Sky Quarry (NASDAQ: SKYQ) fires CEO, issues $175K convertible note

Rhea-AI Filing Summary

Sky Quarry Inc. reported two major developments. The company issued a convertible promissory note to Varie Asset Management LLC with a principal amount of $175,000. The note matures on August 29, 2027, carries a 14% annual interest rate, and can be converted into common stock at $0.48 per share, with a conversion price floor of $0.40 per share. Sky Quarry also granted Varie a warrant to purchase up to 70,000 common shares at $0.48 per share, exercisable immediately for 24 months.

Separately, a special committee of the board terminated Mr. Sealock as Chief Executive Officer for cause on August 28, 2025, under the terms of his employment agreement. The board appointed Marcus Laun, already serving as President, Interim CFO, Executive VP and Director, to also act as Interim Chief Executive Officer.

Positive

• None.

Negative

• CEO termination for cause and role concentration: A special committee removed the prior CEO, Mr. Sealock, for cause on August 28, 2025, and the board installed President, Interim CFO, Executive VP and Director Marcus Laun as Interim CEO, consolidating several top roles in one person and signaling potential leadership and governance risk.

Insights

Corporate governance and capital structure analyst

Sky Quarry replaces its CEO and adds high-cost, dilutive financing.

Sky Quarry entered into a convertible note with Varie Asset Management for principal of $175,000. The note bears a relatively high interest rate of 14% per annum and matures on August 29, 2027. It is convertible into common stock at $0.48 per share, with a floor conversion price of $0.40 per share. Alongside this, the company issued a warrant for up to 70,000 common shares at an exercise price of $0.48, exercisable immediately for 24 months.

The filing also states that on August 28, 2025 a special committee of the board terminated Mr. Sealock’s employment as Chief Executive Officer for cause under his employment agreement. On the same date, the board appointed Marcus Laun, already President, Interim CFO, Executive VP and Director, as Interim CEO. This concentrates multiple key roles in a single individual and reflects an abrupt leadership change, which sophisticated investors often view as a potential governance and continuity risk.

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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): September 4, 2025 (August 28, 2025)

SKY QUARRY INC.

(Exact name of registrant as specified in its charter)

Delaware		001-42296		84-1803091
(State or other		(Commission		(I.R.S. Employer
jurisdiction of incorporation)		File Number)		Identification No.)
707 W. 700 South, Suite 1 Woods Cross, UT 84087 (Address of principal executive offices)  (zip code)
(424) 394-1090 (Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report.)

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.

☐

Section 1 – Registrant’s Business and Operations

Item 1.01   Entry into a Material Definitive Agreement.

On August 29, 2025, the Company issued a convertible promissory note (“Convertible Note”) in the principal amount of $175,000 to Varie Asset Management LLC (“Varie”).  The Convertible Note matures on August 29, 2027, bears an interest rate of 14% per annum and is convertible into shares of the Company’s common stock at anytime at a conversion price of $0.48 per share, subject to adjustment with a floor price of $0.40 per share.  A copy of the Convertible Note is attached hereto as Exhibit 99.1.  Additionally, in connection with the issuance of the Convertible Note, the Company issued a warrant to Varie to purchase up to 70,000 shares of the Company’s common stock at an exercise price of $0.48 per share.  The Warrant is exercisable immediately upon issuance for a period of twenty-four (24) months.  A copy of the Warrant is attached hereto as Exhibit 99.2.

The foregoing is only a summary of the Convertible Note and the Warrant, each of which are attached hereto as exhibits to this Form 8-K.

1 

Section 5 – Corporate Governance and Management

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 

On August 28, 2025, a special committee of the Company’s board of directors terminated Mr. Sealock’s employment with the Company as its Chief Executive Officer for cause pursuant to the terms of his employment agreement.  Additionally, on August 28, 2025, the board of directors appointed Marcus Laun, the Company’s President, Interim CFO, Executive VP and Director, as the Company’s Interim Chief Executive Officer.    

Section 9 – Financial Statements and Exhibits.

Item 9.01Financial Statements and Exhibits. 

(d)Exhibits 

Exhibit No.
99.1		Convertible Promissory Note between Sky Quarry Inc. and Varie Asset Management LLC dated August 29, 2025
99.2		Warrant Agreement issued to Varie Asset Management dated August 29, 2025

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

	Sky Quarry Inc.
Dated: September 4, 2025	By: /s/Marcus Laun
	Name:Marcus Laun
	Title:President

2 

FAQ

What financing did Sky Quarry Inc. (SKYQ) enter into with Varie Asset Management?

Sky Quarry issued a convertible promissory note to Varie Asset Management LLC with a principal amount of $175,000. The note matures on August 29, 2027, bears 14% interest per year, and is convertible into common stock at $0.48 per share, with a floor conversion price of $0.40 per share.

What warrant did Sky Quarry (SKYQ) issue alongside the convertible note?

In connection with the convertible note, Sky Quarry issued a warrant to Varie Asset Management to purchase up to 70,000 shares of common stock at an exercise price of $0.48 per share. The warrant is exercisable immediately upon issuance for a period of 24 months.

Who is the new Interim CEO of Sky Quarry Inc. (SKYQ)?

The board appointed Marcus Laun as Interim Chief Executive Officer. He already serves as the company’s President, Interim CFO, Executive VP and Director, and now holds the Interim CEO role as well.

What happened to Sky Quarry’s previous CEO, Mr. Sealock?

On August 28, 2025, a special committee of Sky Quarry’s board of directors terminated Mr. Sealock’s employment as Chief Executive Officer for cause pursuant to the terms of his employment agreement.

What is the conversion price of Sky Quarry’s new convertible note?

The convertible note issued to Varie Asset Management is convertible into Sky Quarry common stock at a price of $0.48 per share, subject to adjustment, with a floor price of $0.40 per share.

Which exhibits are attached related to the Sky Quarry (SKYQ) financing?

The filing attaches two key exhibits: Exhibit 99.1, the Convertible Promissory Note between Sky Quarry Inc. and Varie Asset Management LLC dated August 29, 2025, and Exhibit 99.2, the Warrant Agreement issued to Varie Asset Management dated August 29, 2025.