Sky Quarry Inc.

PROPOSAL NO. 2 - APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION, AS AMENDED, TO APPROVE THE GRANT OF DISCRETIONARY AUTHORITY TO OUR BOARD OF DIRECTORS TO EFFECT THE SECOND REVERSE STOCK SPLIT

At the Special Meeting, stockholders will be asked to approve (i) an amendment (the “First Reverse Stock Split Amendment”) to our Certificate of Incorporation, as amended (the “COI”) to effect, if approved and effected at all, a reverse stock split of our issued and outstanding common stock, par value $0.0001 per share (the “Common Stock”), by a numerical ratio of not less than 1-for-2 and not greater than 1-for-25 (the “First Reverse Stock Split”) and (ii) a second amendment (the “Second Reverse Stock Split Amendment”) to our COI to effect, if approved and effected at all, another reverse stock split of our issued and outstanding Common Stock by a numerical ratio of not less than 1-for-2 and not greater than 1-for-25 (the “Second Reverse Stock Split” and, together with the First Reverse Stock Split, the “Reverse Stock Splits”). The exact ratio of each of the Reverse Stock Splits, if approved and effected at all, will be set within the applicable range at the discretion of the Board and publicly announced by the Company (i) with respect to the First Reverse Stock Split on or before the two-year anniversary of the approval of Proposal No. 1 and (ii) with respect to the Second Reverse Stock Split, on or after the date of the effectiveness of the First Reverse Stock Split and on or before the two-year anniversary of the approval of Proposal No. 2, in each case, to provide our Board with the flexibility to determine the appropriate ratio and timing for the applicable Reverse Stock Split based upon our performance and other market factors.

Forms of the proposed First Reverse Stock Split Amendment and the Second Reverse Stock Split Amendment reflecting the First Reverse Stock Split and the Second Reverse Stock Split, respectively, are included in Annexes A and B to this Proxy Statement. Because the Company’s COI already includes a provision effecting the Company’s prior 1-for-8 reverse stock split effected on March 15, 2026, the form of the proposed First Reverse Stock Split Amendment set forth in Annex A refers to the First Reverse Stock Split as the “Second Reverse Stock Split” and the form of the proposed Second Reverse Stock Split Amendment set forth in Annex B refers to the Second Reverse Stock Split as the “Third Reverse Stock Split.”

By approving each of Proposal 1 and Proposal 2, stockholders would, subject to the limitations described below, give our Board the discretionary authority, but not the obligation, to effect each of the First Reverse Stock Split and the Second Reverse Stock Split, respectively, and full discretion to approve the ratio at which shares of Common Stock will be reclassified within the applicable ranges described above.

Under the General Corporation Law of the State of Delaware (the “DGCL”), Section 242(d)(2) permits certain amendments, including for a reverse stock split, to be approved by the affirmative vote of a majority of the votes cast by stockholders entitled to vote thereon (the “Votes Cast Standard”) instead of the affirmative vote of a majority in voting power of the outstanding shares (the “Majority of Outstanding Standard”), if and only if (i) the shares subject to the reverse stock split are listed on a national securities exchange immediately before the amendment becomes effective and (ii) the shares meet the listing requirements of such national securities exchange relating to the minimum number of holders immediately after the amendment becomes effective.

It is not certain whether or not our Common Stock meets the requirements to use the Votes Cast Standard at the time that our Board determines to file an amendment to our COI to effect the Reverse Stock Split(s). As a result, we have determined to seek stockholder approval of Proposal 1 and Proposal 2 under both the Votes Cast Standard and the Majority of Outstanding Standard to provide our Board with the maximum flexibility to effect the Reverse Stock Splits in the future.

If either Proposal 1 or Proposal 2 (or both) is approved only under the Votes Cast Standard, then, for each such proposal, our Board will have the authority, in its sole discretion, to implement the applicable Reverse Stock Split authorized by that proposal only if at the time of filing for that particular Reverse Stock Split (i) our Common Stock is listed on Nasdaq (or any other national securities exchange) immediately before the effectiveness of that amendment and (ii) our Common Stock meets the listing requirements of Nasdaq (or any other national securities exchange) relating to the minimum number of holders immediately after that amendment becomes effective.

If either Proposal 1 or Proposal 2 (or both) is approved under the Majority of Outstanding Standard, our Board will have the authority, in its sole discretion, to determine whether to implement the Reverse Stock Split authorized by that proposal at any time within the applicable time period described above for that Reverse Stock Split regardless of whether our Common Stock remains listed on Nasdaq (or any other national securities exchange) or meets the listing requirements of Nasdaq (or any other national securities exchange) relating to the minimum number of holders.

