NASDAQ: SKYQ

Our periodic reports, proxy statements and Current Reports on Form 8-K are available on the SEC’s EDGAR system and may be viewed at http://www.sec.gov and on our website at skyquarry.com/investor-information/sec-filings.

Risk Factors Summary

The following is a summary of some of the principal risks that could materially adversely affect our business, financial condition and results of operations. You should read this summary together with the more detailed description of each risk factor contained in “Part I, Item 1A. Risk Factors.”

General Risks Related to our Business

·Our recurring losses from operations raise substantial doubt regarding our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations.

·We have outstanding debt that is past due and we are not currently making full payments to certain of our lenders pursuant to outstanding loans and merchant cash advance agreements which could result in our lenders declaring the loans to be in default.

·We have a limited operating history upon which you can evaluate our performance, have a history of losses and have only been operating the Eagle Springs Refinery since September 30, 2022. Accordingly, our prospects must be considered in light of the risks that any new company encounters.

·We depend on several significant customers, and a loss of one or more significant customers could adversely affect our results of operations.

·We depend on several principal suppliers for the majority of our crude oil. A disruption in supply or a change in our relationship with any one of them could adversely affect our business, financial condition and results of operations.

·Our future success is dependent on the continued service of our management team.

·The issuance of shares of our common stock as compensation to officers, directors, employees and consultants could have an adverse effect on our operating results and a dilutive effect on our shareholders.

·We entered into financing arrangements that contain covenants that could limit our ability to engage in certain transactions.

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·Acquisition opportunities may present themselves that in hindsight did not achieve the positive results anticipated by our management.

·Environmental and regulatory compliance may impose substantial costs on us.

·We may be exposed to third party liability and environmental liability in the operation of our business.

·We rely on technology to conduct our business, and our technology could become ineffective or obsolete.

·An overall decline in the health of the economy and other factors impacting consumer spending, such as recessionary conditions, governmental instability, inclement weather, and natural disasters, may affect consumer purchases, which could reduce demand for our products and harm our business, financial condition, and results of operations.

·We are exposed to the impact of rising inflation rates, which could negatively affect our results of operations and our ability to invest and hold our cash.

·Failure to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, or our failure to remediate our existing material weaknesses in our internal control over financial reporting, could have a material adverse effect on our results of operations, financial condition and cash flows.

·We have engaged in transactions with related parties, and such and other transactions in the future could present conflicts of interest that could have a material adverse effect on our results of operations, financial condition and cash flows.

·Our financial results may fluctuate from quarter to quarter due to certain maintenance requirements.

·Disruptions or breaches of our IT systems, due to cyber-attacks or otherwise, could cause us to lose financial and operational data, prevent us from efficiently operating our business and cause us to lose revenue and profits or incur significant costs.

· If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

Risks Related to Asphalt Shingle Recycling

·The nature of our WAS recycling operations may involve various risks.

·Our ECOSolv Technology May Not Work as Expected.

·The viability of our asphalt shingle recycling and reclamation business plan, business operations, and future operating results and financial condition are and will be exposed to fluctuating prices for our end-products.

·Because of the speculative nature of asphalt shingle recycling, there is a risk that our business may not succeed.

·The price for asphalt cement, shingle granules, sand aggregate, limestone and/or fiberglass is subject to a variety of factors that are beyond our control.

·The market for asphalt cement, shingle granules, sand aggregate, limestone and/or fiberglass may be highly competitive, and intensely competitive pressures could force us to abandon or curtail our business plan related to asphalt shingle recycling and reclamation.

·Decommissioning costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.

·We may have difficulty marketing or distributing the asphalt cement, shingle granules, sand aggregate, limestone and/or fiberglass we may produce, which could harm our financial condition.

·We do not yet have a market for the anticipated recycled products that we expect to generate from our PR Spring Facility.

·Our shingle remediation activities will be dependent upon having an available supply of waste asphalt shingles from waste haulers, shingle manufacturers or other third parties.

Risks Related to Oil Sands Exploration

·We do not have any proven oil reserves.

·The price of oil has historically been volatile.

·Oil sands development involves many risks.

·Decommissioning costs are unknown and may be substantial. Unplanned costs could divert resources from other projects.

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Risks Related to Oil Refining and Fuels Production

·Volatility in crude oil and wholesale diesel prices affect our business, financial condition and results of operations.

·There are difficulties in operating an oil refinery which could adversely affect our business, financial condition and results of operations.

·A significant decrease in demand for diesel and gasoline, including increased consumer preference for alternative fuels or improvements in fuel efficiency, in the areas we serve would materially affect our revenues and profitability.

·Through early 2026, the U.S. regulatory environment for vehicle emissions and fuel economy has shifted from an aggressive expansion of electric vehicle (“EV”) adoption mandates to a proposed rollback of prior standards, creating continued uncertainty regarding future demand for petroleum-based fuels.

