The Convertible Note s and Warran ts 13 The Purchase Agreement 15 Selling Stockholder 18 Plan of Distribution 19

Description of Capital Stock

Description of Capital Stock 21 Legal Matters 21 Experts 21 Where You Can Find More Information 21 Information Incorporated By Reference 21 We have not, and the Selling Stockholder has not, authorized anyone to provide you with information different from that contained or incorporated by reference in this prospectus or any accompanying prospectus supplement or free writing prospectus, and neither we nor the Selling Stockholder take any responsibility for any other information that others may give you. We and the Selling Stockholder are offering to sell these securities and seeking offers to buy these securities only in jurisdictions where offers and sales are permitted. This prospectus and any accompanying supplement to this prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which they relate. You should not assume that the information contained in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date on the front cover of those documents, or that the information contained in any document incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus relates to the offering of our common stock. Before buying any of our common stock, you should carefully read this prospectus, any supplement to this prospectus, the information and documents incorporated herein by reference and the additional information under the heading " Where You Can Find More Information " and " Information Incorporated by Reference ." These documents contain important information that you should consider when making your investment decision. We own or have rights to various

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View this S-1/A filing on SEC EDGAR