The Company will tabulate votes cast on the approval of Proposal 1 and Proposal 2 pursuant to the Votes Cast Standard and the Majority of Outstanding Standard. The Company will publicly announce the voting results following the completion of the Special Meeting based on the Votes Cast Standard and the Majority of Outstanding Standard and will include in such public announcement a statement as to whether or not Proposal 1 or Proposal 2 (or both) was approved under the Votes Cast Standard, the Majority of Outstanding Standard or both.

Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) requires a minimum bid price of $1.00 per share for continued inclusion on The Nasdaq Capital Market. Although we are currently in compliance with the minimum bid price requirement set forth in the Bid Price Rule, our Common Stock traded as low as approximately $1.00 per share as recently as June 2026. As a result, to reduce the risk that our Common Stock becomes subject to delisting from The Nasdaq Capital Market due to the Bid Price Rule, we have determined to seek stockholder approval of Proposal 1 and Proposal 2 under both the Votes Cast Standard and the Majority of Outstanding Standard, and in two separate proposals that would potentially result in two separate amendments to the Company’s COI, to provide our Board with maximum flexibility in determining when and to what extent to effect the Reverse Stock Splits in the future.

In addition, if we are able to remain listed as a publicly traded company listed on Nasdaq, we will be able to maintain S-3 shelf eligibility, which increases our access to the capital markets and other financing opportunities, including in connection with our ATM program, which has been important to our ability to obtain financing. Once a company has been delisted, it will be expected to have fewer opportunities to attract financing partners and less leverage to negotiate terms for financing arrangements.

The two Reverse Stock Splits, if both approved and effected, could result in an aggregate reverse stock split ratio of up to 1:625 for shares of our Common Stock. However, our Board reserves the right to elect not to proceed with either or both of the Reverse Stock Splits, even if approved under the Majority of Outstanding Standard, and to abandon either or both of the Reverse Stock Splits if it determines, in its sole discretion, that the applicable Reverse Stock Split is no longer in the best interests of our stockholders. No further action by the stockholders will be required for our Board to either implement or abandon either or both of the Reverse Stock Splits.

If our Board does not effect either of the Reverse Stock Splits on or before the applicable dates described herein, any discretionary authority granted to our Board by our stockholders to file an amendment to effect such Reverse Stock Split, will terminate.

Our Board believes that the Reverse Stock Splits, if implemented, will increase the price per share of the Common Stock and assist in meeting the Bid Price Rule for maintaining a Nasdaq listing. Our Board also believes that a reverse stock split would potentially improve the marketability and liquidity of our Common Stock for the following reasons:

·Stock Price Requirements: We understand that many brokerage houses, institutional investors and funds have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers or by restricting or limiting the ability to purchase such stocks on margin. Reverse stock splits could help increase analyst and broker interest in our Common Stock, as their internal policies might discourage them from following or recommending companies with low stock prices.

·Stock Price Volatility: Because trading volatility is often associated with low-priced stocks, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in such stocks or tend to discourage individual brokers from recommending such stocks to their customers. Some of those policies and practices may make the processing of trades in low-priced stocks economically unattractive to brokers.

·Transaction Costs: Investors may be dissuaded from purchasing stocks below certain prices because brokers’ commissions, as a percentage of the total transaction value, can be higher for low-priced stocks.

Reducing the number of outstanding shares of our Common Stock through the Reverse Stock Splits is intended to increase the per share market price of our Common Stock; however, other factors, such as our financial results, market conditions and the market perception of our business may adversely affect the market price of our Common Stock. As a result, there can be no assurance that the Reverse Stock Splits, if either or both completed, will result in the intended benefits described above, that the market price of our Common Stock will increase following the Reverse Stock Split(s), or that the market price of our Common Stock will not decrease in the future.

Criteria to be Used for Determining Whether to Implement Reverse Stock Splits

In determining whether to implement the Reverse Stock Splits and which stock split ratio to implement, our Board may consider, among other things, various factors, such as:

·historical trading price and trading volume of our Common Stock;

·the then-prevailing trading price and trading volume of our Common Stock and the expected impact of the applicable Reverse Stock Split on the trading market for our common stock in the short- and long-term;

·our ability to maintain our listing on The Nasdaq Capital Market;

·which stock split ratios would result in the least administrative cost to us;

·the projected impact of the applicable Reverse Stock Split;

·prevailing general market and economic conditions; and

·if our stockholders approve either Proposal 1 or Proposal 2 (or both), the additional authorized but unissued shares of Common Stock that will result from the implementation of the Reverse Stock Split(s), will provide flexibility to use our Common Stock for business and/or financial purposes.

