0001416090false--12-31Q220250.00001100000005151510.00001103000000002659773falsefalsefalsefalse00014160902025-01-012025-06-300001416090us-gaap:SubsequentEventMember2025-07-012025-07-110001416090us-gaap:SubsequentEventMember2025-07-012025-07-070001416090us-gaap:SubsequentEventMemberimii:CampVerdiArizonaMember2025-07-012025-07-2800014160902023-09-012023-09-220001416090imii:MarchFourTwoThousandTwentyFourMemberimii:MotherLodeMiningIncMember2025-01-012025-06-300001416090us-gaap:AccountsPayableAndAccruedLiabilitiesMemberimii:RelatedPartyByRelatedPartyMember2025-06-300001416090imii:NotesPayableMemberimii:DebraDambrosioMember2025-01-012025-06-300001416090imii:TrentDAmbrosioMember2019-03-292019-04-010001416090imii:StockholderDirectorMember2017-10-012017-10-310001416090imii:StockholderDirectorMember2025-06-300001416090imii:StockholderDirectorMember2014-02-012014-02-280001416090imii:WhitCluffMember2025-06-100001416090imii:FiveIndividualsMember2025-06-100001416090imii:LanceDAmbrosioMember2025-05-012025-06-100001416090imii:LanceDAmbrosioMember2025-06-100001416090imii:WhitCluffMember2025-05-012025-06-100001416090imii:TrentDAmbrosioMember2025-05-012025-06-100001416090imii:TrentDAmbrosioMember2025-06-300001416090imii:TrentDAmbrosioMember2025-06-100001416090imii:FiveIndividualsMember2025-05-012025-06-100001416090imii:TrentDAmbrosioMember2025-01-012025-06-300001416090us-gaap:RestrictedStockMember2025-06-240001416090us-gaap:RestrictedStockMember2025-06-012025-06-240001416090us-gaap:RestrictedStockMember2025-06-100001416090us-gaap:RestrictedStockMember2025-05-012025-06-100001416090us-gaap:RestrictedStockMember2025-04-010001416090us-gaap:RestrictedStockMember2025-01-012025-06-300001416090imii:DiagonalLendingLLCMember2024-08-012024-08-0200014160902025-05-012025-06-100001416090imii:DiagonalLendingLLCThreeMember2024-01-012024-09-300001416090imii:DiagonalLendingLLCTwoMember2025-01-012025-06-300001416090imii:DiagonalLendingLLCTwoMember2024-01-012024-09-300001416090imii:DiagonalLendingLLCThreeMember2025-01-012025-06-300001416090us-gaap:InvestorMember2025-01-012025-06-300001416090imii:DiagonalLendingLLCTwoMember2025-06-300001416090imii:DiagonalLendingLLCThreeMember2025-06-300001416090us-gaap:InvestorMember2025-06-300001416090imii:DiagonalLendingLLCTwoMember2024-01-012024-01-230001416090imii:DiagonalLendingLLCThreeMember2024-05-012024-05-030001416090imii:DiagonalLendingLLCTwoMember2024-01-230001416090imii:DiagonalLendingLLCThreeMember2024-05-030001416090us-gaap:ConvertibleNotesPayableMember2024-12-310001416090us-gaap:ConvertibleNotesPayableMember2025-06-300001416090imii:DiagonalLendingLLCMember2024-12-310001416090imii:DiagonalLendingLLCMember2025-06-300001416090imii:OneUnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2023-01-012023-12-310001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:CluffRichPC401KMember2024-01-012024-12-310001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:WhitCluffMember2024-03-280001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:OctoberOneTwentyTwentyFourMember2024-01-012024-09-300001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2023-01-310001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:DigitalAssetMediumLLCMember2025-01-090001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:CluffRichPC401KMember2022-06-290001416090imii:PineValleyInvestmentLLCMember2025-06-300001416090imii:ThreeUnsecuredShortTermPromissoryNoteMemberimii:PineValleyInvestmentLLCMember2025-06-300001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:WhitCluffMember2025-06-300001416090imii:ThreeUnsecuredShortTermPromissoryNoteMemberimii:PineValleyInvestmentLLCMember2023-01-010001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:OctoberOneTwentyTwentyFourMember2025-06-300001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2025-06-300001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:JanOneTwentyTwentyFiveMember2025-06-300001416090imii:TwoUnsecuredShortTermPromissoryNoteMemberimii:FrancisERichMember2023-01-010001416090imii:DebraDambrosioMember2023-01-010001416090imii:OneUnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2023-01-010001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:OctoberOneTwentyTwentyFourMember2024-10-010001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:OctoberOneTwentyTwentyFourMember2024-07-012024-09-300001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:JanOneTwentyTwentyFiveMember2025-01-010001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2024-11-010001416090imii:PineValleyInvestmentLLCMember2023-01-292023-02-010001416090imii:FrancisERichMember2023-01-292023-02-010001416090imii:DebraDambrosioMember2023-01-292023-02-010001416090imii:CluffRichPC401KMember2023-01-292023-02-010001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:DigitalAssetMediumLLCMember2025-06-300001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:CluffRichPC401KMember2025-06-300001416090imii:OneUnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2025-06-300001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:OctoberOneTwentyTwentyFourMember2025-01-012025-06-300001416090imii:OneUnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2023-01-292023-02-010001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:DebraDambrosioMember2025-01-012025-06-300001416090imii:DebraDambrosioMemberimii:UnsecuredShortTermPromissoryNoteMemberimii:JanOneTwentyTwentyFiveMember2025-01-012025-06-300001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:DigitalAssetMediumLLCMember2025-01-012025-01-090001416090imii:UnsecuredShortTermPromissoryNoteMemberimii:CluffRichPC401KMember2023-01-292023-02-010001416090imii:RelatedPartyOneMember2024-12-310001416090imii:RelatedPartyOneMember2025-06-300001416090imii:WhitCluffMember2025-06-300001416090imii:WhitCluffMember2024-12-310001416090imii:PineValleyInvestmentsMember2024-12-310001416090imii:PineValleyInvestmentsMember2025-06-300001416090imii:FrancisERichMember2024-12-310001416090imii:FrancisERichMember2025-06-300001416090imii:DigitalAssetMediumLLCMember2025-06-300001416090imii:DigitalAssetMediumLLCMember2024-12-310001416090imii:DebraDambrosioMember2024-12-310001416090imii:DebraDambrosioMember2025-06-300001416090imii:CluffRichPC401KMember2024-12-310001416090imii:CluffRichPC401KMember2025-06-300001416090imii:WhitCluffMember2025-01-012025-06-300001416090imii:PineValleyInvestmentsMember2025-01-012025-06-300001416090imii:FrancisERichMember2025-01-012025-06-300001416090imii:DigitalAssetMediumLLCMember2025-01-012025-06-300001416090imii:DebraDambrosioMember2025-01-012025-06-300001416090imii:CluffRichPC401KMember2025-01-012025-06-300001416090imii:UnsecuredPromissoryNoteMemberimii:PhilZobristMember2025-06-300001416090imii:UnsecuredPromissoryNoteMemberimii:PhilZobristMember2015-12-310001416090imii:UnsecuredPromissoryNoteMemberimii:PhilZobristMember2025-01-012025-06-300001416090imii:UnsecuredPromissoryNoteMemberimii:PhilZobristMember2015-10-012015-10-020001416090imii:UnsecuredPromissoryNoteMemberimii:PhilZobristMember2013-01-012013-01-110001416090imii:UnsecuredPromissoryNoteMember2015-10-020001416090imii:UnsecuredPromissoryNoteMemberimii:AntczakPolichLawLLCMember2025-01-012025-06-300001416090imii:UnsecuredPromissoryNoteMemberimii:AntczakPolichLawLLCMember2023-03-210001416090imii:UnsecuredPromissoryNoteMemberimii:PhilZobristMember2013-01-110001416090imii:AntczakPolichLawLLCMember2024-12-310001416090imii:AntczakPolichLawLLCMember2025-06-300001416090imii:PhilZobristMember2024-12-310001416090imii:PhilZobristMember2025-06-300001416090imii:LetterOfIntentMember2025-01-012025-06-300001416090imii:TwentyMonthsUntilFebruaryOneTwoThousandTwentyFiveMemberimii:LetterOfIntentMember2025-01-012025-06-300001416090imii:MotherLodeMiningIncMember2023-01-102023-01-120001416090imii:MotherLodeMiningIncMember2025-01-012025-06-300001416090imii:MotherLodeMiningIncMember2023-01-012023-01-240001416090imii:MotherLodeMiningIncMember2023-01-012023-01-230001416090imii:MotherLodeMiningIncMember2023-01-012023-01-180001416090imii:MotherLodeMiningIncMember2023-01-012023-01-170001416090imii:MotherLodeMiningIncMember2023-01-012023-01-160001416090imii:MotherLodeMiningIncMember2023-01-012023-01-050001416090imii:MotherLodeMiningIncMember2023-01-012023-01-030001416090imii:MotherLodeMiningIncMember2024-12-310001416090imii:MotherLodeMiningIncMember2025-06-300001416090us-gaap:FairValueInputsLevel3Member2025-06-300001416090us-gaap:FairValueInputsLevel3Member2025-01-012025-06-300001416090us-gaap:FairValueInputsLevel3Member2024-12-310001416090imii:TopMemberimii:ProcessingAndLaboratoryMember2025-01-012025-06-300001416090imii:BottomMemberimii:ProcessingAndLaboratoryMember2025-01-012025-06-300001416090imii:TopMemberus-gaap:FurnitureAndFixturesMember2025-01-012025-06-300001416090imii:BottomMemberus-gaap:FurnitureAndFixturesMember2025-01-012025-06-300001416090imii:BottomMemberimii:VehiclesAndEquipmentMember2025-01-012025-06-300001416090imii:TopMemberimii:VehiclesAndEquipmentMember2025-01-012025-06-300001416090imii:TopMemberus-gaap:BuildingMember2025-01-012025-06-300001416090imii:BottomMemberus-gaap:BuildingMember2025-01-012025-06-300001416090imii:ClavoRicoLtdMember2015-10-020001416090imii:HawkstoneMiningLimitedMember2020-02-012020-02-210001416090imii:ClavoRicoLtdMember2015-09-292015-10-020001416090imii:InceptionResourcesLLCMember2025-01-012025-06-3000014160902010-03-0500014160902020-12-3000014160902022-12-3000014160902022-12-3100014160902020-12-3100014160902010-03-040001416090us-gaap:RetainedEarningsMember2025-06-300001416090us-gaap:AdditionalPaidInCapitalMember2025-06-300001416090us-gaap:CommonStockMember2025-06-300001416090us-gaap:PreferredStockMember2025-06-300001416090us-gaap:RetainedEarningsMember2025-04-012025-06-300001416090us-gaap:AdditionalPaidInCapitalMember2025-04-012025-06-300001416090us-gaap:CommonStockMember2025-04-012025-06-300001416090us-gaap:PreferredStockMember2025-04-012025-06-3000014160902025-03-310001416090us-gaap:RetainedEarningsMember2025-03-310001416090us-gaap:AdditionalPaidInCapitalMember2025-03-310001416090us-gaap:CommonStockMember2025-03-310001416090us-gaap:PreferredStockMember2025-03-3100014160902025-01-012025-03-310001416090us-gaap:RetainedEarningsMember2025-01-012025-03-310001416090us-gaap:AdditionalPaidInCapitalMember2025-01-012025-03-310001416090us-gaap:CommonStockMember2025-01-012025-03-310001416090us-gaap:PreferredStockMember2025-01-012025-03-310001416090us-gaap:RetainedEarningsMember2024-12-310001416090us-gaap:AdditionalPaidInCapitalMember2024-12-310001416090us-gaap:CommonStockMember2024-12-310001416090us-gaap:PreferredStockMember2024-12-3100014160902024-06-300001416090us-gaap:RetainedEarningsMember2024-06-300001416090us-gaap:AdditionalPaidInCapitalMember2024-06-300001416090us-gaap:CommonStockMember2024-06-300001416090us-gaap:PreferredStockMember2024-06-300001416090us-gaap:RetainedEarningsMember2024-04-012024-06-300001416090us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001416090us-gaap:CommonStockMember2024-04-012024-06-300001416090us-gaap:PreferredStockMember2024-04-012024-06-3000014160902024-03-310001416090us-gaap:RetainedEarningsMember2024-03-310001416090us-gaap:AdditionalPaidInCapitalMember2024-03-310001416090us-gaap:CommonStockMember2024-03-310001416090us-gaap:PreferredStockMember2024-03-3100014160902024-01-012024-03-310001416090us-gaap:RetainedEarningsMember2024-01-012024-03-310001416090us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001416090us-gaap:CommonStockMember2024-01-012024-03-310001416090us-gaap:PreferredStockMember2024-01-012024-03-3100014160902023-12-310001416090us-gaap:RetainedEarningsMember2023-12-310001416090us-gaap:AdditionalPaidInCapitalMember2023-12-310001416090us-gaap:CommonStockMember2023-12-310001416090us-gaap:PreferredStockMember2023-12-3100014160902024-01-012024-06-3000014160902024-04-012024-06-3000014160902025-04-012025-06-3000014160902024-12-3100014160902025-06-3000014160902025-08-19iso4217:USDxbrli:sharesiso4217:USDxbrli:sharesxbrli:pure

