Sky Quarry Inc. 8-K

What Happened
Sky Quarry Inc. (with affiliates Foreland Refining Corp. and 2020 Resources LLC) announced on June 29, 2026 that it entered a Conversion and Exchange Agreement with Libertas Funding LLC to convert and cancel $3,985,000 of outstanding merchant cash advance (MCA) obligations into a single promissory note. The new Note bears interest at 8% per annum (non‑compounding), requires principal‑first repayments with escalating weekly payments, and is secured by the same liens and collateral that previously secured the MCAs. Marcus Laun, Sky Quarry’s Interim CEO, Interim CFO and President, executed a personal guarantee of the Note; the company agreed to indemnify and reimburse him for any payments he might make under that guarantee.

Key Details

• $3,985,000 total of MCA obligations converted and extinguished (from four Libertas MCA agreements dated Oct 2023–Feb 2024).
• Promissory Note issued June 29, 2026: 8% annual interest (non‑compounding); principal‑first, escalating weekly payments; prepayment allowed without penalty.
• All preexisting security interests, liens and collateral in favor of Libertas remain in place and continue to secure the Note.
• Marcus Laun provided a Personal Guarantee dated June 29, 2026; Sky Quarry will indemnify and reimburse him (with 8% interest) for any payments he makes under the guarantee. Board unanimously approved the indemnity/reimbursement.

Why It Matters
This transaction consolidates multiple merchant cash advance arrangements into one secured promissory note, clarifying the company’s obligations and repayment terms but keeping the company encumbered by the same collateral and by restrictions on selling or pledging future receivables (except for typical accounts receivable or inventory financing) and on selling material assets without Libertas’s consent. The CEO’s personal guarantee reduces creditor risk but creates potential personal liability for an executive—Sky Quarry will indemnify and reimburse him. Investors should note the interest rate, repayment structure and continued liens when assessing the company’s liquidity, leverage and financing flexibility.