Sky Quarry Reports First Quarter 2025 Financial Results
WOODS CROSS, Utah, May 15, 2025 (GLOBE NEWSWIRE) -- Sky Quarry Inc. (NASDAQ: SKYQ) ("Sky Quarry" or "the Company"), an integrated energy solutions company committed to revolutionizing the waste asphalt shingle recycling industry, today announced its financial and operational results for the three months ended March 31, 2025.
Key Financial and Operational Highlights
-- Generated $6.3 million in Q1 revenue, a 50% increase from Q4 2024.
-- Signed a Letter of Intent with R & R Solutions, the only permitted
asphalt shingle recycler in New Mexico, to explore the feasibility of
establishing a modular waste-to-energy site in the Southwest.
-- Executed a Letter of Intent with Southwind RAS, a leading recycler in the
Midwest, to collaborate on regional facility deployment and feedstock
supply.
-- Engaged TAR360 to accelerate the company's growth trajectory, optimize
internal processes, and support execution across key operational
initiatives.
Commentary by David Sealock, Chairman & Chief Executive Officer, and Darryl Delwo, Chief Financial Officer of Sky Quarry
"We are pleased with the continued growth across our operations and the progress we've made in the first quarter of 2025 toward executing our waste-to-energy strategy, which is central to our mission of transforming recycled asphalt shingles into sustainably produced fuels and other valuable materials. At PR Spring, asset upgrades are nearing completion, and once commissioned, the site will activate our fully integrated production model and enable commercial-scale output.
As part of our national expansion strategy, we signed non-binding Letters of Intent with Southwind RAS in the Midwest and R & R Solutions in the Southwest. These LOIs represent an early step in evaluating potential partnerships that could expand Sky Quarry's geographic footprint and provide access to more than 1.5 million tons of asphalt shingle supply annually. If advanced, these relationships could unlock new revenue opportunities through facility development, expanded processing capacity, and the sale of high-value materials such as recycled liquid asphalt, blended fuels, and other products derived from waste asphalt shingles.
We're seeing the impact of operational improvements made in 2024 at the Foreland Refinery, with a 50% increase in revenue from Q4 2024 to Q1 2025 as output stabilized and product volumes rebounded.
To build on this momentum, we engaged TAR360 to further optimize operations at Foreland. While we're encouraged by recent performance gains, our shared goal is to increase throughput by up to 400% over time, scaling from our current 20,000 barrels per month to as much as 100,000. Achieving this level of production would enhance operating leverage, expand margins, and drive stronger profitability.
With these improvements and additional efficiencies underway, we believe Foreland is positioned to play a key role in meeting growing fuel demand across the Western U.S. California's refining capacity is expected to decline by 21% in a single year due to major facility closures, while global price spreads and supply constraints are creating price dislocations that make local refining more competitive. As market conditions continue to evolve, we are executing with purpose by scaling production, improving performance, and positioning Sky Quarry for a strong 2025."
Financial Results for the Three Months Ended March 31, 2025
Total revenues for the first quarter ended March 31, 2025, were approximately $6.3 million, down from $11.0 million in the same period of 2024. This decline was primarily driven by ongoing challenges in reestablishing supply streams following the Foreland Refinery outage and refurbishment in mid-2024. In addition, lower commodity prices contributed to the decrease, with WTI crude falling from $87 per barrel in April 2024 to $71 per barrel at the end of Q1 2025.
Gross profit for the quarter was negative $726,000, compared to a gross profit of $569,000 in the prior-year period.
Total operating expenses increased to $1.94 million in Q1 2025, up from $1.61 million in Q1 2024, reflecting higher general and administrative costs, non-cash share-based compensation, and depreciation.
As a result, the Company reported a net loss of $3.3 million for the first quarter of 2025, compared to a net loss of $2.5 million in the same period last year.
Net cash used in operating activities for the three months ended March 31, 2025, was approximately $2.0 million, compared to $1.2 million for the same period in 2024.
About Sky Quarry Inc.
