# EDGAR Filing Document

**Accession Number:** 0001416090
**File Stem:** 0001493152-26-006252
**Filing Date:** 2026-2
**Character Count:** 604505
**Document Hash:** ade09388a2a7d0e181bed31c5383fbd2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-006252.hdr.sgml**: 20260211

**ACCESSION NUMBER**: 0001493152-26-006252

**CONFORMED SUBMISSION TYPE**: 1-A

**PUBLIC DOCUMENT COUNT**: 15

**FILED AS OF DATE**: 20260211

**DATE AS OF CHANGE**: 20260211

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BLUSKY AI INC.
- **CENTRAL INDEX KEY:** 0001416090
- **STANDARD INDUSTRIAL CLASSIFICATION:** GOLD & SILVER ORES [1040]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 352302128
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 1-A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 024-12711
- **FILM NUMBER:** 26622210

**BUSINESS ADDRESS:**
- **STREET 1:** 5330 SO  900 E
- **STREET 2:** STE 280
- **CITY:** MURRAY
- **STATE:** UT
- **ZIP:** 84117
- **BUSINESS PHONE:** 801-312-8113

**MAIL ADDRESS:**
- **STREET 1:** 5330 SO  900 E
- **STREET 2:** STE 280
- **CITY:** MURRAY
- **STATE:** UT
- **ZIP:** 84117

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INCEPTION MINING INC.
- **DATE OF NAME CHANGE:** 20130520

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** GOLD AMERICAN MINING CORP.
- **DATE OF NAME CHANGE:** 20100628

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SILVER AMERICA, INC.
- **DATE OF NAME CHANGE:** 20100310

## Part

**AN OFFERING CIRCULAR PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"). INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING CIRCULAR FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF THE COMPANY'S SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING CIRCULAR IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.**

**PRELIMINARY OFFERING CIRCULAR DATED ________, 2026** 

**BLUSKY AI, INC.**

![](form1a_001.jpg)

**5530 South 900 East, Suite 280**

**Murray, UT 84117**

**(801) – 810-8790** 

**<u>www.bluskyaidatacenters.com</u>**

**Up to 12,500,000 Shares and up to 2,500,000 Bonus Shares** 

**Maximum offering of $75,000,000 at a price between $4.00 and $6.00 per share**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Price to public** |  | **Underwriting discount and commissions (1)** | **Proceeds to issuer (2)** | **Proceeds to other persons (3)** |
| **Per Share** | $5.00  |  | $0.2586  | $4.7414  | $-  |
| **Total Cash Value** | 62500000.00 |  | 3232500.00 | 59267500.00  |  |
| **Total Bonus Share Value**  | 12500000.00  |  |  |  |  |
| **Total Maximum Value** | $75000000.00 | (4) | $3232500.00 | $59267500.00 | $0.00 |

---

(1) The Company has engaged DealMaker Securities LLC ("Broker") to serve as its sole and
 exclusive placement agent to assist in the placement of its securities on a best effort, non-contingency basis, and its affiliates
 to perform broker-dealer administrative and compliance related functions in connection with this offering. The Broker does not
 purchase any securities from the issuer with a view to sell those for the issuer as part of the distribution of the securities. The
 Company will pay Broker, and affiliates in accordance with the terms of the Order Form between the Company and Broker and its
 affiliates, a copy of which is filed as an exhibit to the Offering Circular of which this Offering Circular is a part. The Company
 has paid Broker and affiliates a one-time advance of $50,000 and monthly payments of $10,000 for three months (total of $30,000)
 for accountable expenses for services. Once the Offering commences, the Company will pay Broker's affiliates a monthly fee of
 $10,000 for account management services not to exceed $90,000. The Broker will charge an amount equal to 4.5% of all
 proceeds of the Offering (excluding Bonus Shares). There is also a supplemental marketing budget of $250,000. If the Offering is fully subscribed, the total
 compensation payable to Broker and affiliates shall not exceed $3,232,500. See " <u>Plan of Distribution</u> " for details
 of compensation to be paid to the placement agent.

(2) This amount excludes the
 expenses of the offering. See " <u>Use of Proceeds</u> " for estimated offering expenses payable by the Company in
 connection with this offering. The Company expects that the amount of other expenses of the offering that it will pay will be
 approximately $1,326,000, including, among other things, $76,000 in legal fees, accounting costs, compliance fees, and
 Blue Sky fees, and $1,250,000 in payment processing fees payable to Stripe.

(3) There are no finder's fees or other fees being paid to third parties from the proceeds.

(4) BluSky AI, Inc. ("BluSky AI,"
 "BluSky," or the "Company") is offering up to 12,500,000 shares (each a "Share"
 or collectively, the "Shares") of Common Stock, par value $0.00001 per share, plus up to 2,500,000 additional
 shares of Common Stock eligible to be issued as bonus shares (the "Bonus Shares") to investors based upon an investor's
 investment level. No additional consideration will be received by the Company for the issuance of Bonus Shares and the company
 will absorb the cost of the issuance of the Bonus Shares. The Price per Share above does not include the effective discount that
 would result from the issuance of Bonus Shares. If eligible for Bonus Shares, investors will receive the greater amount of Bonus
 Shares for which they are eligible and are not cumulative even if investors would qualify for multiple eligibility categories
 for receipt of Bonus Shares. *See* "Plan of Distribution" on page 17 and "Securities Being Offered"
 on page 42 for further details. The Company is seeking to raise up to $62,500,000
from the sale of Common Stock. The Total Maximum Amount does not include $12,500,000, the value of the Bonus Shares (assuming the maximum
number of Bonus Shares are issued in this Offering). The Company shall not receive such amounts because investors are not paying the
purchase price for such Bonus Shares. The offering price will be between $4.00 and $6.00 to be determined at the time of qualification. Offering price will be disclosed via a supplemental filing within 2 days
 of Qualification.

All investors will be required to purchase securities pursuant to a subscription agreement which appears as an Exhibit to the Offering Circular of which this Offering Circular forms a part, and which is irrevocable.

Our common stock is currently quoted on the OTCID Basic Market tier of the OTC Link ATS (alternative trading system), the over-the-counter markets administered by OTC Markets Group, Inc., under the symbol "BSAI".

**The offering will terminate at the earlier of: (1) the date at which the maximum offering amount has been sold, (2) one year from the date upon which the Securities and Exchange Commission qualifies the Offering Circular of which this Offering Circular forms a part, or (3) the date at which the offering is earlier terminated by the Company in its sole discretion. The Company may undertake one or more closings on a rolling basis. There is no minimum amount for this offering. After each closing, funds tendered by investors will be available to the Company. The offering is being conducted on a best-efforts basis without any minimum target.** 

**INVESTING IN THE COMMON STOCK OF BLUSKY AI, INC. IS SPECULATIVE AND INVOLVES SUBSTANTIAL RISKS. YOU SHOULD PURCHASE THESE SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 7 TO READ ABOUT THE MORE SIGNIFICANT RISKS YOU SHOULD CONSIDER BEFORE BUYING THE COMMON STOCK OF THE COMPANY.**

**THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.**

**GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO <u>WWW.INVESTOR.GOV</u> AND CONSULTING WITH YOUR INDIVIDUAL FINANCIAL AND LEGAL ADVISORS.**

**Sales of these securities will commence on approximately ________, 2026.** 

**The Company is following the "Offering Circular" format of disclosure under Regulation A.**

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [SUMMARY](#a_01) | 3 |
| [THE OFFERING](#a_02) | 4 |
| [RISK FACTORS](#a_03) | 7 |
| [DILUTION](#a_04) | 15 |
| [PLAN OF DISTRIBUTION](#a_05) | 17 |
| [USE OF PROCEEDS TO ISSUER](#a_06) | 23 |
| [THE COMPANY'S BUSINESS](#a_07) | 23 |
| [THE COMPANY'S PROPERTY](#a_07a) | 30 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#a_08) | 31 |
| [DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES](#a_09) | 35 |
| [COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS](#a_10) | 38 |
| [SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS](#a_11) | 39 |
| [INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS](#a_12) | 41 |
| [SECURITIES BEING OFFERED](#a_13) | 42 |
| [UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 2025](#a_14) | F-1 |
| [FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024, AND 2023](#a_14) | F-1 |

---

 

*In this Offering Circular, the term "BluSky AI", "BluSky" "we", "us", "our" or "the Company" refers to BluSky AI Inc.*

THIS OFFERING CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY'S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS "ESTIMATE," "PROJECT," "BELIEVE," "ANTICIPATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

**SUMMARY**

**Overview**

BluSky AI Inc. is a Neocloud purpose-built for artificial intelligence/machine learning (AI/ML) and high-performance computing (HPC) that was originally formed in Nevada on July 2, 2007. BluSky AI's core infrastructure is defined by its rapidly deployable *SkyMod* data centers. *SkyMods* next-generation, scalable AI Factories can accelerate speed-to-market and have the potential for energy optimization to support high-performance machine learning workloads. BluSky AI empowers small, mid-sized, enterprise, and academic entities from start-up to scale-up to help drive innovation without compromise.

The company's mission is to empower AI innovators in an attempt to eliminate infrastructure bottlenecks and can accelerating time-to-compute with energy-efficient, scalable solutions.

Previously known as Inception Mining Inc., the company underwent a significant transformation and rebranding in March 2025 to align with its new strategic direction and name change to "BluSky AI Inc." This change reflects BluSky AI Inc.'s commitment to address the universal need for compute power—positioning itself as a foundational layer in the AI revolution, which Grandview Research predicts to be a $1.81 trillion marketplace by 2030. Its infrastructure-first approach will help enable clients to focus on innovation while the company plans to deliver the critical backbone, powering tomorrow's breakthroughs.

BluSky AI's *SkyMod* AI Factories are focused on high-performance computing infrastructure, strategic land site selection, and operational risk management. The BluSky AI "Neocloud" refers to a new breed of cloud providers that specialize in offering high-performance computing, particularly GPU-as-a-Service (GPUaaS), tailored specifically for demanding AI and machine learning workloads and millisecond edge compute inferencing. The company is dedicated to delivering state-of-the-art infrastructure and solutions tailored to meet the demands of modern AI applications and computational workloads.

The Company's business model is centered on pre-fabricated modular data center development. The company has announced letters of intent to lease or acquire multiple site locations while targeting an additional 20+- locations and 150+- MW of compute power. The GPU-as-a-Service (GPUaaS) offering marks a strategic pivot toward scalable, AI-optimized infrastructure. The Company designs and has plans to deploy proprietary modular data centers called *SkyMod* AI Factories engineered for rapid deployment, energy efficiency, and geographic flexibility, enabling tailored solutions for high-performance computing environments. As a planned Neocloud operator, BluSky AI offers could include GPUaaS to enterprise and institutional clients, delivering dedicated, on-demand access to advanced GPU clusters optimized for artificial intelligence, machine learning, and large-scale simulation workloads. This model will integrate site-specific risk management, regulatory compliance, and sustainability into every deployment, positioning BluSky AI as a next-generation infrastructure provider for mission-critical AI applications.

Historically, we operated in the mining industry, serving as a consultant to mining companies and as an operator of a mine engaged in the production of precious metals. From 2013 to 2020, the Company owned certain real property, and the associated exploration permits and mineral rights commonly known as the UP and Burlington Gold Mine in Idaho ("UP and Burlington"). From 2015 through January 24, 2023, the Company operated the Clavo Rico mine in Honduras through its wholly-owned subsidiary, Compañía Minera Cerros del Sur, S.A de C.V. ("CMCS") and other mining concessions. The Clavo Rico mine's workings included several historical underground mining operations dating back to the early Mayan and Spanish occupation, and the primary mine operated through 2022 was located on the 200-hectare Clavo Rico Concession, located in southern Honduras.

**The Offering**

---

| | |
|:---|:---|
| **Securities offered:** | Maximum of 12,500,000 Shares at an estimated public offering price of $5.00 per share (based on the assumed public offering price of $5.00, which is the midpoint of the anticipated price range included on the cover page of this prospectus), plus up to 2,500,000 shares of Common Stock eligible to be issued as Bonus Shares for no additional consideration. |
| <br>**Securities outstanding <u>before</u> the Offering (as of February 5, 2026):**  |  |
| **Common Stock, $0.00001 par value per share** | 24,992,505 shares |
| **Series A Preferred Stock, $0.00001 par value per share** | 51 shares |
| **Securities outstanding <u>after</u> the Offering (1):** |  |
| **Common Stock** | 39,992,505 shares |
| **Series A Preferred Stock** | 51 shares |
| <br> **Use of proceeds:**<br>**Dividend policy:**<br>**Transfer agent:**<br>**Risk Factors:** | <br>We estimate that the net proceeds to us from this offering will be approximately $57,941,500, assuming an offering price of $5.00 per share, after deducting commissions, estimated offering expenses and payment processing fees payable by us.<br>We intend to use the net proceeds of this offering primarily for general corporate purposes, including capital expenditures, labor, real estate, marketing and sales, technology development, and other expenses. See "*Use of Proceeds*" for additional information.<br>We have not historically paid dividends on our Common Stock and do not anticipate paying dividends on our Common Stock for the foreseeable future.<br>Colonial Stock Transfer Company, Inc.<br>See "*Risk Factors*" beginning on page 7 and the other information contained in this prospectus for a discussion of factors you should carefully consider before investing in our securities. |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Assumes
 that all Shares offered are sold in this offering, and assumes the issuance of
 all Bonus Shares available to investors in this offering.

&nbsp;&nbsp;&nbsp;&nbsp;(2) The total number of shares of Common Stock that
 will be outstanding after this offering is based on 24,992,505 shares of Common Stock outstanding as of February 5,
 2026.

Except as otherwise indicated herein, all information in this prospectus assumes, including the number of shares of common stock that will be outstanding after this offering, assumes or gives effect to:

● no shares of Common Stock have been issued pursuant to any warrants or options; and

● no exercise of outstanding options after.

**Selected Risks Associated with Our Business**

Our business is subject to a number of risks and uncertainties, including those highlighted in the section titled "Risk Factors" immediately following this summary. These risks include, but are not limited to, the following:

● We rely on third parties and disruptions in the supply chain could cause significant delays.

● We rely on the existing U.S. energy grid.

● We operate in a highly competitive and growing market.

● Limited availability and rising costs of GPUs could constrain our growth.

● An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations.

● We have incurred losses since our inception in 2007 and may never be profitable, which raises doubt about our ability to continue as a going concern.

● We are subject to legal proceedings.

● We do not currently carry any property or casualty insurance.

● Uncertain customer adoption of AI-specific infrastructure may affect demand.

● We face resource acquisition challenges due to our size and recent expansion into these operations.

● The existing scarcity of powered lands makes our potential acquisitions more expensive and we face increased competition in making acquisitions.

● There is a limited availability of quality properties that would be potential business targets for our business.

● We face acquisition disadvantages due to our size and lack of funding.

● We face ongoing challenges in retaining talent and recruiting contractors with expertise in our industry.

● Our operations require high infrastructure costs.

● We may experience difficulty raising capital to fund our operations.

● We depend on our Chief Executive Officer and Chief Financial Officer and the loss of this individual could adversely affect our business.

● Rapid technological change may result in our technology becoming obsolete or in our competitors having an advantage.

● The timelines for integration and deployment may cause uncertainty and unpredictability in our results of operations.

● Our component and infrastructure dependency may result in supply chain delays and disruption.

● We rely on strategic partnerships with third parties to advance our business strategy.

● There is uncertainty that the markets will adopt AI compute infrastructure as it is a relatively new industry.

● We face a changing regulatory landscape and increasing compliance costs that must be paid to continue our operations.

● Our reliance on technology makes us vulnerable to cybersecurity threats.

● We require additional, significant capital to fund our expansion; none of which is committed at this time.

● Our commitment to sustainability adds additional costs and obligations to our business.

● We face reputational risks if we experience bad publicity or adverse results in our operations.

● We face regional operational challenges that may result in additional administrative expense and complexity in our operations.

● Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

● Trading on the Over-the-Counter markets may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

● Our stock has been a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations and the FINRA's sales practice requirements, which may limit a stockholders' ability to buy and sell our stock.

● Our common stock may be affected by limited trading volume and price fluctuation which could adversely impact the value of our common stock.

● FINRA sales practice requirements may also limit a stockholders' ability to buy and sell our stock.

● Because the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.

● A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.

● Our stock price may be volatile.

● We have never paid a cash dividend on our common stock and we do not anticipate paying any in the foreseeable future.

● We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

● Difficulties we may encounter managing our growth could adversely affect our results of operations.

● If we lose key personnel or are unable to attract and retain additional qualified personnel, we may not be able to successfully manage our business and achieve our objectives.

● Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

**RISK FACTORS**

The purchase of the Shares involves substantial risks. You should carefully consider the following risk factors in addition to any other risks associated with this investment. The Shares offered by the Company constitute a highly speculative investment and you should be in an economic position to lose your entire investment. The risks listed do not necessarily comprise all those associated with an investment in the Shares and are not set out in any particular order of priority. Additional risks and uncertainties may also have an adverse effect on the Company's business and your investment in the Shares. An investment in the Company may not be suitable for all recipients of this Offering Circular. You are advised to consult an independent professional adviser or attorney who specializes in investments of this kind before making any decision to invest. You should consider carefully whether an investment in the Company is suitable in the light of your personal circumstances and the financial resources available to you.

The discussions and information in this Offering Circular may contain both historical and forward-looking statements. To the extent that the Offering Circular contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of the Company's business, please be advised that the Company's actual financial condition, operating results, and business performance may differ materially from that projected or estimated by the Company in forward-looking statements. The Company has attempted to identify, in context, certain factors it currently believes may cause future experience and actual results to differ from the Company's current expectations.

Before investing, you should carefully read and consider the following risk factors:

**Risks Related to Our Company**

***We rely on third parties and disruptions in the supply chain could cause significant delays.***

One of the primary risks comes from our reliance on modular data center providers. Any disruptions in the supply chain, such as delays in manufacturing, installation, or shipping, could affect deployment schedules. Furthermore, standardization challenges across different jurisdictions may require design adjustments, increasing both costs and deployment times. The need for specialized equipment, such as liquid cooling systems for high-performance AI workloads, also introduces compatibility risks with various modular providers. Another significant risk revolves around the GPU supply chain and performance. GPUs are essential for BluSky AI's high-performance computing infrastructure, particularly for AI and machine learning workloads. However, the global semiconductor supply chain remains volatile, with shortages, geopolitical restrictions, and high demand from cloud and AI companies impacting availability and pricing. BluSky AI's dependence on a few major GPU manufacturers, such as NVIDIA and AMD, increases procurement risks, as delays or price hikes from these suppliers can directly affect operational costs and scalability.

***We rely on the existing U.S. energy grid.***

Additionally, there are risks related to the U.S. energy grid. The growing demand for data centers, combined with aging energy infrastructure in some regions, poses a risk to BluSky AI's ability to secure reliable power for its facilities. Regulatory restrictions on energy consumption and sustainability requirements may also affect site selection and operational costs. Power-intensive AI workloads require stable energy supplies, and any potential grid instabilities could necessitate costly backup solutions, such as on-site renewables or energy storage systems. For BluSky AI's government contracts, any portion of its business tied to these agreements may be subject to renegotiation of profits or termination at the government's discretion. Changes in federal or state regulations, budget reallocations, or shifts in policy could impact existing agreements, and government contracts often include termination clauses, meaning the government can end agreements without cause, potentially leading to financial losses. Additionally, the company must comply with evolving security and data protection requirements in government contracts, which may require additional investment in infrastructure and regulatory compliance measures.

***We operate in a highly competitive and growing market.***

BluSky AI operates in a highly competitive data center market that is rapidly evolving in response to the growing demand for AI computing, particularly GPU on-demand services. The company faces competition from traditional hyperscale data center providers like AWS, Google, and Microsoft, as well as specialized modular data center firms.

***Limited availability and rising costs of GPUs could constrain our growth.***

Our business depends heavily on the availability of high-performance GPUs from third-party manufacturers such as NVIDIA and AMD. Global supply shortages, high demand, and market constraints have led to increased prices and limited availability of GPUs. A continued shortfall in GPU supply could delay deployments, increase costs, or reduce the performance of our offerings, negatively affecting our competitive position.

***An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations.***

The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.

***We have incurred losses since our inception in 2007 and may never be profitable, which raises doubt about our ability to continue as a going concern.***

Since our inception in 2007, we have incurred operating losses. As of September 30, 2025, our accumulated deficit since inception was $33,878,127. We have substantial current obligations and at September 30, 2025, we had $3,303,790 of current liabilities as compared to $1,381,776 of current assets. Since inception, we have been able to raise only minimal additional capital, and we have minimal cash on hand. Accordingly, the Company does not have sufficient cash resources or current assets to pay its current obligations, and we have been meeting many of our obligations through the issuance of our common stock to our employees, consultants, and advisors as payment for the goods and services.

Our management continues to search for additional financing; however, considering the difficult U.S. and global economic conditions along with the substantial turmoil in the capital and credit markets, there is a significant possibility that we will be unable to obtain financing to continue our operations.

These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent registered public accounting firm's report on our audited financial statements as of and for the year ended December 31, 2024. If we are unable to continue as a going concern, investors will likely lose all of their investment in our company.

***We are subject to legal proceedings.***

We are subject to legal proceedings and litigation, which can be expensive and unpredictable.

***We do not currently carry any property or casualty insurance.***

Our business is subject to a number of risks and hazards generally, including but not limited to potential disruptions from natural disasters, such as earthquakes or floods, which could impact data center operations. Cybersecurity threats pose another significant risk, as data centers are prime targets for malicious attacks. Additionally, the company must navigate regulatory compliance challenges, particularly in meeting environmental standards and data protection laws. Market volatility and competition in the rapidly evolving AI and HPC sectors also present operational risks.

Such occurrences could result in damage to our properties, equipment, and infrastructure, personal injury or death, environmental damage, delays, monetary losses, and possible legal liability. You could lose all or part of your investment if any such catastrophic event occurs. We do not carry any property or casualty insurance at this time (but we will carry all insurances that we are required to by law, such as motor vehicle and workers' compensation, plus other coverage that may be in the best interest of the Company). Even if we do obtain insurance, it may not cover all of the risks associated with our operations. Insurance against risks such as environmental pollution or other hazards as a result of exploration and operations are often not available to us or to other companies in our business on acceptable terms. Should any events against which we are not insured occur, we may become subject to substantial losses, costs, and liabilities, which will adversely affect our financial condition.

***Uncertain customer adoption of AI-specific infrastructure may adversely affect demand.***

Our growth depends on increased demand for modular, dedicated AI compute infrastructure. However, customer preferences and adoption timelines are difficult to predict. A slowdown in AI investments, greater reliance on in-house or cloud-based solutions, or emerging competing technologies may affect demand for our services and negatively impact our business.

***We face resource acquisition challenges due to our size and recent expansion into these operations.***

Competing companies often have the greater financial muscle to secure highly desirable properties, equipment, and technical expertise. This imbalance may hinder BluSky AI's ability to compete for necessary capital and strategic partnerships, ultimately affecting growth prospects.

***The existing scarcity of Powered Lands makes our potential acquisitions more expensive, and we face increased competition in making acquisitions.***

"Powered land" in the context of data centers refers to land that is pre-equipped with a committed power infrastructure, often including a signed agreement with a utility provider. This ensures that the site has a guaranteed power load available, typically ranging from 50 to 1000 MW, before construction begins. Such arrangements significantly reduce delays and risks associated with securing power during the development phase. As data center power demands surge across the U.S., securing access to "powered land" with adequate grid connectivity has also become increasingly competitive. Any delays in obtaining utility approvals, interconnections, or sufficient power supply could hinder our ability to deploy or operate facilities, limiting revenue and scalability.

***There is a limited availability of quality properties that would be potential business targets for our business.***

BluSky AI's business model depends on securing powered lands and suitable properties for data center exploration. However, there is a limited supply of such lands, especially in high-demand regions like the United States. Larger competitors, with established networks and deeper pockets, are often better positioned to claim or lease these sites.

***We face acquisition disadvantages due to our size and lack of funding.***

The competitive market for powered lands means BluSky AI may face higher acquisition costs or be unable to secure properties that meet its operational requirements. This scarcity can delay project timelines and limit geographic expansion, thereby reducing the company's competitive edge.

***We face ongoing challenges in retaining talent and recruiting contractors with expertise in our industry.***

In addition to competing for physical assets, BluSky AI faces stiff competition in recruiting and retaining skilled professionals. Larger companies can offer more attractive compensation packages and benefits, which may impede BluSky AI's efforts to build and maintain a high-caliber technical and operational team. The inability to secure or retain top talent not only affects day-to-day operations but also limits the company's ability to innovate and execute its long-term strategy. This talent gap can lead to delays in property development and operation, further disadvantaging the company relative to its competitors.

***Our operations require high infrastructure costs.***

Developing and operating data centers is capital-intensive. BluSky AI must invest heavily in infrastructure to compete effectively. Limited financial resources, compared to competitors, can constrain the company's ability to fund rapid expansion and state-of-the-art technology deployment.

***We may experience difficulty raising capital to fund our operations.***

The need for continuous investment in property acquisition, infrastructure development, and talent recruitment increases the company's dependency on raising capital. Difficulty in securing adequate funding could lead to reduced operational capacity, stalled expansion plans, and, ultimately, material adverse effects on business performance.

***We depend on our Chief Executive Officer and Chief Financial Officer and the loss of this individual could adversely affect our business.***

Our company is completely dependent on Trent D'Ambrosio, our Chief Executive Officer and Chief Financial Officer. Mr. D'Ambrosio is also a member of our Board of Directors. The loss of Mr. D'Ambrosio could significantly and adversely affect our business and could even result in a complete failure of the Company. We do not carry any life insurance on the life of Mr. D'Ambrosio.

***Rapid technological change may result in our technology becoming obsolete or in our competitors having an advantage.***

BluSky AI's reliance on cutting-edge AI compute technology, including quantum encryption and advanced GPU chip technology, exposes the company to the risk of rapid technological obsolescence. New developments in chip architecture, cooling systems, or deployment models may reduce demand for our current solutions. New developments by competitors or unforeseen technical challenges may also render current solutions less competitive or require significant reinvestment if we fail to adapt quickly to these changes.

***The timelines for integration and deployment may cause uncertainty and unpredictability in our results of operations.***

While the modular container centers are designed for rapid deployment, any delays in installation, integration of renewable energy sources, or unforeseen engineering challenges may extend timelines and impair revenue recognition.

***Our component and infrastructure dependency may result in supply chain delays and disruption.***

The company's model depends heavily on securing critical components—from renewable energy infrastructure (solar, wind, geothermal) to GPU chips. Disruptions in these supply chains or changes in supplier terms could lead to increased costs or reduced capacity expansion.

***We rely on strategic partnerships with third parties to advance our business strategy.***

Partnerships with key technology suppliers and energy infrastructure providers are central to BluSky AI's strategy. Any breakdown or change in these relationships could impact deployment capabilities and market competitiveness.

***There is uncertainty that the markets will adopt AI compute infrastructure as it is a relatively new industry.***

While demand for AI compute infrastructure is surging, there remains uncertainty about the pace of market adoption, customer retention, and the ability to scale operations profitably amid evolving client needs.

***We face a changing regulatory landscape and increasing compliance costs that must be paid to continue our operations.***

Operating on powered land assets and harnessing renewable energy exposes the company to diverse regulatory and permitting environments. Changes in local, state, or federal regulations—especially those related to energy use and environmental standards—could delay project timelines or increase costs.

Ensuring compliance with evolving industry, environmental, and cybersecurity standards may necessitate additional investments in technology and personnel, impacting overall margins.

***Our reliance on technology makes us vulnerable to cybersecurity threats.***

Our modular data centers and customer operations depend on robust IT security. A successful cyberattack could result in service disruptions, data loss, or reputational damage. While we employ security measures, no system is infallible. We may be required to expend significant resources to prevent or respond to such incidents, which could materially impact our operations.

***We require additional, significant capital to fund our expansion; none of which is committed at this time.***

Rapid deployment across multiple sites and the significant capital expenditure required for modular scalability might strain financial resources. Inadequate funding or unfavorable capital market conditions could hamper growth and increase dilution risks for current shareholders. Difficulties in coordinating large-scale, geographically diverse projects may result in inefficiencies and increased operational costs.

***Our commitment to sustainability adds additional costs and obligations to our business.***

The focus on green power and renewable energy, while a competitive differentiator, also exposes the company to risks if renewable energy prices fluctuate or if new environmental regulations are enacted that affect operational costs.

***We face reputational risks if we experience bad publicity or adverse results in our operations.***

As a public company, BluSky AI's commitment to sustainability and security must be consistently upheld. Any lapses in ESG performance or publicized operational failures could lead to reputational damage and reduced investor confidence.

***We face regional operational challenges that may result in additional administrative expense and complexity in our operations.***

While geographic diversification offers resilience, it also introduces complexity. Variations in local regulatory environments, infrastructure readiness, and market demand across different states or regions may result in inconsistent performance and increased management challenges.

These risk factors, while not exhaustive, highlight key areas where BluSky AI Inc. may face uncertainties that could impact its business model, operational performance, and financial outcomes. Investors and stakeholders should consider these factors alongside the company's strategic initiatives and market opportunities when evaluating its long-term prospects.

***Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.***

In their audit opinion issued in connection with our consolidated balance sheets as of December 31, 2024 and our related consolidated statements of operations and comprehensive loss, stockholders' deficit, and cash flows for the year ended December 31, 2024, our auditors have expressed substantial doubt about our ability to continue as a going concern given our recurring net losses, negative cash flows from operations and the limited amount of funds on our balance sheet. We have prepared our financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue in existence. This could make it more difficult to raise capital in the future.

**Risks Associated with Our Common Stock**

***Trading on the over-the-counter markets may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.***

Our common stock is quoted on the OTCID Basic Market tier of the OTC Link ATS (alternative trading system), the over-the-counter markets administered by OTC Markets Group, Inc., under the symbol "BSAI," but the common stock is currently not eligible for proprietary broker-dealer quotations. Trading in stock quoted on over-the-counter markets is often thin, volatile, and characterized by wide fluctuations in trading prices due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the Over-the-Counter markets are not a stock exchange, and trading of securities on the over-the-counter markets is often more sporadic than the trading of securities listed on other stock exchanges such as the NASDAQ Stock Market, New York Stock Exchange or American Stock Exchange. Accordingly, our shareholders may have difficulty reselling any of their shares.

***Our stock has been a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations and the FINRA's sales practice requirements, which may limit a stockholders' ability to buy and sell our stock.***

Our stock has recently been a penny stock. The SEC has adopted Rule 15g-9 which generally defines penny stock to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The term accredited investor refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customers' account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability or willingness of broker-dealers to trade our securities. We believe that the penny stock rules discourage broker-dealer and investor interest in, and limit the marketability of, our common stock.

***Our common stock may be affected by limited trading volume and price fluctuation which could adversely impact the value of our common stock.***

There has been limited trading in our common stock and there can be no assurance that an active trading market in our common stock will either develop or be maintained. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations which could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to periodically enter the market in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our common stock will be stable or appreciated over time.

***FINRA sales practice requirements may also limit a stockholders' ability to buy and sell our stock.***

In addition to the penny stock rules promulgated by the SEC, which are discussed in the immediately preceding risk factor, FINRA rules require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit the ability to buy and sell our stock and have an adverse effect on the market value for our shares.

***Because the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.***

Our shares have recently been classified as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 (the "Exchange Act") which imposes additional sales practice requirements on broker-dealers who sell our securities in this offering or in the aftermarket. For sales of our securities, broker-dealers must make a special suitability determination and receive a written agreement prior from you to making a sale on your behalf. Because of the imposition of the foregoing additional sales practices, it is possible that broker-dealers will not want to make a market in our common stock. This could prevent you from reselling your shares and may cause the value of your investment to decline.

***A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.***

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds, we need in order to conduct our planned operations through the sale of equity securities, or convertible debt instruments, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds, we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.

***Our stock price may be volatile.***

The stock market in general has experienced volatility that often has been unrelated to the operating performance of any specific public company. The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

● changes in our industry;

● competitive pricing pressures;

● our ability to obtain working capital financing;

● additions or departures of key personnel;

● limited "public float" in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market prices of our common stock;

● sales of our common stock;

● our ability to execute our business plan;

● operating results that fall below expectations;

● loss of any strategic relationship;

● regulatory developments;

● economic and other external factors; and

● period-to-period fluctuations in our financial results.

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

***We have never paid a cash dividend on our common stock, and we do not anticipate paying any in the foreseeable future.***

We have not paid a cash dividend on our common stock to date, and we do not intend to pay cash dividends in the foreseeable future. Our ability to pay dividends will depend on our ability to successfully develop one or more properties and generate revenue from operations. Notwithstanding, we will likely elect to retain any earnings, if any, to finance our growth. Future dividends may also be limited by bank loan agreements or other financing instruments that we may enter into in the future. The declaration and payment of dividends will be at the discretion of our Board of Directors.

***We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.***

Recent federal legislation, including the Sarbanes-Oxley Act of 2002 and the Jumpstart our Business Startups Act of 2012, among others, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges and NASDAQ are those that address board of directors' independence, audit committee oversight and the adoption of a code of ethics. While our Board of Directors has adopted a Code of Ethics and Business Conduct, we have not yet adopted any of these corporate governance measures and, since our securities are not listed on a national securities exchange or NASDAQ, we are not required to do so. It is possible that if we were to adopt some or all of these corporate governance measures, shareholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

***Difficulties we may encounter managing our growth could adversely affect our results of operations.***

As our business needs expand, we may need to hire a significant number of employees. This expansion may place a significant strain on our managerial and financial resources. To manage the potential growth of our operations and personnel, we will be required to:

● improve existing, and implement new, operational, financial and management controls, reporting systems and procedures;

● install enhanced management information systems; and

● train, motivate, and manage our employees.

We may not be able to install adequate management information and control systems in an efficient and timely manner, and our current or planned personnel, systems, procedures and controls may not be adequate to support our future operations. If we are unable to manage growth effectively, our business would be seriously harmed.

***If we lose key personnel or are unable to attract and retain additional qualified personnel, we may not be able to successfully manage our business and achieve our objectives.***

We believe our future success will depend upon our ability to retain our key management, primarily Mr. D'Ambrosio, our Chief Executive Officer and Chief Financial Officer. We may not be successful in attracting, assimilating and retaining our employees in the future.

***Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.***

If our stockholders sell substantial amounts of our common stock in the public market upon the expiration of any statutory holding period, under Rule 144, or issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an "overhang" and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

**DILUTION**

Dilution means a reduction in value, control, or earnings of the shares the investor owns.

*Immediate dilution*

An early-stage company typically sells its shares (or grants options on its shares) to its founders and early employees at a low cash price, as they are typically putting their "sweat equity" into the company. When the company seeks cash investments from outside investors, the new investors typically pay a higher price for their shares than the founders or earlier investors.

The following table compares the price that new investors are paying for their shares with the effective cash price paid by existing stockholders, assuming that the new shares are sold at an estimated price of $5.00 per Share (the midpoint between the estimated offering price range of $4.00 to $6.00 per Share). The schedule presents the number of shares and pricing as issued and reflects all transactions in the past five years, so investors can understand what they will pay for their investment compared to what earlier parties have paid.

The following table presents the approximate effective cash price paid for all shares and potential shares issuable by the Company as of February 5, 2026.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Date Issued** | **Issued Shares** | **Potential Shares** | **Total Issued and Potential Shares** | **Effective Cash Price per Share at Issuance or Potential Conversion** |
|  **<u>Common Shares:</u>** |  |  |  |  |  |
| Common Shares | 2/17/2023 | 60002 |  | 60002 | $0.00001 |
| Common Shares | 9/22/2023 | 157143 |  | 157143 | $0.00001 |
| Common Shares | 4/1/2025 | 200000 |  | 200000 | $0.00001 |
| Common Shares | 6/10/2025 | 1100000 |  | 1100000 | $0.00001 |
| Common Shares | 6/24/2025 | 500000 |  | 500000 | $0.00001 |
| Common Shares | 7/7/2025 | 20000000 |  | 20000000 | $4.0800 |
| Common Shares | 9/4/2025 | 25500 |  | 25500 | $0.00001 |
| Common Shares | 9/23/2025 | 433750 |  | 433750 | $4.0000 |
| Common Shares | 9/30/2025 | 33415 |  | 33415 | $5.9800 |
|  **<u>Preferred Shares:</u>** |  |  |  |  |  |
|  | N/A | N/A | N/A | N/A | $- |
|  **<u>Options:</u>** |  |  |  |  |  |
|  | N/A | N/A | N/A | N/A | $- |
|  **<u>Warrants:</u>** |  |  |  |  |  |
|  | N/A | N/A | N/A | N/A | $- |

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The following table describes the dilution that new investors will experience when they invest in the Company and relative to the Company's existing holders of securities. This calculation is based on the net tangible assets of the Company; as such calculations are based on net tangible book value of $531 as of December 31, 2024, and as summarized in our audited financial statements.

Offering costs assumed in the following table include up to $2,812,500 (or 4.5% of the proceeds from this offering) in commissions, compensation of $420,000 paid to Broker affiliates, processing fee of $1,250,000 (2%), as well as $76,000 direct legal and accounting fees incurred in support of this Offering.

The table presents three amount raised scenarios: a $5,000,000 raise from this offering, a $31,250,000 raise from this offering, and a fully subscribed $62,500,000 raise from this offering.

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| | | | |
|:---|:---|:---|:---|
|  | **$5000000**<br>**Raise** | **$31250000**<br>**Raise** | **$62500000**<br>**Raise** |
| Price per Share | $5.00 | $5.00 | $5.00 |
| Shares Issued | 1000000 | 6250000 | 12500000 |
| Bonus Shares Issued | 200000 | 1250000 | 2500000 |
| Capital raised | 5000000 | 31250000 | 62500000 |
| Less: Offering Costs | 821000 | 2572250 | 4558500 |
| Net Offering Proceeds | 4179000 | 28747750 | 57941500 |
| Net Tangible Book Value Pre-financing as of September 30, 2025 | (2104889) | (2104889) | (2104889) |
| Net Tangible Book Value Post-financing\* | 2074111 | 26617861 | 55836611 |
| Shares Issued and Outstanding Pre-Offering\* | 24992505 | 24992505 | 24992505 |
| Shares Issued and Outstanding Post-Offering\* | 26192505 | 32492505 | 39992505 |
| Net Tangible Book Value per Share Prior to Offering | (0.08) | (0.08) | (0.08) |
| Increase/(Decrease) per Share Attributable to New Investors | 0.16 | 0.82 | 1.48 |
| Net Tangible Book Value per Share After Offering | 0.08 | 0.90 | 1.40 |
| Dilution per Share to New Investors ($) | 4.92 | 4.18 | 3.60 |
| Dilution per Share to New Investors (%) | 98.4% | 83.6% | 72.1% |

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\* Based on Net Tangible Book Value as of September 30, 2025, and 24,992,496 shares of common stock outstanding as September 30, 2025, and excludes shares of common stock issued subsequent to September 30, 2025.

*Future dilution*

Another aspect of dilution is the dilution that happens due to future actions by the Company. The investor's stake in the Company could be diluted due to the Company issuing additional shares. In other words, when the Company issues more shares, the percentage of the Company that each investor owns will go down, even though the value of the Company may go up. In that event, the investor will own a smaller piece of a larger company. This increase in number of shares outstanding could result from a stock offering (such as an initial public offering, a crowdfunding round, a venture capital round, or angel investment), employees exercising stock options, or by conversion of certain instruments (ex. convertible bonds, preferred shares or warrants) into stock.

If the Company decides to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction in the amount earned per share, although earnings per share typically occurs only if the Company offers dividends, and most early-stage companies are unlikely to offer dividends, preferring to invest any earnings into the Company.

The type of dilution that hurts early-stage investors most occurs when the Company sells more shares in a "down round," meaning at a lower valuation than in earlier offerings. The example provided below is hypothetical and for illustrative purposes only:

● In June 2024, Jane invests $20,000 for shares that represent 2% of a company valued at $1 million.

● In December, the Company is doing very well and sells $5 million in shares to venture capitalists on a valuation (before the new investment) of $10 million. Jane now owns only 1.3% of the Company, but her stake is worth $200,000.

● In June 2025, the Company has serious problems and in order to continue to operate raises $1 million at a valuation of only $2 million (the "down round"). Jane now owns only 0.89% of the Company, and her stake is now worth only $26,660.

This type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes get to convert their notes into equity at a "discount" to the price paid by the new investors. They receive more shares than the new investors would for the same price because of their earlier investment which may have been associated with greater risk. Additionally, convertible notes may have a "price cap" on the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes receive more shares for the same dollar amount of investment than new investors receive. In the event that the financing is a "down round" the holders of the convertible notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money. Investors should pay careful attention to the number of convertible notes that the Company has issued and may issue in the future, and the terms of those notes.

If you are making an investment expecting to own a certain percentage of the Company or expecting each share to hold a certain amount of value, it's important to realize how the value of those shares can decrease by actions taken by the Company. Dilution can make drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.

**PLAN OF DISTRIBUTION**

**Plan of Distribution**

The Company is offering up to 12,500,000 Shares (the "Shares"), plus up to 2,500,000 shares of Bonus Shares par value $0.00001 per share (the "Shares") on a "best efforts" basis at an assumed public offering price of $5.00, which is the mid-point of the estimated offering price range between $4.00-$6.00 per Share. No additional consideration will be received by the company for the issuance of Bonus Shares and the company will absorb the cost of the issuance of the Bonus Shares. The minimum subscription is $1,000.00.

The Company intends to market the shares in this offering primarily through online means. Online marketing may take the form of contacting potential investors through electronic media and posting our offering circular on an online investment platform. This offering circular will be furnished to prospective investors via download 24 hours per day, 7 days per week on the Company's website on a landing page (<u>www.invest.bluskyaidatacenters.com</u>) that relates to the offering.

The offering will terminate at the earliest of (i) the date at which the maximum offering amount has been sold, (ii) three years from the date upon which the Commission qualifies the Offering Circular of which this offering circular forms a part or (iii) the date at which the offering is earlier terminated by the Company, in its sole discretion.

The Company intends to complete multiple closings on a rolling basis. After each closing, funds tendered by investors will be available to the Company.

Further, after each closing, funds tendered by investors will be held in a segregated account owned by the Company, but with viewing privileges assigned to Broker, and will remain in that account until cleared (AML/KYC). After the initial closing of this Offering, we expect to hold closings on at least a monthly basis.

**Agreement with DealMaker Securities, LLC**

DealMaker Securities, LLC, a broker-dealer registered with the SEC and a member of FINRA, has been engaged to provide operational processing, compliance, and administration of the Company's best efforts offering. This role differs from that of a traditional underwriter in that the Broker does not purchase any securities from the Company with a view to sell such for the Company as part of the distribution of the security. Affiliates of Broker have also been engaged to provide technology services and marketing advisory services, specifically Novation Solutions Inc. O/A DealMaker and DealMaker Reach, LLC.

Broker and its affiliates will receive an advance against accountable expenses of $50,000 and a cash commission equal to four-and one-half percent (4.5%) of the amount raised in the Offering. Broker's affiliates have also been engaged for services associated with the Offering.

**Commissions and Discounts**

The following table shows the total discounts and commissions payable to the placement agents in connection with this Offering:

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| | | |
|:---|:---|:---|
|  | Per Share |  |
| Public offering price | $5.00 |  |
| Commissions | $0.23 | (1) |
| Proceeds, before expenses, to us | $4.77 |  |

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(1) Broker will receive commissions of 4.5% of the Offering proceeds, not including the Bonus Shares.

**Bonus Shares**

Investors in this offering are eligible to receive bonus shares of Common Stock, which effectively gives them a discount on their investment. Those investors will receive, as part of their total investment in the Offering, up to 20% of the total shares they purchased, depending upon the amount they invest as described below (the "Bonus Shares"). Investors receiving the Bonus Shares will pay an effective price of less than $5.00 per share (which is the mid-point of the estimated offering price range between $4.00-$6.00 per Share).

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| | | |
|:---|:---|:---|
| **Total Investment** | **Bonus Shares** | **Effective Price Per Share** |
| $2000 | 2% Bonus Shares | $4.90 |
| $5000 | 5% Bonus Shares | $4.76 |
| $10000 | 10% Bonus Shares | $4.55 |
| $25000 | 15% Bonus Shares | $4.35 |
| $50000 | 20% Bonus Shares | $4.17 |

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We believe that Bonus Shares simply reduce the cost basis per share of the investment. However, it is recommended that investors consult with their own tax professionals to fully understand any tax implications of receiving Bonus Shares.

**Administrative and Compliance Related Functions**

Broker will provide administrative and compliance related functions in connection with this Offering, including:

● Review investor information, including KYC ()"**Know Your Customer**") data, AML ()"**Anti Money Laundering**") and other compliance background checks, and provide a recommendation to the Company whether to accept investor as a customer.

● Review each investor's subscription agreement to confirm such investor's participation in the Offering and provide a determination to the Company whether to accept the use of the subscription agreement for the investor's participation.

● Contact and/or notify the company, if needed, to gather additional information or clarification on an investor.

● Not provide any investment advice nor any investment recommendations to any investor.

● Keep investor details and data confidential and not disclose to any third party except as required by regulators or pursuant to the terms of the agreement (e.g. as needed for AML and background checks).

● Responsibility for all FINRA 5110 filings and updates.

● Review of written communications for compliance with applicable rules. Coordinate with third party providers to ensure adequate review and compliance. It is ultimately the responsibility of the Company as to whether to accept the recommendations of DealMaker with respect to compliance with written communications.

● Provide, or coordinate the provision by a third party, of an "invest now" payment processing mechanism.

For these services, we have agreed to pay Broker:

● A one-time $20,000 advance against accountable expenses for the pre-Offering analysis; and

● A cash compensation equal to 4.5% of the amount raised in the Offering.

The maximum fee for these services provided by Broker is $2,832,500.

**Technology Services**

The Company has also engaged Novation Solutions Inc., operating as DealMaker ("DealMaker"), an affiliate of Broker, to create and maintain the online subscription processing platform for the Offering.

After the qualification by the Commission of the Offering Circular of which this Offering Circular is a part, this Offering will be conducted using the online subscription processing platform of DealMaker Platform through our website at www.invest.bluskyaidatacenters.com, whereby investors will receive, review, execute and deliver subscription agreements electronically as well as make payment of the purchase price through a third party processor by ACH debit transfer or wire transfer or credit card to an account we designate. There is no escrow established for this Offering. We will hold closings upon the receipt of investors' subscriptions and our acceptance of such subscriptions.

For these services, we have agreed to pay DealMaker:

● A one-time payment of $5,000 plus a monthly payment of $1,000 for three months ($3,000) in accountable expenses paid in advance of the commencement of the Offering prepaid for self-directed electronic roadshow; and

● a monthly account management fee of $1,000, not to exceed $9,000, would be charged after the commencement of the Offering.

The maximum fees to be paid to DealMaker for Technology services is $17,000.

**Marketing and Advisory Services**

The Company has also engaged DealMaker Reach, LLC ("**Reach**"), an affiliate of Broker, for certain marketing advisory and consulting services. Reach will consult and advise on the design and messaging on creative assets, website design and implementation, paid media and email campaigns, advise on optimizing the company's campaign page to track investor progress, and advise on strategic planning, implementation, and execution of company's capital raise marketing budget.

For these services, we have agreed to pay Reach:

● A one-time payment of $25,000 plus a monthly payment of $9,000 for three months ($27,000) in accountable expenses paid in advance of the commencement of the Offering for consulting and developing materials for self-directed electronic roadshow;

● A monthly marketing advisory fee of $9,000, not to exceed $81,000, would be charged after the commencement of the Offering; and

● A supplementary marketing services budget of $250,000 in fees to be charged on a case-by-case basis, as may be authorized by the Company.

The maximum fees to be paid to Reach for contracted marketing services is $383,000.

In the event of a fully subscribed offering, total compensation payable to Broker and affiliates shall not exceed $3,232,500 (5.17% of the Offering proceeds).

**Other Terms**

Except as set forth above, the Company is not under any contractual obligation to engage Dealmaker to provide any services to the Company after this Offering, and has no present intent to do so. However, Dealmaker may, among other things, introduce the Company to potential target businesses or assist the Company in raising additional capital, as needs may arise in the future. If Dealmaker provides services to the Company after this Offering, the Company may pay Dealmaker fair and reasonable fees that would be determined at that time in an arm's length negotiation.

Dealmaker intends to use an online platform at the domain name www.dealmaker.tech (the "**Online Platform**") to provide technology tools to allow for the sales of securities in this Offering.

**Subscription Procedures**

After the Offering Circular has been qualified by the Commission, the Company will accept tenders of funds to purchase Shares. The Company may close on investments on a "rolling" basis (so not all investors will receive their Shares on the same date). Investors may subscribe by tendering funds via wire, credit or debit card, or ACH only. Checks will not be accepted. Investors will subscribe via the Company's investment website and investor funds will be processed via DealMaker's integrated payment solutions. Funds will be held in the Company's payment processor account until the Broker has reviewed the proposed subscription, and the Company has accepted the subscription. The initial closing will occur as soon as funds clear. We expect to hold subsequent closings on at least a monthly basis.

Assuming additional information does not need to be provided for due diligence (AML/KYC) and the investment has been funded it will take up to three (3) business days to determine whether a subscription agreement has been accepted or rejected. In the event additional information is required from the subscriber, within three (3) business days, Broker will reach out to the subscriber for that information.

The Company will then close on that subscription in the following closing, after which the funds will then be released to the Company.

Upon each closing, funds tendered by investors will be made available to the Company for their use.

In order to invest you will be required to subscribe to the offering via the Company's website integrating DealMaker's technology and agree to the terms of the offering, subscription agreement, and any other relevant exhibit attached thereto.

Investors will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation by the investor to the effect that, if the investor is not an "accredited investor" as defined under securities law, the investor is investing an amount that does not exceed the greater of 10% of their annual income or 10% of their net worth (excluding the investor's principal residence).

Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. Broker will review all subscription agreements completed by the investor.

The Company maintains the right to accept or reject subscriptions in whole or in part, for any reason or for no reason, including, but not limited to, in the event that an investor fails to provide all necessary information, even after further requests from the Company, in the event an investor fails to provide requested follow up information to complete background checks or fails background checks, and in the event the Company receives oversubscriptions in excess of the maximum offering amount.