false --12-31 Q3 0001416090 0001416090 2025-01-01 2025-09-30 0001416090 2026-02-04 0001416090 2025-09-30 0001416090 2024-12-31 0001416090 us-gaap:RelatedPartyMember 2025-09-30 0001416090 us-gaap:RelatedPartyMember 2024-12-31 0001416090 2025-07-01 2025-09-30 0001416090 2024-07-01 2024-09-30 0001416090 2024-01-01 2024-09-30 0001416090 us-gaap:PreferredStockMember 2024-12-31 0001416090 us-gaap:CommonStockMember 2024-12-31 0001416090 us-gaap:AdditionalPaidInCapitalMember 2024-12-31 0001416090 us-gaap:RetainedEarningsMember 2024-12-31 0001416090 us-gaap:PreferredStockMember 2025-03-31 0001416090 us-gaap:CommonStockMember 2025-03-31 0001416090 us-gaap:AdditionalPaidInCapitalMember 2025-03-31 0001416090 us-gaap:RetainedEarningsMember 2025-03-31 0001416090 2025-03-31 0001416090 us-gaap:PreferredStockMember 2025-06-30 0001416090 us-gaap:CommonStockMember 2025-06-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2025-06-30 0001416090 us-gaap:RetainedEarningsMember 2025-06-30 0001416090 2025-06-30 0001416090 us-gaap:PreferredStockMember 2023-12-31 0001416090 us-gaap:CommonStockMember 2023-12-31 0001416090 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001416090 us-gaap:RetainedEarningsMember 2023-12-31 0001416090 2023-12-31 0001416090 us-gaap:PreferredStockMember 2024-03-31 0001416090 us-gaap:CommonStockMember 2024-03-31 0001416090 us-gaap:AdditionalPaidInCapitalMember 2024-03-31 0001416090 us-gaap:RetainedEarningsMember 2024-03-31 0001416090 2024-03-31 0001416090 us-gaap:PreferredStockMember 2024-06-30 0001416090 us-gaap:CommonStockMember 2024-06-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2024-06-30 0001416090 us-gaap:RetainedEarningsMember 2024-06-30 0001416090 2024-06-30 0001416090 us-gaap:PreferredStockMember 2025-01-01 2025-03-31 0001416090 us-gaap:CommonStockMember 2025-01-01 2025-03-31 0001416090 us-gaap:AdditionalPaidInCapitalMember 2025-01-01 2025-03-31 0001416090 us-gaap:RetainedEarningsMember 2025-01-01 2025-03-31 0001416090 2025-01-01 2025-03-31 0001416090 us-gaap:PreferredStockMember 2025-04-01 2025-06-30 0001416090 us-gaap:CommonStockMember 2025-04-01 2025-06-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2025-04-01 2025-06-30 0001416090 us-gaap:RetainedEarningsMember 2025-04-01 2025-06-30 0001416090 2025-04-01 2025-06-30 0001416090 us-gaap:PreferredStockMember 2025-07-01 2025-09-30 0001416090 us-gaap:CommonStockMember 2025-07-01 2025-09-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2025-07-01 2025-09-30 0001416090 us-gaap:RetainedEarningsMember 2025-07-01 2025-09-30 0001416090 us-gaap:PreferredStockMember 2024-01-01 2024-03-31 0001416090 us-gaap:CommonStockMember 2024-01-01 2024-03-31 0001416090 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-03-31 0001416090 us-gaap:RetainedEarningsMember 2024-01-01 2024-03-31 0001416090 2024-01-01 2024-03-31 0001416090 us-gaap:PreferredStockMember 2024-04-01 2024-06-30 0001416090 us-gaap:CommonStockMember 2024-04-01 2024-06-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2024-04-01 2024-06-30 0001416090 us-gaap:RetainedEarningsMember 2024-04-01 2024-06-30 0001416090 2024-04-01 2024-06-30 0001416090 us-gaap:PreferredStockMember 2024-07-01 2024-09-30 0001416090 us-gaap:CommonStockMember 2024-07-01 2024-09-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2024-07-01 2024-09-30 0001416090 us-gaap:RetainedEarningsMember 2024-07-01 2024-09-30 0001416090 us-gaap:PreferredStockMember 2025-09-30 0001416090 us-gaap:CommonStockMember 2025-09-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2025-09-30 0001416090 us-gaap:RetainedEarningsMember 2025-09-30 0001416090 us-gaap:PreferredStockMember 2024-09-30 0001416090 us-gaap:CommonStockMember 2024-09-30 0001416090 us-gaap:AdditionalPaidInCapitalMember 2024-09-30 0001416090 us-gaap:RetainedEarningsMember 2024-09-30 0001416090 2024-09-30 0001416090 2010-03-04 0001416090 2010-03-05 0001416090 2020-12-30 0001416090 2020-12-31 0001416090 2022-12-30 0001416090 2022-12-31 0001416090 BSAI:InceptionResourcesLLCMember 2025-01-01 2025-09-30 0001416090 BSAI:HawkstoneMiningLimitedMember 2020-02-21 2020-02-21 0001416090 BSAI:ClavoRicoLtdMember 2015-09-29 2015-10-02 0001416090 BSAI:ClavoRicoLtdMember 2015-10-02 0001416090 us-gaap:BuildingMember srt:MinimumMember 2025-09-30 0001416090 us-gaap:BuildingMember srt:MaximumMember 2025-09-30 0001416090 BSAI:VehiclesAndEquipmentMember srt:MinimumMember 2025-09-30 0001416090 BSAI:VehiclesAndEquipmentMember srt:MaximumMember 2025-09-30 0001416090 us-gaap:FurnitureAndFixturesMember srt:MinimumMember 2025-09-30 0001416090 us-gaap:FurnitureAndFixturesMember srt:MaximumMember 2025-09-30 0001416090 BSAI:ProcessingAndLaboratoryMember srt:MinimumMember 2025-09-30 0001416090 BSAI:ProcessingAndLaboratoryMember srt:MaximumMember 2025-09-30 0001416090 us-gaap:FairValueInputsLevel3Member 2024-12-31 0001416090 us-gaap:FairValueInputsLevel3Member 2025-01-01 2025-09-30 0001416090 us-gaap:FairValueInputsLevel3Member 2025-09-30 0001416090 BSAI:MotherLodeMiningIncMember 2023-01-01 2023-01-03 0001416090 BSAI:MotherLodeMiningIncMember 2023-01-01 2023-01-05 0001416090 BSAI:MotherLodeMiningIncMember 2023-01-01 2023-01-16 0001416090 BSAI:MotherLodeMiningIncMember 2023-01-01 2023-01-17 0001416090 BSAI:MotherLodeMiningIncMember 2023-01-01 2023-01-18 0001416090 BSAI:MotherLodeMiningIncMember 2023-01-01 2023-01-23 0001416090 BSAI:MotherLodeMiningIncMember 2023-01-01 2023-01-24 0001416090 BSAI:MotherLodeMiningIncMember 2025-01-01 2025-09-30 0001416090 BSAI:MotherLodeMiningIncMember 2023-03-01 2023-03-01 0001416090 BSAI:MotherLodeMiningIncMember 2023-04-01 2023-04-01 0001416090 BSAI:MotherLodeMiningIncMember 2023-05-01 2023-05-01 0001416090 BSAI:MotherLodeMiningIncMember 2023-06-01 2023-06-01 0001416090 BSAI:MotherLodeMiningIncMember BSAI:TwentyMonthsUntilFebruaryOneTwoThousandTwentyFiveMember 2025-01-01 2025-09-30 0001416090 BSAI:MotherLodeMiningIncMember 2025-03-31 0001416090 BSAI:AcquisitionAndPowerAssignmentAgreementMember us-gaap:CommonStockMember 2025-07-07 2025-07-07 0001416090 BSAI:AcquisitionAndPowerAssignmentAgreementMember 2025-07-07 2025-07-07 0001416090 BSAI:PhilZobristMember 2025-09-30 0001416090 BSAI:PhilZobristMember 2024-12-31 0001416090 BSAI:AntczakPolichLawLLCMember 2025-09-30 0001416090 BSAI:AntczakPolichLawLLCMember 2024-12-31 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:PhilZobristMember 2013-01-11 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:PhilZobristMember 2013-01-01 2013-01-11 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:PhilZobristMember 2015-10-01 2015-10-02 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:PhilZobristMember 2015-10-02 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:PhilZobristMember 2015-12-31 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:PhilZobristMember 2025-09-30 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:PhilZobristMember 2025-01-01 2025-09-30 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:AntczakPolichLawLLCMember 2023-03-21 0001416090 BSAI:UnsecuredPromissoryNoteMember BSAI:AntczakPolichLawLLCMember 2023-01-01 2023-12-31 0001416090 BSAI:AntczakPolichLawLLCMember BSAI:UnsecuredPromissoryNoteMember 2025-09-30 0001416090 BSAI:AntczakPolichLawLLCMember BSAI:UnsecuredPromissoryNoteMember 2025-01-01 2025-09-30 0001416090 BSAI:CluffRichPC401KMember 2025-09-30 0001416090 BSAI:CluffRichPC401KMember 2024-12-31 0001416090 BSAI:CluffRichPC401KMember 2025-01-01 2025-09-30 0001416090 BSAI:WhitCluffMember 2025-09-30 0001416090 BSAI:WhitCluffMember 2024-12-31 0001416090 BSAI:WhitCluffMember 2025-01-01 2025-09-30 0001416090 BSAI:DigitalAssetMediumLLCMember 2025-09-30 0001416090 BSAI:DigitalAssetMediumLLCMember 2024-12-31 0001416090 BSAI:DigitalAssetMediumLLCMember 2025-01-01 2025-09-30 0001416090 BSAI:DebraDambrosioMember 2025-09-30 0001416090 BSAI:DebraDambrosioMember 2024-12-31 0001416090 BSAI:DebraDambrosioMember 2025-01-01 2025-09-30 0001416090 BSAI:FrancisERichMember 2025-09-30 0001416090 BSAI:FrancisERichMember 2024-12-31 0001416090 BSAI:FrancisERichMember 2025-01-01 2025-09-30 0001416090 BSAI:PineValleyInvestmentsMember 2025-09-30 0001416090 BSAI:PineValleyInvestmentsMember 2024-12-31 0001416090 BSAI:PineValleyInvestmentsMember 2025-01-01 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:CluffRichPC401KMember 2022-06-29 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:CluffRichPC401KMember 2023-02-01 2023-02-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:CluffRichPC401KMember 2023-01-01 2023-12-31 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:CluffRichPC401KMember 2025-07-16 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:CluffRichPC401KMember 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:DigitalAssetMediumLLCMember 2025-01-09 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:DigitalAssetMediumLLCMember 2025-01-01 2025-01-09 0001416090 BSAI:DigitalAssetMediumLLCMember BSAI:UnsecuredShorttermPromissoryNoteMember 2025-01-01 2025-09-30 0001416090 BSAI:DigitalAssetMediumLLCMember BSAI:UnsecuredShorttermPromissoryNoteMember 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:DebraDambrosioMember 2023-01-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:DebraDambrosioMember 2023-01-31 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:DebraDambrosioMember 2023-02-01 2023-02-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:DebraDambrosioMember 2023-01-01 2023-12-31 0001416090 BSAI:DebraDambrosioMember BSAI:UnsecuredShorttermPromissoryNoteMember 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteOneMember BSAI:DebraDambrosioMember 2024-06-01 2024-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteOneMember BSAI:DebraDambrosioMember 2024-10-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteOneMember BSAI:DebraDambrosioMember 2024-10-01 2024-10-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteOneMember BSAI:DebraDambrosioMember 2024-01-01 2024-12-31 0001416090 BSAI:UnsecuredShorttermPromissoryNoteOneMember BSAI:DebraDambrosioMember 2025-08-05 0001416090 BSAI:UnsecuredShorttermPromissoryNoteOneMember BSAI:DebraDambrosioMember 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteTwoMember BSAI:DebraDambrosioMember 2024-10-01 2024-12-31 0001416090 BSAI:UnsecuredShorttermPromissoryNoteTwoMember BSAI:DebraDambrosioMember 2024-11-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteTwoMember BSAI:DebraDambrosioMember 2024-11-01 2024-11-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteTwoMember BSAI:DebraDambrosioMember 2025-01-01 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteTwoMember BSAI:DebraDambrosioMember 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteThreeMember BSAI:DebraDambrosioMember 2025-01-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteThreeMember BSAI:DebraDambrosioMember 2025-01-01 2025-01-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteThreeMember BSAI:DebraDambrosioMember 2025-09-01 0001416090 BSAI:UnsecuredShorttermPromissoryNoteThreeMember BSAI:DebraDambrosioMember 2025-09-30 0001416090 BSAI:DebraDambrosioMember 2025-09-24 2025-09-24 0001416090 BSAI:FrancisERichIRAMember BSAI:UnsecuredShorttermPromissoryNoteMember 2023-01-01 0001416090 BSAI:FrancisERichIRAMember BSAI:UnsecuredShorttermPromissoryNoteMember 2023-02-01 2023-02-01 0001416090 BSAI:FrancisERichIRAMember BSAI:UnsecuredShorttermPromissoryNoteMember 2025-09-30 0001416090 BSAI:PineValleyInvestmentsMember BSAI:UnsecuredShorttermPromissoryNoteMember 2023-01-01 0001416090 BSAI:PineValleyInvestmentsMember BSAI:UnsecuredShorttermPromissoryNoteMember 2023-02-01 2023-02-01 0001416090 BSAI:PineValleyInvestmentsMember BSAI:UnsecuredShorttermPromissoryNoteMember 2025-09-30 0001416090 BSAI:UnsecuredShorttermPromissoryNoteMember BSAI:WhitCluffMember 2024-03-28 0001416090 BSAI:WhitCluffMember BSAI:UnsecuredShorttermPromissoryNoteMember 2025-09-30 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCMember 2025-09-30 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCMember 2024-12-31 0001416090 us-gaap:ConvertibleNotesPayableMember 2025-09-30 0001416090 us-gaap:ConvertibleNotesPayableMember 2024-12-31 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCMember 2024-01-23 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCMember 2024-01-23 2024-01-23 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCMember 2024-01-01 2024-09-30 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCOneMember 2024-05-03 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCOneMember 2024-05-03 2024-05-03 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCOneMember 2024-01-01 2024-09-30 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCOneMember 2025-01-01 2025-09-30 0001416090 BSAI:ThousandEightHundredDiagonalLendingLLCOneMember 2025-09-30 0001416090 BSAI:LenderMember 2025-01-09 0001416090 BSAI:LenderMember 2025-01-09 2025-01-09 0001416090 2025-09-01 2025-09-30 0001416090 2025-08-31 0001416090 2025-08-01 2025-08-31 0001416090 2025-07-11 0001416090 2025-07-11 2025-07-11 0001416090 BSAI:DiagonalLendingLLCMember 2024-08-01 2024-08-02 0001416090 us-gaap:RestrictedStockMember 2025-04-01 2025-04-01 0001416090 us-gaap:RestrictedStockMember 2025-04-01 0001416090 us-gaap:RestrictedStockMember BSAI:FiveIndividualsMember 2025-06-10 2025-06-10 0001416090 us-gaap:RestrictedStockMember BSAI:FiveIndividualsMember 2025-06-10 0001416090 us-gaap:RestrictedStockMember 2025-06-10 2025-06-10 0001416090 us-gaap:RelatedPartyMember 2025-06-10 0001416090 us-gaap:RestrictedStockMember 2025-06-24 2025-06-24 0001416090 us-gaap:RestrictedStockMember 2025-06-24 0001416090 BSAI:ConsultingAgreementMember 2025-09-04 2025-09-04 0001416090 BSAI:ConsultingAgreementMember 2025-09-04 0001416090 BSAI:DebraDambrosioMember 2025-09-24 0001416090 BSAI:LenderMember 2025-01-01 2025-09-30 0001416090 BSAI:LenderMember 2025-09-30 0001416090 srt:ChiefExecutiveOfficerMember 2014-02-01 2014-02-28 0001416090 srt:ChiefExecutiveOfficerMember 2017-10-01 2017-10-31 0001416090 srt:ChiefExecutiveOfficerMember 2019-04-01 2019-04-01 0001416090 BSAI:NotesPayableMember 2025-01-01 2025-09-30 0001416090 us-gaap:RestrictedStockMember BSAI:TrentDAmbrosioMember 2025-06-10 2025-06-10 0001416090 us-gaap:RestrictedStockMember BSAI:TrentDAmbrosioMember 2025-06-10 0001416090 BSAI:TrentDAmbrosioMember 2025-06-10 0001416090 us-gaap:RestrictedStockMember BSAI:WhitCluffMember 2025-06-10 2025-06-10 0001416090 us-gaap:RestrictedStockMember BSAI:WhitCluffMember 2025-06-10 0001416090 BSAI:WhitCluffMember 2025-06-10 0001416090 us-gaap:RestrictedStockMember BSAI:PowerAssignmentAgreementMember 2025-07-11 2025-07-11 0001416090 us-gaap:RestrictedStockMember BSAI:PowerAssignmentAgreementMember 2025-07-11 0001416090 BSAI:MotherLodeMiningIncMember 2024-03-04 2024-03-04 0001416090 2023-09-22 2023-09-22 0001416090 us-gaap:SubsequentEventMember 2025-10-15 0001416090 us-gaap:SubsequentEventMember 2025-10-15 2025-10-15 0001416090 BSAI:ConsultingAgreementMember us-gaap:SubsequentEventMember 2025-10-31 2025-10-31 0001416090 us-gaap:SubsequentEventMember 2025-11-09 2025-11-09 0001416090 us-gaap:SubsequentEventMember 2025-12-15 2025-12-15 0001416090 BSAI:LenderMember us-gaap:SubsequentEventMember 2025-12-12 0001416090 us-gaap:SubsequentEventMember 2025-11-09 0001416090 BSAI:LenderMember us-gaap:SubsequentEventMember 2025-12-12 2025-12-12 0001416090 BSAI:ConsultingAgreementMember us-gaap:SubsequentEventMember 2025-12-15 2025-12-15 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure utr:acre

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-55219

BluSky AI Inc.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		35-2302128
(State of Other Jurisdictionof Incorporation or Organization)		(IRS EmployerIdentification Number)
(State of Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification Number)
5330 South 900 East, Suite 280Murray, Utah		84117
5330 South 900 East, Suite 280 Murray, Utah		84117
(Address of Principal Executive Offices)		(Zip Code)

801-~~312~~810-~~8113~~8790

(Registrant’s telephone number, including area code)

Copies to:

Brunson Chandler & Jones, PLLC

175 South Main Street, Suite 1410

Salt Lake City, Utah 84111

(801) 303-5721

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232,405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-3 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☒	Smaller reporting company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered to Section 12(b) of the Act: None.

As of ~~August~~February 194, ~~2025~~2026, there were 24,~~465~~992,~~205~~ 505 shares of the registrant’s common stock issued and outstanding.

BLUSKY AI INC.

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		F-1	~~F-1~~
Item 1.	Financial Statements	F-1	~~F-1~~
	Condensed Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024		F-1
	Condensed Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024	F-1
	Condensed Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)		F-2
	Condensed Statements of Operations for the Three and Nine months Ended September 30, 2025 and 2024 (Unaudited)	F-2
	Condensed Statements of Stockholders’ Deficit for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)		F-3
	Condensed Statements of Stockholders’ Deficit for the Three and Nine months Ended September 30, 2025 and 2024 (Unaudited)	F-3
	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited)		F-4
	Condensed Statements of Cash Flows for the Nine months Ended September 30, 2025 and 2024 (Unaudited)	F-4
	Notes to Condensed Consolidated Financial Statements (Unaudited)		F-5
	Notes to Condensed Financial Statements (Unaudited)	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7	7
Item 4.	Controls and Procedures	7	7
PART II – OTHER INFORMATION		8	8
Item 1.	Legal Proceedings	8	8
Item 1A.	Risk Factors	8	8
Item 2.	Unregistered Sales of Equity Securities and Use of Protocols	8	8
Item 3.	Defaults Upon Senior Securities	9	9
Item 4.	Mine Safety Disclosures	9	9
Item 5.	Other Information	9	9
Item 6.	Exhibits	10	10
Signature Page		11	11

2 ~~Table of Contents~~

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

~~Item~~BluSky AI, 1Inc. ~~Financial Statements~~

~~BluSky~~(FKA Inception AIMining, Inc.)

~~(FKA~~Condensed Balance ~~Inception Mining, Inc.)~~Sheets

Condensed Balance Sheets

	September 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	1,295,261		$	-
Prepaid expenses		12,765			-
Other current assets		73,750			-
Total Current Assets		1,381,776			-

Right of use operating lease asset – related party		273,963			-
Solar power asset		1,289,309			-
Other assets		40,531			531
Total Assets	$	2,985,579		$	531

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	1,802,420		$	1,745,787
Accrued interest - related parties		9,368			30,310
Operating lease liability – related party – current portion		73,057			-
Note payable		60,000			125,000
Notes payable - related parties		1,358,945			992,761
Convertible notes payable - net of discount		-			266,450
Derivative liabilities		-			186,542
Total Current Liabilities		3,303,790			3,346,850

Operating lease liability – related party, net of current portion		223,406			-
Total Liabilities		3,527,196			3,346,850

Commitments and Contingencies		-			-

Stockholders’ Deficit
Preferred stock, $0.00001 par value; 10,000,000 shares authorized, 51 shares issued and outstanding		1			1
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
Additional paid-in capital		33,336,259			26,517,017
Accumulated deficit		(33,878,127	)		(29,863,364	)
Total Stockholders’ Deficit		(541,617	)		(3,346,319	)
Total Liabilities and Stockholders’ Deficit	$	2,985,579		$	531

	June 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	889		$	-
Prepaid expenses and other current assets		31,382			-
Total Current Assets		32,271			-
Other assets		531			531
Total Assets	$	32,802		$	531
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	2,014,925		$	1,745,787
Accrued interest - related parties		57,960			30,310
Note payable		125,000			125,000
Notes payable - related parties		1,219,667			992,761
Convertible notes payable - net of discount		-			266,450
Derivative liabilities		-			186,542
Total Current Liabilities		3,417,552			3,346,850
Total Liabilities		3,417,552			3,346,850
Commitments and Contingencies		-			-
Stockholders’ Deficit
Preferred stock, $0.00001 par value; 10,000,000 shares authorized, 51 shares issued and outstanding		1			1
Common stock, $0.00001 par value; 10,300,000,000 shares authorized, 4,465,205 and 2,659,773 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		45			27
Additional paid-in capital		27,860,099			26,517,017
Accumulated deficit		(31,244,895	)		(29,863,364	)
Total Stockholders’ Deficit		(3,384,750	)		(3,346,319	)
Total Liabilities and Stockholders’ Deficit	$	32,802		$	531

See accompanying notes to the unaudited condensed financial statements.

~~See accompanying notes to the unaudited condensed financial statements.~~F-1

~~F-1~~ Table of Contents

BluSky AI, Inc.

(FKA Inception Mining, Inc.)

Condensed Statements of Operations

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
	For the Three Months Ended						For the Nine Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Operating Expenses
General and administrative	$	1504,~~541,189~~153		$	~~136~~109,~~438~~742		$	12,~~687~~191,~~294~~447		$	~~260~~369,~~175~~917
Depreciation and amortization		-			~~181~~182			-			~~362~~544
Total Operating Expenses		1504,~~541,189~~153			~~136~~109,~~619~~924			12,~~687~~191,~~294~~447			~~260~~370,~~537~~461
Loss from Operations		(1504,~~541,189~~153	)		(~~136~~109,~~619~~924	)		(12,~~687~~191,~~294~~447	)		(~~260~~370,~~537~~461	)
Other Income/(Expenses)
Other income (expense)		-			-			96			-
Change in derivative liability		-			65,294			186,542			49,036
Interest income		4,555			-			4,555			-
Initial derivative expense		-			(136,466	)		-			(193,582	)
Change in derivative liability		-			(139,472	)		186,542			(90,436	)
Gain on extinguishment of debt		-			-			152,131			-
Loss on extinguishment of debt		(2,101,978	)		(13,043	)		(1,949,847	)		(13,043	)
Interest expense		(15,731	)		(294,738	)		(33,006	)		(354,426	)
Initial derivative expense		-			-			-			(193,582	)
Total Other Income/(Expenses)		(15,731	)		(365,910	)		305,763			(498,972	)
Interest expense		(31,656	)		(17,507	)		(64,662	)		(371,933	)
Net Loss from Operations before Income Taxes		(1,556,920	)		(502,529	)		(1,381,531	)		(759,509	)
Total Other Income/(Expenses)		(2,129,079	)		(170,022	)		(1,823,316	)		(668,994	)
Net Loss from Operations before Income Taxes		(2,633,232	)		(279,946	)		(4,014,763	)		(1,039,455	)
Provision for Income Taxes		-			-			-			-
Net Loss	$	(12,~~556~~633,~~920~~232	)	$	(~~502~~279,~~529~~946	)	$	(14,~~381~~014,~~531~~763	)	$	(~~759~~1,~~509~~039,455	)
Net Loss per Share – Basic and Diluted	$	(0.50	)	$	(0.19	)	$	(0.48	)	$	(0.29	)
Deemed dividend – solar power asset		(8,510,691	)		-			(8,510,691	)		-
Weighted average number of shares outstanding during the period – Basic and Diluted		3,137,732			2,638,875			2,900,493			2,638,875
Net loss attributable to shareholders	$	(11,143,923	)	$	(279,946	)	$	(12,525,454	)	$	(1,039,455	)
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		23,098,931			2,652,259			9,707,293			2,643,369

See accompanying notes to the unaudited condensed financial statements.

F-2 ~~Table of Contents~~

~~BluSky~~Table ~~AI,~~of ~~Inc.~~Contents

~~(FKA Inception Mining~~BluSky AI, Inc.)

~~Condensed~~(FKA Inception ~~Statements~~Mining, ~~of Stockholders’ Deficit~~Inc.)

