UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

or

000-55730

Commission file number

(303) 500-5073500-3210

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b)12(g) of the Act:

Common

Title of each class

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o☐ Yes   x☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

o☐ Yes   x☒ No

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. 

x☒ Yes   Noo☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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).o☒Yes   x☐ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

oYes  xNo

Emerging growth company   x

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.o☒

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

The aggregate market value of our common shares of voting stock held by non-affiliates of our Company at December 31, 2017,2023, computed by reference to the price at which the common equity was last sold ($4.98)0.0004), as of the last business day of the registrant’s most recently completed second fiscal quarter (December 31, 2017)(June 30, 2023), was $108,862,800.$690,611.

As of March 29, 2018,2024, there were 52,000,0001,740,316,947 common shares, $0.001 par value, issued and outstanding.

TABLE OF CONTENTS

PART I

FORWARD LOOKING STATEMENTS

This Form 10-K contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”“may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common stock” refer to the common shares in our capital stock.

ITEM 1. BUSINESS.

GENERAL

The following is a summary of some of the information contained in this document. Unless the context requires otherwise, references in this document to “our Company,” “us,” “we,” “our,” “BlackStar,” or the “Company” are to BlackStar Enterprise Group, Inc.

DESCRIPTION OF BUSINESS

We are based in Boulder, Colorado and are engaged in Merchant Banking and Finance andin the United States. Since 2018 we have also been developing a blockchain-based software platform to trade electronic fungible shares of our common stock. Once completed, the platform design might enable us to license the technology as a Platform as a Service (“PaaS”) for other publicly traded companies, providing revenue to finance our merchant banking. The completion of our software platform depends on our ability to license it to an existing Alternative Trading System (“ATS”) or for us to possibly register as an ATS, which we do not intend to do at this time as we would prefer to license our platform to an existing ATS. The platform is not currently operational or in use by anyone. We have recognized net losses of ($116,138)$1,046,983 in the year ended December 31, 2017.2023. We have relied solely on sales of our securities, convertible note financing, and private loans to fund our operations. To execute our business plan, our parent company, International Hedge Group, Inc., through a Securities Purchase Agreement dated January 25, 2016, acquired 95% of the common stock and the Class A Super Majority Voting Preferred Stock of our Company for $100,000 in August 2016, and for an additional $100,000 in October 2016. The Company recently completed a private placement offering pursuant to the offering exemption under Rule 506 of Regulation D of the Securities Act of 1933, raising $165,000.

The Company intends to use the proceeds of this offeringraise additional funds in order to fund operations of the merchant bank, including exploratory efforts into how the Company can bestand to expand its services into the blockchain and crypto-equity industry. To fund ongoing operations, we may raise funds in the future, which are not yet committed.

Reports to Security Holders

We are subject to the reporting requirements of Section 12(g) of the Exchange Act, and as such, we intend to file all required disclosures.

You may read and copy any materials we file with the SEC in the SEC’s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

Jumpstart Our Business Startups Act

We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we did not have more than $1,000,000,000$1,235,000,000 in annual gross revenue and did not have such amount as of December 31, 2016,2022, our last fiscal year.

We may lose our status as an emerging growth company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1,000,000,000$1,235,000,000 or (ii) we issue more than $1,000,000,000$1,235,000,000 in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if at any time we are deemed to be a large accelerated filer. We will lose our status as an emerging growth company on the last day of our fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective registration statement.

As an emerging growth company, we may take advantage of specified reduced reporting and other burdens that are otherwise applicable to generally reporting companies. These provisions include:

As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934. Such sections are provided below:

Section 404(b) of the Sarbanes-Oxley Act of 2002 requires a public company’s auditor to attest to, and report on, management’s assessment of its internal controls.

Sections 14A(a) and (b) of the Securities and Exchange Act, implemented by Section 951 of the Dodd-Frank Act, require companies to hold shareholder advisory votes on executive compensation and golden parachute compensation.

We have already taken advantage of these reduced reporting burdens in this Form 10-K, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As long as we qualify as an emerging growth company, we will not be required to comply with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards.  We are choosing to irrevocably opt out of the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act.  

HISTORY

Our Company, BlackStar Enterprise Group, Inc., (“BlackStar, Enterprise,” “We,“we,” or the “Company”“our”) was originally formed on December 17, 2007 as NPI08, Inc. in the State of Delaware. Our name was changed in 2010 to BlackStar Energy Group, Inc. In August of 2016, our name was changed to BlackStar Enterprise Group, Inc.

Our Company was divested from Kingsley Capital, Inc. in a bankruptcy proceeding in 2008, in which Kingsley was the debtor. Our Company attempted to start up in the energy business in 2010 without success, resulting in losses totaling $1,819,530 over a three-year period. Our Company was inactive until 2016 when new management and capital were introduced.

Definitions

As used throughout this Report, capitalized terms used but not defined herein shall have the meanings assigned to such terms in the filing. The following terms shall have the meanings set forth below, unless the context clearly indicates otherwise:

BlackStar EnterpriseDigital Trading Platform ^TM (“BDTP ^TM”): a digital Electronic Fungible Shares trading platform enabling the trading of BlackStar common shares in electronic fungible form. (The BDTP ^TM has not been approved by any regulatory agency or broker dealer and is not currently operational.)

BlackStar Electronic Fungible Shares (“BEFS”): a digitally evidenced share, also known as an electronic share, (see “Digital Share” – see below) of BlackStar common stock holding the same characteristics as securities evidenced by a paper certificate which has been transmitted electronically and protected by cryptographic protocols on BDTP ^TM. Digital equity shares are the “electronic fungible shares” on account. Electronic Fungible Shares are the same class of common stock as, and are identical to, paper certificated and book-entry shares of common stock; BEFS merely describes the format of the share of common stock.

Blockchain: a disintermediating technology, where each transaction is cryptographically signed, and always appended to an immutable ledger, visible to all participants, and distributed across boundaries of trust. Once a ledger transaction has received a sufficient level of validation, cryptography ensures that it can never be replaced or reversed. Transactions are secure, authenticated, and verifiable.

Blockchain Equity Trading ^TM (“BET ^TM”): computer software platforms, including the BDTP ^TM, for the trading of only one SEC regulated security on an immutable blockchain, and for the analysis, monitoring, storing, and tracking of financial investments on an immutable blockchain. The Company will subscribe the platform to individual public companies for the exclusive exchange of cash for free-trading shares of one public company, creating an individual spot market.

Blockchain First ^TM: financial services software for managing the trading of stocks or equities on an immutable blockchain that prevents the disruption of order flow of customer trades.

Digital Shares: common shares holding the same characteristics as securities evidenced by a paper certificate but are recorded via electronic book-entry through the Deposit and Withdrawal at Custodian (“DWAC”) system in digital form and are protected by cryptographic protocols, sometimes also referred to as an electronic share, an electronic fungible share, or an electronic fungible common share in this document. Digital shares are the same class of common stock as, and are identical to, paper certificated and book-entry shares of common stock; digital share merely describes the format of the share of common stock.

