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Sky Quarry (NASDAQ: SKYQ) converts $3.99M MCA obligations into 8% secured note

Filing Impact
(Very High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Sky Quarry Inc. entered into a Conversion and Exchange Agreement with Libertas Funding to restructure $3,985,000 of outstanding merchant cash advance obligations into a new promissory note. This consolidates multiple future-receipts agreements into a single debt instrument.

The new note bears non-compounding interest at 8% per year and is repaid on a principal-first basis through escalating weekly payments, with optional prepayment allowed without penalty. Existing liens and security interests in favor of Libertas remain in place, and Sky Quarry is restricted from selling or pledging future receivables or material assets without Libertas’s consent.

As a condition of the deal, Interim CEO, CFO and President Marcus Laun provided a personal guarantee of all obligations under the note. The company agreed to indemnify him and reimburse any payments he makes under the guarantee with interest at 8% per year, an arrangement unanimously approved by the Board of Directors.

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Insights

Sky Quarry converts MCA obligations into a structured 8% note with CEO guarantee.

Sky Quarry, Foreland Refining, and 2020 Resources consolidated $3,985,000 of merchant cash advance obligations into a single promissory note to Libertas Funding. The note carries a non-compounding 8% interest rate and principal-first escalating weekly repayments, replacing several future-receipts contracts.

All existing liens and collateral rights from the prior MCA agreements continue to secure the new note, and the company is limited in selling or pledging future receivables and material assets without Libertas’s written consent. These covenants suggest tighter operating flexibility while the note is outstanding.

Interim CEO, CFO and President Marcus Laun provided a personal guarantee covering all obligations under the note. Sky Quarry agreed to indemnify him and reimburse any payments he makes with 8% annual interest. Board approval of this arrangement formalizes management’s support but also underscores the importance of servicing this debt under the agreed schedule.

Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 1.02 Termination of a Material Definitive Agreement Business
A significant contract was terminated, which may affect business operations or revenue.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Total MCA obligations converted $3,985,000 Aggregate outstanding merchant cash advance obligations exchanged into new note
Interest rate on new note 8% per annum Non-compounding interest on promissory note to Libertas
Libertas #4 future receipts $1,731,660 Sale of future sales receipts under October 25, 2023 agreement
Libertas #5 future receipts $2,632,852 Sale of future sales receipts under January 11, 2024 agreement
Libertas #6 future receipts $4,224,000 Sale of future sales receipts under January 18, 2024 agreement
Libertas #7 future receipts $1,386,000 Sale of future sales receipts under February 19, 2024 agreement
Reimbursement interest to CEO 8% per annum Interest on any amounts reimbursed to Marcus Laun under guarantee
Conversion and Exchange Agreement financial
"entered into a Conversion and Exchange Agreement (the “Exchange Agreement”) with Libertas"
merchant cash advance obligations financial
"converted, exchanged and cancelled $3,985,000 in aggregate outstanding merchant cash advance obligations"
promissory note financial
"for the issuance by the Company Parties to Libertas a promissory note (the “Note”)"
A promissory note is a written IOU in which one party promises to pay a specific sum, often with interest, to another party by a set date or on demand. Investors care because it functions like a loan: it creates a legal claim on future cash flows, carries credit and timing risk, and can affect valuation or liquidity—think of it as a formal, tradable promise to be repaid that can be assessed like any other debt investment.
principal-first repayment structure financial
"repayable pursuant to a principal-first repayment structure with escalating weekly payments"
personal guarantee financial
"executed a personal guarantee (the “Personal Guarantee”) in favor of Libertas"
A personal guarantee is a promise by an individual—typically an owner, director, or executive—to be personally responsible for a loan or contractual obligation if the company cannot pay. Investors pay attention because it raises the likelihood lenders will be repaid and shows insiders have “skin in the game,” but it also exposes those individuals’ personal assets and can signal higher credit or operational risk for the business.
general release financial
"Libertas provided a general release of all claims against the Company Parties"
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Learn about SEC filing dates
0001812447 false 0001812447 2026-06-29 2026-06-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  June 29, 2026

 

SKY QUARRY INC.

(Exact name of registrant as specified in its charter)

 

Delaware

001-42296

84-1803091

(State or other jurisdiction of
incorporation or organization)

(Commission File Number)

(IRS Employer
Identification No.)

  

707 W. 700 South, Suite 105

Woods Cross, UT 84087

(Address of principal executive office) (Zip Code)

 

(424) 394-1090

(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)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

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 June 29, 2026, Sky Quarry Inc. (the “Company”), together with Foreland Refining Corporation, a Texas corporation (“Foreland”), and 2020 Resources LLC (“2020 Resources,” and together with the Company and Foreland, the “Company Parties”), entered into a Conversion and Exchange Agreement (the “Exchange Agreement”) with Libertas Funding LLC, a Connecticut limited liability company (“Libertas”), pursuant to which the Company Parties converted, exchanged and cancelled $3,985,000 in aggregate outstanding merchant cash advance obligations (the “MCA Obligations”) owed to Libertas pursuant to (i) that certain Agreement of Sale of Future Receipts dated October 25, 2023, by and between Libertas and Foreland, for the sale of $1,731,660 of future sales receipts (“Libertas #4”), (ii) that certain Agreement of Sale of Future Receipts dated January 11, 2024, by and between Libertas and Foreland, for the sale of $2,632,852 of future sales receipts (“Libertas #5”), (iii) that certain Agreement of Sale of Future Receipts dated January 18, 2024, by and between Libertas and Foreland, for the sale of $4,224,000 of future sales receipts (“Libertas #6”), (iv) that certain Agreement of Sale of Future Receipts dated February 19, 2024, by and between Libertas and Foreland, for the sale of $1,386,000 of future sales receipts (“Libertas #7” and, together with Libertas #4, Libertas #5 and Libertas #6, the “MCA Agreements”), for the issuance by the Company Parties to Libertas a promissory note (the “Note”) in the original principal amount of $3,985,000.

