Sky Quarry Inc.

Previous wording

The following discussion and analysis of financial condition and results of operations of the Company is based upon, and should be read in conjunction with, its unaudited financial statements and related notes elsewhere in this Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States.

Current wording

The following discussion and analysis of financial condition and results of operations of the Company is based upon, and shouldbe read in conjunction with, its unaudited financial statements and related notes elsewhere in this Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States.

Previous wording

As a result of our financial condition, we have included in our condensed consolidated financial statements as of June 30, 2025 and December 31, 2024, and for the three and six months ended June 30, 2025 and 2024, a note indicating that there is significant doubt about the Company’s ability to continue as a going concern. The opinion on the December 31, 2024 audited financial statements from our independent registered public accounting firm for those statements also includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. From inception (June 4, 2019) through June 30, 2025, we have incurred accumulated net losses of $35,054,876. To address our going concern, we aim to increase revenues by securing greater volumes of crude oil for our Foreland refinery, which should enhance our contribution margin. Additionally, we are pursuing opportunities to reduce debt service through refinancing or repayment of existing obligations, establish strategic partnerships, and raise capital through equity or debt offerings, or a combination of these actions. Given our current revenue and cash usage levels, we have pressing working capital needs that necessitate raising funds through equity or debt issuance, coupled with efforts to boost revenue and control operating expenses. However, there is no guarantee that we will be able to raise sufficient capital, grow revenues, and generate the cash flow needed to meet our operating expenses and capital requirements effectively.

Current wording

As a result of our financial condition, we have included in our condensed consolidated financial statements as of September 30, 2025 and December 31, 2024, and for the three and nine months ended September 30, 2025 and 2024, a note indicating that there is significant doubt about the Company’s ability to continue as a going concern. The opinion on the December 31, 2024 audited financial statements from our independent registered public accounting firm for those statements also includes an explanatory paragraph describing the uncertainty as to our ability to continue as a going concern. From inception (June 4, 2019) through September 30, 2025, we have incurred accumulated net losses of $33,301,117. To address our going concern, we aim to increase revenues by securing greater volumes of crude oil for our Foreland refinery, which should enhance our contribution margin. Additionally, we are pursuing opportunities to reduce debt service through refinancing or repayment of existing obligations, establish strategic partnerships, and raise capital through equity or debt offerings, or a combination of these actions. Given our current revenue and cash usage levels, we have pressing working capital needs that necessitate raising funds through equity or debt issuance, coupled with efforts to boost revenue and control operating expenses. However, there is no guarantee that we will be able to raise sufficient capital, grow revenues, and generate the cash flow needed to meet our operating expenses and capital requirements effectively.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

This section includes a summary of our historical results of operations, followed by detailed comparisons of our results for the three and six months ended June 30, 2025 and 2024, respectively. We have derived this data from our unaudited interim condensed consolidated financial statements included in this Quarterly Report.

Current wording

This section includes a summary of our historical results of operations, followed by detailed comparisons of our results for the three and nine months ended September 30, 2025 and 2024, respectively. We have derived this data from our unaudited interim condensed consolidated financial statements included in this Quarterly Report.

Previous wording

We had net sales of $4,541,472 and $10,874,439 for the three and six months ended June 30, 2025, compared to $3,375,244 and $14,327,574 for the three and six months ended June 30, 2024. Our net sales were $10,874,439 for the six months ended June 30, 2025, compared to $14,327,574 for the six months ended June 30, 2024. Our cost of goods sold for the three months ended June 30, 2025, were $4,658,440, compared to $3,860,833 for the three months ended June 30, 2024. Year to date cost of goods sold of $11,717,499 for the six months ended June 30, 2025, compared to $14,243,714 for the six months ended June 30, 2024. Cost of goods sold does not change directly with sales due to certain fix cost allocations across significantly lower production barrels. The significant decrease in our sales were the direct result of the company’s challenges associated with regaining supply streams disrupted in May and June 2024 as a result of the Foreland Refinery outage, disruption and refurbishment in 2024. Additionally, WTI pricing fell from $87 per barrel on April 5, 2024, to $68 per barrel on June 30, 2025, which corresponded with reduced pricing in the end sales products.

