Sky Quarry Inc. Segments Disclosure

22.SEGMENT REPORTING  

 

The Company has one reportable segment: refined crude oil. The company refines crude oil to produce several key products, including Diesel, Liquid Asphalt, VGO, and Naphtha, each with distinct industrial applications. Diesel is used primarily in transportation and industrial sectors, while Liquid Asphalt is essential for road construction and roofing. VGO serves as an intermediate product for further refining, and Naphtha is used as a feedstock for gasoline production and petrochemicals.

 

The Company’s chief operating decision maker is the executive officer. The chief decision maker uses gross profit to evaluate income generated from segment assets in deciding whether to reinvest profits into the refined crude oil segment or into other parts of the entity.

 

The Company is in the process of developing a second segment, 2020 Resources LLC (PR Spring facility) which currently is not generating revenues. There continues to be associated development costs which are being capitalized, with a plan to be completed in fourth quarter of 2026.

 

The following presents selected financial information with respect to our single reportable segment for the years ended December 31:

 

	2025		2024
Net sales	$12,491,089		$23,364,188
Cost of goods sold	15,589,637		24,759,530
Gross margin	(3,098,548)		(1,395,342)
Operating expenses:
General and administrative	6,140,135		6,121,955
Depreciation and amortization	9,817		5,889
Total operating expenses	6,149,952		6,127,844
Loss from operations	(9,248,500)		(7,523,186)
Other income (expense):
Loss on issuance of private placement	-		(1,935,934)
Interest expense	(3,162,864)		(6,516,512)
Loss on extinguishment of debt	(103,881)		(241,311)
Gain or (loss) on warrant revaluation	361,581		1,477,870
Other income (expense)	(46,387)		35,637
Gain (loss) on disposal of assets	1,652		(25,075)
Other expense, net	(2,949,899)		(7,205,325)
Loss before provision for income taxes	(12,198,399)		(14,728,511)
Provision for income taxes	-		-
			-
Net loss	(12,198,399)		(14,728,511)
Other Comprehensive Loss
Exchange loss on translation of foreign operations	(694)		(8,203)
Net loss and comprehensive loss	(12,199,093)		(14,736,714)

 

The segmented assets as of December 31, 2025, are as follows:

 

		2020
	Foreland	Resource
	Refining	LLC	Total
Total assets	$8,497,814	$10,717,007	$19,214,821

 

The segmented assets as of year-end December 31, 2024, are as follows:

 

		2020
	Foreland	Resource
	Refining	LLC	Total
Total assets	$15,065,555	$11,881,688	$26,947,243