Therefore, the Board recommends that the stockholders grant the Board discretion to amend the Company’s COI to implement the First Reverse Stock Split and the Second Reverse Stock Split. The Board proposed wide stock split ratios (for an aggregate reverse stock split ratio of up to 1:625) to give it flexibility in determining the appropriate stock split ratio possible that will meet the Bid Price Requirement necessary to prevent delisting from the Nasdaq Capital Market as well as in connection with any other business transaction that the Board believes is in the best interest of the Company to pursue.

Except for adjustments that may result from the treatment of fractional shares, which will be rounded up to the nearest whole number, each stockholder will beneficially hold the same percentage of Common Stock immediately following each Reverse Stock Split as such stockholder held immediately prior to such Reverse Stock Split. Also, proportionate adjustments will be made to the per-share exercise price and the number of shares covered by outstanding options, warrants, and other convertible securities to buy Common Stock, so that the total prices required to be paid to fully exercise each option, warrant, or other convertible security before and after the Reverse Stock Splits will be approximately equal. The par value of the Common Stock will remain $0.0001 per share after the Reverse Stock Splits.

The Board does not intend as part of the Reverse Stock Splits to reduce the amount of the Company’s authorized shares of Common Stock. As of the Record Date, the Company has a total of 2,000,000,000 shares of Common Stock authorized and 8,808,017 shares issued, leaving 1,991,191,983 shares available for issuance, not including shares reserved for issuance under its “At-the-Market” program and upon exercise of warrants or options, or any other convertible securities. If Proposal 1 and Proposal 2 are approved, the number of unissued, available authorized shares of Common Stock will increase, as reflected in the following table as if the Reverse Stock Splits were to occur on the Record Date:

(1) Does not reflect shares reserved for issuance.

(2) Approximate. For purposes of this illustration, fractional shares are rounded.

The increase in the number of shares of Common Stock available for issuance and any subsequent issuance of such shares could have the effect of delaying or preventing a change in control of the Company without further action by the stockholders. The Board is not aware of any attempt to take control of the Company and has not presented this proposal with the intention that the Reverse Stock Split be used as a type of anti-takeover device. Any additional shares of Common Stock, when issued, would have the same rights and preferences as the shares of Common Stock presently outstanding.

It should be noted that the liquidity of the Common Stock may be adversely affected by the Reverse Stock Splits given the reduced number of shares that would be outstanding after the Reverse Stock Splits. In addition, there can be no assurance that the Reverse Stock Splits will result in a market price that will help generate investor interest. The Board anticipates, however, that the expected higher market price and continued exchange listing will mitigate, to some extent, the effects on the liquidity through the anticipated increase in marketability discussed above.

The Board understands that there is a risk that the market price for the Common Stock may not react proportionally to the Reverse Stock Splits. For example, if the Company accomplishes a 1:10 Reverse Stock Split at a time when the market price is $1.00 per share, there can be no assurance that the resulting market price will thereafter remain at or above $10.00 per share. In addition, there can be no assurance that the Reverse Stock Splits will ensure continuing compliance with the listing standards of Nasdaq. Previously, on March 28, 2025, we were notified by Nasdaq that we were not in compliance with the Bid Price Rule. On March 15, 2026, the Company had effected a one-for-eight reverse stock split, and subsequently, on March 30, 2026, the Company was notified by Nasdaq that the Company had regained compliance. Despite this prior reverse stock split, our Common Stock traded as low as approximately $1.00 per share as recently as June 2026. As a precautionary measure, the Board is seeking discretionary authority to effect the Reverse Stock Splits.

The Board confirms that the contemplated Reverse Stock Splits are not and will not be the first step in a series of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Securities Exchange Act of 1934, as amended.

Amendment to our COI to effect the Reverse Stock Splits, if any, will become effective at the time set forth in the applicable certificate of amendment as filed with the Secretary of State of the State of Delaware. The text of the form of such amendment to the COI is set forth in Annex A and Annex B to this Proxy Statement. Such amendments to our COI will be subject to change to include the exact reverse stock split ratio determined by our Board. Additionally, the text of such amendments will be subject to such changes as may be required by the office of the Secretary of State of the State of Delaware or as the Board deems necessary or advisable to effect the Reverse Stock Split(s), if any.

Based upon the foregoing factors and understanding the risks, the Board has determined that granting the Board the discretion to implement the Reverse Stock Splits is in the best interests of the Company and its stockholders.

Certain U.S. Federal Income Tax Consequences of the Reverse Stock Splits

The following summary describes certain U.S. federal income tax consequences of the Reverse Stock Splits to holders of our Common Stock. This summary addresses the tax consequences only to U.S. holders.

