Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and the notes to our unaudited condensed consolidated financial statements, which appear elsewhere in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the "SEC") on April 21, 2025.

Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Statement reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

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.

Reverse Stock Split

We filed a Certificate of Amendment to our Certificate of Incorporation with the State of Delaware on April 9, 2024 (the "Effective Split Date") to effect a one-for-three (1-for-3) (the "Split Ratio") reverse stock split of our shares of common stock (the "Reverse Stock Split"), without changing the par value, rights, terms, conditions, and limitations of such shares of common stock. No fractional shares were issued in connection with the Reverse Stock Split, and any of our stockholders that were entitled to receive a fractional share as a result of the Reverse Stock Split instead received one additional share of our common stock in lieu of the fractional share. The Reverse Stock Split did not in itself affect any stockholder's ownership percentage of our common stock, except to the extent that any fractional share was rounded up to the nearest whole share. The number of shares of common stock subject to the exercise of outstanding options, warrants and convertible securities was also reduced by the Split Ratio as of the Effective Split Date and their respective exercise prices were increased by the Split Ratio. Neither the authorized shares of capital stock nor the par value per share of our common stock was affected by the Reverse Stock Split.

All historical share and per-share amounts reflected throughout the consolidated financial statements have been adjusted to reflect the Reverse Stock Split.

Overview

We are an oil production, refining, and a development-stage environmental remediation company formed to deploy technologies to facilitate the recycling of waste asphalt shingles and remediation of oil-saturated sands and soils. The recycling of asphalt shingles is expected to reduce the dependence on landfills for the removal of waste and to also reduce dependence on foreign and domestic virgin crude oil extraction for industrial uses.

We have developed a process for separating oil from oily sands and other oil-bearing solids utilizing a proprietary solvent which we refer to as our ECOSolv technology or the ECOSolv process. The solvent is used in a closed-loop distillation and evaporation circuit which results in up to 99% of the solvent being recoverable for continuous reuse and requires no water. The solvent has demonstrated oil separation rates of up to 95% in bench testing using samples of both mined crushed ore and ground asphalt shingles.

We intend to retrofit the PR Spring Facility, located in southeast Utah (as defined below) to recycle waste asphalt shingles using our ECOSolv technology, to produce and sell oil as well as asphalt paving aggregate mined from our bitumen deposit.

We also plan to develop modular asphalt shingle recycling facilities (the "ASR Facility") which can be deployed in cities with high concentrations of waste asphalt shingles and near asphalt shingle manufacturing centers.

Corporate History

We were incorporated in Delaware on June 4, 2019, as "Recoteq, Inc." On April 22, 2020, we changed our name to "Sky Quarry Inc." Sky Quarry is a holding company and has no operations. The purpose of the holding company is to maintain ownership over our subsidiaries, create management efficiencies and establish an organizational structure to facilitate the potential acquisition of other businesses within or complementary to our industry.

On September 16, 2020, we acquired 2020 Resources LLC. The assets of 2020 Resources include an oil sands remediation facility (the "PR Spring facility") and a 100% interest in asphalt bitumen leases covering approximately 5,930 acres in the PR Spring region in Utah. On September 16, 2020, we also acquired 2020 Resources (Canada) Ltd, an entity which is currently inactive.

On September 30, 2022, we acquired Foreland Refining Corporation, which is engaged in the refining of heavy crude oil into diesel and other petroleum products (naphtha, vacuum gas oil, and paving asphalt liquids) at its Eagle Springs Refinery located near Ely, Nevada. The acquisition of Foreland was immediately accretive to our revenues and cash flow and provides a strong base for growth. We believe the acquisition is a strategic fit and will form an important role in the future enabling us to vertically integrate the production and refining of oil from waste materials to energy in a sustainable and efficient manner.

Our Financial Condition and Going Concern Issues

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.

Special Notes Regarding Smaller Reporting Company Status

We are filing this report as a "smaller reporting company" (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). As a result of being a smaller reporting company, we are allowed and have elected to omit certain information from this Management's Discussion and Analysis of Financial Condition and Results of Operations; however, we have provided all information for the periods presented that we believe to be appropriate.

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

Introduction

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.

We had net sales of $1,336,963 and $12,211,402 for the three and nine months ended September 30, 2025, compared to $4,846,795 and $19,174,369 for the three and nine months ended September 30, 2024.

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.

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.

Net Sales and Net Income (Loss)

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:

		Three		Three		Nine		Nine
		Months		Months		Months		Months
		Ended September 30,		Ended September 30,		Ended September 30,		Ended September 30,
		2025		2024		2025		2024
Net sales		$1,336,963		$4,846,795		$12,211,402		$19,174,369
Cost of goods sold		2,387,726		4,750,839		14,105,226		18,994,553
Gross margin		(1,050,763)		95,956		(1,893,824)		179,816
Operating expenses:
General and administrative		1,499,470		1,279,636		5,053,896		3,857,418
Depreciation and amortization		2,568		1,472		7,512		4,417
Total operating expenses		1,502,038		1,281,108		5,061,408		3,861,835
Loss from operations		(2,552,801)		(1,185,152)		(6,955,232)		(3,682,019)
Other income (expense):
Loss on issuance of private placement		-		(1,935,934)		-		(1,935,934)
Interest expense		(1,059,148)		(1,320,115)		(2,250,324)		(4,773,663)
Loss on extinguishment of debt		(19,568)		-		(76,228)		(108,887)
Gain on warrant valuation		20,060		-		120,686		-
Other income (expense)		(8,553)		(4,059)		(1,872)		1,085
Loss on disposal of assets		(170,674)		-		(170,058)		(25,075)
Other expense, net		(1,237,883)		(3,260,108)		(2,377,796)		(6,842,474)
Loss before provision for income taxes		(3,790,684)		(4,445,260)		(9,333,028)		(10,524,493)
Provision for income taxes		-		-		-		-
Net loss		(3,790,684)		(4,445,260)		(9,333,028)		(10,524,493)
Other comprehensive loss
Exchange loss on translation of foreign		964		-		(711)		(8,134)
operations
Net loss and comprehensive loss		$(3,789,720)		$(4,445,260)		$(9,333,739)		$(10,532,627)
Loss per common share
Basic and diluted		$(0.17)		$(0.25)		$(0.44)		$(0.59)
Weighted average shares outstanding
Basic and diluted		22,949,421		17,819,356		21,274,059		17,819,356