~~(Unaudited)~~Condensed Statements of Stockholders’ Deficit

	Preferred stock				Common stock				Additional					Total
	($0.00001 Par)				($0.00001 Par)				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficiency
Balance, December 31, 2024		51	$	1		2,638,773	$	27	$	26,517,017	$	(29,863,364	)	$	(3,346,319	)
Rounding shares issued with reverse split		-		-		5,432		-		-		-			-
Net income for the period		-		-		-		-		-		175,389			175,389
Balance, March 31, 2025		51		1		2,644,205		27		26,517,017		(29,687,975	)		(3,170,930	)
Shares issued for services		-		-		1,800,000		18		1,343,082		-			1,343,100
Net loss for the period		-		-		-		-		-		(1,556,920	)		(1,556,920	)
Balance, June 30, 2025		51	$	1		4,444,205	$	45	$	27,860,099	$	(31,244,895	)	$	(3,384,750	)

(Unaudited)

	Shares		Amount		Shares		Amount		Capital		Deficit			Deficiency
	Preferred stock				Common stock				Additional					Total
	($0.00001 Par)				($0.00001 Par)				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficiency
Balance, December 31, 2023		51	$	1		2,638,903	$	26	$	26,491,974	$	(28,913,582	)	$	(2,421,581	)
Balance, December 31, 2024		51	$	1		2,659,773	$	27	$	26,517,017	$	(29,863,364	)	$	(3,346,319	)
Net income for the period		-		-		-		-		-		(256,980	)		(256,980	)
Rounding shares issued with reverse split		-		-		5,432		-		-		-			-
Balance, March 31, 2024		51		1		2,638,903		26		26,491,974		(29,170,562	)		(2,678,561	)
Net income for the period		-		-		-		-		-		175,389			175,389
Net loss for the period		-		-		-		-		-		(502,529	)		(502,529	)
Balance, March 31, 2025		51		1		2,665,205		27		26,517,017		(29,687,975	)		(3,170,930	)
Balance, June 30, 2024		51	$	1		2,638,903	$	26	$	26,491,974	$	(29,673,091	)	$	(3,181,090	)
Shares issued for services		-		-		1,800,000		18		1,343,082		-			1,343,100
Net loss for the period		-		-		-		-		-		(1,556,920	)		(1,556,920	)
Balance, June 30, 2025		51		1		4,465,205		45		27,860,099		(31,244,895	)		(3,384,750	)
Shares issued for services		-		-		25,500		-		153,000		-			153,000
Shares issued for conversion of notes payable		-		-		444,750		4		3,904,526		-			3,904,530
Shares issued for conversion of accrued liabilities		-		-		22,415		1		129,525		-			129,526
Shares issued for solar power asset		-		-		20,000,000		200		1,289,109		-			1,289,309
Net loss for the period		-		-		-		-		-		(2,633,232	)		(2,633,232	)
Balance, September 30, 2025		51	$	1		24,957,870	$	250	$	33,336,259	$	(33,878,127	)	$	(541,617	)

See accompanying notes to the unaudited condensed financial statements.

	Preferred stock				Common stock				Additional					Total
	($0.00001 Par)				($0.00001 Par)				Paid-in		Accumulated			Stockholders’
	Shares		Amount			Shares	Amount		Capital		Deficit			Deficiency
Balance, December 31, 2023		51	$	1		2,638,903	$	26	$	26,491,974	$	(28,913,582	)	$	(2,421,581	)
Net income for the period		-		-		-		-		-		(256,980	)		(256,980	)
Balance, March 31, 2024		51		1		2,638,903		26		26,491,974		(29,170,562	)		(2,678,561	)
Net loss for the period		-		-		-		-		-		(502,529	)		(502,529	)
Balance, June 30, 2024		51		1		2,638,903		26		26,491,974		(29,673,091	)		(3,181,090	)
Balance		51		1		2,638,903		26		26,491,974		(29,673,091	)		(3,181,090	)
Shares issued with extinguishment of debt		-		-		20,870		1		25,043		-			25,044
Net loss for the period		-		-		-		-		-		(279,946	)		(279,946	)
Net Income (loss)		-		-		-		-		-		(279,946	)		(279,946	)
Balance, September 30, 2024		51	$	1		2,659,773	$	27	$	26,517,017	$	(29,953,037	)	$	(3,435,992	)
Balance		51	$	1		2,659,773	$	27	$	26,517,017	$	(29,953,037	)	$	(3,435,992	)

~~F-3~~See accompanying ~~Table~~notes ofto ~~Contents~~the unaudited condensed financial statements.

~~BluSky AI, Inc.~~F-3

~~(FKA~~Table ~~Inception~~of ~~Mining, Inc.)~~Contents

~~Condensed~~BluSky AI, ~~Statements of Cash Flows~~Inc.

(~~Unaudited~~FKA Inception Mining, Inc.)

	For the Six Months Ended
	June 30, 2025			June 30, 2024
Cash Flows From Operating Activities:
Net Loss	$	(1,381,531	)	$	(759,509	)
Adjustments to reconcile net loss to net cash used in operations
Depreciation and amortization expense		-			362
Common stock issued for services		1,343,100			-
(Gain) loss on extinguishment of debt		(338,673	)		-
Change in derivative liability		-			(49,036	)
Default penalty additions		-			88,890
Expenses paid in behalf of the company by related party		-			10,300
Amortization of right-of-use asset		-			7,002
Amortization of debt discount		-			219,961
Initial derivative expense		-			193,582
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(31,382	)		10,000
Accounts payable and accrued liabilities		279,818			214,091
Accounts payable and accrued liabilities - related parties		27,651			5,216
Net Cash Used In Operating Activities		(101,017	)		(59,141	)
Cash Flows From Investing Activities:
Net Cash Provided By (Used In) Investing Activities		-			-
Cash Flows From Financing Activities:
Repayment of notes payable-related parties		(8,500	)		(98,475	)
Repayment of convertible notes payable		-			(98,784	)
Proceeds from notes payable-related parties		110,406			106,400
Proceeds from convertible notes payable		-			150,000
Net Cash Provided by Continuing Financing Activities		101,906			59,141
Effects of exchange rate changes on cash		-			-
Net Change in Cash		889			-
Cash at Beginning of Period		-			2
Cash at End of Period	$	889		$	2
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	11,074
Cash paid for taxes	$	-		$	-
Supplemental disclosure of non-cash investing and financing activities:
Recognition of debt discounts on convertible note payable	$	-		$	179,800
Note payable issued to related party for settlement of convertible note payable	$	125,000		$	-

Condensed Statements of Cash Flows

~~See accompanying notes to the unaudited condensed financial statements.~~(Unaudited)

F-4 Table of Contents

	September 30, 2025			September 30, 2024
	For the Nine Months Ended
	September 30, 2025			September 30, 2024
Cash Flows From Operating Activities:
Net Loss	$	(4,014,763	)	$	(1,039,455	)
Adjustments to reconcile net loss to net cash used in operations
Depreciation and amortization expense		-			544
Common stock issued for services		1,496,100			-
Loss on extinguishment of debt		1,949,847			13,043
Change in derivative liability		(186,542	)		90,436
Default penalty additions		-			88,890
Expenses paid in behalf of the company by related party		-			10,300
Amortization of right-of-use asset		18,264			9,595
Amortization of debt discount		-			219,961
Initial derivative expense		-			193,582
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(12,764	)		10,000
Other assets		(113,750	)		-
Operating lease liability – related party		4,236			-
Accounts payable and accrued liabilities		123,221			333,600
Accounts payable and accrued liabilities - related parties		55,228			5,216
Net Cash Used In Operating Activities		(680,923	)		(64,288	)

Cash Flows From Investing Activities:
Net Cash Provided By Investing Activities		-			-

Cash Flows From Financing Activities:
Repayment of notes payable-related parties		(121,722	)		(98,475	)
Repayment of convertible notes payable		-			(98,784	)
Proceeds from notes payable-related parties		362,906			111,545
Proceeds from convertible notes payable		1,735,000			150,000
Net Cash Provided by Continuing Financing Activities		1,976,184			64,286
Net Change in Cash		1,295,261			(2	)
Cash at Beginning of Period		-			2
Cash at End of Period	$	1,295,261		$	-

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	11,074
Cash paid for taxes	$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:
Common stock issued for conversion of debt	$	4,034,056		$	25,043
Common stock issued for solar power asset	$	1,289,309		$	-
Recognition of debt discounts on convertible note payable	$	-		$	179,800
Origination of operating lease	$	292,227		$	-
Accounts payable issued for settlement of note payable	$	10,000		$	-
Note payable issued to related party for settlement of convertible note payable	$	125,000		$	-

~~BluSky~~See accompanying ~~AI,~~notes ~~Inc~~to the unaudited condensed financial statements.

~~(FKA Inception Mining, Inc.)~~F-4

~~Notes~~Table toof ~~Condensed Financial Statements (Unaudited)~~Contents

~~June 30~~BluSky AI, ~~2025~~Inc.

1.(FKA Inception ~~Nature~~Mining, ~~of Business~~Inc.)

~~BluSky~~Notes to ~~AI,~~Condensed ~~Inc.~~Financial ~~(formerly~~Statements ~~known as Inception Mining, Inc.~~(Unaudited) 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 31September 30, ~~2010, the Company decided to redirect its business focus toward precious metal mineral acquisition and exploration.~~2025

~~On March 5, 2010, the Company amended its articles of incorporation to (~~1~~) change its name to Silver America, Inc~~. Nature ~~and~~of (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.Business

OnBluSky AI, ~~June~~Inc. ~~23,~~(formerly ~~2010~~known as Inception Mining, Inc.) was incorporated under the ~~Company~~name ~~amended~~of ~~its~~Golf ~~articles~~Alliance Corporation and under the laws of the ~~incorporation~~State toof ~~change~~Nevada ~~its~~on ~~name~~July to2, ~~Gold~~2007. ~~American~~Inception Mining, ~~Corp~~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.

OnGolf Alliance ~~February~~Corporation ~~25,~~pursued ~~2013, Gold American Mining Corp. and~~ its ~~majority~~original ~~shareholder~~business ~~(the~~plan ~~“Majority~~to ~~Shareholder”),~~provide ~~and~~opportunities ~~its~~for ~~wholly~~golfers 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~~play ~~Inception~~on ~~purchased~~private ~~the~~golf ~~U.P.~~courses 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 normally 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~~them ~~acquisition~~due ~~of the gold mine pursuant~~ to the ~~terms~~membership requirements of the ~~Asset~~private ~~Purchase Agreement~~clubs. AsDuring ~~a result of such acquisition,~~ the ~~Company’s~~year ~~operations~~ended ~~were~~July ~~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~~31, ~~2020~~2010, the Company ~~sold~~decided ~~the Up & Burlington property and mineral rights~~ to ~~Ounces~~redirect its ~~High~~business ~~Exploration,~~focus ~~Inc.~~toward inprecious ~~exchange~~metal ~~for~~mineral ~~$250,000~~acquisition ~~in cash consideration~~ and ~~66,974,252 shares of common stock of Hawkstone Mining Limited, a publicly-trade Australian company~~exploration.

On March ~~May 17~~5, ~~2013~~2010, the Company amended its articles of incorporation to (1) change its name to ~~Inception~~Silver ~~Mining~~America, Inc. and (~~“Inception”~~2) orincrease 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 ~~October 2~~23, ~~2015~~2010, the Company ~~consummated~~amended 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~~articles ~~Compañía~~of ~~Minera~~incorporation ~~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 inits ~~control,~~name ~~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~~Gold ~~early~~American ~~Mayan~~Mining ~~and Spanish occupation~~Corp.

On February ~~January 12~~25, ~~2023~~2013, ~~Inception~~Gold American Mining Corp. and its majority shareholder (the “Majority Shareholder”), and its wholly owned subsidiary, Inception Development Inc. (the “~~Company~~Subsidiary”), entered into aan ~~non-binding~~Asset ~~Letter~~Purchase ofAgreement ~~Intent~~ (the “~~LOI~~Asset Purchase Agreement”) with ~~Mother~~Inception ~~Lode~~Resources, ~~Mining~~LLC, ~~Inc.~~a Utah corporation (“~~MLM~~Inception Resources”), pursuant to which Inception purchased the U.P. ~~The~~and ~~LOI~~Burlington ~~became~~Gold ~~binding~~Mine onin ~~January~~consideration 24of 16,000 ~~2023.~~shares ~~Pursuant~~of tocommon stock of Inception, the ~~terms~~assumption of promissory notes in the ~~LOI~~amount of $950,000 and the ~~Company~~assignment ~~agreed~~of toa ~~sell~~3% ~~all~~net ofroyalty. ~~the~~Inception ~~shares~~Resources ofwas ~~its~~an ~~wholly-~~entity owned ~~subsidiary,~~by ~~Compañía~~and ~~Minera~~under ~~Cerros~~the ~~Del~~control of ~~Sur,~~the Smajority shareholder.A. deThis Ctransaction was deemed an asset purchase by entities under common control.V. The Asset Purchase Agreement closed on February 25, 2013 (the “~~CMCS~~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 ~~MLM~~our acquisition of the gold mine pursuant to the terms of the Asset Purchase Agreement. ~~CMCS~~As isa result of such acquisition, the ~~Honduran-based~~Company’s ~~company~~operations ~~that~~were ~~owns~~then focused on the ~~Clavo~~ownership ~~Rico~~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.

~~F-5~~On May ~~Table~~17, 2013, the Company amended its articles of ~~Contents~~incorporation to change its name to Inception Mining, Inc. (“Inception” or the “Company”).

~~Since~~On October 2, 2015, the ~~divestiture~~Company ofconsummated ~~the~~a merger with Clavo Rico ~~Mine,~~Ltd. ~~the~~(“Clavo ~~Company~~Rico”). ~~has~~Clavo ~~been~~Rico ~~operating~~is as a ~~consultant~~privately held Turks and ~~advisor~~Caicos tocompany with principal operations in Honduras, Central America. Clavo Rico operates the Clavo Rico mining ~~industry~~concession through its subsidiaries Compañía Minera Cerros del Sur, ~~including~~S.A tode ~~Mother~~C.V. ~~Lode~~and ~~Mining~~Compañía Minera Clavo Rico, S.A. de C.V. and holds other mining concessions. Pursuant to the ~~new~~agreement, ~~owner~~the Company issued 240,226 shares of common stock of Inception and assumed promissory notes in the ~~Clavo~~amount ~~Rico~~of ~~mine~~$5,488,980 and accrued interest of $3,434,426. ItUnder ~~also~~this ~~has~~merger anagreement, ~~ongoing~~there ~~financial~~was ~~interest~~a change in ~~the~~control, and it was treated for accounting purposes as a reverse recapitalization with Clavo Rico, ~~Mine~~Ltd. ~~under~~being the ~~LOI,~~surviving ~~with~~entity. ~~monthly~~Its ~~payments~~workings include ~~due~~several ~~through~~historical ~~February~~underground ~~2025~~operations ~~that~~dating ~~are~~back ~~secured~~to bythe aearly ~~net~~Mayan ~~smelter~~and ~~royalty~~Spanish occupation.

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 AIF-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.5

~~The~~Table ~~new~~of 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.Contents

~~"Neocloud"~~On January ~~refers~~12, to2023, aInception ~~new~~Mining, ~~breed~~Inc. of(the ~~cloud~~“Company”) ~~providers~~entered ~~that~~into ~~specialize~~a ~~in offering high~~non-~~performance~~binding ~~computing,~~Letter ~~particularly~~of ~~GPU-as-a-Service~~Intent (~~GPUaaS~~the “LOI”) with Mother Lode Mining, ~~tailored~~Inc. ~~specifically~~(“MLM”). ~~for~~The ~~demanding~~LOI AIbecame ~~and~~binding ~~machine~~on ~~learning~~January ~~workloads~~24, 2023. ~~Neoclouds~~Pursuant ~~are~~to ~~specialist~~the ~~cloud~~terms ~~providers~~of ~~filling~~the aLOI, ~~crucial~~the Company ~~gap~~agreed into sell all of the ~~market~~shares byof ~~offering~~its ~~dedicated~~wholly-owned ~~and~~subsidiary, ~~optimized~~Compañía ~~infrastructure~~Minera ~~for~~Cerros Del Sur, S.A. de C.V. (“CMCS”), to MLM. CMCS is the ~~rapidly~~Honduran-based ~~expanding~~company ~~field~~that ofowns ~~artificial~~the ~~intelligence~~Clavo Rico mine.

2.Since the ~~Summary~~divestiture of ~~Significant~~the ~~Accounting~~Clavo ~~Policies~~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.

~~Going~~The Company ~~Concern~~underwent -a ~~The~~significant ~~accompanying~~transformation ~~financial~~and ~~statements~~rebranding ~~have~~in ~~been~~March ~~prepared~~2025 onto aalign ~~going~~with ~~concern~~its ~~basis,~~new ~~which~~strategic ~~contemplates~~direction ~~the~~and ~~realization~~name ofchange to ~~assets~~“BluSky ~~and~~AI ~~the~~Inc.”. ~~satisfaction~~This ofchange ~~liabilities~~reflects BluSky AI Inc.’s commitment to advancing technology and providing unparalleled services in the ~~normal~~data ~~course~~center ~~of business~~industry. AsThe ~~shown~~Company’s operations are primarily in ~~the~~AI-driven ~~accompanying~~data ~~financial~~center ~~statements~~solutions, ~~the~~combining innovation with regulatory compliance and sustainability. The Company ~~had~~is a ~~net~~modular ~~loss~~data ofcenter ~~$1,381,531~~provider ~~during~~focused ~~the~~on ~~six~~high-~~month~~performance ~~period~~computing ~~ended~~infrastructure, strategic ~~June~~site 30selection, ~~2025~~ and ~~had~~operational arisk ~~working~~management ~~capital~~and ~~deficit~~specializing ofin ~~$3,385,281~~artificial asintelligence of(AI) ~~June~~and ~~30,~~as ~~2025~~a Neocloud operator). “Neocloud” ~~These~~refers ~~along~~to ~~with~~a ~~other~~new ~~factors~~breed ~~indicate~~of cloud providers that ~~the~~specialize ~~Company~~in ~~has~~offering ~~substantial~~high-performance ~~doubt~~computing, ofparticularly GPU-as-a-Service ~~being~~(GPUaaS), ~~able~~tailored tospecifically ~~continue~~for asdemanding aAI ~~going~~and ~~concern~~machine ~~for~~learning aworkloads. ~~period~~The company is dedicated to delivering state-of-the-art ~~one~~infrastructure ~~year~~and ~~from~~solutions tailored to meet the ~~issuance~~demands of ~~these~~modern ~~financial~~AI ~~statements~~applications and computational workloads.

The new ~~Company’s~~business ~~existence~~model iscentered ~~dependent~~on ~~upon~~modular ~~management’s~~data ~~ability~~center todevelopment ~~develop~~and ~~profitable~~GPU-as-a-Service ~~operations~~(GPUaaS), ~~and~~marking toa ~~obtain~~strategic ~~additional~~pivot ~~funding~~toward ~~sources~~scalable, AI-optimized infrastructure. ~~There~~The ~~can~~Company bedesigns noand ~~assurance~~deploys ~~that~~modular ~~the~~data ~~Company’s~~centers ~~financing~~engineered ~~efforts~~for ~~will~~rapid ~~result~~deployment, inenergy ~~profitable~~efficiency, and ~~operations~~geographic orflexibility, ~~the~~enabling ~~resolution~~tailored ofsolutions ~~the~~for ~~Company’s~~high-performance ~~liquidity~~computing ~~problems~~environments. ~~The~~As ~~accompanying~~a ~~statements~~Neocloud dooperator, ~~not~~BluSky ~~include~~AI offers ~~any~~GPUaaS ~~adjustments~~to ~~that~~enterprise ~~might~~and ~~result~~institutional ~~should~~clients, ~~the~~delivering ~~Company~~dedicated, beon-demand ~~unable~~access to ~~continue~~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 ~~going~~next-generation ~~concern~~infrastructure provider for mission-critical AI applications.

