Company: BSAI
Filing Date: 2025-04-01
Form Type: 10-K
Source: 0001096906-25-000357
Chunk: 570

Company: BLUSKY AI INC.
Filing Date: 2025-04-01
Form: 10-K
Item: Item 1C
Chunk 570
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 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

At December 31, 2024, the Company marked to market the fair value of the debt derivatives and determined a fair value of $186,542. The Company recorded a gain from change in fair value of debt derivatives of $196,321 for the year ended December 31, 2024. The fair value of the embedded derivatives was determined using the Monte Carlo Valuation Model. The Monte Carlo Valuation Model was based on the following assumptions: (1) expected volatility of 155.5%, (2) weighted average risk-free interest rate of 4.30% and (3) expected life of 0.13 years.  Based upon ASC 840-15-25, the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes. Pursuant to the sequencing approach, the Company evaluates its contracts based upon earliest issuance date.

4. Note Receivable On January 12, 2023, Inception Mining, Inc. (the “Company”) entered into a non-binding Letter of Intent (the “LOI”) with Mother Lode Mining, Inc. (“MLM”). The LOI became binding on January 24, 2023 when the final installment of initial payment set forth under the LOI was received by the Company. Pursuant to the terms of the LOI, the Company agreed to sell all of the shares of its wholly-owned subsidiary, Compañía Minera Cerros Del Sur, S.A. de C.V. (“CMCS”), to MLM. CMCS is the Honduran-based company that owns the Clavo Rico mine. The purchase price for the sale of CMCS by the Company to MLM consisted of the following cash consideration (a) $204,200 was delivered by MLM to the Company on January 3, 2023 to pay outstanding debts owed by the Corporation; (b) $300,000 was delivered by MLM to the Company on January 5, 2023 to satisfy existing debts of the Company; (c) $100,000 was delivered by MLM to the Company on January 16, 2023; (d) $200,000 was delivered by MLM to the Company on January 17, 2023; (e) $1,200,000