Internet Digital Offering ^TM (“IDO ^TM”): financial services software for managing and hosting indications of interest for potential initial or secondary future offerings on an immutable blockchain. 

CORPORATE STRUCTURE

Our corporate structure is as follows:

COMPANY OVERVIEW

We are based in Boulder, Colorado and are engaged in Merchant Banking and Finance. BlackStar Enterprise’sFinance in the United States. BlackStar’s venue is private early stageearly-stage companies throughout various industries that, in our judgement, exhibit a potential for sustained growth. We are a publicly traded specialized merchant banking firm, facilitating joint venture capital to early stageearly-stage revenue companies. We are actively seeking opportunityopportunities for discussion with revenue generating enterprises and emerging companies for financing.

Proposed New Line of Business

Since 2018, we have also been developing a blockchain-based software platform to trade electronic fungible shares of our common stock. Once completed, the platform design might enable us to license the technology as a Platform as a Service (“PaaS”) for other publicly traded companies, providing revenue to finance our merchant banking. The completion of our software platform depends on our ability to license it to an existing Alternative Trading System (“ATS”) or for us to possibly register as an ATS, which we do not intend to do at this time as we would prefer to license our platform to an existing ATS. The platform is not currently operational or in use by anyone.

References throughout this registration statement to “digital shares” and similar terms refers to the typical way securities are held and traded and is the same as DTCC eligible book entry securities. We are not attempting to “tokenize” securities, but intend our concept to use distributed ledger technology to execute and record securities transactions with higher efficiency and lower cost, which is essentially a back-office function.

Our software platform is in the final stages of software development and is working to initiate platform operations but will need further funding to fund operations of the merchant bank and to expand its services to licensees. To fund ongoing operations, we may raise funds in the future, which are not yet committed.

BlackStar also intends to offer consulting and regulatory compliance services to crypto-equity companies desiring to issue digital shares and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in involvement in crypto-relateddigital share related ventures though our wholly-owned subsidiary, Crypto EnergyBlockchain Equity Management Corp. (“CEMC”BEMC”) formed in September 2017. BEMC is currently non-operational, inactive and has no business or clients at this time. It is intended to offer advisory services as to how to implement use of a custom platform for the client’s equity based off of the BDTP^TM. BEMC has not established any anticipated time frames or key milestones for BEMC business. In addition to the services described above, on December 31, 2017, BlackStar Enterprise Group,formed a subsidiary nonprofit company, Blockchain Equity SRO, Inc. is traded on, a self-regulatory membership organization for the OTC QB underdigital share industry. Further details about the symbol “BEGI.”business plan for BEMC, the operating subsidiary of BlackStar, and Blockchain Equity SRO can be found in the “Current Business” section below. 

Our principal executive officesAs to the BEMC business model, the primary factor for its development is dependent upon whether the BDTP ^TM achieves regulatory approval by the SEC for the platform and an ATS arrangement has been achieved and approved as necessary by the SEC.

In addition to the services described above, on December 31, 2017, BlackStar formed a subsidiary nonprofit company, Blockchain Equity SRO, Inc., formerly known as Crypto Industry SRO Inc., a self-regulatory membership organization for the digital share industry. Further details about the business plan for BEMC, the operating subsidiary of BlackStar, and Blockchain Equity SRO can be found in the “Current Business” section below. 

The Company intends to raise additional funds in order to fund operations of the merchant bank, and to expand its services into the blockchain industry. To fund ongoing operations, we may raise funds in the future, which are located at 4450 Arapahoe Ave., Suite 100, Boulder, CO 80303 and our office telephone number is (303) 500-5073. We maintain a website at www.blackstarenterprisegroup.com, and such website is not incorporated into or a part of this filing.yet committed.

International Hedge Group, Inc. (“IHG”), our parent company, contracted to acquire 95% of our outstanding stock in January 2016 and closed on the purchase in summer of 2016. In lieu of the 95% of common shares originally agreed upon, IHG received 44,400,000 shares of common stock and 1,000,000 of Class A Preferred Stock. IHG is our controlling shareholder and is engaged in providing management services to companies, and, on occasion, capital consulting. IHG’s strategy in investing in BlackStar Enterprise Group, Inc. is to own a controlling interest in a publicly quoted company which has the mission to engage in funding of start-up and developed business ventures using its stock for private placement or public offerings. IHG and BlackStar are currently managed and controlled by the same individuals, but IHG and BlackStar may each seek its funding from different and as yet, undetermined sources, with funding structures of different natures.

CORPORATE STRUCTURE

Our corporate structureprincipal executive offices are located at 4450 Arapahoe Ave., Suite 100, Boulder, CO 80303 and our office telephone number is as follows:(303) 500-3210. We maintain a website at www.blackstareg.com, and such website is not incorporated into or a part of this filing.

CURRENT BUSINESS – MERCHANT BANKING

Our Company, BlackStar Enterprise Group, Inc. (OTC QB:Pink: BEGI) is a publicly traded merchant banking firm seeking to facilitate venture capital to early stageearly-stage revenue companies. BlackStar intends to offer consulting and regulatory compliance services to crypto-equity companies and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in involvement in crypto-related ventures though our newly formed wholly-owned subsidiary, Crypto Equity Management Corp., (“CEMC”). BlackStar intends to serve businesses in their early corporate lifecycles and may provide funding in the forms of ventures in which we control the venture until divestiture or spin-off by developing the businesses with capital. We have only engaged in one transaction as a merchant bank form to date.date and we did not control that venture.

Our investment strategy focuses primarily on ventures with companies that we believe are poised to grow at above-average rates relative to other sectors of the U.S. economy, which we refer to as "emerging“emerging growth companies."” Under no circumstances does the company intend to become an investment company and its activities and its financial statement ratios of assets and cash will be carefully monitored and other activities reviewed by the Board to prevent being classified or inadvertently becoming an investment company which would be subject to regulation under the Investment Company Act of 1940.

BlackStar is conducting a continuing analysis for the Company’s involvement in Distributed Ledger Technology (“DLT”) related ventures. To pursue that end, the Company formed a subsidiary, Crypto Equity Management Corp. (“CEMC”), on September 30, 2017. As a merchant bank, BlackStar intends to seek to provide access to capital for companies and is specifically seeking out ventures involved in DLT. BlackStar recognizes the similarities in the rapidly evolving DLT ecosystem today compared to the Dot Com era in the 90’s, which present both challenges and opportunities. BlackStar intends to facilitate funding and management of DLT involved companies through majority controlled joint ventures through its subsidiary Crypto Equity Management Corp.  BlackStar, through CEMC, intends to initially control and manage each venture.

IHG also may enter into management consulting agreements with companies for which BlackStar provides funding to attempt to guide the companies in the complex business world for the purpose of protecting and enhancing the venture investments made by BlackStar.