~~Management~~“Neocloud” refers isto ~~currently~~a ~~working~~new tobreed ~~make~~of ~~changes~~cloud providers that ~~will~~specialize ~~result~~ in ~~profitable~~offering ~~operations~~high-performance computing, particularly GPU-as-a-Service (GPUaaS), tailored specifically for demanding AI and tomachine ~~obtain~~learning ~~additional~~workloads. ~~funding~~Neoclouds ~~sources~~are tospecialist ~~meet~~cloud providers filling a crucial gap in the ~~Company’s~~market ~~need~~by ~~for~~offering ~~cash~~dedicated ~~during~~and optimized infrastructure for the ~~next~~rapidly ~~twelve~~expanding ~~months~~field ~~and~~of ~~beyond~~artificial intelligence.

~~Basis~~2. Summary of ~~Presentation~~Significant -Accounting ~~The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.~~Policies

~~Condensed~~Going Concern ~~Financial Statements~~ - The ~~interim~~accompanying financial statements ~~included herein~~ have been prepared byon ~~BluSky~~a ~~AI,~~going ~~Inc.~~concern ~~(“BluSky” or the “Company”) without audit~~basis, ~~pursuant~~which tocontemplates the ~~rules~~realization ~~and regulations~~ of assets and the ~~Securities~~satisfaction ~~and~~of ~~Exchange~~liabilities ~~Commission~~in (the ~~“SEC”~~normal orcourse ~~the~~of ~~“Commission”)~~business. ~~Certain~~As ~~information~~shown ~~and~~in ~~footnote~~the ~~disclosures~~accompanying ~~normally included in~~ financial statements, ~~prepared~~the inCompany had ~~accordance~~a ~~with~~net ~~accounting~~loss ~~principles~~of ~~generally~~$4,014,763 ~~accepted~~during in the ~~United~~nine-month ~~States~~period ofended ~~America~~September ~~(“US~~30, ~~GAAP”)~~2025 ~~have~~and ~~been~~had ~~condensed~~a orworking ~~omitted~~capital ~~pursuant~~deficit toof ~~such~~$1,922,014 ~~rules~~as of ~~and~~September ~~regulations~~30, ~~although the Company believes that the disclosures are adequate to make the information presented not misleading~~2025. These ~~interim~~along ~~financial~~with ~~statements~~other ~~should~~factors beindicate ~~read~~that ~~in conjunction with~~ the ~~financial~~Company ~~statements~~has ~~and~~substantial ~~notes~~doubt ~~thereto~~of ~~included~~being inable ~~this~~to ~~filing~~continue ~~and~~as ~~the~~a going ~~Form~~concern ~~10-K~~ for ~~the~~a ~~year~~period ~~ended~~of ~~December~~one ~~31,~~year ~~2024~~from ~~filed with~~ the ~~SEC~~issuance onof ~~April~~these 1,financial ~~2025~~statements.

InThe Company’s ~~the~~existence ~~opinion~~is ofdependent upon management,’s ~~all~~ability ~~adjustments~~to ~~have~~develop ~~been~~profitable ~~made~~operations ~~consisting~~and ofto ~~normal~~obtain ~~recurring~~additional ~~adjustments~~funding sources. ~~necessary~~There tocan ~~present~~be ~~fairly~~no ~~the~~assurance ~~financial~~that ~~position of~~ the Company’s ~~and~~financing asefforts ofwill ~~June~~result ~~30,~~in ~~2025,~~profitable ~~the results of its statements of~~ operations ~~and~~or ~~comprehensive income (loss) for~~ the ~~three and six-month period ended June 30, 2025, its condensed statement~~ resolution of ~~stockholders’ deficit and its cash flows for~~ the ~~six-month~~Company’s ~~period~~liquidity ~~ended June 30, 2025~~problems. The ~~results~~accompanying ofstatements ~~operations~~do ~~for~~not ~~the~~include ~~interim~~any ~~periods~~adjustments ~~are~~that ~~not~~might ~~necessarily~~result ~~indicative~~should of the ~~results~~Company be ~~for~~unable ~~the~~to ~~full~~continue ~~year~~as a going concern.

~~F-6~~Management is ~~Table~~currently ofworking ~~Contents~~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~~ Basis of ~~Estimates~~Presentation –- InThe ~~preparing~~Company prepares its financial statements in ~~conformity~~accordance with ~~generally accepted~~ accounting principles, wegenerally ~~are~~accepted ~~required~~in ~~to make estimates and assumptions that affect~~ the United ~~reported~~States ~~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~~America. 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~~ F-The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At June 30, 2025 and December 31, 2024, the Company had $0 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.6

~~Fair~~Table ~~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.Contents

~~Fair~~Condensed Financial ~~value~~Statements ~~measurements~~-The dointerim ~~not~~financial ~~include~~statements ~~transaction~~included ~~costs~~herein have been prepared by BluSky AI, Inc. A(“BluSky” or ~~fair~~the ~~value~~“Company”) ~~hierarchy~~without isaudit, ~~used~~pursuant to ~~prioritize~~ the ~~quality~~rules and ~~reliability~~regulations of the ~~information~~Securities ~~used~~and toExchange ~~determine~~Commission ~~fair~~(the ~~values~~“SEC” or the “Commission”). ~~Categorization~~Certain ~~within~~information ~~the~~and ~~fair~~footnote ~~value~~disclosures ~~hierarchy~~normally isincluded ~~based~~in onfinancial statements prepared in accordance with accounting principles generally accepted in the ~~lowest~~United ~~level~~States of ~~input~~America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that isthe ~~significant~~disclosures are adequate to make the ~~fair~~information presented ~~value~~not ~~measurement~~misleading. ~~The~~These ~~fair~~interim ~~value~~financial ~~hierarchy~~statements isshould ~~defined~~be ~~into~~read in conjunction with the ~~following~~financial ~~three~~statements ~~categories:~~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.

~~Level~~In the 1:opinion ~~Quoted~~of ~~market~~management, ~~prices~~all inadjustments ~~active~~have ~~markets~~been ~~for~~made ~~identical~~consisting ~~assets~~of ornormal ~~liabilities.~~recurring ~~Level~~adjustments 2:necessary ~~Observable~~to ~~inputs~~present ~~other~~fairly ~~than~~the financial ~~Level~~position 1of ~~prices~~the ~~such~~Company and as ~~quoted~~of ~~prices~~September ~~for~~30, ~~similar~~2025, ~~assets~~the orresults ~~liabilities;~~of ~~quoted~~its ~~prices~~statements inof ~~markets~~operations ~~with~~and ~~insufficient~~comprehensive ~~volume or infrequent transactions~~ income (~~less active markets~~loss); orfor ~~model-derived~~the ~~valuations~~three inand ~~which~~nine-month ~~all~~period ~~significant~~ended ~~inputs~~September ~~are~~30, ~~observable~~2025, orits ~~can~~condensed bestatement ~~derived~~of ~~principally~~stockholders’ ~~from~~deficit orand ~~corroborated~~its bycash flows ~~observable market data~~ for ~~substantially~~ the ~~full~~nine-month ~~term~~period ofended ~~the~~September ~~assets~~30, ~~or liabilities~~2025. ~~Level~~The 3:results ~~Unobservable~~of ~~inputs~~operations tofor the ~~valuation~~interim ~~methodology~~periods ~~that~~ are ~~significant~~not tonecessarily ~~the measurement~~ indicative of ~~fair~~the ~~value~~results offor ~~assets~~the orfull ~~liabilities~~year.

ToUse of ~~the~~Estimates ~~extent~~– ~~that~~In ~~valuation~~preparing isfinancial ~~based~~statements onin ~~models~~conformity orwith ~~inputs~~generally ~~that~~accepted accounting principles, we are ~~less~~required to ~~observable~~make orestimates ~~unobservable~~and inassumptions ~~the~~that ~~market,~~affect the ~~determination~~reported amounts of ~~fair~~assets ~~value~~and ~~requires~~liabilities ~~more~~and ~~judgment.~~the Indisclosure ~~certain~~of ~~cases,~~contingent ~~the~~assets and ~~inputs~~liabilities ~~used~~at tothe ~~measure~~date ~~fair~~of ~~value~~the ~~may~~financial ~~fall~~statements ~~into~~and ~~different~~revenues ~~levels~~and ofexpenditures during the ~~fair~~reported ~~value hierarchy~~periods. InActual ~~such~~results ~~cases,~~could differ ~~for~~materially ~~disclosure~~from ~~purposes,~~those ~~the~~estimates. ~~level~~Estimates inmay ~~the~~include ~~fair~~those ~~value~~pertaining ~~hierarchy~~to ~~within~~valuation ~~which~~of the ~~fair~~estimated ~~value~~useful ~~measurement~~lives isand ~~disclosed~~valuation of properties, plant and isequipment, ~~determined~~deferred ~~based~~tax onassets, ~~the~~convertible ~~lowest~~preferred ~~level~~stock, ~~input~~derivative ~~that~~assets isand ~~significant~~liabilities, tostock-based compensation ~~the~~and ~~fair~~payments, ~~value~~and ~~measurement~~contingent liabilities.

Cash and Cash Equivalents -The ~~carrying~~Company ~~value~~considers all highly liquid temporary cash investments with an original maturity of ~~the~~three ~~Company’s~~months or less to be cash, ~~accounts~~equivalents. ~~payable~~At September 30, ~~short-term~~2025 ~~borrowings~~and ~~(including~~December ~~convertible~~31, ~~notes~~2024, ~~payable)~~the Company had $1,295,261 and ~~other~~$0 ~~current~~in ~~assets~~cash ~~and~~equivalents, ~~liabilities~~respectively. The ~~approximate~~aggregate ~~fair~~cash ~~value~~balance ~~because~~on ofdeposit ~~their~~in ~~short-term~~these ~~maturity~~accounts is insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has never experienced any losses in such accounts.

~~Notes~~Fair Value ~~Receivable~~ Measurements -The ~~Notes~~fair ~~receivable~~value ~~include~~of ~~amounts~~a ~~due~~financial toinstrument is the ~~Company~~amount ~~pursuant~~that could be received upon the sale of an asset or paid to ~~financial~~transfer ~~agreements~~a ~~stipulating~~liability ~~interest~~in ~~rates,~~an ~~payment~~orderly ~~terms~~transaction ~~and~~between ~~maturity~~market ~~dates~~participants at the measurement date. AsFinancial ofassets ~~June~~are ~~30,~~marked ~~2025~~to bid prices and ~~December~~financial ~~31,~~liabilities ~~2024,~~are ~~notes~~marked ~~receivable~~to ~~balance~~offer ~~includes~~prices. ~~one~~The ~~note~~fair ~~due~~value ~~from~~should ~~Mother~~be ~~Load~~calculated ~~Mining,~~based ~~Inc.~~on assumptions that market participants would use in pricing the ~~amounts~~asset ofor $2liability,~~219,442~~ ~~and~~not ~~$2,219,442,~~on ~~respectively~~assumptions specific to the entity. In addition, ~~net~~the offair ~~reserves~~value of ~~$2,219,442~~liabilities should ~~and~~include $2consideration of non-performance risk,~~219,442~~ ~~(see~~including ~~Note~~the 4party’s –own ~~Note~~credit ~~Receivable)~~risk.

~~F-7~~Fair value ~~Table~~measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of ~~Contents~~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:

~~Long-Lived~~Level ~~Assets~~1: -Quoted Wemarket ~~review~~prices ~~the~~in ~~carrying~~active ~~amount~~markets offor ~~our~~identical ~~long-lived~~ assets or liabilities. Level 2: Observable inputs other than Level 1 prices such as quoted prices for ~~impairment~~similar ~~whenever~~assets ~~there~~or ~~are~~liabilities; ~~negative~~quoted ~~indicators~~prices ofin ~~impairment.~~markets Anwith ~~asset~~insufficient isvolume ~~considered~~or ~~impaired~~infrequent ~~when~~transactions ~~estimated~~(less ~~future~~active ~~cash~~markets); ~~flows~~or model-derived valuations in which all significant inputs are ~~less~~observable ~~than~~or ~~the~~can ~~carrying~~be ~~amount~~derived ofprincipally ~~the~~from ~~asset.~~or Incorroborated ~~the~~by ~~event~~observable market data for substantially the ~~carrying~~full ~~amount~~term of ~~such~~the ~~asset~~assets isor ~~not~~liabilities. ~~considered~~Level ~~recoverable,~~3: ~~the~~Unobservable ~~asset~~inputs isto ~~adjusted~~the tovaluation ~~its~~methodology ~~fair~~that ~~value.~~are ~~Fair~~significant ~~value~~to isthe ~~generally~~measurement ~~determined~~of ~~based~~fair onvalue ~~discounted~~of ~~future~~assets ~~cash~~or ~~flows~~liabilities.

~~Properties,~~To the ~~Plant~~extent ~~and~~that ~~Equipment~~valuation -is Webased ~~record~~on ~~properties,~~models ~~plant~~or ~~and~~inputs ~~equipment~~that atare ~~historical~~less ~~cost.~~observable Weor ~~provide~~unobservable ~~depreciation~~in ~~and~~the ~~amortization~~market, inthe ~~amounts~~determination ~~sufficient~~of tofair value ~~match~~requires ~~the~~more ~~cost~~judgment. ofIn ~~depreciable~~certain ~~assets~~cases, the inputs used to ~~operations~~measure ~~over~~fair ~~their~~value ~~estimated~~may ~~service~~fall ~~lives~~into ordifferent ~~productive~~levels of the fair value hierarchy. WeIn ~~capitalize~~such ~~expenditures~~cases, for ~~improvements~~disclosure ~~that~~purposes, ~~significantly~~the ~~extend~~level in the ~~useful~~fair ~~life~~value ofhierarchy anwithin ~~asset.~~which Wethe ~~charge~~fair ~~expenditures~~value ~~for~~measurement ~~maintenance~~is disclosed and ~~repairs~~is todetermined ~~operations~~based ~~when~~on ~~incurred.~~the ~~Depreciation~~lowest islevel ~~computed~~input ~~using~~that ~~the~~is ~~straight-line~~significant ~~method~~to ~~over~~the ~~estimated~~fair ~~useful~~value ~~lives as follows:~~measurement.

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

F-7

~~Stock~~Table ~~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.~~Contents

~~Stock-Based~~The carrying ~~Compensation~~value -of ~~For~~the ~~stock-based~~Company’s ~~transactions~~cash, ~~compensation~~accounts ~~expense~~payable, isshort-term ~~recognized~~borrowings ~~over~~(including ~~the~~convertible ~~requisite~~notes ~~service period~~payable), ~~which~~and isother current ~~generally~~assets ~~the~~and ~~vesting~~liabilities ~~period,~~approximate ~~based on the estimated~~ fair value onbecause ~~the grant date~~ of ~~the~~their ~~award~~short-term maturity.

~~Income (Loss) per Common Share~~ Notes Receivable -~~Basic~~ ~~net~~Notes ~~income~~receivable ~~(loss)~~include ~~per~~amounts ~~common~~due ~~share~~to isthe ~~computed~~Company bypursuant ~~dividing~~to ~~net~~financial ~~income~~agreements ~~(loss),~~stipulating ~~less~~interest ~~the preferred stock dividends~~rates, payment byterms ~~the~~and ~~weighted~~maturity ~~average~~dates. ~~number~~As of ~~common~~September ~~shares~~30, ~~outstanding.~~2025 ~~Dilutive~~and ~~income~~December ~~(loss)~~31, ~~per~~2024, ~~share~~notes receivable balance includes ~~any~~one ~~additional~~note ~~dilution~~due from Mother ~~common~~Load ~~stock equivalents~~Mining, ~~such~~Inc. asin ~~stock~~the ~~options~~amounts ~~and~~of ~~warrants~~$2,219,442 and ~~convertible instruments~~$2,219,442, ~~if the impact is not antidilutive. 0 and 393~~respectively,~~169~~ ~~common~~net ~~share~~of ~~equivalents~~reserves ~~have~~of ~~been excluded from the diluted loss per share calculation for the six-month periods ended June 30~~$2,219,442 ~~2025~~ and ~~2024~~$2, ~~respectively~~219,442 ~~because~~(see Note it4 ~~would~~– beNote ~~anti-dilutive~~Receivable).

~~Derivative~~Long-Lived Assets ~~Liabilities~~ - ~~Derivative~~We ~~liabilities~~review ~~are~~the ~~recorded~~carrying atamount ~~fair~~of ~~value~~our ~~when~~long-lived ~~issued~~assets ~~and~~for ~~the~~impairment ~~subsequent~~whenever ~~change~~there inare ~~fair~~negative ~~value~~indicators ~~each~~of ~~period~~impairment. An asset is ~~recorded~~considered inimpaired ~~other~~when ~~income~~estimated ~~(expense)~~future incash flows are less than the ~~statements~~carrying amount of ~~operations~~the asset. WeIn dothe event the carrying amount of such asset is not ~~hold~~considered orrecoverable, ~~issue~~the ~~any~~asset ~~derivative~~is ~~financial~~adjusted ~~instruments~~to ~~for~~its ~~speculative~~fair ~~trading~~value. ~~purposes~~Fair value is generally determined based on discounted future cash flows.

~~Income~~Properties ~~Taxes~~and Equipment -~~The~~ ~~Company’s~~We ~~income~~record ~~tax~~properties ~~expense~~ and ~~deferred~~equipment ~~tax~~at ~~assets~~historical cost. We provide depreciation and ~~liabilities~~amortization ~~reflect~~in ~~management’s~~amounts sufficient ~~best~~to ~~assessment~~match the cost of depreciable assets to operations over their estimated ~~future~~service ~~taxes~~lives toor beproductive ~~paid~~value. ~~Significant~~We ~~judgments~~capitalize expenditures for improvements that significantly extend the useful life of an asset. We charge expenditures for maintenance and ~~estimates~~repairs to ~~are~~operations ~~required~~when inincurred. ~~determining~~Depreciation is computed using the ~~income~~straight-line ~~tax~~method ~~expense.~~over estimated useful lives as follows:

~~Deferred~~ Schedule ~~income taxes arise from temporary differences between the tax and financial statement recognition~~ of ~~revenue~~Property and ~~expense.~~Equipment InUseful 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.Lives

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.

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

~~Business~~Stock Issued ~~Segments~~for –Goods ~~The~~and ~~Company~~Services ~~operates~~- inCommon ~~one~~and ~~segment~~preferred shares issued for goods and ~~therefore~~services ~~segment~~are ~~information~~valued isbased ~~not~~upon ~~presented~~the fair market value of our common stock or the goods and services received.

FStock-8Based Compensation ~~Table~~- 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 ~~Contents~~the award.

~~Operating~~Income (Loss) ~~Lease~~per –Common ~~The~~Share ~~Company~~-Basic ~~leases~~net ~~its~~income ~~corporate~~(loss) ~~headquarters~~per ~~and~~common ~~administrative~~share ~~offices~~is incomputed ~~Salt~~by ~~Lake~~dividing ~~City~~net income (loss), ~~Utah~~less the preferred stock dividends, by the weighted average number of common shares outstanding. ~~This~~Dilutive ~~lease~~income ~~expired~~(loss) inper ~~August~~share ~~2024~~includes any additional dilution from common stock equivalents, such as stock options and warrants, and convertible instruments, if the impact is ~~now~~not aantidilutive. ~~month~~0 and 1,027,273 common share equivalents have been excluded from the diluted loss per share calculation for the nine-~~to-~~month ~~lease~~periods ended September 30, 2025 and 2024, respectively, because it would be anti-dilutive.