·The industries in which we operate are subject to seasonal trends, which may cause our operating costs to fluctuate, affecting our cash flow.

·Our operations are subject to stringent environmental laws and regulations that may expose us to significant costs and liabilities that could exceed current expectations.

·A climate-related decrease in demand for crude oil could negatively affect our business.

·Our business operations may be materially adversely affected by negative impacts to the global economy, capital markets, or other geopolitical conditions resulting from economic uncertainty, armed conflicts, acts of terrorism, political unrest or health epidemics.

Risks Related to Ownership of our Common Stock

·We may not be able to maintain a listing of our common shares on Nasdaq.

·We received a notice of noncompliance with the Nasdaq Capital Market minimum bid price requirement, and if we do not regain compliance by March 23, 2026, our common stock may be delisted; although our stockholders have approved a reverse stock split, there is no assurance that such action will restore or maintain compliance.

·The market price of our stock may be highly volatile, and you could lose all or part of your investment.

·An active, liquid trading market for our common stock may not be sustained, which may make it difficult for you to sell the common stock you purchase.

·Since we do not expect to pay any cash dividends for the foreseeable future, investors may be forced to sell their stock in order to obtain a return on their investment.

·If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected.

·Future issuances of our common stock or securities convertible into, or exercisable or exchangeable for, our common stock, or the expiration of lock-up agreements that restrict the issuance of new common stock or the trading of outstanding common stock, could cause the market price of our common stock to decline and would result in the dilution of your holdings.

·Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which could rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock.

·We expect to raise additional capital through equity and/or debt offerings to support our working capital requirements and operating losses.

·If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.

·We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, and our stockholders could receive less information than they might expect to receive from more mature public companies.

·We are also a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

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Item 1. Business

Overview

We operate a regional refinery (the Eagle Springs Refinery) producing diesel, vacuum gas oil (VGO), naphtha and liquid paving asphalt from crude oil suppliers in the Uintah basin near Nevada and Utah. In addition to our goal of growing the refinery, we have a separate division in the development-stage (P.R. Springs) formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soil, providing sustainable refined crude products. We anticipate several benefits from the recycling and production of oil from asphalt shingles reducing the dependence on landfills for the disposal of waste and reducing dependence on foreign oil.

We have developed a process for separating oil from oily sands and other oil-bearing solids utilizing a proprietary solvent, which we refer to as our ECOSolv technology or the ECOSolv process. The solvent is used in a closed-loop distillation and evaporation circuit which results in up to 99% of the solvent being recoverable for continuous reuse and requires no water. The solvent has demonstrated oil separation rates of up to 95% in bench testing using samples of both mined crushed ore and ground asphalt shingles. Bench testing was conducted in house, and through unaffiliated third parties which were completed in May and August 2022.

Currently, we intend to finish retrofitting our oil sands remediation facility located in PR Spring in eastern Utah in the next twelve months from when the necessary funding is obtained to recycle waste asphalt shingles using our ECOSolv technology, to produce and sell oil as well as asphalt paving aggregate mined from our bitumen deposit.

We intend to continue to develop regional model asphalt shingle recycling facilities, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturing centers. Our design contemplates a modular, scalable, purpose-built facility capable of remediating waste asphalt shingles and separation into their base components of bitumen / asphalt cement, shingle granules, sand aggregate, limestone and fiberglass.

Recent Developments

Plant Outages and Maintenance

Our facilities require ongoing maintenance and from time-to-time certain repairs, improvements and retrofitting, which may require us to temporarily shut down or operate at a diminished capacity. Our Eagle Springs refinery operated by Foreland Refinery Corporation experienced a shut down during the fourth quarter of 2025 in connection with a boiler repair. Currently, repairs have been completed, and the refinery is being prepared to resume operations, subject to the procurement of feedstock. The unscheduled repairs and outages at Foreland’s Eagle Springs Refinery have had a negative impact on our final financial results for the third and fourth quarters of 2025, and financial results for the first quarter of 2026. We expect the facility to be operational by the end of the second quarter of 2026.

Stock Split

On March 5, 2026, we filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of Delaware to (i) effect on the corporate level a one-for-eight (1-for-8) reverse stock split of shares of our Common Stock. The Reverse Stock Split was effective on March 15, 2026, at 11:59pm Eastern Time.

Corporate History and Structure

We were incorporated in Delaware on June 4, 2019, as “Recoteq, Inc.” On April 22, 2020, we changed our name to “Sky Quarry Inc.” We have three (3) wholly-owned subsidiaries: 2020 Resources, 2020 Canada, and Foreland.