SERVICESServices

Crypto Equity Management Corp. is a newly formed subsidiary of BlackStar and has no operating history or assets to date.

As BlackStar focuses its merchant banking efforts on the crypto-equity and DLT industry, BlackStar intends to seek investments through joint ventures in private or public emerging commercial-stage businesses within the blockchain ecosystem. BlackStar also intends to offer consulting and compliance services to member crypto companies and blockchain entrepreneurs on securities and commodity futures.

The Company will seek targeted joint ventures in the sector, primarily focusing on distributed ledger security features and technology, and the peer-to-peer (P2P) global equity trading arena. BlackStar, through CEMC,BEMC, will seek to initially control and manage each venture into which it enters. While remaining compliant with current SEC disclosure and reporting guidelines, BlackStar is conducting an in-depth analysis into the Company’s involvement in crypto-equity and DLT related ventures.

In addition to the services described above, BlackStar Enterprise formed a subsidiary nonprofit company, Crypto Industry SRO Inc., on December 31, 2017. Crypto Industry SRO is in the beginning stages of organizing membership participation in the newly-formed nonprofit. Crypto Industry SRO is planned to act as a self-regulatory membership organization for the crypto-equity industry and set guidelines and best-practice rules by which industry members would abide. BlackStar will provide management of this entity under a services contract.

BlackStar Enterprise Group intends to leverage its experience in the traditional world of public finance, including experience with securities, options, and SEC registration and compliance, into working with select organizations supporting the development and implementation of new technologies in the crypto-equityelectronic share and DLT world. To facilitate this process, BlackStar plans to establish an advisory board in its subsidiary, Crypto IndustryBlockchain Equity SRO, Inc., with applicable technical and practical experience.

The Company’s success will be dependent upon the Company’s ability to analyze and manage the opportunities presented.

BlackStar’s Operating Principles:

• Provide alternative joint venture funding for entrepreneurs;
• Require GAAP and SEC accounting compliance for portfolio ventures;
• Require competent and efficient legal representation;
• Require qualified managers for portfolio ventures, and in some cases, help staff the client company while avoiding recruiting costs or attempts to bring in high-price executives.

We seek venture investments in private, or public emerging commercial-stage businesses with perceived strong growth prospects within certain industry sectors. Companies that we work with may engage in consulting agreements with our parent company, International Hedge Group, Inc. (“IHG”), to add additional monitoring as to their financial situations. We seek to invest up to $1 million per company in business ventures. We may provide off-balance sheet financing to venture companies, through joint ventures or limited liability companies under structures we cannot now predict.

Our success will be dependent upon are our abilities to analyze and manage the lending opportunities presented to us.

Our management may earn shares of our Company under our Stock Option and Award Plan as incentives on the basis of achievement. All are accountable to each other, as well as the shareholders, and bonus awards are intended based upon individual performance, as well as team cooperation, and enterprise building.

INVESTMENT OBJECTIVES

CAPITAL APPRECIATION. Our primary investment objective is to provide our shareholders with long termlong-term capital appreciation by investing primarily in business ventures in which we maintain majority control with selective private companies.We believe that a typical new business venture will have a five-year window. Our investment objective is to restrict our investments to emerging growth companies we believe offer special opportunities and meet our growth criteria, and we intend to reduce the risks associated with investments in startups. Our goal is to provide mezzanine and expansion capital to companies through legally formed joint venture entities through which we control in order to develop a comprehensive growth strategy, possibly involving a consolidation of similarly situated businesses or a geographic expansion of existing product or service offerings. We are currently exploring options for investments in companies involved in the cryptocurrencyelectronic share and blockchain (DLT) technology industry.

CAPITAL PRESERVATION. A second investment objective is to preserve investor capital through risk management and monitoring the management of our loan portfolio. Among the risk management techniques which we expect to employ are: (i) limiting our investments in very early stageearly-stage companies, (ii) holding majority ventures interests in venture companies that have a positive cash flow; (iii) co-investing in venture companies with other professional venture capital. Many ventures will not provide any gain, and some will be complete losses. BlackStar, through CEMC,BEMC, will initially control and manage each venture it enters into in the cryptocurrencyelectronic share and blockchain technology industry.

OUR APPROACH COMPARED TO TRADITIONAL SOURCES OF VENTURE FINANCING

Emerging companies traditionally seek financing for growth from three primary sources: small private placements, independent private venture capital funds and corporate strategic investors. Each of these sources has advantages but also notable disadvantages for the emerging company. Small Private Placements are often underfunded and untimely. Venture capital funds generally are established for a limited term and their primary goal is to maximize their financial return within a short time frame, often two years or less with severe terms for extensions or additional funding.A venture capital fund often seeks to liquidate its investment in the emerging company by encouraging either an early initial public offering or a sale. This often can jeopardize an emerging company'scompany’s chances for success especially if its business has not been fully developed or its intellectual property fully safeguarded prior to its debut into the market.

Corporate strategic investors are typically large corporations that invest in emerging companies to gain access to a promising product or technology without incurring the initial cost of development or the diversion of managerial time and attention necessary to develop new products or technologies. Often these investments involve both financing support to the emerging company and an arrangement under which the strategic investor obtains the right to use, and intellectual property ownership of, the products or technology of the emerging company. While strategic investors are generally able to provide business development support, the rationale behind the investment of a strategic investor may be incompatible with the development of the emerging company. Strategic investors often discourage the emerging company from becoming a public company, selling to competitors of the strategic investor or from retaining the intellectual property rights to products developed jointly with the strategic investor.

We may be limited in our ability to fund ventures because we may not be successful in raising additional funds to fund ventures or growth. Through the public market for our common stock, we hope to have access to additional equity capital that may be needed for growing our ventures. We hope to offer to fill this opportunity on selected ventures.

We believe that our advantage over a strategic investor is that our interests are more closely aligned with those of the emerging company. An initial public offering of the emerging company, our venture, often required to raise the additional capital investment necessary to fully develop a venture company'scompany’s product or technology, would also benefit us by creating repayment of our loan, and possibly in certain instances, an equity position.

OUR VENTURE POLICIES

We may invest in ventures which do not have any annual revenue, if we have determined that an investment may make of such company have growth capital.

Although we may seek to venture into companies with existing positive EBITDA (earnings before interest, income taxes, depreciation and amortization), we may also consider turn aroundturnaround situations where we can clearly identify the source(s) of financial distress and see a possible solution. Through our investment, or through co-investment with other private equity funding sources we will seek to achieve performance improvements.

In the shorter term, we do not anticipate paying any dividends or making other distributions, but this may change in the future. We may not always achieve a return on our venture investment.

In selecting venture investments for our venture, we will endeavor to meet our guidelines, as established by our Board which include the following concepts. We may, however, make investments that do not conform to one or more of these guidelines when deemed appropriate by our Board of Directors. Such investments might be made if we believe that a failure to conform in one area is offset by exceptional strength in another or is compensated for by a higher yield, favorable warrant issuance or other attractive terms or features.