~~The~~Derivative Liabilities ~~Company~~- ~~made~~Derivative ~~cash~~liabilities ~~payments~~are ofrecorded ~~$3,144~~at ~~and~~fair ~~$8,225~~value ~~for~~when ~~the~~issued ~~six~~and ~~months~~the ~~ended~~subsequent ~~June~~change ~~30,~~in ~~2025~~fair ~~and~~value ~~2024,~~each ~~respectively.~~period ~~The~~is recorded ~~Company~~in ~~incurred~~other ~~rent~~income (expense) in the statements of ~~$9,459~~operations. ~~and~~We ~~$7,400~~do ~~for~~not ~~the~~hold ~~six~~or ~~months~~issue ~~ended~~any ~~June~~derivative ~~30,~~financial ~~2025~~instruments ~~and~~for speculative ~~2024,~~trading ~~respectively~~purposes.

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.F-8

3.Table ~~Derivative~~of ~~Financial Instruments~~Contents

~~The~~Income Taxes -The Company’s ~~adopted~~income ~~the~~tax ~~provisions~~expense ofand ~~ASC~~deferred ~~subtopic~~tax ~~825-10,~~assets ~~Financial~~and ~~Instruments~~liabilities ~~(“ASC~~reflect ~~825-10”)~~management’s onbest ~~January~~assessment 1,of ~~2008.~~estimated ~~ASC~~future taxes ~~825-10~~to ~~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~~Significant ~~determining~~judgments ~~the fair value measurements for assets~~ and ~~liabilities~~estimates are required ~~or permitted to be recorded at fair value, the Company considers the principal or most advantageous market~~ in ~~which~~determining ~~it would transact and considers assumptions that market participants would use when pricing~~ the ~~asset~~income ortax ~~liability, such as inherent risk, transfer restrictions, and risk of non-performance~~expense. ~~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~~Deferred income ~~following~~taxes ~~table~~arise ~~provides~~from atemporary ~~summary~~differences ofbetween ~~changes~~the intax ~~fair~~and ~~value~~financial statement recognition of revenue and expense. In evaluating the Company’s ~~Level~~ability 3to ~~financial~~recover its deferred tax assets, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, asprojected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, the Company develops assumptions including the amount of ~~June~~future 30state and federal pretax operating income, ~~2025:~~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.

	Debt Derivative Liabilities
Balance, December 31, 2024	$	186,542
Settlement of derivative liabilities		(186,542	)
Balance, June 30, 2025	$	-

~~Derivative~~Business Segments ~~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~~operates ~~identified~~in ~~the~~one ~~embedded~~segment 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 totherefore ~~fair~~segment ~~value~~information asis ofnot ~~each subsequent reporting date~~presented.

~~Based~~Operating Lease ~~upon~~– ~~ASC~~In ~~840-15-25~~accordance ~~(EITF~~with ~~Issue~~ASC ~~00-19~~842, the ~~paragraph~~Company ~~11)~~determines whether or not a contract contains a lease based on whether or not it provides the Company ~~has~~with ~~adopted~~the use of a ~~sequencing~~specifically identified ~~approach~~asset ~~regarding~~for ~~the~~a ~~application~~period of ~~ASC~~time, ~~815-40~~as well as both the right to ~~its~~direct ~~outstanding~~the ~~convertible~~use ~~notes.~~of ~~Pursuant~~that toasset and receive the ~~sequencing~~significant ~~approach,~~economic benefits of the asset. The Company ~~evaluates~~elected ~~its~~the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts ~~based~~contain ~~upon~~embedded ~~earliest~~leases, ~~issuance~~2) ~~date~~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.

4Recently 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. ~~Note~~If ~~Receivable~~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.

~~On January 12, 2023, Inception Mining, Inc. (the “Company”) entered into a non~~F-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.9

~~F-9~~ Table of Contents

~~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,. Derivative ~~2023~~Financial 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.Instruments

InThe Company ~~addition~~adopted to the ~~amounts~~provisions ~~already delivered under the LOI, an additional amount~~ of ~~$2,700,000~~ASC ~~shall~~subtopic ~~be paid by MLM to the Company over a period of twenty~~825-~~four~~10, ~~(24)~~Financial ~~months~~Instruments (~~the~~ “~~Monthly~~ASC ~~Payments~~825-10”). ~~The~~on ~~Monthly~~January ~~Payments shall be paid as follows: (i) $25,000 due March~~ 1, ~~2023,~~2008. ~~(ii)~~ASC 825-10 ~~$50,000~~defines ~~due~~fair onvalue ~~the~~as ~~first day of each of April, May and June 2023, and (iii) $100,000 due on~~ the ~~first~~price ~~day~~that ofwould ~~each~~be ~~month~~received ~~for~~from ~~the~~selling ~~following~~an ~~twenty~~asset ~~months,~~or ~~until~~paid ~~February~~to 1,transfer ~~2025~~a atliability ~~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~~orderly ~~balance~~transaction between ofmarket ~~$2,219,442~~participants asat ofthe ~~March~~measurement ~~31, 2025~~date. ~~MLM~~When ~~paid~~determining anthe ~~additional~~fair ~~$80,000~~value inmeasurements ~~initial~~for ~~payments~~assets ~~than~~and ~~the~~liabilities ~~agreement~~required or ~~called~~permitted ~~for.~~to ~~Based~~be onrecorded ~~this~~at ~~additional~~fair ~~funds~~value, ~~MLM~~the ~~has~~Company ~~paid~~considers ~~less than~~ the ~~scheduled~~principal ~~payments~~or tomost ~~make~~advantageous upmarket ~~the~~in ~~cash~~which ~~outflow~~it towould ~~them. Outstanding balances~~ transact and ~~missed~~considers ~~Monthly~~assumptions ~~Payments~~that ~~will~~market beparticipants ~~secured~~would byuse awhen ~~10%~~pricing ~~NSR on~~ the ~~Clavo~~asset ~~Rico~~or ~~mine~~liability, ~~production~~such ~~until~~as ~~the~~inherent ~~Monthly~~risk, ~~Payments~~transfer ~~are delivered~~ restrictions, and ~~the~~risk ~~purchase~~of ~~price is paid in full~~non-performance. InASC ~~addition~~825-10 toestablishes ~~the Monthly Payments, the Company will receive~~ a ~~carried~~fair ~~forward~~value ~~net~~hierarchy ~~profits~~that ~~interest~~requires ~~royalty~~an ~~(“NPI”)~~entity ofto 5%maximize on the ~~Clavo~~use ~~Rico~~of ~~mine~~observable inputs ~~production~~and ~~until~~minimize the ~~total~~use ~~NPI~~of ~~paid~~unobservable toinputs ~~the~~when ~~Company~~measuring isfair ~~$1,000,000, subject to limited conditions~~value.

The following table ~~summarizes~~provides ~~the~~a ~~note~~summary ~~receivable~~of changes in fair value of the Company’s asLevel of3 ~~June~~financial ~~30,~~liabilities ~~2025~~as ~~and~~of ~~December~~September 3130, ~~2024~~ 2025:

	June 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.	$	2,219,442		$	2,219,442
Less: Payments received		-			-
Total Note Receivable outstanding		2,219,442			2,219,442
Less: Allowance for Doubtful Note Receivable		(2,219,442	)		(2,219,442	)
Total Note Receivable	$	-		$	-

5. Accounts Payable and Accrued Liabilities

	Debt Derivative Liabilities
Balance, December 31, 2024	$	186,542
Settlement of derivative liabilities		(186,542	)
Balance, September 30, 2025	$	-

~~Accounts~~Derivative Liabilities ~~payable~~–The ~~and~~Company ~~accrued~~issued ~~liabilities~~convertible promissory notes which are convertible into common stock, at ~~June~~holders’ 30option, at ~~2025~~a ~~and~~discount ~~December~~to ~~31,~~the ~~2024~~market ~~consisted~~price of the ~~following:~~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.

	June 30, 2025		December 31, 2024
Accounts Payable	$	643,418	$	518,930
Accrued Liabilities		1,236,788		1,226,857
Accrued Salaries and Benefits		134,719		-
Total Accrued Liabilities	$	2,014,925	$	1,745,787

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.

64. ~~Notes~~ Note ~~Payable~~Receivable

~~Notes~~On January ~~payable~~12, ~~were~~2023, ~~comprised~~Inception Mining, Inc. (the “Company”) entered into a non-binding Letter of Intent (the ~~following~~“LOI”) with asMother Lode Mining, Inc. (“MLM”). The LOI became binding on January 24, 2023 when the final installment of ~~June~~initial 30payment set forth under the LOI was received by the Company. Pursuant to the terms of the LOI, ~~2025~~the ~~and~~Company ~~December~~agreed 31to sell all of the shares of its wholly-owned subsidiary, ~~2024:~~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.

Notes Payable	June 30, 2025			December 31, 2024
Phil Zobrist	$	60,000		$	60,000
Antczak Polich Law LLC		65,000			65,000
Total Notes Payable		125,000			125,000
Less Short-Term Notes Payable		(125,000	)		(125,000	)
Total Long-Term Notes Payable	$	-		$	-

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.

F-10 ~~Table of Contents~~

~~Phil~~Table ~~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 June 30, 2025, the gross balance of the note was $60,000 and accrued interest was $134,719.Contents

~~Antczak~~In addition ~~Polich~~to ~~Law,~~the ~~LLC~~amounts –already Ondelivered ~~March~~under 21the LOI, ~~2023~~an additional amount of $2,700,000 shall be paid by MLM to the Company ~~issued~~over a anperiod ~~unsecured~~of ~~Promissory~~twenty-four ~~Note~~(24) months (the “~~Note~~Monthly Payments”). toThe ~~Antczak~~Monthly ~~Polich~~Payments ~~Law~~shall be paid as follows: (i) $25,000 due ~~LLC~~March 1, 2023, (~~“Antczak”~~ii) $50,000 indue on the ~~principal~~first ~~amount~~day of each of April, May and June 2023, and (iii) $75100,000 ~~(the~~due ~~“Note”)~~on ~~and~~the ~~does~~first ~~not~~day ~~accrue~~of each ~~interest.~~month ~~This~~for ~~note~~the isfollowing ~~due~~twenty onmonths, ~~December~~until 31February 1, ~~2023~~2025 at which point all amounts due and ~~requires~~payable ~~monthly~~hereunder shall be delivered in a final balloon payment. The Company has received several payments leaving an outstanding balance of $102,219,442 as of March 31, 2025. MLM paid an additional $80,000 ~~starting~~in ~~July~~initial ~~2023~~payments ~~with~~than ~~any~~the ~~remaining~~agreement ~~balance~~called for. Based on the additional funds, MLM has paid inless ~~full~~than the scheduled payments to make up the cash outflow to them. Outstanding balances and missed Monthly Payments will be secured by ~~December~~a ~~31,~~10% NSR ~~2023~~on the Clavo Rico mine production until the Monthly Payments are delivered and the purchase price is paid in full. AsIn ofaddition ~~June~~to the ~~30,~~Monthly ~~2025~~Payments, the ~~gross~~Company ~~balance~~will receive a carried forward net profits interest royalty (“NPI”) of 5% on the ~~note~~Clavo Rico ~~was~~mine production until the total NPI paid to the Company is $651,000,000, subject to limited conditions.

7.The following ~~Notes~~table ~~Payable~~summarizes –the ~~Related~~note ~~Parties~~receivable of the Company as of September 30, 2025 and December 31, 2024:

~~Notes~~ Schedule ~~payable – related parties were comprised~~ of ~~the~~Note ~~following as of June 30, 2025 and December 31, 2024:~~Receivable

Notes Payable - Related Parties	Relationship		June 30, 2025				December 31, 2024
	September 30, 2025				December 31, 2024
Cluff-Rich PC 401K	Affiliate - Controlled by Director		$	51,000			$	51,000
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.	$	2,219,442			$	2,219,442
Whit Cluff	Director			15,327				15,327
Less: Payments received		-				-
Digital Asset Medium, LLC	Affiliate - Controlled by Director			227,500				-
Total Note Receivable outstanding		2,219,442				2,219,442
Debra D’ambrosio	Immediate Family Member			530,840				531,434
Less: Allowance for Doubtful Note Receivable		(2,219,442	)			(2,219,442	)
Francis E. Rich	Immediate Family Member			100,000				100,000
Total Note Receivable	$	-			$	-
Pine Valley Investments	Affiliate - Controlled by Director			295,000				295,000
Total Notes Payable - Related Parties				1,219,667				992,761
Less Short-Term Notes Payable - Related Parties				(1,219,667	)			(992,761	)
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% Solar Power 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 nine months ended September 30, 2023, the Company made a payment of $9,000 towards the principal balance. As of June 30, 2025, the gross balance of the notes was $51,000.Asset

On July 7, 2025, BluSky AI Inc., entered into an Acquisition and Power Assignment Agreement with Digital Asset Medium, LLC (~~Affiliate~~“DAM”), a –Wyoming ~~Director)~~limited ~~– On~~liability ~~January~~company, 9whose managing member, ~~2025~~Trent D'Ambrosio, is also the Company ~~formalized~~’s anCEO. ~~unsecured~~DAM ~~Short-Term~~assigned ~~Promissory~~to ~~Notes~~the Company its exclusive right to ~~Digital~~utilize ~~Asset~~solar ~~Medium,~~and ~~LLC~~grid-interconnected power at a data center project located in ~~principal~~the ~~amounts~~Milford ~~totaling~~area ~~$227~~of Beaver County,~~500~~ Utah. (In exchange for the ~~“Note”),~~assignment ~~which~~of ~~bears~~the aPower ~~15.00%~~Commitment ~~interest~~in ~~rate~~the ~~and~~Acquisition ~~matures~~Agreement, onthe ~~January~~Company 31issued 20,000,000 ~~2026~~shares of its restricted common stock to DAM. ~~This~~The ~~lender~~solar power ~~directly~~asset ~~paid~~was valued at $~~125~~1,~~000~~289,309. toThis ~~settle~~asset will not be placed into service until the ~~notes~~Milford ~~held~~project byhas ~~1800~~been ~~Diagonal~~built ~~Lending,~~and ~~LLC~~is ~~(see~~beginning to ~~Note~~use 9)power. AsOnce ofthis ~~June~~milestone ~~30,~~has ~~2025~~been achieved, the ~~gross~~Company ~~balance~~will begin amortizing the value of this asset over the ~~note~~remaining ~~was~~life of ~~$227~~the agreement. Currently,~~500~~ ~~and~~there ~~accrued~~is ~~interest~~no ~~was~~amortization ~~$16,081~~expense or cash flows related to this asset.

D6. ~~D’Ambrosio (Immediate Family Member of Director) –~~ OnAccounts Payable ~~January 1, 2023, there were six notes outstanding with outstanding balance of the Notes of $446,210~~ and ~~accrued~~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 June 30, 2025, the gross balance of the note was $422,618 and accrued interest was $11,906.Liabilities

~~F-11~~Accounts payable ~~Table~~and accrued liabilities at September 30, 2025 and December 31, 2024 consisted of ~~Contents~~the following:

D. Schedule ~~D’Ambrosio (Immediate Family Member~~ of ~~Director)~~Accounts ~~–During~~Payable 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~~Accrued on October 31, 2025. During the nine months ended September 30, 2024, the Company made payments of $4,430 towards the principal balance. As of June 30, 2025, the gross balance of the note was $45,965 and accrued interest was $22,983.Liabilities

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 June 30, 2025, the gross balance of the note was $61,851 and accrued interest was $6,225.

	September 30, 2025		December 31, 2024
Accounts Payable	$	351,835	$	518,930
Deferred Salaries Payable		1,311,788		1,226,857
Accrued Interest Payable		138,797		-
Total Accrued Liabilities	$	1,802,420	$	1,745,787

D7. ~~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. As of June 30, 2025, the gross balance of the note was $406 and accrued interest was $0. Payable

~~Francis~~Notes payable ~~E. Rich –On January 1, 2023, there~~ were ~~two~~comprised ~~notes outstanding with outstanding balance~~ of the ~~Notes~~following 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.~~September ~~As of June~~ 30, 2025, ~~the~~and ~~gross~~December ~~balance of the notes was $100~~31,~~000.~~ 2024:

~~Pine~~ Schedule ~~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 June 30, 2025, the gross balance of the notes was $295,000.Payable

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 June 30, 2025, the gross balance of the note was $15,327 and accrued interest was $766.

Notes Payable	September 30, 2025			December 31, 2024
Phil Zobrist	$	60,000		$	60,000
Antczak Polich Law LLC		-			65,000
Total Notes Payable		60,000			125,000
Less Short-Term Notes Payable		(60,000	)		(125,000	)
Total Long-Term Notes Payable	$	-		$	-

~~Typically~~Phil Zobrist – On January 11, ~~any~~2013, ~~gains~~the orCompany ~~losses~~issued onan unsecured Promissory Note to Phil Zobrist in the ~~extinguishment~~principal amount of ~~debts~~$60,000 (the ~~are~~“Note”) ~~reported~~due on demand and bearing 0% per annum interest. The total net proceeds the ~~statement~~Company ofreceived ~~operations~~was $60,000. ~~However~~On October 2, ~~since~~2015, ~~all~~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 ~~the~~these ~~debts~~Notes in the amount of $29,412 and charged this ~~section~~amount to ~~are~~interest ~~related~~expense ~~parties,~~during the ~~gains~~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 ~~losses~~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 ~~debts~~debt ~~have~~of ~~been~~$121,337 ~~recorded~~for asthe ~~additional~~remaining derivative ~~paid-in~~liability ~~capital~~and ~~instead~~of $11,842 for the remaining debt discount. As of ~~gains~~September or30, ~~losses~~2025, the gross balance of the note was $60,000 and accrued interest was $137,441.

~~8. Convertible Notes Payable~~F-11

~~Convertible~~Table ~~notes payable were comprised~~ of ~~the following as of June 30, 2025 and December 31, 2024:~~Contents

Convertible Notes Payable	June 30, 2025		December 31, 2024
1800 Diagonal Lending	$	-	$	266,451
Total Convertible Notes Payable		-		266,451
Less Unamortized Discount		-		-
Total Convertible Notes Payable, Net of Unamortized Debt Discount		-		266,451
Less Short-Term Convertible Notes Payable		-		(266,451	)
Total Long-Term Convertible Notes Payable, Net of Unamortized Debt Discount	$	-	$	-

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.

~~F-12~~8. Notes ~~Table~~Payable of– ~~Contents~~Related Parties

~~1800~~Notes payable ~~Diagonal Lending LLC~~– Onrelated ~~January~~parties ~~23,~~were ~~2024,~~comprised ~~the Company issued an unsecured Convertible Promissory Note (“Note”) to 1800 Diagonal Lending, LLC (“1800”), in the principal amount~~ of ~~$63,250 (~~the ~~“Note”)~~following ~~due~~as ~~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~~December ~~second note with the lender noted below and paid the note in full. As of June 30~~31, ~~2025, the gross balance of the note was $0 and accrued interest was $0.~~2024:

~~1800~~ Schedule ~~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~~Related ~~(the~~Parties ~~“Note”)~~Notes 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 June 30, 2025, the gross balance of the note was $0 and accrued interest was $0.Payable

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.