Current wording

Our net sales were $12,211,402 for the nine months ended September 30, 2025, compared to $19,174,369 for the nine months ended September 30, 2024. Our cost of goods sold for the three months ended September 30, 2025, were $2,387,726, compared to $4,750,839 for the three months ended September 30, 2024. Year to date cost of goods sold of $14,105,226 for the nine months ended September 30, 2025, compared to $18,994,553 for the nine months ended September 30, 2024. Cost of goods sold does not change directly with sales due to certain fix cost allocations across significantly lower production barrels. The significant decrease in our sales were the direct result of the company’s challenges associated with regaining supply streams disrupted in May and June 2024 as a result of the Foreland Refinery outage, disruption and refurbishment in 2024. Additionally, West Texas Intermediate pricing fell from $87 per barrel on April 5, 2024, to $63 per barrel on September 30, 2025, which corresponded with reduced pricing in the end sales products.

Previous wording

Our operating expenses were $1,623,612 for the three months ended June 30, 2025, compared to $971,851 for the three months ended June 30, 2024. Year to date operating expenses were $3,559,466 for the six months ended June 30, 2025, compared to $2,579,207 for the six months ended June 30, 2024. Our operating expenses consisted of General and Administrative, non-cash charges associated with Share-Based Payments, Depreciation and Amortization, and Foreign Exchange rate changes with the Canadian Dollar.

Current wording

Our operating expenses were $1,502,038 for the three months ended September 30, 2025, compared to $1,281,108 for the three months ended September 30, 2024. Year to date operating expenses were $5,061,408 for the nine months ended September 30, 2025, compared to $3,861,835 for the nine months ended September 30, 2024. Our operating expenses consisted of General and Administrative, non-cash charges associated with Share-Based Payments, Depreciation and Amortization, and Foreign Exchange rate changes with the Canadian Dollar.

Previous wording

Our net sales, costs of goods sold, gross profit, operating expenses, other income (expense) and net loss for the three months and six months ended June 30, 2025 and 2024, were as follows:

Current wording

Our net sales, costs of goods sold, gross profit, operating expenses, other income (expense) and net loss for the three months and nine months ended September 30, 2025 and 2024, were as follows:

Previous wording

The following table shows net sales by category for the three and six month periods ended June 30, 2025 and 2024:

Current wording

The following table shows net sales by category for the three and nine month periods ended September 30, 2025 and 2024:

Previous wording

We had net sales of $4,541,472 for the three months ended June 30, 2025, compared to $3,375,244 for the three months ended June 30, 2024, an increase of $1,166,228. Year to date net sales of $10,874,439 for the six months ended June 30, 2025, compared to $14,327,574 for the three months ended June 30, 2024, a decrease of $3,453,135. The decline in net sales for the second quarter of 2025 compared to the prior period was primarily due to the Company’s challenges associated with regaining supply volumes previously disrupted in May and June 2024 as a result of the Foreland Refinery outage, disruption and refurbishment in 2024. Additionally, WTI pricing fell from $87 per barrel on April 5, 2024, to $68 per barrel on June 30, 2025, which corresponded with reduced pricing in the end sales products.

Current wording

We had net sales of $1,336,963 for the three months ended September 30, 2025, compared to $4,846,795 for the three months ended September 30, 2024, a decrease of $3,509,832. Year to date net sales of $12,211,402 for the nine months ended September 30, 2025, compared to $19,174,369 for the three months ended September 30, 2024, a decrease of $6,962,967. The decline in net sales for the third quarter of 2025 compared to the prior period was primarily due to the Company’s challenges associated with regaining supply volumes previously disrupted in May and June 2024 as a result of the Foreland Refinery outage, disruption and refurbishment in 2024. Additionally, WTI pricing fell from $87 per barrel on April 5, 2024, to $63 per barrel on September 30, 2025, which corresponded with reduced pricing in the end sales products.

Previous wording

The following table shows cost of goods sold by category for the three and six month periods ended June 30, 2025 and 2024:

Current wording

The following table shows cost of goods sold by category for the three and nine month periods ended September 30, 2025 and 2024:

Previous wording

June 30, 2025 was a negative $117,529, compared to negative $485,589 for the three months ended June 30, 2024, a decrease of $368,060 for the comparative period. Our gross profit for the six months ended June 30, 2025, was a negative $843,060, compared to $83,860 for the six months ended June 30, 2024, a decrease of $926,920 for the comparative period. The decline in cost of sales for the six months ended June 30, 2025 presented compared to the prior periods was primarily due to the decline in net sales described above and the contribution margin covering more fixed costs within cost of goods sold.