This summary is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations, administrative rulings and judicial authority, all as in effect as of the date of this statement. We have not sought any ruling from the Internal Revenue Service (“IRS”) with respect to the statements made and the conclusions reached in this discussion, and there can be no assurance that the IRS will agree with these statements and conclusions. This summary addresses only holders that hold their shares of Common Stock as capital assets for U.S. federal income tax purposes. This discussion is not a comprehensive discussion of all the tax consequences that may be relevant to holders subject to special tax rules.

This summary addresses only U.S. federal income tax consequences, and does not address consequences arising under state, local, or foreign tax laws or other aspects of U.S. federal taxation that may be relevant to a holder. Each holder should consult its own tax advisor regarding the U.S. federal, state, local, and foreign income and other tax consequences of the Reverse Stock Splits.

THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE REVERSE STOCK SPLITS ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a U.S. holder generally should not recognize gain or loss upon the Reverse Stock Splits. Because no fractional shares will be issued and any fractional shares resulting from the Reverse Stock Split will be rounded up to the next whole share, no stockholder will receive cash in connection with the Reverse Stock Splits. A U.S. holder’s aggregate tax basis in the shares of Common Stock received pursuant to the Reverse Stock Split should equal the aggregate tax basis of the shares of the Common Stock surrendered, and such U.S. holder’s holding period in the shares of Common Stock received should include the holding period in the shares of Common Stock surrendered. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of common stock surrendered to the shares of common stock received in a recapitalization pursuant to the Reverse Stock Splits. U.S. holders of shares of common stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

Proposal 1 (First Reverse Stock Split).

For Proposal 1, we are seeking stockholder approval under both the Votes Cast Standard and the Majority of Outstanding Standard. Accordingly, Proposal 1 will be deemed approved if it receives (i) the affirmative vote of a majority of the votes cast or (ii) the affirmative vote of a majority in voting power of the outstanding shares. For purposes of the Votes Cast Standard, only votes cast “for” or “against” a proposal are counted in determining the outcome of the vote. For purposes of the Majority of Outstanding Standard, abstentions will have the same practical effect as a vote “against” the proposal. We believe that Proposal 1 is a routine matter, so if you fail to provide your broker, nominee, fiduciary or other custodian, as applicable, with instructions on how to vote your shares, such broker, nominee, fiduciary or other custodian, as applicable, may vote your shares in its/their discretion. Accordingly, no broker non-votes are expected to occur.

Proposal 2 (Second Reverse Stock Split).

The required vote for Proposal 2 is the same as described above for Proposal 1 (First Reverse Stock Split). However, this proposal is conditioned upon the approval of Proposal 1. If Proposal 1 is not approved, Proposal 2 will also not be approved.

OUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND DECLARED ADVISABLE THE FIRST AMENDMENT AND THE SECOND AMENDMENT SET FORTH IN PROPOSALS 1 AND 2, RESPECTIVELY, AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY VOTE “FOR” PROPOSAL 1 AND “FOR” PROPOSAL 2.

PROPOSAL NO. 3 - APPROVAL OF THE SKY QUARRY INC. 2026 OMNIBUS INCENTIVE PLAN

At the Special Meeting, stockholders will be asked to approve the Company’s 2026 Omnibus Incentive Plan. The Board believes that approval of the 2026 Omnibus Plan is critical to the Company's continued ability to attract, retain, and motivate the employees, non-employee directors, and consultants on whom the Company's success depends. As of the date hereof, no shares remain available for future grants under the 2020 Stock Plan, which is insufficient to meet the Company's anticipated equity compensation needs. If the 2026 Omnibus Plan is not approved by stockholders, the Company believes it will be unable to provide competitive equity incentives, which could place the Company at a significant disadvantage in attracting and retaining talent and require the Company to increase the cash component of its compensation program. Upon stockholder approval of the 2026 Omnibus Plan, the 2020 Stock Plan will terminate and no further awards will be granted thereunder. The terms of the 2026 Omnibus Plan are described below and a copy of the 2026 Omnibus Plan is set forth in this proxy statement as Annex C. This summary does not contain all of the terms and conditions of the 2026 Omnibus Plan and is qualified in its entirety by reference to the 2026 Omnibus Plan as set forth in Annex C.

General Information

The 2026 Omnibus Plan, if approved by stockholders, will allow the Company to continue to encourage the profitability and growth of the Company through short-term and long-term incentives that are consistent with the Company's objectives, give participants an incentive for excellence in individual performance, promote teamwork among participants, and give the Company a significant advantage in attracting and retaining key employees, directors and consultants. The Company's named executive officers and directors have an interest in this proposal as they are eligible to receive equity awards under the 2026 Omnibus Plan.