Notes Payable - Related Parties	Relationship	September 30, 2025			December 31, 2024
Cluff-Rich PC 401K	Affiliate - Controlled by Director	$	46,000		$	51,000
Whit Cluff	Director		15,327			15,327
Digital Asset Medium, LLC	Affiliate - Controlled by Director		480,000			-
Debra D’ambrosio	Immediate Family Member		422,618			531,434
Francis E. Rich	Immediate Family Member		100,000			100,000
Pine Valley Investments	Affiliate - Controlled by Director		295,000			295,000
Total Notes Payable - Related Parties			1,358,945			992,761
Less Short-Term Notes Payable - Related Parties			(1,358,945	)		(992,761	)
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. ~~Stockholders’~~On ~~Deficit~~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.

~~Common~~Digital Asset ~~Stock~~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.

~~The~~D. D’Ambrosio ~~Company~~(Immediate isFamily ~~authorized~~Member toof ~~issue~~Director) 10– On January 1,~~300~~ 2023,~~000,000~~ ~~shares~~there ofwere ~~common~~six ~~stock~~notes outstanding with aoutstanding balance ~~par~~of ~~value~~the Notes of $0446,210 and accrued interest of $81,204.~~00001~~ ~~per~~During ~~share~~January 2023, the Company issued an unsecured Short-Term Promissory Notes to D. AsD’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 ~~June~~March 301, 2025 and ~~December~~is 31non-interest bearing. The Company issued 23,201 ~~2024~~shares of common stock on February 1, ~~there~~2023 ~~were~~as 4settlement for the accrued interest of $81,~~465~~204. During the year ended December 31,~~205~~ ~~and~~2023, 2the Company made a payment of $30,~~659~~000 towards the principal balance. As of September 30,~~773~~ ~~shares~~2025, the gross balance of ~~common~~the ~~stock~~note was ~~issued~~$422,618 and ~~outstanding,~~accrued ~~respectively~~interest was $0.

~~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~~F-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.12

OnTable ~~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.~~Contents

D. D’Ambrosio (Immediate Family Member of Director) –During June through September, 2024, the Company received funds in the amount of $50,395. On ~~April~~October 1, ~~2025~~2024, the Company ~~issued~~formalized ~~200~~an unsecured Short-Term Promissory Notes to D. D’Ambrosio in principal amounts totaling $50,~~000~~395 ~~restricted~~(the ~~shares~~“Note”), ofwhich ~~Common~~bears ~~Stock~~a to5.00% aninterest ~~individual~~rate ~~for~~and ~~services~~matures ~~rendered~~on atOctober 31, 2025. During the ~~market~~year ~~price~~ended December 31, 2024, the Company made payments of $04,430 towards the principal balance.51 ~~per~~On ~~share~~August ~~for~~5, a2025, ~~total~~the ~~value~~Company paid-off the balance of this note of $~~102~~45,~~000~~965. As of September 30, 2025, the gross balance of the note was $0 and accrued interest was $0.

OnD. D’Ambrosio ~~June~~(Immediate 10Family Member of Director) –During October through December, ~~2025~~2024, the Company ~~issued~~received funds in the amount of $62,851. On November 1,~~100~~ 2024,~~000~~ ~~restricted~~the ~~shares~~Company offormalized ~~Common~~an ~~Stock~~unsecured Short-Term Promissory Notes to ~~five~~D. ~~individuals~~D’Ambrosio ~~for~~in principal ~~services~~amounts ~~rendered~~totaling at$62,851 (the ~~market~~“Note”), ~~price~~which ofbears $0a 15.~~401~~00% ~~per~~interest ~~share~~rate ~~for~~and amatures ~~total~~on ~~value~~November ~~of $441~~30,~~100~~ 2025. OfDuring the nine months ended September 30 2025, the 1Company paid $62,~~100,000~~851 ~~restricted~~towards ~~shares~~the balance of ~~Common~~this ~~Stock~~note. ~~issued~~As ~~900~~of September 30,~~000~~ ~~shares~~2025, ~~were~~the ~~issued~~gross balance toof ~~related~~the ~~parties~~note was $0 and accrued interest was $0.

D. D’Ambrosio (Immediate Family Member of Director) –On ~~June~~January 241, 2025, the Company ~~issued~~formalized ~~500~~an unsecured Short-Term Promissory Notes to D. D’Ambrosio in principal amounts totaling $406 (the “Note”),~~000~~ ~~restricted~~which ~~shares~~bears ofa ~~Common~~15.00% ~~Stock~~interest torate and anmatures ~~individual~~on ~~for~~December ~~services~~31, ~~rendered~~2025. atOn September 1, 2025, the ~~market~~Company ~~price~~paid-off the balance of this note of $1406.60 ~~per~~As ~~share~~of ~~for~~September a30, ~~total~~2025, the ~~value~~gross balance of the note was $~~800,000~~0 and accrued interest was $0.

~~F-13~~On September ~~Table~~24, 2025, the Company issued 9,408 shares of ~~Contents~~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.

10Francis E. ~~Related~~Rich ~~Party~~–On ~~Transactions~~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.

~~Consulting~~Pine Valley ~~Agreement~~Investments, LLC –On InJanuary ~~February~~1, ~~2014~~2023, ~~the~~there ~~Company~~were ~~entered~~three ~~into~~Notes aoutstanding ~~consulting agreement~~ with ~~stockholder/director~~outstanding ~~Trent~~balance ~~D’Ambrosio.~~of ~~The~~the ~~Company~~Notes ~~agreed~~of ~~to pay~~ $18295,000 and ~~per~~accrued ~~month~~interest ~~for~~of ~~twelve months~~$115,250. ~~This~~On ~~agreement~~February ~~was~~1, ~~renegotiated~~2023, inthe ~~October~~Company ~~2017~~re-negotiated ~~and~~these ~~the~~notes ~~Company~~into ~~agreed~~one tonote ~~pay~~with ~~the~~a ~~stockholder/director~~maturity ~~$25,000~~date ~~per~~of ~~month~~March 1, ~~starting~~2025 inand ~~October~~is ~~2017~~non-interest bearing. ~~This~~The ~~agreement~~Company ~~was~~issued ~~superseded~~32,929 byshares anof ~~Employment~~common ~~Agreement~~stock as ofsettlement ~~April~~for 1,the ~~2019~~outstanding ~~(see~~accrued ~~Employment~~interest of ~~Agreements below)~~$115,250. As of ~~June~~September 30, 2025, ~~there~~the isgross ~~$1,236,788~~balance inof ~~deferred~~the ~~salaries~~notes inwas ~~accounts payable and accrued liabilities~~$295,000.

~~Mr.~~Whit Cluff (Affiliate – Director) – On March 28, 2024, the Company issued an unsecured Short-Term Promissory Note to Cluff-Rich PC ~~currently~~401K ~~serves~~in asthe aprincipal ~~director~~amount of $15,327 (the ~~Company~~“Note”) ~~and~~due ~~has~~on aApril ~~separate~~30, ~~agreement~~2025 asand bears a ~~consultant~~5.0% interest rate. As of ~~the~~September 30, ~~Company~~2025, ~~effective~~the asgross balance of ~~October~~the 2note was $15,327 ~~2015~~and accrued interest was $766.

~~Employment Agreements – The Company has an employment agreement with its chief executive officer, Trent D’Ambrosio~~9. Convertible ~~The~~Notes ~~employment agreement was effective as of April 1, 2019 and provides for compensation of $300,000 annually.~~Payable

~~Notes~~Convertible notes ~~Payable –The Company took one short-term note~~ payable ~~from~~were ~~Debra~~comprised ~~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 ~~six~~following ~~months~~as ~~ended~~of ~~June~~September 30, 2025. ~~The~~and ~~Company~~December ~~received $110~~31,~~406~~ in cash from related parties, made payments of $8,500 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).2024:

~~Accounts~~ Schedule ~~Payable –Two officers/directors~~ of ~~the~~Convertible ~~Company~~Notes 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 June 30, 2025, there is $321,829 in accounts payable and accrued liabilities.Payable

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.

Convertible Notes Payable	September 30, 2025		December 31, 2024
1800 Diagonal Lending	$	-	$	266,450
Total Convertible Notes Payable		-		266,450
Less Unamortized Discount		-		-
Total Convertible Notes Payable, Net of Unamortized Debt Discount		-		266,450
Less Short-Term Convertible Notes Payable		-		(266,450	)
Total Long-Term Convertible Notes Payable, Net of Unamortized Debt Discount	$	-	$	-

~~On June 10, 2025, the Company issued 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 $40,100.~~F-13

~~Common~~Table ~~Stock Issued for Services - 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.~~Contents

1800 Diagonal Lending LLC– On ~~June~~January 1023, ~~2025~~2024, the Company issued ~~300~~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 ~~restricted~~(less ~~shares~~an original issue discount (“OID”) of ~~Common~~$13,250). ~~Stock~~The toNote ~~Lance~~is ~~D’Ambrosio~~convertible ~~for~~into ~~services~~common ~~rendered~~stock, at holder’s option, at a 25% discount of the ~~market~~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 $023,613 towards the principal balance of $21,083 and $2,530 in accrued interest.~~401~~ ~~per~~For ~~share~~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 aprincipal ~~total~~of $21,083 ~~value~~and interest of $~~120~~2,~~300~~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 ~~June~~May 103, ~~2025~~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 ~~restricted~~(less ~~shares~~an original issue discount (“OID”) of ~~Common~~$16,550). ~~Stock~~The toNote ~~Whit~~is ~~Cluff~~convertible ~~for~~into ~~services~~common ~~rendered~~stock, at holder’s option, at a 35% discount of the ~~market~~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 $0116,550 of debt discount to current period operations as interest expense.~~401~~ ~~per~~On ~~share~~June 4, 2024, the Company was notified by the lender that the note was in default. The Company recognized default penalties for aprincipal ~~total~~of ~~value~~$58,275 and interest of $406,~~100~~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.

11On 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. ~~Commitments~~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 ~~Contingencies~~interest and $186,542 in change in derivative liability.

~~Litigation~~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.

~~The Company at times is subject to other legal proceedings that arise in the ordinary course of business~~10. ~~The~~Operating ~~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.~~Leases

~~March~~The ~~4, 2024, the~~ Company ~~filed~~leases aits ~~complaint~~corporate ~~against~~headquarters ~~Mother Lode Mining, Inc., a Canadian company,~~ and ~~Robert~~administrative ~~Salna~~offices ~~(the~~in ~~“Defendants”),~~Salt ~~alleging~~Lake ~~an amount of not less than $2~~City,~~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~~Utah.A. deThis ~~C.V.~~lease expired in ~~2023~~August ~~(the~~2024 ~~“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~~is ~~enrichment~~now ~~against the Defendants, and seeks~~ a ~~monetary~~month-to-month ~~judgment~~lease and anthus ~~award~~is ofexempt ~~attorneys’ fees and other expenses. The complaint arises~~ from ~~the~~operating ~~Defendants’~~lease ~~failure~~accounting tounder ~~convey~~ASC ~~agreed-upon consideration to the Company as contracted for the sale of CMCS~~842. The Company ~~was~~made ~~able~~cash topayments ~~effect service~~ of ~~process on Mother Lode Mining~~$3,269 ~~Inc. through Alternative Service~~ and ~~litigation~~$9,595 ~~has~~for ~~proceeded~~the ~~since~~nine ~~that~~months ~~time.~~ended OnSeptember ~~May 2~~30, 2025, ~~Mother~~and ~~Lode Mining filed a Motion to Dismiss For Failure to State a Claim against the Company~~2024, ~~and the Company disputes the premise of their argument~~respectively. ~~The Company intends to continue to pursue the lawsuit aggressively.~~

InOn July 11, 2025, the ~~opinion~~Company ofentered ~~management~~into a Ground Lease with an Option to Purchase (the “Lease”) with Wild Mustang Ventures LLC, asa ofWyoming ~~June~~limited 30liability company (the “Landlord”), ~~2025~~through which the Company leased 51.6 acres in Milford, Utah (the ~~amount~~“Milford ofLand”) ~~ultimate~~for ~~liability~~a ~~with~~two-year ~~respect~~term. toWild ~~such~~Mustang ~~matters~~Ventures, ifLLC ~~any~~is deemed an affiliate of the Company. The base rent is $90,000 ~~may~~annually, bewhich ~~likely~~shall accrue until the earlier of the expiration of the lease or until the Company exercises its option to ~~have~~purchase athe ~~material~~Milford ~~impact~~Land. Payments on the lease are being deferred until the Company’s ~~business,~~is ~~financial~~in a better cash flow position, ~~results~~so ofno ~~operations~~lease orpayments have ~~liquidity~~been made. ~~However,~~The asLease ~~the~~contains ~~outcome~~standard ofother ~~litigation~~provisions and ~~other~~includes ~~claims~~a ismutual indemnification ~~difficult~~clause towhich ~~predict~~requires ~~significant~~that ~~changes~~the parties indemnify each other except in the ~~estimated~~case ~~exposures~~of ~~could~~gross ~~exist~~negligence or willful misconduct.

OnThe supplemental ~~September~~balance ~~22,~~sheet ~~2023,~~information ~~the~~related ~~Company~~to ~~entered~~the ~~into~~operating alease ~~consulting~~for ~~agreement with William McCluskey. This agreement requires~~ the ~~Company~~periods ~~to pay $200,000 in consulting fees to William McCluskey before March 31, 2025. This amount~~ is ~~currently~~as ~~reported in accounts payable and accrued liabilities at June 30, 2025.~~follows:

~~F-14~~ Schedule ~~Table~~ of ~~Contents~~Balance Sheet Operating Lease

12. Subsequent Events

	September 30, 2025		December 31, 2024
Operating leases
Long-term right-of-use assets	$	273,963	$	-

Short-term operating lease liabilities	$	73,057	$	-
Long-term operating lease liabilities		223,406		-
Total operating lease liabilities	$	296,463	$	-

~~Management~~Maturities of ~~has evaluated subsequent events, in accordance with FASB ASC Topic 855, “Subsequent Events,” through~~ the ~~date~~Company’s ~~which~~undiscounted ~~the~~operating ~~financial~~lease ~~statements~~liabilities ~~were available to be issued and there~~ are ~~no material subsequent events, except~~ as ~~noted below.~~follows:

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 Schedule of ~~Beaver~~Operating ~~County,~~Lease ~~Utah.~~Liabilities ~~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.~~Maturities

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. 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. 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.

Year Ending	Operating Leases
2025	$	45,000
2026		90,000
2027		90,000
2028		90,000
2029		45,000
Total lease payments		360,000
Less: Imputed interest/present value discount		(63,537	)
Present value of lease liabilities	$	296,463

~~On July 28, 2025, the~~ The Company ~~signed~~incurred arent ~~letter~~expense of ~~intent~~$36,785 and to$10,633 for ~~purchase~~the ~~land~~nine inmonths ~~Camp~~ended ~~Verdi~~September 30, ~~Arizona~~2025 ~~for~~and $32024,~~100,000~~ respectively.

~~On July 28, 2025, the Company signed a letter of intent to sign a 15 year ground lease on a property in Delta, Utah~~11. Stockholders’ ~~Lessee will pay $5,000 per month upon entering into a final agreement for the duration of the Lease.~~ Deficit

~~Power availability may be reserved by the Lessee by making a non-refundable power purchase agreement (“PPA”) deposit of $300,000 per MW (“Reserved Power”).~~Common Stock

~~F-15~~The Company ~~Table~~is authorized to issue 10,300,000,000 shares of ~~Contents~~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.

~~ITEM~~The Company 2.enacted ~~MANAGEMENT~~a reverse stock split of the Company’Ss ~~DISCUSSION~~issued ~~AND~~and ~~ANALYSIS~~outstanding OFshares ~~FINANCIAL~~of ~~CONDITION~~common ~~AND~~stock, ~~RESULTS~~par OFvalue ~~OPERATIONS~~$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.

~~Forward~~On August ~~Looking~~2, ~~Statements~~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.

~~The statements contained in the following MD&A and elsewhere throughout this Quarterly Report on Form 10~~F-Q, including any documents incorporated by reference, that are not historical facts, including statements about our beliefs and expectations, are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar words or expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.14

~~These~~Table ~~forward-looking statements, which reflect our management’s beliefs, objectives, and expectations as~~ of the date hereof, are based on the best judgement of our management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: economic, social and political conditions, global economic downturns resulting from extraordinary events such as the COVID-19 pandemic and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in our filings with the SEC, including our most recent filings on Forms 10-K and 10-Q.Contents

WeOn April ~~caution that the foregoing list of factors is not exclusive~~1, ~~and new factors may emerge~~2025, ~~or changes to~~ the ~~foregoing~~Company ~~factors~~issued ~~may occur~~200,000 ~~that~~restricted ~~could~~shares ~~impact~~of ~~our~~Common ~~business.~~Stock ~~We undertake no obligation~~ to ~~publicly~~an ~~update~~individual orfor ~~revise~~services ~~these~~rendered ~~statements,~~at ~~whether~~the asmarket ~~a result~~ price of ~~new~~$0.51 ~~information,~~per ~~future~~share ~~events~~for ora ~~otherwise,~~total ~~except~~value toof ~~the extent required by the federal securities laws~~$102,000.

~~This~~On June ~~discussion~~10, ~~should~~2025, bethe ~~read~~Company inissued ~~conjunction~~1,100,000 ~~with~~restricted ~~our~~shares ~~financial~~of ~~statements~~Common onStock ~~our~~to ~~2024~~five ~~Form~~individuals ~~10-K,~~for ~~and~~services ~~our~~rendered ~~financial~~at ~~statements~~the ~~and~~market price ~~the~~of ~~notes~~$0.401 ~~thereto~~per ~~contained~~share ~~elsewhere~~for ina ~~this~~total ~~Quarterly~~value ~~Report~~of on$441,100. ~~Form~~With ~~10-Q~~600,000 shares issued to related parties.

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

~~The~~On July ~~interim~~7, ~~consolidated~~2025, ~~financial~~BluSky ~~statements~~AI ~~included~~Inc., ~~herein~~entered ~~have~~into ~~been~~an ~~prepared~~Acquisition byand ~~BluSky~~Power AIAssignment ~~Inc.~~Agreement ~~(“BluSky~~with ~~AI”~~Digital orAsset ~~the~~Medium, LLC (“~~Company~~DAM”), a ~~without~~Wyoming ~~audit~~limited liability company, ~~pursuant~~whose tomanaging ~~the~~member, ~~rules~~Trent ~~and~~D'Ambrosio, ~~regulations~~is ofalso the ~~Securities~~Company’s ~~and~~CEO ~~Exchange Commission~~ (~~the~~see ~~“Commission”~~Note 5). ~~Certain~~In ~~information~~exchange for ~~and~~the ~~footnote~~assignment ~~disclosure~~of ~~normally~~the ~~included~~Power Commitment in ~~consolidated~~the ~~financial~~Acquisition ~~statements~~Agreement, ~~prepared~~the inCompany ~~accordance~~issued ~~with~~20,000,000 shares ~~accounting~~of ~~principles~~its ~~generally~~restricted ~~accepted~~common instock ~~the~~to ~~United~~DAM. ~~States~~The ofCompany ~~America~~used a ~~(“US~~large ~~GAAP”)~~block ~~have~~stock ~~been~~valuation ~~condensed~~model orto ~~omitted~~value ~~pursuant~~this tostock ~~such~~issuance, ~~rules~~which ~~and~~resulted ~~regulations,~~in ~~although~~a ~~the~~valuation ~~Company~~of ~~believes~~$9,800,000. The ~~that~~solar ~~the~~power ~~disclosures~~asset, ~~are~~which ~~adequate~~was toreviewed ~~make~~by ~~the~~a ~~information~~valuation ~~presented~~specialist, ~~not~~was ~~misleading~~valued at $1,289,309. The ~~These~~difference ~~interim~~of ~~consolidated~~$8,510,691 has ~~financial~~been ~~statements~~treated ~~should~~as a deemed dividend by the Company. Normally, this dividend would be ~~read~~recorded in ~~conjunction~~retained ~~with~~earnings. However, the ~~financial~~Company ~~statements~~has ~~and~~a ~~notes~~negative ~~thereto~~retained ~~included~~earnings inbalance, ~~this~~so ~~filing~~the difference was recorded against additional paid-in capital.

