Sky Quarry to issue stock to settle $639K in liabilities
A market-based formula sets the debt-settlement share count, while 6,000 additional shares are designated to offset attorneys’ fees.
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Rhea-AI Filing Summary
Sky Quarry Inc. will issue common stock to LendSpark Corporation under a court-approved agreement to settle $638,998.00 in aggregate principal amount of outstanding liabilities owed to LendSpark, described as past due or in default. Settlement Shares may be issued in up to two tranches. Their number is based on the claim amount and a conversion price equal to the lower of the Common Stock closing price on the trading day before initial conversion or its average closing price for the five trading days before initial conversion. Sky Quarry will also issue 6,000 shares as a settlement fee to offset attorneys’ fees.
Sky Quarry may not issue shares if LendSpark would beneficially own more than 4.99% of outstanding Common Stock. LendSpark’s daily resales are limited to 20% of daily trading volume on Sky Quarry’s principal trading market unless the parties agree otherwise in writing. Sky Quarry agreed to reserve at least twice the shares issuable under the order, including an initial reserve of at least 500,000 shares with its transfer agent. The settlement became binding upon the court’s approval on October 2, 2026. Once all shares are delivered, the parties will release each other from claims relating to the settled liabilities.
Filing Explained
The court-approved settlement gives LendSpark a remedy if Sky Quarry fails to deliver the settlement or fee shares: LendSpark may declare default and seek repayment of the unpaid claim, less amounts recovered from share sales, and return any remaining settlement shares it holds for cancellation.
8-K Event Classification
Key Figures
Key Terms
conversion price financial
beneficially own regulatory
Section 3(a)(10) regulatory
restrictive legends regulatory
FAQ
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When are the parties released from claims covered by the SKYQ settlement?
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (Commission File Number) | (IRS Employer |
(Address of principal executive office) (Zip Code)
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(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.0001 | SKYQ | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
On October 1, 2026, Sky Quarry, Inc. (the "Company") entered into a Settlement Agreement and Stipulation (the "Settlement Agreement") with LendSpark Corporation, an Indiana corporation ("LendSpark"). The Settlement Agreement replaces, in its entirety, a settlement agreement and stipulation that the Company and LendSpark entered into on September 25, 2026, which is of no further force or effect. Under the Settlement Agreement, the Company and LendSpark agreed to settle bona fide outstanding liabilities of the Company owed to LendSpark in the aggregate principal amount of $638,998.00 (the "Claim Amount"). These liabilities are past due or in default. Under its terms, the Settlement Agreement became binding on the parties only upon entry of a court order approving it. On October 2, 2026, after a hearing on the fairness of the terms and conditions of the Settlement Agreement, the Circuit Court of the Twelfth Judicial Circuit in and for DeSoto County, Florida (the "Court") entered an order in LendSpark Corporation v. Sky Quarry, Inc., Case No. 2026 CA 529 (the "Order"). The Order approved the Settlement Agreement as fair to LendSpark, the only party to whom shares will be issued, within the meaning of Section 3(a)(10) of the Securities Act of 1933, as amended (the "Securities Act").
Under the Settlement Agreement and the Order, the Company will issue shares of its common stock, par value $0.0001 per share (the "Common Stock"), to LendSpark in an amount sufficient to satisfy the Claim Amount (the "Settlement Shares"). The Settlement Shares will be issued in up to two tranches. The number of Settlement Shares will be determined based on the Claim Amount and a conversion price equal to the lower of: (a) the closing price of the Common Stock on the trading day before the initial conversion; or (b) the average closing price of the Common Stock for the five trading days before the initial conversion.
The Company will also issue LendSpark 6,000 shares of Common Stock as a settlement fee to offset attorneys' fees (the "Settlement Fee Shares"). The Settlement Shares and the Settlement Fee Shares will be adjusted proportionally if the Company effects a reverse stock split. The Settlement Shares and the Settlement Fee Shares will be issued as freely tradable shares without restrictive legends.
The Settlement Agreement limits the issuance and resale of the Settlement Shares and the Settlement Fee Shares as follows:
·The Company may not issue Settlement Shares or Settlement Fee Shares to the extent that LendSpark would beneficially own more than 4.99% of the outstanding Common Stock at any time.
·LendSpark has agreed to limit its daily resales of the Settlement Shares and the Settlement Fee Shares on the Company's principal trading market to 20% of the daily trading volume of the Common Stock, unless the parties agree otherwise in writing.
The Company has agreed to reserve from its authorized capital stock a number of shares of Common Stock equal to at least two times the number of shares issuable under the Order, including an initial reserve of at least 500,000 shares with its transfer agent. The Company has also agreed to certain covenants, including restrictions on specified corporate actions while LendSpark holds shares of Common Stock. The Company has also agreed to indemnify LendSpark and its affiliates and representatives. If the Company fails to deliver the Settlement Shares or the Settlement Fee Shares as required, or if certain other events occur, LendSpark may declare a default. On a default, LendSpark may void its remaining obligations and seek repayment of the unpaid portion of the Claim Amount, less any amounts it has recovered from sales of Settlement Shares, in which case LendSpark would return any remaining Settlement Shares it then holds to the Company for cancellation.