 

Upon issuance of the Note, the MCA Obligations and MCA Agreements were fully and irrevocably satisfied, cancelled and extinguished. Libertas provided a general release of all claims against the Company Parties arising out of or related to the MCA Agreements.

 

Promissory Note

 

In connection with the Exchange Agreement, the Company Parties issued the Note to Libertas on June 29, 2026. The Note bears interest at a rate of 8% per annum (non-compounding) and is repayable pursuant to a principal-first repayment structure with escalating weekly payments until all principal and accrued interest have been paid in full. The Note may be prepaid in whole or in part at any time without premium or penalty. Events of default under the Note include failures to make required payments, insolvency and breaches of material covenants. Upon an event of default, Libertas may declare the entire unpaid principal balance, together with all accrued and unpaid interest, immediately due and payable.

 

All existing security interests, liens and other collateral rights previously granted to Libertas under the MCA Agreements remain in full force and effect and continue to secure the obligations under the Note. While the Note remains outstanding, the Company may not sell or pledge its future receivables (except in connection with accounts receivable or inventory financing) and may not sell any assets material to the operation of its business without Libertas’s prior written consent.

 

Personal Guarantee

 

As a condition to Libertas’s agreement to enter into the Exchange Agreement, Marcus Laun, the Company’s Interim Chief Executive Officer, executed a personal guarantee (the “Personal Guarantee”) in favor of Libertas, dated June 29, 2026, guaranteeing the payment of all obligations payable by the Company under the Note. The Personal Guarantee supersedes all prior personal guarantees or similar undertakings provided in connection with the MCA Agreements and remains in force until all amounts due under the Note have been paid in full. The Company has agreed to indemnify Mr. Laun for any losses, liabilities, costs and expenses he incurs or pays as a result of any claims made against him under the Personal Guarantee. To the extent that Mr. Laun makes any payment thereunder, the Company has agreed to reimburse Mr. Laun with interest thereon at a rate of 8% per annum from the date of payment until the date of reimbursement.

 

Mr. Laun is the Company’s Interim Chief Executive Officer, Interim Chief Financial Officer and President and serves on the Company’s Board of Directors. The Company’s entry into the indemnification and reimbursement arrangement with Mr. Laun was unanimously approved by the Board of Directors.




The foregoing descriptions of the Exchange Agreement, the Note and the Personal Guarantee do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K (this “Current Report”) and are incorporated herein by reference.

 

Item 1.02 Termination of a Material Definitive Agreement.

 

The information set forth under Item 1.01 of this Current Report is incorporated by reference into this Item 1.02.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth under Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.

 

Description

10.1

 

Conversion and Exchange Agreement, dated June 29, 2026, by and among Sky Quarry Inc., Foreland Refining Corporation, 2020 Resources LLC and Libertas Funding LLC.

10.2

 

Promissory Note, dated June 29, 2026, issued by Sky Quarry Inc., Foreland Refining Corporation and 2020 Resources LLC in favor of Libertas Funding LLC.

10.3

 

Personal Guarantee, dated June 29, 2026, executed by Marcus Laun in favor of Libertas Funding LLC.

104

  

The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.




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.

 

 

 

 

 

 

Dated: July 2, 2026

By:

/s/ Marcus Laun

 

Name:

Marcus Laun

 

Title:

Interim Chief Executive Officer, Interim Chief Financial Officer and President


FAQ

What debt did Sky Quarry (SKYQ) restructure with Libertas Funding?

Sky Quarry restructured $3,985,000 of merchant cash advance obligations owed to Libertas Funding. These arose from several agreements for the sale of future receipts and were consolidated into a single promissory note.

What are the key terms of Sky Quarry’s new promissory note?

The new note has an 8% non-compounding annual interest rate and a principal-first repayment structure with escalating weekly payments. It can be prepaid at any time, in whole or part, without premium or penalty.

What collateral secures Sky Quarry’s new note to Libertas?

All existing security interests, liens and collateral rights previously granted to Libertas under the merchant cash advance agreements remain in effect and now secure the obligations under the new $3,985,000 promissory note.

What restrictions does Sky Quarry face while the note is outstanding?

While the note is outstanding, Sky Quarry may not sell or pledge future receivables (other than typical receivables or inventory financing) and may not sell assets material to its operations without Libertas’s prior written consent.

What is Marcus Laun’s role in guaranteeing Sky Quarry’s obligations?

Interim CEO, CFO and President Marcus Laun signed a personal guarantee covering all obligations under the note. The company agreed to indemnify him and reimburse any payments he makes, with 8% annual interest on reimbursed amounts.

How were Sky Quarry’s prior merchant cash advance agreements affected?

Upon issuance of the new note, the prior merchant cash advance obligations and agreements were fully satisfied, cancelled and extinguished. Libertas also issued a general release of claims related to those agreements against the company parties.

Filing Exhibits & Attachments

7 documents