On September 16, 2020, we acquired 2020 Resources (formerly, US Oil Sands (Utah) LLC and USO (Utah) LLC), which was incorporated on November 2, 2017. The assets of 2020 Resources include the PR Spring Facility and a 100% interest in asphalt bitumen leases covering approximately 5,930 acres in the PR Spring region in Utah. On September 16, 2020, we also acquired 2020 Canada (formerly, USO (Canada) Ltd.), which was incorporated on April 26, 2018, and is currently inactive.

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On September 30, 2022, we acquired Foreland (formerly, Petro Source Resources), which was incorporated on May 29, 1998. Foreland is engaged in the refining of heavy crude oil into diesel and other petroleum products (naphtha, VGO, and paving asphalt liquids) at its Eagle Springs Refinery located near Ely, Nevada.

The following chart depicts our organizational structure:

Industry

Oil Refining and Sales Market

The process of converting crude oil into usable products is known as refining. Refining is a core component of the U.S. midstream energy sector and supports the production of transportation fuels, petrochemical feedstocks, and infrastructure-related materials. The most common products derived from a barrel of crude oil are gasoline and diesel, followed by jet fuel, heating oil, asphalt, lubricants, and petrochemical inputs used in plastics and industrial manufacturing.

According to the U.S. Energy Information Administration (EIA), the United States has remained the world’s largest crude oil producer in recent years. U.S. crude oil production reached multiple record highs during 2024 and 2025, reflecting continued efficiency gains and strong output from major producing basins.

In August 2024, U.S. crude oil production set a monthly record, averaging approximately 13.4 million barrels per day (b/d), surpassing the prior record set in late 2023. Annual average production for 2025 is estimated at approximately 13.6 million b/d, representing the highest annual output in U.S. history. For 2026, the EIA projects U.S. crude oil production to remain near record levels, averaging approximately 13.5 million b/d, before moderating modestly in subsequent years.

U.S. refining capacity continues to support high levels of refined product output. Refinery utilization rates have generally remained strong, particularly during peak driving seasons, with gasoline and diesel accounting for the majority of refined product demand. Refined petroleum products remain essential inputs for freight transportation, aviation, construction, agriculture, and petrochemical manufacturing.

The United States also continues to play a critical role as a supplier of refined petroleum products to domestic and export markets. Demand for crude oil and refined products has been supported by federally funded infrastructure projects, increased construction activity, and sustained transportation needs across the country.

Overall, the U.S. oil refining and sales market remains characterized by record-level crude production, stable refining operations, and continued demand tied to transportation, industrial activity, and long-term infrastructure investment.

Waste Asphalt Shingle Market

According to a report by the United States Environmental Protection Agency titled “Advancing Sustainable Materials Management: Assessing Trends in Materials Generation and Management in the United States” dated December 2020, about 15.1 million tons of waste shingles are generated annually. Waste asphalt shingles amount to about 2.5% of the total building-related waste in the U.S. Over 96% of these waste shingles end up in landfills, occupying over 23 million cubic yards of space.

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This waste stream is expected to increase considering that, according to the Asphalt Roofing Manufacturers Association, four-out-of-five homes in the U.S. are roofed with asphalt shingles. According to Grand View Research, the U.S. residential and commercial roofing materials market size was estimated at $16 billion in 2024 and is anticipated to grow at a compound annual growth rate of 4.5% from 2024 to 2030.

According to an industry survey by National Asphalt Pavement Association (“NAPA”), the use of reclaimed asphalt pavement (“RAP”) has risen by 75.2% since NAPA began collecting data in 2009, while total asphalt mixture tonnage has grown by 23.3% during the same period. RAP usage during the 2022 paving season reduced the need for an estimated 26.9 million barrels of asphalt binder and more than 93 million tons of aggregate. RAP storage for future use also reduced the landfill space needed by 68.2 million cubic yards.

According to NAPA, manufacturers also kept 641,000 tons of unprocessed, recycled asphalt shingle (“RAS”) out of landfills nationwide, as RAS usage in 2022 increased by 7% over 2021 totals, reducing the need for 740,000 barrels of asphalt binder.

NAPA also reported that the usage of warm-mix asphalt (“WMA”) technologies in 2022 decreased by 1.6% from 2021, with the decreased WMA tonnage in the commercial and residential sector leading the decline. NAPA further reported that the usage of 175 million tons of WMA mix, representing slightly less than 40% of the estimated market, resulted in reduced greenhouse gas emissions on a scale equal to the annual emissions of approximately 40,000 passenger vehicles.

States and local agencies around the U.S. are beginning to see the advantage of using RAS in road infrastructure projects on county, city and state roads. They are using RAS in aggregate base courses and for granular base stabilization on local roads. Paving contractors in many states are using RAS for parking lots, private driveways and in hot mix asphalt (“HMA”) for varied purposes such as patching and temporary roads. The most promising future market may be local governments. Over the last ten years, the Minnesota Department of Transportation has been doing laboratory and field tests with RAS on hiking and biking trails and on town and county road sections, with positive results. The Georgia Department of Transportation has also experienced good results using RAS on local roads to the extent that they have modified their HMA specifications to allow for 5% waste shingles in the total mix.