Summary of the 2026 Omnibus Incentive Plan

The 2026 Omnibus Plan promotes ownership in the Company by its eligible employees, nonemployee directors and consultants, and aligns incentives between these service providers and stockholders by permitting these service providers to receive compensation in the form of awards denominated in, or based on the value of, the Company. These incentives will be provided through the grant of options, stock appreciation rights, restricted stocks, restricted stock units, performance-based awards (including performance-based restricted stocks and restricted stock units), other share based awards, other cash-based awards or any combination of the foregoing. Participation in the 2026 Omnibus Plan will be open to employees, non-employee directors, or consultants, who have been selected as an eligible recipient under the 2026 Omnibus Plan by the Administrator. Awards of incentive stock options, however, will be limited to employees eligible to receive such form of award under the Code. As of July 23, 2026, it is expected that approximately 20 employees, 2 consultants and 3 of our non-employee directors will be eligible to participate in the 2026 Omnibus Plan.

Shares Subject to the 2026 Omnibus Plan

A total of 3,000,000 shares of the Company’s common stock will be reserved and available for issuance under the 2026 Omnibus Plan (the “Share Limit”). The maximum number of shares that may be issued pursuant to options intended to be incentive stock options will be equal to 3,000,000. Notwithstanding anything herein to the contrary, the maximum number of shares subject to awards granted during any fiscal year to any non-employee director, taken together with any cash fees paid to such non-employee director during the fiscal year with respect to such director’s service as a non-employee director, shall not exceed $5,000,000 (calculating the value of any such awards based on the grant date fair market value of such awards for financial reporting purposes).

The total number of shares of the Company’s common stock that will be reserved and may be issued under the 2026 Omnibus Plan will automatically increase on the first trading day of each calendar year, beginning with calendar year 2026, by a number of shares equal to 19.99% of the total number of the Company common stock outstanding on the last day of the prior calendar year. The Administrator may act prior to January 1 of a given year to provide that there will be no increase in the share reserve for that year, or that the increase in the share reserve will be smaller than as provided in the 2026 Omnibus Plan.

Shares issued under the 2026 Omnibus Plan may, in whole or in part, be authorized but unissued shares or shares that shall have been or may be reacquired by the Company in the open market, in private transactions or otherwise. Any shares of common stock subject to an award under the 2026 Omnibus Plan that, after the date the 2026 Omnibus Plan becomes effective, are forfeited, canceled, settled or otherwise terminated without a distribution of shares to a participant will thereafter be deemed to be available for awards with respect to shares of common stock. In applying the immediately preceding sentence, if (i) shares otherwise issuable or issued in respect of, or as part of, any award are withheld to cover taxes or any applicable exercise price, such shares will be treated as having been issued under the 2026 Omnibus Plan and will not be available for issuance under the 2026 Omnibus Plan, and (ii) any share-settled stock appreciation rights or options are exercised, the aggregate number of shares subject to such stock appreciation rights or options will be deemed issued under the 2026 Omnibus Plan and will not be available for issuance under the 2026 Omnibus Plan. In addition, shares tendered to exercise outstanding options or other awards, withheld to cover applicable taxes on any awards or repurchased on the open market using exercise price proceeds shall not be available for issuance under the 2026 Omnibus Plan. For the avoidance of doubt, shares underlying awards that are subject to the achievement of performance goals will be counted against the share reserve based on the target value of such awards unless and until such time as such awards become vested and settled in shares, and awards that, pursuant to their terms, may be settled only in cash shall not count against the share reserve.

Administration of the 2026 Omnibus Plan

The 2026 Omnibus Plan will be administered by the Board, or, if and to the extent the Board does not administer the plan, the Compensation Committee (the “Administrator”). The Administrator has the power to determine the terms of the awards granted under the 2026 Omnibus Plan, including the exercise price, the number of shares subject to each award, and the exercisability and vesting terms of the awards. The Administrator also has the power to determine the persons to whom and the time or times at which awards will be made and to make all other determinations and take all other actions advisable for the administration of the 2026 Omnibus Plan. All decisions made by the Administrator pursuant to the provisions of the 2026 Omnibus Plan will be final, conclusive and binding.

Stock Options

The 2026 Omnibus Plan provides for grants of both nonqualified and incentive stock options. A nonqualified stock option entitles the recipient to purchase Company common stock at a fixed exercise price. The exercise price per share will be determined by the compensation committee but such price will never be less than 100% of the fair market value of a share of Company common stock on the date of grant. Fair market value will generally be the closing price of a share of Company common stock on the Nasdaq on the date of grant. Nonqualified stock options under the 2026 Omnibus Plan generally must be exercised within ten (10) years from the date of grant. A nonqualified stock option is an option that does not meet the qualifications of an incentive stock option as described below.