Current wording

Our cost of goods sold for the three months ended September 30, 2025 was $2,387,726 compared to $4,750,839 for the three months September 30, 2024, a decrease of $2,363,113. Our year to date cost of goods sold for the nine months ended September 30, 2025, was $14,105,226 compared to $18,994,553 for the nine months September 30, 2024, a decrease of $4,889,327. Gross profit for the three months ended September 30, 2025 was a negative $1,050,763, compared to $95,956 for the three months ended September 30, 2024, a decrease of $1,146,719 for the comparative period. Our gross profit for the nine months ended September 30, 2025, was a negative $1,893,824, compared to $179,816 for the nine months ended September 30, 2024, a decrease of $2,073,640 for the comparative period. The decline in cost of sales for the nine months ended September 30, 2025 presented compared to the prior periods was primarily due to the decline in net sales described above and the contribution margin covering more fixed costs within cost of goods sold.

Previous wording

Cost of goods sold as a percentage of net sales was 103% for the three months ended June 30, 2025, compared to 114% for the three months ended June 30, 2024. Our year to date cost of goods sold as a percentage of net sales was 108% for the six months ended June 30, 2025, compared to 99% for the six months ended June 30, 2024. The increased cost as a percentage of revenues was due to the Company continuing to regain supply streams as a result of the refurbishment of the Foreland refinery in 2024.

Current wording

Cost of goods sold as a percentage of net sales was 179% for the three months ended September 30, 2025, compared to 98% for the three months ended September 30, 2024. Our year to date cost of goods sold as a percentage of net sales was 116% for the nine months ended September 30, 2025, compared to 99% for the nine months ended September 30, 2024. The increased cost as a percentage of revenues was due efficiency constraints with the Company continuing to regain supply streams as a result of the refurbishment of the Foreland refinery in 2024.

Previous wording

The following table shows general and administrative expenses by category for the three and six month periods ended June 30, 2025 and 2024:

Current wording

The following table shows general and administrative expenses by category for the three and nine month periods ended September 30, 2025 and 2024:

Previous wording

Our general and administrative expenses increased during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to an increase of $181,000 in executive compensation primarily from new additional directors added and their related directors fees expense, and increased professional fees of approximately $490,000 associated with the Company going public late in fiscal 2024. the increased selling general and administrative costs for the six months ended June 30, 2025 compared to 2024 were also due to a $926,000 increase in professional fees from the Company’s public offering occurring late in 2024 and ongoing public company costs, and an increase in executive compensation of $156,000 from added directors fees associated with going public and the requirement of additional board members.

Current wording

Our general and administrative expenses increased during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 primarily due to an increase of $112,153 in executive compensation primarily from new additional directors added and their related directors’ fees expense, and increased professional fees of approximately $159,723 associated with the Company going public late in fiscal 2024. the increased selling general and administrative costs for the nine months ended September 30, 2025 compared to 2024 were also due to a $375,636 increase in executive compensation from the Company’s public offering occurring late in 2024 and ongoing public company costs, and an increase in professional fees of $1,086,106 from added directors fees associated with going public and the requirement of additional board members.

Previous wording

Other expense was $468,070 for the three months ended June 30, 2025, compared to $2,104,038 for the three months ended June 30, 2024, a decrease of $1,635,968. In the three months ended June 30, 2025, other income (expense) consisted of interest expense, net of interest expense $318,708, gain on extinguishment of debt $29,093, loss on warrant valuation $174,354, and other expense $4,100. In the three months ended June 30, 2024, other income (expense) consisted of interest expense, net of interest income of $2,105,821, loss on sale of assets of $25,075, offset by other income $26,858. Other expense was $1,139,818 for the six months ended June 30, 2025, compared to $3,526,676 for the six months ended June 30, 2024, a decrease of $2,386,858. In the six months ended June 30, 2025, other income (expense) consisted of interest expense, net of interest income $1,191,176, loss on extinguishment of debt of $56,660, offset by gain on warrant valuation $100,626, gain on sale of assets of $3,920, and other income $3,472. In the six months ended June 30, 2024, other income (expense) consisted of interest expense, net of interest income of $3,414,266, loss on extinguishment of debt of $108,887, loss on sale of assets of $25,075, offset by other income $21,552. The warrant liability is revalued at each reporting date based on changes in the underlying factors influencing the fair value of the warrants, such as the Company’s stock price, volatility, and other market conditions. The Company’s management believes that the non-cash gain recognized in the current period from the remeasurement of warrant liabilities is not reflective of ongoing operating performance. As this item did not occur in the prior-year quarter, it should be evaluated separately when comparing financial results across periods. During the period, the Company incurred significant interest expense related to its term debt. This interest expense is primarily due to the high financing costs associated with the term notes, which were utilized to support ongoing working capital needs and operational expenses. These notes terms, characterized by higher interest rates relative to traditional debt instruments, have resulted in a notable impact on our financial performance for the quarter. This increase in interest expense reflects the financial obligations of maintaining liquidity and funding operations, particularly during a phase of substantial investment in refinery refurbishment and related activities. The Company continues to evaluate its capital structure to optimize costs and enhance financial stability, considering refinancing options and alternative capital sources where feasible.