The Oil Sands Market

As an unconventional hydrocarbon resource, oil sands (or bitumen) hold hundreds of billions of barrels of oil on a worldwide basis. Although Canada is the only country that is currently extracting large quantities of oil from its oil sands deposits, the United States also has large oil sands resources that can be developed, according to the U.S. Department of Interior Bureau of Land Management. In a 2007 Report entitled “A Technical, Economic, and Legal Assessment of North American Oil Shale, Oil Sands, and Heavy Oil Resources In Response to Energy Policy Act of 2005 Section 369(p)” (September 2007), prepared by the Utah Heavy Oil Program, Institute For Clean and Secure Energy and The University of Utah for the U.S. Department of Energy, the authors reported the following estimates, which estimates were based upon source material published in 1979, 1987 and 1993:

·The United States has an estimated 76 billion barrels of oil-in-place (“OIP”) from bitumen and heavy oil contained in oil sands resources (OIP are not estimates of reserves or recoverable resources).

·In the United States, Utah is known to have the largest oil sands deposits, with total resource estimates ranging from 23 to 32 billion barrels of OIP from bitumen and heavy oil contained in oil sands formations and deposits.

A substantial part of the oil sands deposits in our oil sands leases described below are accessible through outcroppings or in shallow depths with limited or no overburden. In our view, the location and accessibility of oil sands deposits at the PR Spring Facility creates an opportunity for commercial development, supported by positive economics, using surface mining techniques and our extraction technology.

The worldwide growing demand for heavy crude oil and the recent decline in crude oil production in countries such as Venezuela, Russia and the Ukraine make the high quality, low sulfur, heavy oil found in oil sands deposits in the United States a valuable resource that has been underdeveloped to date. The development of oil sands domestically has the potential to turn the United States into a major supplier of heavy oil to world markets. To date, oil sands development has been limited by the absence of viable technology that can extract heavy oil and bitumen from the oil

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sands deposits in an economical and environmentally responsible manner. To that end, we aim to develop our oil sands leases in an economically and environmentally responsible manner.

Asphalt Paving Sales Market

Asphalt is a key infrastructure construction material noted for its durability, flexibility, and ability to withstand adverse weather conditions. Asphalt is widely used for resurfacing projects to extend the lifespan of existing infrastructure and to repair cracks, potholes, and deterioration. The asphalt market is driven by the demand for road infrastructure development, maintenance, and repair.

The paving infrastructure industry is seeing progress in the adoption of asphalt technologies aimed at elevating performance, durability, and sustainability, including the use of polymer-modified asphalt and warm mix asphalt, and the use of asphalt shingles and reclaimed asphalt pavement. For example, the Missouri Department of Transportation reports that blending asphalt shingles to its hot mix asphalt results in a very durable, more-rut resistant asphalt at a much lower price, and that by using RAS, the department reduces the amount of liquid asphalt in a mix design by 20% to 25%. Together, these innovations strive to extend the longevity, environmental impact, and durability of paving asphalt and to reduce the demand for virgin materials and promote circular economy principles.

Recent favorable economic developments are expected to further boost overall activity and revenue in the construction industry where Federal and State government departments are investing in infrastructure projects such as highway or roadway repair, bridge and road construction and rehabilitation.

On November 15, 2021, President Biden signed into law a $1.2 trillion bipartisan package for new federal investments in America’s infrastructure over five years, including money for roads, bridges, mass transit, rail, airports, ports and waterways. Over $110 billion of new funds is allocated toward improving the nation’s roads and bridges, and investments in other major transportation programs.

Under the infrastructure package, $2.6 billion will be invested in roads and bridges in Utah over the next five years. Projects scheduled to start or are already under construction include a brand-new highway, new interchanges, widened freeways and highways, new paths for pedestrians and cyclists, maintenance to keep roads and bridges in good condition and improved access to a new state park. Under that same infrastructure package, California will receive $28.2 billion to build and repair more than 14,220 miles of highways and 1,536 bridges over five years. As of the date of this report, the infrastructure law referenced above is still the federal framework controlling these investments.

Oil Refining and Sales Market

The process of converting crude oil into usable products is known as refining. Refining is a core component of the U.S. midstream energy sector and supports the production of transportation fuels, petrochemical feedstocks, and infrastructure-related materials. The most common products derived from a barrel of crude oil are gasoline and diesel, followed by jet fuel, heating oil, asphalt, lubricants, and petrochemical inputs used in plastics and industrial manufacturing.

According to the U.S. Energy Information Administration (EIA), the United States has remained the world’s largest crude oil producer in recent years. U.S. crude oil production reached multiple record highs during 2024 and 2025, reflecting continued efficiency gains and strong output from major producing basins.