In August ~~the opinion of management, all adjustments have been made consisting of normal recurring adjustments~~ and ~~consolidating~~September ~~entries~~2025, ~~necessary to present fairly~~ the ~~consolidated financial position of the~~ Company ~~and~~issued ~~subsidiaries as of June 30~~433,750 shares ~~2025, the results~~ of ~~its~~common ~~consolidated~~stock ~~statements~~at of$4.00 per ~~operations and comprehensive loss for the three and six month periods ended June 30, 2025 and 2024, and its consolidated cash flows for the six-month periods ended June 30, 2025 and 2024~~share. ~~The~~See ~~results~~note of8 ~~consolidated operations~~ for ~~the~~more ~~interim periods are not necessarily indicative of the results for the full year~~details.

~~The~~On September ~~preparation~~4, of2025, ~~consolidated~~the ~~financial~~Company ~~statements~~issued in25,500 ~~conformity~~shares ~~with~~of UScommon ~~GAAP~~stock ~~requires management~~ to ~~make~~five ~~estimates~~consultants ~~and~~per ~~assumptions~~consulting ~~that~~agreements. ~~affect~~These ~~certain~~shares ~~reported~~were valued ~~amounts~~at ~~and disclosures~~$6.00 ~~Accordingly,~~per ~~actual~~share ~~results~~and ~~could~~the ~~differ~~Company ~~from~~recognized ~~those~~consulting ~~estimates~~fees of $153,000.

3On September ~~Table~~24, 2025, the Company issued 9,408 shares of ~~Contents~~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.

~~Overview~~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 ~~Plan~~accounts payable of ~~Operation~~$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.

~~Overview~~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.

~~BluSky AI Inc~~12., Related isParty a pioneering company 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 Provider. 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 operates with a focus on innovation, scalability, and environmental sustainability.Transactions

~~Previously~~Consulting Agreement ~~known~~– asIn ~~Inception~~February ~~Mining Inc.~~2014, the ~~company~~Company ~~underwent~~entered into a ~~significant~~consulting ~~transformation~~agreement ~~and~~with ~~rebranding~~stockholder/director inTrent ~~March~~D’Ambrosio. The ~~2025~~Company agreed to ~~align~~pay ~~with~~$18,000 ~~its~~per ~~new~~month ~~strategic~~for ~~direction~~twelve months. This ~~change~~agreement ~~reflects~~was ~~BluSky~~renegotiated AIin ~~Inc.’s~~October ~~commitment~~2017 and the Company agreed to ~~advancing~~pay ~~technology~~the ~~and~~stockholder/director ~~providing~~$25,000 ~~unparalleled~~per ~~services~~month starting in ~~the~~October ~~data~~2017. ~~center~~This ~~industry~~agreement was superseded by an Employment Agreement as of April 1, 2019 (see Employment Agreements below). ~~The~~As ~~Company~~of September 30, 2025, there is ~~headquartered~~$1,311,788 in ~~Salt~~deferred ~~Lake~~salaries ~~City,~~in ~~Utah,~~accounts payable ~~BluSky~~and AIaccrued ~~Inc~~liabilities.

~~Historically,~~Mr. Cluff wecurrently ~~have~~serves ~~operated within the mining industry, serving~~ as a ~~consultant~~director toof ~~mining~~the ~~companies~~Company and ashas ~~an operator of~~ a ~~mine~~separate ~~engaged~~agreement inas ~~the~~a ~~production~~consultant of ~~precious metals. On January 12, 2023,~~ the Company ~~entered~~effective ~~into~~as anof ~~agreement through which the Company divested its ownership interest in the Clavo Rico mine~~October 2, ~~resulting in the transfer of operations to Mother Lode Mining and full control of the Clavo Rico mine asset~~2015.

~~Current~~Employment Agreements ~~Operations~~– 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.

~~BluSky AI Operations~~F-15

~~Since~~Table March 1, 2025, the Company has focused 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 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 modular design that leverages 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 the data center market.Contents

~~BluSky~~Notes Payable AI–The isCompany ~~revolutionizing~~took ~~the~~one ~~artificial~~short-term ~~intelligence~~note ~~compute~~payable ~~landscape~~from byDebra ~~addressing~~D’Ambrosio, ~~the~~an immediate ~~global~~family ~~supply~~member ~~shortage~~related ~~with~~party and aone ~~cutting~~short-~~edge,~~term ~~turnkey~~note ~~solution.~~payable ~~Our~~from ~~strategy~~Digital ~~centers~~Asset ~~on rapidly deployable~~Medium, ~~plug-and-play~~LLC, ~~modular~~an ~~compute~~affiliate ~~centers~~of ona ~~powered~~direct ~~land~~during ~~assets—sites~~the ~~that~~nine ~~already~~months ~~possess~~ended ~~permitted~~September ~~energy~~30, ~~infrastructure~~2025. The ~~This~~Company ~~approach~~received ~~not~~$362,906 ~~only~~in ~~accelerates~~cash ~~time~~from torelated ~~market~~parties, ~~but~~made ~~also~~payments ~~itends~~of to$121,722 ~~positions~~in ~~BluSky~~cash AIto asrelated aparties ~~premier~~and AI$125,000 ~~compute~~was ~~infrastructure~~paid directly ~~provider~~to ~~dedicated~~another lender to ~~meeting~~settle ~~the~~their ~~surging~~outstanding ~~demand~~notes ~~for~~(See ~~advanced~~Notes AI8 ~~services~~and 9 for more details).

4Accounts Payable ~~Table~~–Two officers/directors of ~~Contents~~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.

~~Results~~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 ~~Operations~~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.

~~Three~~On June ~~months~~10, ~~ended~~2025, ~~June~~the 30Company issued 500,000 ~~2025~~restricted ~~compared~~shares of Common Stock to Trent D’Ambrosio for services rendered at the ~~three~~market price ~~months~~of ~~ended~~$0.401 ~~June~~per ~~30,~~share ~~2024~~for a total value of $200,500.

~~We had a net loss of $1,556,920 for the three-month period ended~~ On June 3010, 2025, ~~and a net loss of $502,529 for~~ the ~~three-month~~Company ~~period~~issued ~~ended June 30~~100,000 ~~2024.~~restricted ~~This~~shares ~~change in our results over the two periods is primarily the result~~ of anCommon ~~increase~~Stock into ~~consulting~~Whit ~~expense,~~Cluff ~~the~~for ~~change~~services inrendered ~~the~~at ~~derivative liabilities,~~ the ~~increase~~market ~~in the loss on extinguishment~~ price of ~~debt~~$0.401 ~~and~~per ~~offset~~share byfor a ~~decrease~~total invalue ~~interest expense. The following table summarizes key items~~ of ~~comparison and their related increase (decrease) for the three-month periods ended June 30~~$40, ~~2025 and 2024:~~100.

	Three Months Ended						Increase/
	June 30, 2025			June 30, 2024			(Decrease)
General and Administrative	$	1,541,189		$	136,438		$	1,404,751
Depreciation and Amortization Expenses		-			181			(181	)
Total Operating Expenses		1,541,189			136,619			1,404,570
Loss from Operations		(1,541,189	)		(136,619	)		(1,404,570	)
Change in Derivative Liabilities		-			65,294			65,294
Initial Derivative Expense		-			(136,466	)		136,466
Interest Expense		(15,731	)		(294,738	)		279,007
Loss from Operations Before Taxes		(1,556,920	)		(502,529	)		(1,054,391	)
Provision for Income Taxes		-			-			-
Net Loss	$	(1,556,920	)	$	(502,529	)	$	(1,054,391	)

13. Commitments and Contingencies

~~General~~On July 11, 2025, BluSky AI Inc, (the “Company”) entered into an Acquisition and ~~administrative~~Power ~~expenses~~Assignment ~~increased~~Agreement ~~for~~(the “Acquisition Agreement”) with Digital Asset Management, LLC (“DAM”), a Wyoming limited liability company, through which DAM assigned to the ~~three~~Company its exclusive right to utilize of solar and grid-~~month~~interconnected ~~period~~power (the ~~ended~~“Power ~~June~~Commitment”), 30for the operational life of Buyer’s data center project located in the Milford area of Beaver County, ~~2025~~Utah ~~because~~(the “Project”). The term of anthe ~~increase~~Acquisition Agreement is the length of the Project. In exchange for the assignment of the Power Commitment in ~~consulting~~the Acquisition Agreement, ~~legal~~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 ~~investor~~conditions ~~relations~~for ~~expenses~~use, ~~compared~~a tosystem impact study and an “energy services agreement” from the ~~three-month~~local ~~period~~provider. ~~ended~~The ~~June~~final 30valuation can’t be established at this time since there isn’t a final measurement date. Since this is an entity under common control, ~~2024~~the power rights will be recorded at its historical value.

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.Litigation

~~Interest~~The Company ~~expense~~at ~~decreased~~times ~~for~~is ~~the~~subject ~~three-month~~to ~~period~~other ~~ended~~legal ~~June~~proceedings ~~30,~~that ~~2025~~arise ~~because~~in the ~~interest~~ordinary ~~expense~~course ~~related~~of business. The following is a summary of pending or threatened lawsuits that could reasonably be expected to ~~settled~~have ~~notes~~a ~~was~~material ~~lower~~effect ~~and~~on the ~~decrease~~results of ~~amortization~~operations of ~~existing~~the ~~debt discounts~~Company.

~~Six~~March 4, ~~months~~2024, ~~ended~~the ~~June~~Company 30filed a complaint against Mother Lode Mining, ~~2025~~Inc., ~~compared~~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 ~~Six~~Defendants, ~~months~~and ~~ended~~seeks ~~June~~a 30monetary 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. ~~2024~~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.

WeIn the ~~had~~opinion ~~net loss~~ of $1management,~~381,531~~ ~~for~~as ~~the~~of ~~six-month~~September ~~period ended June~~ 30, 2025, ~~and~~the aamount ~~net loss~~ of ~~$759,509~~ultimate ~~for~~liability ~~the~~with ~~six-month~~respect ~~period~~to ~~ended~~such ~~June 30~~matters, ~~2024.~~if ~~This~~any, ~~change~~may inbe ~~our~~likely to ~~results~~have ~~over~~a ~~the~~material ~~two~~impact ~~periods~~on ~~is primarily~~ the ~~result~~Company’s ofbusiness, anfinancial ~~increase~~position, inresults ~~consulting expense and the elimination~~ of ~~derivative~~operations ~~liabilities~~or ~~during the current period~~liquidity. ~~The~~However, ~~following~~as ~~table~~the ~~summarizes key items~~ outcome of ~~comparison~~litigation and ~~their~~other ~~related~~claims ~~increase~~is ~~(decrease)~~difficult ~~for~~to ~~the~~predict ~~three-month~~significant ~~periods~~changes ~~ended~~in ~~June~~the ~~30,~~estimated ~~2025~~exposures ~~and~~could ~~2024:~~exist.

	Six Months Ended						Increase/
	June 30, 2025			June 30, 2024			(Decrease)
General and Administrative	$	1,687,294		$	260,175		$	1,427,119
Depreciation and Amortization Expenses		-			362			(362	)
Total Operating Expenses		1,687,294			260,537			1,426,757
Loss from Operations		(1,687,294	)		(260,537	)		(1,426,757	)
Other Income (expense)		96			-			96
Change in Derivative Liabilities		-			49,036			49,036
Initial Derivative Expense		-			(193,582	)		193,582
Gain on Extinguishment of Debt		338,673			-			338,673
Interest Expense		(33,006	)		(354,426	)		321,420
Loss from Operations Before Taxes		(1,381,531	)		(759,509	)		(622,022	)
Provision for Income Taxes		-			-			-
Net Loss	$	(1,381,531	)	$	(759,509	)	$	(622,022	)

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.

General and administrative expenses increased for the six-month period ended June 30, 2025 because of higher consulting and investor relations expenses, compared to the six-month period ended June 30, 202414. Subsequent Events

~~Changes~~Management has evaluated subsequent events, in ~~derivative~~accordance ~~liabilities~~with ~~was~~ASC ~~because~~855, of“Subsequent Events,” through the ~~elimination~~date ofwhich the ~~derivative~~financial statements ~~liabilities~~were inavailable ~~the~~to ~~current~~be ~~year~~issued ~~that~~and ~~was~~there ~~reported~~are ~~under~~no ~~the~~material ~~gain~~subsequent onevents, ~~extinguishment~~except ofas ~~debt~~noted below.

~~Interest~~On ~~expense~~October ~~decreased~~15, in 2025, ~~because~~BluSky ofAI ~~the~~Inc. ~~interest~~raised ~~expense~~$50,000 through ~~related~~its Regulation D offering, issuing a convertible promissory note to ~~settled~~an ~~notes~~accredited ~~was~~lender. ~~lower~~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 ~~decrease~~stock hits a market price of ~~amortization~~$5.00 per share and a mandatory conversion feature at 80% of ~~existing~~market ~~debt~~triggered ~~discounts~~if the Company’s common stock traded above $8.00 per share for a specified period.

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

~~Liquidity~~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 ~~Capital~~is ~~Resources~~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.

~~Our~~On ~~balance~~November ~~sheet~~9, as2025, ofBluSky ~~June~~AI ~~30,~~Inc. ~~2025~~raised ~~reflects~~$50,000 through ~~assets~~its ofRegulation ~~$32~~D offering,~~802~~ issuing a convertible promissory note to an accredited lender. WeThis ~~had~~note ~~cash~~bears ininterest 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 ~~amount~~stock hits a market price of $~~889~~5.00 per share and ~~working~~a ~~capital~~mandatory ~~deficit~~conversion infeature at 80% of market triggered if the ~~amount~~Company’s ofcommon stock traded above $~~3,385,281~~8.00 per asshare offor ~~June~~a ~~30,~~specified ~~2025~~period. ~~Thus,~~On weDecember do12, ~~not~~2025, ~~have~~the ~~sufficient~~lender ~~working~~elected ~~capital~~ to ~~enable~~convert usthis tonote ~~carry~~into ~~out~~common ~~our~~stock. ~~stated~~The ~~plan~~Company issued 13,441 shares of ~~operation~~common stock to a lender for the ~~next~~conversion ~~twelve~~of ~~months~~the $50,000 promissory note.

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

	June 30, 2025			December 31, 2024
Current assets	$	32,271		$	-
Current liabilities		3,417,552			3,346,850
Working capital deficit	$	(3,385,281	)	$	(3,346,850	)

F-16

WeTable ~~anticipate~~of 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.Contents

~~Going~~ITEM 2. ~~Concern~~MANAGEMENT’S ~~Consideration~~DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

AsForward Looking reflected in the accompanying unaudited condensed consolidated financial statements, the Company and has an accumulated deficit of $31,244,895. In addition, there is a working capital deficit of $3,385,281 as of June 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.Statements

	Six Months Ended
	June 30, 2025			June 30, 2024
Net Cash Used in Operating Activities	$	(101,017	)	$	(59,141	)
Net Cash Provided by (Used in) Investing Activities		-			-
Net Cash Provided by Financing Activities		101,906			59,141
Net Increase (Decrease) in Cash	$	889		$	-

The statements contained in the following MD&A and elsewhere throughout this Quarterly Report on Form 10-Q, including any documents incorporated by reference, that are not historical facts, including statements about our beliefs and expectations, are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar words or expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

~~Operating~~These forward-looking ~~Activities~~statements, which reflect our management’s beliefs, objectives, and expectations as of the date hereof, are based on the best judgement of our management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: economic, social and political conditions, global economic downturns resulting from extraordinary events such as the COVID-19 pandemic and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in our filings with the SEC, including our most recent filings on Forms 10-K and 10-Q.

~~Net~~We caution ~~cash~~that ~~flow used in operating activities during~~ the ~~six~~foregoing ~~months~~list ~~ended~~of ~~June~~factors ~~30,~~is ~~2025~~not ~~was $101~~exclusive,~~017,~~ anand ~~increase~~new offactors ~~$41,876~~may ~~from the $59~~emerge,~~141~~ ~~net~~or ~~cash~~changes ~~used~~to ~~during~~ the ~~six~~foregoing ~~months~~factors ~~ended~~may ~~June 30~~occur, that ~~2024~~could impact our business. ~~This~~We ~~increase~~undertake inno ~~the~~obligation ~~cash~~to ~~used~~publicly inupdate ~~operating~~or ~~activities~~revise ~~was~~these ~~primarily~~statements, ~~due~~whether toas ~~the~~a ~~increase~~result inof ~~net~~new information, ~~loss~~future ~~for~~events ~~2025~~or ~~that~~otherwise, ~~used~~except ~~more~~to ~~cash~~the ~~from~~extent ~~operations~~required ~~for~~by the ~~period~~federal securities laws.

~~Investing~~This discussion ~~Activities~~should be read in conjunction with our financial statements on our 2024 Form 10-K, and our financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

~~Investing~~Introduction to ~~activities~~Interim ~~during~~Financial ~~the six months ended June 30, 2025 provided $0, a decrease of $0 from the $0 provided by investing activities during the six months ended June 30, 2024~~Statements.

~~Financing~~The interim ~~Activities~~financial statements included herein have been prepared by BluSky AI Inc. (“BluSky AI” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). Certain information and footnote disclosure 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.

~~Financing~~In the ~~activities~~opinion ~~during~~of ~~the~~management, ~~six~~all ~~months~~adjustments ~~ended~~have ~~June~~been ~~30,~~made ~~2025~~consisting ~~provided~~of ~~cash~~normal ofrecurring ~~$101~~adjustments and consolidating entries,~~906,~~ annecessary to ~~increase~~present offairly ~~$42,765~~the ~~from~~financial position of the ~~$59,141~~Company ~~provided~~and bysubsidiaries ~~financing~~as ~~activities~~of ~~during~~September 30, 2025, the ~~six~~results ~~months~~of ~~ended~~its ~~June~~statements ~~30,~~of ~~2024.~~operations ~~During~~for the ~~six~~three ~~months~~and nine-month periods ended ~~June~~September 30, 2025 and 2024, ~~the~~and ~~Company~~its ~~received~~cash ~~$110,406~~flows infor the ~~proceeds~~nine-month ~~from~~periods ~~notes~~ended ~~payable~~September -30, ~~related~~2025 ~~parties~~and 2024. The ~~Company~~results ~~made~~of ~~$8,500~~operations infor ~~payments~~the oninterim ~~notes~~periods ~~payable~~are –not ~~related~~necessarily indicative ~~parties~~of the results for the full year.

6The preparation ~~Table~~ of ~~Contents~~financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

~~Critical Accounting Policies~~3

~~Our~~Table financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing 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 affected 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 financials.Contents

~~Costs of acquiring mining properties~~ Overview and ~~any~~Plan exploration and development costs are expensed as incurred unless proven and probable reserves exist, and the property is a commercially mineable property. Mine development costs incurred either to develop new gold and silver deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production are capitalized. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mining costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated salvage value.Operation

The Company capitalizes costs for mining properties by individual property and defers such costs for later amortization only if the prospects for economic productions are reasonably certain. Capitalized costs are expensed in the period when the determination has been made that economic production does not appear reasonably certain.Overview

~~Recent~~BluSky AI ~~Accounting~~Inc., ~~Pronouncements~~is a pioneering company 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 Provider. 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 operates with a focus on innovation, scalability, and environmental sustainability.