Current wording

Other expense was $2,377,796 for the nine months ended September 30, 2025, compared to $6,842,474 for the nine months ended September 30, 2024, a decrease of $4,464,678. In the nine months ended September 30, 2025, other income (expense) consisted of interest expense, net of interest income $2,250,324, loss on extinguishment of debt of $76,228, offset by gain on warrant valuation $120,686, loss on disposal of assets of $166,754, and other expense of $1,872. In the nine months ended September 30, 2024, other income (expense) consisted of interest expense, net of interest income of $4,773,663, loss on extinguishment of debt of $108,887, loss on sale of assets of $25,075, offset by other income $1,085. The warrant liability is revalued at each reporting date based on changes in the underlying factors influencing the fair value of the warrants, such as the Company’s stock price, volatility, and other market conditions. The Company’s management believes that the non-cash gain recognized in the current period from the remeasurement of warrant liabilities is not reflective of ongoing operating performance. As this item did not occur in the prior-year quarter, it should be evaluated separately when comparing financial results across periods. During the period, the Company incurred significant interest expense related to its term debt. This interest expense is primarily due to the high financing costs associated with the term notes, which were utilized to support ongoing working capital needs and operational expenses. These notes, characterized by higher interest rates relative to traditional debt instruments, have resulted in a notable impact on our financial performance for the quarter. This increase in interest expense reflects the financial obligations of maintaining liquidity and funding operations, particularly during a phase of substantial investment in refinery refurbishment and related activities. The Company continues to evaluate its capital structure to optimize costs and enhance financial stability, considering refinancing options and alternative capital sources where feasible.

Previous wording

Net loss was $2,208,650 or a loss of $0.10 per share, for the three months ended June 30, 2025, compared to net loss of $3,562,478 or $0.22 per share, for the three months ended June 30, 2024. Net loss was $5,542,344 or a loss of $0.27 per share, for the six months ended June 30, 2025, compared to net loss of $6,025,023 or $0.37 per share, for the six months ended June 30, 2024.

Current wording

Net loss was $3,790,684 or a loss of $0.17 per share, for the three months ended September 30, 2025, compared to net loss of $4,445,260 or $0.25 per share, for the three months ended September 30, 2024. Net loss was $9,333,028 or a loss of $0.44 per share, for the nine months ended September 30, 2025, compared to net loss of $10,524,493 or $0.59 per share, for the nine months ended June 30, 2024.

Previous wording

Our net loss compared to the previous periods net loss was primarily driven by reduced net sales as a result of the reduction in sales as the Company continues to regain supply streams.

Current wording

Our net loss compared to the previous periods’ net loss was primarily driven by a reduction in total production of the refinery which resulted in reduced revenues during the period

Previous wording

We had negative operating cash flows for the six months ended June 30, 2025, but positive cash flows from operations for the three months ended June 30, 2025. Our cash on hand as of June 30, 2025, was $173,795. While we had negative net cash from operations for the six months ended June 30, 2025, our monthly cash flow burn rate for the six months ended June 30, 2025, was $389,884. In connection with the Foreland Refinery acquisition and PR Spring facility retrofit program, we believe we will continue to have material capital expenditures and face long term cash needs. While we anticipate that these needs will be satisfied through the issuance of our debt and/or equity securities until such time as our cash flows from operations will satisfy our cash needs we cannot provide any assurances of such.