In August 2024, U.S. crude oil production set a monthly record, averaging approximately 13.4 million barrels per day (b/d), surpassing the prior record set in late 2023. Annual average production for 2025 is estimated at approximately 13.6 million b/d, representing the highest annual output in U.S. history. For 2026, the EIA projects U.S. crude oil production to remain near record levels, averaging approximately 13.5 million b/d, before moderating modestly in subsequent years.

U.S. refining capacity continues to support high levels of refined product output. Refinery utilization rates have generally remained strong, particularly during peak driving seasons, with gasoline and diesel accounting for the majority of refined product demand. Refined petroleum products remain essential inputs for freight transportation, aviation, construction, agriculture, and petrochemical manufacturing.

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The United States also continues to play a critical role as a supplier of refined petroleum products to domestic and export markets. Demand for crude oil and refined products has been supported by federally funded infrastructure projects, increased construction activity, and sustained transportation needs across the country.

Overall, the U.S. oil refining and sales market remains characterized by record-level crude production, stable refining operations, and continued demand tied to transportation, industrial activity, and long-term infrastructure investment.

The PR Spring Facility

Construction of the PR Spring Facility was completed in 2019 and originally utilized a hybrid water/biosolvent recovery system for the separation of oil from oily sands and asphalt sludge. This process has since been shown to be uneconomical in the current environment and to use significant amounts of water.

We are in the process of retrofitting the PR Spring Facility to utilize our ECOSolv process to recycle waste asphalt shingles into crude oil and clean solids, and to produce oil and asphalt paving aggregate from its bitumen deposits, which will require very little or no water. This same solvent process has been demonstrated in bench tests to be effective in the separation of waste asphalt shingles into its base components of oil, sand and fiberglass. Although there are no proven oil reserves at the PR Spring facility, we believe that we will be able to economically operate the facility solely with the use of waste asphalt shingles.

We have invested approximately $6.3 million since September 16, 2020, at the PR Spring facility, all of which is related to the retrofit of the facility. We estimate the remaining capital costs for the completion of the retrofit will be approximately $4.0 million. We intend to finish retrofitting the PR Spring Facility in the next twelve months from when the necessary funding is obtained. We also plan to develop a modular asphalt shingle recycling facility design to grind and mill the shingle feedstock, which can be deployed in areas with high concentrations of waste asphalt shingles and near asphalt shingle manufacturers.

The ECOSolv Process

Under the ECOSolv process, mined oil sands or waste asphalt shingle pellets are crushed and then mixed with a proprietary hydrocarbon-based waterless solvent and heated and agitated in a mixing vessel into a slurry. The solvent “washes” the sand clean and separates the sand from the pre-oil liquid asphalt. The freed ‘pre-oil’ is then processed during the separation stage and various products can be produced – West Texas Intermediate (WTI) market bitumen, heavy oil or heavy crude oil. The solvent is extracted by separation, distillation and evaporation processes and is captured for re-use in the closed loop system, leaving clean heavy oil behind ready for sale. Separation of the sand is done by mechanical drying units, which evaporate and capture the solvent for reuse, leaving behind clean sand.

Bench testing for oil recovery from waste asphalt shingles was performed using samples containing 22% to 25% weight saturation asphalt bitumen content. The samples were processed using our ECOSolv process and resulted in a product containing, on average, 20.8% bitumen and less than 1% solvent, implying a hydrocarbon recovery factor of up to 95% and solvent recovery of up to 99%.

PR Spring Asphalt Bitumen Leases

2020 Resources holds a 100% undivided interest in contiguous asphalt bitumen leases covering approximately 5,880 acres in the PR Spring region of Uintah County, Utah. The leases were issued by the State of Utah’s School and Institutional Trust Land Administration and require payment of annual rent of $5,880 per year. Once production from the bitumen deposit begins production royalties will be paid at 8% and 10% of gross sales per year.

The PR Spring oil sands deposit is located along the southeast flank of the Uintah Basin, formed during the late Cretaceous and Early Tertiary period. The deposit is within the Eocene-aged Green River Formation of the Douglas Creek Member. In general, the sands thicken to the southeast, closer to their source, becoming increasingly finer-grained and carbonate rich to the north and northwest.

The location of the project is amongst rugged topography, meaning the overburden thickness of the oil-saturated sands is highly variable. This variability directly affects the total volume to bitumen in-place calculations across the property. The target deposit is topographically high, which has resulted in erosion of much of the non-reservoir overburden. The mine pits have been proposed in an ideal location where the target resource is very shallow and thick with minimal

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overburden and outcropping at the surface in some locations. Well data in the mine pits is very dense and high quality, with 70 core holes in the Phase 1 mine pit locations and over 180 cored wells across PR Spring acreage. A detailed understanding of the reservoir can be achieved by analysis of this data. To that end, we aim to develop our oil sands leases in an economically and environmentally responsible manner.

