Monitor the company's stock price and trading volume for the initial conversion and subsequent resale by LendSpark. The 20% daily volume leak-out provision may cap daily selling pressure, but the overhang of a large variable-share settlement could weigh on the stock for weeks. Watch for any further 8-Ks disclosing the actual number of shares issued.
Price Chart
Executive Summary
Sky Quarry settled $638,998 in past-due liabilities with LendSpark by issuing freely tradable common stock via a court-approved Section 3(a)(10) settlement. The number of shares is variable based on a discounted conversion price, and LendSpark can resell up to 20% of daily volume. This resolves a default situation but creates severe dilution risk for existing shareholders.
Key Financial Metrics
Key Facts
- Settled $638,998 in past-due liabilities with LendSpark via stock issuance under Section 3(a)(10).
- Conversion price is the lower of the closing price on the day before conversion or the 5-day average closing price.
- Shares are issued as freely tradable without restrictive legends.
- LendSpark's resale is limited to 20% of daily trading volume unless otherwise agreed.
- Company has ~8.77M shares outstanding as of Sept 15, 2026, with 2B authorized shares.
- Company must reserve at least 500,000 shares initially and 2x the total issuable shares.
- LendSpark's beneficial ownership is capped at 4.99% at any time.
- Issuance cannot exceed 19.99% of outstanding shares without shareholder approval, which the company states will not be sought.
- A prior settlement agreement dated Sept 25, 2026 was replaced entirely.
- Court order approving the settlement was entered on Oct 2, 2026.
Financial Impact
Dilution from the $638,998 settlement could be substantial; at the current stock price (not provided), the number of shares issued could be a large percentage of the 8.77M outstanding. The company has 2B authorized shares, indicating capacity for massive dilution.
Risk Factors
- Severe dilution to existing shareholders from the variable-price share issuance.
- Potential for significant downward price pressure as LendSpark resells shares into the market.
- Company's admission of being in default on liabilities signals financial distress.
- No shareholder approval will be sought for issuances up to 19.99% of outstanding shares.
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001096906-26-001527 |
| Document: skyq-20261002_8k.htm | 0001096906-26-001527 |
| Document: skyq_ex99z1.htm | 0001096906-26-001527 |
| Document: 0001096906-26-001527-index-headers.html | 0001096906-26-001527 |
| Document: 0001096906-26-001527-index.html | 0001096906-26-001527 |
| Document: 0001096906-26-001527.txt | 0001096906-26-001527 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 23, 2026 3d ago | DEFA14A | $2.20 | awaiting T+1 | — | $2.16 (−1.82%) |
Oct 23, 2026 3d ago | DEF 14A | $2.18 | awaiting T+1 | — | $2.16 (−0.87%) |
Oct 8, 2026 18d ago | 8-K | $2.45 $2.33 | ▲ +4.90% | ▲ +4.84% | $2.16 (+11.84%) |
Sep 24, 2026 4w ago | 8-K | $2.91 $2.67 | ▼ −8.25% | ▼ −8.79% | $2.16 (−25.77%) |
Sep 18, 2026 5w ago | 424B5 | $2.67 $2.60 | ▲ +2.62% | ▲ +2.61% | $2.16 (+19.10%) |
Sep 4, 2026 7w ago | DEFA14A | $2.66 $2.67 | ▲ +0.38% | ▲ +0.84% | $2.16 (−18.80%) |
Aug 21, 2026 9w ago | 8-K | $2.75 $2.68 | ▼ −2.55% | ▼ −2.25% | $2.16 (−21.45%) |
Jul 21, 2026 13w ago | 8-K | $4.13 $5.64 | ▲ +36.56% | ▲ +37.80% | $2.16 (−47.70%) |
Jul 2, 2026 16w ago | 8-K | $2.64 $2.12 | ▲ +19.70% | ▲ +20.57% | $2.16 (+18.18%) |
Apr 22, 2026 26w ago | 424B5 | $7.06 $6.00 | ▲ +15.01% | ▲ +15.80% | $2.16 (+69.41%) |
US Market Status
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