Current wording

We had negative operating cash flows for the three and nine months ended September 30, 2025. Our cash on hand as of September 30, 2025, was $362,517. While we had negative net cash from operations for the nine months ended September 30, 2025, our monthly cash flow burn rate for the nine months ended September 30, 2025, was $237,155. In connection with the Foreland Refinery acquisition and PR Spring facility retrofit program, we believe we will continue to have material capital expenditures and face long term cash needs. While we anticipate that these needs will be satisfied through the issuance of our debt and/or equity securities until such time as our cash flows from operations will satisfy our cash needs we cannot provide any assurances of such.

Previous wording

Our cash decreased by $211,321 as of June 30, 2025, as compared to December 31, 2024. Our total current assets decreased by $1,798,041 primarily because of a decrease in inventory of $1,149,885, and accounts receivable of $501,376, offset by increase in prepaid expenses of $64,541.

Current wording

Our cash decreased by $22,599 as of September 30, 2025, as compared to December 31, 2024. Our total current assets decreased by $2,344,920 primarily because of a decrease in inventory of $1,796,495, and accounts receivable of $919,432, offset by increase in prepaid expenses of $393,606.

Previous wording

Our total assets decreased by $4,146,682 due to the changes in current assets as well as decreases in restricted cash of $2,127,981, property, plant and equipment of $524,791, and right-of-use assets of $48,842, offset by an increase in oil and gas properties of $352,973.

Current wording

Our total assets decreased by $6,095,340 due to the changes in current assets as well as decreases in restricted cash of $2,111,796, property, plant and equipment of $795,402, and right-of-use assets of $1,060,172, offset by an increase in oil and gas properties of $216,950.

Previous wording

Our current liabilities as of June 30, 2025 as compared to December 31, 2024, decreased by $692,187 and our total liabilities decreased by $513,667, both primarily as a result of an increase in accounts payable of $182,323, current portion of operating lease of $39,402, current portion of finance lease of $844, notes payable of $244,409, and finance lease liability of $11,935, offset by decreases in lines of credit of $127,094, current maturities of notes payable of $687,036, warrant liability of $100,626, and operating lease liability of $77,824.

Current wording

Our current liabilities as of September 30, 2025 as compared to December 31, 2024, increased by $156,490 and our total liabilities decreased by $57,764, both primarily as a result of an increase in accounts payable of $387,630, current portion of operating lease of $18,894, notes payable of $835,260, offset by decreases in current portion of finance lease of $16,120, finance lease liability of $971,690, lines of credit of $14,368, current maturities of notes payable of $98,860, warrant liability of $120,686, and operating lease liability of $77,824.

Previous wording

Our cash on hand as of June 30, 2025, was $173,795. The Company will continue to require additional cash to meet ongoing operational and capital needs. Despite the company’s efforts to increase production capacity at the refinery, as well as ongoing maintenance and refurbishment activities, and the high interest payments, we are not yet generating sufficient cash flow to cover operational costs. The need for cash is driven by both ongoing operating expenses, and costs of indebtedness. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our equity securities, or a combination thereof, until such time as improvements to our cash flows from operations will satisfy our cash flow needs. Management remains committed to securing the necessary resources to ensure the Company can meet its financial obligations and continue executing its long-term objectives.

Current wording

Our cash on hand as of September 30, 2025, was $362,517. The Company will continue to require additional cash to meet ongoing operational and capital needs. Despite the company’s efforts to increase production capacity at the refinery, as well as ongoing maintenance and refurbishment activities, and the high interest payments, we are not yet generating sufficient cash flow to cover operational costs. The need for cash is driven by both ongoing operating expenses, and costs of indebtedness. We anticipate that these needs will be satisfied through the issuance of debt or the sale of our equity securities, or a combination thereof, until such time as improvements to our cash flows from operations will satisfy our cash flow needs. Management remains committed to securing the necessary resources to ensure the Company can meet its financial obligations and continue executing its long-term objectives. There is no assurance, however, that we will be successful in these efforts.