VENTURE CRITERIA

STAGE OF DEVELOPMENT CRITERIA. We are a special situations Company.company. We will primarily look for opportunities with a core business which we believe will provide us with a return of investment and on investment within a moderate period of time, typically targeting about thirty-six to sixty months. Our objective is to invest in emerging corporations which meet our requirements as well as qualitative potential that we look for in each opportunity. In addition, we will look to invest in ventures with corporations. In some instances, we may relax our quantitative requirements with the view to assist such venture companies in developing a strategic business plan which may include merger or acquisition of other private operating businesses which may be synergistic to the existing business of the public corporation. We may invest in ventures with companies in any of the following stages. We will always have majority control and Board control of our venture subsidiaries.

The stages of development are defined as follows:

-     

• Seed capital companies represent the earliest stage of development. These companies have raised relatively modest equity capital to prove a concept and qualify for start-up capital. Their activities generally are limited to product development, scientific and market research, recruiting a management team and developing a business plan. These companies likely do not have financial support from either venture capitalists or larger companies making strategic investments.

-     

• Start-up stage companies are completing or have recently completed product development and initial marketing but have not sold their products commercially. Generally, such firms have made market studies, assembled key management, developed a business plan and are ready to commence operations.

-     

• Expansion stage companies have initiated or are about to initiate full-scale operations and sales but may not be showing a profit.

-     

• Mezzanine stage companies are approaching or have attained break even or profitability and are continuing to expand. An acquisition or initial public offering may be imminent.

QUALITATIVE CRITERIA. All potential ventures will first be evaluated and assessed based on their relative stage of development and the quality of an investment in such venture company based on the above criteria. Once our management team has determined that a potential venture satisfies the above criteria and is suitable for investment, it will then be evaluated using the multi-step process described below. After completion of the process, receipt and review of all internal and outside reports and evaluations of the potential venture company, the Board will consider the potential venture terms. If the Board approves the investment, we will then create appropriate legal documents to reflect our venture and any management service contracts between the venture and our company.

We intend to follow the steps set forth below in our venture process:

(1) BUSINESS PLAN/ASSESSMENT. Business plan description and complete resumes of management from all entrepreneurs. Members of our management team will meet with the best of these entrepreneurs, attempting to identify key traits that have been associated with entrepreneurial success in the past, such as high energy, a must-win attitude, intellectual brilliance, high personal integrity, relevant experience, a strong work ethic, and the ability to prioritize and focus. A business plan submitted for evaluation to us should contain the following information:

-               Overview of the business concept as well as the company's strategic focus and direction.

-               Discussion of competition including a discussion of specialized expertise, intellectual property, patents, and/or other unique advantages held by either the company or its competitors.

-               Sources and uses of cash with respect to investment capital sought.

-              Pro forma financial projections for at least the current year and two subsequent years including expected capital requirements from the time of the investment capital received through the two subsequent years.

-               Operating plan including current and projected staffing, equipment, and space requirements.

-               Discussion of minimum dollar proceeds necessary in order to implement the business plan.

-               Marketing plan.

-               Discussion of conflicts of interest with investors together with steps being taken by the venture company to mitigate such conflicts of interest and to protect against future conflicts of interest.

-               Resumes for all key officers/managers.

(2) EVALUATE POTENTIAL MARKET. We have developed relationships with consultants, who represent a valuable source of information about a target investment'sinvestment’s market. We will call upon these contacts as well as create new ones in the markets of each company seeking funding. As we evaluate markets, we must become confident that the company can attain a competitive market position over time.

(3) EXAMINE STRUCTURE OF BUSINESS MODEL. We will examine the structure upon which the business plan is built. The Board has indicated a distinct bias toward business models calling for high gross margins and relatively low capital intensiveness. Such businesses have the potential for higher internally sustainable growth rates than average and superior return on equity invested. In addition, we will require, whenever possible, implementation of the following policies into the articles, bylaws or operating agreements of its venture companies:

-               There can be only one class of common shares, all with equal voting rights, and all distributions of capital or earnings can only be made to all members based upon their percentage interest without preference;

-               Compensation of the key officers/managers and their affiliates, including, but not limited to, all salary, bonuses, commissions and/or fees, shall be limited based upon the success of the venture company in reaching predetermined milestones; and

-               The primary responsibility of the management/officers of the entity is to serve as fiduciaries charged with serving the best interests of the stockholders/members even when such interests may be in conflict with the management, officers or other employees of the entity.

(4) CHECK REFERENCES. We will require that each entrepreneur supply a list of references in order that we may get a better sense of the entrepreneur'sentrepreneur’s past experience, strengths, weaknesses, and work habits. We make it a point to get references outside of this list as well, in order to avoid only "cherry-picked“cherry-picked references."” We believe that these checks are important to develop a more complete and accurate picture of the team.

(5) CALL CUSTOMERS AND SUPPLIERS. We intend to call a number of current and/or prospective customers and suppliers to get a sense of how they view the targeted investment including its products and the market.

(6) EVALUATE PRODUCTS/TECHNOLOGY. As part of our analysis, we will evaluate the target venture’s current products, development pipeline and underlying technology. To evaluate technology, we will not rely on in-house expertise alone, but will contact and hire appropriate specialists and consultants.

(7) EVALUATE RISKS/REWARDS. Evaluate the pro-forma financials, the likelihood of an exit after a 6 month to 24 month holding period.

(8) NEGOTIATE VENTURE TERMS. When deciding on making a venture investment, we will draw up a term sheet for negotiation, and terms will be agreed upon.

(9) FINANCIALS AND CORPORATE INFORMATION.

We will, after formation of the venture subsidiary, control all accounting and financials as a subsidiary of our Company.

RESERVES. We intend to retain reserves after the venture investment in order to have sufficient funds for equity-oriented follow-on investments in venture companies. We intend to sell additional common stock to meet the funding requirements for any follow-on venture investments. If such sales are successful, we expect to have cash reserves. In order to enhance the rate of return on these reserves and increase the amounts ultimately available for investments and our operating costs, we plan to engage in a reserve management strategy.

AVERAGE INVESTMENT. The amount of funds committed to a venture will vary depending on the funds available to us, the quality and completeness of the venture management team, the perceived business opportunity, the capital required compared to existing capital, and the potential return. Although the venture or investment amounts will vary considerably, we expect that the venture (excluding follow-on investments) will be between $250,000 and $500,000.

INDUSTRY ANALYSIS AND HISTORY

Barriers to Entry in the Merchant Banking Industry

There is one major barrier to entry into the Merchant Banking Industry which is capital. We have very limited capital with which to compete in this industry. Many other competitors have been in the business for many years and have very large capital resources and an established reputation. Our barriers to entry are, in addition to lack of capital, lack of reputation, lack of recognition, part-time management, lack of financial history to raise money, and lack of equity in our company upon which to base a capital raise.