An incentive stock option is a share option that meets the requirements of Section 422 of the Code. Incentive stock options may be granted only to employees and the aggregate fair market value of a share of Company common stock determined at the time of grant with respect to incentive stock options that are exercisable for the first time by a participant during any calendar year may not exceed $100,000. No incentive stock option may be granted to any person who, at the time of the grant, owns or is deemed to own shares possessing more than 10% of the Company’s total combined voting power or that of any of the Company’s affiliates unless (i) the option exercise price is at least 110% of the fair market value of the shares subject to the option on the date of grant and (ii) the term of the incentive stock option does not exceed five (5) years from the date of grant.

Stock Appreciation Rights

A SAR entitles the holder to receive an amount equal to the difference between the fair market value of a share of Company common stock on the exercise date and the exercise price of the SAR (which may not be less than 100% of the fair market value of a share of Company common stock on the grant date), multiplied by the number of shares of Company common stock subject to the SAR (as determined by the Administrator).

Restricted Stock Awards

A restricted stock award is an award of Company common stock that vests in accordance with the terms and conditions established by the Administrator.

Restricted Stock Units

A restricted stock unit is a right to receive shares or the cash equivalent of Company common stock at a specified date in the future, subject to forfeiture of such right. If the restricted stock unit has not been forfeited, then on the date specified in the restricted stock unit grant, the Company must deliver to the holder of the restricted stock unit unrestricted Company common stock (or, in the Administrator’s sole discretion, cash equal to the shares that would otherwise be delivered, or partly in cash and partly in shares). Participants holding restricted stock units will have no voting rights.

Other Share-Based Awards

We may grant or sell to any participant a right or other interest that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Company common stock, including unrestricted Company common stock under the 2026 Omnibus Plan or a dividend equivalent. A dividend equivalent is a right to receive payments, based on dividends with respect to Company common stock.

Other Cash-Based Awards

We may grant cash awards under the 2026 Omnibus Plan, including cash awards as a bonus or upon the attainment of certain performance goals.

Performance-Based Awards

We may grant an award conditioned on satisfaction of certain performance criteria. Such performance-based awards include performance-based restricted stock and restricted stock units. Any dividends or dividend equivalents payable or credited to a participant with respect to any unvested performance-based award will be subject to the same performance goals as the shares or units underlying the performance-based award.

Performance Goals

If the Administrator determines that an award under the 2026 Omnibus Plan will be earned subject to the achievement of performance goals, the Administrator may select one or more performance criteria upon which to grant such award, which may include, but are not limited to, any one or more of the following: earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; net operating profit after tax; cash flow; revenue; net revenues; sales; days sales outstanding; income; net income; operating income; net operating income, operating margin; earnings; earnings per share; return on equity; return on investment; return on capital; return on assets; return on net assets; total shareholder return; economic profit; market share; appreciation in the fair market value, book value or other measure of value of a share of Company common stock; expense/cost control; working capital; customer satisfaction; employee retention or employee turnover; employee satisfaction or engagement; environmental, health, or other safety goals; individual performance; strategic objective milestones; any other criteria specified by the Administrator in its sole discretion; or, as applicable, any combination of, or a specified increase or decrease in, any of the foregoing.

Vesting

The Administrator has the authority to determine the vesting schedule of each award, and to accelerate the vesting and exercisability of any award. However, no award shall vest in full earlier than the first anniversary of the applicable grant date. This one-year minimum vesting restriction does not apply to (i) substitute awards, (ii) awards that result in the issuance of an aggregate of up to five percent (5%) of the shares authorized for issuance under the 2026 Omnibus Plan, or (iii)

the Administrator’s discretion to provide for accelerated vesting in connection with a participant’s death, disability, or a change in control.

Equitable Adjustments

In the event of a merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event, extraordinary dividend, stock split, reverse stock split, combination or exchange of shares, or other change in corporate structure or payment of any other distribution, the maximum number and kind of the Company common stock reserved for issuance or with respect to which awards may be granted under the 2026 Omnibus Plan will be adjusted to reflect such event, and the Administrator will make such adjustments as it deems appropriate and equitable in the number, kind and exercise price of the Company common stock covered by outstanding awards made under the 2026 Omnibus Plan, and in any other matters that relate to awards and that are affected by the changes in the shares referred to in this section.

Change in Control

Unless otherwise expressly provided in an award agreement, awards will not automatically vest upon a change in control (as defined in the 2026 Omnibus Plan). However, if a participant’s employment or service is terminated by the Company without cause, or the participant resigns for good reason (each as defined in the 2026 Omnibus Plan), in either case within twelve (12) months following a change in control, then the participant’s awards will become fully vested (or, in the case of performance-based awards, will vest based on the greater of (i) target performance or (ii) actual performance as of the change in control, as determined in good faith by the administrator).

