Company: BSAI
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001096906-25-001383
Chunk: 7

Company: BLUSKY AI INC.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 7
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ments – The Company operates in one segment and therefore segment information is not presented.

 F-8Table of Contents

 Operating Lease – The Company leases its corporate headquarters and administrative offices in Salt Lake City, Utah. This lease expired in August 2024 and is now a month-to-month lease. The Company made cash payments of $3,144 and $8,225 for the six months ended June 30, 2025 and 2024, respectively. The Company incurred rent expense of $9,459 and $7,400 for the six months ended June 30, 2025 and 2024, respectively. 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 June 30, 2025:   Debt Derivative Liabilities Balance, December 31, 2024 $186,542 Settlement of derivative liabilities  (186,542 )Balance, June 30, 2025 $-  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-dil