Competitive Factors impacting our abilityImpacting Our Ability to gain market shareGain Market Share

Our competition enjoys advantages which may prevent us from achieving a market share due to our competitors’ known reputations, large funding abilities, competent management, and capital resources all of which will impede our abilities to achieve market share.

Competitive Factors in the Industry

There are numerous entities, Investmentsinvestments banks, merchant banks, hedge funds, private equity, commercial banks and private investors which will compete for the same business in which we intend to engage. We will be at a significant disadvantage to all of these other competitors for the foreseeable future. All of our competitors should be considered to be far better capitalized than we are.

Registrant’s Competitive positionPosition in the Industry

Registrant isWe are an insignificant participant in the merchant banking industry and cannot be expected to obtain a market share even discernable percentage wise. Without a large infusion of capital, itwe will remain a very small participant in the industry.

Merchant Banking

The term merchant banking is generally understood to mean negotiated private equity investment or financing through alternative methods by financial institutions in loans, convertible debt or off-balance sheet vehicles, or through unregistered securities of either privately or publicly held companies. Both investment banks, commercial banks, and other companies engage in merchant banking, and the type of security in which they invest is diverse. They may invest in securities with an equity participation feature; these may be convertible preferred stock or subordinated debt with conversion privileges or warrants. Other investment bank services include raising capital from outside sources, advising on mergers and acquisitions, and providing bridge loans while bond financing is being raised in a leveraged buyout (LBO) and are also typically offered by financial institutions or broker dealers engaged in the merchant bank industry. One which is often omitted is the provision of experienced management by the merchant to commercialize ideas, or technology.

Merchant banking has been an occasionally lucrative but a highly risky endeavor for the small number of bank holding companies and banks that have engaged in it under existing law, and for private equity investors. Banking law legislation has expanded the merchant-banking activity that is permissible to commercial banks and has spurred interest in this specialty on the part of some institutions. However, limitations exist that have scared many banks away from the markets after the Lehman collapse and the resulting fallout with JP Morgan, Bank of America and the big bank Wall Street bailout. Although for much of the past half-century commercial banks have been permitted (subject to certain restrictions) to engage in merchant banking activities, their continued role is limited by the conservatism of the regulators and their Boards.

Evolution of Modern Era Merchant Banking

Many banks entered merchant banking in the 1960s to take advantage of the economies of scope produced when private equity investing is added to other bank services, particularly commercial lending. As lenders to small and

medium-sized companies, banks become knowledgeable about individual firms'firms’ products and prospects and consequently are natural providers of direct private equity investment to these firms.

In the middle to late 1980s, the decision to enter merchant banking was thrust on other banks and bank holding companies by unforeseen events. In those years, as a result of the LDC (less-developed-country) debt crisis, many banks received private equity from developing nations in return for their defaulted loans. At that time, many of these banks set up merchant-banking subsidiaries to try to extract some value from this private equity.

Also, at about that time, most commercial banks began refocusing their private equity investments to middle-market and public companies (often low-tech, already profitable companies) and, rather than providing seed capital, financed expansion or changes in capital structure and ownership. Most particularly, they took equity positions in LBOs, takeovers, or recapitalizations or provided subordinated debt in the form of bridge loans to facilitate the transaction. Often, they did both. Commercial banks financed much of the LBO activity of the 1980s.

Then, in the mid-1990s, major commercial banks began once again focusing on venture capital, where they had substantial expertise from their previous exposure to this kind of investment. Some of these recent venture-capital

investments have been spectacularly successful. For example, the Internet search engine Lycos was a 1998 investment of Chase Manhattan'sManhattan’s venture-capital arm.

We do not compete in the area of these merchant banks, or even large or mid-market banks. We are an insignificant participant in the total market and our focus is on small investments, which larger banks may rule out.

Historical Track Records

Our Company has no historical track record, and we should be deemed a pure start-up of earning or operating with all of the risks of an unproven company (see “Risk Factors”).

IHG, our parent company, also may enter into management consulting agreements with companies for which we provide funding to attempt to guide the companies in the complex business world for the purpose of protecting and enhancing the venture investments made by us.

COMPETITION, MARKETS, REGULATION AND TAXATION

Competition

There are a large number of companies and individuals engaged in the Merchant Banking and Finance industry; accordingly, there is a high degree of competition. Almost all of the companies and individuals so engaged have substantially greater technical and financial resources than we do. We are attempting to create a novel solution in the BDTP ^TM that we may use as a model, potentially enabling us to generate ongoing revenue that we can then use for Merchant Banking.

We are an insignificant participant among the firms which engage in the funding of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than we have. In view of our limited financial resources and limited management availability, we will continue to be at a significant competitive disadvantage compared to our competitors.

Investment Company Act 1940

Although we will be subject to regulation under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, we believe we willnot be subject to regulation under the Investment Company Act of 1940 (the "1940 Act"“1940 Act”) insofar as we will not be engaged in the business of investing or trading in securities within the definitions and parameters which would make us subject to the “1940 Act.” In the event we engage in business activities that result in us holding investment interests in a number of entities, we might become subject to regulation under the 1940 Act. In such event, we would be required to register as an Investment Company and incur significant registration and compliance costs. Under no circumstances does the company intend to become an investment company and its activities and its financial statement ratios of assets and cash will be carefully monitored and other activities reviewed

by the Board to prevent being classified or inadvertently becoming an investment company which would be subject to regulation under the Investment Company Act of 1940.

As a fundamental concept, the 1940 Act requires registration of companies that invest and manage funds to invest for others and trade in securities of other companies. Those companies that cross a threshold of 40% of assets in cash and stock in other companies may be required to register. Investment companies may issue face amount certificates, be a Unit Investment Trust, or be a mutual fund. We intend to do several things to remain outside of the 1940 Act: a) we will not trade in securities of other companies or manage investments for others, b) we intend to remain primarily in the merchant bank lending business recognized as exempt under Sections 3(c)(4) and (5) of the 1940 Act, c) we intend to carefully monitor our ratios of cash and securities to total assets to avoid crossing the 1940 Act threshold, d) we intend to hold loans comprising 60% to 70% of our assets at any time, e) we intend to maintain secured loans to companies as our primary business, f) we do not intend to issue face amount certificates, g) we do not intend to distribute profits and dividends to our shareholders on an annual or shorter basis, if ever, h) we do not pass through profits and losses to our shareholders on a tax basis, i) smaller secured loans will be our primary business and our primary profit center, which we intend will account for more than 50% of our revenues; j) we will not issue Units in investment trusts, k) we will not act as a mutual fund, and l) we will not invest funds on behalf of others.

We have obtained no formal determination from the SEC as to our status under the 1940 Act and, consequently, any violation of the 1940 Act would subject us to material adverse consequences. We believe that, currently, we are exempt under Regulation 3(c)(4) and (5) of the 1940 Act.