Eagle Springs Refinery

On September 30, 2022, we acquired Foreland Refinery Corp, which is engaged in the refining of heavy crude oil into diesel and other petroleum products (naphtha, VGO, and paving asphalt liquids) operating as the Eagle Springs Refinery located near Ely, Nevada. The refinery has a “name plate” production capacity of approximately 80,000 barrels per month, subject to air permit limitations and the regional aspect of its feedstock supply. We anticipate operating at approximately 45,000 barrels per month during 2026. In addition to securing additional crude oil from regional producers, management anticipates that the heavy oil produced at the PR Spring Facility once operational will be refined at the Eagle Springs Refinery resulting in increased production and revenues and higher efficiencies across the production chain.

The refinery’s major processing units include crude oil distillation, catalytic cracker, naphtha hydrotreating, and reforming units, which produce diesel, VGO, naphtha, asphalt paving oil and other associated refined products.

Feedstock crude oil, consisting largely of heavy sulfur-heavy oil, is sourced from local producers in Nevada and Utah as well as other North American sources. All the crude oil is delivered to the refinery by truck. Refined products are transported by third parties to wholesale, bulk, and retail customers primarily across Nevada, Utah and California and other North American jurisdictions.

Crude oil is received into the refinery tank farm and crude oil terminals, which include over 29,500 barrels of oil storage. The crude oil is processed through various refining units into products and where they are stored in the refinery’s approximately 73,800 barrels of refined product specific tankage.

Revenue Streams

Foreland produces diesel, vacuum gas oil (VGO), naphtha and asphalt paving liquids, which is then sold through short-term and long-term contracts to our established long-term customers and on the spot market.

The PR Spring Facility, once operational, is expected to produce asphalt paving aggregate, a low-sulfur heavy oil product from remediated asphalt shingles and in the future from mined bitumen sands, to be sold to and refined by the Eagle Springs Refinery.

We anticipate that the products derived from the recycling of waste asphalt shingles will include liquid asphalt cement, shingle granules and sand aggregate, limestone and fiberglass, which can be sold back to asphalt paving companies or shingle manufacturers.

ASR Facilities

Our historical growth plans have included the strategy of decentralized modular asphalt shingle recycling facilities referred to as ASR Facilities. We have determined that we should focus on processing waste shingles and work with partners and other companies to own and operate ASR facilities. We believe that this will provide us with a steady supply of waste shingle feedstock, allow for quality control and collection of tipping (waste disposal) fees. Discussions with other suitable facilities with existing waste shingle stockpiles are underway.

We have reviewed and analyzed several designs for ASR Facilities with a “front end” module, which could be used to grind, and mill shingle feedstock processing extracts and separating the granules and sand. The remaining bitumen can be pressed into solid pellets for ease of transportation to PR Springs. Strategically, we are reviewing the opportunity to process waste asphalt shingle pellets from the front-end modules that could potentially be shipped initially to the PR Spring Facility for secondary remediation while “back end” modules could be used for the distillation process to separate the solvents.

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Remediating waste asphalt shingles into their basic components of asphalt cement, shingle granules, sand aggregate, limestone and fiberglass could be sold for use as binding material and tar coat, to the asphalt paving industry, or to roofing shingle manufacturers.

Reserves

We do not have any proven reserves on our bitumen leases at the PR Spring Facility, primarily because we have not yet produced oil from the bitumen leases and sold the product in a commercial setting.

Raw Materials and Suppliers

Currently, the primary raw materials used in the manufacture of our current products are crude oil and other petroleum fuel operational inputs. The cost of these raw materials is a key factor in pricing our products.

We source raw materials and crude oil feedstock mostly from regional producers and suppliers, and we continue to explore partnerships and opportunities to optimize our supply costs.

We have historically purchased certain key raw materials from a limited number of suppliers. For the year ended December 31, 2025, we did not owe any vendors for our supply of crude oil and other petroleum fuel operational inputs, and for the year ended December 31, 2024, three vendors accounted for 20%, 13% and 11%, respectively, of our supply of crude oil and other petroleum fuel operational inputs. We purchase raw materials with the use of purchase orders. While we believe that there is an ample supply of most of the raw materials that we need, in the absence of firm and long-term contracts, we may not be able to obtain a sufficient supply of these raw materials from our existing suppliers or alternatives in a timely fashion or at a reasonable cost. If we fail to secure a sufficient supply of key raw materials in a timely fashion, it will result in a significant delay in delivering our products. Furthermore, failure to obtain a sufficient supply of these raw materials at a reasonable cost could also harm our revenue and gross profit margins.