In the interest of allowing interested investors as much time as possible to complete the paperwork associated with a subscription, the Company has not set a maximum period of time to decide whether to accept or reject a subscription. If a subscription is rejected, funds will not be accepted by wire transfer or ACH, and payments made by debit card or check will be returned to subscribers within thirty (30) days of such rejection without deduction or interest. Upon acceptance of a subscription, the Company will send a confirmation of such acceptance to the subscriber.

Broker has not investigated the desirability or advisability of investment in the Shares, nor approved, endorsed or passed upon the merits of purchasing the Shares. Broker is not participating as an underwriter and under no circumstance will it recommend the Company's securities or provide investment advice to any prospective investor or make any securities recommendations to investors. Broker is not distributing any Offering Circulars or making any oral representations concerning this Offering Circular or this Offering. Based upon Broker's anticipated limited role in this Offering, it has not and will not conduct extensive due diligence of this Offering and no investor should rely on the involvement of Broker in this offering as any basis for a belief that it has done extensive due diligence. Broker does not expressly or impliedly affirm the completeness or accuracy of the Offering Circular and/or Offering Circular presented to investors by the Company. All inquiries regarding this offering should be made directly to the Company.

Upon confirmation that an investor's funds have cleared, the Company will instruct the transfer agent to issue shares to the investor. The transfer agent will notify an investor when shares are ready to be issued and the Transfer Agent has set up an account for the investor.

**No Escrow**

The proceeds of this Offering will not be placed into an escrow account. We will offer our Shares on a best-efforts basis. As there is no minimum offering amount, upon the clearance of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.

**Investor Suitability Standards**

Our Shares are being offered and sold only to "qualified purchasers" (as defined in Regulation A under the Securities Act) include: (i) "accredited investors" under Rule 501(a) of Regulation D and (ii) all other investors so long as their investment in any of the interests of our company (in connection with any series offered under Regulation A) does not represent more than 10% of the greater of their annual income or net worth (for natural persons), or 10% of the greater of annual revenue or net assets at fiscal year-end (for non-natural persons). We reserve the right to reject any investor's subscription in whole or in part for any reason, including if we determine in our sole and absolute discretion that such investor is not a "qualified purchaser" for purposes of Regulation A.

For an individual potential investor to be an "accredited investor" for purposes of satisfying one of the tests in the "qualified purchaser" definition, the investor must be a natural person who has:

1. an individual net worth, or joint net worth with the person's spouse, that exceeds $1,000,000 at the time of the purchase, excluding the value of the primary residence of such person and the mortgage on that primary residence (to the extent not underwater), but including the amount of debt that exceeds the value of that residence and including any increase in debt on that residence within the prior 60 days, other than as a result of the acquisition of that primary residence; or

2. earned income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

If the investor is not a natural person, different standards apply. See Rule 501 of Regulation D for more details. For purposes of determining whether a potential investor is a "qualified purchaser," annual income and net worth should be calculated as provided in the "accredited investor" definition under Rule 501 of Regulation D. In particular, net worth in all cases should be calculated excluding the value of an investor's home, home furnishings and automobiles."

Investors will be required to complete an Investment Subscription Agreement in order to invest. The Investor Subscription Agreement includes a representation by the investor to the effect that, if the investor is not an "accredited investor" as defined under securities law, the investor is investing an amount that does not exceed the greater of 10% of his or her annual income or 10% of your net worth (calculated by excluding the value of the investor's principal residence).

Colonial Stock Transfer Company, Inc., is the transfer agent of the Company and will maintain stockholder information on a book-entry basis. We will not issue shares in physical or paper form. Instead, our shares will be recorded and maintained on our stockholder register.

In the event that it takes some time for the Company to raise funds in this offering, the Company may rely on cash on hand, or may seek to raise funds by conducting a new offering of equity or debt securities.

**Provisions of Note in Our Subscription Agreement**

***Forum Selection Provision***

***Jury Trial Waiver***

Investors in this offering will be bound by the subscription agreement, which includes a provision under which investors waive the right to a jury trial of any claim they may have against the Company arising out of or relating to the agreement, including any claims made under the federal securities laws. By signing the agreement, the investor warrants that the investor has reviewed this waiver with his or her legal counsel, and knowingly and voluntarily waives the investor's jury trial rights following consultation with the investor's legal counsel.

If we opposed a jury trial demand based on the waiver, a court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of Nevada, which governs the agreement, by a federal or state court in the State of Nevada. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the subscription agreement. You should consult legal counsel regarding the jury waiver provision before entering into the subscription agreement.

If you bring a claim against the Company in connection with matters arising under the agreement, including claims under the federal securities laws, you may not be entitled to a jury trial with respect to those claims, which may have the effect of limiting and discouraging lawsuits against the Company. If a lawsuit is brought against the Company under the agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in such an action.

Nevertheless, if the jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the agreement with a jury trial. No condition, stipulation or provision of the subscription agreement serves as a waiver by any holder of the Company's securities or by the Company of compliance with any substantive provision of the federal securities laws and the rules and regulations promulgated under those laws.

In addition, when the shares are transferred, the transferee is required to agree to all the same conditions, obligations and restrictions applicable to the shares or to the transferor with regard to ownership of the shares that were in effect immediately prior to the transfer of the shares, including but not limited to the subscription agreement.

**Selling Securityholders**

No securities are being sold for the account of securityholders; all net proceeds of this offering will go to the Company**.**

**Transfer Agent and Registrar**

Colonial Stock Transfer Company, Inc. has been engaged to be the transfer agent for the Common Stock and maintains shareholder information on a book-entry basis. We will not issue shares in physical or paper form.

**Investors' Tender of Funds and Return of Funds**

After the Commission has qualified the Offering Circular, and prior to any closing date agreed upon by DealMaker and the Company, the Company will accept tenders of funds to purchase the Shares. The Company may close on investments on a "rolling" basis (so not all investors will receive their shares on the same date). Upon closing, funds tendered by investors will be made available to the Company for its use.

In the event that it takes some time for the Company to raise funds in this offering, the Company may rely on cash on hand, or may seek to raise funds by conducting a new offering of equity or debt securities.

In order to invest you will be required to subscribe to the offering via the Online Platform and agree to the terms of the offering, the subscription agreement and any other relevant exhibits attached thereto.

**USE OF PROCEEDS TO ISSUER**

Assuming a maximum raise of $62,500,000, the net proceeds of this offering would be approximately $57,941,500 after subtracting estimated offering costs of $3,232,500 to DealMaker in fees and commissions, $10,000 in audit and accounting fees, $45,000 for Blue Sky registration fees, and $21,000 in legal fees. There are also additional expenses of approximately 2% on the processing of the payments from the Investors (payable to Stripe), or $1,250,000 that would also be subtracted from the maximum raise. We intend to use the proceeds respective to this maximum raise for general working capital purposes.

Assuming a raise of $31,250,000, representing 50% of the maximum offering amount, the net proceeds would be approximately $28,722,750 after subtracting estimated offering costs of $1,826,250 to DealMaker in fees and commissions, $10,000 in audit and accounting fees, $45,000 in Blue Sky related filing fees and $21,000 in legal fees. There are also additional expenses of approximately 2% on the processing of the payments from the Investors, or $625,000 that would also be subtracted from the maximum raise. In such event we would use the proceeds respective to this 50% raise to conduct normal business operations, including payments to officers, and conduct the needed research and development, allowing us to develop new cancer treatments.

The Company intends to use the proceeds of this offering for general working capital expenses, to cover general and administrative costs and for marketing and public relations efforts, which includes pay for employees/officers. The Company does not anticipate any material change in the use of proceeds if all of the securities being qualified on the Offering Circular are not sold; it will simply have to spend less on each category in this use of proceeds section on an adjusted basis.

During the course of the offering, the company may issue Bonus Shares as described under the "Plan of Distribution" and "Securities Being Offered" sections herein. The issuance of Bonus Shares does not affect the potential proceeds that may be received by the company.

***The Company reserves the right to change the above intended use of proceeds if management believes it is in the best interests of the Company.***

**THE COMPANY'S BUSINESS**

**Overview**

BluSky AI Inc. is a pre-fabricated modular data center provider specializing in artificial intelligence (AI) and high-performance computing (HPC) that was originally formed in Nevada on July 2, 2007. The company is dedicated to delivering state-of-the-art infrastructure and solutions tailored to meet the demands of modern AI applications and computational workloads with a focus on innovation, scalability, and environmental sustainability.

Previously known as Inception Mining Inc., the company underwent a significant transformation and rebranding in March 2025 to align with its new strategic direction. This change reflects BluSky AI Inc.'s commitment to advancing technology and providing unparalleled services in the data center industry. The Company is headquartered in Salt Lake City, Utah.

Historically, we operated within the mining industry, serving as a consultant to mining companies and as an operator of a mine engaged in the production of precious metals. From 2015 through January 24, 2023, the Company operated the Clavo Rico mine in Honduras through its wholly owned subsidiary, Compañía Minera Cerros del Sur, S.A de C.V. ("CMCS") and other mining concessions.

***<u>2023 Divestiture of the Clavo Rico Mine and Legacy Mining Matters</u>***

On January 12, 2023, 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.

In addition to the amounts already delivered under the LOI, an additional amount of $2,700, 0000 was agreed to be paid by MLM to the Company over a period of twenty-four (24) months (the "Monthly Payments") to be secured by a 10% NSR on the Clavo Rico mine production until the Monthly Payments are delivered and the purchase price is paid in full. In addition to the Monthly Payments, the Company received a carried forward net profits interest royalty ("NPI") of 5% on the Clavo Rico mine production until the total NPI paid to the Company is $1,000,000, subject to limited conditions. MLM has not made all of the payments required under the LOI and the Company has been aggressively pursuing the collection of these amounts owed. See the "Litigation" section in Item 3 for an update.

Since the Divestiture of the Clavo Rico Mine up through March 2025, the Company has been operating as a consultant and advisor to the mining industry, including to Mother Lode Mining, the new owner of the Clavo Rico mine. It also has an ongoing financial interest in the Clavo Rico Mine under the LOI.

According to the LOI, the Company is obligated to receive $2,700,000 in cash payments through January 2025, with such payments secured by a ten percent net smelter royalty on the Clavo Rico Mine's production. The Company has created an allowance for this total amount and is also in litigation over non-payment of this receivable.

The Company also received a carried forward net profits interest royalty of five percent of the Clavo Rico mine production until payment to the Company reaches $1,000,000, subject to reduction for certain limited Clavo Rico mine expenses.

During the year ended December 31, 2024, the Company did not receive any payments from Mother Lode Mining and Mother Lode Mining is in default under this note. Management has been addressing this issue with Mother Lode Mining through litigation, and the Company has established an allowance for the entire remaining balance.

*Current Operations*

BluSky AI Inc. is rapidly emerging as a pivotal force in the Neocloud ecosystem, with plans to deliver high-performance infrastructure tailored for artificial intelligence workloads. Unlike traditional hyperscalers, BluSky AI Inc. is a Neocloud purpose-built for artificial intelligence/machine learning (AI/ML) and high-performance computing (HPC). BluSky AI's core infrastructure is defined by its rapidly deployable *SkyMod* data centers. *SkyMods* next-generation, scalable AI Factories provide speed-to-market and energy optimization to support high-performance machine learning workloads. BluSky AI plans to empowers small, mid-sized, enterprise, and academic entities from start-up to scale-up to drive innovation without compromise.

 *SkyMods* are pre-configured AI "factories" engineered to meet the surging demand for compute power driven by generative models, machine learning inference, and large-scale training pipelines. With operations anchored in Salt Lake City, BluSky AI is positioning itself as a nimble alternative to legacy cloud providers, offering speed-to-market and network scalability through planned multiple locations without the multi-year buildout timelines.

At the heart of BluSky AI's offering is its GPU-as-a-Service model, which will provide clients with flexible access to top-tier GPUs, including plans for numerous configurations. This consumption-based model allows enterprises, research institutions, and startups to scale their AI workloads without the capital burden of owning and maintaining hardware. Each *SkyMod* unit—will be available in various configurations— and will come fully assembled and ready for plug-and-play operations, dramatically reducing deployment friction. BluSky AI's planned infrastructure is optimized for low-latency networking, supporting model parallelism and high-throughput inference across multi-tenant environments.

As a Neocloud provider, BluSky AI is part of a new generation of AI-first infrastructure companies that prioritize performance, transparency, and agility. Neoclouds are defined by their ability to deliver bare-metal GPU access, simplified pricing, and orchestration tools that support hybrid and multi-cloud environments. BluSky AI's approach aligns with this ethos, offering transparent hourly GPU rates and integrated support for AI-ready networking solutions from industry leaders. This plan positions BluSky AI to serve not just commercial clients, but also government and academic institutions seeking sovereign AI infrastructure with predictable cost structures.

Operationally, BluSky AI plans to expand its Neocloud footprint through strategic site acquisitions and partnerships, which signals the company's intent to scale its modular deployments across energy-rich regions. By leveraging existing energy infrastructure and deploying *SkyMods* in various zones, BluSky AI is the potential to sidestep the bottlenecks that plague traditional data center development. This decentralized, modular strategy not only has the potential to accelerate time-to-value for clients, but also could align with ESG goals around energy optimization and infrastructure reuse. In a market racing to meet AI's insatiable demand, BluSky AI Inc. plans to build the backbone behind the intelligence to meet the industry's needs as they continue to grow.

BluSky AI's planned operational footprint includes a growing portfolio of strategically located sites across the western and central United States, each selected for power availability, scalability, and proximity to key transmission infrastructure. The company currently controls or has executed letters of intent for multiple properties intended to support near term and long term deployment of its modular SkyMod AI Factory systems.

In Milford, Utah, BluSky AI controls 51 acres under a ground lease with access to up to 9.3 MW of power, positioning the site for initial SkyMod deployment. Nearby in Delta, Utah, the company has executed a letter of intent to lease 25 acres, with expansion plans supporting up to 50 MW of capacity. BluSky AI has also announced a letter of intent for a 0.375 acre site in Nephi, Utah, with approximately 4 MW of available power.

Beyond Utah, BluSky AI has entered into a letter of intent for a 5 acre site in Pueblo, Colorado, with up to 15 MW of power, and holds a contract for a 36 acre parcel in Walsenburg, Colorado, also capable of supporting up to 15 MW. In Higbee, Missouri, the company has executed a letter of intent for a 10 acre ground lease site with 50 MW of available capacity. Additionally, BluSky AI has entered into a letter of intent for a site in Mulhall, Oklahoma, with approximately 16 MW of power.

Collectively, these locations reflect BluSky AI's strategy of targeting energy rich, infrastructure ready regions to accelerate deployment and meet rising demand for AI compute. Across its current portfolio, the Company's potential power capacity exceeds 140 MW, supporting both near term activation and scalable long term growth.

**BluSky AI Operations**

The Company is focusing its operations on artificial intelligence compute infrastructure and participating in the dynamic and expanding AI industry. The Company has plans to grow its AI operations organically. BluSky AI was established by drawing on extensive industry expertise, insights from outside experts, and a careful evaluation of current conditions in the data center markets. The innovative concept is built around a pre-fabricated modular design that leverages existing power infrastructure. BluSky AI plans to develop multiple modular data center sites across various U.S. jurisdictions, with artificial intelligence/machine learning (AI/ML) focus, specifically targeting facilities with the potential to develop power capacity or utilize existing power capacities. Many of these sites may have been in process for years. This strategy enables a potential faster time to market, scalable deployment, and a cost-effective approach that meets the evolving needs of the data center market.

BluSky AI is planning to revolutionizing the artificial intelligence compute landscape by addressing the immediate global supply shortage with a cutting-edge, turnkey solution. Our strategy centers on rapidly deployable, plug-and-play, modular compute centers called *SkyMods* on powered land assets—sites that already possess permitted energy infrastructure. This approach not only accelerates time to market but also positions BluSky AI as a premier AI compute infrastructure provider dedicated to meeting the surging demand for advanced AI services.

 *BluSky AI's Neocloud—A Next-Generation Compute Infrastructure*

BluSky AI Inc. is planned as a Neocloud purpose-built for artificial intelligence/machine learning (AI/ML) and high-performance computing (HPC). BluSky AI's planned core infrastructure is defined by its rapidly deployable *SkyMod* data centers. *SkyMods* next-generation, scalable AI Factories provide speed-to-market and energy optimization to support high-performance machine learning workloads. With plans to scale across multiple sites and deliver high compute capacity (ranging from 1 MW to 60 MW per site), BluSky AI plans to provide a client-tailored scalability to empower small, mid-sized, enterprise, and academic partners from start-up to scale-up to drive innovation without compromise.

The company's mission is to empower AI innovators by eliminating infrastructure bottlenecks and accelerating time-to-compute with energy-efficient, scalable solutions.

*Meeting the AI Compute Shortfall*

BluSky AI's plan is to design leading AI compute provisioning. By placing our modular units on strategically locations, with existing power where available, and plans will provide the essential backbone for AI inferences—enabling trained AI models to recognize patterns and draw conclusions on demand. Our unique offering may minimize technical deployment risks while maximizing opportunities for immediate incremental revenue generation and rapid market capture.

Our Neocloud developing portfolio of *SkyMod* AI factories plans to serve as a core infrastructure asset for the massive need for AI compute that is currently 3x the amount of the current data center capacity, providing strategic growth and innovation in the era of IoT and big data.

We are targeting initial sites ranging from 1 MW to 60 MW across various states, targeting robust geographic diversification to capture regional and global demand.

We are committed to delivering cutting-edge, environmentally conscious, and modular compute solutions that will empower AI companies to realize their full potential, driving the next generation of AI applications and safeguarding data with the industry leading-level security.

We believe BluSky AI's unique approach to its future operations—combining turnkey-powered land assets, rapid deployment, and scalable modular compute centers— could deliver the critical infrastructure needed to bridge the AI compute gap that exists in the marketplace today. While today's market focus is primarily on the 80% demand coming from Large Language and Training Models, 80% of the future demand will rely on inferencing needing low-latency millisecond compute. Our solutions not only address today's pressing needs but also lay a solid foundation for AI inference for sustained growth and technological advancement in the future of AI.

BluSky AI's plans are built around a revenue model focused on delivering modular data center solutions that leverage existing power infrastructure for rapid, scalable, and cost-effective deployments. The company will generate revenue primarily through:

● **Leasing and Subscription Services:** BluSky AI plans to provide a modular, turnkey data center solutions to customers on a subscription or leasing basis. These planned services include the design, deployment, and ongoing management of facilities tailored to support power capacities of less than 50MW, which accelerates time to market and reduces capital expenditure compared to traditional builds.

● **Integrated Infrastructure Services:** Beyond physical infrastructure, BluSky AI plans to offer advanced operational monitoring, predictive maintenance, and energy management analytics. These value-added services may help clients optimize performance and minimize downtime, creating additional revenue streams.

● **Strategic Partnerships and Government Contracts:** With a growing demand for secure, sustainable, and energy-efficient data center operations, BluSky AI plans to position itself to serve a diverse customer base—including private enterprises and governmental agencies. Current negotiations are underway with chip partners and others who have client bases that they also need to serve through potential BluSky AI's solutions. This dependency on revenue-generating activities from both commercial and public sectors is key to its expansion strategy.

Key plans for products and service families revolve around pre-fabricated modular data center designs, scalable power and cooling solutions, and integrated management systems—all aimed at delivering predictable quality and cost efficiency. This planned operational focus not only drives revenue but also underpins the company's broader strategy to expand its footprint across multiple U.S. jurisdictions while meeting the evolving needs of high-value clients, including government, education, and others.

BluSky AI plans include accelerating its development efforts to enhance its suite of *SkyMod* AI factories. The company's R&D team is developing new modules that integrate advanced power management, enhanced cooling, and remote monitoring capabilities, which are designed to improve deployment speed and scalability. These enhancements target facilities with existing power infrastructure under 60MW, a segment that is seeing robust market demand due to the growing need for sustainable, cost-effective, and rapidly deployable data centers.

Market trends indicate a steady increase in demand for modular data centers driven by rising energy efficiency requirements and the need for quicker, scalable solutions. Competitive conditions are intensifying as traditional hyperscale data center operators and emerging off-grid, sustainable providers vie for market share. In response, BluSky AI is strategically refining its business plans and product offerings and operational efficiencies while building relationships to forge key partnerships with both commercial enterprises and governmental customers. This dual focus not only supports its revenue generation strategy but also positions the company to remain competitive in a dynamic and rapidly evolving market landscape.

**Pricing Program for Modular AI Data Center**

Our pricing program in development will be structured to provide flexibility and transparency for AI workloads. It balances resource utilization with modular scalability, catering to training, inference, and mixed AI workflows.

 **Development plans include:**

**Base Structure**

Individual blocks of power supports a defined compute capacity, which is billed based on:

-Resource Usage (Compute Time, Memory, and Storage)

-Workload Type (Training vs. Inference)

-Service Plan (On-Demand vs. Reserved)

**Key Benefits**

Key benefits may include:

1. Scalability: Modular increments allow gradual scaling up to meet demand.

2. Cost Efficiency: Discounts for reserved plans and spot pricing reduce long-term costs.

3. Flexibility: Tailored configurations for training, inference, or mixed workloads.

4. Sustainability: Carbon-neutral options available, appealing to ESG-conscious clients.

**Usage Metrics**

BluSky AI data centers plans to offer usage metrics calculated by the amount of compute time utilized, measured in CPU and GPU hours. Customers will be billed according to the number of hours their CPUs or GPUs are in use, with GPU pricing typically being higher than CPU pricing due to the greater processing power offered by GPUs.

**- Compute Time(CPU/GPU Hours):**

- Customers are billed based on the number of hours the CPUs or GPUs are used.

- GPU pricing is typically higher than CPU pricing due to greater processing power.

**- Resource Allocation:**

Resource allocation charges are determined by the number of cores, GPUs, or accelerators allocated, as well as their respective performance levels. High-performance GPUs incur higher costs compared to entry-level models due to their enhanced capabilities.

**- Memory Usage:**

Memory usage charges may be based on the amount of RAM used per hour or the specific memory tier utilized for training or inference workloads.

**- Storage Costs:**

Storage costs include charges for high-speed storage used during compute processes, such as NVMe SSDs, as well as fees for long-term data storage.

**Type of Workload:**

The type of workload affects pricing, with training and inference being the primary factors. Training large models, such as deep learning networks, requires significantly more resources and is priced higher. In contrast, inference, which involves deploying models for predictions, is less resource-intensive and generally incurs lower costs.

**Reserved vs. On-Demand Pricing**

With On-Demand pricing, customers pay a premium for immediate access to resources without any long-term commitment. In contrast, Reserved or Subscription pricing provides discounts for reserving resources for a longer period or for bulk usage.

**Pricing tiers for specific hardware configurations:**

The Standard tier offers low-cost, general-purpose resources suitable for small-scale tasks. The High-Performance tier, on the other hand, comes with premium pricing for advanced GPUs or clusters, designed to handle complex AI workloads.

**Location and Energy Costs:**

Location and energy costs play a significant role in pricing. Regions with lower energy costs or tax incentives for renewable energy typically offer lower pricing. However, carbon-neutral or sustainable data centers may charge a premium for green computing initiatives.

**Additional Costs**

Additional costs may include networking fees for data transfer in and out of the data center or between regions, as well as charges for software licenses related to proprietary AI frameworks, tools, or libraries. Additionally, support services such as technical assistance, managed services, or custom optimization may incur extra fees.

**- Colocation Data Centers:**

Colocation data centers typically charge flat fees for rack space, power, and cooling, with additional charges applied for compute usage.

**Emerging Trends**

Emerging trends in data center pricing and operations include several innovative approaches. Pay-As-You-Go pricing is ideal for startups or workloads with unpredictable demands, allowing customers to pay only for the resources they use. Spot Pricing offers discounts for utilizing idle resources during non-peak times, which can help reduce costs. Custom AI Accelerators, like Google's TPU, are increasingly being used in data centers, offering competitive pricing tailored for specific AI tasks.

BluSky AI's approach to building its modular data centers will rely on a complex, carefully managed supply chain and sourcing strategy. BluSky AI has already developed key vendor relationships and solution partners over the prior years of working in the hyperscale environment. The company will leverage existing on-site power infrastructures and renewable energy options, such as solar, hydrogen, or even alternative on-site grid systems. This helps to accelerate deployments and reduce the need for extensive new power installations, although securing reliable, sustainable power often involves long lead times for specialized components like hydrogen fuel cells or advanced renewable integration systems, and can be impacted by regional regulatory constraints.

BluSky AI plans to focus on sites in various U.S. jurisdictions, specifically targeting facilities with power capacities under 50MW. However, acquiring suitable land with the necessary zoning, infrastructure, and environmental clearances can be time-consuming and competitive, as prime locations are in high demand.

For equipment sourcing, BluSky AI will need to procure critical items such as transformers, switch gear, servers, CPUs, GPUs, LPUs, racks, and cooling solutions. These components are essential for ensuring efficient power distribution and supporting high-performance computing workloads. However, these items often come with long lead times due to their customizability, regulatory compliance requirements, and the current global supply chain constraints, such as semiconductor shortages. Specialized racks and advanced cooling systems, like rear-door heat exchangers and liquid cooling modules, are also vital for handling the substantial heat loads generated by modern AI deployments. These systems require extensive engineering and have lengthy procurement cycles.

By balancing these sourcing strategies and navigating industry constraints, BluSky AI is targeting to deliver scalable, efficient, and cost-effective data center solutions that meet the evolving needs of its diverse customer base, including revenue-generating activities from commercial and governmental clients.

BluSky AI's operational model is being built on leveraging open standards and modular, scalable solutions that do not hinge on proprietary intellectual property rights. In fact, the company does not currently hold patents, trademarks, licenses, franchises, or concessions that affect its core operations. This approach provides several advantages:

● **Flexibility and Agility:** By not being tied to a proprietary IP portfolio, BluSky AI can rapidly adapt to technological advances and market shifts without concerns about the expiration or enforcement of specific patents or licenses.

● **Open Standards & Collaboration:** The company embraces open-source frameworks and industry best practices—such as those embodied in the AT Protocol—allowing for interoperability and a more transparent development environment. This strategy reduces reliance on exclusive technologies and minimizes risks associated with the duration or changes in IP rights.

● **Cost Efficiency:** Avoiding significant investments in proprietary IP frees up resources that can be redirected toward R&D, scaling operations, and forming strategic partnerships. The operational model thus remains cost-effective and resilient in a competitive, fast-evolving market.

Overall, BluSky AI does not see an impact on its operations related to the duration or effect of patents, trademarks, licenses, franchises, or concessions, allowing it to focus on innovation and scalable deployment without being encumbered by restrictive intellectual property concerns.

BluSky AI faces several risks associated with its modular data center model, reliance on GPUs, and constraints in the U.S. energy grid, as well as potential exposure to government contract renegotiation or termination.

In summary, BluSky AI's planned operations are designed to meet constant, year-round needs. This non-seasonal nature is a significant strength, allowing the company to focus on scalable, long-term growth while mitigating risks associated with fluctuating market cycles. Grandview Research estimates a 35.9% annual CAGR in this market over the next 7 years.

BluSky AI plans to operate in a highly competitive data center market that is rapidly evolving alongside the surge in demand for AI computing, particularly GPU on demand services. Here are some key points regarding the competitive landscape and growth prospects:

● **Competitive Environment in Data Centers:** 

 BluSky AI faces competition from traditional hyperscale data center providers (like AWS, Google, and Microsoft) as well as specialized modular data center firms. Its focus on deploying pre-fabricated modular solutions that integrate with existing power infrastructure gives it a competitive edge that may offer faster deployment, lower capital costs, and scalability. However, the market is crowded, and large players benefit from economies of scale and long-established supply chains.

● **GPU on Demand and AI Workloads:** 

 The demand for GPUs has skyrocketed as AI workloads intensify. BluSky AI plans to target this growing segment with the intent to offer flexible, high-density computing solutions. Despite robust market growth, global semiconductor supply constraints and fierce competition from major GPU vendors such as NVIDIA and AMD present challenges. BluSky AI is investing in supply chain resilience and strategic partnerships with multiple vendors to secure a steady supply of GPUs to meet customer needs.

● **Growth Dynamics:** 

 With the increasing importance of AI across industries, the overall market for data centers and GPU-powered infrastructure is expected to continue growing. BluSky AI's pre-fabricated modular approach may allow it to capture a portion of this growth by meeting the rising demand for energy-efficient, rapidly deployable data centers that can scale as client requirements evolve. This growth is fueled by the need for continuous, non-seasonal computing capacity, particularly in sectors like government, finance, and healthcare.

● **Risks and Strategic Considerations:** 

 While BluSky AI is well-positioned, it must navigate industry challenges such as long lead times for critical components, energy grid constraints in certain regions, and potential disruptions in the semiconductor supply chain. Additionally, competitive pressures may force frequent innovations or strategic adjustments, particularly as larger players ramp up their AI and GPU offerings.

*Compliance with Government Regulation*

Since the Divestiture of CMCS and the Clavo Rico mine in January 2023, we are no longer subject to the mining regulations of Honduras.

The Company's policy is to conduct our business in a manner that safeguards public health and mitigates the environmental effects of our business activities. To comply with these laws and regulations, we have made, and in the future may be required to make, capital and operating expenditures.

In the U.S., federal guidelines like the Federal Data Center Enhancement Act focus on cybersecurity, resiliency, and energy efficiency. <u>https://www.congress.gov/bill/118th-congress/senate-bill/933/text</u>

In 2023, the European Union introduced the revised Energy Efficiency Directive (EED, EU/2023/1791) that requires data centers to report energy efficiency data to the European Commission. <u>https://energy.ec.europa.eu/topics/energy-efficiency/energy-efficiency-targets-directive-and-rules/energy-efficiency-directive_en</u>

Data centers have a significant environmental footprint, and compliance with environmental regulations is critical:

- Air Quality: Backup generators require air permits and adherence to emission standards.

- Water Management: Cooling systems often need permits for water usage and discharge.

- Hazardous Materials: Proper storage and disposal of materials like batteries and used oil are essential.

*Capital Equipment and Research & Development Expenditures*

During the year ended December 31, 2024 and the nine months ended September 30, 2025, we did not incur any expense related to research and development. Additionally, we are not currently conducting any research and development activities other than those relating to the Company's new artificial intelligence-related operations.

*Employees*

As of the date of this filing, we currently employ 5 full-time employees and 5 temporary employees in the United States. We have contracts with various independent contractors and consultants to fulfill additional needs, including investor relations and other administrative functions, and may staff further with employees as we expand activities and bring new projects online. We are negotiating managed services contracts with top vendors to utilize their employees and expertise in data management to negate the need to initially expand a large BluSky AI's staff with growth.

*Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts*

We do not currently own any patents or trademarks. Also, we are not a party to any license or franchise agreements, concessions, or labor contracts arising from any patents. trademarks, or royalty agreements.

*Company Information*

The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is <u>www.sec.gov</u>. Further information about the Company may be found at its website: <u>www.bluskyaidatacenters.com</u>. The Company makes available its filings to investors, free of charge, on this website.

**Reports to Security Holders**

You may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also find all the reports that we have filed electronically with the SEC at their Internet site www.sec.gov.

**Litigation**

<br> From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. Except as set forth below, we are currently not aware of any such pending or threatened legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

March 4, 2024, the Company filed a complaint against Mother Lode Mining, Inc., a Canadian company, and Robert Salna (the "Defendants"), alleging an amount of not less than $2,237,800 (plus interest, additional costs and attorneys' fees) due from Defendants as a result of their breach of their obligations and duties arising from the sale of Compañía Minera Cerros Del Sur, S.A. de C.V. in 2023 (the "Sale"). In the complaint, filed in the United States District Court for the District of Utah, Central Division, the Company asserts claims related to alleged breach of contract and unjust enrichment against the Defendants, and seeks a monetary judgment and an award of attorneys' fees and other expenses. The complaint arises from the Defendants' failure to convey agreed-upon consideration to the Company as contracted for the sale of CMCS. The Company was able to effect service of process on Mother Lode Mining, Inc. through Alternative Service and litigation has proceeded since that time. On May 2, 2025, Mother Lode Mining filed a Motion to Dismiss for Failure to State a Claim against the Company, and the Company disputes the premise of their argument. The Company is currently negotiating a settlement of this matter.

 

*See* "Risk Factors" for a summary of risks our Company may face in relation to litigation against our Company.

**THE COMPANY'S PROPERTY**

*<u>Corporate Headquarters</u>*

We currently maintain our corporate offices at 5330 South 900 East, Suite 280, Murray, Utah 84117. During the year ended December 31, 2024, and the nine months ended September 30, 2025, we paid monthly rent of approximately $1,500 for use of the corporate office.

Other than the above, the Company neither owns nor holds any interest in any material properties requiring disclosure under this item.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**Forward Looking Statements**

Except for historical information, the following Management's Discussion and Analysis contains forward-looking statements based upon current expectations that involve certain risks and uncertainties. Such forward-looking statements include statements regarding, among other things, (a) discussions about mineral resources and mineralized material, (b) our projected sales and profitability, (c) our growth strategies, (d) anticipated trends in our industry, (e) our future financing plans, (f) our anticipated needs for working capital, (g) our lack of operational experience and (h) the benefits related to ownership of our common stock. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Business," as well as in this Report generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this Report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Report will in fact occur as projected.

**Overview**

BluSky AI Inc., is a pioneering company in AI-driven data center solutions, combining innovation with regulatory compliance and sustainability. The Company is a Neocloud with plans to offer rapidly scalable pre-fabricated modular data centers specializing in artificial intelligence/machine learning (AI/ML) providing high-performance computing infrastructure, strategic site selection, and operational risk management. The company is dedicated to delivering state-of-the-art infrastructure and solutions tailored to meet the demands of modern AI applications and computational workloads in an environment where computational demands are accelerating twofold every 9 months. The Company operates with a focus on innovation, scalability, and environmental sustainability.

Previously known as Inception Mining Inc., the company underwent a significant transformation and rebranding in March 2025 to align with its new strategic direction. This change reflects BluSky AI Inc.'s commitment to advancing technology and providing unparalleled services in the data center industry. The Company is headquartered in Salt Lake City, Utah, BluSky AI Inc.

Historically, we have operated within the mining industry, serving as a consultant to mining companies and as an operator of a mine engaged in the production of precious metals. On January 12, 2023, the Company entered into an agreement through which the Company divested its ownership interest in the Clavo Rico mine, resulting in the transfer of operations to Mother Lode Mining and full control of the Clavo Rico mine asset.

**Current Operations**

The Company is focused on artificial intelligence compute infrastructure and participating in the dynamic and expanding AI industry predicted to be $1.81 trillion by 2030 by Grandview Research. The Company has plans to grow its AI operations organically within the Company. BluSky AI was established by drawing on extensive industry expertise, insights from outside experts, and a careful evaluation of current conditions in the data center markets. The innovative concept is built around a pre-fabricated modular design that may leverage existing power infrastructure. BluSky AI plans to develop multiple data center sites across various U.S. jurisdictions, with artificial intelligence (AI) focus, specifically targeting facilities with the ability to develop power capacity or utilize existing power capacities. This strategy enables a faster time to market, scalable deployment, and a cost-effective approach that meets the evolving needs of AI and the high compute data center market.

BluSky AI plans to revolutionize the artificial intelligence compute landscape by addressing the immediate global supply shortage with a cutting-edge, turnkey solution called *SkyMods*. Our strategy centers on rapidly deployable, plug-and-play, pre-fabricated modular compute centers on powered land assets—sites that already possess permitted energy infrastructure. This approach not only accelerates time to market but also positions BluSky AI as a premier AI compute infrastructure provider dedicated to meeting the surging demand for advanced AI services.

**Results of Operations**

We had a net loss of $2,633,232 for the three-month period ended September 30, 2025, and a net loss of $279,946 for the three-month period ended September 30, 2024. This change in our results over the two periods is primarily the result of an increase in consulting expense, the change in the derivative liabilities, the increase in the loss on extinguishment of debt and an increase in interest expense. The following table summarizes key items of comparison and their related increase (decrease) for the three-month periods ended September 30, 2025 and 2024:

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | |
|  | **September 30, 2025** | **September 30, 2024** | **Increase/**<br> **(Decrease)** |
| General and Administrative | $504153 | $109742 | $394411 |
| Depreciation and Amortization Expenses | - | 182 | (182) |
| Total Operating Expenses | 504153 | 109924 | 394229 |
| Loss from Operations | (504153) | (109924) | (394229) |
| Interest Income | 4555 |  | 4555 |
| Change in Derivative Liabilities |  | (139472) | 139472 |
| Loss on Extinguishment of Debt | (2101978) | (13043) | (2088935) |
| Interest Expense | (31656 ) | (17507) | (14149) |
| Loss from Operations Before Taxes | (2633232) | (279946) | (2353286) |
| Provision for Income Taxes | - | - |  |
| Net Loss | $(2633232) | $(279946) | $(2353286) |

---

General and administrative expenses increased for the three-month period ended September 30, 2025 because of an increase in consulting, legal and investor relations expenses, compared to the three-month period ended September 30, 2024.

Changes in derivative liabilities was due to the elimination of the derivative liabilities in the current year that was reported under the gain on extinguishment of debt in the first three months of the 2025 fiscal year.

Interest expense increased for the three-month period ended September 30, 2025 because of the interest expense related to additions to notes from related parties.

<u>Nine months ended September 30, 2025, compared to the Nine months ended September 30, 2024</u>

We had net loss of $4,014,763 for the nine-month period ended September 30, 2025, and a net loss of $1,039,455 for the nine-month period ended September 30, 2024. This change in our results over the two periods is primarily the result of an increase in consulting expense, the increase in the loss on extinguishment of debt and the elimination of derivative liabilities during the current period. The following table summarizes key items of comparison and their related increase (decrease) for the three-month periods ended September 30, 2025 and 2024:

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| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** | |
|  | **September 30, 2025** | **September 30, 2024** | **Increase/**<br>**(Decrease)** |
| General and Administrative | $2191447 | $369917 | $1821530 |
| Depreciation and Amortization Expenses | - | 544 | (544) |
| Total Operating Expenses | 2191447 | 370461 | 1820986 |
| Loss from Operations | (2191447) | (370461) | (1820986) |
| Other Income (expense) | 96 |  | 96 |
| Interest Income | 4555 |  | 4555 |
| Change in Derivative Liabilities | 186542 | (90436) | 276978 |
| Initial Derivative Expense |  | (193582) | 193582 |
| Loss on Extinguishment of Debt | (1949847) | (13043) | (1936804) |
| Interest Expense | (64662) | (371933) | 307271 |
| Loss from Operations Before Taxes | (4014763) | (1039455) | (2975308) |
| Provision for Income Taxes | - | - |  |
| Net Loss | $(4014763) | $(1039455) | $(2975308) |

---

General and administrative expenses increased for the nine-month period ended September 30, 2025 because of higher consulting and investor relations expenses, compared to the nine-month period ended September 30, 2024.

Changes in derivative liabilities was because of the elimination of the derivative liabilities in the current year that was reported under the gain on extinguishment of debt.

Interest expense decreased in 2025 because of the interest expense related to settled notes was lower and the decrease of amortization of existing debt discounts.

<u>Year ended December 31, 2024, compared to the year ended December 31, 2023</u>

We had a net loss of $949,782 for the year ended December 31, 2024, which was $13,705,441 more than the net income of $12,755,659 for the year ended December 31, 2023. This change in our results over the two periods is primarily the result of an increase in interest expense of $138,191, the change of derivative liabilities of ($3,132,140), a decrease in gain on extinguishment of debt of ($6,326,145) and income from discontinued operations of ($6,732,872). The following table summarizes key items of comparison and their related increase (decrease) for the years ended December 31, 2024 and 2023.

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| | | | |
|:---|:---|:---|:---|
|  | Years Ended December, | Years Ended December, | |
|  | 2024 | 2023 | Increase/<br>(Decrease) |
| General and Administrative | $520378 | $1065893 | $(545515) |
| Depreciation and Amortization Expenses | 727 | 725 | 2 |
| Total Operating Expenses | 521105 | 1066618 | (545513) |
| Income (Loss) from Operations | (521105) | (1066618) | 545513 |
| Change in Derivative Liabilities | 196321 | 3328461 | (3132140) |
| Initial Derivative Expense | (193582) | (55065) | (138517) |
| Bad Debt Expense on Note Receivable |  | (2219442) | 2219442 |
| Loss on Disposal of Property, Plant and Equipment | (2531) |  | (2531) |
| Loss on Extinguishment of Debt | (13043) | 6313102 | (6326145) |
| Interest Expense | (415842) | (277651) | (138191) |
| Income (Loss) from Operations Before Taxes | (949782) | 6022787 | (6972569) |
| Net Income (Loss) from Continued Operations | (949782) | 6022787 | (6972569) |
| Net Income (Loss) from Discontinued Operations |  | (497581) | 497581 |
| Gain on Sale of Mine Property in Discontinued Operations | - | 7230453 | (7230453) |
| Net Income (Loss) from Discontinued Operations | - | 6732872 | (6732872) |
| Net Income (Loss) | $(949782) | $12755659 | $(13705441) |

---

*Operating Expenses*

Operating expenses for the years ended December 31, 2024 and 2023 were $521,105 and $1,066,618, respectively. The decrease in operating expenses for 2024 compared to 2023 were comprised primarily of an decrease in consulting fees.

*Other Income (Expenses)*

Other income (expenses) for the years ended December 31, 2024 and 2023 were ($428,677) and $7,089,405, respectively. For the year ended December 31, 2024, other income (expenses) was comprised of $196,321 for change in derivative liability, ($193,582) in initial derivative expenses, ($13,043) for loss on extinguishment of debt and ($415,842) for interest expense. For the year ended December 31, 2023, other income (expenses) was comprised of $3,328,461 for change in derivative liability, ($55,065) in initial derivative expense, ($2,219,442) for bad debt expense on note receivable, $6,313,102 for gain on extinguishment of debt and ($277,651) for interest expense.

*Net Income (Loss)*

Net loss for the year ended December 31, 2024 was $949,782 while the net income for the year ended December 31, 2023 was $12,755,659.

<u>Liquidity and Capital Resources</u>

Our balance sheet as of September 30, 2025 reflects assets of $1,696,470. We had cash in the amount of $1,295,261 and working capital deficit in the amount of $1,922,014 as of September 30, 2025. Thus, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.

<u>Working Capital</u>

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Current assets | $1381776 | $- |
| Current liabilities | 3303790 | 3346850 |
| Working capital deficit | $(1922014) | $(3346850) |

---

We anticipate generating losses and, therefore, may be unable to continue operations in the future, if we don't acquire additional capital and issue debt or equity or enter into a strategic arrangement with a third party.

<u>Going Concern Consideration</u>

As reflected in the accompanying unaudited condensed financial statements, the Company and has an accumulated deficit of $33,878,127. In addition, there is a working capital deficit of $1,922,014 as of September 30, 2025. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30, 2025** | **September 30, 2024** |
| Net Cash Provided by (Used in) Operating Activities | $(680923) | $(64288) |
| Net Cash Provided by (Used in) Investing Activities |  |  |
| Net Cash Provided by (Used in) Financing Activities | 1976184 | 64286 |
| **Net Increase (Decrease) in Cash** | $1295261 | $(2) |

---

 <u>Operating Activities</u>

Net cash flow used in operating activities during the nine months ended September 30, 2025 was $680,923, an increase of $616,635 from the $64,288 net cash used during the nine months ended September 30, 2024. This increase in the cash used in operating activities was primarily due to the increase in net loss for 2025 that used more cash from operations for the period.

 <u>Investing Activities</u>

Investing activities during the nine months ended September 30, 2025 provided $0, a decrease of $0 from the $0 provided by investing activities during the nine months ended September 30, 2024.

 <u>Financing Activities</u>

Financing activities during the nine months ended September 30, 2025 provided cash of $1,976,184, an increase of $1,911,898 from the $64,286 provided by financing activities during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, the Company received $362,906 in proceeds from notes payable - related parties and $1,735,000 in proceeds from convertible notes payable and made $121,722 in payments on notes payable – related parties.

**Critical Accounting Policies**

Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are influenced by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial condition and results of operations.

**Capitalization of Infrastructure Development Costs**

Costs incurred in acquiring land, securing long-term leases, and developing modular data center infrastructure—including site preparation, transformer installation, and power distribution—are capitalized when the underlying assets are expected to provide future economic benefit. These costs include engineering, permitting, interconnection studies, and construction-related expenditures directly attributable to preparing the site for its intended use. Costs associated with exploratory site assessments or feasibility studies are expensed as incurred unless the site is deemed commercially viable and development is probable.

We evaluate the carrying value of capitalized infrastructure costs and related property, plant, and equipment at least quarterly to determine whether such amounts exceed their net realizable value. If indicators of impairment exist, we assess recoverability based on expected future cash flows from GPU-as-a-Service operations, tenant lease arrangements, or potential asset sales. Impairment losses are recognized when the carrying amount of an asset exceeds its estimated fair value.

**Asset Classification and Depreciation**

Modular data center units, transformers, and related equipment are classified as property, plant, and equipment and depreciated over their estimated useful lives using the straight-line method. Useful lives are determined based on industry benchmarks, expected technological obsolescence, and contractual lease terms. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvement.

**Revenue Recognition**

Revenue from GPU-as-a-Service contracts is recognized in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised compute capacity is transferred to the customer, typically over time as services are rendered. Contracts may include variable consideration such as usage-based fees, which are estimated and constrained based on historical trends and contractual terms. Revenue from long-term hosting or colocation agreements is recognized ratably over the service period.

**Capitalized Software and Platform Development**

Internal-use software and platform development costs are capitalized during the application development stage in accordance with ASC 350-40. These costs include third-party development fees, direct labor, and infrastructure integration expenses. Capitalized software is amortized over its estimated useful life, typically three to five years. Costs incurred during the preliminary project stage or post-implementation maintenance are expensed as incurred.

**Estimates and Assumptions**

Key estimates include the recoverability of long-lived assets, useful lives of infrastructure components, fair value of lease obligations, and revenue recognition under multi-element arrangements. These estimates are reviewed periodically and adjusted as necessary based on changes in market conditions, regulatory developments, and operational performance.

Recent Accounting Pronouncements

For recent accounting pronouncements, please refer to the notes to financial statements in Part I, Item 1 of this Quarterly Report.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

**DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES**

**Identification of Directors and Executive Officers**

Our Bylaws state that our authorized number of directors shall be one or more and shall be set by resolution of our Board of Directors. We currently have two directors.

Our current directors and officers are as follows:

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| | | |
|:---|:---|:---|
| **Name and Business Address** | **Age** | **Position** |
| Trent D'Ambrosio | 60 | CEO, CFO and Director |
| Whit Cluff | 74 | Director |
| Dan Gay | 64 | COO and Director |

---

Our directors will serve in that capacity until our next annual shareholder meeting or until a successor is elected and qualified. Officers hold their positions at the will of our Board of Directors. There are no arrangements, agreements or understandings between non-management security holders and management under which non-management security holders may directly or indirectly participate in or influence the management of our affairs.

**Trent D'Ambrosio, Chief Executive Officer, Chief Financial Officer, and Director**

Mr. D'Ambrosio has been a Director of the Company since February 28, 2013. From October 2011 through March 2013, Mr. D'Ambrosio held the positions of Interim Chief Executive Officer and Chief Financial Officer of Inception Holdings LLC, a resource exploration company, and was the responsible for the overall strategic direction for the organization. His professional record includes 25 years of management and financial services experience with companies ranging from Fortune 500 companies to start-ups. Mr. D'Ambrosio holds a B.S. in Business Management, an MBA and a Certificate of Mining Studies.

**Dan Gay, Chief Operating Officer and Director**

Mr. Gay, age 64, brings over 30 years of experience in data center innovation, enterprise IT strategy, and AI-driven technologies to the Board. Since 2023, Mr. Gay has served as the Fractional Chief Marketing and Sales Officer for Catapult Solutions. From 2018 to 2023, Mr. Gay served as the Chief Marketing and Sales Officer for BlockCerts Blockchain. He also served as the VP and Chief Marketing Officer for iThrive Health from 2010-2016. Other noteworthy roles include the Director of National Accounts and the Director of Small Business for MCI, as the Vice President of Sales for Qwest, and the Chief Marketing Officer of Montana Power. He received a Bachelor of Science degree in Marketing and Advertising from Arizona State University.

**Whit Cluff, Director**

Mr. Cluff has over 35 years of experience in the commercial real estate industry. Mr. Cluff has been involved in all disciplines of real estate land development, mixed-use development, retail tenant representation, developer representation, industrial property procurement and asset management. Mr. Cluff has an extensive background in public and private businesses giving him strong analytical, planning, and organization ability with effective negotiation skills. From 2003 through the present, Mr. Cluff has worked in commercial real estate. Mr. Cluff attended the University of Utah and served in the United States Army.

**Other Directorships**

Other than as set forth above, none of our directors hold any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940.

**Board of Directors and Director Nominees**

Since our Board of Directors does not include a majority of independent directors, the decisions of the Board regarding director nominees are made by persons who have an interest in the outcome of the determination. The Board will consider candidates for directors proposed by security holders, although no formal procedures for submitting candidates have been adopted. Unless otherwise determined, at any time not less than 90 days prior to the next annual Board meeting at which a slate of director nominees is adopted, the Board will accept written submissions from proposed nominees that include the name, address and telephone number of the proposed nominee; a brief statement of the nominee's qualifications to serve as a director; and a statement as to why the security holder submitting the proposed nominee believes that the nomination would be in the best interests of our security holders. If the proposed nominee is not the same person as the security holder submitting the name of the nominee, a letter from the nominee agreeing to the submission of his or her name for consideration should be provided at the time of submission. The letter should be accompanied by a résumé supporting the nominee's qualifications to serve on the Board, as well as a list of references.

The Board identifies director nominees through a combination of referrals from different people, including management, existing Board members and security holders. Once a candidate has been identified, the Board reviews the individual's experience and background and may discuss the proposed nominee with the source of the recommendation. If the Board believes it to be appropriate, Board members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of the slate of director nominees submitted to security holders for election to the Board.

Some of the factors, which the Board considers when evaluating proposed nominees, include their knowledge of and experience in business matters, finance, capital markets and mergers and acquisitions. The Board may request additional information from each candidate prior to reaching a determination, and it is under no obligation to formally respond to all recommendations, although as a matter of practice, it will endeavor to do so.

**Conflicts of Interest**

Our directors are not obligated to commit their full time and attention to our business and, accordingly, they may encounter a conflict of interest in allocating their time between our operations and those of other businesses. In the course of their other business activities, they may become aware of investment and business opportunities which may be appropriate for presentation to us as well as other entities to which they owe a fiduciary duty. As a result, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. They may also in the future become affiliated with entities that are engaged in business activities similar to those we intend to conduct.

