Sky Quarry Reports First Quarter 2025 Financial Results
- 50% quarter-over-quarter revenue growth from Q4 2024 to Q1 2025
- Strategic LOIs signed with R & R Solutions and Southwind RAS, potentially accessing 1.5 million tons of asphalt shingle supply
- Plans to increase Foreland Refinery throughput by up to 400% (from 20,000 to 100,000 barrels per month)
- Favorable market conditions due to California's 21% refining capacity decline
- Revenue declined 43% year-over-year to $6.3 million from $11.0 million in Q1 2024
- Net loss widened to $3.3 million from $2.5 million in Q1 2024
- Negative gross profit of $726,000 compared to positive $569,000 in prior year
- Operating expenses increased to $1.94 million from $1.61 million year-over-year
- Cash burn increased with $2.0 million used in operations vs $1.2 million in prior year
Insights
Sky Quarry shows mixed Q1 results with sequential growth but year-over-year decline, amid operational transformation and expansion efforts.
Sky Quarry's Q1 2025 results reveal a complex financial picture with important diverging trends. While the company achieved
The financial fundamentals remain challenging, with a
Two new Letters of Intent with regional recyclers (R&R Solutions and Southwind RAS) outline potential access to 1.5 million tons of asphalt shingle supply annually, indicating a meaningful expansion opportunity if these non-binding agreements progress to full partnerships. The engagement of TAR360 to optimize Foreland operations targets ambitious throughput improvements of up to
Management's commentary highlights California's declining refining capacity (
In essence, Sky Quarry is executing a transitional strategy focused on production scale-up and geographic expansion, but investors should note the significant financial challenges that persist despite sequential operational improvements. The company's success hinges on converting LOIs to binding agreements, completing PR Spring upgrades, and successfully increasing Foreland's throughput to improve margins and reduce cash burn.
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, a50% 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
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
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
Financial Results for the Three Months Ended March 31, 2025
Total revenues for the first quarter ended March 31, 2025, were approximately
Gross profit for the quarter was negative
Total operating expenses increased to
As a result, the Company reported a net loss of
Net cash used in operating activities for the three months ended March 31, 2025, was approximately
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, 2025 | December 31, 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 | - | - | ||||||
| Common stock | 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 31, 2025 | Three Months Ended 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 | ||||
FAQ
What was SKYQ's revenue in Q1 2025?
How much did Sky Quarry lose in Q1 2025?
What are Sky Quarry's expansion plans with recent partnerships?
What is Sky Quarry's target production capacity at Foreland Refinery?
How much cash did SKYQ use in operations during Q1 2025?