Previous wording

Our net cash used in operating activities for the six months ended June 30, 2025, were $729,401, as compared to cash used of $2,602,375 for the six months ended June 30, 2024. Our net cash used in operating activities for the six months ended June 30, 2025, consisted of a net loss of $5,542,344, favorable working capital changes of $3,137,543, less share based compensation of $309,354, depreciation and amortization of $557,454, amortization of debt issuance costs of $807,636, amortization of right-of-use asset of $48,842, loss on extinguishment of debt of $56,660, and gain on revaluation of warrant liability of $100,626, and gain on sale of assets of $3,920. Our net cash used in operating activities for the six months ended June 30, 2024, consisted of a net loss of $6,025,023, favorable changes in working capital of $883,794 less share-based compensation of $459,968, depreciation and amortization of $369,521, amortization of right-of-use asset of $34,528, and loss on extinguishment of debt of $108,887.

Current wording

Our net cash used in operating activities for the nine months ended September 30, 2025, were $1,982,648 , as compared to cash used of $4,616,746 for the nine months ended September 30, 2024. Our net cash used in operating activities for the nine months ended September 30, 2025, consisted of a net loss of $9,333,028, favorable working capital changes of $4,551,167, less share based compensation of $546,417, depreciation and amortization of $873,984, amortization of debt issuance costs of $1,172,292, amortization of right-of-use asset of $80,920, loss on extinguishment of debt of $76,228, and gain on revaluation of warrant liability of $120,686, and loss on sale of assets of $170,058. Our net cash used in operating activities for the nine months ended September 30, 2024, consisted of a net loss of $10,524,493, less unfavorable changes in working capital of $275,854, share-based compensation of $534,572, depreciation and amortization of $589,267, amortization of right-of-use asset of $52,455, amortization of debt issuance costs of $2,936,408, loss on issuance of warrants of $1,936,937, and loss on extinguishment of debt of $108,887.

Previous wording

Our cash flow used in investing activities for the six months ended June 30, 2025 and 2024, was $381,296 and $1,371,716, respectively, a decrease of $990,420. Our investing activities during the six months ended June 30, 2025, consisted of a net increase from proceeds of sale of assets of $14,060, payments for exploration and evaluation assets of $352,973, and payments for property, plant and equipment of $42,383. Our investing activities during the six months ended June 30, 2024, consisted of payments for exploration and evaluation assets of $656,964, and payments for property, plant and equipment of $714,752.

Current wording

Our cash flow used in investing activities for the nine months ended September 30, 2025 and 2024, was $124,859 and $1,899,212, respectively, a decrease of $1,774,353. Our investing activities during the nine months ended September 30, 2025, consisted of a net increase from proceeds of sale of assets of $14,060, and payments for oil and gas properties of $48,544, and property, plant and equipment of$90,374. Our investing activities during the nine months ended September 30, 2024, consisted of payments for exploration and evaluation assets of $689,992, and payments for property, plant and equipment of $1,209,220.

Previous wording

Our net cash provided by (used in) financing activities for the six months ended June 30, 2025 and 2024, was ($1,226,930) and $4,178,508, respectively, a decrease of $5,405,438. Our cash flows from financing activities during the six months ended June 30, 2025, consisted of proceeds of lines of credit of $8,338,455, proceeds from notes payable of $574,380, offset by payments on lines of credit of $8,465,550, payments on notes payable of $1,670,741, and payments of financing lease of $3,473. Our cash flows from financing activities during the six months ended June 30, 2024, consisted of proceeds of lines of credit of $16,377,043, proceeds from notes payable of $15,054,104, and issuance of preferred stock of $307,921, and issuance of common stock of $1,138,077, proceeds on issuance of stock warrants of $1,258,475, offset by payments on lines of credit of $18,426,517, payments on notes payable of $8,847,174, and payments on debt issuance cost of $1,043,187.

Current wording

Our net cash provided by (used in) financing activities for the nine months ended September 30, 2025 and 2024, was $316,230 and $5,023,764, respectively, a decrease of $4,707,534. Our cash flows from financing activities during the nine months ended September 30, 2025, consisted of proceeds of lines of credit of $10,076,552, proceeds from notes payable of $2,314,980, offset by payments on lines of credit of $10,090,920, payments on notes payable of $1,969,382, and payments of debt issuance costs of $15,000. Our cash flows from financing activities during the nine months ended September 30, 2024, consisted of proceeds of lines of credit of $33,556,317, proceeds from notes payable of $16,767,738, and issuance of preferred stock of $308,000, and issuance of common stock of $4,790,597, offset by payments on lines of credit of $34,889,877, payments on notes payable of $12,216,266, common stock offering costs of $1,720,619, discounts on notes payable of $1,531,252, and preferred stock offering costs of $40,874.