Markets.

Our market is highly competitive and constantly changing. Commercial success is frequently dependent on capital availability, the effectiveness and sufficiency of which are very difficult to predict accurately. It is one of the principal economic risks of mezzanine and expansion stage funding companies like ours.

Governmental Regulation.

Federal Regulations.

Governmental Regulation.

We are subject to regulations by securities laws as a public company. We do not intend to become an investment company under the Investment Company Act of 1940, but if we exceed certain thresholds of certain assets or our business operations cease to fall within certain exemptions, we might inadvertently become subject to the Act.

Compliance with Environmental Laws and Regulations.Regulations.

We are not involved in operations with environmental considerations for our business.

State Regulations.

Certain states may require that we obtain a Lender’s License prior to making a loan in that state. We intend to address this on an as needed basis.

State Regulations.

We are not involved in operations with environmental considerations for our business.

Title to Properties.

Not applicable.

OFF BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements.

NUMBER OF PERSONS EMPLOYED

As of December 31, 2017,2023, we have no full-time employees and 2 independent consultants who act as our officers and directors on a part-time basis of about 30up to 40 hours per week.

DESCRIPTION OF PROPERTIES/ASSETS

Real Estate - None

Oil and Gas Properties - None

Patents - None

Trademarks - None

PLAN

IMPACTS OF OPERATIONSCOVID-19 

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in 2020 caused significant volatility in U.S. and international markets. There was significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, as of March 2020, the Company transitioned its operations to 100% work from home and there has been minimal impact to our internal operations from the transition. Since the pandemic subsided, the Company does not believe that there will be a material future impact to its operations and ultimately an impact to the Company’s overall revenues at this time, though a future pandemic of a similar nature could disrupt global markets again.

PROPOSED NEW LINES OF BUSINESS

The matters discussed below contain certain forward-looking information and relate to analyses, business plans, business opportunities, management intentions and other information, available as of the date hereof, but is not yet fully determinable. These statements also relate to our contemplated future prospects, developments and business strategies. Although we believe that our plans, intentions and expectations reflected in or suggested by the matters discussed below are reasonable, we cannot assure you that such plans, intentions or expectations will be achieved. Important factors that could cause actual plans, intentions or expectations to differ materially from our plans, intentions or expectations include, but are not limited to the risks and uncertainties included under “Risk Factors” in this document. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual plans, intentions or expectations may vary materially from those discussed below. Given these uncertainties, users of the information included below are cautioned not to place undue reliance on such information.

BlackStar Digital Trading Platform ^TM

Background

Under the Securities Act of 1933, the offer and sale of securities must be registered unless an exemption from registration is available. Title III of the Jumpstart Our Business Startups (JOBS) Act of 2012 added Securities Act Section 4(a)(6) that provides an exemption from registration for certain crowdfunding transactions. In 2015, the SEC adopted Regulation Crowdfunding to implement the requirements of Title III. Under the rules, eligible companies were allowed to raise capital using Regulation Crowdfunding starting in May 2016. The landscape of new rules and regulations made Regulation Crowdfunding extremely difficult for companies to effectively raise money. Companies were limited to how much they could raise, solicitation rules across state lines for accredited and non-accredited investors is complicated, liquidity issues arise with no public trading market for private securities, high transaction costs, and the amount one could invest.

The Bitcoin started trading on its blockchain in 2011 and by 2017, coinciding with the failure of crowdfunding, “coins” and “tokens” were underwritten on a blockchain to fund global projects and start-up companies. The blockchain offered issuers a platform to fund and investors the freedom to trade with few limitations or regulations. Investors opened “wallets” rather than a trading account with a registered broker-dealer. Investors made their own decisions, there were no minimum amounts, there were no trading hours, and there were no commissions. Investors could trade new ideas with a “coin” or “currency” connected to the company through a “wallet.” The cryptocurrency innovation was based on a new distributed ledger design using a blockchain. The many “tokens” and “coins” created and promoted on the blockchain were founded in a totally unregulated environment. As a result, there have been many fraudulent “offerings” that ran afoul of existing SEC registration requirements, there have been thefts of “coins” and “tokens”, collapses of the “tokens/coins”, bankruptcies and closures of brokers and traders in the cryptocurrency environment, all with enormous losses to investors. The SEC has used enforcement actions of existing laws to regulate this new industry. This has created the need to create blockchain innovations under existing SEC rules.

In June 2017, the management of BlackStar began analyzing the crypto industry due, in large part, to its rapid ascent in popularity. BlackStar realized that the public blockchain trading of these faux currencies plagiarized the U.S. securities market and reduced the ability to fund and trade small companies and new issues. BlackStar noted the lack of specific regulation and is attempting to design a new system based within the existing rules of the SEC and FINRA.

Our Company has examined numerous “exchanges” or “platforms” for trading and believed that, among other things, they lacked essential regulatory compliance practices. This research and management’s securities and compliance background lead the Company to create a platform that contains the essentials for full regulatory compliance including:

• Know-Your-Customer (KYC);

• Anti-Money Laundering (AML);

• IRS tax reporting; and

• SEC compliance.

In July 2020, the Company determined that similar products and services (although not identical to the BDTP™ platform) have needed to register or have been required to register as an ATS in accordance with Regulation ATS, which is the regulatory framework for “alternative trading systems” (ATS). An ATS is an SEC-regulated trading venue which serves as an alternative to trading at a public exchange. The basic function of a broker-operated ATS is an electronic manifestation of a previously manual trading process, when trading desks would first try to execute trades internally before sending the order to a public exchange, although this is a small portion of all US stock market transactions. The vast majority of trades still occur at exchanges and electronic communication networks (ECNs).

Under the existing regulatory framework, an ATS is a trading system that meets the definition of “exchange” under federal securities laws but is not required to register as a national securities exchange if the ATS operates under the exemption provided under Exchange Act Rule 3a1-1(a). To operate under this exemption, an ATS must comply with the requirements set forth in Rules 300-303 of Regulation ATS. To comply with Regulation ATS, an ATS must, among other things, register as a broker-dealer and file an initial operation report with the SEC on Form ATS before commencing operations. Thereafter, an ATS must file amendments to Form ATS to provide notice of any changes to its operations, and must file a cessation of operation report on Form ATS if it ceases operations. Form ATS is not an application and the SEC does not approve an ATS before it begins operation. Form ATS is, instead, a notice to the SEC. As of September 30, 2022, the SEC lists 33 ATS’s that trade National Market System (NMS) stocks.

As a result, in lieu of expending the money and resources to become an ATS at this time, the Company is seeking to license the BDTP™ platform to an existing ATS, broker-dealer, and/or clearing firm to host the BDTP™ platform so that it may comply with existing rules and regulations. If we are unable to license it to an entity in this way, we may reevaluate whether to seek compliance with Regulation ATS as a standalone ATS. See the section below entitled “Licensing the BDTP™ Platform With An Existing Trading System” for additional information.