Please see “Risk Factors—General Risks Related to Our Business—We depend on several principal suppliers for most of our crude oil. A disruption in supply or a change in our relationship with any one of them could adversely affect our business, financial condition and results of operations” for a description of the risks related to our supplier relationships.

Sales and Marketing

Our comprehensive sales and marketing strategy will be utilized to drive growth, establish brand recognition, and expand our market reach and client base. This will involve attending industry conferences and events in the green tech, energy, and waste management sectors, leveraging our website, email marketing, and social media platforms, and regularly distributing press releases to share important Company updates and milestones. We will also pursue both earned and paid placements in newsletters and media outlets at local and national levels to further enhance visibility to amplify our message.

Customers

Our customers generally include refineries that use our products for feedstock to process them into finished petroleum products.

For the year ended December 31, 2025, three customers accounted for approximately 33%, 31% and 24%, respectively, of our total net sales, and for the year ended December 31, 2024, these customers accounted for approximately 35%, 23% and 22%, respectively, of our total net sales. These customers do not have any ongoing commitment to purchase our products. While additional customers continue to be sourced, customer concentration risk still exists. The loss of or a sustained decrease in demand by any one of these customers could result in a substantial loss of revenues and could have a material adverse effect on our results of operations. See “Risk Factors—General Risks Related to Our Business—We depend on several significant customers, and a loss of one or more significant customers could adversely affect our results of operations.”

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Competition

We compete with a multitude of foreign, regional, and local competitors that vary by market. If our existing or future competitors seek to gain or retain market share by reducing prices, we may be required to lower our prices, which would adversely affect our operating results. Similarly, if customers or potential customers perceive the products or services offered by our existing or future competitors to be of higher quality than ours or part of a broader product mix, our revenues may decline, which would adversely affect our operating results.

Competitive Strengths

In our operating refinery business, we have identified Foreland Refinery Corp to have a competitive advantage as the only licensed operating refinery currently in the state of Nevada. A lack of national pipeline infrastructure and trucking logistics requirements give a competitive advantage for our refinery to work with geographically located oil producers.

In our development stage emerging waste asphalt shingles business, we have identified several competitive strengths that we believe will support our position. These include our ability to optimize margins through diversified revenue streams, establishing long-term contracts, and our ability to scale our operations.

We believe that our adaptable business model, focused on collecting tipping fees ranging from $45 to $150 per ton for waste asphalt shingles with a processing cost of approximately $25 per ton, will enable us to produce bitumen and other materials at minimal cost based on our internal analysis. According to a Statista report dated August 28, 2024, tipping fees in the US in 2022 and 2023 ranged from $43 to $83 per ton, however based on our internal research we believe that tipping fees can be as high as $145-$160 per ton, in certain locations.

While we believe we are well-positioned to participate in the waste asphalt shingle recycling sector due to our know how to recycle this material into multiple high value products, we recognize the challenges that come with the rapid growth of this emerging industry. However, we believe our fully integrated process, capable of producing and refining, will offer a distinct advantage by streamlining every step from extraction to refining, ensuring greater efficiency and control over production. By combining refining capabilities with cost-effective operations, we believe that we can produce high-quality materials with significant cost savings and minimal environmental impact.

Growth Strategies

Our growth strategies include growing the production output of our Eagle Spring Refinery operated by Foreland Refinery Corp to a higher capacity, and to commence operations at our PR Spring facility.

We believe our growth of our refinery will be driven in part by permanent nearby refinery shutdowns reducing the supply of diesel and other products in the regional area driving higher crack spreads or refinery margins. Additionally, refinery growth strategies include acquiring more crude feedstock from regional suppliers and operating in longer uninterrupted production cycles.

We believe the commercialization of PR Spring facility is another component in our growth strategy. Currently, we believe PR Spring represents a significant opportunity to both unlock value in terms of the previous facility owners’ sunk costs with the plant’s investment and the available hydrocarbon resource near the facility to be processed.

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Intellectual Property

We hold the following patents and patent applications:

ID Type

Patent Name

Filing Date

Issue Date

Expiry Date

Patent 2578873

Removal of hydrocarbons from particulate solids (Canada)

10/15/2024

12/11/2012

12/11/2032

Patent 8758601B2

Removal of hydrocarbons from particulate solids (U.S.)

09/18/2012

06/24/2014

09/18/2032

Patent 10184084B2

Oilsands processing using inline agitation and an inclined plate separator (U.S.)

12/04/2015

01/22/2019

12/04/2035

Application 3028202 (1)

Method for producing pipeline specification bitumen from oil sands mining and extraction facilities using non-miscible solvents and centrifuge processing (Canada)

12/20/2018

Application 2017/ 0306242 A1 (1)

Method for producing pipeline specification bitumen from oil sands mining and extraction facilities (U.S.)

10/26/2017

(1)Patent applications are currently under review and may not be renewed if they have no practical application under the new solvent-based recovery system being contemplated.

