Company: BSAI
Filing Date: 2025-04-01
Form Type: 10-K
Source: 0001096906-25-000357
Chunk: 107

Company: BLUSKY AI INC.
Filing Date: 2025-04-01
Form: 10-K
Item: Item 10
Chunk 107
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 period.  The Company utilized valuation models to determine the fair value of the derivative liabilities depending on the features embedded in the instruments.  These models use certain assumptions related to exercise price, term, expected volatility, and risk-free interest rate.

We identified auditing the determination and valuation of the derivative liabilities as a critical audit matter due to the significant judgements used by the Company in determining whether the embedded conversion features required derivative accounting treatment, and the significant judgements used in determining the fair value of the derivative liabilities. Auditing the determination and valuation of the derivative liabilities involved a high degree of auditor judgement, and specialized skills and knowledge were needed.

How the Critical Audit Matter was Addressed in the Audit 

Our audit procedures related to the following:

 ·We inspected and reviewed debt and other agreements to evaluate the Company's determination of whether derivative accounting was required, including assessing and evaluating management's application of relevant accounting standards to such transactions. ·We evaluated the appropriateness and mechanical accuracy of each model utilized. ·We tested the reasonableness of the assumptions used by the Company in the respective models, including exercise price, expected term, expected volatility, risk-free interest rate, and market capitalization. ·We tested the accuracy and completeness of data used by the Company in developing the assumptions used in the valuation models. ·We developed an independent expectation for comparison to the Company's estimate. ·We evaluated the accuracy and completeness of the Company's presentation of these instruments in the financial statements and related disclosures in Note 3, including evaluating whether such disclosures were in accordance with relevant accounting standards.

Professionals with specialized skill and knowledge were utilized by the Firm to assist in the evaluation of the valuation models deployed by management.

/s/ Sadler, Gibb & Associates, LLC

We have served as the Company’s auditor since 2015.

Draper, UT

March 31, 2025  

 F-2Table of Contents

Blusky AI, Inc.

(fka Inception Mining, Inc.)

Consolidated Balance Sheets

  December 31, 2024  December 31, 2023 ASSETS Current Assets      Cash and cash equivalents $-  $2 Prepaid expenses and other current assets  -   10,000 Total Current Assets  -   10,002          Property, plant and equipment, net  -   3,258 Right of use operating lease asset  -