In the event of any proposed change in control, the Administrator will take any action as it deems appropriate and equitable to effectuate the purposes of the 2026 Omnibus Plan and to protect the participants who hold outstanding awards under the 2026 Omnibus Plan, which action may include, without limitation, the following: (i) the continuation of any award, if the Company is the surviving corporation; (ii) the assumption of any award by the surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of equivalent awards for any award, provided, however, that any such substitution with respect to options and SARs shall occur in accordance with the requirements of Section 409A of the Code; or (iv) settlement of any award for the change in control price (less, to the extent applicable, the per share exercise or grant price), or, if the per share exercise or grant price equals or exceeds the change in control price or if the Administrator determines that the award cannot reasonably become vested pursuant to its terms, such award shall terminate and be canceled without consideration.

Recoupment Policy

Awards under the 2026 Omnibus Plan are subject to any compensation recovery and/or recoupment policy adopted by the Company to comply with applicable law, including the Dodd-Frank Act and SEC rules.

No Repricing Without Shareholder Approval

Except as permitted in connection with equitable adjustments for corporate transactions or changes in capitalization, the Administrator may not, without the approval of the Company’s stockholders, (i) reduce the exercise price of any outstanding option or stock appreciation right, (ii) cancel any outstanding option or stock appreciation right and replace it with a new option, stock appreciation right, other award, or cash, or (iii) take any other action that is considered a ‘repricing’ under applicable stock exchange rules.

Amendment and Termination

The Administrator may alter, amend, modify, or terminate the 2026 Omnibus Plan at any time, provided that the approval of our stockholders will be obtained for any amendment to the 2026 Omnibus Plan that requires stockholder approval under the rules of the stock exchange(s) on which the Company common stock is then listed or in accordance with other applicable law, including, but not limited to, an increase in the number of shares of Company common stock reserved for issuance, a reduction in the exercise price of options or other entitlements, an extension of the maximum term of any award, or an amendment that grants the Administrator additional powers to amend the 2026 Omnibus Plan. In addition, no modification of an award will, without the prior written consent of the participant, adversely alter or impair any rights or obligations under any award already granted under the 2026 Omnibus Plan, unless the Administrator expressly reserved the right to do so at the time of the award.

Effective Date and Term

The 2026 Omnibus Plan will become effective on the date it is approved by the Company’s stockholders (the “Effective Date”). The 2026 Omnibus Plan will remain in effect until terminated by the Board; provided, however, that (i) no awards other than incentive stock options may be granted under the 2026 Omnibus Plan on or after the tenth (10th) anniversary of the Effective Date, and (ii) no incentive stock options may be granted under the 2026 Omnibus Plan on or after the tenth (10th) anniversary of the date the 2026 Omnibus Plan was adopted by the Board. Any awards granted prior to the applicable date described above will remain outstanding in accordance with their terms.

Summary of U.S. Federal Income Tax Consequences

The following discussion of certain relevant United States federal income tax effects applicable to certain awards granted under the 2026 Omnibus Plan is only a summary of certain of the United States federal income tax consequences applicable to United States residents under the 2026 Omnibus Plan, and reference is made to the Code for a complete statement of all relevant federal tax provisions. No consideration has been given to the effects of foreign, state, local and other laws (tax or other) on the 2026 Omnibus Plan or on a participant, which laws will vary depending upon the particular jurisdiction or jurisdictions involved. Participants who are stationed outside the United States may be subject to foreign taxes as a result of the 2026 Omnibus Plan.

Nonqualified Stock Options

An optionee subject to United States federal income tax will generally not recognize taxable income for United States federal income tax purposes upon the grant of a nonqualified stock option. Rather, at the time of exercise of the nonqualified stock option, the optionee will recognize ordinary income, subject to wage and employment tax withholding, and the Company will be entitled to a deduction, in an amount equal to the excess of the fair market value of the shares on the date of exercise over the exercise price. If the shares acquired upon the exercise of a nonqualified stock option are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of such exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the optionee), depending upon the length of time such shares were held by the optionee.

