Company: BSAI
Filing Date: 2025-04-01
Form Type: 10-K
Source: 0001096906-25-000357
Chunk: 965

Company: BLUSKY AI INC.
Filing Date: 2025-04-01
Form: 10-K
Item: Item 7
Chunk 965
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 The amount of equity relating to the non-controlling interest is separately identified in the equity section of the balance sheet and the amount of the net income (loss) relating to the non-controlling interest is separately identified on the statement of operations. Recently Issued Accounting Pronouncements – From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

3. Derivative Financial Instruments The Company adopted the provisions of ASC subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of December 31, 2024:   Debt Derivative Liabilities Balance, December 31, 2023 $39,281 Transfers in upon initial fair value of derivative liabilities  343,582 Change in fair value of derivative liabilities and warrant liability  (196,321)Balance, December 31, 2024 $186,542  Derivative Liabilities – The Company issued convertible promissory notes which are convertible into common stock, at holders’ option, at a discount to the market price of the Company’s common stock. The Company has identified the embedded derivatives related to these notes relating to certain anti-dilutive (reset) provisions. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of debenture and to fair value as of each subsequent reporting date.

 F-12Table of Contents