In general, officers and directors of a corporation are required to present business opportunities to the corporation if:

● the corporation could financially undertake the opportunity;

● the opportunity is within the corporation's line of business; and

● it would be unfair to the corporation and its stockholders not to bring the opportunity to the attention of the corporation.

We plan to adopt a code of ethics that obligates our directors, officers and employees to disclose potential conflicts of interest and prohibits those persons from engaging in such transactions without our consent.

**Significant Employees**

Other than as described herein, we do not expect any other individuals to make a significant contribution to our business.

**Legal Proceedings**

None of our directors, executive officers or control persons has been involved in any of the following events during the past five years:

● any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

● any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

● being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

● being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, where the judgment has not been reversed, suspended, or vacated.

**No Audit Committee or Financial Expert**

The Company does not have an audit committee or a financial expert serving on the Board of Directors. The Company plans to form and implement an audit committee as soon as practicable.

**Family Relationships**

Lance D'Ambrosio, an advisor to the Company, is the brother of Trent D'Ambrosio, the CEO of the Company. Other than the D'Ambrosio brothers, there are no family relationships among our officers, directors, or persons nominated for such positions.

**Code of Ethics**

We have not yet adopted a code of ethics that applies to our principal executive officer and principal accounting officer, but intend to do so this year.

**COMPENSATION OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES**

Our Board of Directors has not established a separate compensation committee. Instead, the Board of Directors reviews and approves executive compensation policies and practices, reviews salaries and bonuses for our officer(s), decides on benefit plans, and considers other matters as may, from time to time, be referred to it. We do not currently have a Compensation Committee Charter. Our Board continues to emphasize the important link between our performance, which ultimately benefits all shareholders, and the compensation of our executives. Therefore, the primary goal of our executive compensation policy is to closely align the interests of the shareholders with the interests of the executive officer(s). In order to achieve this goal, we attempt to (i) offer compensation opportunities that attract and retain executives whose abilities and skills are critical to our long-term success and reward them for their efforts in ensuring our success and (ii) encourage executives to manage from the perspective of owners with an equity stake in us.

**Compensation Table for Executives**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary** | **Bonus** | **Stock Awards** | **Option Awards** | **Non-equity Incentive Plan Compensation** | **Non-qualified Deferred Compensation Earnings** | **All Other Compensation** | **Total** |
|  | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** | **($)** |  |
| Trent D'Ambrosio, Chief Executive Officer, Chief Financial Officer, | 2025 | 300000 |  | 200500 |  |  |  |  | 500500  |
| President, Secretary, and Director | 2024 | 300000 |  |  |  |  |  |  | 300000 |
| Whit Cluff, | 2025 |  |  | 40100 |  |  |  |  | 40100 |
| Director | 2024 |  |  |  |  |  |  |  |  |
| Dan Gay, | 2025 | 55000  |  | 102000 |  |  |  |  | 157000 |
| Chief Operating Officer and Director | 2024 |  |  |  |  |  |  |  | -  |

---

(1) Mr.
 D'Ambrosio's employment agreement compensates him $300,000 per year. However,
 the Company didn't pay him that full amount during the nine months ended September
 30, 2025 and the fiscal years ended December 31, 2024 and 2023. For the nine months
 ended September 30, 2025, he as paid $0 and the Company recorded $225,000 as deferred salaries
 payable. For the years ended December 31, 2024 and 2023, he was paid $0 and $175,000,
 respectively. The Company also recorded $300,000 and 125,000 as deferred salaries payable
 for the fiscal years ended December 31, 2024 and 2023, respectively.

**Employment Agreements**

The Company previously entered into multiple employment agreements with its Chief Executive Officer, Trent D'Ambrosio. In 2019, it entered into another employment agreement with Mr. D'Ambrosio that was effective as of April 1, 2019, and provided for compensation of $300,000 annually. The agreement was effective for 60 months. The agreement was renewed February 2023, and then again in December 2024, as described below. These employment agreements provide for Mr. D'Ambrosio to be receive benefits and an optional annual bonus to be determined by the Board of Directors of the Company.

On or about December 1, 2024, the Company entered into an Amended and Restated Employment Agreement (the "Agreement"), dated as of December 1, 2024, between the Company and Mr. D'Ambrosio (hereinafter referred to as the "Executive"). This Agreement amended and restated in full the prior employment agreements entered into between the Executive and the Company in April 2019, and it superseded all other agreements between the parties, including a February 25, 2013 employment agreement that was later amended in part on August 1, 2015, and any other prior employment agreements.

On or about April 1, 2025, the Company entered into a consulting agreement with Dan Gay, the Company's Chief Operating Officer, pursuant to which Mr. Gay provided advisory, business development, and operational restructuring services to the Company, and was to be compensated $5,000 per month and be issued 200,000 shares of Company common stock. On or about September 1, 2025, the Company entered into a new consulting agreement with Mr. Gay, pursuant to which Mr. Gay's base compensation was increased to $10,000 per month.

**Outstanding Equity Awards at Fiscal Year-End**

None.

**Compensation of Directors**

We have no formal plan for compensating our directors for their services. We have no formal plan to compensating our directors in the future in their capacity as directors, although such directors are expected in the future to receive options to purchase shares of our common stock as awarded by our Board of Directors or by any compensation committee that may be established.

**Pension, Retirement or Similar Benefit Plans**

There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.

**Compensation Committee**

We do not currently have a compensation committee of the Board of Directors or a committee performing similar functions. All members of the Board of Directors participate in the consideration of executive officer and director compensation.

**SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS**

**Security Ownership of Certain Beneficial Owners**

The following tables list, as of November 10, 2025, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using beneficial ownership‚ concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

The percentages below are calculated based on 24,992,505 shares of our common stock issued and outstanding as of February 5, 2026. Unless otherwise indicated, the address of each person listed is c/o BluSky AI, Inc., 5330 South 900 East, Suite 280, Murray, UT 84117.

---

| | | | |
|:---|:---|:---|:---|
| <br>**Name and Address of Beneficial Owner** | <br>**Title of**<br>**Class** | **Amount and**<br>**Nature of**<br>**Beneficial**<br>**Ownership (1)** |<br>**Percent of**<br>**Class (2)** |
| Trent D'Ambrosio (3) | Common Stock | 20277546 | 81.25% |
|  | Preferred Stock | 51 | 100.00% |
| Whit Cluff (4) | Common Stock | 250709 | 1.00% |
| Dan Gay (5)  | Common Stock | 400000 | 1.60% |
| All Officers and Directors as a Group |  | 20928255 | 83.74% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Percentage of ownership is based on 24,992,505
 common shares outstanding as of February 5, 2026. The number and percentage of shares beneficially owned is determined under
 the rules of the SEC and the ownership includes any shares as to which the individual has sole or shared voting power or investment
 power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option
 or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown
 as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes
 to this table.

(2) SEC Rule 13d-3 generally provides that beneficial
 owners of securities include any person who, directly or indirectly, has or shares voting power and/or investment power with respect
 to such securities, and any person who has the right to acquire beneficial ownership of such security within 60 days. Any securities
 not outstanding which are subject to such options, warrants or conversion privileges exercisable within 60 days are treated as outstanding
 for the purpose of computing the percentage of outstanding securities owned by that person. Such securities are not treated as outstanding
 for the purpose of computing the percentage of the class owned by any other person. At the present time there are no outstanding
 options or warrants.

(3) Mr. D'Ambrosio, the CEO and a Director of
 the Company, owns 51 shares of preferred stock with voting rights per share equal to (x) 0.019607 multiplied by the total issued
 and outstanding shares of Common Stock eligible to vote at the time of the respective vote (the "Numerator"), divided
 by (y) 0.49, minus (x) the Numerator. He is also the beneficial owner of 23,201 shares through his wife, Debra D'Ambrosio and
 20,000,000 shares through Digital Asset Medium LLC, an asset he controls.

(4) Mr. Cluff, a Director of the Company, owns 45,631
 shares personally and beneficially owns 16,429 shares through his wife, Fran Rich, and 5,143 shares through the Cluff-Rich 401K.

(5) Mr. Gay,
 a Director and COO of the Company, owns 400,000 shares personally.

SEC Rule 13d-3 generally provides that beneficial owners of securities include any person who, directly or indirectly, has or shares voting power and/or investment power with respect to such securities, and any person who has the right to acquire beneficial ownership of such security within 60 days. Any securities not outstanding which are subject to such options, warrants or conversion privileges exercisable within 60 days are treated as outstanding for the purpose of computing the percentage of outstanding securities owned by that person. Such securities are not treated as outstanding for the purpose of computing the percentage of the class owned by any other person. At the present time there are no outstanding options or warrants held by directors or officers of the Company.

**Securities Authorized for Issuance under Equity Compensation Plans**

As of December 31, 2025, we have one equity compensation plan: the 2013 Incentive Stock Plan.

**INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS**

SEC rules require us to disclose any transaction since the beginning of our last fiscal year and for the two fiscal years preceding our last fiscal year, or any currently proposed transaction in which we are a participant in which the amount involved exceeded or will exceed $120,000 and in which any related person has or will have a direct or indirect material interest. A related person is any executive officer, director, nominee for director, or holder of 5% or more of our Common Stock, or an immediate family member of any of those persons

The Company took six short-term notes payable from Debra D'ambrosio, an immediate family member related party during the year ended December 31, 2024. The Company received $174,396 in cash from related parties and paid out $98,475 in cash to related parties on notes payable. The Company also took one short-term note payable form Whit Cluff, a director, during the year ended December 31, 2024. Mr. Cluff paid expenses of the Company in the amount of $15,327.

Two officers/directors of the Company have been paying expenses for the Company on their personal credit cards. The Company has recorded these expenses and accrued the amounts in accounts payable to the individuals. As of December 31, 2024, there is $260,828 in accounts payable and accrued liabilities.

The Company took one short-term note payable from Debra D'Ambrosio, an immediate family member related party and one short-term note payable from Digital Asset Medium, LLC, an affiliate of a direct during the nine months ended September 30, 2025. The Company received $362,906 in cash from related parties, made payments of $121,722 in cash to related parties and $125,000 was paid directly to another lender to settle their outstanding notes.

Two officers/directors of the Company have been paying expenses for the Company on their personal credit cards. The Company has recorded these expenses and accrued the amounts in accounts payable to the individuals. As of September 30, 2025, there is $104,839 in accounts payable and accrued liabilities.

On July 11, 2025, the Company entered into a Ground Lease with an Option to Purchase (the "Lease") with Wild Mustang Ventures LLC, a Wyoming limited liability company (the "Landlord"), through which the Company leased 51.6 acres in Milford, Utah (the "Milford Land") for a two-year term. Wild Mustang Ventures, LLC is deemed an affiliate of the Company. The base rent is $90,000 annually, which shall accrue until the earlier of the expiration of the lease or until the Company exercises its option to purchase the Milford Land. Payments on the lease are being deferred until the Company is in a better cash flow position, so no lease payments have been made. The Lease contains standard other provisions and includes a mutual indemnification clause which requires that the parties indemnify each other except in the case of gross negligence or willful misconduct.

On June 10, 2025, the Company issued 500,000 restricted shares of Common Stock to Trent D'Ambrosio for services rendered at the market price of $0.401 per share for a total value of $200,500.

On June 10, 2025, the Company issued 100,000 restricted shares of Common Stock to Whit Cluff for services rendered at the market price of $0.401 per share for a total value of $40,100.

In connection with BluSky AI Inc.'s ongoing development efforts, the company entered into a material transaction with Digital Asset Medium LLC, a Wyoming-based developer of power land for large-scale data center sites. On July 7, 2025, BluSky AI executed an Acquisition and Power Assignment Agreement with Digital Asset Medium LLC, under which BluSky AI acquired the exclusive rights to utilize 9.3 MW of solar and grid-interconnected power at the Milford, Utah site. In consideration for this assignment, BluSky AI issued 20 million restricted shares of its common stock to Digital Asset Medium LLC, with the agreement remaining in effect for the operational life of the Milford data center project.

Pursuant to SEC disclosure requirements under Item 404 of Regulation S-K, BluSky AI confirms that this transaction exceeds the $120,000 threshold and qualifies as a related party transaction. As of the date of the agreement, Trent D'Ambrosio Managing Member of Digital Asset Medium LLC is a holder of more than 5% of BluSky AI's outstanding Common Stock, thereby meeting the definition of a "related person." The transaction was approved by BluSky AI's Board of Directors and includes customary representations, warranties, and indemnification provisions. No executive officer, director, nominee for director, or immediate family member of such persons had a direct or indirect material interest in the transaction beyond the equity ownership held by Trent D'Ambrosio.

This disclosure covers the current fiscal year and satisfies the reporting obligations for any related party transactions occurring since the beginning of BluSky AI's last fiscal year and the two fiscal years preceding it. BluSky AI remains committed to transparency and compliance in all material dealings, particularly those involving strategic infrastructure and equity consideration. The company will continue to evaluate and disclose any future transactions involving related persons in accordance with SEC rules and ASC 850 guidance.

**SECURITIES BEING OFFERED AND DESCRIPTION OF SECURITIES**

**General**

We are offering up to 12,500,000 Shares and up to 2,500,000 Bonus Shares at an assumed public offering price of $5.00 per Share, which is the mid-point of the estimated offering price range between $4.00-$6.00 per Share.

We are authorized to issue 10,300,000,000 shares of common stock, par value $0.00001 per share, of which approximately 24,992,505 shares are issued and outstanding as of February 5, 2026. In addition, we are authorized to issue 12,500,000 shares of preferred stock, par value $0.00001 per share, of which approximately (i) 51 shares have been designated as Series A Preferred Stock and are issued and outstanding as of February 5, 2026.

The following is a brief description of shares of common stock ("common stock") of BluSky AI Inc. (the "Company," "we," "us," or "our"). The brief description is based upon our Articles of Incorporation, including the Certificate of Amendment to our Articles of Incorporation, (as amended, our "Articles of Incorporation"), our Bylaws (our "Bylaws"), and provisions of applicable Nevada law. This summary does not purport to be complete and is subject to, and qualified in its entirety by, the full text of our Articles of Incorporation and Bylaws, each of which is incorporated by reference as an exhibit to our Annual Report on Form 10-K.

**Market Information**

Our common stock is not traded on any exchange. Our common stock is quoted on the OTCID Basic Market tier of the OTC Link ATS (alternative trading system), the over-the-counter markets administered by OTC Markets Group, Inc., under the trading symbol "BSAI," but the Company's stock is not eligible for proprietary broker-dealer quotations. We cannot assure you that there will be a market in the future for our common stock.

OTC securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC securities transactions are conducted through a telephone and computer network connecting dealers. OTC issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a national or regional stock exchange.

**Classes of Stock**

We have two classes of stock: common stock and Series A Preferred Stock.

**Preferred Stock**

On August 30, 2016, the Board of Directors of the Company, pursuant to Article II of the Company's Articles of Incorporation, approved the designation of fifty-one (51) shares of its authorized capital stock as "Series A Preferred Stock". The Certificate of Designation for the Series A Preferred Stock was filed on August 31, 2016. These shares have preferential voting rights and no conversion rights.

**Common Stock**

Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders. Our holders of common stock do not have cumulative voting rights. Holders of common stock will be entitled to receive ratably such dividends as may be declared by the Board out of funds legally available therefor, which may be paid in cash, property, or in shares of the Company's capital stock. Upon liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of common stock will be entitled to receive their ratable share of the net assets of the Company legally available for distribution after payment of all debts and other liabilities. There are no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock.

**Holders**

As of February 5, 2026, there were approximately 1,504 holders of record of our common stock and one holder of record for our preferred stock.

**Dividends**

To date, we have not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by our Board of Directors.

**TRANSFER AGENT AND REGISTRAR**

The transfer agent and registrar for our common stock is Colonial Stock Transfer Company, Inc.

**ONGOING REPORTING AND SUPPLEMENTS TO THIS OFFFERING CIRCULAR**

We will be required to make annual and semi-annual filings with the SEC. We will make annual filings on Form 1-K, which will be due by the end of April each year and will include audited financial statements for the previous fiscal year. We will make semi-annual filings on Form 1-SA, which will be due by September 28 each year, which will include unaudited financial statements for the six months to June 30. We will also file a Form 1-U to announce important events such as the loss of a senior officer, a change in auditors or certain types of capital-raising.

At least every 12 months, we will file a post-qualification amendment to the Offering Circular of which this Offering Circular forms a part, to include the Company's recent financial statements.

We may supplement the information in this Offering Circular by filing a Supplement with the SEC.

All these filings will be available on the SEC's EDGAR filing system. You should read all the available information before investing.

**BLUSKY AI, INC.**

**(fka INCEPTION MINING, INC.)**

**CONTENTS**

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;**Page** |
| [Condensed Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024](#gok_001) | &nbsp;&nbsp;F-2 |
| [Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2025, and 2024 (Unaudited)](#gok_002) | &nbsp;&nbsp;F-3 |
| [Condensed Statements of Stockholders' Deficit for the Three and Nine Months Ended September 30, 2025, and 2024 (Unaudited)](#gok_003) | &nbsp;&nbsp;F-4 |
| [Condensed Statements of Cash Flows for the Three and Nine Months Ended September 30, 2025, and 2024 (Unaudited)](#gok_004) | &nbsp;&nbsp;F-5 |
| [Notes to Condensed Financial Statements as of June 30, 2025 (Unaudited)](#gok_005) | &nbsp;&nbsp;F-6 |
| [Report of Registered Independent Public Accounting Firm](#a_20) (PCAOB ID: 3627) | &nbsp;&nbsp;F-18 |
| [Consolidated Balance Sheets as of December 31, 2024 and 2023](#a_21) | &nbsp;&nbsp;F-20 |
| [Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023](#a_22) | &nbsp;&nbsp;F-21 |
| [Consolidated Statements of Stockholders' Deficit for the Years Ended December 31, 2024 and 2023](#a_23) | &nbsp;&nbsp;F-22 |
| [Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023](#a_24) | &nbsp;&nbsp;F-23 |
| [Notes to Consolidated Financial Statements as of December 31, 2024 and 2023](#a_25) | &nbsp;&nbsp;F-24 |

---

[**Table of Contents**](#TOC_001)

**BluSky AI, Inc.**

**(FKA Inception Mining, Inc.)**

**Condensed Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
|  | **(Unaudited)** | |
| ASSETS |  |  |
| Current Assets |  |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents | $1295261 | $- |
| &nbsp;&nbsp;&nbsp; Prepaid expenses | 12765 |  |
| &nbsp;&nbsp;&nbsp; Other current assets | 73750 | - |
| Total Current Assets | 1381776 |  |
| Right of use operating lease asset – related party | 273963 |  |
| Solar power asset | 1289309  | -  |
| Other assets | 40531 | 531 |
| Total Assets | $2985579 | $531 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities | $1802420 | $1745787 |
| &nbsp;&nbsp;&nbsp; Accrued interest - related parties | 9368 | 30310 |
| &nbsp;&nbsp;&nbsp; Operating lease liability – related party – current portion | 73057 |  |
| &nbsp;&nbsp;&nbsp; Note payable | 60000 | 125000 |
| &nbsp;&nbsp;&nbsp; Notes payable - related parties | 1358945 | 992761 |
| &nbsp;&nbsp;&nbsp; Convertible notes payable - net of discount |  | 266450 |
| &nbsp;&nbsp;&nbsp; Derivative liabilities | - | 186542 |
| Total Current Liabilities | 3303790 | 3346850 |
| &nbsp;&nbsp;&nbsp; Operating lease liability – related party, net of current portion | 223406 | - |
| Total Liabilities | 3527196 | 3346850 |
| Commitments and Contingencies |  |  |
| Stockholders' Deficit |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, $0.00001 par value; 10,000,000 shares authorized, 51 shares issued and outstanding | 1 | 1 |
| &nbsp;&nbsp;&nbsp; Common stock, $0.00001 par value; 10,300,000,000 shares authorized, 24,957,870 and 2,659,773 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | 250 | 27 |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | 33336259 | 26517017 |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (33878127) | (29863364) |
| Total Stockholders' Deficit | (541617) | (3346319) |
| Total Liabilities and Stockholders' Deficit | $2985579 | $531 |

---

See accompanying notes to the unaudited condensed financial statements.

[**Table of Contents**](#TOC_001)

**BluSky AI, Inc.**

**(FKA Inception Mining, Inc.)**

**Condensed Statements of Operations**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30, 2025** | **September 30, 2024** | **September 30, 2025** | **September 30, 2024** |
| Operating Expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp; General and administrative | $504153 | $109742 | $2191447 | $369917 |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | - | 182 | - | 544 |
| Total Operating Expenses | 504153 | 109924 | 2191447 | 370461 |
| Loss from Operations | (504153) | (109924) | (2191447) | (370461) |
| Other Income/(Expenses) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Other income (expense) |  |  | 96 |  |
| &nbsp;&nbsp;&nbsp; Interest income | 4555 |  | 4555 |  |
| &nbsp;&nbsp;&nbsp; Change in derivative liability |  | (139472) | 186542 | (90436) |
| &nbsp;&nbsp;&nbsp; Loss on extinguishment of debt | (2101978) | (13043) | (1949847) | (13043) |
| &nbsp;&nbsp;&nbsp; Initial derivative expense |  |  |  | (193582) |
| &nbsp;&nbsp;&nbsp; Interest expense | (31656) | (17507) | (64662) | (371933) |
| Total Other Income/(Expenses) | (2129079) | (170022) | (1823316) | (668994) |
| Net Loss from Operations before Income Taxes | (2633232) | (279946) | (4014763) | (1039455) |
| Provision for Income Taxes | - | - | - | - |
| Net Loss | $(2633232) | $(279946) | $(4014763) | $(1039455) |
| Deemed dividend – solar power asset | (8510691 ) | -  | (8510691 ) | -  |
| Net loss attributable to shareholders | $(11143923) | $(279946) | $(12525454 ) | $(1039455 ) |
| Net loss per share – Basic and Diluted | $(0.48) | $(0.11) | $(1.29) | $(0.39) |
| Weighted average number of shares outstanding during the period – Basic and Diluted | 23098931 | 2652259 | 9707293 | 2643369 |

---

See accompanying notes to the unaudited condensed financial statements.

[**Table of Contents**](#TOC_001)

**BluSky AI, Inc.**

**(FKA Inception Mining, Inc.)**

**Condensed Statements of Stockholders' Deficit**

**(Unaudited)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred stock** | **Preferred stock** | **Common stock** | **Common stock** | | | |
|  | **($0.00001 Par)** | **($0.00001 Par)** | **($0.00001 Par)** | **($0.00001 Par)** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br> **Capital** |<br> **Accumulated**<br> **Deficit** | **Total** <br> **Stockholders'**<br> **Deficiency** |
| **Balance, December 31, 2024** | 51 | $&nbsp;&nbsp;&nbsp;&nbsp; 1 | 2659773 | $27 | $26517017 | $(29863364) | $(3346319) |
| Rounding shares issued with reverse split |  |  | 5432 |  |  |  |  |
| Net income for the period | - | - | - | - | - | 175389 | 175389 |
| **Balance, March 31, 2025** | 51 | 1 | 2665205 | 27 | 26517017 | (29687975) | (3170930) |
| Shares issued for services |  |  | 1800000 | 18 | 1343082 |  | 1343100 |
| Net loss for the period | - | - | - | - | - | (1556920) | (1556920) |
| **Balance, June 30, 2025** | 51 | 1 | 4465205 | 45 | 27860099 | (31244895) | (3384750) |
| Shares issued for services |  |  | 25500 |  | 153000 |  | 153000 |
| Shares issued for conversion of notes payable |  |  | 444750 | 4 | 3904526 |  | 3904530 |
| Shares issued for conversion of accrued liabilities |  |  | 22415 | 1 | 129525 |  | 129526 |
| Shares issued for solar power asset |  |  | 20000000 | 200 | 1289109 |  | 1289309 |
| Net loss for the period | - | - | - | - | - | (2633232) | (2633232) |
| **Balance, September 30, 2025** | 51 | $1 | 24957870 | $250 | $33336259 | $(33878127) | $(541617) |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred stock** | **Preferred stock** | **Common stock** | **Common stock** | | | |
|  | **($0.00001 Par)** | **($0.00001 Par)** | **($0.00001 Par)** | **($0.00001 Par)** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br> **Capital** |<br> **Accumulated**<br> **Deficit** | **Total**<br> **Stockholders'**<br> **Deficiency** |
| **Balance, December 31, 2023** | 51 | $&nbsp;&nbsp;&nbsp;&nbsp;1 | 2638903 | $26 | $26491974 | $(28913582) | $(2421581) |
| Net income for the period | - | - | - | - | - | (256980) | (256980) |
| **Balance, March 31, 2024** | 51 | 1 | 2638903 | 26 | 26491974 | (29170562) | (2678561) |
| Net loss for the period | - | - | - | - | - | (502529) | (502529) |
| **Balance, June 30, 2024** | 51 | 1 | 2638903 | 26 | 26491974 | (29673091) | (3181090) |
| Shares issued with extinguishment of debt |  |  | 20870 | 1 | 25043 |  | 25044 |
| Net loss for the period | - | - | - | - | - | (279946) | (279946) |
| **Balance, September 30, 2024** | 51 | $1 | 2659773 | $27 | $26517017 | $(29953037) | $(3435992) |

---

See accompanying notes to the unaudited condensed financial statements.

[**Table of Contents**](#TOC_001)

**BluSky AI, Inc.**

**(FKA Inception Mining, Inc.)**

**Condensed Statements of Cash Flows**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30, 2025** | **September 30, 2024** |
| Cash Flows From Operating Activities: |  |  |
| Net Loss | $(4014763) | $(1039455) |
| Adjustments to reconcile net loss to net cash used in operations |  |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization expense |  | 544 |
| &nbsp;&nbsp;&nbsp; Common stock issued for services | 1496100 |  |
| &nbsp;&nbsp;&nbsp; Loss on extinguishment of debt | 1949847 | 13043 |
| &nbsp;&nbsp;&nbsp; Change in derivative liability | (186542) | 90436 |
| &nbsp;&nbsp;&nbsp; Default penalty additions |  | 88890 |
| &nbsp;&nbsp;&nbsp; Expenses paid in behalf of the company by related party |  | 10300 |
| &nbsp;&nbsp;&nbsp; Amortization of right-of-use asset | 18264 | 9595 |
| &nbsp;&nbsp;&nbsp; Amortization of debt discount |  | 219961 |
| &nbsp;&nbsp;&nbsp; Initial derivative expense |  | 193582 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | (12764) | 10000 |
| &nbsp;&nbsp;&nbsp; Other assets | (113750) |  |
| &nbsp;&nbsp;&nbsp; Operating lease liability – related party | 4236 |  |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities | 123221 | 333600 |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities - related parties | 55228 | 5216 |
| Net Cash Used In Operating Activities | (680923) | (64288) |
| Cash Flows From Investing Activities: |  |  |
| Net Cash Provided By Investing Activities |  |  |
| Cash Flows From Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp; Repayment of notes payable-related parties | (121722) | (98475) |
| &nbsp;&nbsp;&nbsp; Repayment of convertible notes payable |  | (98784) |
| &nbsp;&nbsp;&nbsp; Proceeds from notes payable-related parties | 362906 | 111545 |
| &nbsp;&nbsp;&nbsp; Proceeds from convertible notes payable | 1735000 | 150000 |
| Net Cash Provided by Continuing Financing Activities | 1976184 | 64286 |
| Net Change in Cash | 1295261 | (2) |
| Cash at Beginning of Period | - | 2 |
| Cash at End of Period | $1295261 | $- |
| <u>Supplemental disclosure of cash flow information:</u> |  |  |
| Cash paid for interest | $- | $11074 |
| Cash paid for taxes | $- | $- |
| <u>Supplemental disclosure of non-cash investing and financing activities:</u> |  |  |
| Common stock issued for conversion of debt | $4034056 | $25043 |
| Common stock issued for solar power asset | $1289309 | $- |
| Recognition of debt discounts on convertible note payable | $- | $179800 |
| Origination of operating lease | $292227  | $- |
| Accounts payable issued for settlement of note payable | $10000 | $- |
| Note payable issued to related party for settlement of convertible note payable | $125000 | $- |

---

See accompanying notes to the unaudited condensed financial statements.

[**Table of Contents**](#TOC_001)

**BluSky AI, Inc.**

**(FKA Inception Mining, Inc.)**

**Notes to Condensed Financial Statements (Unaudited)**

**September 30, 2025**

**1. Nature of Business**

BluSky AI, Inc. (formerly known as Inception Mining, Inc.) was incorporated under the name of Golf Alliance Corporation and under the laws of the State of Nevada on July 2, 2007. Inception Mining, Inc. was a precious metal mineral acquisition, exploration and development company. Inception Development, Inc., its wholly owned subsidiary, was incorporated under the laws of the State of Idaho on January 28, 2013.

Golf Alliance Corporation pursued its original business plan to provide opportunities for golfers to play on private golf courses normally closed to them due to the membership requirements of the private clubs. During the year ended July 31, 2010, the Company decided to redirect its business focus toward precious metal mineral acquisition and exploration.

On March 5, 2010, the Company amended its articles of incorporation to (1) change its name to Silver America, Inc. and (2) increase its authorized common stock from 100,000,000 to 500,000,000. In 2020, the Company increased its authorized common stock from 500,000,000 to 800,000,000. In 2022, the Company increased its authorized common stock from 800,000,000 to 10,300,000,000.

On June 23, 2010, the Company amended its articles of incorporation to change its name to Gold American Mining Corp.

On February 25, 2013, Gold American Mining Corp. and its majority shareholder (the "Majority Shareholder"), and its wholly owned subsidiary, Inception Development Inc. (the "Subsidiary"), entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Inception Resources, LLC, a Utah corporation ("Inception Resources"), pursuant to which Inception purchased the U.P. and Burlington Gold Mine in consideration of 16,000 shares of common stock of Inception, the assumption of promissory notes in the amount of $950,000 and the assignment of a 3% net royalty. Inception Resources was an entity owned by and under the control of the majority shareholder. This transaction was deemed an asset purchase by entities under common control. The Asset Purchase Agreement closed on February 25, 2013 (the "Closing"). Inception was a "shell company" (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) immediately prior to our acquisition of the gold mine pursuant to the terms of the Asset Purchase Agreement. As a result of such acquisition, the Company's operations were then focused on the ownership and operation of the mine acquired from Inception Resources and the Company then ceased to be a shell company as it no longer has nominal operations. On February 21, 2020, the Company sold the Up & Burlington property and mineral rights to Ounces High Exploration, Inc. in exchange for $250,000 in cash consideration and 66,974,252 shares of common stock of Hawkstone Mining Limited, a publicly-trade Australian company.

On May 17, 2013, the Company amended its articles of incorporation to change its name to Inception Mining, Inc. ("Inception" or the "Company").

On October 2, 2015, the Company consummated a merger with Clavo Rico Ltd. ("Clavo Rico"). Clavo Rico is a privately held Turks and Caicos company with principal operations in Honduras, Central America. Clavo Rico operates the Clavo Rico mining concession through its subsidiaries Compañía Minera Cerros del Sur, S.A de C.V. and Compañía Minera Clavo Rico, S.A. de C.V. and holds other mining concessions. Pursuant to the agreement, the Company issued 240,226 shares of common stock of Inception and assumed promissory notes in the amount of $5,488,980 and accrued interest of $3,434,426. Under this merger agreement, there was a change in control, and it was treated for accounting purposes as a reverse recapitalization with Clavo Rico, Ltd. being the surviving entity. Its workings include several historical underground operations dating back to the early Mayan and Spanish occupation.

[**Table of Contents**](#TOC_001)

On January 12, 2023, Inception Mining, Inc. (the "<u>Company</u>") entered into a non-binding Letter of Intent (the "LOI") with Mother Lode Mining, Inc. ("MLM"). The LOI became binding on January 24, 2023. 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.

Since the divestiture of the Clavo Rico Mine, the Company has been operating as a consultant and advisor to the mining industry, including to Mother Lode Mining, the new owner of the Clavo Rico mine. It also has an ongoing financial interest in the Clavo Rico Mine under the LOI, with monthly payments due through February 2025 that are secured by a net smelter royalty.

The Company underwent a significant transformation and rebranding in March 2025 to align with its new strategic direction and name change to "BluSky AI Inc.". This change reflects BluSky AI Inc.'s commitment to advancing technology and providing unparalleled services in the data center industry. The Company's operations are primarily in AI-driven data center solutions, combining innovation with regulatory compliance and sustainability. The Company is a modular data center provider focused on high-performance computing infrastructure, strategic site selection, and operational risk management and specializing in artificial intelligence (AI) and as a Neocloud operator). "Neocloud" refers to a new breed of cloud providers that specialize in offering high-performance computing, particularly GPU-as-a-Service (GPUaaS), tailored specifically for demanding AI and machine learning workloads. The company is dedicated to delivering state-of-the-art infrastructure and solutions tailored to meet the demands of modern AI applications and computational workloads.

The new business model centered on modular data center development and GPU-as-a-Service (GPUaaS), marking a strategic pivot toward scalable, AI-optimized infrastructure. The Company designs and deploys modular data centers engineered for rapid deployment, energy efficiency, and geographic flexibility, enabling tailored solutions for high-performance computing environments. As a Neocloud operator, BluSky AI offers GPUaaS to enterprise and institutional clients, delivering dedicated, on-demand access to advanced GPU clusters optimized for artificial intelligence, machine learning, and large-scale simulation workloads. This model integrates site-specific risk management, regulatory compliance, and sustainability into every deployment, positioning BluSky AI as a next-generation infrastructure provider for mission-critical AI applications.

"Neocloud" refers to a new breed of cloud providers that specialize in offering high-performance computing, particularly GPU-as-a-Service (GPUaaS), tailored specifically for demanding AI and machine learning workloads. Neoclouds are specialist cloud providers filling a crucial gap in the market by offering dedicated and optimized infrastructure for the rapidly expanding field of artificial intelligence.

**2. Summary of Significant Accounting Policies**

**Going Concern -** The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company had a net loss of $4,014,763 during the nine-month period ended September 30, 2025 and had a working capital deficit of $1,922,014 as of September 30, 2025. These along with other factors indicate that the Company has substantial doubt of being able to continue as a going concern for a period of one year from the issuance of these financial statements.

The Company's existence is dependent upon management's ability to develop profitable operations and to obtain additional funding sources. There can be no assurance that the Company's financing efforts will result in profitable operations or the resolution of the Company's liquidity problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Management is currently working to make changes that will result in profitable operations and to obtain additional funding sources to meet the Company's need for cash during the next twelve months and beyond.

**Basis of Presentation -** The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.

[**Table of Contents**](#TOC_001)

**Condensed Financial Statements -**The interim financial statements included herein have been prepared by BluSky AI, Inc. ("BluSky" or the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC" or the "Commission"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These interim financial statements should be read in conjunction with the financial statements and notes thereto included in this filing and the Form 10-K for the year ended December 31, 2024 filed with the SEC on April 1, 2025.

In the opinion of management, all adjustments have been made consisting of normal recurring adjustments necessary to present fairly the financial position of the Company and as of September 30, 2025, the results of its statements of operations and comprehensive income (loss) for the three and nine-month period ended September 30, 2025, its condensed statement of stockholders' deficit and its cash flows for the nine-month period ended September 30, 2025. The results of operations for the interim periods are not necessarily indicative of the results for the full year.

**Use of Estimates –** In preparing financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenditures during the reported periods. Actual results could differ materially from those estimates. Estimates may include those pertaining to valuation of the estimated useful lives and valuation of properties, plant and equipment, deferred tax assets, convertible preferred stock, derivative assets and liabilities, stock-based compensation and payments, and contingent liabilities.

**Cash and Cash Equivalents -**The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At September 30, 2025 and December 31, 2024, the Company had $1,295,261 and $0 in cash equivalents, respectively. The aggregate cash balance on deposit in these accounts is insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has never experienced any losses in such accounts.

**Fair Value Measurements -**The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the party's own credit risk.

Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

---

| |
|:---|
| Level 1: Quoted market prices in active markets for identical assets or liabilities. |
| Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. |
| Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. |

---

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

[**Table of Contents**](#TOC_001)

The carrying value of the Company's cash, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.

**Notes Receivable** - Notes receivable include amounts due to the Company pursuant to financial agreements stipulating interest rates, payment terms and maturity dates. As of September 30, 2025 and December 31, 2024, notes receivable balance includes one note due from Mother Load Mining, Inc. in the amounts of $2,219,442 and $2,219,442, respectively, net of reserves of $2,219,442 and $2,219,442 (see Note 4 – Note Receivable).

**Long-Lived Assets -** We review the carrying amount of our long-lived assets for impairment whenever there are negative indicators of impairment. An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flows.

**Properties and Equipment -** We record properties and equipment at historical cost. We provide depreciation and amortization in amounts sufficient to match the cost of depreciable assets to operations over their estimated service lives or productive value. We capitalize expenditures for improvements that significantly extend the useful life of an asset. We charge expenditures for maintenance and repairs to operations when incurred. Depreciation is computed using the straight-line method over estimated useful lives as follows:

---

| | |
|:---|:---|
| Building | 7 to 15 years |
| Vehicles and equipment | 3 to 7 years |
| Furniture and fixtures | 2 to 3 years |
| Processing and laboratory | 5 to 15 years |

---

**Stock Issued for Goods and Services -** Common and preferred shares issued for goods and services are valued based upon the fair market value of our common stock or the goods and services received.

**Stock-Based Compensation -** For stock-based transactions, compensation expense is recognized over the requisite service period, which is generally the vesting period, based on the estimated fair value on the grant date of the award.

**Income (Loss) per Common Share -**Basic net income (loss) per common share is computed by dividing net income (loss), less the preferred stock dividends, by the weighted average number of common shares outstanding. Dilutive income (loss) per share includes any additional dilution from common stock equivalents, such as stock options and warrants, and convertible instruments, if the impact is not antidilutive. 0 and 1,027,273 common share equivalents have been excluded from the diluted loss per share calculation for the nine-month periods ended September 30, 2025 and 2024, respectively, because it would be anti-dilutive.

**Derivative Liabilities -** Derivative liabilities are recorded at fair value when issued and the subsequent change in fair value each period is recorded in other income (expense) in the statements of operations. We do not hold or issue any derivative financial instruments for speculative trading purposes.

[**Table of Contents**](#TOC_001)

**Income Taxes -**The Company's income tax expense and deferred tax assets and liabilities reflect management's best assessment of estimated future taxes to be paid. Significant judgments and estimates are required in determining the income tax expense.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating the Company's ability to recover its deferred tax assets, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, the Company develops assumptions including the amount of future state and federal pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company is using to manage the underlying businesses. The Company provides a valuation allowance for deferred tax assets for which the Company does not consider realization of such deferred tax assets to be more likely than not.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on the Company's results of operations, cash flows or financial position.

**Business Segments** – The Company operates in one segment and therefore segment information is not presented.

**Operating Lease** – In accordance with ASC 842, the Company determines whether or not a contract contains a lease based on whether or not it provides the Company with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. The Company elected the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. We elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less.

**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.

[**Table of Contents**](#TOC_001)

**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 September 30, 2025:

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| | |
|:---|:---|
|  | **Debt <br> Derivative <br> Liabilities**  |
| Balance, December 31, 2024 | $186542 |
| Settlement of derivative liabilities | (186542) |
| Balance, September 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-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.

Based upon ASC 840-15-25 (EITF Issue 00-19, paragraph 11) 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 "<u>Company</u>") 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 was delivered by MLM to the Company on January 18, 2023, to pay a settlement amount for existing debt of the Company; (f) $500,000 was delivered by MLM to the Company on January 23, 2023, to satisfy existing debts of the Company; (g) $500,000 was delivered by MLM to the Corporation on January 24, 2023 to satisfy existing debts of the Corporation.

[**Table of Contents**](#TOC_001)

In addition to the amounts already delivered under the LOI, an additional amount of $2,700,000 shall be paid by MLM to the Company over a period of twenty-four (24) months (the "Monthly Payments"). The Monthly Payments shall be paid as follows: (i) $25,000 due March 1, 2023, (ii) $50,000 due on the first day of each of April, May and June 2023, and (iii) $100,000 due on the first day of each month for the following twenty months, until February 1, 2025 at which point all amounts due and payable hereunder shall be delivered in a final balloon payment. The Company has received several payments leaving an outstanding balance of $2,219,442 as of March 31, 2025. MLM paid an additional $80,000 in initial payments than the agreement called for. Based on the additional funds, MLM has paid less than the scheduled payments to make up the cash outflow to them. Outstanding balances and missed Monthly Payments will be secured by a 10% NSR on the Clavo Rico mine production until the Monthly Payments are delivered and the purchase price is paid in full. In addition to the Monthly Payments, the Company will receive a carried forward net profits interest royalty ("NPI") of 5% on the Clavo Rico mine production until the total NPI paid to the Company is $1,000,000, subject to limited conditions.

The following table summarizes the note receivable of the Company as of September 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Note Receivable from Mother Load Mining, Inc. pursuant to a Letter of Intent dated effective January 12, 2023, in the original principal amount of $5,700,000, accruing no interest, with monthly payments beginning on March 31, 2023, maturing February 1, 2025. | $2219442 | $2219442 |
| Less: Payments received | - | - |
| Total Note Receivable outstanding | 2219442 | 2219442 |
| Less: Allowance for Doubtful Note Receivable | (2219442) | (2219442) |
| Total Note Receivable | $- | $- |

---

**5. Solar Power Asset**

On July 7, 2025, BluSky AI Inc., entered into an Acquisition and Power Assignment Agreement with Digital Asset Medium, LLC ("DAM"), a Wyoming limited liability company, whose managing member, Trent D'Ambrosio, is also the Company's CEO. DAM assigned to the Company its exclusive right to utilize solar and grid-interconnected power at a data center project located in the Milford area of Beaver County, Utah. In exchange for the assignment of the Power Commitment in the Acquisition Agreement, the Company issued 20,000,000 shares of its restricted common stock to DAM. The solar power asset was valued at $1,289,309. This asset will not be placed into service until the Milford project has been built and is beginning to use power. Once this milestone has been achieved, the Company will begin amortizing the value of this asset over the remaining life of the agreement. Currently, there is no amortization expense or cash flows related to this asset.

**6. Accounts Payable and Accrued Liabilities**

Accounts payable and accrued liabilities at September 30, 2025 and December 31, 2024 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| Accounts Payable | $351835 | $518930 |
| Deferred Salaries Payable | 1311788 | 1226857 |
| Accrued Interest Payable | 138797 | - |
| Total Accrued Liabilities | $1802420 | $1745787 |

---

**7. Notes Payable**

Notes payable were comprised of the following as of September 30, 2025 and December 31, 2024:

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| | | |
|:---|:---|:---|
| **Notes Payable** | **September 30, 2025** | **December 31, 2024** |
| Phil Zobrist | $60000 | $60000 |
| Antczak Polich Law LLC | - | 65000 |
| Total Notes Payable | 60000 | 125000 |
| Less Short-Term Notes Payable | (60000) | (125000) |
| Total Long-Term Notes Payable | $- | $- |

---

**Phil Zobrist** – On January 11, 2013, the Company issued an unsecured Promissory Note to Phil Zobrist in the principal amount of $60,000 (the "Note") due on demand and bearing 0% per annum interest. The total net proceeds the Company received was $60,000. On October 2, 2015, the Company entered into a new convertible note with Phil Zobrist that matures on December 31, 2016 and bears 18% per annum interest. The Company agreed to accrue interest from inception of these Notes in the amount of $29,412 and charged this amount to interest expense during the year ended December 31, 2015. The Note is convertible into common stock, at holder's option, at a price of $0.99 (0.18 pre-split) or a 50% discount to the average of the three lowest VWAP of the common stock during the 20-trading day period prior to conversion. On October 2, 2016, the Company renegotiated the note payable. The convertible feature was removed, and the note was extended until December 31, 2024. The Company recognized a gain on the extinguishment of debt of $121,337 for the remaining derivative liability and of $11,842 for the remaining debt discount. As of September 30, 2025, the gross balance of the note was $60,000 and accrued interest was $137,441.

[**Table of Contents**](#TOC_001)

**Antczak Polich Law, LLC** – On March 21, 2023, the Company issued an unsecured Promissory Note ("Note") to Antczak Polich Law, LLC ("Antczak"), in the principal amount of $75,000 (the "Note") and does not accrue interest. This note is due on December 31, 2023 and requires monthly payments of $10,000 starting July 2023 with any remaining balance paid in full by December 31, 2023. The Company made one payment of $10,000 during the fiscal year ended December 31, 2023. On September 30, 2025, the Company paid $10,000 towards the balance of this note and then Antczak elected to convert the remaining $55,000 into 11,000 shares of common stock valued at $65,780. The Company recognized a loss on extinguishment of debt of $10,780. As of September 30, 2025, the gross balance of the note was $0.

**8. Notes Payable – Related Parties**

Notes payable – related parties were comprised of the following as of September 30, 2025 and December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
| **Notes Payable - Related Parties** | **Relationship** | **September 30, 2025** | **December 31, 2024** |
| Cluff-Rich PC 401K | Affiliate - Controlled by Director | $46000 | $51000 |
| Whit Cluff | Director | 15327 | 15327 |
| Digital Asset Medium, LLC | Affiliate - Controlled by Director | 480000 |  |
| Debra D'ambrosio | Immediate Family Member | 422618 | 531434 |
| Francis E. Rich | Immediate Family Member | 100000 | 100000 |
| Pine Valley Investments | Affiliate - Controlled by Director | 295000 | 295000 |
| Total Notes Payable - Related Parties |  | 1358945 | 992761 |
| Less Short-Term Notes Payable - Related Parties |  | (1358945) | (992761) |
| Total Long-Term Notes Payable - Related Parties |  | $- | $- |

---

**Cluff-Rich PC 401K –** On June 29, 2022, the Company issued an unsecured Short-Term Promissory Note to Cluff-Rich PC 401K in the principal amount of 60,000 (the "Note") due on December 31, 2022 and bears a 5.0% interest rate. On February 1, 2023, the Company re-negotiated this note which extended it to March 1, 2025 and made it non-interest bearing. The Company issued 5,143 shares of common stock on February 1, 2023 as settlement for the accrued interest of $18,000. During the fiscal ended December 31, 2023, the Company made a payment of $9,000 towards the principal balance. On July 16, 2025, the Company made a payment of $5,000 towards the balance of the note. As of September 30, 2025, the gross balance of the notes was $46,000.

**Digital Asset Medium, LLC (Affiliate – Director) –** On January 9, 2025, the Company formalized an unsecured Short-Term Promissory Notes to Digital Asset Medium, LLC in principal amounts totaling $480,000 (the "Note"), which bears a 15.00% interest rate and matures on January 31, 2026. This lender directly paid $125,000 to settle the notes held by 1800 Diagonal Lending, LLC (see Note 9). On September 30, 2025, the Company issued 13,007 shares of common stock valued at $77,782 for the conversion of accrued interest of $29,129 and accounts payable of $35,908. The Company recognized a loss on extinguishment of debt of $12,745. As of September 30, 2025, the gross balance of the note was $480,000 and accrued interest was $8,601.

**D. D'Ambrosio (Immediate Family Member of Director) –** On January 1, 2023, there were six notes outstanding with outstanding balance of the Notes of $446,210 and accrued interest of $81,204. During January 2023, the Company issued an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $6,408 (the "Note") that bears a 3.00% interest rate. On February 1, 2023, the Company re-negotiated these notes into one note with a maturity date of March 1, 2025 and is non-interest bearing. The Company issued 23,201 shares of common stock on February 1, 2023 as settlement for the accrued interest of $81,204. During the year ended December 31, 2023, the Company made a payment of $30,000 towards the principal balance. As of September 30, 2025, the gross balance of the note was $422,618 and accrued interest was $0.

[**Table of Contents**](#TOC_001)

**D. D'Ambrosio (Immediate Family Member of Director) –**During June through September, 2024, the Company received funds in the amount of $50,395. On October 1, 2024, the Company formalized an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $50,395 (the "Note"), which bears a 5.00% interest rate and matures on October 31, 2025. During the year ended December 31, 2024, the Company made payments of $4,430 towards the principal balance. On August 5, 2025, the Company paid-off the balance of this note of $45,965. As of September 30, 2025, the gross balance of the note was $0 and accrued interest was $0.

**D. D'Ambrosio (Immediate Family Member of Director) –**During October through December, 2024, the Company received funds in the amount of $62,851. On November 1, 2024, the Company formalized an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $62,851 (the "Note"), which bears a 15.00% interest rate and matures on November 30, 2025. During the nine months ended September 30 2025, the Company paid $62,851 towards the balance of this note. As of September 30, 2025, the gross balance of the note was $0 and accrued interest was $0.

**D. D'Ambrosio (Immediate Family Member of Director) –**On January 1, 2025, the Company formalized an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $406 (the "Note"), which bears a 15.00% interest rate and matures on December 31, 2025. On September 1, 2025, the Company paid-off the balance of this note of $406. As of September 30, 2025, the gross balance of the note was $0 and accrued interest was $0.

On September 24, 2025, the Company issued 9,408 shares of common stock to D. D'Ambrosio valued at $51,744 for the accrued interest on all of the D. D'Ambrosio notes of $47,042 and recognized a loss on extinguishment of debt of $4,702.

**Francis E. Rich –**On January 1, 2023, there were two notes outstanding with outstanding balance of the Notes of $100,000 and accrued interest of $47,500. On February 1, 2023, the Company re-negotiated these notes into one note with a maturity date of March 1, 2025 and is non-interest bearing. The Company issued 16,429 shares of common stock as settlement for the accrued interest of $57,500. As of September 30, 2025, the gross balance of the notes was $100,000.

**Pine Valley Investments, LLC –**On January 1, 2023, there were three Notes outstanding with outstanding balance of the Notes of $295,000 and accrued interest of $115,250. On February 1, 2023, the Company re-negotiated these notes into one note with a maturity date of March 1, 2025 and is non-interest bearing. The Company issued 32,929 shares of common stock as settlement for the outstanding accrued interest of $115,250. As of September 30, 2025, the gross balance of the notes was $295,000.

**Whit Cluff (Affiliate – Director)** – On March 28, 2024, the Company issued an unsecured Short-Term Promissory Note to Cluff-Rich PC 401K in the principal amount of $15,327 (the "Note") due on April 30, 2025 and bears a 5.0% interest rate. As of September 30, 2025, the gross balance of the note was $15,327 and accrued interest was $766.