Net Sales

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

	Three Months		Three Months			Nine Months		Nine Months
	Ended		Ended			Ended		Ended
	September 30, 2025		September 30, 2024		Change	September 30, 2025		September 30, 2024		Change
Diesel	$	328,729	$	1,999,239	(84%)	$	4,131,383	$	7,311,109	(43%)
Liquid Asphalt		757,664		1,353,534	(44%)		4,880,933		5,533,302	(12%)
VGO		197,671		1,233,791	(84%)		2,935,859		4,708,459	(38%)
Naphtha		38,822		260,231	(85%)		235,035		1,600,825	(85%)
Other		14,077		-	-		28,192		20,674	36%
	$	1,336,963	$	4,846,795		$	12,211,402	$	19,174,369

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.

Beginning in late June 2025, the Company's production was limited due to crude supplier disruptions and delays in completing certain maintenance activities. The Company expects production to resume in January 2026.

Cost of Goods Sold

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

		Three Months		Three Months			Nine Months		Nine Months
		Ended		Ended			Ended		Ended
		September 30, 2025		September 30, 2024	Change		September 30, 2025		September 30, 2024	Change
Crude oil	$	1,194,132	$	2,578,024	(54%)	$	8,707,452	$	13,478,422	(35%)
Fuels and chemicals		327,623		7,530	4,251%		1,139,356		23,803	4,687%
Freight out		73,323		379,931	(81%)		1,262,592		1,936,407	(35%)
Freight in		89,259		112,376	(21%)		912,974		696,786	31%
Salary and wages		314,442		552,070	(43%)		944,082		1,208,851	(22%)
Depreciation and amortization		313,963		937,173	(66%)		866,473		1,174,117	(26%)
Repairs and maintenance		52,880		22,156	139%		212,520		229,887	(8%)
Other		22,104		161,579	(86%)		59,777		246,280	(76%)
	$	2,387,726	$	4,750,839		$	14,105,226	$	18,994,553

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.

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.

General and Administrative

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

		Three Months		Three Months			Nine Months		Nine Months
		Ended		Ended			Ended		Ended
		September 30, 2025		September 30, 2024	Change		September 30, 2025		September 30, 2024	Change
Executive compensation	$	661,214	$	549,061	20%	$	2,067,905	$	1,692,269	22%
Professional fees		542,411		382,688	42%		2,006,484		920,378	118%
Insurance		171,507		150,516	14%		495,200		479,600	3%
Lease and utilities		50,052		113,590	(56%)		164,662		200,090	(18%)
Other		26,029		6,795	283%		86,917		154,244	(44%)
Travel		706		27,252	(97%)		104,854		158,748	(34%)
Bank charges		11,189		11,840	(5%)		18,113		136,477	(87%)
Licenses		(11,987)		13,384	(190%)		3,178		36,068	(91%)
Automobile		48,349		24,510	97%		106,583		79,544	34%
	$	1,499,470	$	1,279,636	17%	$	5,053,896	$	3,857,418	31%

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.

Other Income (Expense)

Other expense was $1,237,883 for the three months ended September 30, 2025, compared to $3,260,108 for the three months ended September 30, 2024, a decrease of $2,022,225. In the three months ended September 30, 2025, other income (expense) consisted of interest expense, net of interest expense $1,059,148, loss on disposal of assets of $170,674, loss on extinguishment of debt $19,568, gain on warrant valuation $20,060, and other expense $8,553. In the three months ended September 30, 2024, other income (expense) consisted of interest expense, net of interest income of $1,320,115, offset by other expense of $4,059.

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.

Net Loss

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.

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

Liquidity and Capital Resources

Introduction

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.

Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2025 and December 31, 2024, respectively, are as follows:

		September 30,		December 31,
		2025		2024		Decrease
Cash	$	362,517	$	385,116	$	(22,599)
Total Current Assets		2,652,453		4,997,373		(2,344,920)
Total Assets		20,851,903		26,947,243		(6,095,340)
Total Current Liabilities		12,555,162		12,398,672		156,490
Total Liabilities		15,390,982		15,448,746		(57,764)

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.

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.

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.

The decrease in cash and assets and increase in liabilities, noted above, are due to the losses described above.

In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.

On June 27, 2025, the Company's wholly owned subsidiary, Foreland Refining Corporation, launched a Regulation Crowdfunding (Reg CF) offering to raise up to $1.235 million to fund working capital and general corporate purposes. As of September 30, 2025, the subsidiary had raised $0 in commitments. Although the Reg CF is being conducted at the subsidiary level, the proceeds are expected to support business lines that may be consolidated into the Company's operations. The offering is not expected to have a material near-term impact on the Company's consolidated liquidity position.

Cash Requirements

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.

Sources and Uses of Cash

Operating Activities

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.

Investing Activities

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.

Financing Activities

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.