Sky Quarry Inc. Reports Significant Decline in Q1 2025 Financial Performance

Sky Quarry Inc. reported a significant decline in financial performance for the first quarter of 2025, with net sales of $6.3 million, down from $11.0 million in the same period of 2024. The company's cost of goods sold also decreased to $7.1 million from $10.4 million year-over-year, resulting in a gross margin loss of $726,092 compared to a profit of $569,449 in the prior year. The net loss for the quarter was $3.3 million, or $0.16 per share, compared to a loss of $2.5 million, or $0.15 per share, in the previous year. The decline in sales was attributed to challenges in regaining supply streams disrupted by a refinery outage and a drop in West Texas Intermediate (WTI) crude oil prices.

In terms of operational metrics, Sky Quarry's total assets decreased to $24.6 million as of March 31, 2025, down from $26.9 million at the end of 2024. Current assets also fell to $4.7 million, primarily due to a reduction in inventory. The company reported a decrease in accounts payable and accrued expenses, which fell to $3.2 million from $4.0 million. The total liabilities decreased to $15.0 million, reflecting a reduction in the warrant liability and current maturities of notes payable.

Strategically, Sky Quarry continues to focus on its core operations in oil production and refining, particularly through its acquisition of Foreland Refining Corporation, which has been positioned to enhance revenue generation. The company is also in the process of retrofitting its PR Spring facility in Utah to utilize its proprietary ECOSolv technology for recycling waste asphalt shingles. This initiative aims to reduce landfill dependency and improve oil recovery processes. However, the company faces ongoing challenges in securing sufficient capital to meet its operational and capital needs, as indicated by its accumulated deficit of $27.3 million.

Looking ahead, Sky Quarry's management has expressed a commitment to increasing revenues by securing greater volumes of crude oil for its refinery and exploring refinancing options to reduce debt service costs. The company is actively seeking to raise additional capital through equity or debt offerings to support its growth plans and operational needs. However, there remains uncertainty regarding the ability to raise sufficient funds and generate positive cash flow to meet its obligations effectively.