**9. Convertible Notes Payable**

Convertible notes payable were comprised of the following as of September 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
| **Convertible Notes Payable** | **September 30, 2025**  | **December 31, 2024**  |
| 1800 Diagonal Lending | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $266450 |
| Total Convertible Notes Payable |  | 266450 |
| Less Unamortized Discount | - | - |
| Total Convertible Notes Payable, Net of Unamortized Debt Discount |  | 266450 |
| Less Short-Term Convertible Notes Payable | - | (266450) |
| Total Long-Term Convertible Notes Payable, Net of Unamortized Debt Discount | $- | $- |

---

[**Table of Contents**](#TOC_001)

**1800 Diagonal Lending LLC**– On January 23, 2024, the Company issued an unsecured Convertible Promissory Note ("Note") to 1800 Diagonal Lending, LLC ("1800"), in the principal amount of $63,250 (the "Note") due on October 30, 2024 and bears 12% per annum interest, due at maturity. The total net proceeds the Company received was $50,000 (less an original issue discount ("OID") of $13,250). The Note is convertible into common stock, at holder's option, at a 25% discount of the average of the three lowest trading price of the common stock during the 10 trading day period prior to conversion. During the nine months ended September 30, 2024, the Company paid $23,613 towards the principal balance of $21,083 and $2,530 in accrued interest. For the nine months ended September 30, 2024, the Company amortized $63,250 of debt discount to current period operations as interest expense. On June 4, 2024, the Company was notified by the lender that the note was in default. The Company recognized default penalties for principal of $21,083 and interest of $2,530. On January 9, 2025, the Company negotiated a settlement on this note and the second note with the lender noted below and paid the note in full. As of September 30, 2025, the gross balance of the note was $0 and accrued interest was $0.

**1800 Diagonal Lending LLC**– On May 3, 2024, the Company issued an unsecured Convertible Promissory Note ("Note") to 1800 Diagonal Lending, LLC ("1800"), in the principal amount of $116,550 (the "Note") due on February 15, 2025 and bears 12% per annum interest, due at maturity. The total net proceeds the Company received was $100,000 (less an original issue discount ("OID") of $16,550). The Note is convertible into common stock, at holder's option, at a 35% discount of the lowest trading price of the common stock during the 10 trading day period prior to conversion. For the nine months ended September 30, 2024, the Company amortized $116,550 of debt discount to current period operations as interest expense. On June 4, 2024, the Company was notified by the lender that the note was in default. The Company recognized default penalties for principal of $58,275 and interest of $6,993. On January 9, 2025, the Company negotiated a settlement on this note and the note with the lender noted above and paid the note in full. As of September 30, 2025, the gross balance of the note was $0 and accrued interest was $0.

On January 9, 2025, the Company negotiated the settlement of both notes with the lender and agreed to pay $125,000 to settle both notes in full. The Company took a note from a related party (see Note 8) to pay the $125,000 to the lender. The Company recognized a gain on forgiveness of debt of $338,673. This gain is made of $152,131 of default principal and interest and $186,542 in change in derivative liability.

**Regulation D Convertible Notes Payable** – In August and September 2025, BluSky AI Inc. raised $1,735,000 in gross proceeds through a Regulation D offering, issuing convertible promissory notes to 13 accredited lenders. These notes bore interest at 15.0% per annum and were scheduled to mature 12 months from issuance. Initially, the notes included a voluntary conversion at 80% of market price if the stock hits a market price of $5.00 per share and a mandatory conversion feature at 80% of market triggered if the Company's common stock traded above $8.00 per share for a specified period. Prior to conversion, the Company and the noteholders mutually agreed to amend the conversion terms, reducing the conversion price from the original contractual rate to $4.00 per share. This amendment was executed to align with the Company's evolving capital structure strategy, simplify the cap table ahead of anticipated additional financings, and reward early supporters with a more favorable conversion rate in recognition of their risk tolerance during a critical growth phase. In mid-August 2025, following the Company's common stock trading above the $8.00 threshold, all outstanding notes were mandatorily converted into an aggregate of 433,750 shares of common stock at the amended $4.00 per share conversion price. As a result of this modification and subsequent conversion, the Company recognized a non-cash loss on extinguishment of debt totaling $2,103,750, reflecting the difference between the fair value of the common stock issued and the carrying value of the notes at the time of conversion.

 **10. Operating Leases**

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 and thus is exempt from operating lease accounting under ASC 842. The Company made cash payments of $3,269 and $9,595 for the nine months ended September 30, 2025 and 2024, respectively.

On July 11, 2025, the Company entered into a Ground Lease with an Option to Purchase (the "Lease") with Wild Mustang Ventures LLC, a Wyoming limited liability company (the "Landlord"), through which the Company leased 51.6 acres in Milford, Utah (the "Milford Land") for a two-year term. Wild Mustang Ventures, LLC is deemed an affiliate of the Company. The base rent is $90,000 annually, which shall accrue until the earlier of the expiration of the lease or until the Company exercises its option to purchase the Milford Land. Payments on the lease are being deferred until the Company is in a better cash flow position, so no lease payments have been made. The Lease contains standard other provisions and includes a mutual indemnification clause which requires that the parties indemnify each other except in the case of gross negligence or willful misconduct.

The supplemental balance sheet information related to the operating lease for the periods is as follows:

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| | | |
|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** |
| <u>Operating leases</u> |  |  |
| Long-term right-of-use assets | $273963 | $- |
| Short-term operating lease liabilities | $73057 | $- |
| Long-term operating lease liabilities | 223406 | - |
| Total operating lease liabilities | $296463 | $- |

---

Maturities of the Company's undiscounted operating lease liabilities are as follows:

---

| | |
|:---|:---|
| **Year Ending** | **Operating Leases** |
| 2025 | $45000 |
| 2026 | 90000 |
| 2027 | 90000 |
| 2028 | 90000 |
| 2029 | 45000 |
| Total lease payments | 360000 |
| Less: Imputed interest/present value discount | (63537) |
| Present value of lease liabilities | $296463 |

---

The Company incurred rent expense of $36,785 and $10,633 for the nine months ended September 30, 2025 and 2024, respectively.

**11. Stockholders' Deficit**

**Common Stock**

The Company is authorized to issue 10,300,000,000 shares of common stock with a par value of $0.00001 per share. As of September 30, 2025 and December 31, 2024, there were 24,957,870 and 2,659,773 shares of common stock issued and outstanding, respectively.

The Company enacted a reverse stock split of the Company's issued and outstanding shares of common stock, par value $0.00001 per share (the "Common Stock"), at a ratio of 1,000-for-1 (the "Reverse Stock Split"). The Reverse Stock Split became effective on March 10, 2025 (the "Effective Date"). All share amounts presented in this 10-Q have been retroactively adjusted to reflect the Reverse Stock Split.

On August 2, 2024, the Company issued 20,870 restricted shares of Common Stock to 1800 Diagonal Lending LLC upon the conversion of $12,000 in existing debt owed to the shareholder that has been accrued by the Company.

[**Table of Contents**](#TOC_001)

On April 1, 2025, the Company issued 200,000 restricted shares of Common Stock to an individual for services rendered at the market price of $0.51 per share for a total value of $102,000.

On June 10, 2025, the Company issued 1,100,000 restricted shares of Common Stock to five individuals for services rendered at the market price of $0.401 per share for a total value of $441,100. With 600,000 shares issued to related parties.

On June 24, 2025, the Company issued 500,000 restricted shares of Common Stock to an individual for services rendered at the market price of $1.60 per share for a total value of $800,000.

On July 7, 2025, BluSky AI Inc., entered into an Acquisition and Power Assignment Agreement with Digital Asset Medium, LLC ("DAM"), a Wyoming limited liability company, whose managing member, Trent D'Ambrosio, is also the Company's CEO (see Note 5). In exchange for the assignment of the Power Commitment in the Acquisition Agreement, the Company issued 20,000,000 shares of its restricted common stock to DAM. The Company used a large block stock valuation model to value this stock issuance, which resulted in a valuation of $9,800,000. The solar power asset, which was reviewed by a valuation specialist, was valued at $1,289,309. The difference of $8,510,691 has been treated as a deemed dividend by the Company. Normally, this dividend would be recorded in retained earnings. However, the Company has a negative retained earnings balance, so the difference was recorded against additional paid-in capital.

In August and September 2025, the Company issued 433,750 shares of common stock at $4.00 per share. See note 8 for more details.

On September 4, 2025, the Company issued 25,500 shares of common stock to five consultants per consulting agreements. These shares were valued at $6.00 per share and the Company recognized consulting fees of $153,000.

On September 24, 2025, the Company issued 9,408 shares of common stock to D. D'Ambrosio for the conversion of accrued interest of $47,042. These shares were valued at $5.50 per share for a total value of $51,744 and the Company recognized a loss on extinguishment of debt of $4,702.

On September 30, 2025, the Company issued 13,007 shares of common stock to Digital Asset Medium, LLC ("DAM"), a related entity, for the conversion of accrued interest of $29,129 and accounts payable of $35,908. These shares were valued at $5.98 per share for a total value of $77,782 and the Company recognized a loss on extinguishment of debt of $12,745.

On September 30, 2025, the Company issued 11,000 shares of common stock to a lender for the conversion of a note payable with a balance of $55,000. These shares were valued at $5.98 per share for a total value of $65,780 and the Company recognized a loss on extinguishment of debt of $10,780.

**12. Related Party Transactions**

**Consulting Agreement** – In February 2014, the Company entered into a consulting agreement with stockholder/director Trent D'Ambrosio. The Company agreed to pay $18,000 per month for twelve months. This agreement was renegotiated in October 2017 and the Company agreed to pay the stockholder/director $25,000 per month starting in October 2017. This agreement was superseded by an Employment Agreement as of April 1, 2019 (see Employment Agreements below). As of September 30, 2025, there is $1,311,788 in deferred salaries in accounts payable and accrued liabilities.

Mr. Cluff currently serves as a director of the Company and has a separate agreement as a consultant of the Company effective as of October 2, 2015.

**Employment Agreements** – The Company has an employment agreement with its chief executive officer, Trent D'Ambrosio. The employment agreement was effective as of April 1, 2019 and provides for compensation of $300,000 annually.

[**Table of Contents**](#TOC_001)

**Notes Payable –**The Company took one short-term note payable from Debra D'Ambrosio, an immediate family member related party and one short-term note payable from Digital Asset Medium, LLC, an affiliate of a direct during the nine months ended September 30, 2025. The Company received $362,906 in cash from related parties, made payments of $121,722 in cash to related parties and $125,000 was paid directly to another lender to settle their outstanding notes (See Notes 8 and 9 for more details).

**Accounts Payable –**Two officers/directors of the Company have been paying expenses for the Company on their personal credit cards. The Company has recorded these expenses and accrued the amounts in accounts payable to the individuals. As of September 30, 2025, there is $104,839 in accounts payable and accrued liabilities.

**Land Lease Agreement** – On July 11, 2025, the Company entered into a Ground Lease with an Option to Purchase (the "Lease") with Wild Mustang Ventures LLC, a Wyoming limited liability company (the "Landlord"), through which the Company leased 51.6 acres in Milford, Utah (the "Milford Land") for a two-year term. Wild Mustang Ventures, LLC is deemed an affiliate of the Company. The base rent is $90,000 annually, which shall accrue until the earlier of the expiration of the lease or until the Company exercises its option to purchase the Milford Land. Payments on the lease are being deferred until the Company is in a better cash flow position, so no lease payments have been made. The Lease contains standard other provisions and includes a mutual indemnification clause which requires that the parties indemnify each other except in the case of gross negligence or willful misconduct.

On June 10, 2025, the Company issued 500,000 restricted shares of Common Stock to Trent D'Ambrosio for services rendered at the market price of $0.401 per share for a total value of $200,500.

On June 10, 2025, the Company issued 100,000 restricted shares of Common Stock to Whit Cluff for services rendered at the market price of $0.401 per share for a total value of $40,100.

**13. Commitments and Contingencies**

On July 11, 2025, BluSky AI Inc, (the "Company") entered into an Acquisition and Power Assignment Agreement (the "Acquisition Agreement") with Digital Asset Management, LLC ("DAM"), a Wyoming limited liability company, through which DAM assigned to the Company its exclusive right to utilize of solar and grid-interconnected power (the "Power Commitment"), for the operational life of Buyer's data center project located in the Milford area of Beaver County, Utah (the "Project"). The term of the Acquisition Agreement is the length of the Project. In exchange for the assignment of the Power Commitment in the Acquisition Agreement, the Company issued 20,000,000 shares of its restricted common stock to DAM. The shares have been recorded at par of $0.00001 there are additional agreements that need to be completed to finalize the transaction. Including additional terms and conditions for use, a system impact study and an "energy services agreement" from the local provider. The final valuation can't be established at this time since there isn't a final measurement date. Since this is an entity under common control, the power rights will be recorded at its historical value.

Litigation

The Company at times is subject to other legal proceedings that arise in the ordinary course of business. The following is a summary of pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations of the Company.

March 4, 2024, the Company filed a complaint against Mother Lode Mining, Inc., a Canadian company, and Robert Salna (the "Defendants"), alleging an amount of not less than $2,237,800 (plus interest, additional costs and attorneys' fees) due from Defendants as a result of their breach of their obligations and duties arising from the sale of Compañía Minera Cerros Del Sur, S.A. de C.V. in 2023 (the "Sale"). In the complaint, filed in the United States District Court for the District of Utah, Central Division, the Company asserts claims related to alleged breach of contract and unjust enrichment against the Defendants, and seeks a monetary judgment and an award of attorneys' fees and other expenses. The complaint arises from the Defendants' failure to convey agreed-upon consideration to the Company as contracted for the sale of CMCS. The Company was able to effect service of process on Mother Lode Mining, Inc. through Alternative Service and litigation has proceeded since that time. On May 2, 2025, Mother Lode Mining filed a Motion to Dismiss For Failure to State a Claim against the Company, and the Company disputes the premise of their argument. The Company intends to continue to pursue the lawsuit aggressively.

In the opinion of management, as of September 30, 2025, the amount of ultimate liability with respect to such matters, if any, may be likely to have a material impact on the Company's business, financial position, results of operations or liquidity. However, as the outcome of litigation and other claims is difficult to predict significant changes in the estimated exposures could exist.

On September 22, 2023, the Company entered into a consulting agreement with William McCluskey. This agreement requires the Company to pay $200,000 in consulting fees to William McCluskey before March 31, 2025. This amount is currently reported in accounts payable and accrued liabilities at September 30, 2025.

**14. Subsequent Events**

Management has evaluated subsequent events, in accordance with ASC 855, "Subsequent Events," through the date which the financial statements were available to be issued and there are no material subsequent events, except as noted below.

On October 15, 2025, BluSky AI Inc. raised $50,000 through its Regulation D offering, issuing a convertible promissory note to an accredited lender. This note bears interest at 15.0% per annum and is scheduled to mature 12 months from issuance. The note includes a voluntary conversion at 80% of market price if the stock hits a market price of $5.00 per share and a mandatory conversion feature at 80% of market triggered if the Company's common stock traded above $8.00 per share for a specified period.

On October 31, 2025, the Company issued 5,000 shares of common stock to a consultant per the consulting agreement.

On October 15, 2025, BluSky AI Inc. raised $50,000 through its Regulation D offering, issuing a convertible promissory note to an accredited lender. This note bears interest at 15.0% per annum and is scheduled to mature 12 months from issuance. The note includes a voluntary conversion at 80% of market price if the stock hits a market price of $5.00 per share and a mandatory conversion feature at 80% of market triggered if the Company's common stock traded above $8.00 per share for a specified period. On January 10, 2026, the lender elected to convert this note into common stock. The Company issued 13,694 shares of common stock to a lender for the conversion of the $50,000 promissory note.

On November 9, 2025, BluSky AI Inc. raised $50,000 through its Regulation D offering, issuing a convertible promissory note to an accredited lender. This note bears interest at 15.0% per annum and is scheduled to mature 12 months from issuance. The note includes a voluntary conversion at 80% of market price if the stock hits a market price of $5.00 per share and a mandatory conversion feature at 80% of market triggered if the Company's common stock traded above $8.00 per share for a specified period. On December 12, 2025, the lender elected to convert this note into common stock. The Company issued 13,441 shares of common stock to a lender for the conversion of the $50,000 promissory note.

On December 15, 2025, the Company issued 2,500 shares of common stock to a consultant per the consulting agreement.

**<u>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

To the Board of Directors and Shareholders of BluSky AI Inc, (fka Inception Mining, Inc.):

<u>Opinion on the Financial Statements</u>

We have audited the accompanying consolidated balance sheets of BluSky AI Inc. (fka Inception Mining, Inc.) ("the Company") as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), stockholders' deficit, and cash flows for each of the years in the two-year period ended December 31, 2024 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

<u>Explanatory Paragraph Regarding Going Concern</u>

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency and negative cash flows from operations which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

<u>Basis for Opinion</u>

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

<u>Critical Audit Matters</u>

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

<u>Determination and Valuation of Derivative Liabilities</u>

*Critical Audit Matter Description*

As described further in Note 3 of the consolidated financial statements, during the year ended December 31, 2024 and in prior periods, the Company issued convertible notes and that required management to assess whether the conversion features of the convertible notes required bifurcation and separate valuation as a derivative liability. The Company determined that the conversion features of certain of its convertible notes are required to be accounted for as derivative liabilities due to: (1) certain conversion features did not contain an explicit limit on the number of shares to be delivered in share settlement; and (2) the fact the Company could not assert it had sufficient authorized but unissued shares available to settle certain instruments considering all other stock-based commitments. The derivative liabilities were recorded at fair value when issued and subsequently re-measured to fair value upon settlement or at the end of each reporting 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

 **BluSky AI, Inc.**

**(fka Inception Mining, Inc.)**

**Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| ASSETS |  |  |
| Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $- | $2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | - | 10000 |
| Total Current Assets |  | 10002 |
| Property, plant and equipment, net |  | 3258 |
| Right of use operating lease asset |  | 9595 |
| Other assets | 531 | 531 |
| Total Assets | $531 | $23386 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT |  |  |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $1745787 | $1332038 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest - related parties | 30310 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability |  | 9595 |
| &nbsp;&nbsp;&nbsp;&nbsp;Note payable | 125000 | 125000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable - related parties – current portion | 992761 | 32895 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible notes payable - net of discount | 266450 | 37540 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 186542 | 39281 |
| Total Current Liabilities | 3346850 | 1576349 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term notes payable - related parties, net of current portion | - | 868618 |
| Total Liabilities | 3346850 | 2444967 |
| Commitments and Contingencies |  |  |
| Stockholders' Deficit |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $0.00001 par value; 10,000,000 shares authorized, 51 shares issued and outstanding | 1 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.00001 par value; 10,300,000,000 shares authorized, 2,659,773 and 2,638,903 shares issued and outstanding as of December 31, 2024 and 2023, respectively | 27 | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 26517017 | 26491974 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (29863364) | (28913582) |
| Total Stockholders' Deficit | (3346319) | (2421581) |
| Total Liabilities and Stockholders' Deficit | $531 | $23386 |

---

See accompanying notes to the consolidated financial statements.

 **BluSky AI, Inc.**

**(fka Inception Mining, Inc.)**

**Consolidated Statements of Operations and Comprehensive Income (Loss)**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2024** | **December 31, 2023** |
| Operating Expenses |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | $520378 | $1065893 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 727 | 725 |
| Total Operating Expenses | 521105 | 1066618 |
| Loss from Operations | (521105) | (1066618) |
| Other Income/(Expenses) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in derivative liability | 196321 | 3328461 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bad debt expense on note receivable |  | (2219442) |
| &nbsp;&nbsp;&nbsp;&nbsp;Initial derivative expense | (193582) | (55065) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of property, plant and equipment | (2531) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (13043) | 6313102 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (415842) | (277651) |
| Total Other Income/(Expenses) | (428677) | 7089405 |
| Net Income (Loss) from Operations before Income Taxes | (949782) | 6022787 |
| Provision for Income Taxes | - | - |
| Net Income (Loss) from Continuing Operations | (949782) | 6022787 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Income (Loss) from Discontinued Operations |  | (497581) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on Sale of Mine Property in Discontinued Operations |  | 7230453 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for Income Taxes on Discontinued Operations | - | - |
| Net Income (Loss) from Discontinued Operations | - | 6732872 |
| Net Income (Loss) | (949782) | 12755659 |
| Net Income (Loss) - Non-Controlling Interest | - | (13671) |
| Net Income (Loss) - Controlling Interest | $(949782) | $12741988 |
| Net income (loss) per share - Continuing Operations - Basic and Diluted | $(0.36) | $2.58 |
| Net income (loss) per share - Discontinued Operations - Basic and Diluted | $- | $2.89 |
| Net income (loss) per share - Basic | $(0.36) | $5.47 |
| Net income (loss) per share - Diluted | $(0.36) | $0.03 |
| Weighted average number of shares outstanding during the period - Basic | 2647513 | 2330781 |
| Weighted average number of shares outstanding during the period - Diluted | 2647513 | 432626746 |
| Net Income (Loss) | $(949782) | $12755659 |
| Other Comprehensive Income (Loss) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exchange differences arising on translating foreign operations | - | (86472) |
| Total Comprehensive Income (Loss) | (949782) | 12669187 |
| Total Comprehensive Income (Loss) - Non-Controlling Interest | - | - |
| Total Comprehensive Income (Loss) - Controlling Interest | $(949782) | $12669187 |

---

See accompanying notes to the consolidated financial statements.

 **BluSky AI, Inc.**

**(fka Inception Mining, Inc.)**

**Consolidated Statements of Stockholders' Deficit**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred stock** | **Preferred stock** | **Common stock** | **Common stock** | | | | | |
|  | **($0.00001 Par)** | **($0.00001 Par)** | **($0.00001 Par)** | **($0.00001 Par)** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Other**<br>**Comprehensive**<br>**Income (Loss)** | **Non-**<br>**Controlling**<br>**Interest** | **Total**<br>**Stockholders'**<br>**Deficiency** |
| **Balance, December 31, 2022** | 51 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 | 244654 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2 | $8155159 | $(41655570) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(618683) | $(11952) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34131043) |
| Shares issued for services |  |  | 277147 | 3 | 279426 |  |  |  | 279429 |
| Shares issued with extinguishment of debt |  |  | 2117102 | 21 | 18057389 |  |  |  | 18057410 |
| Effects of sale of mine property |  |  |  |  |  |  | 705155 | (1719) | 703436 |
| Foreign currency translation adjustment |  |  |  |  |  |  | (86472) |  | (86472) |
| Net income for the Year | - | - | - | - | - | 12741988 | - | 13671 | 12755659 |
| **Balance, December 31, 2023** | 51 | 1 | 2638903 | 26 | 26491974 | (28913582) |  |  | (2421581) |
| Shares issued with extinguishment of debt |  |  | 20870 | 1 | 25043 |  |  |  | 25044 |
| Net loss for the Period | - | - | - | - | - | (949782) | - | - | (949782) |
| **Balance, December 31, 2024** | 51 | $1 | 2659773 | $27 | $26517017 | $(29863364) | $- | $- | $(3346319) |

---

See accompanying notes to the consolidated financial statements.

 **BluSky AI, Inc.**

**(fka Inception Mining, Inc.)**

**Consolidated Statements of Cash Flows**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, 2024** | **December 31, 2023** |
| Cash Flows From Operating Activities: |  |  |
| Net Income (Loss) | $(949782) | $12755659 |
| Net Income (Loss) from discontinued operations |  | 497581 |
| Gain on sale of mine property in discontinued operations |  | (7230453) |
| Adjustments to reconcile net income (loss) to net cash used in operations |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 727 | 725 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for services |  | 279429 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful note receivable |  | 2219442 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of property, plant and equipment | 2531 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on extinguishment of debt | 13043 | (6313102) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in derivative liability | (196321) | (3273396) |
| &nbsp;&nbsp;&nbsp;&nbsp;Default penalty additions | 119734 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expenses paid in behalf of the company by related party | 15327 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use asset | 9595 | 13511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 219961 | 77032 |
| &nbsp;&nbsp;&nbsp;&nbsp;Initial derivative expense | 193582 |  |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivables |  | 3556358 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 10000 | (7283) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 404154 | 30888 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities - related parties | 30310 | (1363250) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Cash Provided By (Used In) Continuing Operations | (127139) | 1243141 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Cash Provided By (Used In) Discontinued Operations | - | (466) |
| Net Cash Provided By (Used In) Operating Activities | (127139) | 1242675 |
| Cash Flows From Investing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investing activities of discontinued operations | - | (652) |
| Net Cash Provided By (Used In) Investing Activities |  | (652) |
| Cash Flows From Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of notes payable-related parties | (98475) | (39000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of convertible notes payable | (98784) | (1343429) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable-related parties | 174396 | 39303 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from convertible notes payable | 150000 | 100000 |
| Net Cash Provided by (Used in) Continuing Financing Activities | 127137 | (1243126) |
| Effects of exchange rate changes on cash | - | 1105 |
| Net Change in Cash | (2) | 2 |
| Cash at Beginning of Period | 2 | - |
| Cash at End of Period |  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less Cash of Discontinued Operations at End of Period |  |  |
| Cash of Continued Operations at End of Period | $- | $2 |
| Supplemental disclosure of cash flow information: |  |  |
| Cash paid for interest | $11074 | $157494 |
| Cash paid for taxes | $- | $- |
| Supplemental disclosure of non-cash investing and financing activities: |  |  |
| Note receivable acquired for sale of mine property | $- | $2700000 |
| Common stock issued for conversion of debt | $25043 | $- |
| Common stock issued for settlement of notes payable - related parties | $- | $18057410 |
| Recognition of debt discounts on convertible note payable | $179800 | $66615 |

---

See accompanying notes to the consolidated financial statements.

 **BluSky AI, Inc.**

**(fka Inception Mining, Inc.)**

**Notes to Consolidated Financial Statements**

**As of December 31, 2024 and 2023**

**1. Nature of Business**

BluSky AI Inc, (formerly know as Inception Mining, Inc.) (formerly known as Gold American Mining Corp.) was incorporated under the name of Golf Alliance Corporation and under the laws of the State of Nevada on July 2, 2007. Inception Mining, Inc. is a precious metal mineral acquisition, exploration and development company. Inception Development, Inc., its wholly owned subsidiary, was incorporated under the laws of the State of Idaho on January 28, 2013.

Golf Alliance Corporation pursued its original business plan to provide opportunities for golfers to play on private golf courses normally closed to them due to the membership requirements of the private clubs. During the year ended July 31, 2010, the Company decided to redirect its business focus toward precious metal mineral acquisition and exploration.

On March 5, 2010, the Company amended its articles of incorporation to (1) to change its name to Silver America, Inc. and (2) increased its authorized common stock from 100,000,000 to 500,000,000.

On June 23, 2010, the Company amended its articles of incorporation to change its name to Gold American Mining Corp.

On November 21, 2012, the Company implemented a 200 to 1 reverse stock split. Upon effectiveness of the stock split, each shareholder cancelled 200 shares of common stock for every share of common stock owned as of November 21, 2012. This reverse stock split was effective on February 13, 2013. All share and per share references have been retroactively adjusted to reflect this 200 to 1 reverse stock split in the financial statements and in the notes to financial statements for all periods presented, to reflect the stock split as if it occurred on the first day of the first period presented.

On February 25, 2013, Gold American Mining Corp. and its majority shareholder (the "Majority Shareholder"), and its wholly-owned subsidiary, Inception Development Inc. (the "Subsidiary"), entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Inception Resources, LLC, a Utah corporation ("Inception Resources"), pursuant to which Inception purchased the U.P. and Burlington Gold Mine in consideration of 16,000,000 shares of common stock of Inception, the assumption of promissory notes in the amount of $950,000 and the assignment of a 3% net royalty. Inception Resources was an entity owned by and under the control of the majority shareholder. This transaction is deemed an asset purchase by entities under common control. The Asset Purchase Agreement closed on February 25, 2013 (the "Closing"). Inception was a "shell company" (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) immediately prior to our acquisition of the gold mine pursuant to the terms of the Asset Purchase Agreement.

On May 17, 2013, the Company amended its articles of incorporation to change its name to Inception Mining, Inc. ("Inception" or the "Company").

On October 2, 2015, the Company consummated a merger with Clavo Rico Ltd. ("Clavo Rico"). Clavo Rico is a privately held Turks and Caicos company with principal operations in Honduras, Central America. Clavo Rico operates the Clavo Rico mining concession through its subsidiaries Compañía Minera Cerros del Sur, S.A de C.V. and Compañía Minera Clavo Rico, S.A. de C.V. and holds other mining concessions. Pursuant to the agreement, the Company issued of 240,225,901 shares of common stock of Inception and assumed promissory notes in the amount of $5,488,980 and accrued interest of $3,434,426. Under this merger agreement, there was a change in control and it has been treated for accounting purposes as a reverse recapitalization with Clavo Rico, Ltd. being the surviving entity. Its workings include several historical underground operations dating back to the early Mayan and Spanish occupation.

On January 11, 2016, the Company implemented a 5.5 to 1 reverse stock split. This reverse stock split was effective on May 26, 2016. All share and per share references have been retroactively adjusted to reflect this 5.5 to 1 reverse stock split in the financial statements and in the notes to financial statements for all periods presented, to reflect the stock split as if it occurred on the first day of the first period presented. Immediately before the Reverse Split, the Company had 266,669,980 shares of common stock outstanding. Immediately after the Reverse Split, the Company had 48,485,451 shares of common stock outstanding, pending fractional-share rounding-up calculations to adjust for the Reverse Split.

On January 12, 2023, Inception Mining, Inc. (the "<u>Company</u>") entered into a non-binding Letter of Intent (the "LOI") with Mother Lode Mining, Inc. ("MLM"). The LOI became binding on January 24, 2023.

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.

Since the Divestiture of the Clavo Rico Mine, the Company has been operating as a consultant and advisor to the mining industry, including to Mother Lode Mining, the new owner of the Clavo Rico mine. It also has an ongoing financial interest in the Clavo Rico Mine under the LOI.

**COVID-19** – The Company has been impacted significantly by the COVID-19 global pandemic. In response to COVID-19, national and local governments around the world have instituted certain measures, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders, and recommendations to practice social distancing. Based on management's assessment as of December 31, 2024, the ultimate impact of COVID-19 on the Company's business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the global economy, which are uncertain and cannot be predicted at this time.

**2. Summary of Significant Accounting Policies**

**Going Concern –** The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements during year ended December 31, 2024, the Company has an accumulated deficit of $29,863,364, a working capital deficit of $3,346,850 and used $127,139 in cash for operating activities. These factors among others raise substantial doubt about the Company's ability to continue as a going concern for twelve months from the date these financial statements are issued.

The Company's existence is dependent upon management's ability to develop profitable operations and to obtain additional funding sources. There can be no assurance that the Company's financing efforts will result in profitable operations or the resolution of the Company's liquidity problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Management is currently working to make changes that will result in profitable operations and to obtain additional funding sources to meet the Company's need for cash during the next twelve months and beyond.

**Use of Estimates –** In preparing financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenditures during the reported periods. Actual results could differ materially from those estimates. Estimates may include those pertaining to valuation of inventories and mineralized material on leach pads, the estimated useful lives and valuation of properties, plant and equipment, mineral rights and properties, deferred tax assets, convertible preferred stock, derivative assets and liabilities, reclamation liabilities, stock-based compensation and payments, and contingent liabilities.

**Principles of Consolidation –** The accompanying consolidated financial statements include the accounts of Inception Mining, Inc. and its wholly owned subsidiaries, Inception Development, Corp., Clavo Rico Development Corp., Clavo Rico, Ltd. and Compañía Minera Cerros del Río, S.A. de C.V., and its controlling interest subsidiaries, Compañía Minera Cerros del Sur, S.A. de C.V. and Compañía Minera Clavo Rico, S.A. de C.V. (collectively, the "Company"). All intercompany accounts have been eliminated upon consolidation through the date the subsidiaries were disposed of on January 24, 2023.

**Basis of Presentation –** The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.

**Cash and Cash Equivalents –** The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2024 and December 31, 2023, the Company had no cash equivalents. The aggregate cash balance on deposit in these accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has never experienced any losses in such accounts.

**Settlement of Contracts in Company's Equity–** In accordance with ASC 815-40-25, the Company must meet certain requirements in order to report contracts as equity versus liabilities. These requirements must be met by the Company or the contracts need to be reported as liabilities. The Company has adopted the sequencing approach as guidance on contracts that permit partial net share settlement. The Company evaluates the contracts based on the earliest issuance date. Currently, the Company doesn't have any items that are reported as equity instead of liabilities.

**Fair Value Measurements –** The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the party's own credit risk.

Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The carrying value of the Company's cash, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.

The fair value of financial instruments on December 31, 2024 are summarized below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Debt derivative liabilities | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | 186542 | 186542 |
| Total Liabilities | $- | $- | $186542 | $186542 |

---

The fair value of financial instruments on December 31, 2023 are summarized below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Warrant liabilities | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $- | $- |
| Debt derivative liabilities | - | - | 39281 | 39281 |
| Total Liabilities | $- | $- | $39281 | $39281 |

---

The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed below in Note 3. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed below in Note 3 are that of volatility and market price of the underlying common stock of the Company.

**Notes Receivable** – Notes receivable include amounts due to the Company pursuant to financial agreements stipulating interest rates, payment terms and maturity dates. As of December 31, 2024 and 2023, notes receivable balances include one note due from Mother Load Mining, Inc. in the amounts of $2,219,442, net of reserves of $2,219,442 (see Note 4 – Note Receivable). However, the Company has elected to create an allowance for doubtful collection of this note for the full outstanding balance of $2,219,442 as of December 31, 2024 and recognized a bad debt expense of $2,219,442 during the year ended December 31, 2023.

**Long-Lived Assets –** We review the carrying amount of our long-lived assets for impairment whenever there are negative indicators of impairment. An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is not considered recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flows.

**Properties, Plant and Equipment –** We record properties, plant and equipment at historical cost. We provide depreciation and amortization in amounts sufficient to match the cost of depreciable assets to operations over their estimated service lives or productive value. We capitalize expenditures for improvements that significantly extend the useful life of an asset. We charge expenditures for maintenance and repairs to operations when incurred. Depreciation is computed using the straight-line method over estimated useful lives as follows:

---

| | |
|:---|:---|
| Building | 7 to 15 years |
| Vehicles and equipment | 3 to 7 years |
| Processing and laboratory | 5 to 15 years |
| Furniture and fixtures | 2 to 3 years |

---

**Stock Issued for Goods and Services –** Common and preferred shares issued for goods and services are valued based upon the fair market value of our common stock or the goods and services received.

**Stock-Based Compensation –** For stock-based transactions, compensation expense is recognized over the requisite service period, which is generally the vesting period, based on the estimated fair value on the grant date of the award.

**Income (Loss) per Common Share –** Basic net income (loss) per common share is computed by dividing net income (loss), less the preferred stock dividends, by the weighted average number of common shares outstanding. Dilutive income (loss) per share includes any additional dilution from common stock equivalents, such as stock options and warrants, and convertible instruments, if the impact is not anti-dilutive. 810,359 common share equivalents have been excluded from the diluted loss per share calculation for the year ended December 31, 2024 because it would be anti-dilutive.

The following tables summaries the changes in the net earnings per common share for the years ended December 31, 2024 and 2023:

---

| | | |
|:---|:---|:---|
| | **For the Years Ended** | **For the Years Ended** |
| <br>Numerator | **December 31, 2024** | **December 31, 2023** |
| Net Income (Loss) - Controlling Interest | $(949782) | $12741988 |
| Gain on Extinguishment of Debt |  | (6313102) |
| Interest Expense |  | 72790 |
| Change in Derivative Liabilities | - | (3220312) |
| Adjusted Net Income (Loss) - Controlling Interest | $(949782) | $3281364 |

---

---

| | | |
|:---|:---|:---|
| Denominator | **Shares** | **Shares** |
| Basic Weighted Average Number of Shares Outstanding during Period | 2647513 | 2330781 |
| Dilutive Shares | - | 430295965 |
| Diluted Weighted Average Number of Shares Outstanding during Period | 2647513 | 432646746 |
| Diluted Net Income (Loss) per Share | $(0.36) | $0.03 |

---

**Comprehensive Loss –** Comprehensive loss is made up of the exchange differences arising on translating foreign operations and the net loss for the years ended December 31, 2024 and 2023.

**Derivative Liabilities –** Derivatives liabilities are recorded at fair value when issued and the subsequent change in fair value each period is recorded in other income (expense) in the consolidated statements of operations. We do not hold or issue any derivative financial instruments for speculative trading purposes.

**Income Taxes –** The Company's income tax expense and deferred tax assets and liabilities reflect management's best assessment of estimated future taxes to be paid. Significant judgments and estimates are required in determining the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating the Company's ability to recover its deferred tax assets, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, the Company develops assumptions including the amount of future state and federal pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income, and are consistent with the plans and estimates that the Company is using to manage the underlying businesses. The Company provides a valuation allowance for deferred tax assets for which the Company does not consider realization of such deferred tax assets to be more likely than not.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Management is not aware of any such changes that would have a material effect on the Company's results of operations, cash flows or financial position.

**Business Segments** – The Company operates in one segment and therefore segment information is not presented.

**Operating Lease** – The Company leases its corporate headquarters and administrative offices in Salt Lake City, Utah. This lease expires in August 2024.

The supplemental balance sheet information related to the operating lease for the periods is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Operating leases |  |  |
| Long-term right-of-use assets | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $9595 |
| Short-term operating lease liabilities | $- | $9595 |
| Long-term operating lease liabilities | - | - |
| Total operating lease liabilities | $- | $9595 |

---

The Company made cash payments of $22,484 and $15,772 for the years ended December 31, 2024 and 2023, respectively. The Company incurred rent expense of $22,484 and $15,722 for the years ended December 31, 2024 and 2023, respectively.

**Non-Controlling Interest Policy** – Non-controlling interest (NCI) is the portion of equity ownership in a subsidiary not attributable to the parent company, who has a controlling interest and consolidates the subsidiary's financial results with its own. 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 | $39281 |
| Transfers in upon initial fair value of derivative liabilities | 343582 |
| Change in fair value of derivative liabilities and warrant liability | (196321) |
| Balance, December 31, 2024 | $186542 |

---

**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.

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 "<u>Company</u>") 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 was delivered by MLM to the Company on January 18, 2023, to pay a settlement amount for existing debt of the Company; (f) $500,000 was delivered by MLM to the Company on January 23, 2023, to satisfy existing debts of the Company; (g) $500,000 was delivered by MLM to the Corporation on January 24, 2023 to satisfy existing debts of the Corporation.

In addition to the amounts already delivered under the LOI, an additional amount of $2,700,000 shall be paid by MLM to the Company over a period of twenty-four (24) months (the "Monthly Payments"). The Monthly Payments shall be paid as follows: (i) $25,000 due March 1, 2023, (ii) $50,000 due on the first day of each of April, May and June 2023, and (iii) $100,000 due on the first day of each month for the following twenty months, until February 1, 2025 at which point all amounts due and payable hereunder shall be delivered in a final balloon payment. The Company has received payments totaling $480,558, leaving an outstanding balance of $2,219,442 as of December 31, 2024. MLM is currently $298,642 behind on payments. Outstanding balances and missed Monthly Payments will be secured by a 10% net smelter royalty (NSR) on the Clavo Rico mine production until the Monthly Payments are delivered and the purchase price is paid in full. In addition to the Monthly Payments, the Company will receive a carried forward net profits interest royalty ("NPI") of 5% on the Clavo Rico mine production until the total NPI paid to the Company is $1,000,000, subject to limited conditions. However, the Company has elected to create an allowance for doubtful collection of this note for the full outstanding balance of $2,219,442 as of December 31, 2024 and recognized a bad debt expense of $2,219,442 during the year ended December 31, 2023.

The following table summarizes the note receivable of the Company as of December 31, 2024 and 2023:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Note Receivable from Mother Load Mining, Inc. pursuant to a Letter of Intent dated effective January 12, 2023, in the original principal amount of $5,700,000, accruing no interest, with monthly payments beginning on March 31, 2023, maturing February 1, 2025. | $2219442 | $2700000 |
| Less: Payments received | - | (480558) |
| Total Note Receivable outstanding | 2219442 | 2219442 |
| Less: Allowance for Doubtful Note Receivable | (2219442) | (2219442) |
| Total Note Receivable | $- | $- |

---

**5. Properties, Plant and Equipment, Net**

Properties, plant and equipment of continuing operations at December 31, 2024 and 2023 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Machinery and Equipment | $25368 | $25368 |
| Office Equipment and Furniture | 1627 | 1627 |
|  | 26995 | 26995 |
| Less Accumulated Depreciation | (24464) | (23737) |
| Less Loss on Disposal of Property, Plant and Equipment | (2531) | - |
| Total Property, Plant and Equipment | $- | $3258 |

---

During the years ended December 31, 2024 and 2023, the Company recognized depreciation expense of $727 and $725, respectively. During the year ended December 31, 2024, the Company disposed of its remaining property, plant and equipment and recognized a loss of $2,531.

**6. Accounts Payable and Accrued Liabilities**

Accounts Payable and accrued liabilities of continuing operations at December 31, 2024 and 2023 consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2023** |
| Accounts Payable | $518930 | $348902 |
| Accrued Liabilities | 1226857 | 913887 |
| Accrued Salaries and Benefits | - | 69249 |
| Total Accrued Liabilities | $1745787 | $1332038 |

---

**7. Notes Payable**

Notes payable of continuing operations were comprised of the following as of December 31, 2024 and 2023:

---

| | | |
|:---|:---|:---|
| **Notes Payable** | **December 31, 2024** | **December 31, 2023** |
| Phil Zobrist | $60000 | $60000 |
| Antczak Polich Law LLC | 65000 | 65000 |
| Total Notes Payable | 125000 | 125000 |
| Less Short-Term Notes Payable | (125000) | (125000) |
| Total Long-Term Notes Payable | $- | $- |

---

**Phil Zobrist** – On January 11, 2013, the Company issued an unsecured Promissory Note to Phil Zobrist in the principal amount of $60,000 (the "Note") due on demand and bearing 0% per annum interest. The total net proceeds the Company received was $60,000. On October 2, 2015, the Company entered into a new convertible note with Phil Zobrist that originally matured on December 31, 2016 and bears 18% per annum interest. The Company agreed to accrue interest from inception of these Notes in the amount of $29,412 and charged this amount to interest expense during the year ended December 31, 2015. The Note is convertible into common stock, at holder's option, at a price of $0.99 (0.18 pre-split) or a 50% discount to the average of the three lowest VWAP of the common stock during the 20-trading day period prior to conversion. On October 2, 2016, the Company renegotiated the note payable. The convertible feature was removed, and the note was extended until December 31, 2024. The Company recognized a gain on the extinguishment of debt of $121,337 for the remaining derivative liability and of $11,842 for the remaining debt discount. As of December 31, 2024, the gross balance of the note was $60,000 and accrued interest was $129,363.

**Antczak Polich Law, LLC** – On March 21, 2023, the Company issued an unsecured Promissory Note ("Note") to Antczak Polich Law, LLC ("Antczak"), in the principal amount of $75,000 (the "Note") and does not accrue interest. This note was due on December 31, 2023 and requires monthly payments of $10,000 starting July 2023 with any remaining balance paid in full by December 31, 2023. The Company made one payment of $10,000 during the fiscal year ended December 31, 2023. As of December 31, 2024, the gross balance of the note was $65,000 and in default.

**8. Notes Payable – Related Parties**

Notes payable – related parties of continuing operations were comprised of the following as of December 31, 2024 and 2023:

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| | | | |
|:---|:---|:---|:---|
| **Notes Payable - Related Parties** | **Relationship** | **December 31, 2024** | **December 31, 2023** |
| Cluff-Rich PC 401K | Affiliate - Controlled by Director | $51000 | $51000 |
| Whit Cluff | Director | 15327 |  |
| Debra D'Ambrosio | Immediate Family Member | 531434 | 455513 |
| Francis E. Rich | Immediate Family Member | 100000 | 100000 |
| Pine Valley Investments | Affiliate - Controlled by Director | 295000 | 295000 |
| Total Notes Payable - Related Parties |  | 992761 | 901513 |
| Less Short-Term Notes Payable - Related Parties |  | (992761) | (32895) |
| Total Long-Term Notes Payable - Related Parties |  | $- | $868618 |

---

**Cluff-Rich PC 401K (Affiliate – Controlled by Significant Shareholder) –** On June 29, 2022, the Company issued an unsecured Short-Term Promissory Note to Cluff-Rich PC 401K in the principal amount of 60,000 (the "Note") due on December 31, 2022 and bears a 5.0% interest rate. On February 1, 2023, the Company re-negotiated this note which extended it to March 1, 2025 and made it non-interest bearing. The Company issued 5,143 shares of common stock as settlement for the accrued interest of $18,000. During the year ended December 31, 2023, the Company made a payment of $9,000 towards the principal balance. As of December 31, 2024, the gross balance of the notes was $51,000.

**D. D'Ambrosio (Immediate Family Member of Director) –** On January 1, 2023, there were six notes outstanding with outstanding balance of the Notes of $446,210 and accrued interest of $81,204. During January 2023, the Company issued an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $6,408 (the "Note") that bears a 3.00% interest rate. On February 1, 2023, the Company re-negotiated these notes into one note with a maturity date of March 1, 2025 and is non-interest bearing. The Company issued 23,201 shares of common stock on February 1, 2023 as settlement for the accrued interest of $81,204. During the year ended December 31, 2023, the Company made a payment of $30,000 towards the principal balance. As of December 31, 2024, the gross balance of the note was $422,618.

**D. D'Ambrosio (Immediate Family Member of Director) –** On January 1, 2024, the Company issued an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $32,895 (the "Note") for the two Notes issued from April through December 2023, which had expired. The Note bears a 5.00% interest rate and matures on December 31, 2023. During the year ended December 31, 2024, the Company paid the principal balance of $32,895. As of December 31, 2024, the gross balance of the note was $0.

**D. D'Ambrosio (Immediate Family Member of Director) –** On January 31, 2024, the Company issued an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $22,695 (the "Note"), which bears a 5.00% interest rate and matures on January 31, 2025. During the year ended December 31, 2024, the Company paid the principal balance of $22,695. As of December 31, 2024, the gross balance of the note was $0.

**D. D'Ambrosio (Immediate Family Member of Director) –** On March 31, 2024, the Company issued an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $6,000 (the "Note"), which bears a 5.00% interest rate and matures on March 31, 2025. During the year ended December 31, 2024, the Company paid the principal balance of $6,000. As of December 31, 2024, the gross balance of the note was $0.

**D. D'Ambrosio (Immediate Family Member of Director) –** On May 1, 2024, the Company issued an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $32,455 (the "Note"), which bears a 5.00% interest rate and matures on December 31, 2024. During the year ended December 31, 2024, the Company paid the principal balance of $32,455. As of December 31, 2024, the gross balance of the note was $0.

**D. D'Ambrosio (Immediate Family Member of Director) –** During June through September, 2024, the Company received funds in the amount of $50,395. On October 1, 2024, the Company formalized an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $50,395 (the "Note"), which bears a 5.00% interest rate and matures on October 31, 2025. During the year ended December 31, 2024, the Company made payments of $4,430 towards the principal balance. As of December 31, 2024, the gross balance of the note was $45,965.

**D. D'Ambrosio (Immediate Family Member of Director) –** During October through December, 2024, the Company received funds in the amount of $62,851. On November 1, 2024, the Company formalized an unsecured Short-Term Promissory Notes to D. D'Ambrosio in principal amounts totaling $62,851 (the "Note"), which bears a 15.00% interest rate and matures on November 30, 2025. As of December 31, 2024, the gross balance of the note was $62,851 and accrued interest was $1,550.

**Francis E. Rich (Immediate Family Member of Director) –** On January 1, 2023, there were two notes outstanding with outstanding balance of the Notes of $100,000 and accrued interest of $47,500. On February 1, 2023, the Company re-negotiated these notes into one note with a maturity date of March 1, 2025 and is non-interest bearing. The Company issued 16,429 shares of common stock as settlement for the accrued interest of $57,500. As of December 31, 2024, the gross balance of the notes was $100,000.

**Pine Valley Investments, LLC (Affiliate – Controlled by Significant Shareholder) –** On January 1, 2023, there were three Notes outstanding with outstanding balance of the Notes of $295,000 and accrued interest of $115,250. On February 1, 2023, the Company re-negotiated these notes into one note with a maturity date of March 1, 2025 and is non-interest bearing. The Company issued 32,929 shares of common stock as settlement for the outstanding accrued interest of $115,250. As of December 31, 2024, the gross balance of the notes was $295,000.

**Whit Cluff (Affiliate – Director)** – On March 28, 2024, the Company issued an unsecured Short-Term Promissory Note to Cluff-Rich PC 401K in the principal amount of $15,327 (the "Note") due on April 30, 2025 and bears a 5.0% interest rate. As of December 31, 2024, the gross balance of the note was $15,327 and accrued interest was $766.

Typically, any gains or losses on the extinguishment of debts are reported on the statement of operations. However, since all of the debts in this section are related parties, the gains or losses on the extinguishment of debts have been recorded as additional paid-in capital instead of gains or losses.

**9. Convertible Notes Payable**

Convertible notes payable were comprised of the following as of December 31, 2024 and 2023:

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| | | |
|:---|:---|:---|
| **Convertible Notes Payable** | **December 31, 2024** | **December 31, 2023** |
| 1800 Diagonal Lending | $266451 | $77701 |
| Total Convertible Notes Payable | 266451 | 77701 |
| Less Unamortized Discount | - | (40161) |
| Total Convertible Notes Payable, Net of Unamortized Debt Discount | 266451 | 37540 |
| Less Short-Term Convertible Notes Payable | (266451) | (37540) |
| Total Long-Term Convertible Notes Payable, Net of Unamortized Debt Discount | $- | $- |

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**1800 Diagonal Lending LLC** – On September 12, 2023, the Company issued an unsecured Convertible Promissory Note ("Note") to 1800 Diagonal Lending, LLC ("1800"), in the principal amount of $116,550 (the "Note") due on June 15, 2024 and bears 11% per annum interest, due at maturity. The total net proceeds the Company received was $100,000 (less an original issue discount ("OID") of $16,550). The Note is convertible into common stock, at holder's option, at a 25% discount of the average of the three lowest trading price of the common stock during the 10 trading day period prior to conversion. During the year ended December 31, 2023, the Company paid $43,122 towards the principal balance of $38,849 and $4,273 in accrued interest. For the year ended December 31, 2023, the Company amortized $26,454 of debt discount as interest expense. During the year ended December 31, 2024, the Company paid $86,245 towards the principal balance of $77,701 and $8,544 in accrued interest. For the year ended December 31, 2024, the Company amortized $40,161 of debt discount as interest expense. As of December 31, 2024, the gross balance of the note was $0 and accrued interest was $0.