Overview of the BDTP™ Platform

BlackStar intends the BDTP™ to be a tool for trading securities within the existing FINRA and SEC regulated brokerage ecosystem, addressing many of the regulatory issues by operating within the existing confines of the system. For example, customers will continue to use brokerage accounts and broker-dealers and the transfer agent will continue to maintain the shareholder records. In addition, the BDTP™ platform is intended to seamlessly integrate with the order entry processes, priority rules, and execution procedures of the existing brokerage ecosystem. All custodial duties are intended to remain the same because the BDTP™ will pass encrypted customer and account information and buy/sell orders to the relevant parties. As currently contemplated and as a brief summary, the BDTP™ platform is expected to operate in the following manner:

Blockchain First ^TM: Financial services software for managing the trading of stocks or equities on a Distributed Ledger that prevents the disruption of order flow of customer trades.

*** THE BROKER DEALER SUBMITS THE CERTIFICATES TO THE TRANSFER AGENT AND THE TRANSFER AGENT VERIFIES OWNERSHIP. THEN THE BROKER DEALER’S POSITION IS EITHER DEBITED OR CREDITED DEPENDING UPON WHETHER IT WAS A DEPOSIT OR WITHDRAWAL.

BlackStar has built the technology based upon the Quantum Ledger Database, a blockchain framework from Amazon Web Services (“AWS”), and to use the AWS Cloud for transaction data storage. The BDTP™ would offer a web-based interface for trading transactions as well as an Application Programming Interface (API) that directly accesses all transactions stored on the BDTP™. In June 2020, BlackStar and Artuova, a custom software development company, successfully completed a production ready user interface for the BDTP™ platform, which is feature-complete. As of September 21, 2022, the core platform and its software is complete and is in the testing phase. The BDTP™ platform has been completely designed in terms of the following components: data model, reports, web-based user interface, blockchain interface, transaction logic, cloud interface, and functional demonstration app. BlackStar intends to continue to seek further input from various regulatory agencies and others on the functionality of the BDTP™ over the next several months. It will remain in the testing phase until we license the BDTP™ platform to a broker-dealer, clearing firm, and/or ATS. The BDTP™ platform is not designed to support transactions in any tokens, faux currencies, coins, crypto or any crypto related assets. The SEC and FINRA would have complete and transparent access to the data recorded by the BDTP ^TM, offering a single data interface and consolidated history of transactions; the SEC and FINRA would only become Certificate Holders if they approve and agree to participate in viewing the data, and only if the platform is approved at a future date. BlackStar hopes that this increased transparency will mitigate many of the risks of investing in OTC Markets listed stocks and restore investor confidence in trading shares of OTC companies.

We believe that the BDTP™ platform is compatible with the Depository Trust Company’s (DTC) Deposit and Withdrawal at Custodian (DWAC) service, which provides participants with the ability to make electronic book-entry deposits and withdrawals of eligible securities into and out of their DTC book-entry accounts using a Fast Automated Securities Transfer service (FAST) transfer agent as the distribution point. We have designed our technology to be

fully compatible with the DWAC system – i.e. shares of stock in uncertificated (book-entry) form can be moved into or out of the DWAC system just as with certificated shares of stock through a company’s existing transfer agent and existing broker-dealers.

We further believe that blockchain technology is compatible with the DWAC system because it does not contradict or counter the system, but rather provides an alternative for the customer to execute trades without markups/markdowns and at very low costs. DTC is market-neutral, which means it accepts transactions from multiple exchanges and trading platforms on a nondiscriminatory basis. It currently supports more than 50 exchanges and trading platforms, including the New York Stock Exchange (NYSE), Nasdaq, and the OTC Markets. This is the design of the BDTP™ platform. The BDTP™ platform is simply another trading platform, which uses blockchain technology and is designed to execute its trades through an existing ATS with the broker-dealer responsible for clearing and processing the transactions as it does for any transactions that occur on an existing ATS. The execution of a trade on the blockchain through an ATS will be reported back to the broker-dealer for clearing and settlement. Upon execution of a trade on the blockchain through an ATS, the ATS will publicly report the last price, volume, change and current bid-offer ladder to the broker-dealer that sent the order. The clearing of the trade will be the responsibility of the broker-dealer that introduces their customer to trade on the BDTP™ platform.

In addition, trading on private blockchain technology is compatible with the existing trading system because it can be programmed to follow the same protocols and rules as every other approved trading system. A broker-dealer will double-encrypt the customer data and send it to the BDTP™ platform, while freezing the data in the customer's account. There is no difference in how orders are currently sent to market makers or exchanges, but the benefit of BDTP™ platform is that there are additional security features, including a prohibition on short selling, and customer execution of their own order. The ATS or broker dealer hosting the quotes (the “Host”) will connect to the blockchain trading engine data and the blockchain execution engine data through a secure line, where the Host will have access to all the data sent to and from the blockchain in order to report the quotes. The Host will be responsible for all activity on the blockchain as a broker dealer. The final connectivity of the Host to the blockchain, along with their roles and responsibilities, will need regulatory review and approval once a Host partner is selected.

The core platform has been designed for initial use with BlackStar common stock and is thus the BlackStar Digital Trading Platform™ (BDTP). Our BlackStar Electronic Fungible Shares (BEFS) are proposed to be the initially traded securities on the blockchain on the BDTP™ platform and the rights and privileges to each shareholder of the BEFS is the same as certificated shares of common stock of BlackStar. BEFS are the same class of common stock as, and are identical to, paper certificated and book-entry shares of common stock; BEFS merely describes the format of the share of common stock. If the BDTP™ platform is approved for trading by the SEC and FINRA, the BEFS (those shares of common stock trading through the platform) would not differ as to its rights and privileges under state law from the authorized common stock of BlackStar. Please note that the Company is not submitting the BDTP^TM for any SEC approval in this registration statement. DTCC has for decades held electronic shares “under its agency” with broker-dealers for “street name” shares, without any problems under state law, including the Delaware General Corporation Law. The BEFS would be no different from DTCC held shares in book-entry form, except that the BEFS will be traded in blockchain transactions using an existing ATS rather than being traded on an exchange. Under current SEC and FINRA regulations, any shares that are uncertificated form would still be required to be deposited through a FINRA registered broker-dealer. Any FINRA broker dealer that accepts deposits can be used.

The BEFS are not “tokens” or “crypto tokens”. A “token” is generally understood to be a unit of value that blockchain-based organizations or projects develop on top of existing blockchain networks. While they often share compatibility with the cryptocurrencies of that network, they are a wholly different digital asset class. “Tokens” allow developers to create a cryptocurrency without needing to build a blockchain for that cryptocurrency. As cryptocurrencies, “crypto tokens” are often assets with value as are a myriad of other intangible assets with value. “Tokens” can typically be transferred, traded, bought, and sold, and they are stored in blockchain wallets. A blockchain wallet is a program or hardware device that is used to store cryptocurrency. Transactions with a crypto token are processed on the blockchain that it uses. For example, if it is an ERC-20 token built on Ethereum, then the Ethereum blockchain will handle all transactions for that token.