~~For~~Previously known ~~recent~~as ~~accounting~~Inception ~~pronouncements~~Mining Inc., ~~please~~the ~~refer~~company underwent a significant transformation and rebranding in March 2025 to ~~the~~align ~~notes~~with its new strategic direction. This change reflects BluSky AI Inc.’s commitment to ~~financial~~advancing ~~statements~~technology and providing unparalleled services in ~~Part~~the I,data ~~Item~~center 1industry. ofThe ~~this~~Company ~~Quarterly~~is ~~Report~~headquartered in Salt Lake City, Utah, BluSky AI Inc.

~~Off-Balance~~Historically, we ~~Sheet~~have ~~Arrangements~~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.

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.Current Operations

~~ITEM~~BluSky AI ~~3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Operations

AsSince March 1, 2025, the Company has focused 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 within the Company. BluSky AI was established by drawing on extensive industry expertise, insights from outside experts, and a ~~smaller~~careful ~~reporting~~evaluation ~~company~~of current conditions in the data center markets. The innovative concept is built around a modular design that leverages existing power infrastructure. BluSky AI plans to develop multiple data center sites across various U.S. jurisdictions, wewith ~~are~~artificial ~~not~~intelligence ~~required~~(AI) focus, specifically targeting facilities with the ability to ~~include~~develop ~~disclosures~~power ~~under~~capacity ~~this~~or ~~item~~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 the data center market.

~~ITEM~~BluSky AI 4is revolutionizing the artificial intelligence compute landscape by addressing the immediate global supply shortage with a cutting-edge, turnkey solution. ~~CONTROLS~~Our ~~AND~~strategy ~~PROCEDURES~~centers on rapidly deployable, plug-and-play, modular compute centers on powered land assets—sites that already possess permitted energy infrastructure. This approach not only accelerates time to market but also itends to positions BluSky AI as a premier AI compute infrastructure provider dedicated to meeting the surging demand for advanced AI services.

~~Evaluation~~ Results of ~~Disclosure Controls and Procedures~~Operations

WeThree months ~~maintain~~ended ~~disclosure~~September ~~controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934~~30, as2025 ~~amended,~~compared ~~or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and~~ to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the ~~supervision~~three ~~and~~months ~~with~~ended ~~the~~September participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act, as of the end of the period covered by this report. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were not effective as of June 30, ~~2025.~~2024

~~Changes~~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 ~~Internal~~our ~~Control~~results ~~Over~~over ~~Financial~~the ~~Reporting~~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:

There have been no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

	Three Months Ended						Increase/
	September 30, 2025			September 30, 2024			(Decrease)
General and Administrative	$	504,153		$	109,742		$	394,411
Depreciation and Amortization Expenses		-			182			(182	)
Total Operating Expenses		504,153			109,924			394,229
Loss from Operations		(504,153	)		(109,924	)		(394,229	)
Interest Income		4,555			-			4,555
Change in Derivative Liabilities		-			(139,472	)		139,472
Loss on Extinguishment of Debt		(2,101,978	)		(13,043	)		(2,088,935	)
Interest Expense		(31,656	)		(17,507	)		(14,149	)
Loss from Operations Before Taxes		(2,633,232	)		(279,946	)		(2,353,286	)
Provision for Income Taxes		-			-			-
Net Loss	$	(2,633,232	)	$	(279,946	)	$	(2,353,286	)

~~7 Table of Contents~~4

~~PART~~Table IIof ~~– OTHER INFORMATION~~Contents

~~ITEM~~General and 1.administrative ~~LEGAL~~expenses ~~PROCEEDINGS~~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.

~~From time to time, we may become involved~~ Changes in ~~various~~derivative ~~lawsuits~~liabilities ~~and~~was ~~legal~~due ~~proceedings~~to ~~which arise in~~ the ~~ordinary~~elimination ~~course~~ of ~~business.~~the ~~However,~~derivative ~~litigation~~liabilities ~~is subject to inherent uncertainties and an adverse result~~ in ~~these~~the orcurrent ~~other~~year ~~matters may arise from time to time~~ that ~~may~~was ~~harm~~reported ~~our~~under ~~business.~~the ~~Except~~gain on asextinguishment ~~set~~of ~~forth~~debt ~~below,~~in wethe ~~are~~first ~~currently~~three ~~not~~months ~~aware~~ of ~~any~~the ~~such~~2025 ~~pending~~fiscal ~~or threatened legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results~~year.

~~March~~Interest expense 4,increased ~~2024,~~for the ~~Company~~three-month ~~filed~~period aended ~~complaint~~September ~~against Mother Lode Mining~~30, ~~Inc.,~~2025 abecause ~~Canadian~~of ~~company, and Robert Salna (~~the ~~“Defendants”), alleging an amount of not less than $2,237,800 (plus~~ interest, ~~additional~~expense 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~~additions ~~breach~~to ofnotes ~~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~~related ~~Defendants’ failure to convey agreed-upon consideration to the Company as contracted for the sale of CMCS~~parties. 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 continues to pursue the lawsuit aggressively.

~~ITEM~~Nine months ~~1A.~~ended ~~RISK~~September ~~FACTORS~~30, 2025 compared to the Nine months ended September 30, 2024

AsWe had net loss of $4,014,763 for the nine-month period ended September 30, 2025, and a ~~smaller~~net ~~reporting~~loss ~~company~~of $1,039,455 wefor ~~are~~the ~~not~~nine-month ~~required~~period ended toSeptember ~~include~~30, ~~disclosure~~2024. ~~under~~This ~~this~~change ~~item~~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. WeThe ~~refer~~following ~~readers~~table tosummarizes ~~our~~key ~~Form~~items ~~10-K~~of comparison and their related increase (decrease) for ~~additional~~the ~~risk~~three-month ~~factor~~periods ~~disclosures.~~ended September 30, 2025 and 2024:

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

	Nine Months Ended						Increase/
	September 30, 2025			September 30, 2024			(Decrease)
General and Administrative	$	2,191,447		$	369,917		$	1,821,530
Depreciation and Amortization Expenses		-			544			(544	)
Total Operating Expenses		2,191,447			370,461			1,820,986
Loss from Operations		(2,191,447	)		(370,461	)		(1,820,986	)
Other Income (expense)		96			-			96
Interest Income		4,555			-			4,555
Change in Derivative Liabilities		186,542			(90,436	)		276,978
Initial Derivative Expense		-			(193,582	)		193,582
Loss on Extinguishment of Debt		(1,949,847	)		(13,043	)		(1,936,804	)
Interest Expense		(64,662	)		(371,933	)		307,271
Loss from Operations Before Taxes		(4,014,763	)		(1,039,455	)		(2,975,308	)
Provision for Income Taxes		-			-			-
Net Loss	$	(4,014,763	)	$	(1,039,455	)	$	(2,975,308	)

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

~~The~~Changes in ~~Company~~derivative ~~has~~liabilities ~~claimed~~was ~~exemption~~because ~~from~~of ~~registration under~~ the ~~Securities~~elimination ~~Act~~of ~~for~~ the ~~sales~~derivative ~~and~~liabilities ~~issuances of securities~~ in the ~~following~~current ~~transactions~~year ~~under Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, in~~ that ~~such~~was ~~sales~~reported ~~and issuances did not involve a public offering, or~~ under ~~Rule 701 promulgated under~~ the gain ~~Securities~~on ~~Act,~~extinguishment inof ~~that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701~~debt.

OnInterest expense ~~April~~decreased 1,in 2025, ~~the~~because ~~Company~~of ~~issued~~the ~~200,000~~interest ~~restricted~~expense ~~shares~~related ~~of Common Stock~~ to ~~Dan~~settled ~~Gay~~notes ~~for~~was ~~services~~lower ~~rendered prior to that date~~ and ~~pursuant to existing, written employment agreements or other compensation agreements. These shares were valued at~~ the ~~market~~decrease ~~price~~ of ~~$0.51~~amortization ~~per share for a total value~~ of ~~$102,000~~existing debt discounts.

On June 10, 2025, the Company issued 1,100,000 restricted shares of Common Stock to five individuals for services rendered prior to that date and pursuant to existing, written employment agreements or other compensation agreements. These issuances included the issuance of 100,000 shares to Whitney Cluff, 300,000 shares to Lance D’Ambrosio, 500,000 shares to Trent D’Ambrosio, 100,000 shares to Rodney Sperry, and 100,000 shares to Julien Bedard. These shares were valued at the market price of $0.401 per share for a total value of $441,100.5

OnTable ~~June 24, 2025, the Company issued 500,000 restricted shares~~ of Common Stock to Wild Mustang, LLC for services rendered prior to that date and pursuant to existing, written employment agreements or other compensation agreements. These shares were valued at the market price of $1.60 per share for a total value of $800,000.Contents

~~On July 7, 2025, the Company issued 20,000,000 shares to Digital Asset Medium, LLC pursuant to an Acquisition~~ Liquidity and ~~Power~~Capital ~~Assignment Agreement.~~ Resources

8Our balance ~~Table~~sheet as of ~~Contents~~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.

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~Working Capital

None.

	September 30, 2025			December 31, 2024
Current assets	$	1,381,776		$	-
Current liabilities		3,303,790			3,346,850
Working capital deficit	$	(1,922,014	)	$	(3,346,850	)

~~ITEM~~We anticipate 4.generating ~~MINE~~losses ~~SAFETY~~and, ~~DISCLOSURES~~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.

~~Not~~Going Concern ~~applicable as the Company conducts no mining operations in the U.S. or its territories.~~Consideration

~~ITEM~~As reflected 5in the accompanying unaudited condensed financial statements, the Company and has an accumulated deficit of $33,878,127. In ~~OTHER~~addition, ~~INFORMATION~~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.

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.

	Nine Months Ended
	September 30, 2025			September 30, 2024
Net Cash Provided by (Used in) Operating Activities	$	(680,923	)	$	(64,288	)
Net Cash Provided by (Used in) Investing Activities		-			-
Net Cash Provided by (Used in) Financing Activities		1,976,184			64,286
Net Increase (Decrease) in Cash	$	1,295,261		$	(2	)

Additionally, 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. 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. 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.Operating Activities

OnNet cash ~~July~~flow 28used in operating activities during the nine months ended September 30, 2025 was $680,923, an increase of $616,635 from the $64,288 ~~Company~~net ~~signed~~cash aused ~~letter~~during ofthe ~~intent~~nine months ended September 30, 2024. This increase in the cash used in operating activities was primarily due to ~~purchase~~the ~~land~~increase in ~~Camp~~net ~~Verdi,~~loss ~~Arizona~~for 2025 that used more cash from operations for ~~$3,100,000~~the period.

On July 28, 2025, the Company signed a letter of intent to sign a 15 year ground lease on a property in Delta, Utah. Lessee will pay $5,000 per month upon entering into a final agreement for the duration of the Lease. Investing Activities

~~Power~~Investing activities ~~availability~~during ~~may~~the benine ~~reserved~~months byended ~~the~~September ~~Lessee~~30, by2025 ~~making~~provided $0, a ~~non-refundable~~decrease ~~power~~of ~~purchase~~$0 ~~agreement~~from ~~(“PPA”)~~the ~~deposit~~$0 ofprovided ~~$300,000~~by ~~per~~investing MWactivities during ~~(“Reserved~~the ~~Power”)~~nine months ended September 30, 2024.

~~9 Table of Contents~~Financing Activities

~~ITEM~~Financing activities 6during 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. ~~EXHIBITS~~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.

Exhibit Number		Exhibit Description
3.1		Articles of Incorporation (1)
3.2		Certificate of Amendment, effective March 5, 2010(2)
3.3		Certificate of Amendment, effective June 23, 2010(3)
3.4		Articles of Merger, effective May 17, 2013 (4)
3.5		Bylaws (1)
10.1+		Employment Agreement with Trent D’Ambrosio (16)
10.18		Settlement Agreement with Antilles Family Office, LLC dated January 18, 2023 (17)
10.19		Letter of Intent with Mother Lode Mining, Inc. effective as of January 24, 2023 (18)
31.1*		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Schema Document
101.CAL		Inline XBRL Calculation Linkbase Document
101.DEF		Inline XBRL Definition Linkbase Document
101.LAB		Inline XBRL Label Linkbase Document
101.PRE		Inline XBRL Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*+	Filed herewith.Employment Agreement
(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 Form 10-Q filed with the SEC on May 20, 2013.
(5)	Incorporated by reference from the Form S-1 filed with the SEC on June 2, 2019.
(6)	Incorporated by reference from the Form 8-K filed with the SEC on January 25, 2023.
(7)	Incorporated by reference from the Form 8-K filed with the SEC on February 8, 2023.

Table of Contents

10Critical Accounting ~~Table of Contents~~Policies

~~SIGNATURES~~Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing 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 affected 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 financials.

~~Pursuant~~BluSky AI toInc. (“the ~~requirements~~Company”) ofis a publicly traded, development-stage enterprise specializing in the ~~Securities~~design, ~~Exchange~~deployment, ~~Act~~and operation of ~~1934~~prefabricated modular data centers that deliver GPU-as-a-Service (“GPUaaS”) infrastructure. Operating within the emerging NeoCloud sector, the ~~registrant~~Company ~~has~~is ~~duly~~focused ~~caused~~on ~~this~~scalable, ~~report~~energy-optimized tocompute besolutions ~~signed~~for onAI-native ~~its~~and ~~behalf~~enterprise bycustomers. As of the ~~undersigned~~reporting ~~thereunto~~date, ~~duly~~the ~~authorized~~Company is pre-revenue and actively evaluating multiple development sites across diverse regulatory and utility jurisdictions.

	BLUSKY AI INC.
Date: August 19, 2025	By:	/s/ Trent D’Ambrosio
	Name:	Trent D’Ambrosio
	Title:	Chief Executive Officer (Principal Executive Officer)
		Chief Financial Officer (Principal Financial and Accounting Officer)

The preparation of the Company’s condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses, and related disclosures. These estimates are based on historical experience, current conditions, and various other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates. The Company considers the following accounting policies and estimates to be critical to the understanding of its financial statements:

111. 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.

2. Convertible Instruments and Embedded Features

The Company has issued convertible notes with features such as mandatory conversion triggers and variable conversion prices. These instruments are assessed, Debt with Conversion and Other Options, and, Derivatives and Hedging, to determine whether embedded features require bifurcation and separate accounting. Fair value estimates of such features, when applicable, are based on inputs and require significant judgment regarding volatility, discount rates, and probability-weighted outcomes.

3. Fair Value Measurements

The Company applies, Fair Value Measurement, in the valuation of non-cash transactions, including equity issuances and debt conversions. Given the Company’s pre-revenue status and limited trading history, observable market inputs may be supplemented with internal valuation models to estimate the fair value of common stock and other instruments. These estimates impact the recognition of stock-based compensation, extinguishment of debt, and other equity-linked transactions.

4. Stock-Based Compensation

The Company will account for stock-based compensation in accordance with, Compensation—Stock Compensation. The fair value of equity awards granted to employees, directors, and consultants is estimated on the grant date using the Black-Scholes option pricing model or other appropriate valuation techniques. Key assumptions include expected volatility, risk-free interest rate, expected term, and forfeiture rates. As a public company, the Company uses its own trading history to estimate volatility, supplemented by peer data where appropriate.

5. Going Concern Assessment

In accordance, Presentation of Financial Statements—Going Concern, the Company evaluates whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year from the issuance of the financial statements. This assessment includes consideration of available cash, committed financing, anticipated capital raises, and the timing of potential revenue-generating deployments. Management has concluded that, while the Company is pre-revenue, its current capital structure and financing plans support its ability to continue operations for the foreseeable future.

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to include disclosures under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act, as of the end of the period covered by this report. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were not effective as of September 30, 2025.

Changes in Internal Control Over Financial Reporting

Table of Contents

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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 continues to pursue the lawsuit aggressively.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to include disclosure under this item. We refer readers to our Form 10-K for additional risk factor disclosures.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuance of Common Stock

The Company has claimed exemption from registration under the Securities Act for the sales and issuances of securities in the following transactions under Section 4(a)(2) and 3(a)(9) of the Securities Act and/or Regulation D promulgated thereunder, in that such sales and issuances did not involve a public offering, as the shareholders were accredited and/or financially sophisticated and had adequate access, through business or other relationships, to information about the Company, and the sales did not involve a public offering of securities or any general solicitation or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation.

On July 7, 2025, the Company issued 20,000,000 shares of common stock to Digital Asset Medium, LLC (“DAM”), a related entity, pursuant to an agreement dated July 7, 2025.

In August and September 2025, the Company issued promissory notes to investors in the aggregate amount of $1,735,000 through a Regulation D offering to thirteen lenders. On September 23, 2025, these notes were converted into 433,750 shares of common stock at $4.00 per share pursuant to a mandatory conversion feature of the notes.

On September 4, 2025, the Company issued 25,500 shares of common stock to five consultants per consulting agreements at $6.00 per share.

On September 24, 2025, the Company issued 9,408 shares of common stock to Debra D’Ambrosio for the conversion of accrued interest of $47,042 at $5.00 per share. The shares were valued at $5.50 per share and the Company recognized a loss on conversion of debt of $4,702.

On September 30, 2025, the Company issued 13,007 shares of common stock to DAM, a related entity, for the conversion of accrued interest of $29,129 and accounts payable of $35,908 at $5.00 per share. The shares were valued at $5.98 per share and the Company recognized a loss on conversion 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 $55,000 at $5.00 per share. The shares were valued at $5.98 per share and the Company recognized a loss on conversion of debt of $10,780.

Table of Contents

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable as the Company conducts no mining operations in the U.S. or its territories.

ITEM 5. OTHER INFORMATION

On August 26, 2025 (the “Execution Date”), BluSky AI, Inc. (the “Company”) entered into a Contract to Buy and Sell Real Estate (Land) (the “Agreement”) with Snowy River Ranches, LLC (“SRR”). The Agreement sets forth the terms through which the Company will acquire 36.06 acres in Walsenberg, Colorado, including the Purchase Price ($248,000), Earnest Money ($10,000) Due Diligence deadlines, Closing Date and other items.

Table of Contents

ITEM 6. EXHIBITS

Exhibit Number		Exhibit Description

3.1		Articles of Incorporation (1)

3.2		Certificate of Amendment, effective March 5, 2010(2)

3.3		Certificate of Amendment, effective June 23, 2010(3)

3.4		Articles of Merger, effective May 17, 2013 (4)

3.5		Bylaws (1)

10.1+		Employment Agreement with Trent D’Ambrosio (5)

10.18		Settlement Agreement with Antilles Family Office, LLC dated January 18, 2023 (6)

10.19		Letter of Intent with Mother Lode Mining, Inc. effective as of January 24, 2023 (7)

10.20		Acquisition and Power Assignment Agreement with Digital Asset Medium LLC*

10.21		Contract to Buy and Sell Real Estate (Land) Agreement with Snowy River Ranches, LLC dated August 26, 2025 (8)

31.1*		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Schema Document

101.CAL		Inline XBRL Calculation Linkbase Document

101.DEF		Inline XBRL Definition Linkbase Document

101.LAB		Inline XBRL Label Linkbase Document

101.PRE		Inline XBRL Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith.
+	Employment Agreement

(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 Form 10-Q filed with the SEC on May 20, 2013.

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

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

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

(8)	Incorporated by reference from the Form 8-K filed with the SEC on September 2, 2025.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BLUSKY AI INC.

Date: February 5, 2026	By:	/s/ Trent D’Ambrosio
	Name:	Trent D’Ambrosio
	Title:	Chief Executive Officer (Principal Executive Officer)
		Chief Financial Officer (Principal Financial and Accounting Officer)

Filing Compare · BLUSKY AI INC.