**1800 Diagonal Lending LLC** – On January 23, 2024, the Company issued an unsecured Convertible Promissory Note ("Note") to 1800 Diagonal Lending, LLC ("1800"), in the principal amount of $63,250 (the "Note") due on October 30, 2024 and bears 12% per annum interest, due at maturity. The total net proceeds the Company received was $50,000 (less an original issue discount ("OID") of $13,250). The Note is convertible into common stock, at holder's option, at a 25% discount of the average of the three lowest trading price of the common stock during the 10 trading day period prior to conversion. During the year ended December 31, 2024, the Company paid $23,613 towards the principal balance of $21,083 and $2,530 in accrued interest. For the year ended December 31, 2024, the Company amortized $63,250 of debt discount to current period operations as interest expense. On June 4, 2024, the Company was notified by the lender that the note was in default. The Company recognized default penalties for principal and interest of $40,480. As of December 31, 2024, the gross balance of the note was $70,647 and accrued interest was $3,170.

**1800 Diagonal Lending LLC** – On May 3, 2024, the Company issued an unsecured Convertible Promissory Note ("Note") to 1800 Diagonal Lending, LLC ("1800"), in the principal amount of $116,550 (the "Note") due on February 15, 2025 and bears 12% per annum interest, due at maturity. The total net proceeds the Company received was $100,000 (less an original issue discount ("OID") of $16,550). The Note is convertible into common stock, at holder's option, at a 35% discount of the lowest trading price of the common stock during the 10 trading day period prior to conversion. For the year ended December 31, 2024, the Company amortized $116,550 of debt discount to current period operations as interest expense. On June 4, 2024, the Company was notified by the lender that the note was in default. The Company recognized default penalties for principal and interest of $79,254. As of December 31, 2024, the gross balance of the note was $195,804 and accrued interest was $7,510.

**Antczak Polich Law, LLC** – On August 1, 2018, the Company issued an unsecured Convertible Promissory Note ("Note") to Antczak Polich Law, LLC ("Antczak"), in the principal amount of $300,000 (the "Note") due on August 1, 2019 and bears 8% per annum interest, due at maturity. This Note was issued for $300,000 in legal fees due to Antczak for its services related to several legal issues handled for the Company. The Note is convertible into common stock, at holder's option, at a fixed conversion price of $0.75 per share. On March 21, 2023, the Company negotiated a settlement with the lender on this note. This note reverted to a non-convertible note with a balance of $75,000 and does not accrue interest (see note 7 for more details) and the remaining balance along with accrued interest was forgiven. During the year ended December 31, 2023, the Company recognized a gain on settlement of debt of $309,798. During the year ended December 31, 2023, the Company made a payment of $10,000 toward the principal of this note. As of December 31, 2024, the gross balance of the note was $65,000 and accrued interest was $0.

**Antczak Polich Law, LLC** – On December 1, 2018, the Company issued an unsecured Convertible Promissory Note ("Note") to Antczak Polich Law, LLC ("Antczak"), in the principal amount of $130,000 (the "Note") due on December 1, 2019 and bears 8% per annum interest, due at maturity. This Note was issued for $130,000 in legal fees due to Antczak for its services related to several legal issues handled for the Company. The Note is convertible into common stock, at holder's option, at a fixed conversion price of $0.75 per share. On March 21, 2023, the Company negotiated a settlement with the lender on this note. The remaining accrued interest was forgiven. During the year ended December 31, 2023, the Company recognized a gain on settlement of debt of $14,142. As of December 31, 2024, the gross balance of the note was $0 and accrued interest was $0.

**Antilles Family Office LLC** – On May 20, 2019, the Company issued a secured Convertible Promissory Note ("Note") to an Investor, in the principal amount of $4,250,000 (the "Note") due on May 20, 2022 and bears 20% (24% default) per annum interest, due at maturity. The total net proceeds the Company received was $3,000,000. On November 24, 2021, the Note was assigned by the Investor to Antilles Family Office, LLC ("Antilles"). The Note is convertible into common stock, at holder's option, at 100% of market price less $0.01 per share. Market price means the mathematical average of the five lowest individually daily volume weighted average prices of the common stock from the period beginning on the issuance date and ending on the maturity date. The conversion price has a floor price of $0.01 per share of common stock. The Company issued 9,250 warrants to purchase shares of common stock in connection with this note. The warrants have a three-year life and an exercise price as follows: 3,750 at an exercise price of $0.40 per share, 3,000 at an exercise price of $0.50 per share and 2,500 at an exercise price of $0.60 per share. The proceeds were allocated between the note for $1,788,038 and the warrants for $1,211,962. The note has an early payoff penalty of 140% of the then outstanding face value. On July 29, 2019, the investor converted $265,000 of the principal balance into 2,987 shares of common stock valued at $0.11 per share. The Company recognized a loss on the extinguishment of debt of $40,350. During 2020, the investor converted $36,300 of the principal balance into 17,834 shares of common stock. The Company recognized a loss on the extinguishment of debt of $531,194. The Company also made cash payments of $500,000 towards the principal balance of the note. The Company has required payments as follows: $2,400,000 in 2021 and the remaining balance due in 2022. During 2020, the Company experienced a triggering event. As a result, the interest rate increased to 20% for the life of the note. On April 14, 2020, the Company entered into a Forbearance Agreement with Investor in which Investor agreed to rescind its prior declaration of an Event of Default under the May 20, 2019 Note Purchase Agreement and the Company agreed to pay certain monthly and quarterly redemptions of the May 20, 2019 Note through 2022. Specifically, the Company agreed to pay $900,000 during 2020, $2,400,000 during 2021 and $500,000 delivered during each quarter of 2022 until the Note is converted or redeemed in full. During the year ended December 31, 2021, the investor converted $231,724 of the principal balance into 83,753,430 shares of common stock. The Company recognized a loss on the extinguishment of debt of $1,783,593. The Company also made cash payments of $142,857 towards the principal balance of the note. The Investor assigned the Note to Antilles in November 2021. On December 30, 2021, the Company was served with a complaint filed by Antilles claiming an amount of $5,324,206 due from the Company. In the complaint, filed in the United States District Court for the District of Delaware, Antilles alleges breach of contract and unjust enrichment against the Company and seeks a judgment in the collection action, an aware of attorneys' fees and other expenses, and injunctive relief to preserve the assets of the Company. The Company has responded to the complaint with a motion to dismiss several counts of the complaint as impermissibly duplicative of the breach of contract claim, and intends to defend the lawsuit aggressively. On January 18, 2023, the Company negotiated a settlement and paid $1,200,000 to Antilles. The remaining balance of $1,873,532 and the accrued interest of $3,695,059 was forgiven. During the year ended December 31, 2023, the Company recognized a gain on settlement of debt of $5,574,710. As of December 31, 2024, the gross balance of the note was $0 and accrued interest was $0.

**Scotia International of Nevada, Inc.** – On January 10, 2019, the Company issued an unsecured Convertible Promissory Note ("Note") to Scotia International of Nevada, Inc. ("Scotia"), in the principal amount of $400,000 (the "Note") due on January 10, 2022 and bears 6% per annum interest, due at maturity. The Note was issued as part of a buyout agreement on the net smelter royalty due Scotia on the precious metals mined from the Company's mining operation in Honduras. The Note is convertible into common stock, at holder's option, at $0.50 per share as long as the Company's common stock's bid price is less than $0.75 per share. If the bid price is more than $0.75 per share, then Scotia may elect to convert at the average bid price of the common stock during the 10-trading day period prior to conversion. On April 12, 2023, the Company negotiated a settlement with the lender on this note. This note reverted to a non-convertible note with a balance of $75,000 and does not accrue interest (see note 7 for more details) and the remaining balance along with accrued interest was forgiven. During the year ended December 31, 2023, the Company recognized a gain on settlement of debt of $421,289. During the year ended December 31, 2023, the Company paid this debt in full. As of December 31, 2024, the gross balance of the note was $0 and accrued interest was $0.

**10. Stockholders' Deficit**

**Common Stock**

On August 2, 2024 upon the conversion of $12,000 in existing debt owed to the shareholder that has been accrued, the Company issued 20,870 restricted shares of Common Stock to 1800 Diagonal Lending LLC.

On January 1, 2023, the Company issued 28,572 restricted shares of Common Stock to Justin Wilson for services rendered to the Company. These shares were valued at $0.0006 per share and the Company recognized an expense for stock-based compensation of $17,143.

On January 1, 2023, the Company issued 28,572 restricted shares of Common Stock to Sean Wilson for services rendered to the Company. These shares were valued at $0.0006 per share and the Company recognized an expense for stock-based compensation of $17,143.

On February 1, 2023, the Company issued 5,143 restricted shares of Common Stock to Cluff-Rich 401(k) upon the conversion of $18,000 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 16,429 restricted shares of Common Stock to Fran Rich upon the conversion of $57,500 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 23,201 restricted shares of Common Stock to Debra D'Ambrosio upon the conversion of $81,204 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 485,403 restricted shares of Common Stock to Trent D'Ambrosio upon the conversion of $1,794,754 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 17,143 restricted shares of Common Stock to Kay Briggs upon the conversion of $60,000 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 204,286 restricted shares of Common Stock to Legends Capital Group upon the conversion of $2,204,695 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 314,572 restricted shares of Common Stock to L W Briggs Irrevocable Trust upon the conversion of $3,370,371 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 52,858 restricted shares of Common Stock to Claymore Management upon the conversion of $580,768 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 965,138 restricted shares of Common Stock to Clavo Rico Inc. upon the conversion of $9,774,869 in existing debt owed to the shareholder that has been accrued by the Company.

On February 1, 2023, the Company issued 32,929 restricted shares of Common Stock to Pine Valley Investments upon the conversion of $115,250 in existing debt owed to the shareholder that has been accrued by the Company.

On February 17, 2023, the Company issued 42,858 restricted shares of Common Stock to Whit Cluff for services rendered to the Company. These shares were valued at $0.000014 per share and the Company recognized an expense for stock-based compensation of $60,000.

On February 17, 2023, the Company issued 2,858 restricted shares of Common Stock to Rod Sperry for services rendered to the Company. These shares were valued at $0.000014 per share and the Company recognized an expense for stock-based compensation of $4,000.

On February 17, 2023, the Company issued 2,858 restricted shares of Common Stock to Brunson Chandler & Jones, PLLC for services rendered to the Company. These shares were valued at $0.000014 per share and the Company recognized an expense for stock-based compensation of $4,000.

On February 17, 2023, the Company issued 14,286 restricted shares of Common Stock to Kyle Pickard for services rendered to the Company. These shares were valued at $0.000014 per share and the Company recognized an expense for stock-based compensation of $20,000.

On September 22, 2023, the Company issued 157,143 restricted shares of Common Stock to William McCluskey for services rendered to the Company in accordance to a consulting agreement. These shares were valued at $0.001 per share and the Company recognized an expense for stock-based compensation of $157,143.

**11. Income Taxes**

The Company's former subsidiaries, Compania Minera Cerros del Sur and Compania Minera Clavo Rico, which are located in Honduras, are required to pay income tax and solidarity tax on their income and/or assets annually. During 2022, the Company paid $109,904 for the 2021 tax liability and accrued for and estimated $13,973 for the 2022 fiscal year.

The Company accounts for U.S. income taxes under FASB Codification Topic 740-10-25 ("ASC 740-10-25"). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The provision for income tax expense (recovery) is comprised the following amounts:

---

| | | |
|:---|:---|:---|
| **Tax Reconciliations** | **December 31, 2024** | **December 31, 2023** |
| Tax at Statutory Rate | $(246913) | $3316471 |
| Meals and Entertainment | (63) | (362) |
| Change in Derivative Liability | (51043) | (851083) |
| Amortization of Debt Discount | 57190 | (20028) |
| Accrued Interest | 48050 | 11212 |
| Change in Valuation of Allowance | 192779 | (2456210) |
| Tax Provision | $- | $- |

---

The components of deferred income tax in the accompanying balance sheets are as follows:

---

| | | |
|:---|:---|:---|
| **Deferred Tax Assets** | **December 31, 2024** | **December 31, 2023** |
| (21% Federal, 5% Average Corporate Rate) |  |  |
| Net Operating Loss Carry-forwards | $4127868 | $4320740 |
| Depreciation | 217362 | 217362 |
| Accrued Interest | (48050) | (11213) |
| Valuation Allowance | (4297180) | (4526889) |
| Deferred Tax Assets | $- | $- |

---

As of December 31, 2024 and 2023, the Company had net operating loss carry-forwards for U.S. federal income tax purposes of approximately $2,614,710 and $1,872,892, respectively. A portion of the federal amount, $1,710,000, is subject to an annual limitation of approximately $17,000 as a result of a change in the Company's ownership through February 2013, as defined by Federal Internal Revenue Code Section 382 and the related income tax regulations. As a result of the 20-year federal carry-forward period and the limitation, approximately, $1,400,000 of the net operating loss will expire unutilized. These net operating loss carry-forwards will expire through the year ending 2044.

The valuation allowance was established to reduce the deferred tax asset to the amount that will more likely than not be realized. This is necessary due to the Company's continued operating losses and the uncertainty of the Company's ability to utilize all of the net operating loss carry-forwards before they will expire through the year 2044.

The Company is subject to income tax in the U.S. federal jurisdiction. The Company has not been audited by the U.S. Internal Revenue Service in connection with income taxes. The Company's tax years beginning with the year ended June 30, 2012 through December 31, 2024 generally remain open to examination by the Internal Revenue Service until its net operating loss carry-forwards are utilized and the applicable statutes of limitation have expired.

**12. Related Party Transactions**

Consulting Agreement – In February 2014, the Company entered into a consulting agreement with the Company's chief executive officer, stockholder and director. The Company agreed to pay $18,000 per month for twelve months. This agreement was renegotiated in October 2017 and the Company agreed to pay the stockholder/director $25,000 per month starting in October 2017. This agreement was superseded by an Employment Agreement as of July 1, 2018 (see Employment Agreements below). As of December 31, 2022, the Company owed $1,035,000 to the stockholder/director in accrued consulting fees. The accrued consulting fees were converted to equity on February 1, 2023. As of December 31, 2024, the balance of accrued consulting fees was $0.

**Employment Agreements** – Mr. Cluff currently serves as a director of the Company and has a separate agreement as a consultant of the Company effective as of October 2, 2015.

The Company has an employment agreement with its chief executive officer, Trent D'Ambrosio. The employment agreement was effective as of April 1, 2019 and provides for compensation of $300,000 annually. This agreement is effective for 60 months. Additionally, the employment agreement provides for benefits and an optional annual bonus to be determined by the Board of Directors.

**Notes Payable –** The Company took six short-term notes payable from Debra D'Ambrosio, an immediate family member related party during the year ended December 31, 2024. The Company received $174,396 in cash from related parties and paid out $98,475 in cash to related parties on notes payable. The Company also took one short-term note payable form Whit Cluff, a director, during the year ended December 31, 2024. Mr. Cluff paid expenses of the Company in the amount of $15,327 (See Note 8 for more details).

**Accounts Payable –** Two officers/directors of the Company have been paying expenses for the Company on their personal credit cards. The Company has recorded these expenses and accrued the amounts in accounts payable to the individuals. As of December 31, 2024, there is $260,828 in accounts payable and accrued liabilities.

**13. Commitments and Contingencies**

Litigation

The Company at times is subject to other legal proceedings that arise in the ordinary course of business. The following is a summary of pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of operations of the Company.

On March 4, 2024, the Company filed a lawsuit against Mother Lode Mining, Inc., a Canadian company, and Robert Salna (the "Defendants"), alleging an amount of not less than $2,237,800 (plus interest, additional costs and attorneys' fees) due from Defendants as a result of their breach of their obligations and duties arising from the sale of Compañía Minera Cerros Del Sur, S.A. de C.V. in 2023 (the "Sale"). In the complaint, filed in the United States District Court for the District of Utah, Central Division, the Company asserts claims related to alleged breach of contract and unjust enrichment against the Defendants, and seeks a monetary judgment and an award of attorneys' fees and other expenses. The complaint arises from the Defendants' failure to convey agreed-upon consideration to the Company as contracted for the sale of CMCS. The Company was able to effect service of process on Mother Lode Mining, Inc. through Alternative Service and litigation has proceeded since that time. Mother Lode Mining has until May 2, 2025 to file a responsive pleading to the Company's complaint. The Company intends to pursue the lawsuit aggressively.

On January 18, 2023, the Company negotiated a settlement with Antilles Family Office, LLC through which the Company paid $1,200,000 to Antilles and the remaining balance of $1,873,532 and the accrued interest of $3,695,059 under the original Secured Redeemable Convertible Promissory Note was forgiven.

The Company's former subsidiary, Compañía Minera Clavo Rico, S.A. de C.V., was served with a lawsuit filed by SAR, the taxing authority in Honduras, alleging additional tax liability due. The Complaint alleges that HNL7,186,151.96 lempires are due in a demand for execution of a forced extrajudicial title. The Company had accrued $256,674 in this matter, but the liability was extinguished with the sale of the subsidiary.

**Other Commitments**

On September 22, 2023, the Company entered into a consulting agreement with William McCluskey. This agreement requires the Company to pay $200,000 in consulting fees to William McCluskey before March 31, 2025. This amount is currently reported in accounts payable at December 31, 2024.

**14. Discontinued Operations**

During the year ended December 31, 2022, the Company decided to discontinue all of its operating activities. Based on that decision, the Company's board of directors committed to a plan to sell the CMCS entity operating the mine in Honduras.

In accordance with the provisions of ASC 205-20, the Company has zero reported assets and liabilities of the discontinued operations (held for sale) in the consolidated balance sheets as of December 31, 2024 and 2023.

In accordance with the provisions of ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the consolidated statements of operations and comprehensive loss. The results of operations from discontinued operations for the years ended December 31, 2024 and 2023 have been reflected as discontinued operations in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023, and consist of the following.

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31, 2024** | **December 31, 2023** |
| Precious Metals Income | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $- |
| Cost of goods sold | - | 315152 |
| Gross profit |  | (315152) |
| OPERATING EXPENSES OF DISCONTINUED OPERATIONS: |  |  |
| General and administrative |  | 181519 |
| Depreciation and amortization | - | 212 |
|  | - | 181731 |
| OPERATING INCOME (LOSS) OF DISCONTINUED OPERATIONS |  | (496883) |
| OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS |  |  |
| Interest expense | - | 698 |
|  |  | 698 |
| INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS |  | (497581) |
| Provision for income taxes of discontinued operations | - | - |
| NET INCOME (LOSS) OF DISCONTINUED OPERATIONS | $- | $(497581) |

---

The Company recognized a gain on the sale of mine property in discontinued operations of $7,230,453. This gain was comprised of the Company's investments in the subsidiaries and any inter-company loans that were provided to or from the subsidiaries. This gain was reported as a separate line item in discontinued operations in the consolidated statements of operations and comprehensive loss.

In accordance with the provisions of ASC 205-20, the Company has separately reported the cash flow activity of the discontinued operations in the consolidated statements of cash flows. The cash flow activity from discontinued operations for the years ended December 31, 2024 and 2023 have been reflected as discontinued operations in the consolidated statements of cash flows for the years ended December 31, 2024 and 2023, and consist of the following.

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31, <br> 2024** | **December 31, 2023** |
| DISCONTINUED OPERATING ACTIVITIES |  |  |
| Net loss | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $(497581) |
| Depreciation expense |  | 4259 |
| Changes in operating assets and liabilities: |  |  |
| Trade receivables |  | 91 |
| Inventories |  | (12981) |
| Prepaid expenses and other current assets |  | (34670) |
| Accounts payable and accrued liabilities |  | (294243) |
| Accounts payable and accrued liabilities - related parties | - | 834659 |
| Net cash provided by operating activities of discontinued operations | $- | $(466) |
| INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS |  |  |
| Purchase of property, plant and equipment | $- | $(652) |
| Net cash provided by (used in) investing activities of discontinued operations | $- | $(652) |

---

**16. Subsequent Events**

Management has evaluated subsequent events, in accordance with FASB ASC Topic 855, "Subsequent Events," through the date which the consolidated financial statements were available to be issued and there are no material subsequent events, except as noted below.

On January 9, 2025, the Company entered into a 12 month, $125,000 promissory note with Digital Asset Medium LLC (a related party). The Note has a 15% annual interest rate.

On March 5, 2025, the Company received notice from FINRA as to the Effective Date of the name change to be March 7, 2025. The name change to "BLUSKY AI, INC." is already effective and, twenty days following the Effective Date, the trading symbol for the Common Stock will change to "BSAI."

The Company enacted a reverse stock split of the Company's issued and outstanding shares of common stock, par value $0.00001 per share (the "Common Stock"), at a ratio of 1-for-1,000 (the "Reverse Stock Split"). The Reverse Stock Split became effective on March 10, 2025 (the "Effective Date").

**PART III**

**INDEX TO EXHIBITS**

---

| | |
|:---|:---|
| 1.1\* | [Agreement with DealMaker Securities, LLC](ex1-1.htm) |
| 3.1 | [Articles of Incorporation (1)](https://www.sec.gov/Archives/edgar/data/1416090/000121390007001436/fsb21007ex3i_golfalliance.htm) |
| 3.2 | [Certificate of Amendment, effective March 5, 2010(2)](https://www.sec.gov/Archives/edgar/data/1416090/000121390010000843/f8k030510ex3i_silveramerca.htm) |
| 3.3 | [Certificate of Amendment, effective June 23, 2010(3)](https://www.sec.gov/Archives/edgar/data/1416090/000121390010002645/f8k062310ex3i_silveramerica.htm) |
| 3.4 | [Articles of Merger, effective May 17, 2013 (4)](https://www.sec.gov/Archives/edgar/data/1416090/000135448813003012/immi_ex31.htm) |
| 3.5 | [Bylaws (1)](https://www.sec.gov/Archives/edgar/data/1416090/000121390007001436/fsb21007ex3ii_golfalliance.htm) |
| 4.1\* | [Description of Securities](ex4-1.htm) |
| 4.2\* | [Form of Subscription Agreement](ex4-2.htm) |
| 10.1 | [Employment Agreement with Trent D'Ambrosio (4)](https://www.sec.gov/Archives/edgar/data/1416090/000149315219008560/ex10-14.htm) |
| 10.2 | [Note Purchase Agreement (4)](https://www.sec.gov/Archives/edgar/data/1416090/000149315219008560/ex10-15.htm) |
| 10.3 | [Senior Secured Redeemable Convertible Note (4)](https://www.sec.gov/Archives/edgar/data/1416090/000149315219008560/ex10-16.htm) |
| 10.4 | [Warrant (4)](https://www.sec.gov/Archives/edgar/data/1416090/000149315219008560/ex10-17.htm) |
| 10.5 | [Settlement Agreement with Antilles Family Office, LLC dated January 18, 2023 (5)](https://www.sec.gov/Archives/edgar/data/1416090/000149315223002470/ex10-1.htm) |
| 10.6 | [Letter of Intent with Mother Lode Mining, Inc. effective as of January 24, 2023 (6)](https://www.sec.gov/Archives/edgar/data/1416090/000149315223003973/ex10-1.htm) |
| 10.7\* | [Acquisition and Power Assignment Agreement (the "Acquisition Agreement") with Digital Asset Management, LLC](ex10-7.htm) |
| 10.8\* | [Consulting Agreement with Dan Gay dated April 1, 2025](ex10-8.htm)  |
| 10.9\* | [Consulting Agreement with Dan Gay dated September 1, 2025](ex10-9.htm) |
| 11\* | [Consent of Sadler, Gibb & Associates, LLC](ex11.htm) |
| 12\* | [Opinion of Brunson Chandler & Jones, PLLC](ex12.htm) |

---

\* Filed herewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Incorporated by reference from Form SB-2 filed with the SEC on October 31, 2007.

(2) Incorporated by reference from Form 8-K filed with the SEC on March 10, 2010.

(3) Incorporated by reference from Form 8-K filed with the SEC on June 28, 2010.

(4) Incorporated by reference from the Form S-1 filed with the SEC on June
 2, 2019.

(5) Incorporated by reference from the Form 8-K filed with the SEC on January
 25, 2023.

(6) Incorporated by reference from the Form 8-K filed with the SEC on February 8, 2023.

**SIGNATURES**

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering Circular to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Murray, State of Utah, on February 11, 2026.

---

| | |
|:---|:---|
| BluSky AI, Inc. | BluSky AI, Inc. |
| By: | */s/ Trent D'Ambrosio* |
|  | Trent D'Ambrosio |
|  | Chief Executive Officer, President |

---

The following persons in the capacities and on the dates indicated have signed this Offering Circular.

---

| |
|:---|
| */s/ Whit Cluff* |
| Whit Cluff |
| Director |

---

The following persons in the capacities and on the dates indicated have signed this Offering Circular.

---

| |
|:---|
| */s/ Dan Gay* |
| Dan Gay |
| Director |

---

## Add

**Exhibit 1.1**

![](ex1-1_001.jpg)

**Order Form**

**Reg A**

---

| | |
|:---|:---|
| ***Prepared for:*** BluSky AI | ***Quote Date:*** Feb 10, 2026 |
| ***Contact:*** Trent Dambrosio | ***Valid Until:*** Mar 12, 2026 |
| ***Email:*** [redacted] | ***Proposed By:*** Jonathan Self |

---

**Billing Information**

---

| | |
|:---|:---|
| ***Effective Date:*** | Feb 10, 2026 1:46:25 PM UTC-0800 |
| ***Payment Terms:*** | 100% Due on Signing |
| ***Billing Contact:*** | Trent D'Ambrosio |
| ***Billing Phone:*** | [redacted] |
| ***Billing Email:*** | [redacted] |
| ***Billing Address:*** | 5330 South 900 East, Suite 280, Murray UT USA 84117 |

---

**Set Up Fees**

---

| | |
|:---|:---|
| **Set Up Fees** | **Net Price** |
| DealMaker Marketing Services - Full Package Setup | $25000 |
| DealMaker Securities – Reg A Onboarding Setup | $20000 |
| DealMaker.tech Plus Setup | $5000 |
| Discount | 25.93% |
| **Total Net Setup** | $**50000** |

---

**Monthly Fees**

---

| | |
|:---|:---|
| **Monthly Fees** | **Net Price** |
| DealMaker Marketing Services - Marketing Consulting Monthly Fee | $2000 |
| DealMaker Marketing Services - Marketing Advisory Monthly Fee | $9000 |
| DealMaker.tech - Plus Platform Monthly Fee | $1000 |
| Discount | 20% |
| **Total Net Monthly** | $**12000** |

---

1/42

This Order Form sets forth the terms of service by which a number of separate DealMaker affiliates are engaged to provide services to Customer (collectively, the "**Services**"). By its signature below in each applicable section, Customer hereby agrees to the terms of service of each company referenced in such section. Unless otherwise specified above, the Services shall commence on the date hereof.

By proceeding with its order, Customer agrees to be bound contractually with each respective company. The Applicable Terms of Service include and contain, among other things, warranty disclaimers, liability limitations and use limitations.

In particular, Customer understands and agrees that it is carrying out a self-hosted capital raise and bears primary responsibility for the success of its own raise. No DealMaker entity is ever responsible for the success of Customer's offering and no guarantees or representations are ever in place with respect to (i) capital raised (ii) investor solicitation or (iii) completion of investor transactions with Customer. Customer agrees and acknowledges that online capital raising is uncertain, and that nothing in this agreement prevents Customer from pursuing concurrent or sequential alternative forms of capital raising. Customer should use its discretion in choosing to engage the vendors described in this Agreement and agrees that such entities bear no responsibility to Customer with respect to raising capital.

There shall be no force or effect to any different terms other than as described or referenced herein (including all terms included or incorporated by reference) except as entered into by one of the companies referenced herein and Customer in writing.

A summary of Services purchased is described in the Schedule "Summary of Compensation" attached. The applicable Terms of Service are described on the Schedules thereafter, and are incorporated herein.

Services NEVER include providing any investment advice nor any investment recommendations to any investor.

2/42

---

| | |
|:---|:---|
| BluSky AI | BluSky AI |
| <br> **Name** | <br> Trent D'Ambrosio |
| <br> **Title** | <br> CEO |
| <br> **Signature** | <br> */s/ Trent D'Ambrosio*  |
| <br> **Date** | <br> Feb 10, 2026 1:46:25 PM UTC-0800  |

---

3/42

**Schedule "Summary of Compensation"**

**A.** **Regulation A Offering** 

● **$50,000 One-Time Advances** (advances against accountable expenses anticipated to be incurred, and refunded to extent not actually incurred)

*This advance includes:*

 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. $20,000
 prepaid to DealMaker Securities LLC ("Broker") for Pre-Offering Analysis

ii. $5,000
 prepaid to Novation Solutions Inc. ("DealMaker") for infrastructure for
 self-directed electronic roadshow

iii. $25,000
 prepaid to DealMaker Reach, LLC (O/A DealMaker Marketing Services) ("Marketing
 Services") for consulting and developing materials for self-directed electronic
 roadshow

**●** **$10,000 monthly account management compensation.** 

○ Monthly account management and software access commences in the month of the Commencement date. If no Commencement date is stated on the Order Form, services and invoices for those services commence in the first month following the Effective Date.

○ It is expected services will commence in advance of the offering being qualified, and therefore compensation in the form of advances against accountable expenses anticipated to be incurred, and fully refunded to extent not actually incurred, will be collected associated with services. A maximum of $30,000 or three months of account management compensation is payable prior to qualification of the offering containing the Services.

○ After the commencement of the offering, monthly compensation includes:

● $1,000 account maintenance fees payable to DealMaker (up to a maximum of $9,000 during the Offering)

● $9,000 marketing advisory fees payable to Marketing Services (up to a maximum of $81,000 during the Offering)

**●** **4.5% Commission on Cash Compensation From All Proceeds:** 

○ Cash compensation does not include processing investor refunds for Customers, which are chargeable at $50.00 per refund.

○ Customer shall be responsible for third-party fees with respect to payment processing.\* These are to be disclosed as separate selling related expenses in the Form 1-A and Offering Statement for the offering and not connected to Broker of its affiliates.

○ Customer may elect to offset all or a portion of these fees by levying an administrative fee to investors. The Cash Compensation would also be applied to the collection of the administrative fee from the investors.

● **Media Management** **Services to be determined on a case-by-case basis, as may be authorized by the Customer, up to a maximum of an additional $250,000 of compensation during the Offering.** 

● **$11,750 in Corporate Filing Fees (payable to Broker to be remitted to FINRA). All Corporate Filing Fees for the initial filing are due and to be paid prior to submission of the 5110 Filing to FINRA. This fee is dynamic based on changes to the aggregate offering total, so if there are changes to the offering that increase the price or number of securities being sold prior to the offering termination, the FINRA fee will increase. Any additional fee will be invoiced prior to or at the time of submission and due upon receipt.** 

**\*Fees are estimated to be approximately 2% of offering proceeds.**

4/42

**Fair Compensation**

To ensure adherence to FINRA's fair compensation guidelines, Broker is required to set the maximum underwriting compensation to be received in the Offering. Components of compensation for Services are tied to the total aggregate offering price (maximum value of the offering including administrative fees, bonus shares, value of underlying securities. Changes to the value will change the Maximum Compensation described here. Broker will ensure that, in any scenario, the aggregate compensation payable to Broker and its affiliates in respect of Services related to the Offering shall never exceed a maximum amount.

If the Offering is fully subscribed, the maximum amount of underwriting compensation will be $3,232,500, for an aggregate offering price of $75,000,000 where $12,500,000 is bonus share value where there are no commission charges applied.

*\*In the event that the Financial Industry Regulatory Authority ("FINRA") Department of Corporate Finance does not issue a no objection letter for the Offering, all underwriting compensation paid is fully refundable other than for services actually rendered.*

 

**B.** **Non-Regulation A Offering Fees** 

● **$2,000 monthly consulting fees to Marketing Services for branding and marketing services unrelated to the Offering.** 

5/42

**Schedule "Scope of Marketing Services"** 

(provided by DealMaker Marketing Services)

Full Marketing Compensation Includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Website
 Design and Development:

● Copywriting and design of the website with up to 3 rounds of revisions at the copywriting stage and design stage each.

● Development of the website using Webflow.

● Integration of tracking, analytics, and pixels.

● Ongoing maintenance and management of website content.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Audience-Building
 Infrastructure:

● Audience building through email capture on landing pages.

● Creation of the following email series:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Investor
 educational email series (4 to 6 emails)

ii. Post
 investment series (1-2 emails)

● Ongoing email list nurturing with updates from the Customer's campaign announcements, relevant news, and webinars.

● Design and implementation of email capture in Klaviyo.

● Integration of DealMaker webhooks to build and track the investor funnel and status.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Video
 Production:

● Creation of a campaign video to highlight the investment opportunity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. 90-120
 Seconds

ii. Basic
 Motion Graphics (includes lower-thirds, basic text animations, etc.)

iii. Access
 to Stock Footage

● Creation of video script with up to 2 rounds of revisions on the script.

● One full day of video shooting (up to 10 hours).

● Creation of final video with up to three revisions of edits

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Conversion
 Rate Optimization (CRO):

● Continuous testing of website content to improve conversion rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Email
 Marketing:

● Ongoing nurturing of the email list with updates repurposed from the Customer's campaign announcements, relevant news, and webinars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Ad
 Creative

● 4-6 image assets resized for all channels

● 2-3 video assets resized for all channels

● 3-4 copy variations applicable to respective channels

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Paid
 Media

● Management of Google ADs including Search, Display, Google Discovery, and YouTube ads.

● Management of Meta Ads (Facebook & Instagram) as well as Twitter/X ads upon request.

● Ongoing testing of ad copy and creative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Media
 Network:

● Sourcing and negotiating private media placements with relevant publishers and email newsletters.

● Purchases of media placements will include a fee equal to 15% of the total spend. Aggregate fees shall not exceed the maximum listed in "Schedule: Summary of Compensation"

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Reporting:

● Regular calls: bi-weekly

● Strategic planning, implementation, and execution of the marketing budget.

● Coordination with third-party agents in connection with the performance of services.

● Monthly forecasting.

● Monthly and bimonthly report generation.

Customer is responsible for reviewing items 1 through 9 with Customer's professional advisors, as required Marketing Services monthly fee will commence in the first month following **the Effective Date**.

COMPENSATION NOT INCLUDED

● Expenses

**Marketing Services are provided by DealMaker Reach, LLC (O/A DealMaker Marketing Services). Customer hereby agrees to the terms set forth in the DealMaker Marketing Services Terms of Service, with compensation described on Schedules "Summary of Compensation" and "Scope of Marketing Services" hereto.**

---

| | |
|:---|:---|
| **Customer Signature** | */s/ Trent D'Ambrosio*  |

---

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**Schedule "Broker Dealer Services" (DealMaker Securities LLC)**

**Pre-Offering Analysis**

● Reviewing Customer, its affiliates, executives and other parties as described in Rule 262 of Regulation A, and consulting with Customer regarding the same.

**Pre-Offering Consulting for Self-Directed Electronic Roadshow**

● Reviewing with Customer on best business practices regarding raise in light of current market conditions and prior self-directed capital raises

● Reviewing with Customer on customization for investor questionnaire, selection of webhosting services, and template for campaign page

● Advising Customer on compliance of marketing material and other communications with the public with applicable legal standards and requirements

● Providing advice to Customer on content of Form 1A and Revisions

● Assisting in the preparation of SEC and FINRA filings

● Working with the Client's SEC counsel in providing information to the extent necessary

**Advisory, Compliance and Consulting Services During the Offering**

● Reviewing investor information, including identity verification, performing AML (Anti-Money Laundering) and other compliance background checks, and providing Customer with information on an investor in order for Customer to determine whether to accept such investor into the Offering;

● If necessary, discussions with the Customer regarding additional information or clarification on an Customer-invited investor;

● Coordinating with third party agents and vendors in connection with performance of services;

● Reviewing each investor's subscription agreement to confirm such investor's participation in the offering and provide a recommendation to the company whether or not to accept the subscription agreement for the investor's participation;

● Contracting and/or notifying the company, if needed, to gather additional information or clarification on an investor;

● Providing ongoing advice to Customer on compliance of marketing material and other communications with the public, including with respect to applicable legal standards and requirements;

● Reviewing with Customer regarding any material changes to the Form 1A which may require an amended filing; and

● Reviewing third party provider work-product with respect to compliance with applicable rules and regulations.

**Customer hereby engages and retains DealMaker Securities LLC, a registered Broker-Dealer, to provide the applicable services described above. Customer hereby agrees to the terms set forth in the DealMaker Securities Terms, with compensation described on Schedule "Summary of Compensation" hereto.**

---

| | |
|:---|:---|
| **Customer Signature** | */s/ Trent D'Ambrosio* |

---

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**Schedule **"DealMaker.tech Subscription Platform and Shareholder Services Online Portal"**

**During the Offering, Subscription Processing and Payments Functionality**

● Full analytics suite to track all aspects of the offering and manage the conversion of prospective investors into actual investors.

**Apart from the Offering, Shareholder Management via DealMaker Shareholder Services**

● Access to DM Shareholder Management Technology to provide corporate updates, announce additional financings, and track engagement

● Document-sharing functionality to disseminate share certificates, tax documentation, and other files to investors

● Monthly compensation is payable to DealMaker.tech while the client has engaged DealMaker Shareholder Services

**Subscription Management and DM Shareholder Management Technology is provided by Novation Solutions Inc. O/A DealMaker. Customer hereby agrees to the terms set forth in the DealMaker Terms of Service with compensation described on Schedule "Summary of Compensation" hereto.**

---

| | |
|:---|:---|
| **Customer Signature** | */s/ Trent D'Ambrosio* |

---

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![](ex1-1_004.jpg)

**DEALMAKER TERMS OF SERVICE**

These Terms of Services **("Terms")** govern access to the software and services provided by any of the DealMaker entities such as Novation Solutions Inc., O/A DealMaker (**"DealMaker.tech"**), DealMaker Reach, LLC (**"DM Reach"**), DealMaker Securities LLC (**"DMS"**) and DealMaker Transfer Agent LLC, O/A DealMaker Shareholder Services (**"DMTA"**) (individually, each a **"DealMaker Entity"** and collectively, the **"DealMaker Entities"**). Each of the entities may be referred to as **"DealMaker"** or the **"Company"** in these Terms.

These Terms have legal implications. It is important that you read these terms carefully and consult legal counsel if you determine that is appropriate, in order to understand these Terms.

The Terms, together with the DealMaker order form from which this page was linked (**"Order Form"**), form an agreement between the Customer (as defined in the order form) and the applicable DealMaker entit(ies) being engaged for technology or services (each an **"Agreement"**). Each of these Agreements may be referred to as "an Agreement" or "the Agreement" in these Terms.

Each Agreement contains, among other things, warranty disclaimers, liability limitations and use limitations. Each Agreement also contains an arbitration provision which is enforceable against the parties and may impact your rights and obligations. By signing the Order Form and using the DealMaker Entity services described in such Order Form, Customer accepts and agrees to be bound by these Terms.

These Terms apply to all DealMaker Entities unless a DealMaker Entity is explicitly excluded or alternative terms are supplemented, as indicated below.

**<u>1. Definitions</u>**

**"Account"** means Investment funds deposited in Customer's account with a financial institution by (i) Customer's investors directly, funded via wire or check or (ii) a third party payment processor, prior to the Closing of any transaction involving such investments.

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**"Closing"** means the resolution of all applicable AML-related exceptions or discrepancies identified through any searches provided by third parties through Company or otherwise identified by or to Company for all transactions associated with an investment and the acceptance by the Customer of the investment associated with such transactions.

**"Closing Date"** means the date of each Closing.

**"Commencement Date"** occurs in the month the Customer begins paying monthly subscription fees. If no Commencement Date is stated on the Order Form, monthly subscription fees are payable in the month following the Effective Date.

**"Customer Payment Processing Account"** means a Customer's account with a third party payment processor into which Customer deposits investment funds.

**"DM Shareholder Management Technology"** means DealMaker's investor communication functionality technology and/or services provided by DealMaker.tech.

**"Effective Date"** is the date the Agreement is signed.

**"Escrow Account"** means Customer's third party escrow account into which Customer directs investment funds from Investors.

**"Improvements"** means any improvements, updates, variations, modifications, alterations, additions, error corrections, enhancements, functional changes or other changes to the Software, including, without limitation: (i) improvements or upgrades to improve software efficiency and maintainability; (ii) improvements or upgrades to improve operational integrity and efficiency; (iii) changes or modifications to correct errors; and (iv) additional licensed computer programs to otherwise update the Software.

**"Intended Purpose"** means Customer's use of the Software to raise capital online via technology or services provided by DealMaker.tech.

**"Offerings"** refers to online capital formation transactions completed by Company's Customers or Customer's clients, using the Software.

**"Software"** means the DealMaker™ cloud-based software program developed by Company, including its features, functionality, performance, application and use, any related printed, electronic and online documentation, manuals, training aids, user guides, system administration documentation and any other files that may accompany the Software used by the Customer.

**"TOS"** means the DealMaker.tech website terms of service located at https://www.dealmaker.tech/terms.

**<u>2. Term and Termination</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1. <u>Term</u>**

**Unless otherwise stated in the Order Form, the Agreement will remain in effect from the Effective Date until the first day of the month following the completion of an Offering ("Term"). The Term for DMTA is set forth in the DMTA terms.**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2. <u>Billing Terms</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.2.1. <u>One-Time Advances/Setup Billing</u>: Unless otherwise specified in the Order Form, one-time advances/setup charges are only invoiced once, prior to the commencement of Services. With the payment of these invoices, Services would begin.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.2.2. <u>Monthly Invoices</u>: Unless otherwise specified in the Order Form, charges for monthly account management will be invoices monthly, in arrears, and reflect accountable expense totals for Services in advance of an offering's qualification or account management fees associated with ongoing services after the offering's qualification. These would continue to be invoiced monthly for the term of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.2.3. <u>DM Shareholder Management Technology Fees</u>: DM Shareholder Management Technology is a service offered by DealMaker.tech. Unless otherwise specified in the DealMaker.tech or DMTA fee schedules to your Order Form, fees for use of the DM Shareholder Management Technology, when applicable, are invoiced monthly and the services can be canceled within any month upon written notice, effective the month following cancellation of DealMaker.tech services, except for DMTA Customers. Cancellation of fees for use of DM Shareholder Management Technology for DMTA customers is governed by the DMTA terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.2.4. <u>DealMaker Transactional Fees</u> are incurred at the time of each transaction and charged on a monthly basis in arrears or collected at time of service, as specified in the Order Form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.2.5. **<u>Payment.</u>** DealMaker shall be compensated as set out in the Order Form. Unless otherwise specified in the schedules to the Order Form, required by a third party vendor or required by an applicable law or regulation, Customer will be invoiced on a monthly basis. Payment will be automatically debited from the Customer's, third party payment processor treasury account, bank account or credit card on file, with a receipt to be automatically delivered. Invoices will be available for the Customer to review upon request. In the event that any Customer payment fails, in respect of any invoice due and payable to a DealMaker Entity (**"Aged Invoice"**), Customer must re-connect its, third party payment processor treasury account, bank account or update credit card within fourteen (14) days and submit payment for any Aged Invoice. Unless Aged Invoices are cleared and accounts are brought back into good standing within 14 days, automated payouts and reconciliation reporting will be disabled. In the event the Aged Invoices are not cleared, or accounts are not brought back into good standing within 30 days, all services will be paused until payment is received and the Customer's, third party payment processor treasury account, bank account or credit card authorization is restored. DealMaker reserves the right to debit from Customer's credit card authorization on file or authorized payment account in respect of any Aged Invoice thirty days or older, unless the Customer disputes the charges in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3. <u>Termination</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.1. <u>Termination for Cause</u>. Customer or any DealMaker Entity may terminate this Agreement immediately for Cause, as to any or all Subscription services. "Cause" includes a determination that a party is acting, or have acted, in a way that has negatively reflected on or impacted or may negatively reflect on or impact the other party, its prospects, or its customers, including without limitation in a way that violates or causes a violation of applicable law or regulation. Upon termination for cause, there are no additional fees incurred. All prepaid unused fees would be returned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.2. Otherwise, an Agreement may only be terminated as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Material Breach</u>: A party may terminate this Agreement upon sixty (60) days written notice if the breaching party fails to perform or observe any material term, covenant, or condition to be performed or observed by it under this Agreement and such failure continues to be unremedied after sixty (60) days' written notice of such failure from Company to Customer.

If the breach has not been cured within the sixty-day period, the non-breaching party may terminate this Agreement forthwith and may immediately exercise any one or more of the remedies available to it under the Terms of this Agreement, in addition to any remedy available at law. Any compensation paid to the Company prior to the qualification of an offering, if those expenses have not been incurred, would be returned by Company to the Customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Customer Default</u>. If Customer defaults in performing its obligations under an Agreement, Company may terminate this Agreement (i) upon written notice if any material representation or warranty made by Customer proves to be incorrect at any time in any material respect or (ii) upon written notice, in order to comply with a legal requirement, if such compliance cannot be timely achieved using commercially reasonable efforts, after Company has provided Customer with as much notice as practicable; and/or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Right of Termination – Insolvency/Bankruptcy</u>: A party may terminate an Agreement immediately, if the other party becomes the subject of a petition in bankruptcy or any other proceeding relating to insolvency, cessation of business, liquidation or assignment for the benefit of creditors, reorganization or other relief, or is adjudged bankrupt or insolvent or has entered against it a final and unappealable order for relief, under any bankruptcy, insolvency, or other similar law. In the event of Company insolvency, all of the Customer's assets are immediately released.

(collectively, **"Termination Reasons"**)

Other than the Termination Reasons, unless explicitly stated otherwise, an Agreement may not otherwise be terminated prior to the end of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.3. The termination of an Agreement as described herein shall not exclude the availability of any other remedies. Any delay or failure by either party to exercise, in whole or in part, any right, power, remedy or privilege shall not be construed as a waiver or limitation to exercise, in whole or in part, such right, power, remedy or privilege.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.4. All terms of an Agreement, which should reasonably survive termination, shall survive, including, without limitation, confidentiality, limitations of liability and indemnities, arbitration and the obligation to pay compensation relating to services provided by the DealMaker Entity prior to termination.

**<u>3.</u>**  **<u>Intellectual Property</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.1. <u>Title</u>. Company retains title to and sole ownership of the Software and all Improvements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.2. <u>Cloud-Based Software</u>. The Software is cloud based. As such, the source and object code are located on servers outside of the Customer's premises. Customer shall have no access to the facilities at which the Software is hosted.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.3. <u>Intellectual Property</u>. All Intellectual Property, Intellectual Property Rights and distribution rights associated with or arising from Company's Confidential Information including but not limited to the Software, remain exclusively with Company. **"Intellectual Property"** includes, without limitation, with respect to all DealMaker Products: all technical data, designs, specifications, software, data, drawings, plans, reports, patterns, models, prototypes, demonstration units, practices, inventions, methods and related technology, processes or other information, and all rights therein, including, without limitation, patents, copyrights, industrial designs, trade-marks and any registrations or applications for the same and all other rights of intellectual property therein, including any rights that arise from the above items being treated by the parties as trade secrets (the rights being **"Intellectual Property Rights."**)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.4. <u>Restrictions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.4.1. Customer may not: (i) modify, enhance, reverse-engineer, decompile, disassemble or create derivative forms of the Software; (ii) copy the Software; (iii) sell, sub-license, lease, transmit, distribute or otherwise transfer rights in/to the Software; (iv) allow third-party use of the Software installed at the Site; or (v) pledge, hypothecate, alienate or otherwise encumber the Software to any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.4.2. Use of the Software is restricted to the Intended Purpose only. Customer agrees not to engage in any activity restricted by the TOS or transfer any information restricted by the TOS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.4.3. Customer acknowledges that unauthorized reproduction or distribution of the Software is expressly prohibited by law and may result in civil and criminal penalties. Violators may be prosecuted. Customer may not reverse engineer, decompile, disassemble or otherwise attempt to discover the source code of the Software, DealMaker website or any part thereof, except and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.5. Customer represents and warrants that any Customer assets or materials provided and the intended use thereof in accordance with the terms of each Agreement, will not infringe, violate, or misappropriate any third party rights, including without limitation, any copyrights, trademarks, trade secrets, privacy, publicity, or other proprietary or intellectual property rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.6. Customer represents and warrants that Customer will not to bid on or use any DealMaker Entity trademarks, brand names, or any variations thereof in Customer's paid search advertising campaigns. This includes, but is not limited to, Google AdWords, Bing Ads, and other search engine marketing platforms. Unless otherwise provided for in the Agreement, Customer shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.6.1. bid on or use our trademarks as keywords in Customer's paid search campaigns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.6.2. include DealMaker Entity trademarks in Customer's ad copy, display URL, or landing page URL; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.6.3. use any misspellings, variations, or confusingly similar terms to DealMaker Entity trademarks in Customer's paid search activities;

DealMaker reserves the right to monitor and enforce compliance with these trademark bidding restrictions.