Our ECOSolv process is protected as a trade secret.

Properties

Our corporate headquarters are in Woods Cross, Utah, where we lease office space at 707 W. 700 S, Suite 101.

We hold mineral leases (or the operating rights under leases) covering approximately 5,880 net acres within the State of Utah. Our oilsands remediation at the PR Spring Facility is sited on one of these leases. Terms of the leases are set forth in the table below.

Gross

Net

Lease Expiry Date

Annual Rent

Annual Advance Minimum Royalty

Production Royalty Rate

Reference

Acres

Acres

(1)

(2)

(3)

(4)

ML-49927

4,319.90

4,319.90

1/31/2030

$

4,320

$

410,400

10%

ML-51705

1,560.00

1,560.00

1/31/2030

1,560

15,600

8%

Total

5,879.90

5,879.90

$

$5,880

$

$426,000

Mineral leases may be extended past expiry date by continued payment of annual rent and annual advance minimum royalty.

Annual rent on mineral leases may be credited against production royalties payable during the year.

Annual advance on mineral leases of minimum royalty may be credited against production royalties payable during the year.

The production royalty is payable on the market price of products produced from the mineral leased substances, without deduction of costs for mining, overhead, labor, distribution or general and administrative activities.

We also hold two leased land rights of way rentals in Nye County, Nevada, totaling approximately 40 acres. Our Eagle Springs Refinery is sited on one of these leases.

Reference

Acres

Lease

Expiry

Date

Annual

Fee

Right-of-Way Grant N-41035

19.7

12/31/2054

$

2,850

Right-of-Way Grant N-42414

20.3

12/31/2044

1,400

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We are seeking to develop the 5,930 acres of land in PR Spring, Utah to produce heavy oil/bitumen and asphalt paving aggregate from bituminous asphaltic sands deposits and are in the process of retrofitting our existing mining and processing facilities to utilize our ECOSolv technology. During the years ended December 31, 2025 and 2024, we conducted no mining operations. As of the date hereof, the PR Spring lands are classified as an exploration stage property and hold no mineral reserves or proven minerals reserves, as those terms are defined in Subpart 1300 of Regulation S-K.

We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable space will be available to accommodate any such expansion of our operations.

Employees

As of December 31, 2025, we had 26 full-time employees.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

On March 4, 2026, KF Business Ventures, LP filed a lawsuit against the Company and its subsidiaries, Foreland Refining Corp. and 2020 Resources LLC, in Utah state court alleging, among other things, breach of contract, and seeking repayment of approximately $2,200,000 in principal under certain promissory notes, plus accrued interest, unpaid advisory fees, and foreclosure on the collateral securing the notes. The Company intends to vigorously defend against these claims. For additional information, see Item 3, “Legal Proceedings.”

Government Regulation

We are subject to regulation by multiple U.S. government agencies, including the U.S. Environment Protection Agency, or the EPA.

We are subject to the requirements of the Federal Occupational Safety and Health Act, or OSHA, and comparable state laws. The OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of the Comprehensive Environmental Response, Compensation, and Liability Act and similar state laws require that we organize and/or disclose information about hazardous materials used or produced in our operations. Also, pursuant to OSHA, the Occupational Safety and Health Administration has established a variety of standards related to workplace exposure to hazardous substances and employee health and safety.

The Federal Oil Pollution Act of 1990, or OPA, and resulting regulations impose a variety of obligations on responsible parties related to the prevention of oil spills and liability for damages resulting from such spills in waters of the United States. The term “waters of the United States” has been broadly defined to include inland water bodies, including wetlands and intermittent streams. The OPA assigns joint and strict liability to each party responsible for oil removal costs and a variety of public and private damages. We believe that we are in compliance with the OPA and the federal regulations promulgated thereunder in the conduct of our operations.

The Federal Water Pollution Control Act, or the Clean Water Act, and resulting regulations, which are primarily implemented through a system of permits, also govern the discharge of certain contaminants into waters of the United States. Sanctions for failure to comply strictly with the Clean Water Act are generally resolved by payment of fines and correction of any identified deficiencies. However, regulatory agencies could require us to cease construction or operation of certain facilities or to cease hauling wastewater to facilities owned by others that are the source of water discharges. We believe that we substantially comply with the Clean Water Act and related federal and state regulations.

The application, interpretation, and enforcement of these U.S. laws and regulations are often uncertain, particularly in the rapidly evolving industry in which we operate and may be interpreted and applied inconsistently with our current policies and practices. Any existing or new legislation applicable to our operations could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, to respond to regulatory

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inquiries or investigations, and to defend individual or class litigation. These events could cause us to divert significant resources and funds to address these issues and possibly require us to change our business practices.

Implications of Being an Emerging Growth Company

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

·have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act;

·comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

·submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

·disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the first registered offering of our securities, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.235 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

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