Once all of the Settlement Shares and Settlement Fee Shares have been delivered, the parties will release each other from claims relating to the settled liabilities. The settlement will also fully satisfy a pending action based on the same claims in a California court. A stipulation of dismissal of the action before the Court will be held in escrow and filed after the Company delivers the Settlement Shares and the Settlement Fee Shares. The Court has retained jurisdiction to enforce the Settlement Agreement.
The foregoing description of the Settlement Agreement and the Order does not purport to be complete. It is qualified in its entirety by reference to the full text of the Settlement Agreement and the Order, which are filed as Exhibits 10.1 and 99.1 to this Current Report on Form 8-K and are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. The Settlement Shares and the Settlement Fee Shares will be issued in reliance on the exemption from registration provided by Section 3(a)(10) of the Securities Act. That exemption is based on the Court's approval, after a fairness hearing, of the fairness of the terms and conditions of the issuance. As of September 15, 2026, there were approximately 8,770,000 shares of Common Stock issued and outstanding.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
| Description |
10.1* |
| Settlement Agreement and Stipulation, dated October 1, 2026, by and between Sky Quarry, Inc. and LendSpark Corporation |
99.1 |
| Order Granting Approval of Settlement Agreement and Stipulation, entered October 2, 2026, by the Circuit Court of the Twelfth Judicial Circuit in and for DeSoto County, Florida |
104 |
| Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Sky Quarry Inc. | |
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Dated: October 8, 2026 | By: | /s/ Marcus Laun |
| Name: | Marcus Laun |
| Title: | Interim Chief Executive Officer and President |
IN THE CIRCUIT COURT OF THE TWELFTH JUDICIAL CIRCUIT
IN AND FOR DESOTO COUNTY, FLORIDA
LendSpark Corporation, |
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V. |
| Case No. 2026 CA 529 |
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Sky Quarry, Inc., |
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a Delaware Corporation, |
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_________________________I |
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ORDER GRANTING APPROVAL OF SETTLEMENT AGREEMENT AND STIPULATION
This matter having come on for a hearing on the 2nd day of October, 2026, to approve the Settlement Agreement entered into as of October 1, 2026 between Plaintiff, LendSpark Corporation ("Plaintiff'') and Defendant, Sky Quarry, Inc. ("Defendant" and collectively with Plaintiff, the "Parties"), and the Court having held a hearing as to the fairness of the terms and conditions of the Settlement Agreement and Stipulation and being otherwise fully advised in the premises, the Court hereby finds as follows:
1.The Court has been advised that the Parties intend that the sale of the Shares (as defined by the Settlement Agreement and, hereinafter, the "Shares") to and the resale of the Shares by Plaintiff in the United States, assuming satisfaction of all other applicable securities laws and regulations, will be exempt from registration under the Securities Act of 1933 (the "Securities Act") in reliance upon Section 3(a)(l0) of the Securities Act based upon this Court's finding herein that the terms and conditions of the issuance of the Shares by Defendant to Plaintiff are fair to Plaintiff;
2.The hearing having been scheduled upon the consent of Plaintiff and Defendant, Plaintiff has had adequate notice of the hearing and Plaintiff is the only Party to whom Shares will be issued pursuant to the Settlement Agreement;
3.The terms and conditions of the issuance of the Shares in exchange for the release of certain claims as set forth in the Settlement Agreement are fair to Plaintiff, the only Party to whom the Shares will be issued;
4.The fairness hearing was open to Plaintiff. Plaintiff was represented by counsel at the hearing who acknowledged that adequate notice of the hearing was given and consented to the entiy of this Order.
It is hereby ORDERED AND ADJUDGED that the Settlement Agreement and Stipulation is hereby approved as fair to the Party to whom the Shares will be issued, within the meaning of Section 3(a)(10) of the Securities Act and that the sale of the Shares to Plaintiff and the resale of the Shares in the United States by Plaintiff, assuming satisfaction of all other applicable securities laws and regulations, will be exempt from registration under the Securities Act of 1933. The Settlement Agreement and Stipulation entered into between the Parties is hereby approved and the Parties are ordered to comply with same. The Circuit Court of the Twelfth Judicial Circuit in and for Desoto County, Florida reserves jurisdiction over the Parties to this action as well as the subject matter herein for purposes of contempt and enforcement of the Settlement Agreement and Stipulation as well as for such other purposes as allowed by law.
SO ORDERED, this ___
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Conformed copies to: |
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Charles N. Cleland, Jr., Esq. |
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Robe1t E. Turffs, Esq. | eSigned by DON HALL 10/02/2026 11:18:28 K6+Tw9LD |
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