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**<u>4.</u>**  **<u>Confidential Information</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.1. **"Confidential Information"** means any and all confidential or proprietary information of DealMaker or Customer, including affiliates thereof, which has been or may be disclosed by one party to this Agreement ("Disclosing Party") to the other party ("Receiving Party"), at any time prior to and during the Agreement Term, including, without limitation, the names of employees and owners, the names or other personally identifiable information of customers, business and marketing information, technology, know-how, ideas, reports, techniques, methods, processes, uses, composites, skills, and configurations, intellectual property of any kind and all documentation provided by investors in the Offering. Without limiting the generality of the foregoing, DealMaker's Confidential Information includes: (i) the Software; (ii) the computer code underlying the Software, including source and compiled code and all associated documentation and files; (iii) information relating to the performance or quality of the Software and services provided by the DealMaker Entity; (iv) the details of any technical assistance provided to Customer during the Term; (v) any other products or service made available to Customer by DealMaker during the Agreement Term; and (vi) information regarding DealMaker's business operations including its research and development activities. All work product, pricing, Agreement terms and process information of either party exchanged with the other party to perform the terms of the Agreement is agreed to be Confidential Information, except that any logos or marketing references are not Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.2. **"Confidential Information"** does not include information that: (i) is or has become generally known to the public without any action by the non-disclosing party; (ii) was known by either party prior to entering into the Agreement; (iii) was independently determined by either party; or (iv) was disclosed to the relevant party without restriction by a third party who, to the best of such party's knowledge and belief, had no obligation not to disclose such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.3. Neither party may disclose Confidential Information without the express written consent of the other party, except as specifically contemplated in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.4. <u>Trade Secrets.</u> Notwithstanding anything to the contrary herein, with respect to Confidential Information that constitutes a trade secret under the laws of any jurisdiction, such rights and obligations shall survive such expiration or termination until, if ever, such Confidential Information loses its trade secret protection other than due to an act or omission of the receiving Party or its Representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.5. By executing this Agreement, the Customer is providing written consent for DealMaker to disclose Confidential Information but only to the extent required to carry out the terms of this Agreement. Customer's investors will be required to sign-in to the DealMaker.tech portal and agree to the DealMaker.tech TOS. The parties agree that this process shall not constitute a disclosure of "Confidential Information" as described in this section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.6. Notwithstanding anything in this section, Customer and DealMaker hereby agree that each party may use the other party's logo for promotional purposes (**"Logo Use"**). The parties acknowledge that Logo Use does not include the use of any descriptive copy, all of which must be approved by Customer and DealMaker in writing. Except as provided for in this paragraph, nothing contained in this Agreement will be construed as granting Customer or DealMaker any right, title or interest in or to any or to use any of the other party's Confidential Information. Customer or DealMaker may terminate Logo Use at any time, with or without cause, upon written notice to the other party. For any Customer conducting an offering using the DealMaker Software (i.e. Regulation A, Regulation CF, or public offerings), in which the offering is already in the public domain, Customer agrees that DealMaker may disclose Customer name and offering proceeds to third party data aggregators for the purpose of generating industry reports. Industry reports shall not include publication of Customer name or the amount raised.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.7. <u>Authorized Disclosure</u>. Each party may, without the consent of the other party, disclose Confidential Information to the extent reasonably necessary to comply with applicable regulatory demands or orders in connection with the purpose for which the Customer enters into this Agreement. Each party may disclose the existence of this Agreement and any relationship between the parties.

**<u>5.</u>**  **<u>Exclusion of Warranties</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.1. Except as expressly stated in this Agreement, DealMaker makes no representations or warranties or covenants to Customer, either express or implied, with respect to the Software, services provided by the DealMaker Entity or with respect to any Confidential Information disclosed to Customer. DealMaker specifically disclaims any implied warranty or condition of non-infringement, merchantable quality or fitness for a particular purpose. Customer acknowledges that the Software is in continuous development and that it has been advised by DealMaker to undertake its own due diligence with respect to all matters arising from this Agreement. All services are provided on an "as is" and "as available" basis without any warranties, express or implied, including, without limitation, implied warranties of merchantability or fitness for a particular purpose, and DealMaker expressly disclaims all warranties. Customer agrees and understands that no DealMaker entity has any fiduciary duty to Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.2. <u>No Improvements</u>. Company is under no obligation to provide Improvements to the Software during the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.3. <u>Any Improvements Gratuitous</u>. Any Improvements provided by DealMaker to Customer from time to time during the Term shall be, unless otherwise stated, construed as being provided on a purely gratuitous basis and shall not give rise to any right or entitlement on the part of Customer, except as otherwise specifically provided in this Agreement. Any Improvements so provided shall be governed by the same terms and conditions applicable to the Software, as described herein, unless otherwise outlined in a fee schedule or addendum to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.4. <u>No Future Entitlement.</u> Nothing in this Agreement shall be construed as creating any obligation on DealMaker to continue to develop, commercialize, offer, make available or support (i) the Software; or (ii) any feature, functionality or Improvement as may be encompassed in the Software from time to time during the Term, beyond the duration of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.5. <u>Company Templates and Samples are Provided with No Warranties</u>. Customer may request access to DealMaker's templates and resources to help organize and set up an offering or any communications related thereto. These resources may include template communications, educational packages, resources for the management of administrative and collaborative tasks, and best practices observed from other offerings and industries. Customer acknowledges and agrees that, by providing access to any documents, training, or resources, DealMaker is not rendering and shall not be deemed to have rendered any legal, tax, investment, or financial planning advice. Customer shall, as it deems necessary or advisable, consult its own legal, tax, investment, or financial planning advisers. All templates and samples are provided with no warranties whatsoever and by making use of such materials, Customer is agreeing to voluntarily assume any liability with respect thereto.

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**<u>6.</u>**  **<u>Limitation and Exclusion of Liability</u>**

Unless otherwise specified herein, in no event is DealMaker's liability for any damages on any basis, in contract, tort or otherwise, of any kind and nature whatsoever, arising in respect of this Agreement, howsoever caused, including damages of any kind and nature caused by DealMaker's negligence or by a breach of contract or any other breach of duty whatsoever, to exceed the fees actually paid to DealMaker by Customer during the Term. Customer acknowledges that DealMaker has set its fees under this Agreement in reliance on the limitations and exclusions of liability set forth in this Agreement and such reliance forms an essential basis of this Agreement.

**<u>7.</u>**  **<u>Indemnification</u>**

<u>Applicability of Indemnification Clause:</u> Customers of DMTA are bound by the separate indemnification clauses applying only to DMTA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.1. **Indemnification by Customer**. Customer shall indemnify and hold each DealMaker Entity, its affiliates and their respective members, officers, directors and agents (**"Indemnified Parties"**) harmless from any and all actual or direct losses, liabilities, claims, demands, judgements, arbitrations awards, settlements, damages, direct fees, costs and expenses (including attorney fees and costs) (collectively **"Losses"**), resulting from or arising out of any third party suits, actions, claims, demands, investigations or similar proceedings (collectively **"Claim"**) to the extent they are based upon (i) a breach of this Agreement by Customer, (ii) the wrongful acts or omissions of Customer, (iii) Customer, or Customer's clients' engagement with DealMaker and any actions taken in conjunction therewith, including but no limited to usage of the Software, whether or not such activities are in accordance with Intended Usage or (iv) the Offering. **"Losses"** includes, losses arising from payment processing which are losses arising from chargebacks, clawbacks, payment reversals, fraudulent charges, insufficient credit, unauthorized charges, claims of Customer or third parties regarding payment disputes, and any other problems relating to card or ACH payments made for the benefit of Customer (**"Payment Processing Losses"**).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.2. **Indemnification by Company.** The applicable DealMaker Entity shall indemnify and hold Customer, Customer's affiliates and Customer's representatives and agents harmless from any Losses resulting from or arising out of Claims to the extent they are based upon (i) such DealMaker Entity's breach of this Agreement (ii) the negligence, fraud, bad faith or willful misconduct of the DealMaker Entity or (iii) DealMaker Entity's failure to comply with any applicable laws in the performance of its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.3. **Indemnification Procedure**. If any proceeding is commenced against a party entitled to indemnification under this section, prompt notice of the proceeding shall be given to the party obligated to provide such indemnification. The indemnifying party shall be entitled to take control of the defense, investigation or settlement of the Proceedings and the indemnified party agrees to reasonably cooperate, at the indemnifying party's cost in ensuing investigations, defense or settlement. The indemnifying party shall reimburse the indemnified party for all expenses (including reasonable fees, disbursements and other charges of counsel) as they are incurred in connection with investigating, preparing, pursuing, defending, or settling a Claim (including without limitation any shareholder or derivative action); provided, however, that indemnifying party will not be liable to indemnify and hold harmless or reimburse an indemnified party pursuant to this paragraph to the extent that an arbitrator (or panel of arbitrators) or court of competent jurisdiction will have determined by a final non-appealable judgment that such Claim resulted from the gross negligence or willful misconduct of such indemnified party. The Indemnifying Party will not settle, compromise or consent to the entry of a judgment in any pending or threatened Claim unless such settlement, compromise or consent includes a release of the indemnified parties satisfactory to the indemnified parties.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.4. **Indemnified Party Limitation Of Liability**. In no event shall the Indemnified Parties be liable or obligated in any manner for any consequential, exemplary or punitive damages or lost profits incurred by Customer arising from or relating to the Agreement, an Offering, or any actions or inactions taken by an Indemnified Parties in connection with the Agreement, and the Customer agrees not to seek or claim any such damages under any circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.5. **Recovery of Payment Processing Losses.** Notwithstanding anything to the contrary in this Agreement, upon Company giving Customer prior written notice of no less than five business days, DealMaker.tech shall have the right, in its sole discretion, to request Customer reimburse Company for Payment Processing Losses from Customer Account or from Customer's Payment Processing Account, unless prohibited by law. Customer acknowledges and agrees that recovery of Losses from Customer's Payment Processing Account will not serve as any limitation on the indemnification obligations of Customer under this Agreement or any remedy or claim that Company may be entitled to pursue against Customer in respect of such Losses.

**<u>8.</u>**  **<u>Third Party Services</u>**

Customer may request introductions to DealMaker's network of partners and vendors for the purpose of sourcing additional services (including but not limited to, a call center, marketing support, investment relations). Unless otherwise specified in writing, all engagements with third parties in this respect are to be made directly between the Customer and the vendor at the Customer's discretion. Customer acknowledges and agrees that, by making such introductions, DealMaker is not recommending and shall not be deemed to have recommended any partner or vendor's products or services or to have assumed any responsibility for Customer's selection of any partner or vendor or procurement of such products or services.

Without limiting any other protection of DealMaker under this Agreement and notwithstanding anything to the contrary, DealMaker shall bear no responsibility or liability whatsoever in connection with any third party services provided by a vendor engaged by Customer, the decision to engage such vendors rests solely with the management of the Customer on the terms contracted between the Customer and such parties.

**<u>9.</u>**  **<u>Escrow</u>**

Customer acknowledges that if Customer opens a third-party escrow account (either by Customer's choice or as necessary to comply with applicable laws or regulations) in connection with the Company services, Customer will apply for escrow account with a DealMaker-approved escrow provider.

**<u>10.</u>**  **<u>Customer Obligations</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **10.1.** **General**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.1.1. Customer shall be responsible for providing Offering terms to its subscribers. Such disclosure shall include, but is not limited to the following material information: a method of Customer valuation, a description of the security available in the Offering, the risks related to the investment, whether there are existing investors and any additional capital expectations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.1.2. Customer is solely responsible for ensuring that the funds raised in the Offering are used, allocated or invested in accordance with the use of funds described in the Offering disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.1.3. Customer acknowledges that following the final closing for the Offering, Customer will have sufficient liquidity (from the proceeds raised in the Offering or alternate Customer funds) to sustain Customer operations for that period of time which is clearly identified in the Offering disclosure or alternatively, until the next Customer funding round.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.1.4. Nothing in this Agreement shall be construed to relieve the managers or officers of Customer from the performance of their respective duties or limit the exercise of their powers in accordance with the Customer's bylaws, operating and constituent documents, written supervisory procedures, applicable law or otherwise. The Customer bears ultimately responsibility for all decisions with regard to any matter upon which Company has rendered its services. The Company shall not and shall have no authority to control Customer or Customer's day-to-day operations, whether through the performance of the Company's duties hereunder or otherwise. The Customer's directors, managers, officers and employees shall retain all responsibility for Customer, and its operations as and to the extent required by Customer's bylaws, operating and constituent documents, and applicable law. In furtherance and not in limitation of the above, and notwithstanding any other provision of this Agreement or of any other agreement, understanding or document that purports to have any contrary effect or meaning, the DealMaker shall not control, or have the right to control, directly or indirectly, the wages, hours, or terms and conditions of employment of the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.1.5. Customer represents and warrants that it has all necessary rights, consents and authorizations to provide data to DealMaker in connection with the Offering and that such Customer Data sharing complies with all applicable laws, including but not limited to applicable privacy and data protection laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **10.2.** **Privacy.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.2.1. Notwithstanding any other provision of this Agreement, Customer shall not take or direct any action that would contravene, or cause the other party to contravene, applicable legislation that addresses the protection of individuals' personal information (collectively, **"Privacy Laws"**). Customer shall, prior to transferring or causing to be transferred personal information to Company, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or shall have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws, including any consents required from third parties pursuant to applicable Privacy Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.2.2. Customer acknowledges that, when used for an Offering, the Customer's personalized Software dashboard (**"Software Dashboard"**) will contain personal identifying information (**"PII"**) of Customer's investors. Customer is solely responsible for ensuring compliance with all applicable Privacy Laws when Customer (a) downloads and stores any PII obtained from the Software Dashboard and (b) provides Customer's representatives with access to the Software Dashboard.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.2.3. Customer is solely responsible for notifying Company when any Customer representative is no longer working for the Customer and/or authorized to access the Software Dashboard for the Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.2.4 Customer shall cause all third parties with access to PII obtained from the Software Dashboard to execute agreements acknowledging the third parties' obligation to comply with applicable Privacy Laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.2.5. Customer has implemented and continually monitors and enforces an agreement or policy with its Customer representatives, employees and agents that addresses (i) confidentiality and security provisions for all data, including data obtained through the Software Dashboard and (ii) permitted and impermissible use of this data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **10.3.** **Bad Actor Checks**

Customer agrees to provide DealMaker Entity with documentation verifying completion of bad actor checks in compliance with all applicable regulations (**"Bad Actor Checks"**). Customer shall provide DealMaker Entity with a copy of Customer's Bad Actor Checks within thirty (30) days of the Effective Date of this Agreement, failing which, DealMaker Entity shall notify Customer in writing that it shall take steps to complete Customer's Bad Actor Checks at Customer's sole expense.

**<u>11.</u>**  **<u>General Terms</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.1. <u>Publications.</u> Each party acknowledges that its name, logo(s) and a description of the general nature of this Agreement may be used in any press release, public announcement or public communication during and following the Term. Without limiting the generality of the foregoing, Company may publish such information on its websites and in its promotional materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.2. Expenses. Customer shall reimburse DealMaker for all reasonable and documented out-of-pocket expenses incurred in connection with the Agreement, subject to the Customer's prior written approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.3. <u>General Cooperation</u>. The parties shall with reasonable diligence do all such things and provide all such reasonable assurances and execute all such documents, agreements and other instruments as may reasonably be necessary for the purpose of carrying out the provisions and intent of any Agreement. The parties further acknowledge that the implementation of each Agreement will require the co-operation and assistance of each of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.4. <u>No Books And Records Obligations</u>. Any and all obligations of Customer related to the storage of books and records remains the sole obligation of Customer. Company expressly disclaims any and all responsibility with respect to any regulatory or industry requirements with respect to the Customer's obligations related to record keeping and maintenance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.5. <u>Survival.</u> These terms shall continue in effect until the expiration or termination of the Agreement, whichever is earlier. The provisions of these Terms of Service which should by their nature survive expiration or termination of this Agreement shall so survive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.6. <u>Currency</u>. All currencies referred to herein are in US dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.7. <u>Amendment and Waiver</u>. Amendments to any Agreement, including any schedule or attachment hereto, shall be enforceable only if in writing and signed by authorized representatives of each of the applicable parties. A party does not waive any right under this Agreement by failing to insist on compliance with any of the terms of this Agreement or by failing to exercise any right hereunder. No waiver of any breach of any terms or provisions of this Agreement is effective or binding unless made in writing and signed by the authorized representative of each of the parties.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.8. <u>Assignment</u>: No party may assign an Agreement or any of its rights or obligations hereunder without the prior written consent of the other party, such consent not to be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.9. <u>Inurement</u>. Each Agreement inures to the benefit of and is binding on each of the parties and their respective successors and permitted assignees, heirs and legal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.10. <u>Force Majeure</u>. Excluding any obligations of a party to pay monies due hereunder, neither party will be responsible for any delay or failure in its performance or obligations under this Agreement due to causes beyond its reasonable control, including, without limitation, labor disputes, strikes, civil disturbances, government actions, fire, floods, acts of God, war, terrorism, or other similar occurrences (each, a **"Force Majeure Event"**); provided that the party affected by such Force Majeure Event (a) is without fault in causing such delay or failure, (b) notifies the other party of the circumstances causing the Force Majeure Event, and (c) takes commercially reasonable steps to eliminate the delay or failure and resume performance as soon as practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.11. <u>Governing Law.</u> Each Agreement is made in New York governed by and construed in accordance with the laws of the state of New York and the federal laws applicable therein. In connection with each Agreement, the Parties attorn to the jurisdiction of the courts of the State of New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.12. <u>Arbitration</u>. Any and all controversies, claims, or disputes arising out of or relating to each Agreement, or the interpretation, performance, or breach thereof, including the scope or applicability of this provision to arbitrate (**"Dispute"**) shall be referred to senior management of the parties for good faith discussion and resolution. In the event the parties cannot resolve any Dispute informally, then such Dispute shall be submitted to confidential, final, and binding arbitration with venue in New York, NY, pursuant to the rules of the American Arbitration Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.12.1. <u>Arbitration Procedure</u>. The arbitration shall take place in New York. The arbitration shall be before a single, neutral arbitrator who is a former or retired New York state or federal court judge. The arbitration may be initiated by any party by giving to the other party written notice requesting arbitration, which notice shall also include a statement of the claims asserted and the facts upon which the claims are based. Customer and Company each consent to this method of dispute resolution, as well as jurisdiction, and consent to this being a convenient forum for any such claim or dispute and waive any right it may have to object to either the method or jurisdiction for such claim or dispute. In the event of any dispute among the parties, the prevailing party shall be entitled to recover damages plus reasonable costs and attorney's fees, and the decision of the arbitrator shall be final, binding and enforceable in any court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.12.2. <u>Compelling Arbitration</u>. Any party may bring an action in any court of competent jurisdiction to compel arbitration under this Agreement and to enforce an arbitration award. Notwithstanding this arbitration provision, either party shall be entitled to seek injunctive relief (unless otherwise precluded by any other provision of this Agreement) from any court of competent jurisdiction. If for any reason an action proceeds in court rather than in arbitration, it shall be brought exclusively in a state or federal court of competent jurisdiction located in New York and the parties expressly consent to personal jurisdiction and venue therein and expressly waive any right to trial by jury.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.12.3. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION, ACTION, PROCEEDING, CROSS-CLAIM, OR COUNTERCLAIM IN ANY COURT (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF, RELATING TO OR IN CONNECTION WITH (I) THIS AGREEMENT OR THE VALIDITY, PERFORMANCE, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR (II) THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, AUTHORIZATION, EXECUTION, DELIVERY, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.13. <u>Entire Agreement</u>: Each Agreement including all schedules thereto, constitutes the entire agreement between the parties concerning the applicable subject matter and supersedes all prior or collateral agreements, communications, presentations, representations, understandings, negotiations and discussions, oral or written.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.14. <u>Headings</u>**:** Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.15. <u>Number and Gender.</u> Words importing the singular mean the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.16. <u>Severability.</u> If any term, covenant, condition or provision of an Agreement is held by a court or arbitrator(s) of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court or arbitrator(s) only to the extent deemed necessary by that court or arbitrator(s) to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.17. <u>Notices.</u> Any notice required to be given pursuant to an Agreement shall be in writing and delivered by electronic mail, addressed to the appropriate party. Any notice given is deemed to have been received on the date on which it was delivered if a business day, or, failing that, on the next business day. To the fullest extent permitted by applicable law, all amendments to the Agreement and all notices, requests, waivers or other communications regarding Customer's account and/or Customer's use of the Service ("Communications") may be provided to Customer electronically and Customer hereby agrees to receive all Communications from Provider in electronic form. Communications may, at DealMaker's election, be (a) delivered to Customer's e-mail address, (b) displayed on a screen notice visible at login, or (c) posted on the pages within the DealMaker product. In addition to the forgoing, Communications may also be sent by either party in writing via express courier to the address set forth on the Order Form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.18. **<u>Testimonials.</u>** Customer acknowledges that DealMaker's materials may from time to time include testimonials, real world experiences and insights or opinions about other people's experiences with DealMaker (***"Examples"***) and that this information is for illustration purposes only. Customer further acknowledges that campaigns are affected by a variety of factors including but not limited to time, external global events, varying business plans, different industries, and that these Examples are in no way a representation or guarantee that current or future customers will achieve the same or similar results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.19. DealMaker reserves the right to update or modify these terms and conditions at any time. Changes will be effective when posted on our website. You are responsible for reviewing the Terms & Conditions. Continued use of our services after changes take effect constitutes acceptance of the revised Terms & Conditions.

**DealMaker Additional Terms Applicable to Certain DealMaker.tech Services: Third Party Payment Processing, AML/KYC Background Checks, Accreditation Verification and Analytics, Marketing Review Tool.**

**The following sections of the Terms only apply to those DealMaker.tech Customers who purchase the specific services noted.**

**<u>12.</u>**  **<u>Background Checks: AML compliance and "clearing"</u>**

DealMaker's integrated AML searches are tools provided to Customer to assist Customer (or its agents) in complying with applicable obligations related to KYC/AML regulations. Company is not engaged to perform and will not perform, and shall not be deemed responsible for performing, any services related to reviewing or analyzing search results, sources of funds or wealth, or making any determination as to whether Customer has complied with its obligations under applicable anti-money laundering legislation and regulations or as to whether any prospective investor poses any risk of money laundering, terrorist financing, or other criminal or suspicious activity. Customer and/or its agents (including counsel or broker dealer as applicable) shall bear primary responsibility to determine compliance with applicable AML legislation and regulation and shall assist in the clearing of any AML exceptions. Customer's KYC/AML clearing obligations may require Customer to undertake efforts to ensure that individual and corporate investors provide applicable identity verification, explanations of adverse regulatory/disciplinary/bankruptcy history or media reports, confirmation of false positive results, or other documents or information required for AML purposes. DealMaker.tech's AML searches are limited by capabilities and design of products and services of the third parties DealMaker.tech engages to perform such searches, including limitations on the search methodology, matching logic, data sources, and information accuracy.

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**<u>13.</u>** **<u>Regulation D, 506(c) Accredited Investor Verification</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.1. Customer may engage either Company or a third party (each a **"Reviewer"**) to assist Customer in complying with applicable obligations related to accredited investor verification pursuant to Rule 506(c) of Regulation D promulgated under the Securities Act (**"Regulation D"**). If Reviewer is Company, Company shall review investor submissions and uploaded documentation on the DealMaker portal and make a determination as to whether Customer has complied with its obligations to verify accredited investors (as defined by Rule 501 of Regulation D promulgated under the Securities Act) (**"DM Verification"**). Customer acknowledges that Company may contact investor for the purpose of accredited investor verification and that Customer has obtained investor's consent to receive communications from Company and/or DealMaker regarding investor's accreditation verification. If Reviewer is a third party, Company will not perform, and shall not be deemed responsible for performing, any services related to reviewing or analyzing search results, sources of funds or wealth, or making any determination as to whether Customer has complied with its obligations to verify accredited investors (as defined by Rule 501 of Regulation D promulgated under the Securities Act).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2. Company does not make and hereby disclaims any warranty, expressed or implied with respect to the information provided through DM Verification. Company does not guarantee or warrant the correctness, merchantability, or fitness for a particular purpose of the information provided through DM Verification. Customer acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.1. DM Verification shall not include accreditation verification of non-U.S. investors (**"foreign accredited investors"**) who may be subject to foreign accreditation verification requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.2. DM Verification is conducted using a variety of third party database searches, public record services and user submissions. Company cannot represent or warrant that the data provided will be 100% accurate, complete or up to date. The data is time sensitive, and Company provides the information as is. Public records may be incomplete, out of date or have errors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.3. The results of a DM Verification search for any type of personal verification should be interpreted cautiously. Criminal and civil record search results may not provide a complete or accurate representation of a person's criminal background or civil judgment history. Records are available for the majority, but not all, of states and counties. Records can be incomplete, contain inaccuracies or false matches.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.4. Company is not a consumer reporting agency as defined in the Fair Credit Reporting Act (**"FCRA"**), and the information in DealMaker.tech's databases has not been collected in whole or in part for the purpose of furnishing consumer reports, as defined in the FCRA. CUSTOMER SHALL NOT USE DM VERIFICATION SERVICES AS A FACTOR IN (1) ESTABLISHING AN INDIVIDUAL'S ELIGIBILITY FOR PERSONAL CREDIT OR INSURANCE OR ASSESSING RISKS ASSOCIATED WITH EXISTING CONSUMER CREDIT OBLIGATIONS, (2) EVALUATING AN INDIVIDUAL FOR EMPLOYMENT, PROMOTION, REASSIGNMENT OR RETENTION, OR (3) ANY OTHER PERSONAL BUSINESS TRANSACTION WITH ANOTHER INDIVIDUAL.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.5. Customer assumes all risks arising from its use or disclosure of DM Verification information Company provides to Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.6. DM Verification Services are provided in English only. Customer acknowledges that data provided in any other language will require a certified translation which Customer shall pay for, or alternatively, reject the investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.7. Notwithstanding anything in the DealMaker Terms of Service, Customer agrees that it shall indemnify, defend and hold harmless Company, its officers, directors, employees and agents, and the entities that have contributed information to or provided services for DM Verification against any and all direct or indirect losses, claims, demands, expenses (including attorneys' fees and cost) or liabilities of whatever nature or kind arising out of Customer's use of the information provided by DM Verification and Customer's use or distribution of any information obtained therefrom, except for losses caused exclusively and directly by Company's gross negligence, fraud, bad faith or wilful misconduct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.2.8. THE DM VERIFICATION SERVICES AND INFORMATION ARE PROVIDED "AS-IS" AND "AS AVAILABLE" AND NEITHER COMPANY NOR ANY OF ITS DATA SUPPLIERS REPRESENTS OR WARRANTS THAT THE INFORMATION IS CURRENT, COMPLETE OR ACCURATE. COMPANY HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES REGARDING THE PERFORMANCE OF THE WEBSITE OR OUR SERVICES, AND THE ACCURACY, CURRENCY, OR COMPLETENESS OF THE INFORMATION, INCLUDING (WITHOUT LIMITATION) ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Customer acknowledges that these disclaimers are an integral part of this Agreement, and that Company would not provide DM Verification services if Customer did not agree to these disclaimers.

**<u>14.</u>**  **<u>Third-Party Payment Processing</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **14.1.** **For the processing of electronic payments (including bank-to-bank payments, credit card, etc.), the Company may submit material(s) and or application(s) to partner third-party payment processors on behalf of the Customer. Upon approval, the Company will enable the partner processors' intake form/system within the Customer's online DealMaker.tech portal.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.2. Customer acknowledges that Company makes no guarantee that Customer will be approved by any third party, and approval is subject to each third party's sole discretion, including, to the extent applicable, its due diligence and compliance policies and procedures. Use of payment processing service(s) is further contingent on the mutual acceptance by Company and Customer of each third party's respective terms, service agreements, and fees (including fees for merchant processing account and ongoing maintenance, which may be applied on a per-issuer basis) to be included as an addendum to this Agreement and/or presented to Customer for acceptance at the time Customer engages third party, and as updated from time to time. Note holdback periods may apply for electronic payment transfer methods, as enforced by processors. Company shall not be deemed responsible for delivery or any interruption or cessation of any services provided by any third party.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.3. All transactions must clear prior to being made available to Customer. US Federal regulations provide investors with 60 days to recall funds. Customer remains liable to immediately and without protestation or delay return any funds recalled by investors for whatever reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.4. Customer agrees that funds deposited into Customer's Account shall remain in Customer's Account and shall not be withdrawn by Customer or a person authorized by Customer, from the Customer's Account prior to Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.5. Company reserves the right to deny, suspend or terminate participation of any investor in the offering to the extent Company, in its sole discretion, deems it advisable or necessary to comply with applicable laws or to eliminate practices that are not consistent with laws, rules, regulations, best practices, or the protection of its reputation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.6. **Holdbacks.** The Customer hereby acknowledges that certain terms apply in respect of electronic or credit card payment to cover against chargebacks and/or rescission (**"Chargeback"**). Chargeback windows can vary in duration and amount. For this reason, a holdback is applied to all funds processed online and deposited in Customer Payment Processing Account. Company shall have the right, in its sole discretion, to revise the amount and duration of any holdback. Unless otherwise advised in writing prior to the Effective Date, the holdback is 5.00% of payments processed, for a ninety (90) day period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7. In the event that a Customer's investor disputes, through their financial institution, a subscription payment made using electronic or credit card payments **("Chargeback Dispute")**, Customer acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.1. If the Chargeback Dispute is initiated by a subscriber before the Customer has accepted the subscriber's investment, the Company shall refund the subscriber, and no further action will be taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.2. If the Chargeback Dispute is initiated by a subscriber after the Customer has accepted the subscriber's investment, the Company shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.2.1. notify the Customer within twenty-four (24) hours of the Chargeback Dispute; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.2.2. Provide Customer with five (5) business days to resolve the Chargeback Dispute directly with the subscriber.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.3. If, after (5) business days, the subscriber and Customer fail to resolve the Chargeback Dispute, Company will submit evidence contesting the Chargeback Dispute, on behalf of the Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.4. Customer agrees to promptly notify Company upon receipt of any Chargeback Dispute notifications, provide all necessary information and documentation requested by the Company to support the Chargeback Dispute and refrain from directly engaging with the payment processor or any other third party regarding the Chargeback Dispute.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.5. Customer acknowledges that contesting a Chargeback Dispute may require the Company to share certain transaction details with third party payment processors. The Customer agrees to (a) only share information necessary to contest the Chargeback Dispute and (b) comply with all applicable data protection and privacy laws when handling Customer data and providing Customer data to Company related to the Chargeback Dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.6. For the avoidance of doubt, although the Company will make best efforts to represent the Customer in contesting a Chargeback Dispute, Company shall not be liable for and bares no responsibility whatsoever for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.6.1. The outcome of the Chargeback Dispute;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.6.2. Any fees or penalties imposed by payment processors or financial institutions as a result of the Chargeback or Chargeback Dispute; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.7.6.3. Any loss of revenue or business opportunity resulting from the Chargeback or Chargeback Dispute.

**<u>15.</u>**  **<u>Analytics</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15.1. <u>Data and Analytics</u>. Company reserves the right to collect data relating to Customer's usage of the Software during the Term. Without limiting the generality of the foregoing, Company may collect information relating to: (i) Software use (including the number of users, duration of usage sessions, and number of transactions initiated or completed using the Software); (ii) error information (including error messages and any feedback text submitted via any in-application feedback form); (iii) performance data (including software run time); (iv) user experience information (including time spent on each page of the user interface); and (v) license status information (including confirmation of license activation status). Customer shall have the right to access and use data relating to its usage of the Software for its own purposes, as available through the online dashboard or other reports provided by Company. Customer retains all right, title and interest in AI outputs generated from Customer usage of the Software. Company grants Customer a worldwide, perpetual license to use such AI outputs for Customer's business, subject to third party rights and applicable laws and regulations.

**<u>16.</u>**  **<u>Marketing Review Tool</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16.1. DealMaker's integrated third party marketing review tool is made available to Customer (or its agents) to review Customer's marketing materials and assist Customer in complying with applicable marketing regulations (**"Marketing Review Tool"**). If reviewer is Company, Customer may request that a DealMaker Entity assistant Customer with uploading documentation into the Marketing Review Tool but Company will not perform, and shall not be deemed responsible for performing, any services related to reviewing or analyzing search results. Company is not engaged to perform and will not perform and shall not be deemed responsible for making any determination as to whether Customer has complied with its obligations under applicable marketing regulations based on information provided by the Marketing Review Tool. Customer and/or its agents (if so designated) shall be responsible for reviewing the results and determining compliance with applicable marketing legislation and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16.2. Use of the Marketing Review Tool is contingent upon Customer's acceptance of third party provider's terms and fees (if applicable) to be presented to the Customer at the time Customer initiates engagement with the Marketing Review Tool.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16.3. Company does not make and hereby disclaims any warranty, express or implied with respect to the information provided through the Marketing Review Tool. Customer acknowledges that (i) Company does not guarantee or warrant the correctness, merchantability or fitness for a particular purpose of the information provided through Marketing Review Tool; (ii) Marketing Review Tool is PROVIDED "AS-IS" AND "AS AVAILABLE" AND NEITHER COMPANY NOR ANY OF ITS THIRD PARTY SUPPLIER REPRESENTS OR WARRANTS THAT THE INFORMATION IS CURRENT, COMPLETE OR ACCURATE; and (iii) Customer assumes all risks arising from Company or its agents' use of the Marketing Review Tool.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16.4. Notwithstanding anything in the DealMaker Terms of Service, Customer agrees that it shall indemnify, defend and hold harmless Company, its officers, directors, employees and agents, and affiliates that have contributed information to or provided services related to the Marketing Review Tool against any and all direct or indirect losses, claims, demands, expenses (including attorneys' fees and cost) or liabilities of whatever nature or kind arising out of Customer's or its agent's use of the Marketing Review Tool and Customer's use or distribution of any information obtained therefrom.

**<u>Enterprise Customer Terms</u>**

**For DealMaker Customers who have signed an Enterprise Order Form, the Terms apply, as well as the following additional terms. If you are not an Enterprise Customer, these additional terms do not apply to you:**

**<u>17.</u>**  **<u>Definitions</u>**

**"Enterprise Customer"** means a Customer that has entered into an Enterprise Order Form.

**"License"** means the Company's grant to Enterprise Customer of a non-exclusive, non-transferable license for use of the Software by an unlimited number of individual users. Company will designate a DealMaker Enterprise Account to Enterprise Customers with a License.

**"Intended Purpose"** For the purposes of this section, Intended Purpose also includes usage by issuers invited by Enterprise Customer to use Enterprise Customer's Enterprise Account for the above-described purpose.

**"Software"** as it pertains to this section, shall also include any related printed, electronic and online documentation, manuals, training aids, user guides, system administration documentation and any other files that may accompany the Software licensed by Enterprise Customer.

**<u>18.</u>**  **<u>SLA</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18.1. It is expressly understood and agreed that the Company shall determine its capacity to offer consulting services, only to such extent and at such times and places as may be mutually convenient to the parties. Company shall be free to provide similar services to such other business enterprises or activities as the Company may deem fit without any limitation or restriction whatsoever.

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**<u>19.</u>**  **<u>Licensed Intermediary Terms.</u>**

**If Enterprise Customer is a licensed Intermediary (as defined below), the following additional terms apply:**

A. Books
 and Records

<u>Books and Records.</u> Any and all obligations of Customer related to the storage of books and records including but not limited to, obligations in accordance with Sections 17(a)(1), 17(a)(3) and 17(a)(4) of the Securities Exchange Act of 1934 (**"Exchange Act"** or "SEA") remain the sole obligation of Customer and its clients. Company expressly disclaims any and all responsibility with respect to any regulatory or industry requirements with respect to the Customer and its clients' obligations related to record keeping and maintenance.

B. Regulation
 CF Offerings

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i. Obligations of the Customer (acting as a Licensed Intermediary):

Where Customer using the Software has been engaged by its client to (i) act as a Broker-Dealer and a licensed Intermediary pursuant to Regulation CF, 17 C.F.R. Part 227 (the **"Regulation CF"**), or (ii) act as a registered Funding Portal and licensed Intermediary pursuant to Regulation CF, in a transaction involving the offer or sale of securities in reliance on section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)), Customer shall comply with the requirements of Regulation CF (**"Licensed Intermediary"**). For greater certainty, this includes the requirements that Customer shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Register with the Securities and Exchange Commission (**"Commission"**) as either (i) a broker or (ii) a Funding Portal under section 15(b) of the Exchange Act (15 U.S.C. 78o(b)), pursuant to Regulation CF, §227.400;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. If registering with the Commission as a Funding Portal, refrain from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Offering
 investment advice or recommendations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Soliciting
 purchases, sales or offers to buy the securities displayed on its platform;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Compensate
 employees, agents, or other persons for such solicitation or based on the sale of securities
 displayed or referenced on the DealMaker Software used by the Intermediary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Hold,
 manage, possess, or otherwise handle investor funds or securities.

(Regulation CF, §227.300(2)(c))

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. Verify that no director, officer or partner of Customer, or any person occupying a similar status or performing a similar function has a prohibited "financial interest in an issuer" as the term is defined in Regulation CF, §227.300(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4. Have a reasonable basis for believing that Customer's client seeking to initiate an offering of securities under the Regulation has a reasonable basis for keeping accurate records of security holders and is not disqualified to offer securities pursuant to Regulation CF, §227.301(c);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5. Make available to SEC and to the public, the disclosure required by Regulation CF, §227.201 and §227.303;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Provide educational materials to all investors, pursuant to Regulation CF, §227.302(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7. Verify that Customer's clients are not disqualified from offering securities pursuant to Regulation CF, §227.100(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8. Only accept an Investor into an offering after (1) the Investor opens an account with Customer, (2) the Investor consents to electronic delivery and the review of the educational materials regarding the offering and (3) Customer has a reasonable basis to believe that the Investor meets the investment limitations in Regulation CF pursuant to Regulation CF, §227.302 and §227.303.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9. Provide communication channels by which Investors who have opened accounts can communicate with one another and with representatives of the Customer about offerings made available through the Customer or its clients, pursuant to Regulation CF, §227.303(c); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10. Provide Investors the opportunity to reconsider their investment decision and to cancel their investment commitment until 48 hours prior to the new offering deadline, pursuant to Regulation CF §227.304

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11. Provide Investors with notice of material changes as described in Regulation CF, §227.304 (**"Notice"**), including but not limited to notice that the investor's investment commitment will be canceled unless the investor reconfirms his or her investment commitment within five business days of receipt of the Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12. If registering with the Commission as a Funding Portal, comply with the Conditional Safe Harbor provisions in Regulation CF, §227.402; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13. If registering with the Commission as a Funding Portal, implement written policies and procedures reasonably designed to achieve compliance with federal securities laws and the rules and regulations thereunder, relating to its business as a Funding Portal, as required by Regulation CF, §227.402(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14. If registering with the Commission as a Funding Portal, manage any reconciliation or reporting questions with the Issuer directly.

**("Regulation CF Requirements")**

For greater certainty, the parties acknowledge that Company shall bear no responsibility for or liability whatsoever in connection with the Regulation CF Requirements and Customer shall be solely responsible for ensuring that Customer and its clients comply with Regulation CF.

Further Assurances. When Customer or its clients use the Software for an offering in reliance on Regulation CF, Customer shall verify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1. The issuer has filed a Form C Offering Statement with the SEC, as described in Regulation CF, §227.203(a), prior to making an offering to the public pursuant to Regulation CF;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. Issuer complies with marketing and advertising requirements of Regulation CF, §227.204;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. Provider is notified of any investor who, having received Customer's Notice pursuant to Regulation CF §227.304, opts-out of their investment and whose investment must therefore be refunded;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4. Signed and funded subscription agreements, executed by investors who have cleared AML/KYC, are reviewed by the Customer prior to countersignature;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The aggregate amount of all securities sold to all Investors by the Issuer in a single offering during a 12-month period shall not exceed $5,000,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Non-accredited Investors (as defined by Rule 501, CFR §230.301) investing in the offering pursuant to Regulation CF do not exceed the maximum investment permitted in a 12-month period per Regulation CF, §227.100.

<u>Payments To Escrow.</u> Customer acknowledges that it shall direct all payments from Investors in respect of a Regulation CF offering to Issuer's Escrow Account. Customer is responsible for (1) applying for escrow account with a DealMaker-selected Escrow Provider; (2) configuring instructions in the DealMaker Software to ensure that all payments are directed to the appropriate Escrow Account; (3) using the DealMaker.tech application to manage closings pursuant to the DealMaker user guide and (4) coordinating with the escrow company managing the Escrow Account to disburse funds upon request from the issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; C. Regulation A/A+ Offerings

Obligations of the Customer. Where Customer has been engaged by its client as a broker-dealer in connection with an offering pursuant to Regulation A, 17 C.F.R. Parts 230.251-230.263 (**"Regulation A"**), the Customer shall verify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Customer shall complete a reasonable due diligence ensuring no anti-fraud or civil liabilities provisions of federal securities laws have been violated. As such, Customer shall maintain a Due Diligence file including the Issuer Agreement (or Selling Agreement); organizational, constating, financial, and administrative support to accept such Issuer engagement; and Issuer's Offering Memoranda, Subscription Document. Further, the Due Diligence folder shall evidence the collection of such documents in a form as described in Customer's Written Supervisory Procedures ("WSPs"). Customer shall create and maintain customer files, including new account, accredited investor, or qualified purchaser questionnaires, including Investor attestations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Issuer has filed a Form 1-A Offering Statement with the SEC, as described in Regulation A, §230.252 and §239.90, prior to making an offering to the public pursuant to Regulation A;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Issuer complies with marketing and advertising requirements of 17 C.F.R. Part II, Securities and Exchange Commission and the SRO, FINRA, including but not limited to, setting up the issuer landing page for the Offering website.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Signed and funded subscription agreements, executed by investors who have cleared AML/KYC, are reviewed by the Customer and a recommendation is made by Customer to Issuer regarding countersignature.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5. Prior to enabling countersignature:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Issuer has provided written confirmation to Customer that it has BlueSky notice filed in each state, as applicable depending on the states in which the securities are offered and whether the offering is conducted pursuant to Tier 1 or Tier 2 of Regulation A §230.252; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. For the first 25 days of an offering, Customer will monitor investors until the issuer has provided written confirmation that all state BlueSky requirements have been met for the 53 US jurisdictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Issuer and Issuer counsel have taken the steps required to review non-US investors, as required by the applicable international regulations.

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![](ex1-1_001.jpg)

**DEALMAKER SECURITIES LLC ("DMS") CUSTOMER TERMS**

**For any DealMaker Securities Customer, the following additional terms also apply:**

**Broker-Dealer Agreement.** These terms and conditions for DealMaker Securities LLC (**"DMS Terms"**), along with the Order Form and schedules attached to the Order Form create a binding agreement by and between the Customer who has signed the Order Form (**"DMS Customer"**), and DealMaker Securities LLC, a FINRA-registered Broker-Dealer (**"DMS"**)(the **"DMS Agreement"**), as of the Effective Date. DMS Customer may also be considered a Customer of the other DealMaker Entities, depending on the services the Customer purchases.

DMS is a registered broker-dealer providing services in the equity and debt securities market, including offerings conducted via SEC approved exemptions such as Rules 506(b) and 506(c) of Regulation D under the Securities Act of 1933 (the **"Securities Act"**); Regulation A under the Securities Act (**"Regulation A"**); Regulation CF under the Securities Act (**"Regulation CF"**) and others. DMS Customer is offering securities directly to the public in an offering exempt from registration under either Regulation A or Regulation CF (the **"Offering"**). DMS Customer recognizes the benefit of having DMS provide advisory and other services as described herein, on the terms hereof.

Capitalized terms used but not defined in these DMS Terms have the meanings set forth in the Order Form or the Terms. In the event of a conflict between the Terms and the DMS Terms, the DMS Terms shall control.

**<u>1. Appointment & Termination</u>**

DMS Customer hereby engages and retains DMS to provide operations and compliance services at Customer's discretion/ subject to DMS's approval as a FINRA-registered broker-dealer. DMS Customer acknowledges that DMS obligations hereunder are subject to (a) DMS's acceptance of DMS Customer as a customer following DMS's due diligence review and (b) if applicable, issuance by the Financial Industry Regulatory Authority ("FINRA") Department of Corporate Finance of a no objection letter for the Offering.

In addition to the Termination Reasons, DMS may terminate this DMS Agreement if, at any time after the commencement of DMS's due diligence of the potential DMS Customer, DMS reasonably believes that is not advisable to proceed with the contemplated Offering.

**<u>2. Services</u>**

DMS will perform the services listed on the Order Form in connection with the Offering (the **"Services"**).

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**<u>3. Fees</u>**

As payment for the Services, DMS Customer shall pay to DMS such fees as described in the Order Form. Commissions are earned once the DMS Customer's investors are reviewed by DMS. DMS Customer's acceptance of an investor completes DMS's service obligation at which time fees are due and payable to DMS. DMS Customer authorizes DMS to deduct any fees owing directly from the DMS Customer's bank account or third-party escrow account (if Customer has engaged an escrow provider). In the event this DMS Agreement is terminated in accordance with paragraph 1 of the DMS Terms, any advance against accountable expenses anticipated to be incurred, shall be refunded to the extent said expenses are not actually incurred as of the termination date.

**<u>4. Regulatory Compliance</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. DMS Customer and all its third-party providers shall at all times (i) comply with direct reasonable requests of DMS: (ii) maintain all required registrations and licenses, including foreign qualification, if necessary; and (iii) pay all related fees and expenses (including the FINRA corporate filing fee) in each case that are necessary or appropriate to perform their respective obligations under this Agreement. Customer shall comply with and adhere to all DMS policies and procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. DMS Customer shall at all times disclose all compensation received by any third party promoters (including but not limited to social media influencers) in connection with the Offering, in accordance with applicable rules and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. DMS Customer and DMS will have shared responsibility for the review of all documentation related to the Offering but the ultimate discretion about accepting an Investor will be the sole decision of the DMS Customer. Each Investor will be considered to be that of the DMS Customer and NOT that of DMS. DMS Customer shall advise DMS of each Investor who shall not be accepted into the Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. DMS Customer and DMS shall each supervise and train their respective employees, agents, representatives and independent contractors in the performance of functions allocated to them pursuant to the terms of this DMS Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. DMS Customer may request DMS assistance with preparation of the Form C for the Offering and guidance on filing the Form C for the Offering in the SEC-Edgar system, but DMS Customer is ultimately responsible for the review and filing the Form C related to the Offering. In the event that DMS Customer files a Form C-W or Form 1-A-W withdrawing its filing in relation to its Offering, DMS Customer agrees to the prompt return to investors of all funds received from investors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; f. DMS Customer agrees to

● Provide accurate, complete, and timely information through the online form provided. The filing creation timeline will commence only upon receipt of all required information

● Review all filings with their securities counsel to ensure accuracy before each EDGAR filing. DealMaker Securities, LLC is not liable for errors, omissions, or inaccuracies in filings due to incomplete or inaccurate information provided by the Customer.

● Submit requested revisions within the specified review windows, as additional rounds or delays may incur further fees and impact timelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. If either DMS Customer or DMS receives material communications (orally or in writing) from any Governmental Authority or Self-Regulatory Organization with respect to this Agreement or the performance of either party's obligations thereunder, the receiving party shall promptly provide said communications to the other party, unless such notification is expressly prohibited by the applicable Governmental Authority.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. DMS Customer is responsible for the preparation of financial statements using the going concern basis of accounting and required disclosures alerting investors about any underlying financial conditions and management's plans to address them. DMS Customer will provide evidence of sufficient financial wherewithal as part of the diligence process, and in some cases on-going, as requested by DMS in its due diligence process and enhanced due diligence processes. The amount of sufficient financial wherewithal is subject to the DMS Customer's specific facts and circumstances and will be evaluated during the due diligence process. DMS Customer acknowledges that it must maintain at least six months of operating capital and update investor disclosures to reflect any change in operating capital below this threshold. DMS Customer acknowledges that these updates to investors disclosures will be made in accordance with the advice of the DMS Customer's professional advisors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. DMS Customer is solely responsible for confirming that DMS Customer is authorized to use or wholly owns all DMS Customer intellectual property used in connection with the Offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; j. DMS Customer maintains responsibility for acting as the securities registrar or engaging a separate registrar for its corporate securities issuance and ownership records, if not using DMTA.

**<u>5. Role of DMS</u>**

DMS Customer acknowledges and agrees that it relies on its own judgment in engaging DMS Services. DMS Customer understands and agrees that (i) DMS is not assuming any responsibility for the DMS Customer's underlying business decision to pursue any business strategy or effect any Offering; (ii) DMS makes no representations with respect to the quality of any investment opportunity in connection with the Offering (iii) DMS does not guarantee the performance to or of any Investor in the Offering, (iv) DMS does not guarantee the performance of any third party which provides services to DMS or DMS Customer with respect to the Offering), (v) DMS will make commercially reasonable efforts to perform the Services pursuant to this DMS Agreement, (vi) DMS is not an investment adviser, does not provide investment advice and does not recommend securities transactions and any display of data or other information about the Offering, does not constitute a recommendation as to the appropriateness, suitability, legality, validity, or profitability of any Offering, (vii) DMS Services in connection with this DMS Agreement should not be construed as creating a partnership, joint venture, or employer-employee relationship of any kind, (ix) Services in connection with this DMS Agreement that require registration as a FINRA/SEC registered broker-dealer shall be performed exclusively by DMS or an associated person of DMS, (x) DMS is not providing any accounting, legal or tax advice, and (xi) will use "commercially reasonable efforts" to perform Services pursuant to this DMS Agreement but that this shall not give rise to any express or implied commitment by DMS to purchase or place any of the DMS Customer's securities. DMS <u>Customer explicitly acknowledges that DMS shall not and is under no duty to recommend DMS Customer's security and DMS is not selling DMS Customer's security to retail investors.</u>

**<u>6. Indemnification</u>**

<u>Insufficient Funding For A Claim</u>. If the foregoing indemnification or reimbursement is judicially determined to be unavailable or insufficient to fully indemnify and hold harmless DMS as an indemnified party against a Claim, the DMS Customer will contribute to the amount paid or payable by an indemnified party as a result of such Claim in such proportion as is appropriate to reflect the relative financial benefits of the Offering to the Company, on the one hand, and the indemnified party, on the other hand; or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the DMS Customer on the one hand and the indemnified party on the other hand with respect to such Claim as well as any other relevant equitable considerations. Notwithstanding the preceding paragraphs, in no event will the aggregate amount to be contributed by all indemnified parties towards all Claims and DMS Customer losses, exceed the actual fees received by DMS pursuant to the DMS Agreement.

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**<u>7. Witness Reimbursement</u>**

In the event that DMS or any of its employees, officers, directors, affiliates or agents are requested or required to appear as a witness or subpoenaed to produce documents in any action in which the DMS Customer or any of its affiliates is a party to and DMS is not, the DMS Customer will reimburse DMS for all expenses incurred by its employees, officers, directors, affiliates or agents in preparing for and appearing as a witness or producing documents, including the reasonable fees and disbursements of legal counsel.

**<u>8. Notices</u>**

Any notices required by the agreement shall be in writing and shall be addressed and delivered via email at the email address included in the Order Form.

**<u>9. Confidentiality and Mutual Non-Disclosure:</u>**

Nothing contained herein shall be construed to prohibit the SEC, FINRA, or other government entities from obtaining, reviewing, and auditing any information, records, or data of either party containing Confidential Information, as defined in this Agreement.

<u>Disclosure and Retention Of Confidential Information.</u> DMS is hereby expressly permitted by DMS Customer to disclose Confidential Information to third parties involved in the Offering contemplated herein, provided that DMS Customer has been informed of such disclosure in advance and has approved such disclosure (either orally or in writing). DMS may retain one copy of the DMS Customer's Confidential Information to the extent necessary to comply with industry-specific document retention rules and other regulations, and in an archived computer backup system stored as a result of automated backup procedures for compliance purposes. DMS Customer acknowledges that regulatory record-keeping requirements, as well as securities industry best practices, require DMS to maintain copies of practically all data and communications, even after this Agreement is terminated.