Incentive Stock Options

An optionee subject to United States federal income tax will generally not recognize taxable income for United States federal income tax purposes upon the grant of an incentive stock option (within the meaning of Section 422 of the Code) and the Company will not be entitled to a deduction at that time. If the incentive stock option is exercised during employment or within ninety (90) days following the termination thereof (or within one (1) year following termination, in the case of a termination of employment due to death or disability, as such terms are defined in the 2026 Omnibus Plan), the optionee will not recognize any income and the Company will not be entitled to a deduction. The excess of the fair market value of the shares on the exercise date over the exercise price, however, is includible in computing the optionee’s alternative minimum taxable income. Generally, if an optionee disposes of shares acquired by exercising an incentive stock option either within two (2) years after the date of grant or one year after the date of exercise, the optionee will recognize ordinary income, and the Company will be entitled to a deduction, in an amount equal to the excess of the fair market value of the shares on the date of exercise (or the sale price, if lower) over the exercise price. The balance of any gain or loss will generally be treated as a capital gain or loss to the optionee. If the shares are disposed of after the two-year and one-year periods described above, the Company will not be entitled to any deduction, and the entire gain or loss for the optionee will be treated as a capital gain or loss.

SARs

A participant subject to United States federal income tax who is granted a SAR will not recognize ordinary income for United States federal income tax purposes upon receipt of the SAR. At the time of exercise, however, the participant will recognize ordinary income, subject to wage and employment tax withholding, equal to the value of any cash received and the fair market value on the date of exercise of any shares received. The Company will not be entitled to a deduction upon the grant of a SAR, but generally will be entitled to a deduction for the amount of income the participant recognizes upon the participant’s exercise of the SAR. The participant’s tax basis in any shares received will be the fair market value on the date of exercise and, if the shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of the shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the stock is a capital asset of the participant) depending upon the length of time such shares were held by the participant.

Restricted Stock

A participant subject to United States federal income tax generally will not be taxed upon the grant of a restricted stock award, but rather will recognize ordinary income for United States federal income tax purposes in an amount equal to the fair market value of the shares at the time the restricted stock is no longer subject to a substantial risk of forfeiture (within the meaning of the Code). The Company generally will be entitled to a deduction at the time when, and in the amount that, the participant recognizes ordinary income on account of the lapse of the restrictions. A participant’s tax basis in the shares will equal the fair market value of those shares at the time the restrictions lapse, and the participant’s holding period for capital gains purposes will begin at that time. Any cash dividends paid on the shares before the restrictions lapse will be taxable to the participant as additional compensation (and not as dividend income). Under Section 83(b) of the Code, a participant may elect to recognize ordinary income at the time the restricted stock is awarded in an amount equal to their fair market value at that time, notwithstanding the fact that such shares are subject to restrictions and a substantial risk of forfeiture. If such an election is made, no additional taxable income will be recognized by such participant at the time the restrictions lapse, the participant will have a tax basis in the restricted stock equal to their fair market value on the date of their award, and the participant’s holding period for capital gains purposes will begin at that time. The Company generally will be entitled to a tax deduction at the time when, and to the extent that, ordinary income is recognized by such participant.

Restricted Stock Units

A participant subject to United States federal income tax who is granted a restricted stock unit will not recognize ordinary income for United States federal income tax purposes upon the receipt of the restricted stock unit, but rather will recognize ordinary income in an amount equal to the fair market value of the shares at the time the award is settled into shares, subject to wage and employment tax withholding, and the Company will have a corresponding deduction at that time.

Other Share-Based and Other Cash-Based Awards

In the case of other share-based and other cash-based awards, depending on the form of the award, a participant subject to United States federal income tax will not be taxed upon the grant of such an award, but, rather, will recognize ordinary income for United States federal income tax purposes when such an award vests or otherwise is free of restrictions. In any event, the Company will be entitled to a deduction at the time when, and in the amount that, a participant recognizes ordinary income.

Tax Effects for the Company

In addition to the tax impact to the Company described above, the Company’s deduction may also be limited by Section 280G or Section 162(m) of the Code. In general, Section 162(m) of the Code denies a publicly held corporation a deduction for United States federal income tax purposes for compensation in excess of $1,000,000 per year per covered employee.

New Plan Benefits

As of the date hereof, no awards have been granted under the 2026 Omnibus Plan. The aggregate number of shares and aggregate total dollar value of potential future awards under the 2026 Omnibus Plan that may be made to any of our named executive officers or to our executive officers, non-executive officer employees or non-executive directors as a group are not yet determinable because the types and amounts of awards and selection of participants are subject to the Administrator’s future determination.

Registration with the SEC

If the 2026 Omnibus Planis approved by our stockholders and becomes effective, the Company is expected to file a registration statement on Form S-8 registering the shares reserved for issuance under the 2026 Omnibus Plan as soon as reasonably practicable after becoming eligible to use such form.

The approval of Proposal No. 3 will require the affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote thereon. Accordingly, if a valid quorum is established, abstentions will have the same effect as votes against the proposal, and broker non-votes will have no effect regarding the proposal.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE 2026 OMNIBUS INCENTIVE PLAN.