Sky Quarry Inc. (NASDAQ:SKYQ) and its subsidiaries are, collectively, an oil production, refining, and a 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. Our waste-to-energy mission is to repurpose and upcycle millions of tons of asphalt shingle waste, diverting them from landfills. By doing so, we can contribute to improved waste management, promote resource efficiency, conserve natural resources, and reduce environmental impact. For more information, please visit skyquarry.com.
Forward-Looking Statements
This press release may include "forward-looking statements." All statements pertaining to our future financial and/or operating results, future events, or future developments may constitute forward-looking statements. The statements may be identified by words such as "expect," "look forward to," "anticipate," "intend," "plan," "believe," "seek," "estimate," "will," "project," or words of similar meaning. Such statements are based on the current expectations and certain assumptions of our management, of which many are beyond our control. These are subject to a number of risks, uncertainties, and factors, including but not limited to those described in our disclosures. Should one or more of these risks or uncertainties materialize or should underlying expectations not occur or assumptions prove incorrect, actual results, performance, or our achievements may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. We neither intend, nor assume any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. You are urged to carefully review and consider any cautionary statements and the Company's other disclosures, including the statements made under the heading "Risk Factors" and elsewhere in the Company's Form 10-K as filed with the SEC on March 31, 2025. Forward-looking statements speak only as of the date of the document in which they are contained.
Investor Relations
Jennifer Standley
Director of Investor Relations
Ir@skyquarry.com
Company Website
www.skyquarry.com
Sky Quarry Inc.
Consolidated Balance Sheets
As of March 31, 2025 and December 31, 2024
===================================================================
March 31, December 31,
2025 2024
----------- --------------
ASSETS
Current assets:
Cash $ 213,000 $ 385,116
Accounts receivables 1,758,159 1,123,897
Prepaid expenses and other assets 641,427 339,124
Inventory 2,103,379 3,149,236
-------------------------------------- ---------- ----------
Total current assets 4,715,965 4,997,373
Property, plant, and equipment 5,942,782 6,160,318
Oil and gas properties 8,832,356 8,534,967
Restricted cash 798,851 2,929,797
Right-of-use asset 1,091,656 1,115,785
Goodwill 3,209,003 3,209,003
-------------------------------------- ---------- ----------
Total assets $24,590,613 $ 26,947,243
-------------------------------------- ---------- ----------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 3,233,613 $ 4,046,319
Current portion of operating
lease liability 81,775 38,422
Current portion of finance lease
liability 16,626 16,120
Warrant liability 184,087 459,067
Lines of credit 2,328,127 1,260,727
Current maturities of notes
payable 6,164,310 6,578,017
------------------------------------ ----------- -----------
Total current liabilities 12,008,538 12,398,672
Notes payable, less current
maturities, net of debt issuance
costs 1,999,999 2,000,560
Operating lease liability, net of
current portion 15,613 77,824
Finance lease Liability, net of
current portion 987,018 971,690
------------------------------------ ----------- -----------
Total Liabilities 15,011,168 15,448,746
------------------------------------ ----------- -----------
Commitments and contingencies
Shareholders' Equity:
Preferred stock $0.001 par
value: 25,000,000 shares
authorized; 0 shares issued and
outstanding as of March 31, 2025
and December 31, 2024,
respectively - -
Common stock $0.0001 par value:
100,000,000 shares authorized:
21,260,924 and 19,027,208 shares
issued and outstanding as of
March 31, 2025 and December 31,
2024, respectively 2,126 1,903
Additional paid in capital 37,088,388 35,674,391
Accumulated other comprehensive
loss (209,286) (209,708)
Accumulated deficit (27,301,783) (23,968,089)
------------------------------------ ----------- -----------
Total shareholders' equity 9,579,445 11,498,497
------------------------------------ ----------- -----------
Total liabilities and
shareholders' equity $ 24,590,613 $ 26,947,243
------------------------------------ ----------- -----------
Sky Quarry Inc.