**<u>10. Miscellaneous</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. **FINRA Arbitration Rules Apply To DMS Customers**. Notwithstanding anything to the contrary in this Agreement, ANY DISPUTE, CONTROVERSY, CLAIM OR CAUSE OF ACTION BETWEEN THE DMS Customer AND DMS DIRECTLY OR INDIRECTLY RELATING TO OR ARISING OUT OF THIS AGREEMENT, OR BREACH THEREOF required or allowed to be conducted by the Financial Industry Regulatory Authority's ("FINRA") rules (including the FINRA Code of Arbitration Procedure for Industry Disputes) shall be arbitrated in accordance with such rules. Any arbitration shall be before a neutral arbitrator or panel of arbitrators selected under the FINRA Neutral List Selection System (or any successor system) and in a forum designated by the Director of FINRA Dispute Resolution or any member of FINRA Staff to whom such Director has delegated authority. In general accordance with FINRA Rule 2268, by signing an arbitration agreement the parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.1.1. This Agreement contains a pre-dispute arbitration clause.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.2. Except as otherwise provided in this Agreement, all parties to this Agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.3. Arbitration awards are generally final and binding; a party's ability to have a court reverse or modify an arbitration award is very limited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.4. The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.5. The arbitrators do not have to explain the reason(s) for their award unless, in an eligible case, a joint request for an explained decision has been submitted by all parties to the panel at least 20 days prior to the first scheduled hearing date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.6. Any panel of arbitrators may include a minority of arbitrators who were or are affiliated with the securities industry.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.7. The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.8. The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.9. As provided in FINRA Rule 2268, no person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action; or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; or (ii) the class is decertified; or (iii) the DMS Customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Agreement except to the extent stated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. **DMS Customer Identifying Information**. Pursuant to the requirements of Title III of Pub. L. 107-56 (the USA Patriot Act), as amended (the **"Patriot Act"**) and other applicable laws, rules and regulations, DMS is required to obtain, verify and record information that identifies the DMS Customer which information includes the name and address of the DM Customer and other information that that allows DMS to identify the DMS Customer in accordance with the Patriot Act and other such laws, rules and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. **Affiliates of DMS**: DMS Customer acknowledges that agreements with DMS affiliates (also referred to as DealMaker Entities in this Agreement), if any, shall be governed by the DMS affiliates' applicable terms of service and exclusive remedy for Marketing Services to recover any Losses against Customer in respect of the Agreement."

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![](ex1-1_004.jpg)

**DEALMAKER REACH, LLC CUSTOMER TERMS**

**For usage of DealMaker Marketing Services, the following additional terms apply to you ("Marketing Services Terms"):**

<u>1. THE SERVICES</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.1. Overview.** DM Reach shall provide certain digital marketing services as described on the Order Form (collectively, the **"Marketing Services"**) subject to the following additional terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.2.** Customer shall provide Marketing Services with all reasonably necessary materials, company history, financial statements, business and market description, bios of principals and key employees, customers, products, services, tax returns, financial models, systems, pricing, intellectual property, technical specifications, access to social media channels, and all other pre-conditions necessary for providing the DM Marketing Services (the **"Information"**).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.3.** The parties acknowledge and agree that all such Information comes from Customer and that Marketing Services does not create such Information and relies on its accuracy, ownership and property. Customer represents and warrants to the Marketing Services that all such Information is accurate, true and correct and that, in the event Information changes during the Marketing Services Term (as defined below), Customer shall provide updated Information to Marketing Services. Customer further acknowledges that Marketing Services bases its Services on such Information.

<u>2. RELATIONSHIP</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1.** Marketing Services and Customer are independent contractors in all matters relating to Marketing Services. Marketing Services is not a broker-dealer, investment advisor, investment bank or financial advisor. Nothing in this Agreement shall be construed to create any partnership, joint venture, agency, employment, or any other relationship between the parties. Except for DM Reach's provision of DM Reach Services to Customer in connection with the Marketing Spend, neither party has the authority to act on behalf of or to enter into any contract, incur any liability, or make any representation on behalf of the other party, unless otherwise expressly agreed to in writing signed by both parties. Except for Marketing Services provision of its Services to Customer in connection with the Marketing Spend, neither party has the authority to act on behalf of or to enter into any contract, incur any liability, or make any representation on behalf of the other party, unless otherwise expressly agreed to in writing signed by both parties. Marketing Services has exclusive control over its employees, representatives, agents, contractors and subcontractors, and none of the foregoing shall be deemed to be employees of Customer or eligible to participate in any employment benefit plans or other benefits available to Customer employees. Customer shall exercise no immediate control over the actual means and manner of Marketing Services' performance under this Agreement, except to the extent that Customer expects the satisfactory completion of the Marketing Services under this Agreement. Each party is responsible for its respective employees, representatives, agents, contractors and subcontractors, and the foregoing's compliance with the terms of this Agreement. Marketing Services is not and shall not be deemed to be a dealer, broker, finder, intermediary or otherwise entitled to any brokerage, finder's, or other fee or commission in connection with any purchase or sale of securities resulting from Marketing Services' general marketing services. Marketing Services shall be solely responsible for all local, state and federal tax liabilities arising from any income received under this Agreement, whether cash or stock.

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<u>3. FEES AND EXPENSES</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1.** Customer is responsible for all costs and expenses incurred on Customer's behalf in connection with the provision of the Marketing Services (***"Expenses"***). Any Expenses outside of the agreed budget are subject to Customer's prior written approval. Customer is also responsible for its own costs and expenses incurred in connection with the Offering, and Customer acknowledges and agrees that the DealMaker Entities collect compensation related to the Offering as set forth in the terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. Budget and Marketing Spend.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.1. As part of engaging Marketing Services, Customer is authorizing and directing Marketing Services to allocate the marketing and advertising budget expended during the Customer's marketing campaign (***"Marketing Spend"***).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.2. **Ad Network ("Ad Network").** The **Ad Network Program** is an invitation-based program in which Customers may have the opportunity to purchase advertising slots in a variety of publications as part of Marketing Spend (**"Advertising Placement"**) subject to Customer's agreement to the Ad Network terms and conditions set out herein (**"Ad Network Program"**). Customer acknowledges that it may be eligible for the Ad Network Program, however Marketing Services has sole control of whether Customer is admitted to the Ad Network Program, as described in the Summary of Compensation. Customer acknowledges that Marketing Services manages the program and charges fees for the Ad Network Program. Customer explicitly acknowledges that Marketing Services shall have sole discretion to terminate Customer's participation in the Ad Network Program for non-compliance with Ad Network Program terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.3. For Customers eligible for the Ad Network Program, Marketing Services shall have discretion to allocate Marketing Spend during the marketing campaign, except for charges in connection with the placement of Ad Network advertising placements (**"Advertising Placement"**).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.4. Customer shall approve Ad Network Costs in accordance with required timelines by either (a) executing an authorization for each placement (**"Ad Network Insertion Order"**) or (b) pre-approval of a bi-weekly budget for all Ad Network Costs (**"Approved Ad Network Budget"**) as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Ad Network** **Insertion Order**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i. DealMaker shall present Ad Network opportunity proposals (**"Ad Network Proposal"**) to Customer for approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ii. Once Customer approves an Ad Network Proposal, DealMaker shall provide a DealMaker Ad Network Program Insertion Order (**"Ad Network Insertion Order"**) to Customer for a specific Advertisig Placement. By electronically executing the Ad Network Insertion Order, Customer authorizes Marketing Services to incur the Ad Network Costs listed on the Ad Network Insertion Order. Marketing Services shall not incur Ad Network Costs without the written approved Ad Network Insertion Order from Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; iii. Customer acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Customer must execute Ad Network Insertion Order and prepay Marketing Services for all Ad Network Costs before Marketing Services places ad advertisement on Customer's behalf. Once a Customer executes the Ad Network Invoice (**"Ad Network Invoice"**);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b. Ad Network Costs and Ad Network Invoices are non-cancellable and non-refundable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c. Customer's timely payment of Ad Network Costs is required to maintain the integrity of the Ad Network Program; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; d. If Customer fails to pay Ad Network Costs in accordance with the timelines set out in an Ad Network Insertion Order, DealMaker may remove Customer from the Ad Network Program, unless otherwise stated on the Ad Network Insertion Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; iv. The Content of Ad Network Advertising Placements shall be approved by the Customer as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a. Customer shall receive proposed content of Advertising Placement from DealMaker (**"Feedback Date"**) prior to the Advertising Placement publication date listed on the Ad Network Insertion Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b. Customer shall approve Advertising Placement publication content in writing within 48 hours of the Feedback Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c. If Customer approval or Customer Feedback is not received within 48 hours of the Feedback Date, the Advertising Placement will be published as initially presented to Customer.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Approved Ad Network Budget**: On a bi-weekly basis, Customer shall provide written approval of an Ad Network Budget. Marketing Services shall have full discretion to allocate Ad Network Costs for the placement of advertisements up to the bi-weekly Approved Ad Network Budget. All Marketing Spend and Ad Network Costs up to the agreed budget amount will be charged directly to Customer's provided payment method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) Ad Network Costs in connection with the purchase of Advertising Placements will incur a media management fee as indicated on the Order Form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.5. Customer acknowledges that Marketing Services or its affiliates (a) may have an ownership interest in some providers of placement advertisements, details of which are available upon Customer's request; and (b) as a result of Marketing Services relationships and negotiated terms with various vendors, certain benefits may accrue to Marketing Services or its affiliates including but not limited to additional revenue from certain partnership placements. Unless Customer expressly instructs otherwise, Marketing Services may use its discretion in deploying Marketing Spend, including but not limited to approved Ad Network Costs.

**4.** **Customer Representations**

Customer further acknowledges that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.1. Return on Marketing Spend, Ad Network spend and/or advertising spend (***"Return"***) can vary greatly with each Offering or campaign and may differ from historical averages, both with respect to Marketing Services fees and fees for any third party partners introduced by Marketing Services or its affiliates. Historical data, averages and information are not a representation of what can be achieved in any particular Offering or campaign as each Offering and campaign is unique and influenced by numerous external factors including but not limited to the Customer's industry, the Customer's management team, the economic environment at the time of an Offering and the funds available for Marketing Spend and Ad Network Costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.2. There are many marketing strategies and tools available to raise capital. Customer is responsible for selecting the capital raising approach that is best suited to Customer's business. Marketing Services and its affiliates cannot predict and do not guarantee that a market participant will attain a particular result. The success of an Offering depends on the Customer's own effort, motivation, commitment and follow-through.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.3. Customer may use the marketing assets created pursuant to this Agreement for purposes other than raising capital. For example, Marketing Spend and Ad Network Costs may be used to create valuable Customer brand collateral, brand positioning, investor mailing lists and investor analytics, regardless of the amount of capital raised. Customer shall be solely responsible for using the marketing assets created pursuant to this Agreement for purposes other than raising capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.4. Services provided by Marketing services may involve, among other things, communicating with third party publishers to secure advertising space for Marketing Services Customer, including but not limited to Advertising Placements (**"Publishers"**). Customer agrees and warrants that it shall not, directly or indirectly, or through a third party, contact said Publishers by any means and shall not interfere with, circumvent, attempt to circumvent, avoid or bypass Marketing Services' communication with Publishers, interfere with the relationship between Marketing Services and Publishers for the purpose of gaining any benefit, whether such benefit is monetary or otherwise or re-sell paid media or advertising placements to DealMaker Customers without the express written consent of Marketing Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.5. In connection with the Customer's use of Publishers through Marketing Services, whether through the DealMaker Ad Network or otherwise, Customer is responsible for ensuring that it has obtained all necessary rights, consents, and permissions from its own clients/investors for the collection, processing, and use of their data in accordance with applicable law. Customer represents that Customer or its agents have obtained from its clients/investors clear and conspicuous consents regarding the collection and use of their data and personal information, the sharing of this data with Publishers for the purpose of sending Customer's advertising publications and has provided its clients/investors with an option to opt out of the processing of their personal information. The Customer acknowledges and agrees that use of the client/investor data by Marketing Services or its affiliates is predicated upon the Customer's fulfillment of these responsibilities. The Customer shall indemnify, defend, and hold harmless Marketing Services and its affiliates from and against any claims, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or relating to the Customer's failure to obtain such consents or comply with this clause.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.6. Production Services. Marketing Services shall include production services as set out in the Order Form ("**Production Services**"). Customer acknowledges that Production Services may involve the use of third party vendors by Marketing Services in connection with performance of Production Services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.7. **Payment.** The Customer will be billed as set out in the Terms. At the end of the month in which the Marketing Services are delivered, payment will be automatically debited from the Customer's bank account or credit card on file, with a receipt to be automatically delivered. Invoices will be available for the Customer to review upon request. In respect of **Ad Network Costs** only, such costs shall be due and payable on or before the due date on the invoice (**"Due Date"**) using ACH or the Client's pre-authorized payment method on file, unless stated otherwise on the Customer Ad Network Insertion Order. Marketing Services reserves the right to charge the Client's pre-authorized payment method on file for the amount of the Ad Network Costs invoice that is an Aged Invoice (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.8. **Paused Marketing Services.** Customer may request that Marketing Services (and corresponding Fees) be paused (**"Pause Date"**). Customer shall pay (a) any Ad Network Costs incurred prior to the Pause Date; and (b) Marketing Services' monthly service fees for sixty (60) days from the Pause Date. When a campaign is paused, Marketing Services may place the campaign in a queue behind other marketing Campaigns that are ready to launch (**"Launch Queue"**). Customer acknowledges that Marketing Services may not have staff available to relaunch a paused campaign on the Customer's date of choice. Customer campaign may be relaunched once Customer's campaign reaches the beginning of the Launch Queue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.9. **Unpaid Invoices**. Notwithstanding anything to the contrary in the Agreement, in the event that Customer fails to pay all outstanding invoices pursuant to this Agreement, Customer agrees that it shall pay the full amount of the outstanding invoices from the proceeds of the Offering, within seven (7) days of the disbursement of such proceeds to the Customer, plus applicable interest. In the event that a Customer payment for any Marketing Services invoice fails, Customer has fourteen (14) days to re–connect their bank account or credit card and submit payment for any outstanding invoices. In the event that payment for all outstanding invoices is not cleared within 14 days, all advertisements and services provided by Marketing Services will be paused until payment is received and the Customer's bank account or credit card authorization is restored, except for non-payment of Ad Network Costs by Due Date, which shall result in immediate cancellation of the advertising placements. In the event that Customer fails to pay any invoice due and payable (**"Aged Invoices"**) to Marketing Services and such Aged Invoices are not cleared or Customer account is not brought back into good standing within 30 days, all services provided by Marketing Services pursuant to this Agreement will be paused and Customer's campaign will be placed at the end of the Launch Queue until payment is received in full. Once payment is received in full, Customer's campaign will move forward through the Launch Queue.

***Customer acknowledges that marketing assets created using services provided by Marketing Services shall not be released to Customer until all outstanding invoices and Aged Invoices are paid in full.*** Marketing Services shall have the right to register a lien on any assets or property of the Customer in respect of fees owed and outstanding to Marketing Services for more than sixty (60) days.

<u>5.</u> <u>WORK PRODUCT OWNERSHIP</u>

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<u>6.</u> <u>ADDITIONAL INDEMNIFICATION</u>

Notwithstanding and without limitation of any other provision of this Agreement, and notwithstanding whether such losses or damages are foreseeable or unforeseeable, Marketing Services shall not be liable under any circumstances whatsoever for any breach by any other Customer Partner, which term includes third party consultants, agents, corporations, partnerships, trusts or any other entities involved in the placement of partnership advertisements, of securities laws or other rule of any securities regulatory authority, for lost profits or for special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages. Customer agrees that its liability hereunder shall be absolute and unconditional, regardless of the correctness of any representations of any third parties and regardless of any liability of third parties to Marketing Services or any of the Indemnified Parties and shall accrue and become enforceable without prior demand or any other precedent action or proceeding. Customer shall ensure that all agreements with the Customer's Partners include the following indemnity:

"Partner agrees to indemnify, defend and hold Customer and any current or former officers, directors, employees, subsidiaries, affiliates, partners, agents or contractors (**"Representatives"**) harmless from any and all costs, demands, damages, losses, fees, expenses and liabilities (including attorneys' fees and costs) (**"Losses"**) as a result of any third parties demands, regulatory investigations, causes of action, losses, damages, liabilities, costs, fines, claims, class actions and expenses (including reasonable attorney's fees) (**"Claims"**) in connection with the services provided and the content prepared by the Partner for the Offering, unless Customer is proven to have been grossly negligent." The Parties hereby agree that Marketing Services shall be a third party beneficiary of such indemnity provisions in the Customer's agreement with Partner in respect of any "Losses" suffered by Marketing Services related to the Partner's services in respect of the Offering. The Parties further agree that this remedy shall not be the sole and exclusive remedy for Marketing Services to recover any Losses against Customer in respect of the Agreement."

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**Customer further agrees that with respect to Publishers who are retained by Marketing Services on Customer's behalf to place Customer's advertisements in third party publications, Customer shall indemnify and hold harmless Publishers and their Representatives with respect to any Claims arising from Customer content provided directly or indirectly to Publisher.**

<u>7.</u> <u>GENERAL</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **7.1.** **Customer No Unauthorized Usage.** Customer acknowledges that Marketing Services Customers must use DealMaker as the platform for their Offering, and Customer must execute a separate Order form with Novation Solutions Inc., o/a DealMaker.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **7.2.** Customer acknowledges that it is engaging in a self-hosted raise. Customer is responsible for carrying out the self-hosted capital raise and bears primary responsibility for the success of its own Offering. Customer understands that Marketing Services does not and cannot make any guarantees about Customer's campaign of Offering. No language or provision in this Agreement or any related proposal shall be construed as a guarantee or warranty of any type by Marketing Services, including, without limitation, the success of the Customer's campaign or the Offering, the amount of funds raised in the Offering, the costs associated with the capital raised in an Offering or anything relating to the scope of work or quality of work by Marketing Services on the Customer's campaign.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **7.3.** Customer understands and acknowledges that all changes to marketing assets and marketing collateral, including but not limited to, the Customer's website for the Offering and all press releases, must be reviewed according to the terms of Customer's broker-dealer engagement agreement, where Customer has retained a broker-dealer.

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## Add

**EXHIBIT 4.1**

**DESCRIPTION OF SECURITIES**

The following is a brief description of shares of common stock ("common stock") of BluSky AI Inc. (the "Company," "we," "us," or "our"). The brief description is based upon our Articles of Incorporation, including the Certificate of Amendment to our Articles of Incorporation, (as amended, our "Articles of Incorporation"), our Bylaws (our "Bylaws"), and provisions of applicable Nevada law. This summary does not purport to be complete and is subject to, and qualified in its entirety by, the full text of our Articles of Incorporation and Bylaws, each of which is incorporated by reference as an exhibit to our Annual Report on Form 10-K.

**Market Information**

Our common stock is not traded on any exchange. Our common stock is quoted on the OTCID Basic Market tier of the OTC Link ATS (alternative trading system), the over-the-counter markets administered by OTC Markets Group, Inc., under the trading symbol "BSAI," but the Company's stock is not eligible for proprietary broker-dealer quotations. We cannot assure you that there will be a market in the future for our common stock.

OTC securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC securities transactions are conducted through a telephone and computer network connecting dealers. OTC issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a national or regional stock exchange.

**Classes of Stock**

We have two classes of stock: common stock and Series A Preferred Stock.

**Preferred Stock**

On August 30, 2016, the Board of Directors of the Company, pursuant to Article II of the Company's Articles of Incorporation, approved the designation of fifty-one (51) shares of its authorized capital stock as "Series A Preferred Stock". The Certificate of Designation for the Series A Preferred Stock was filed on August 31, 2016. These shares have preferential voting rights and no conversion rights.

**Common Stock**

Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders. Our holders of common stock do not have cumulative voting rights. Holders of common stock will be entitled to receive ratably such dividends as may be declared by the Board out of funds legally available therefore, which may be paid in cash, property, or in shares of the Company's capital stock. Upon liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of common stock will be entitled to receive their ratable share of the net assets of the Company legally available for distribution after payment of all debts and other liabilities. There is no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock.

**Holders**

As of February 5, 2026, there were 1,504 holders of record of our common stock and one holder of record for our preferred stock.

**Dividends**

To date, we have not paid dividends on shares of our common stock, and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by our Board of Directors.

**TRANSFER AGENT AND REGISTRAR**

The transfer agent and registrar for our common stock is Colonial Stock Transfer Company.

## Add

**Exhibit 4.2**

**SUBSCRIPTION AGREEMENT**

**THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.** THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES, AND NO PUBLIC MARKET IS EXPECTED TO DEVELOP FOLLOWING THIS OFFERING (THE "OFFERING").

**THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS.** ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO SUBSCRIBER IN CONNECTION WITH THIS OFFERING OVER OUR WEB-BASED PLATFORM (THE "PLATFORM"). ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

**INVESTORS WHO ARE NOT "ACCREDITED INVESTORS" (AS THAT TERM IS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED UNDER THE ACT) ARE SUBJECT TO LIMITATIONS ON THE AMOUNT THEY MAY INVEST, AS SET OUT IN SECTION 4.** THE COMPANY IS RELYING ON THE REPRESENTATIONS AND WARRANTIES SET FORTH BY EACH SUBSCRIBER IN THIS SUBSCRIPTION AGREEMENT AND THE OTHER INFORMATION PROVIDED BY SUBSCRIBER IN CONNECTION WITH THIS OFFERING TO DETERMINE THE APPLICABILITY TO THIS OFFERING OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

**THE SUBSCRIPTION AGREEMENT, THE OFFERING CIRCULAR OR ANY OF THE OTHER MATERIALS AVAILABLE ON THE PLATFORM (COLLECTIVELY, THE "OFFERING MATERIALS") MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY.** THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY'S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS "ESTIMATE," "PROJECT," "BELIEVE," "ANTICIPATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

**THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE.** THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED.

**THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION AND FOR ANY REASON WHATSOEVER TO MODIFY, AMEND AND/OR WITHDRAW ALL OR A PORTION OF THE OFFERING AND/OR ACCEPT OR REJECT IN WHOLE OR IN PART ANY PROSPECTIVE INVESTMENT IN THE SECURITIES OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE AMOUNT OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THEIR DATE. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THAT DATE.**

---

| | |
|:---|:---|
| TO: | BluSky AI Inc. |
|  | 5530 South 900 East |
|  | Suite 280 |
|  | Murray, UT 84117 |

---

Ladies and Gentlemen:

<u>1. Subscription</u>.

(a) The undersigned ("Subscriber") hereby irrevocably subscribes for and agrees to purchase Shares (the "Securities") of BluSky AI Inc., a Nevada Corporation (the "Company"), at a purchase price of $___ per Share, upon the terms and conditions set forth herein. The minimum subscription is $1,000.00. Each Share is Common Stock at a par value of $0.00001 per share.

(b) Subscriber understands that the Securities are being offered pursuant to an offering circular assigned SEC Registration Number [\*], and its amendments and supplements (the "Offering Circular") filed with the SEC as part of the Offering Statement. By executing this Subscription Agreement, Subscriber acknowledges that Subscriber has received this Subscription Agreement, copies of the Offering Circular and Offering Statement including exhibits thereto and any other information required by the Subscriber to make an investment decision.

(c) The Subscriber's subscription may be accepted or rejected in whole or in part, at any time prior to a Closing Date (as hereinafter defined), by the Company at its sole discretion. In addition, the Company, at its sole discretion, may allocate to Subscriber only a portion of the number of Securities Subscriber has subscribed for. The Company will notify Subscriber whether this subscription is accepted (whether in whole or in part) or rejected. If Subscriber's subscription is rejected, Subscriber's payment (or portion thereof if partially rejected) will be returned to Subscriber without interest and all of Subscriber's obligations hereunder shall terminate.

(d) The aggregate number of Securities sold shall not exceed 15,000,000 Shares (the "Maximum Offering"). The Company may accept subscriptions until one year from the Offering's qualification date, unless otherwise extended by the Company in its sole discretion in accordance with applicable SEC regulations for such other period required to sell the Maximum Offering (the "Termination Date"). The Company may elect at any time to close all or any portion of this offering, on various dates at or prior to the Termination Date (each a "Closing Date"), and such Closing Dates will occur on a rolling basis.

(e) In the event of rejection of this subscription in its entirety, or in the event the sale of the Securities (or any portion thereof) is not consummated for any reason, this Subscription Agreement shall have no force or effect, except for Section 5 hereof, which shall remain in force and effect.

(f) The terms of this Subscription Agreement shall be binding upon Subscriber and its transferees, heirs, successors and assigns (collectively, "Transferees"); provided that for any such transfer to be deemed effective, the Transferee shall have executed and delivered to the Company in advance an instrument in a form acceptable to the Company in its sole discretion, pursuant to which the proposed Transferee shall be acknowledge, agree, and be bound by the representations and warranties of Subscriber, terms of this Subscription Agreement.

(g) By submitting this payment, Subscriber hereby authorizes DealMaker (as defined below) to charge Subscriber's designated payment method for the investment amount indicated. Subscriber understands this investment is subject to the terms of the Offering and its associated rules and investor protections. Subscriber understands it is not a purchaser of goods or services. Subscriber acknowledges that this transaction is final and non-refundable unless otherwise stated or required, and represents that Subscriber understands that this investment is subject to risk, including loss. Subscriber confirms that he/she/it has reviewed all Offering documents and agrees not to dispute this charge with its bank or card issuer, so long as the transaction corresponds to the agreed terms and disclosures.

<u>2. Purchase Procedure</u>.

(a) <u>Payment.</u> The purchase price for the Securities shall be paid simultaneously with the execution and delivery to the Company of the signature page of this Subscription Agreement which shall be delivered through an online platform (the "Online Platform") managed and offered by DealMaker Securities, LLC ("DealMaker"). Subscriber shall deliver a signed copy of this Subscription Agreement through the Online Platform, along with payment for the aggregate purchase price of the Securities by cash, ACH electronic transfer or wire transfer to an account designated by the Company, or by any combination of such methods.

(b) <u>Escrow arrangements.</u> There is no escrow established for this Offering. The Company will hold closings at its discretion upon the receipt of investors' subscriptions and its acceptance of such subscriptions. Upon each closing date, the funds shall be released to the Company and the undersigned shall receive notice and evidence of the digital entry of the number of the Securities owned by undersigned reflected on the books and records of the Company and verified by Colonial Stock Transfer Company, Inc. (the "Transfer Agent"), which books and records shall bear a notation that the Securities were sold in reliance upon Regulation A.

<u>3. Representations and Warranties of the Company</u>.

The Company represents and warrants to Subscriber that the following representations and warranties are true and complete in all material respects as of the date of each Closing Date, except as otherwise indicated. For purposes of this Agreement, an individual shall be deemed to have "knowledge" of a particular fact or other matter if such individual is actually aware of such fact. The Company will be deemed to have "knowledge" of a particular fact or other matter if one of the Company's current officers has, or at any time had, actual knowledge of such fact or other matter.

(a) <u>Organization and Standing.</u> The Company is a corporation duly formed, validly existing and in good standing under the laws of the State of Nevada. The Company has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement, and any other agreements or instruments required hereunder. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.

(b) <u>Issuance of the Securities</u>. The issuance, sale and delivery of the Securities in accordance with this Subscription Agreement has been duly authorized by all necessary corporate action on the part of the Company. The Securities, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and non-assessable.

(c) <u>Authority for Agreement</u>. The execution and delivery by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby (including the issuance, sale and delivery of the Securities) are within the Company's powers and have been duly authorized by all necessary corporate action on the part of the Company. Upon full execution hereof, this Subscription Agreement shall constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) with respect to provisions relating to indemnification and contribution, as limited by considerations of public policy and by federal or state securities laws.

(d) <u>No filings.</u> Assuming the accuracy of the Subscriber's representations and warranties set forth in Section 4 hereof, no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official is required by or with respect to the Company in connection with the execution, delivery and performance by the Company of this Subscription Agreement except (i) for such filings as may be required under Regulation A or under any applicable state securities laws, (ii) for such other filings and approvals as have been made or obtained, or (iii) where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not have a material adverse effect on the ability of the Company to perform its obligations hereunder.

(e) <u>Capitalization</u>. The authorized and outstanding shares of the Company immediately prior to the initial investment in the Securities is as set forth under "Securities being Offered" in the Offering Circular. Except as set forth in the Offering Circular, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), or agreements of any kind (oral or written) for the purchase or acquisition from the Company of any of its securities.

(f) <u>Financial statements.</u> Complete copies of the Company's consolidated financial statements consisting of the balance sheets of the Company as of December 31, 2024 and the related statements of income, stockholders' equity and cash flows for the period since inception then ended (the "Annual Financial Statements") and Company's unaudited consolidated financial statements consisting of the balance sheets of the Company as of September 30, 2025 and the related statements of income, stockholders' equity and cash flows for the nine month period then ended (together with the "Annual Financial Statements", the "Financial Statements") have been made available to the Subscriber and appear in the Offering Circular. The Financial Statements are based on the books and records of the Company and fairly present in all material respects the consolidated financial condition of the Company as of the respective dates they were prepared and the results of the operations and cash flows of the Company for the periods indicated. Sadler, Gibb & Associates, LLC, which has audited the Annual Financial Statements, is an independent accounting firm within the rules and regulations adopted by the SEC.

(g) <u>Proceeds</u>. The Company shall use the proceeds from the issuance and sale of the Securities as set forth in "Use of Proceeds to Issuer" in the Offering Circular.

(h) <u>Litigation</u>. Except as set forth in the Offering Circular, there is no pending action, suit, proceeding, arbitration, mediation, complaint, claim, charge or investigation before any court, arbitrator, mediator or governmental body, or to the Company's knowledge, currently threatened in writing (a) against the Company or (b) against any consultant, officer, manager, director or key employee of the Company arising out of his or her consulting, employment or board relationship with the Company or that could otherwise materially impact the Company.

<u>4. Representations and Warranties of Subscriber</u>. By executing this Subscription Agreement, Subscriber (and, if Subscriber is purchasing the Securities subscribed for hereby in a fiduciary capacity, the person or persons for whom Subscriber is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects as of such Subscriber's respective Closing Date(s):

(a) <u>Requisite Power and Authority</u>. Such Subscriber has all necessary power and authority under all applicable provisions of law to execute and deliver this Subscription Agreement and other agreements required hereunder and to carry out their provisions. All action on Subscriber's part required for the lawful execution and delivery of this Subscription Agreement and other agreements required hereunder have been or will be effectively taken prior to the Closing Date. Upon their execution and delivery, this Subscription Agreement and other agreements required hereunder will be valid and binding obligations of Subscriber, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights and (b) as limited by general principles of equity that restrict the availability of equitable remedies.

(b) <u>Investment Representations</u>. Subscriber understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Securities Act"). Subscriber also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Subscriber's representations contained in this Subscription Agreement.

(c) <u>Illiquidity and Continued Economic Risk</u>. Subscriber acknowledges and agrees that there is no ready public market for the Securities and that there is no guarantee that a market for their resale will ever exist. Subscriber must bear the economic risk of this investment indefinitely and the Company has no obligation to list the Securities on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Securities. Subscriber acknowledges that Subscriber is able to bear the economic risk of losing Subscriber's entire investment in the Securities. Subscriber also understands that an investment in the Company involves significant risks and has taken full cognizance of and understands all of the risk factors relating to the purchase of Securities.

(d) <u>Accredited Investor Status or Investment Limits</u>. Subscriber represents that either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subscriber is an "accredited investor" within the meaning of Rule 501 of Regulation D under the Securities Act. Subscriber represents and warrants that the information set forth in response to question (c) on the signature page hereto concerning Subscriber is true and correct; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The purchase price set out in paragraph (b) of the signature page to this Subscription Agreement, together with any other amounts previously used to purchase Securities in this offering, does not exceed 10% of the greater of the Subscriber's annual income or net worth.

Subscriber represents that to the extent it has any questions with respect to its status as an accredited investor, or the application of the investment limits, it has sought professional advice.

(e) <u>Shareholder information.</u> Within five days after receipt of a request from the Company, the Subscriber hereby agrees to provide such information with respect to its status as a shareholder (or potential shareholder) and to execute and deliver such documents as may reasonably be necessary to comply with any and all laws and regulations to which the Company is or may become subject. **Subscriber further agrees that in the event it transfers any Securities, it will require the transferee of such Securities to agree to provide such information to the Company as a condition of such transfer.**

(f) <u>Company Information</u>. Subscriber understands that the Company is subject to all the risks that apply to early-stage companies, whether or not those risks are explicitly set out in the Offering Circular. Subscriber has had such opportunity as it deems necessary (which opportunity may have presented through online chat or commentary functions) to discuss the Company's business, management and financial affairs with managers, officers and management of the Company and has had the opportunity to review the Company's operations and facilities. Subscriber has also had the opportunity to ask questions of and receive answers from the Company and its management regarding the terms and conditions of this investment. Subscriber acknowledges that except as set forth herein, no representations or warranties have been made to Subscriber, or to Subscriber's advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition.

(g) <u>Valuation.</u> The Subscriber acknowledges that the price of the Securities was set by the Company on the basis of the Company's internal valuation and no warranties are made as to value. The Subscriber further acknowledges that future offerings of Securities may be made at lower valuations, with the result that the Subscriber's investment will bear a lower valuation.

(h) <u>Domicile</u>. Subscriber maintains Subscriber's domicile (and is not a transient or temporary resident) at the address shown on the signature page.

(i) <u>No Brokerage Fees</u>. There are no claims for brokerage commission, finders' fees or similar compensation in connection with the transactions contemplated by this Subscription Agreement or related documents based on any arrangement or agreement binding upon Subscriber.

(j) <u>Foreign Investors</u>. If Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. Subscriber's subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Subscriber's jurisdiction.

5. <u>Survival of Representations and Indemnity</u>. The representations, warranties and covenants made by the Subscriber herein shall survive the Termination Date of this Agreement. The Subscriber agrees to indemnify and hold harmless the Company and its respective officers, directors and affiliates, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all reasonable attorneys' fees, including attorneys' fees on appeal) and expenses reasonably incurred in investigating, preparing or defending against any false representation or warranty or breach of failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein or in any other document furnished by the Subscriber to any of the foregoing in connection with this transaction.

6. <u>Governing Law; Jurisdiction</u>. This Subscription Agreement shall be governed and construed in accordance with the laws of the State of Nevada.

EACH OF THE SUBSCRIBER AND THE COMPANY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF CALIFORNIA AND NO OTHER PLACE AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS SUBSCRIPTION AGREEMENT MAY BE LITIGATED IN SUCH COURTS. EACH OF SUBSCRIBER AND THE COMPANY ACCEPTS FOR ITSELF AND HIMSELF AND IN CONNECTION WITH ITS AND HIS RESPECTIVE PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS SUBSCRIPTION AGREEMENT. EACH OF SUBSCRIBER AND THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN THE MANNER AND IN THE ADDRESS SPECIFIED IN SECTION 8 AND THE SIGNATURE PAGE OF THIS SUBSCRIPTION AGREEMENT. HOWEVER, NOTHING IN THIS PARAGRAPH SHALL BE CONSTRUED TO BE APPLICABLE TO ANY ACTION ARISING UNDER THE FEDERAL SECURITIES LAWS.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SUBSCRIPTION AGREEMENT OR THE ACTIONS OF EITHER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF, EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH PARTY. EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBSCRIPTION AGREEMENT. IN THE EVENT OF LITIGATION, THIS SUBSCRIPTION AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. BY AGREEING TO THIS PROVISION, EACH SUBSCRIBER WILL NOT BE DEEMED TO HAVE WAIVED THE COMPANY'S COMPLIANCE WITH U.S. FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

7. <u>Notices</u>. Notice, requests, demands and other communications relating to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, in the third day after the posting thereof; or (c) emailed, telecopied or cabled, on the date of such delivery to the address of the respective parties as follows:

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| |
|:---|
| If to the Company, to: |
| BluSky AI Inc. |
| 5530 South 900 East |
| Suite 280 |
| Murray, UT 84117 |
| If to a Subscriber, to Subscriber's address as shown on the signature page hereto |

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or to such other address as may be specified by written notice from time to time by the party entitled to receive such notice. Any notices, requests, demands or other communications by telecopy or cable shall be confirmed by letter given in accordance with (a) or (b) above.

The Subscriber hereby agrees that the Company may deliver all notices, financial statements, valuations, reports, reviews, analyses or other materials, and any and all other documents, information and communications concerning the affairs of the Company and its investments, including, without limitation, information about the investment, required or permitted to be provided to the Subscriber under the Offering Circular or hereunder by means e-mail or by posting on an electronic message board or by other means of electronic communication. The Subscriber hereby consents to receive electronically all documents, communications, notices, contracts, and agreements arising from or relating in any way to your or our rights, obligations or services hereunder or pursuant to your ownership of the Securities.

<u>9. Miscellaneous</u>.

(a) All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require.

(b) This Subscription Agreement is not transferable or assignable by Subscriber.

(c) The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Subscriber and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns.

(d) None of the provisions of this Subscription Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Subscriber.

(e) In the event any part of this Subscription Agreement is found to be void or unenforceable, the remaining provisions are intended to be separable and binding with the same effect as if the void or unenforceable part were never the subject of agreement.

(f) The invalidity, illegality or unenforceability of one or more of the provisions of this Subscription Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

(g) This Subscription Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.

(h) The terms and provisions of this Subscription Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person.

(i) The headings used in this Subscription Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

(j) This Subscription Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

(k) If any recapitalization or other transaction affecting the stock of the Company is effected, then any new, substituted or additional securities or other property which is distributed with respect to the Securities shall be immediately subject to this Subscription Agreement, to the same extent that the Securities, immediately prior thereto, shall have been covered by this Subscription Agreement.

(l) No failure or delay by any party in exercising any right, power or privilege under this Subscription Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

[*SIGNATURE PAGE FOLLOWS*]

**BluSky AI Inc.**

**SUBSCRIPTION AGREEMENT SIGNATURE PAGE**

The undersigned, desiring to purchase Units of BluSky AI Inc. by executing this signature page, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement.

(a) EITHER (i) The undersigned is an accredited investor (as that term is defined in Regulation D under the Securities Act because the undersigned meets the criteria set forth in the following paragraph(s) of Appendix A attached hereto: ☐

OR (ii) The amount set forth in paragraph (b) above (together with any previous investments in the Securities pursuant to this offering) does not exceed 10% of the greater of the undersigned's net worth or annual income for all investments in this offering. ☐

(b) The Securities being subscribed for will be owned by, and should be recorded on the Corporation's books as follows:

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| | |
|:---|:---|
| Full legal name of Subscriber (including middle name(s), for individuals): | Number of securities: **Units**<br> Aggregate Subscription Price: **$0.00 USD** |
|  | **<u>TYPE OF OWNERSHIP:</u>** |
| (Name of Subscriber) | If the Subscriber is not an individual: |
| By: | ☐ Individual |
| (Authorized Signature) | ☐ Joint Tenant |
|  | ☐ Tenants in Common |
| (Official Capacity or Title, if the Subscriber is not an individual) | ☐ Community Property |
| (Name of individual whose signature appears above if different than the name of the Subscriber printed above.) | If interests are to be jointly held: |
|  | Name of the Joint Subscriber: |
| (Subscriber's Residential Address, including Province/State and Postal/Zip Code) | Social Security Number of the Joint Subscriber: |
|  | Check this box if the securities will be held in a custodial account: ☐ |
| Taxpayer Identification Number | Type of account: |
| (Telephone Number) | EIN of account: |
|  | Address of account provider: |
| **<u>(Offline Investor)</u>** |  |
| (E-Mail Address) |  |

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**ACCEPTANCE**

The Corporation hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement.

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| | |
|:---|:---|
| Dated as of | Dated as of |
| By: | **BluSky AI Inc.** |
|  | Authorized Signing Officer |

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**CANADIAN ACCREDITED INVESTOR CERTIFICATE**

**TO: BluSky AI Inc.** (the "**Corporation**")

The Investor hereby represents, warrants and certifies to the Corporation that the undersigned is an "Accredited Investor" as defined in Section 1.1 of National Instrument 45-106. The Investor has indicated below the criteria which the Investor satisfies in order to qualify as an "Accredited Investor".

The Investor understands that the Corporation and its counsel are relying upon this information in determining to sell securities to the undersigned in a manner exempt from the prospectus and registration requirements of applicable securities laws.

The categories listed herein contain certain specifically defined terms. If you are unsure as to the meanings of those terms, or are unsure as to the applicability of any category below, please contact your legal advisor before completing this certificate.

In connection with the purchase by the undersigned Subscriber of the Purchased Units, the Subscriber hereby represents, warrants, covenants and certifies to the Corporation (and acknowledges that the Corporation and its counsel are relying thereon) that:

&nbsp;&nbsp;&nbsp;&nbsp;a. the
 Subscriber is, and at the Closing Time, will be, an "accredited investor" within
 the meaning of NI 45-106 or Section 73.3 of the Securities Act (Ontario), as applicable,
 on the basis that the undersigned fits within one of the categories of an "accredited
 investor" reproduced below beside which the undersigned has indicated the undersigned
 belongs to such category;

b. the
 Subscriber was not created or is not used, solely to purchase or hold securities as an accredited
 investor as described in paragraph (m) below; and

c. upon
 execution of this Schedule B by the Subscriber, including, if applicable, Appendix 1 to this
 Schedule B, this Schedule B shall be incorporated into and form a part of the Subscription
 Agreement.

(PLEASE CHECK THE BOX OF THE APPLICABLE CATEGORY OF ACCREDITED INVESTOR)

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| | | |
|:---|:---|:---|
| ☐ | (a) | a Canadian financial institution, or a Schedule III bank; |
| ☐ | (b) | the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); |
| ☐ | (c) | a subsidiary of any Person referred to in paragraphs (a) or (b), if the Person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; |
|  | (d) | a Person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a Person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
| ☐ | (e) | an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a Person referred to in paragraph (d); |
| ☐ | (e.1) | an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
| ☐ | (f) | the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada; |
| ☐ | (g) | a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l'île de Montréal or an intermunicipal management board in Québec; |
| ☐ | (h) | any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; |
| ☐ | (i) | a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada; |

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| | | |
|:---|:---|:---|
| ☐ | (j) | an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds CAD$1,000,000; |
| ☐ | (j.1) | an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds CAD$5,000,000; |
|  | (k.1) | an individual whose net income before taxes exceeded CAD$200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded CAD$300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; |
|  | (k.2) | Net income before taxes combined with your spouse's was more than CAD $300,000 in each of the 2 most recent calendar years, and their combined net income before taxes is expected to be more than CAD $300,000 in the current calendar year |
| ☐ | (l) | an individual who, either alone or with a spouse, has net assets of at least CAD$5,000,000; |
| ☐ | (m) | a Person, other than an individual or investment fund, that has net assets of at least CAD$5,000,000 as shown on its most recently prepared financial statements and that has not been created or used solely to purchase or hold securities as an accredited investor; |
| ☐ | (n) | an investment fund that distributes or has distributed its securities only to (i) a Person that is or was an accredited investor at the time of the distribution, (ii) a Person that acquires or acquired securities in the circumstances referred to in sections 2.10 (Minimum amount investment) and 2.19 (Additional investment in investment funds) of NI 45-106, or (iii) a Person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 (Investment fund reinvestment) of NI 45-106; |
| ☐ | (o) | an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt; |
| ☐ | (p) | a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; |
|  | (q) | a Person acting on behalf of a fully managed account managed by that Person, if that Person (i) is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and (ii) in Ontario, is purchasing a security that is not a security of an investment fund; |
| ☐ | (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; |
| ☐ | (s) | an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; |
| ☐ | (t) | a Person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are Persons that are accredited investors; |
| ☐ | (u) | an investment fund that is advised by a Person registered as an adviser or a Person that is exempt from registration as an adviser; |
|  | (v) | a Person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as (i) an accredited investor, or (ii) an exempt purchaser in Alberta or Ontario; or |
| ☐ | (w) | a trust established by an accredited investor for the benefit of the accredited investor's family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor's spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor's spouse or of that accredited investor's former spouse. |
|  | (x) | in Ontario, such other persons or companies as may be prescribed by the regulations under the Securities Act (Ontario). |

---

The statements made in this Form are true and accurate as of the date hereof.

DATED:

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| | |
|:---|:---|
| INVESTOR: | (Print Full Name of Entity or Individual) |
|  | By: |
|  | (Signature) |
|  | Name: |
|  | (If signing on behalf of entity) |
|  | Title: |
|  | (If signing on behalf of entity) |

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**<u>Definitions for Accredited Investor Certificate</u>**

As used in the Accredited Investor Certificate, the following terms have the meanings set out below:

a. "**Canadian financial institution**" means (i) an association governed by the *Cooperative Credit Associations Act* (Canada) or
 a central cooperative credit society for which an order has been made under section 473(1) of that Act, or (ii) a bank, loan corporation,
 trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative,
 or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada
 or a jurisdiction of Canada;

b. "**entity** "
 means a company, syndicate, partnership, trust or unincorporated organization;

c. "**financial assets**" means cash, securities, or any a contract of insurance, a deposit or an evidence of a deposit that is not a security
 for the purposes of securities legislation;

d. "**fully managed account**" means an account of a client for which a Person makes the investment decisions if that Person has full
 discretion to trade in securities for the account without requiring the client's express consent to a transaction;

e. "**investment fund**" means a mutual fund or a non-redeemable investment fund, and, for greater certainty in Ontario, includes an employee
 venture capital corporation that does not have a restricted constitution, and is registered under Part 2 of the *Employee Investment Act* (British Columbia), R.S.B.C. 1996 c. 112, and whose business objective is making multiple investments and a venture capital
 corporation registered under Part 1 of the *Small Business Venture Capital Act* (British Columbia), R.S.B.C. 1996 c. 429 whose
 business objective is making multiple investments;

f. "**mutual fund**" means an issuer whose primary purpose is to invest money provided by its security holders and whose securities entitle
 the holder to receive on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate
 interest in the whole or in part of the net assets, including a separate fund or trust account, of the issuer;

g. "**non-redeemable investment fund**" means an issuer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. whose
 primary purpose is to invest money provided by its securityholders,

B. that
 does not invest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. for
 the purpose of exercising or seeking to exercise control of an issuer, other than an issuer
 that is a mutual fund or a non-redeemable investment fund, or

ii. for
 the purpose of being actively involved in the management of any issuer in which it invests,
 other than an issuer that is a mutual fund or a non-redeemable investment fund, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. that
 is not a mutual fund;

h. "**related liabilities**" means liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial
 assets and liabilities that are secured by financial assets;

i. "**Schedule III bank**" means an authorized foreign bank named in Schedule III of the Bank Act (Canada);

j. "**spouse** "
 means an individual who (i) is married to another individual and is not living separate and apart within the meaning of the Divorce
 Act (Canada), from the other individual, (ii) is living with another individual in a marriage-like relationship, including a marriage-like
 relationship between individuals of the same gender, or (iii) in Alberta, is an individual referred to in paragraph (i) or (ii),
 or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and

k. "**subsidiary** "
 means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary.

In NI 45-106 a Person or company is an affiliate of another Person or company if one of them is a subsidiary of the other, or if each of them is controlled by the same Person.

In NI 45-106 a Person (first Person) is considered to control another Person (second Person) if (a) the first Person, directly or indirectly, beneficially owns or exercises control or direction over securities of the second Person carrying votes which, if exercised, would entitle the first Person to elect a majority of the directors of the second Person, unless that first Person holds the voting securities only to secure an obligation, (b) the second Person is a partnership, other than a limited partnership, and the first Person holds more than 50% of the interests of the partnership, or (c) the second Person is a limited partnership and the general partner of the limited partnership is the first Person.

**<u>RISK ACKNOWLEDGEMENT FORM (FORM 45-106F9)</u>**

**Form for <u>Individual</u> Accredited Investors**

**WARNING! This investment is risky. Do not invest unless you can afford to lose all the money you pay for this investment**.

