Sky Quarry Inc.

Sky Quarry Inc. Announces Reverse Stock Split: What Investors Need to Know

Sky Quarry Inc. is undertaking a significant action that will directly impact its stock and investors: a 1-for-8 reverse stock split of its common stock. The company filed an 8-K with the SEC to implement this move, which shareholders approved on November 4, 2025. This split primarily aims to help Sky Quarry meet Nasdaq's listing requirements.

Key Details of the Reverse Stock Split:

• Ratio: Shareholders will receive one (1) new share for every eight (8) shares of common stock they currently hold.
• Effective Date: The reverse stock split becomes effective at 5:00 PM ET on March 15, 2026. Trading on a split-adjusted basis is expected to start at market open on March 16, 2026, under a new CUSIP number.
• Purpose: The main reason for this action is to increase Sky Quarry's per-share trading price, helping it meet the Nasdaq Capital Market's minimum bid price requirement (typically $1.00 per share). Companies often use reverse splits to avoid delisting, which can severely harm trading activity and investor confidence.
• Capital Structure Adjustments (Financial Impact):
  • Authorized Shares: The total number of authorized common shares will not change.
  • Outstanding Shares: The number of outstanding common shares will decrease proportionally by the 1-for-8 ratio.
  • Par Value: The par value per common share will also adjust proportionally to reflect the reverse stock split.

Impact on Shareholders:

• Share Count & Price: Your total number of shares will reduce by a factor of eight, while the price per share will theoretically increase by roughly eight times. For instance, if you owned 800 shares at $0.50 each (totaling $400), you would now own 100 shares at approximately $4.00 each (still $400 total value).
• Total Value: Initially, the reverse split does not alter the total market value of your investment. You will own fewer shares, but each share will be worth proportionally more.
• Fractional Shares: Any fractional shares created by the split will be rounded up to the nearest whole share. This means shareholders who would otherwise receive a fraction will slightly benefit by getting an additional whole share.
• No Action Required: For most shareholders, especially those holding shares electronically or through a brokerage account, the adjustment will happen automatically.

Broader Implications for Investors:

While this reverse stock split resolves an immediate compliance issue, investors should grasp its wider context and implications:

1. Avoiding Delisting: Keeping its Nasdaq listing is vital for Sky Quarry. A move to an over-the-counter (OTC) market could drastically reduce trading activity, discourage large investors, and make it harder for the company to raise capital in the future.
2. Underlying Business Challenges: Reverse stock splits often signal a company facing significant challenges. A consistently low stock price usually reflects investor worries about financial performance or future prospects.
   • Sky Quarry's Business: Sky Quarry Inc. specializes in sustainable asphalt production, aiming to innovate in the construction materials sector with environmentally friendly solutions.
   • Financial Health: The low stock price suggests Sky Quarry likely faced headwinds in its recent financial performance, potentially struggling with profitability, revenue growth, or market penetration. While the 8-K filing itself provides no specific financial metrics, the necessity of a reverse split points to a period of underperformance.
   • Risks: Investors should be aware of ongoing risks. These include potential continued operational challenges, intense competition in the construction materials market, the capital-intensive nature of its business, and the risk of further stock price decline if underlying business fundamentals do not improve.
3. Strategic Outlook: Beyond the reverse split, Sky Quarry's long-term success depends on improving its core business. Investors should watch for future announcements on:
   • Operational Efficiency: Plans to reduce costs and optimize production processes.
   • Market Expansion: Strategies to increase market share or enter new geographic regions.
   • Product Innovation: Development of new sustainable solutions to drive revenue growth.
   • Financial Performance: Clear plans to achieve sustained profitability and positive cash flow.

Key Takeaways for Investors:

• Cosmetic Change: Remember, a reverse stock split is mainly a cosmetic adjustment. It doesn't change the company's total market value, its assets, liabilities, or its fundamental business operations.
• Focus on Fundamentals: The split buys the company time on Nasdaq, but it doesn't fix the underlying issues that led to the low stock price. Investors should closely monitor Sky Quarry's upcoming financial reports, strategic initiatives, and management commentary to see if the company can achieve sustainable growth and profitability.
• Potential Volatility: The stock might experience increased volatility around the split's effective date.

This reverse stock split marks a critical moment for Sky Quarry Inc. While it addresses an immediate compliance concern, the company's future performance depends on its ability to execute its business strategy and deliver better financial results. Investors should conduct their own thorough due diligence.