Consolidated Statements of Operations and Comprehensive
Loss
For the Periods Ended March 31, 2025 and 2024
===================================================================
Three Months Ended March Three Months Ended
31, 2025 March 31, 2024
------------------ ------------------------ -------------------
Net sales $ 6,332,967 $ 10,952,330
Cost of goods sold 7,059,059 10,382,881
-------------------- ----- ---------- ----- --- ----------
Gross Margin (726,092) 569,449
-------------------- ----- ---------- ---- --- ----------
Operating
expenses:
General and
administrative 1,935,457 1,607,884
Depreciation and
amortization 2,028 1,472
-------------------- ----- ---------- ----- --- ----------
Total
Operating
expenses 1,937,485 1,609,356
-------------------- ----- ---------- ----- --- ----------
Loss from
operations (2,663,577) (1,039,907)
-------------------- ----- ---------- ---- --- ----------
Other income
(expense):
Interest expense (872,468) (1,308,445)
Loss on
extinguishment
of debt (85,753) (108,887)
Gain on warrant
valuation 274,980 -
Other income
(expense) 7,477 (5,306)
Gain on sale of
assets 5,647 -
-------------------- ----- ---------- ----- --- ----------
Other expense,
net (670,117) (1,422,638)
-------------------- ----- ---------- ---- --- ----------
Loss before
provision for
income taxes (3,333,694) (2,462,545)
Provision for
income taxes - -
------------------ ----- ---------- ----- --- ----------
Net loss (3,333,694) (2,462,545)
Other
comprehensive
income (loss)
Exchange gain
(loss) on
translation of
foreign
operations 422 (8,134)
-------------------- ----- ---------- ----- --- ----------
Net loss and
comprehensive loss $ (3,333,272) $ (2,470,679)
-------------------- ----- ---------- ---- --- ----------
Loss per common
share
------------------ ------------------------ -------------------
Basic and
diluted $ (0.16) $ (0.15)
-------------------- ----- ---------- ---- --- ----------
Weighted average
shares
outstanding
Basic and
diluted 21,264,725 16,334,862
==================== ===== ========== ===== === ==========
Sky Quarry Inc.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2025 and 2024
====================================================================
2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,333,694) $ (2,462,545)
Adjustments to reconcile net loss to
cash used in operating activities:
Share based compensation 78,880 270,176
Depreciation and amortization 242,004 164,534
Amortization of debt issuance costs 765,793 1,166,227
Amortization of right-of-use asset 24,129 21,952
Gain on revaluation of warrant
liabilities (274,980) -
Loss on extinguishment of debt 56,660 108,887
Gain on sale of assets (5,647) -
Changes in operating assets and
liabilities:
Accounts receivable (634,263) (766,259)
Prepaid expenses and other assets (302,302) (323,750)
Inventory 1,045,857 203,235
Accounts payable and accrued
expenses 373,889 371,043
Operating lease liability 450 21,952
------------------------------------- ---------- -----------
Net cash used in operating
activities (1,963,224) (1,224,548)
------------------------------------- ---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of assets 14,060 -
Purchase of exploration and
evaluation assets (297,389) (144,964)
Purchase of property, plant, and
equipment (32,881) (282,702)
------------------------------------- ---------- -----------
Net cash used in investing
activities (316,210) (427,666)
------------------------------------- ---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on lines of credit 5,339,736 10,641,448
Payments on lines of credit (4,272,336) (11,638,704)
Proceeds from note payable 143,237 9,820,288
Payments on note payable (1,231,214) (5,300,608)
Warrants Issued (net against
payment of debt issuance costs) -
Debt discount on note payable (1,970,936)
Payments on finance lease (3,473) (19,851)
Proceeds on issuance of preferred
stock 197,500
Preferred stock offering costs (40,870)
Proceeds on issuance of common
stock 19,492
Common stock offering costs -
------------------------------------ ------------ -----------
Net cash provided by (used in)
financing activities (24,050) 1,707,755
------------------------------------- ---------- -----------
Effect of exchange rate on cash 422 (8,134)
Increase (decrease) in cash and
restricted cash (2,303,062) 47,407
Cash and restricted cash, beginning
of the period 3,314,913 4,680,836
------------------------------------- ---------- -----------
Cash and restricted cash, end of the
period $ 1,011,851 $ 4,728,243
------------------------------------- ---------- ---
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