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| | | |
|:---|:---|:---|
| **Section 1 – TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER** | **Section 1 – TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER** | **Section 1 – TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER** |
| **1. About your investment** | **1. About your investment** | **1. About your investment** |
| Type of Securities: Units | Type of Securities: Units | Issuer: BluSky AI Inc. (the "Issuer") |
| Purchased from: The Issuer | Purchased from: The Issuer |  |
| **Sections 2 to 4 – TO BE COMPLETED BY THE PURCHASER** | **Sections 2 to 4 – TO BE COMPLETED BY THE PURCHASER** | **Sections 2 to 4 – TO BE COMPLETED BY THE PURCHASER** |
| **2. Risk acknowledgement** | **2. Risk acknowledgement** | **2. Risk acknowledgement** |
| This investment is risky. Initial that you understand that: | This investment is risky. Initial that you understand that: | **Your Initials** |
| **Risk of loss** – You could lose your entire investment of $ | **Risk of loss** – You could lose your entire investment of $ |  |
| **Liquidity risk** – You may not be able to sell your investment quickly – or at all. | **Liquidity risk** – You may not be able to sell your investment quickly – or at all. |  |
| **Lack of information** – You may receive little or no information about your investment. | **Lack of information** – You may receive little or no information about your investment. |  |
| **Lack of advice** – You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca. | **Lack of advice** – You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca. |  |
| **3. Accredited investor status** | **3. Accredited investor status** | **3. Accredited investor status** |
| You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria. | You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria. | <br>**Your Initials** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Your net income before taxes was more than CAD$200,000 in each of the 2 most recent calendar years, and you expect it to be more than CAD$200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Your net income before taxes was more than CAD$200,000 in each of the 2 most recent calendar years, and you expect it to be more than CAD$200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Your net income before taxes combined with your spouse's was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than CAD$300,000 in the current calendar year. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Your net income before taxes combined with your spouse's was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than CAD$300,000 in the current calendar year. |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Either alone or with your spouse, you own more than CAD$1 million in cash and securities, after subtracting any debt related to the cash and securities. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Either alone or with your spouse, you own more than CAD$1 million in cash and securities, after subtracting any debt related to the cash and securities. |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Either alone or with your spouse, you have net assets worth more than CAD$5 million. (Your net assets are your total assets (including real estate) minus your total debt.) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Either alone or with your spouse, you have net assets worth more than CAD$5 million. (Your net assets are your total assets (including real estate) minus your total debt.) |  |
| **4. Your name and signature** | **4. Your name and signature** | **4. Your name and signature** |
| By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form. | By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form. | By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form. |
| First and Last Name (please print): | First and Last Name (please print): | First and Last Name (please print): |
| <br> Signature: | <br> Signature: | <br> Signature: |
| Date: | Date: | Date: |
| **Section 5 – TO BE COMPLETED BY THE SALESPERSON** | **Section 5 – TO BE COMPLETED BY THE SALESPERSON** | **Section 5 – TO BE COMPLETED BY THE SALESPERSON** |
| **5. Salesperson information** | **5. Salesperson information** | **5. Salesperson information** |
| First and Last Name of Salesperson (please print): | First and Last Name of Salesperson (please print): | First and Last Name of Salesperson (please print): |
| Telephone: | Email: | Email: |
| Name of Firm (if registered): | Name of Firm (if registered): | Name of Firm (if registered): |

---

---

| |
|:---|
| **Section 6 – TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER** |
| **6. For more information about this investment** |
| **For more information about this investment / the Issuer:**<br>Company Name: **BluSky AI Inc.**<br> Address: , , ,<br> Contact:<br> Email:<br> Telephone:<br>**For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at <u>www.securities-administrators.ca</u>.** |

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U.S. ACCREDITED INVESTOR CERTIFICATE

The Investor hereby represents and warrants that that the Investor is an Accredited Investor, as defined by Rule 501 of Regulation D under the Securities Act of 1933, and Investor meets at least one (1) of the following criteria (initial all that apply) or that Investor is an unaccredited investor and meets none of the following criteria (initial as applicable):

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| | |
|:---|:---|
| ☐ | A bank, as defined in Section 3(a)(2) of the U.S. Securities Act; |
|  | a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; |
|  | a broker or dealer registered pursuant to Section 15 of the United States Securities Exchange Act of 1934; An insurance company as defined in Section 2(a)(13) of the U.S. Securities Act; An investment company registered under the United States Investment Company Act of 1940; or A business development company as defined in Section 2(a)(48) of that Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the United States Small Business Investment Act of 1958;A plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of US$5,000,000; or an employee benefit plan within the meaning of the United States Employee Retirement Income Security Act of 1974, as amended, in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or an employee benefit plan with total assets in excess of U.S. $5,000,000 or, if a self directed plan, with investment decisions made solely by persons that are Accredited Investors; |
| ☐ | A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940; |
| ☐ | The Investor is either (i) a corporation, (ii) an organization described in Section 501(c)(3) of the Internal Revenue Code, (iii) a trust, or (iv) a partnership, in each case not formed for the specific purpose of acquiring the securities offered, and in each case with total assets in excess of US$5,000,000; |
| ☐ | a director, executive officer or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; |
| ☐ | The Investor is a natural person (individual) whose own net worth, taken together with the net worth of the Investor's spouse or spousal equivalent, exceeds US$1,000,000, excluding equity in the Investor's principal residence unless the net effect of his or her mortgage results in negative equity, the Investor should include any negative effects in calculating his or her net worth; |
|  | OR |
|  | The Investor is a natural person (individual) who had an individual income in excess of US$200,000 (or joint income with the Investor spouse or spousal equivalent in excess of US$300,000) in each of the two previous years and who reasonably expects a gross income of the same this year; |
| ☐ | A trust, with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the U.S. Securities Act; |
| ☐ | The Investor is an entity as to which all the equity owners are Accredited Investors. If this paragraph is initialed, the Investor represents and warrants that the Investor has verified all such equity owners' status as an Accredited Investor. |
| ☐ | a natural person who holds one of the following licenses in good standing: General Securities Representative license (Series 7), the Private Securities Offerings Representative license (Series 82), or the Investment Adviser Representative license (Series 65); |
| ☐ | An investment adviser registered pursuant to Section 203 of the Investment Advisers Act of 1940 or registered pursuant to the laws of a state; or |
| ☐ | An investment adviser relying on the exemption from registering with tthe SEC under Section 203(l) or (m) of the Investment Advisers Act of 1940; or |
| ☐ | A rural business investment company as defined in Section 384A of the Consolidated Farm and Rural Development Act; |
| ☐ | An entity, of a type not listed herein, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; |

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| | |
|:---|:---|
| ☐ | A "family office," as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940 (17 CFR 275.202(a)(11)(G)-1): |
|  | (i) With assets under management in excess of $5,000,000, |
|  | (ii) That is not formed for the specific purpose of acquiring the securities offered, and |
|  | (iii) Whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; |
| ☐ | A "family client," as defined in rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940 (17 CFR 275.202(a)(11)(G)-1)), of a family office meeting the requirements in category 23 above and whose prospective investment in the issuer is directed by such family office as referenced above; |
| ☐ | A natural person who is a "knowledgeable employee," as defined in rule 3c-5(a)(4) under the Investment Company Act of 1940 (17 CFR 270.3c-5(a)(4)), of the issuer of the securities being offered or sold where the issuer would be an investment company, as defined in Section 3 of such Act, but for the exclusion provided by either Section 3(c)(1) or Section 3(c)(7) of such Act; or |
| ☐ | The Investor is not an Accredited Investor and does not meet any of the above criteria. |

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DATED:

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| | |
|:---|:---|
| INVESTOR: | (Print Full Name of Entity or Individual) |
|  | By: |
|  | (Signature) |
|  | Name: |
|  | (If signing on behalf of entity) |
|  | Title: |
|  | (If signing on behalf of entity) |

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**<u>INTERNATIONAL INVESTOR CERTIFICATE</u>**

**FOR SUBSCRIBERS RESIDENT OUTSIDE OF CANADA AND THE UNITED STATES**

---

| | |
|:---|:---|
| **TO:** | **BluSky AI Inc.** (the "**Corporation**") |

---

The undersigned (the **"Subscriber"**) represents covenants and certifies to the Corporation that:

&nbsp;&nbsp;&nbsp;&nbsp;i. the
 Subscriber (and if the Subscriber is acting as agent for a disclosed principal, such disclosed
 principal) is not resident in Canada or the United States or subject to applicable securities
 laws of Canada or the United States;

ii. the
 issuance of the securities in the capital of the Corporation under this agreement (the "**Securities**") by the Corporation to the Subscriber (or its disclosed principal, if any) may be effected
 by the Corporation without the necessity of the filing of any document with or obtaining
 any approval from or effecting any registration with any governmental entity or similar regulatory
 authority having jurisdiction over the Subscriber (or its disclosed principal, if any);

iii. the
 Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities
 laws of the jurisdiction which would apply to this subscription, if there are any;

iv. the
 issuance of the Securities to the Subscriber (and if the Subscriber is acting as agent for
 a disclosed principal, such disclosed principal) complies with the requirements of all applicable
 laws in the jurisdiction of its residence;

v. the
 applicable securities laws do not require the Corporation to register the Securities, file
 a prospectus or similar document, or make any filings or disclosures or seek any approvals
 of any kind whatsoever from any regulatory authority of any kind whatsoever in the international
 jurisdiction;

vi. the
 purchase of the Securities by the Subscriber, and (if applicable) each disclosed beneficial
 subscriber, does not require the Corporation to become subject to regulation in the Subscriber's
 or disclosed beneficial subscriber's jurisdiction, nor does it require the Corporation
 to attorn to the jurisdiction of any governmental authority or regulator in such jurisdiction
 or require any translation of documents by the Corporation;

vii. the
 Subscriber will not sell, transfer or dispose of the Securities except in accordance with
 all applicable laws, including applicable securities laws of Canada and the United States,
 and the Subscriber acknowledges that the Corporation shall have no obligation to register
 any such purported sale, transfer or disposition which violates applicable Canadian or United
 States securities laws; and

viii. the
 Subscriber will provide such evidence of compliance with all such matters as the Corporation
 or its counsel may request.

The Subscriber acknowledges that the Corporation is relying on this certificate to determine the Subscriber's suitability as a purchaser of securities of the Corporation. The Subscriber agrees that the representations, covenants and certifications contained to this certificate shall survive any issuance of Securities and warrants of the Corporation to the Subscriber.

The statements made in this Form are true and accurate as of the date hereof.

DATED:

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| | |
|:---|:---|
| INVESTOR: | (Print Full Name of Entity or Individual) |
|  | By: |
|  | (Signature) |
|  | Name: |
|  | (If signing on behalf of entity) |
|  | Title: |
|  | (If signing on behalf of entity) |

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![](image_001.jpg)

**AML Certificate**

By executing this document, the client certifies the following:

**If an Entity:**

1. I am the of the Entity, and as such have knowledge of the matters certified to herein;

2. the Entity has not taken any steps to terminate its existence, to amalgamate, to continue into any other jurisdiction or to change its existence in any way and no proceedings have been commenced or threatened, or actions taken, or resolutions passed that could result in the Entity ceasing to exist;

3. the Entity is not insolvent and no acts or proceedings have been taken by or against the Entity or are pending in connection with the Entity, and the Entity is not in the course of, and has not received any notice or other communications, in each case, in respect of, any amalgamation, dissolution, liquidation, insolvency, bankruptcy or reorganization involving the Entity, or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer with respect to all or any of its assets or revenues or of any proceedings to cancel its certificate of incorporation or similar constating document or to otherwise terminate its existence or of any situation which, unless remedied, would result in such cancellation or termination;

4. the Entity has not failed to file such returns, pay such taxes, or take such steps as may constitute grounds for the cancellation or forfeiture of its certificate of incorporation or similar constating document;

5. **if required, the documents uploaded to the DealMaker portal** are true certified copies of the deed of trust, articles of incorporation or organization, bylaws and other constating documents of the Entity including copies of corporate resolutions or by-laws relating to the power to bind the Entity;

6. The Client is the following type of Entity:

7. The names and personal addresses as applicable for the entity in **Appendix 1** are accurate.

**All subscribers:**

DealMaker Account Number: (Offline Investor)

If I elect to submit my investment funds by an electronic payment option offered by DealMaker, I hereby agree to be bound by DealMaker's Electronic Payment Terms and Conditions (the "Electronic Payment Terms"). I acknowledge that the Electronic Payment Terms are subject to change from time to time without notice.

Notwithstanding anything to the contrary, an electronic payment made hereunder will constitute unconditional acceptance of the Electronic Payment Terms, and by use of the credit card or ACH/EFT payment option hereunder, I: (1) authorize the automatic processing of a charge to my credit card account or debit my bank account for any and all balances due and payable under this agreement; (2) acknowledge that there may be fees payable for processing my payment; (3) acknowledge and agree that I will not initiate a chargeback or reversal of funds on account of any issues that arise pursuant to this investment and I may be liable for any and all damages that could ensue as a result of any such chargebacks or reversals initiated by myself.

By submitting this payment, I hereby authorize DealMaker to charge my designated payment method for the investment amount indicated. I understand this investment is subject to the terms of the offering and its associated rules and investor protections. I understand it is not a purchase of goods or services. I acknowledge that this transactior is final, non-refundable unless otherwise stated or required, and represents an investment subject to risk, including loss. I confirm that I have reviewed all offering documents and agree not to dispute this charge with my bank or card issuer, so long as the transaction corresponds to the agreed terms and disclosures.

DATED:

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| | |
|:---|:---|
| INVESTOR: | (Print Full Name of Investor) |
|  | By: |
|  | (Signature) |
|  | Name of Signing Officer (if Entity): |
|  | Title of Signing Officer (if Entity): |

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**Appendix 1 - Subscriber Information**

**<u>For the Subscriber and Joint Holder (if applicable)</u>**

Name <u>Address</u> <u>Date of Birth (if an Individual)</u> <u>Taxpayer Identification Number</u> <br>         <br>        

**<u>For a Corporation or entity other than a Trust</u> (Insert names and addresses below or attach a list)**

&nbsp;&nbsp;&nbsp;&nbsp;1. One
 Current control person of the Organization:

Name <u>Address</u> <u>Date of Birth</u> <u>Taxpayer Identification Number</u> <br>        

&nbsp;&nbsp;&nbsp;&nbsp;2. Unless
 the entity is an Estate or Sole Proprietorship, list the Beneficial owners of, or those exercising
 direct or indirect control or direction over, more than 25% of the voting rights attached
 to the outstanding voting securities or the Organization:

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Name | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Address | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date of Birth | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxpayer Identification Number |

---

**<u>For a Trust</u> (Insert names and addresses or attach a list)**

&nbsp;&nbsp;&nbsp;&nbsp;1. Current
 trustees of the Organization:

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;Name | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Address | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date of Birth | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxpayer Identification Number |

---

**<u>Self-Certification of Trustee</u>**

Instructions: This form is intended to be used by a trustee, representing a trust who is an investor in BluSky AI Inc.'s offering.

I certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I, , am the trustee of the ("Trust") (the "**Trustee**")

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. On or about , on behalf of the Trust, the Trustee executed a subscription agreement to purchase securities in BluSky AI Inc.'s offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. As the Trustee, I have the authority to execute all Trust powers. Among other things, the Trust allocates to the Trustee the power to invest Trust funds for the benefit of the Trust by purchasing securities in private or public companies, regardless of the suitability of the investment for the Trust ("**Trust Investment**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. With respect to Trust Investments, the Trustee is the only person required to execute subscription agreements to purchase securities.

I certify that the above information is accurate and truthful as of the date below.

Trustee Name: on behalf of

Signature of Client:

Date of Signature:

**APPENDIX A**

An accredited investor includes the following categories of investor. Please initial next to the number or numbers below that describe Subscriber. Additional verification may be required:

(1) Subscriber is a natural person whose individual net worth (or combined net worth with Subscriber's spouse if Subscriber is married) as of the date hereof exceeds $1,000,000. Except as set forth below, in calculating a person's net worth, (i) a person's primary residence shall not be included as an asset; (ii) indebtedness that is secured by the person's primary residence, up to the estimated fair market value of the primary residence at the time of the sale of the Shares, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of the sale of the Shares exceeds the amount outstanding sixty (60) days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (iii) indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of the Shares shall be included as a liability.

(2) Subscriber is a natural person who had an individual "income" exceeding $200,000 during both of the two most recently completed calendar years (or a joint income with Subscriber's spouse in excess of $300,000 in each of those years) and who has a reasonable expectation of reaching the same income level in the current calendar year.

(3) Subscriber is a natural person who holds any of the following licenses from the Financial Industry Regulatory Authority (FINRA): a General Securities Representative license (Series 7), a Private Securities Offerings Representative license (Series 82), or a Licensed Investment Adviser Representative license (Series 65).

(4) Subscriber is a natural person who is a "knowledgeable employee" of the Company, if the Company were an "investment company" within the meaning of the Investment Company Act of 1940 (the "**ICA**") but for Section 33(c)(1) or Section 3(c)(7) of the ICA.

(5) Subscriber is a "business development company," as defined in Section 2(a)(48) of the ICA.

(6) Subscriber is an investment adviser registered under the Investment Advisers Act of 1940 (the "**Advisers Act**") or the laws of any state.

(7) Subscriber is an investment adviser described in section 203(l) (venture capital fund advisers) or section 203(m) (exempt reporting advisers) of the Advisers Act.\

(8) Subscriber is a trust with total assets in excess of $5,000,000 that was not formed for the specific purpose of acquiring the securities offered hereby, and the investment decisions for which are made by a sophisticated person capable of evaluating the merits and risks of the proposed investment.

(9) Subscriber is a revocable trust that may be amended or revoked at any time by the grantors thereof, and all of the grantors are accredited investors.

(10) Subscriber is a Small Business Investment Company licensed by the United States Small Business Administration under Section 301(c) or Section 301(d) of the Small Business Investment Act of 1958.

(11) Subscriber is a "private business development company" as defined in Section 202(a)(22) of the Advisers Act.

(12) Subscriber is a bank, insurance company, registered investment company, business development company, small business investment company, or rural business development company.

(13) Subscriber is a "family office," as defined in rule 202(a)(11)(G)-1 under the Advisers Act, if the family office (i) has assets under management in excess of $5,000,000, (ii) was not formed for the specific purpose of acquiring the securities offered, and (iii) is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment.

(14) Subscriber is a "family client," as defined in rule 202(a)(11)(G)-1 under the Advisers Act, of a family office meeting the requirements above, whose investment in the Company is directed by such family office.

(15) Subscriber is a corporation, a limited liability company, a Massachusetts or similar business trust, a partnership, or a non-profit organization of the type described in Internal Revenue Code section 501(c)(3), in each case not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.

(16) Subscriber is an "employee benefit plan" (within the meaning of Title I of ERISA) and either (i) the decision to invest in the Company was made by a plan fiduciary that is a bank, savings and loan association, insurance company, or registered investment adviser; (ii) the plan has total assets exceeding $5,000,000; or (iii) if a self-directed plan, investment decisions are made solely by persons who, if executing this document, would qualify as an accredited investor under one or more of the numbered paragraphs above.

(17) Subscriber is a plan established and maintained by a State, its political subdivisions, or an agency or instrumentality of a State or its political subdivisions, for the benefit of its employees, and the plan has assets in excess of $5,000,000.

(18) Subscriber is an entity, including Indian tribes, governmental bodies, funds, and entities organized under the laws of foreign countries, that was not formed to invest in the securities offered and own investment assets in excess of $5 million.

(19) Subscriber is an entity. Each of Subscriber's equity investors, if executing this document, would qualify as an accredited investor under one or more of the numbered paragraphs above.

## Add

**Exhibit 10.7**

**ACQUISITION AND POWER ASSIGNMENT AGREEMENT**

This Acquisition and Power Assignment Agreement (the "Agreement") is entered into on July 7, 2025 to be effective as of July 7, 2025 (the "Effective Date"), by and between:

**Digital Asset Medium, LLC**, a Wyoming limited liability company, with its principal place of business at 412 N Main St Suite 100 Buffalo, Wyoming 82834 (the "Seller"), and **BluSky AI Inc.**, a Nevada corporation, with its principal place of business at 5330 S 900 E STE 280 Murray, Utah 84117(the "Buyer").

Collectively, the parties are referred to as the "Parties" and individually, each is referred to as a "Party."

**RECITALS**

WHEREAS, Seller owns the exclusive right to utilize nine and three-tenths (9.3) megawatts ("MW") of solar and grid-interconnected power (the "Power Commitment");

WHEREAS, the Buyer is a modular data center company dedicated to providing innovative and sustainable infrastructure solutions that power AI that is publicly-traded on the OTC Markets under the symbol "BSAI";

WHEREAS, the Buyer desires to purchase the Seller's rights to the Power Commitment in exchange for shares of its common stock in exchange for the consideration and upon the terms set forth below; and

WHEREAS, the Board of Directors of Buyer and Seller have each approved the proposed transaction, contingent upon satisfaction of all of the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, and the covenants, conditions, representations and warranties hereinafter set forth, the parties hereby agree as follows:

**1. Assignment of Power Commitment**

In exchange for the consideration as set forth herein, Seller hereby assigns, transfers, and conveys to Buyer the exclusive right to utilize nine and three-tenths (9.3) megawatts ("MW") of solar and grid-interconnected power (the "Power Commitment") at Seller's existing cost of $0.068 per kilowatt-hour ("kWh"), subject to adjustment as described in Section 2, for the operational life of Buyer's data center project located in the Milford Area of Beaver County, Utah (the "Project"). The Seller shall execute all necessary documents to show the effective assignment of the Power Commitment, including the Assignment and Transfer of Powers attached hereto as Exhibit A. All payments to the power company for the Power Commitment shall be paid by the Buyer directly. All liability under the original contract between Seller and the power company shall remain with the Seller.

**2. Cost of Power**

● Seller shall provide Buyer with written notice of any change in Seller's cost of power as soon as reasonably practicable following such change.

● Following the notification of the change in Seller's cost of power, Buyer shall pay Seller for actual kWh usage at Seller's then-current cost, commencing upon Buyer's absorption and utilization of the Power Commitment ("Absorption Date").

**3. Consideration**

As full and complete consideration for the assignment of the Power Commitment, Buyer shall issue to Seller twenty million (20,000,000) restricted shares of the Buyer's common stock (the "Shares") upon execution of this Agreement.

● The Shares shall be fully paid, non-assessable, and issued pursuant to applicable securities laws.

● The Parties acknowledge and agree that the valuation of the Power Commitment and the Shares is fair and reasonable.

● <u>Once issued,</u> the Shares will be restricted and will not be registered under the Securities Act, but will be issued pursuant to applicable exemptions from such registration requirements for transactions not involving a public offering under the Securities Act of 1933, as amended (the "Securities Act"). Accordingly, the Shares shall be considered "restricted securities" for purposes of the Securities Act, and the holders of Shares will not be able to transfer such shares except upon compliance with the registration requirements of the Securities Act or in reliance upon an available exemption therefrom. The certificates evidencing the Shares shall contain a legend to the foregoing effect.

**4. <u>Closing and Effective Time</u>**. Subject to the provisions of this Agreement, the parties shall hold a closing (the "Closing") at such time and place as the parties hereto may agree. Notwithstanding the foregoing, July 7, 2025, shall be considered the effective date of the Exchange for tax and accounting purposes (the "<u>Effective Time</u>").

**Term**

Following the Effective Time, this Agreement shall remain in effect for the duration of the Project's operational life, unless earlier terminated by mutual written agreement of the Parties.

**5. Representations and Warranties**

**5.1 Seller represents and warrants that:**

● It has full right, title, and authority to assign the Power Commitment;

● The Power Commitment is not subject to any lien, encumbrance, or prior assignment;

● The cost of power stated herein is accurate as of the Effective Date.

● It is acquiring the Shares for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under or exempt from the registration requirements of the Securities Act.

● It is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D of the Securities Act.

**5.2 Buyer represents and warrants that:**

● It has full corporate authority to enter into this Agreement and issue the Shares;

● The Shares will be issued in compliance with all applicable laws and regulations.

**6. Indemnification**

Each Party shall indemnify, defend, and hold harmless the other Party from and against any and all claims, losses, liabilities, and expenses arising out of any breach of its representations, warranties, or obligations under this Agreement.

**7. Miscellaneous**

● **Governing Law**: This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to its conflict of laws principles.

● **Entire Agreement**: This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior agreements or understandings.

● **Amendments**: Any amendment or modification must be in writing and signed by both Parties.

● **Counterparts**: This Agreement may be executed in counterparts, each of which shall be deemed an original.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

---

| | |
|:---|:---|
| **SELLER:** | **SELLER:** |
| Digital Asset Medium, LLC | Digital Asset Medium, LLC |
| By: | /s/ Trent D'Ambrosio |
| Name: | Trent D'Ambrosio |
| Title: | Managing Member |
| **BUYER:** | **BUYER:** |
| BluSky AI Inc. | BluSky AI Inc. |
| By: | /s/ Trent D'Ambrosio |
| Name: | Trent D'Ambrosio |
| Title: | CEO |

---

## Add

**Exhibit 10.8**

**CONSULTING AGREEMENT**

**THIS CONSULTING AGREEMENT** (the "Agreement") is entered into on April 1, 2025, by and among BluSky AI Inc., a Nevada limited liability corporation ("BSAI" or the "Company") and <u>Dan L. Gay,</u> an individual resident of _ (the "Consultant"). Each of the Parties to this Agreement is individually referred to herein as a "Party" and collectively as the "Parties."

**WHEREAS:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The
 Consultant has the business development expertise and experience to assist the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The
 Consultant has provided consulting services to the Company over the past year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The
 Company would like to memorialize the work performed by the Consultant for the Company, and
 compensation to be paid to the Consultant, by entering into this written Agreement; and,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The
 Parties agree that this Agreement reflects the entire understanding and agreements between
 the Parties hereto.

**AGREEMENT:**

In consideration of the foregoing and of the mutual promises set forth herein, and intending to be legally bound, the Parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Engagement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company hereby recognizes the Consultant has rendered, as an independent contractor, advisory, business development, consulting and such other services to the Company. Specifically, the Consultant provided expertise regarding reducing the Company's liabilities and restructuring its operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Compensation</u>. In consideration of the Services performed by the Consultant, the Company shall pay to the Consultant payments (the "Compensation") as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Beginning after April 1, 2025, BSAI shall deliver five thousand dollars ($5,000.00) (per month) to the Consultant and pay via check, ACH, WISE or wire transfer once per month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon execution of this Agreement, BSAI shall deliver to the Consultant an amount of shares of its common stock equal to 200,000 shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At the Company's discretion as part of this Agreement, BSAI may deliver to the Consultant shares of its common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Representations and Warranties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Consultant represents and warrants that: (i) the Consultant has no obligations, legal or otherwise, inconsistent with the terms of this Agreement or with the Consultant's undertaking this relationship with the Company; (ii) the performance of the Services called for by this Agreement do not and will not violate any applicable law, rule or regulation or any proprietary or other right of any third party; (iii) the Consultant will not use in the performance of his responsibilities under this Agreement any confidential information or trade secrets of any other person or entity; and (iv) the Consultant has not entered into or will not enter into any agreement (whether oral or written) in conflict with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Consultant further represents and warrants that he provided bona fide services to the Company, and that such services are not in connection with the offer or sale of securities in a capital-raising transaction, that such services do not directly or indirectly promote or maintain a market for the Company's securities, that, by prearrangement or otherwise, the Company, including all affiliates, will not control or direct the resale of the securities received hereunder in the public market, and that the Company, including all affiliates, will not directly or indirectly receive a percentage of the proceeds from such resales of any securities received by Consultant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Attorney's Fees</u>. Should either Party hereto, or any heir, personal representative, successor or assign of either Party hereto, resort to litigation to enforce this Agreement, the Party or Parties prevailing in such litigation shall be entitled, in addition to such other relief as may be granted, to recover its or their reasonable attorneys' fees and costs in such litigation from the Party or Parties against whom enforcement was sought.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Entire Agreement</u>. This Agreement contains the entire understanding and agreement between the Parties hereto with respect to its subject matter and supersedes any prior or contemporaneous written or oral agreements, representations or warranties between them respecting the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Amendment</u>. This Agreement may be amended only by a writing signed by the Consultant and by a representative of the Company duly authorized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Severability</u>. If any provision of this Agreement, as applied to either Party or to any circumstances, shall be adjudged by a court to be void or unenforceable, the same shall be deemed stricken from this Agreement and shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement. In the event any such provision (the "Applicable Provision") is so adjudged void or unenforceable, Consultant and the Company shall take the following actions in the following order: (i) seek judicial reformation of the Applicable Provision; (ii) negotiate in good faith with each other to replace the Applicable Provision with a lawful provision; and (iii) have an arbitration as provided in Paragraph 19 hereof determine a lawful replacement provision for the Applicable Provision; provided, however, that no such action pursuant to either of clauses (i) or (iii) above shall increase in any respect Consultant's obligations pursuant to the Applicable Provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Rights Cumulative</u>. The rights and remedies provided by this Agreement are cumulative, and the exercise of any right or remedy by either Party hereto (or by its successors), whether pursuant to this Agreement, to any other agreement, or to law, shall not preclude or waive its right to exercise any or all other rights and remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Nonwaiver</u>. No failure or neglect of either Party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of any other right, power or privilege or of the same right, power or privilege in any other instance. All waivers by either Party hereto must be contained in a written instrument signed by the Party to be charged and, in the case of the Company, by an executive officer of the Company or other person duly authorized by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>No Mitigation</u>. In the event this Agreement is terminated for any reason prior to its expiration, the Consultant shall not be required to mitigate damages hereunder, nor shall the Company be entitled to offset from any sums owing to Consultant under the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>No Implied Contract</u>. The Parties intend to be bound only upon execution of this Agreement and no negotiation, exchange or draft or partial performance shall be deemed to imply an agreement. Neither the continuation of Services by the Consultant nor any other conduct shall be deemed to imply a continuing agreement upon the expiration of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Execution of the Agreement</u>. The Company and the party executing this Agreement on behalf of the Company has the requisite corporate power and authority to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Confidentiality</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For purposes of this Agreement, "Protected Information" subject to the provisions of Paragraph 16(b) means: (a) all work product; and (b) all trade secrets or other confidential or proprietary information owned, developed or possessed by the Company or any of its affiliates, whether in tangible or intangible form, pertaining to the business of the Company or any of its affiliates, including, without limitation, research and development operations, systems, databases, computer programs and software, designs, models, operating procedures, knowledge of the organization, products (including process, plans, costs, sales or content), processes, techniques, machinery, contracts, financial information or prospective customers, identities or individual contacts of business entities which are customers or prospective customers, preferences, business or habits and business relationships, whether developed prior to the date of this Agreement or hereafter, and made known to the Consultant, whether or not developed, devised or otherwise created in whole or in part by the Consultant's efforts, by reason of the Consultant's engagement by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding Paragraph 16(a), Protected Information will not include information which: (a) at or prior to the time of disclosure by the Company to Consultant was already known to the Consultant (as evidenced in writing), except to the extent unlawfully appropriated; (b) at or after the time of disclosure by the Company to Consultant becomes generally available to the public other than through any act or omission on the Consultant's part; or (c) the Consultant receives from a third party free to make such disclosure without breach of any legal obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Unauthorized Use or Disclosure of Protected Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) During and after the Term, up through and including two (2) years thereafter, the Consultant agrees that he will maintain the Protected Information in strict confidence and shall use the Protected Information only for the purposes set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) During and after the Term, up through and including two (2) years thereafter, Consultant agrees that he will not: (i) use or disclose any Protected Information in contravention of the Company's policies or procedures made known to the Consultant; (ii) use or disclose any Protected Information in contravention of any lawful instruction or directive, either written or oral, of any Company employee; (iii) use or disclose any Protected Information in contravention of any duty existing under law or contract; (iv) use or disclose any Protected Information knowingly to the detriment of the Company; (v) use or disclose any Protected Information to any third party without the express written consent of the Company; (vi) use or disclose any Protected Information for a purpose other than for which Consultant is authorized under this Agreement; or (vii) otherwise take any action inconsistent with the Company's measures to protect its interests in the Protected Information, or any action which would constitute or facilitate the unauthorized use or disclosure of Protected Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If the Consultant is required to disclose any Protected Information pursuant to any applicable statute, regulation, order, subpoena or document discovery request, the Consultant may do so, provided that prior written notice of such disclosure is furnished to the Company as soon as practicable in order to afford the Company an opportunity to seek a protective order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Non-Disclosure</u>. Except as may be required by law, neither the Consultant nor the Company shall disclose the financial terms of this Agreement to persons not involved in the operation of the Company, and the Parties shall disclose the financial terms of the Agreement to those involved in the operation of the Company only as needed to implement the terms of the Agreement or carry out the operations of the Company. The above notwithstanding, the financial terms of the Agreement may be disclosed to: (i) either Party's accountants, financial or tax advisors, and any potential investors in the Company, provided such persons agree not to disclose such terms of the Agreement further; and (ii) members of Consultant's immediate family, provided such family members agree not to reveal the terms of the Agreement further.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Successors and Assigns</u>. Subject to the other provisions of this Agreement, the rights and obligations of the Company under this Agreement shall be binding on and inure to the benefit of the Company, its successors and permitted assigns. The rights and obligations of the Consultant under this Agreement shall be binding on and inure to the benefit of the heirs and legal representatives of Consultant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Agreement to Perform Necessary Acts</u>. The Consultant and the Company agree to perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Assignment</u>. The Consultant may not assign this Agreement without the Company's prior written consent. This Agreement may be assigned by the Company in connection with a merger, corporate reorganization or sale of all or substantially all of its assets, and in other instances with the Consultant's consent which consent shall not be unreasonably withheld or delayed, subject to the termination provisions in Paragraph 3 above. Compensation under this Agreement is assignable at the discretion of the Consultant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Independent Contractor</u>. The relationship between the Consultant and the Company is that of independent contractor under a "work for hire" arrangement. All work product developed by Consultant shall be deemed owned and assigned to the Company. This Agreement is not authority for the Consultant to act for the Company as its agent or make commitments for the Company. The Consultant retains the discretion in performing the tasks assigned, within the scope of work specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Taxes</u>. The Consultant agrees to pay all taxes that may be imposed upon the Consultant with respect to the fees paid to Consultant hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Notices</u>: Any notice required or permitted to be given hereunder shall be in writing and shall be mailed or otherwise delivered in person or by facsimile transmission at the address of such Party set forth above or to such other address or facsimile telephone number as the Party shall have furnished in writing to the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Governing Law</u>. This Agreement and all matters or issues collateral thereto shall be governed by the laws of the State of Utah applicable to contracts entered into and performed entirely therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Facsimile Certification</u>. A facsimile copy of this Agreement signed by any and/or all Parties shall have the same binding and legal effect as an original of the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Counterparts</u>. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one in the same instrument. Regardless of whether this Agreement is executed in one or more counterparts, each such counterpart may be executed by actual or facsimile signature(s).

IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the date first above written.

---

| | | |
|:---|:---|:---|
| Date: <u>April, 1, 2025</u> | **INCEPTION MINING INC.** | **INCEPTION MINING INC.** |
|  |  | /s/ Trent D'Ambrosio |
|  | By: | Trent D'Ambrosio |
|  | Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| Date: 4-01-2025 | **CONSULTANT** |
|  | /s/ Dan Gay |
|  | Dan Gay |
|  | 13 Cherry Vale Drive<br> Cherry Hills Village,<br> CO 80113 |

---

## Add

**Exhibit 10.9**

**CONSULTING AGREEMENT**

**THIS CONSULTING AGREEMENT** (the "Agreement") is entered into on September 1, 2025, by and among BluSky AI Inc., a Nevada limited liability corporation ("BSAI" or the "Company") and <u>Dan L. Gay,</u> an individual resident of _ (the "Consultant"). Each of the Parties to this Agreement is individually referred to herein as a "Party" and collectively as the "Parties."

**WHEREAS:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The
 Consultant has the business development expertise and experience to assist the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The
 Consultant has provided consulting services to the Company over the past year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The
 Company would like to memorialize the work performed by the Consultant for the Company, and
 compensation to be paid to the Consultant, by entering into this written Agreement; and,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The
 Parties agree that this Agreement reflects the entire understanding and agreement between
 the Parties hereto.

**AGREEMENT:**

In consideration of the foregoing and of the mutual promises set forth herein, and intending to be legally bound, the Parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Engagement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Company hereby recognizes the Consultant has rendered, as an independent contractor, advisory, business development, consulting and such other services to the Company. Specifically, the Consultant provided expertise regarding reducing the Company's liabilities and restructuring its operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Compensation</u>. In consideration of the Services performed by the Consultant, the Company shall pay to the Consultant payments (the "Compensation") as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Beginning after September 1, 2025, BSAI shall deliver ten thousand dollars ($10,000.00) (per month) to the Consultant and pay via check, ACH, WISE or wire transfer once per month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At the Company's discretion as part of this Agreement, BSAI may deliver to the Consultant shares of its common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Representations and Warranties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Consultant represents and warrants that: (i) the Consultant has no obligations, legal or otherwise, inconsistent with the terms of this Agreement or with the Consultant's undertaking this relationship with the Company; (ii) the performance of the Services called for by this Agreement do not and will not violate any applicable law, rule or regulation or any proprietary or other right of any third party; (iii) the Consultant will not use in the performance of his responsibilities under this Agreement any confidential information or trade secrets of any other person or entity; and (iv) the Consultant has not entered into or will not enter into any agreement (whether oral or written) in conflict with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Consultant further represents and warrants that he provided bona fide services to the Company, and that such services are not in connection with the offer or sale of securities in a capital-raising transaction, that such services do not directly or indirectly promote or maintain a market for the Company's securities, that, by prearrangement or otherwise, the Company, including all affiliates, will not control or direct the resale of the securities received hereunder in the public market, and that the Company, including all affiliates, will not directly or indirectly receive a percentage of the proceeds from such resales of any securities received by Consultant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Attorney's Fees</u>. Should either Party hereto, or any heir, personal representative, successor or assign of either Party hereto, resort to litigation to enforce this Agreement, the Party or Parties prevailing in such litigation shall be entitled, in addition to such other relief as may be granted, to recover its or their reasonable attorneys' fees and costs in such litigation from the Party or Parties against whom enforcement was sought.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Entire Agreement</u>. This Agreement contains the entire understanding and agreement between the Parties hereto with respect to its subject matter and supersedes any prior or contemporaneous written or oral agreements, representations or warranties between them respecting the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Amendment</u>. This Agreement may be amended only by a writing signed by the Consultant and by a representative of the Company duly authorized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Severability</u>. If any provision of this Agreement, as applied to either Party or to any circumstances, shall be adjudged by a court to be void or unenforceable, the same shall be deemed stricken from this Agreement and shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement. In the event any such provision (the "Applicable Provision") is so adjudged void or unenforceable, Consultant and the Company shall take the following actions in the following order: (i) seek judicial reformation of the Applicable Provision; (ii) negotiate in good faith with each other to replace the Applicable Provision with a lawful provision; and (iii) have an arbitration as provided in Paragraph 19 hereof determine a lawful replacement provision for the Applicable Provision; provided, however, that no such action pursuant to either of clauses (i) or (iii) above shall increase in any respect Consultant's obligations pursuant to the Applicable Provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Rights Cumulative</u>. The rights and remedies provided by this Agreement are cumulative, and the exercise of any right or remedy by either Party hereto (or by its successors), whether pursuant to this Agreement, to any other agreement, or to law, shall not preclude or waive its right to exercise any or all other rights and remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Nonwaiver</u>. No failure or neglect of either Party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of any other right, power or privilege or of the same right, power or privilege in any other instance. All waivers by either Party hereto must be contained in a written instrument signed by the Party to be charged and, in the case of the Company, by an executive officer of the Company or other person duly authorized by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>No Mitigation</u>. In the event this Agreement is terminated for any reason prior to its expiration, the Consultant shall not be required to mitigate damages hereunder, nor shall the Company be entitled to offset from any sums owing to Consultant under the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>No Implied Contract</u>. The Parties intend to be bound only upon execution of this Agreement and no negotiation, exchange or draft or partial performance shall be deemed to imply an agreement. Neither the continuation of Services by the Consultant nor any other conduct shall be deemed to imply a continuing agreement upon the expiration of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Execution of the Agreement</u>. The Company and the party executing this Agreement on behalf of the Company has the requisite corporate power and authority to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Confidentiality</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For purposes of this Agreement, "Protected Information" subject to the provisions of Paragraph 16(b) means: (a) all work product; and (b) all trade secrets or other confidential or proprietary information owned, developed or possessed by the Company or any of its affiliates, whether in tangible or intangible form, pertaining to the business of the Company or any of its affiliates, including, without limitation, research and development operations, systems, databases, computer programs and software, designs, models, operating procedures, knowledge of the organization, products (including process, plans, costs, sales or content), processes, techniques, machinery, contracts, financial information or prospective customers, identities or individual contacts of business entities which are customers or prospective customers, preferences, business or habits and business relationships, whether developed prior to the date of this Agreement or hereafter, and made known to the Consultant, whether or not developed, devised or otherwise created in whole or in part by the Consultant's efforts, by reason of the Consultant's engagement by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding Paragraph 16(a), Protected Information will not include information which: (a) at or prior to the time of disclosure by the Company to Consultant was already known to the Consultant (as evidenced in writing), except to the extent unlawfully appropriated; (b) at or after the time of disclosure by the Company to Consultant becomes generally available to the public other than through any act or omission on the Consultant's part; or (c) the Consultant receives from a third party free to make such disclosure without breach of any legal obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Unauthorized Use or Disclosure of Protected Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) During and after the Term, up through and including two (2) years thereafter, the Consultant agrees that he will maintain the Protected Information in strict confidence and shall use the Protected Information only for the purposes set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) During and after the Term, up through and including two (2) years thereafter, Consultant agrees that he will not: (i) use or disclose any Protected Information in contravention of the Company's policies or procedures made known to the Consultant; (ii) use or disclose any Protected Information in contravention of any lawful instruction or directive, either written or oral, of any Company employee; (iii) use or disclose any Protected Information in contravention of any duty existing under law or contract; (iv) use or disclose any Protected Information knowingly to the detriment of the Company; (v) use or disclose any Protected Information to any third party without the express written consent of the Company; (vi) use or disclose any Protected Information for a purpose other than for which Consultant is authorized under this Agreement; or (vii) otherwise take any action inconsistent with the Company's measures to protect its interests in the Protected Information, or any action which would constitute or facilitate the unauthorized use or disclosure of Protected Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If the Consultant is required to disclose any Protected Information pursuant to any applicable statute, regulation, order, subpoena or document discovery request, the Consultant may do so, provided that prior written notice of such disclosure is furnished to the Company as soon as practicable in order to afford the Company an opportunity to seek a protective order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Non-Disclosure</u>. Except as may be required by law, neither the Consultant nor the Company shall disclose the financial terms of this Agreement to persons not involved in the operation of the Company, and the Parties shall disclose the financial terms of the Agreement to those involved in the operation of the Company only as needed to implement the terms of the Agreement or carry out the operations of the Company. The above notwithstanding, the financial terms of the Agreement may be disclosed to: (i) either Party's accountants, financial or tax advisors, and any potential investors in the Company, provided such persons agree not to disclose such terms of the Agreement further; and (ii) members of Consultant's immediate family, provided such family members agree not to reveal the terms of the Agreement further.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Successors and Assigns</u>. Subject to the other provisions of this Agreement, the rights and obligations of the Company under this Agreement shall be binding on and inure to the benefit of the Company, its successors and permitted assigns. The rights and obligations of the Consultant under this Agreement shall be binding on and inure to the benefit of the heirs and legal representatives of Consultant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Agreement to Perform Necessary Acts</u>. The Consultant and the Company agree to perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Assignment</u>. The Consultant may not assign this Agreement without the Company's prior written consent. This Agreement may be assigned by the Company in connection with a merger, corporate reorganization or sale of all or substantially all of its assets, and in other instances with the Consultant's consent which consent shall not be unreasonably withheld or delayed, subject to the termination provisions in Paragraph 3 above. Compensation under this Agreement is assignable at the discretion of the Consultant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Independent Contractor</u>. The relationship between the Consultant and the Company is that of independent contractor under a "work for hire" arrangement. All work product developed by Consultant shall be deemed owned and assigned to the Company. This Agreement is not authority for the Consultant to act for the Company as its agent or make commitments for the Company. The Consultant retains the discretion in performing the tasks assigned, within the scope of work specified.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Taxes</u>. The Consultant agrees to pay all taxes that may be imposed upon the Consultant with respect to the fees paid to Consultant hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Notices</u>: Any notice required or permitted to be given hereunder shall be in writing and shall be mailed or otherwise delivered in person or by facsimile transmission at the address of such Party set forth above or to such other address or facsimile telephone number as the Party shall have furnished in writing to the other Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Governing Law</u>. This Agreement and all matters or issues collateral thereto shall be governed by the laws of the State of Utah applicable to contracts entered into and performed entirely therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Facsimile Certification</u>. A facsimile copy of this Agreement signed by any and/or all Parties shall have the same binding and legal effect as an original of the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Counterparts</u>. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one in the same instrument. Regardless of whether this Agreement is executed in one or more counterparts, each such counterpart may be executed by actual or facsimile signature(s).

IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the date first above written.

---

| | | |
|:---|:---|:---|
| Date: <u>September 1, 2025</u> | **BluSky AI Inc.** | **BluSky AI Inc.** |
|  | /s/ Trent D'Ambrosio | /s/ Trent D'Ambrosio |
|  | By: | Trent D'Ambrosio |
|  | Its: | Chief Executive Officer |

---

---

| | |
|:---|:---|
| Date: August 20, 2025 | **CONSULTANT** |
|  | /s/ Dan Gay |
|  | Dan Gay |
|  | 13 Cherry Vale Drive<br> Cherry Hills Village,<br> CO 80113 |

---

## Add

**Exhibit 11**

**<u>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

As independent registered public accountants, we hereby consent to the use of our report dated March 31, 2025, with respect to the financial statements of BluSky AI Inc. for the years ended December 31, 2024, and 2023, and for each of the years then ended, in its Offering Statement on Form 1-A.

*/s/ Sadler, Gibb & Associates, LLC*

Draper, UT

February 11, 2026

## Add

**Exhibit 12**

![](ex12_001.jpg)

February 11, 2026

Board of Directors

BluSky AI Inc.

5330 South 900 East

Suite 280

Murray, Utah 84117

---

| | |
|:---|:---|
| **Re:** | **Offering Statement** |

---

Ladies and Gentlemen:

We have acted as counsel for BluSky AI Inc., a Nevada corporation ("BluSky AI" or the "Company") in a limited capacity in connection with the Offering Statement on Form 1-A (the "Offering Statement") being filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), and Regulation A thereunder. The Offering Statement relates to the issuance and sale by the Company of up to 15,000,000 Shares of Common Stock, par value $0.00001 per share.

In that capacity, we have examined original copies, certified or otherwise identified to our satisfaction of such documents and corporate records, and have examined such laws or regulations, as we have deemed necessary or appropriate for the purposes of the opinions hereinafter set forth.

Based on the foregoing, we are of the opinion that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. BluSky
 AI Inc. is a corporation duly organized and validly existing under the laws of the State
 of Nevada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The
 common shares included in the Shares to be sold pursuant to the terms of the Offering
 Statement (including the common shares underlying the warrants included as part of the Shares),
 when issued or transferred in the manner described in the Offering Statement, will be duly
 authorized, legally issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion letter as Exhibit 12 to the Offering Circular included in the Offering Statement.

Very truly yours,

**BRUNSON CHANDLER & JONES, PLLC**

*/s/ Brunson Chandler & Jones, PLLC*

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM 1-A

### REGULATION A OFFERING STATEMENT
### UNDER THE SECURITIES ACT OF 1933

### Item 1. Issuer Information

**Exact name of issuer:** BluSky AI Inc.

**Jurisdiction of Incorporation/Organization:** NV

**Year of Incorporation:** 2007

**CIK:** 0001416090

**I.R.S. Employer Identification Number:** 35-2302128

**Primary Standard Industrial Classification Code:** 7374

**Total number of full-time employees:** 5

**Total number of part-time employees:** 5

**Address of Principal Executive Offices:** 5530 South 900 East, Suite 280, Murray, UT 84117

**Company Phone:** 801-810-8790

**Person to contact:** Lance Brunson

### Financial Statements

**Balance Sheet Information**

| Metric                                   | Amount      |
|:---|:---|
| Cash and Cash Equivalents                | $1295261.00 |
| Investment Securities                    | $0.00       |
| Accounts and Notes Receivable            | $0.00       |
| Property, Plant and Equipment (PP&E)     | $0.00       |
| Total Assets                             | $2985579.00 |
| Accounts Payable and Accrued Liabilities | $1802420.00 |
| Long-Term Debt                           | $1418945.00 |
| Total Liabilities                        | $3527196.00 |
| Total Stockholders' Equity               | $-541617.00 |
| Total Liabilities and Equity             | $2985579.00 |

**Statement of Comprehensive Income Information**

| Metric                                    | Amount       |
|:---|:---|
| Total Revenues                            | $0.00        |
| Costs and Expenses Applicable to Revenues | $0.00        |
| Depreciation and Amortization             | $0.00        |
| Net Income                                | $-4014763.00 |
| Earnings Per Share - Basic                | -1.29        |
| Earnings Per Share - Diluted              | -1.29        |

**Auditor Information**

| Metric          | Amount                         |
|:---|:---|
| Name of Auditor | Sadler, Gibb & Associates, LLC |

### Outstanding Securities

| Class           |   Outstanding | CUSIP     | Publicly Traded            |
|:---|---:|:---|:---|
| Common Equity   |      24992505 | 45327U302 | OTC ID Tier - OTC Link ATS |
| Preferred Stock |            51 | 000000000 | N/A                        |
| NONE            |             0 | 000000000 | N/A                        |

### Item 2. Issuer Eligibility
- [x] The issuer certifies that all of the statements in this part are true.

### Item 3. Application of Rule 262
- [x] The issuer certifies that it is not disqualified and has not been involved in any disqualifying event.

### Item 4. Summary Information Regarding the Offering

**Tier:** Tier2

**Financial Statement Status:** Audited

**Type of Securities Offered:** Equity (common or preferred stock)

**Is this a delayed or continuous offering?** No

**Was or is the offering to take place within one year after qualification?** No

**Was or is the offering to commence within two days after qualification?** No

**Is this a best efforts offering?** Yes

**Was there any solicitation of interest?** No

**Are there any resale securities by affiliates of the issuer?** No

**Offering Amounts**

| Description                                                     | Amount       |
|:---|:---|
| Number of securities offered                                    | 15000000     |
| Number of securities outstanding                                | 24992505     |
| Price per security                                              | $5.00        |
| Issuer's aggregate offering price                               | $62500000.00 |
| Aggregate offering price of securities held by security holders | $0.00        |
| Aggregate price of securities offered concurrently              | $0.00        |
| Total aggregate offering price                                  | $62500000.00 |

**Anticipated Fees**

| Service Provider   | Name                           | Fees      |
|:---|:---|:---|
| Auditor            | Sadler, Gibb & Associates, LLC | $10000.00 |
| Legal              | Brunson Chandler & Jones, PLLC | $21000.00 |
| Promoters          | None                           | $0.00     |

**Estimated Net Proceeds to the Issuer:** $57941500.00

### Item 5. Jurisdictions in Which Securities are to be Offered

AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY, DC, PR

### Item 6. Unregistered Securities Issued or Sold Within One Year

**Name of Such Issuer:** BluSky AI Inc.

**Title of Securities Issued:** Common Stock

**Total Amount of Securities Issued:** 24992505

**Amount of such securities sold by principal security holders:** 0

**Aggregate consideration:** On April 1, 2025, the Company issued 200,000 restricted shares of Common Stock for services valued $0.51 per share for a total value of $102,000. On June 10, 2025, the Company issued 1,100,000 restricted shares of Common Stock to five individuals for services rendered valued at $0.401 per share for a total value of $441,100. On June 24, 2025, the Company issued 500,000 restricted shares for services valued at $1.60 per share for a total value of $800,000. On July 7, 2025, the Company issued 20,000,000 shares to Digital Asset Medium, LLC pursuant to an agreement dated July 7, 2025. On September 2, 2025, the Company issued 25,500 shares of common stock to consultants for services rendered to the Company. On September 23, 2025, the Company issued 433,750 shares of common stock for the conversion of debt to certain investors in the Company with a conversion rate of $4.00 per share. On September 30, 2025, the Company issued 33,415 shares of common stock valued at $5.00 per share. 20,408 of these shares were issued as part of a conversion for outstanding debt and 13,007 were issued for conversion of existing debt and unreimbursed expenses.

**Basis for aggregate consideration:** —

**Securities Act Exemption:** We claimed exemption from registration under the Securities Act for the sales and issuances of securities in the those transactions under Section 4(a)(2) and Section 3(a)(9) of the Securities Act and/or Regulation D promulgated thereunder.