In addition to their role as a currency, “tokens” can serve many other purposes such as (1) governance tokens—which gives the holder voting rights in a cryptocurrency project. Token holders are able to make and vote on proposals that help determine the future of that specific cryptocurrency; (2) decentralized finance (DeFi)—refers to alternative

financial systems built on blockchain technology. For example, instead of getting a loan from a lender, a holder can put up tokens as collateral and get a loan from a DeFi platform. Each DeFi platform has its own token that it uses as its official currency; (3) crypto rewards—holders receive crypto rewards as an incentive, which are usually paid out as crypto tokens; and (4) non-fungible tokens (NFT)—denotes ownership of a digital asset. The ownership information is stored in the token. NFTs can be used to show who owns a unique digital image, a GIF, or a character in an online game.

In contrast, the BEFS are simply uncertificated shares of stock of BlackStar, which are commonly referred to as a “book-entry shares” in DTC and transfer agent parlance or, as we refer to them, “electronic fungible shares.” Shares held in uncertificated book-entry form have the same rights and privileges as shares held in certificate form. The BEFS simply flow in and out of the existing trading system, exchanges, or OTC Markets through DTC and broker-dealers in uncertificated book-entry form. Only for the period of time that the broker-dealer holds the shares for the customer are the shares residing in a blockchain recognized format and traded via our BDTP™ platform in a blockchain recorded transaction or series of transactions. A blockchain is simply a digital ledger that stores information in blocks that are linked. This information can be transaction records or full-fledged programs that operate on the blockchain, which are called smart contracts. For example, as transactions are confirmed, they would be grouped into a block, and that block would then be added to the blockchain. The BDTP™ platform only uses the blockchain as a medium for the low cost, efficient, and transparent way to trade securities with a minimum of mark ups, mark downs and shorting, and with lowered costs of execution. Using BlackStar’s concept “Blockchain First™,” cash and shares of stock owned by customers are recorded directly to the blockchain. The BEFS are simply held in uncertificated book-entry form and represent an equity ownership interest in a corporation (BlackStar) rather than serving as a distinct currency or another purpose such as a governance right, consumer reward or character in an online game. In addition, the price of a “token” is often aligned to the blockchain it is traded on (Bitcoin or Ethereum) while the price of a share of stock such as the BEFS is aligned with the value of the underlying company. We are not seeking to create “tokens,” but rather to have a system which allows the trading of well recognized corporate shares established under state law.

The BDTP™ platform is not currently operational for any securities and any such securities must first be registered with the SEC under the Securities Act or have an available exemption from registration.

Frequently Asked Questions regarding Proposed BDTP ™ platform

• Are the shares traded on the BDTP ™ platform a different class of common stock?
  • The shares that may be traded on the BDTP^TM Platform in the future, if approvals were granted, would also be “normal” shares of common stock, of the same and only class of common stock as owned by existing shareholders. To use the BDTP™ platform, the shares of the shareholder must be in an electronic share format, accomplished via the standard DWAC procedure. The ownership and voting rights of all shareholders of common stock are identical and the Company only has one class of common stock authorized.

• Do the common shares need to be exchanged for electronic fungible shares to use the platform?
  • The BDTP^TM, once approved and operational, currently contemplates executing orders for common shares in an electronic fungible form, also known as a digital share. There is no exchange of shares needed; however, the shareholder would need to have their shareholdings in an electronic form, accomplished via the DWAC process through a broker dealer and the transfer agent.

• Will the BEFS traded on the proposed BDTP^TM trade at different prices than the OTC Pink?
  • Because it is a distinct market from the OTC Pink, where the common shares currently trade, there is a possibility that the prices reflected for the common shares will differ across the trading markets. BDTP^TM, for instance, only accepts free trading securities (of BlackStar common stock) for cash and prohibits shorting. As a result, there could be a difference in price from one market to the next due to different liquidity in the markets as there are arbitrage opportunities in both separate trading venues.

• Are the BEFS crypto assets or tokens?
  • The proposed BDTP^TM is designed to trade existing shares of common stock (in an electronic form) and NOT crypto assets, cryptocurrency, or tokens. We are not attempting to “tokenize” securities, but instead our concept is to use Distributed Ledger Technology (a private blockchain) to execute, and record transactions with higher efficiency and lower cost, which is essentially a back-office function. The use of a blockchain to record transactions does not make shares of common stock traded on the platform “crypto” assets. The Company does not operate in the crypto asset market nor is it proposing to do so with the BDTP^TM

Additional Features of the BDTP™ Platform

The BDTP™ platform will contain three features: (1) the main trading feature as discussed above, (2) an indication of interest feature for future offerings, and (3) a corporate governance feature.

The indication of interest feature, known as the “Internet Digital Offering™” or IDO™, is expected to record indications of interest for potential, initial or secondary future offerings proposed by the public or private company that subscribes to our customized platform. If allowed under SEC regulations, the funding of private and public companies on a blockchain platform may represent a fairer distribution of securities with a permanent record of solicitation. The distributive ledger technology on a blockchain would enable companies to gauge interest on a first come, first served basis. The IDO™ feature is only for use in self-underwriting situations and includes a method of facilitating a public or private offering for a company on an immutable blockchain. This may consist of the subscriber company uploading a preliminary prospectus to the platform if they are interested in raising capital, collecting a list of company shareholders, and collecting a list of non-company shareholders who have met at least a minimum threshold for potential interest in investing in the company, then prioritizing potential investors meeting the set requirements by the recorded timestamp and distributing the offering materials to them at the appropriate time in compliance with existing securities rules and regulations. Our blockchain-based system may give companies a tool to self-underwrite under the current rules if approved by the SEC and FINRA.

The final feature would record corporate governance information about a public company on an immutable blockchain. This may include a method of preparing for and complying with a financial statement audit, recording general corporate matters, recording financial and accounting matters, recording tax filing matters, on the immutable blockchain at least every 30 days to three months, wherein each recording comprises a time stamp of receipt and cannot be subsequently manipulated or changed, creating a permanent record from inception. The permanent record-keeping of a blockchain based system, we believe, lowers the cost, time and risk to the securities attorney and auditor when preparing an offering document. We currently expect that the corporate governance and indication of interest features can be made available to regulators in real-time.

Licensing the BDTP™ Platform with An Existing Trading System

The BDTP™ platform is designed to be licensed to any company, together with an existing ATS arrangement to execute and process trades, for implementation by the licensee. These electronic fungible shares will trade on the BDTP™ platform exactly as shares of stock currently trade on OTC Markets, without markup or markdown in true “spot transactions.” Any company will be able to license and use our system or platform to trade electronic fungible shares.

We currently intend to seek a contractual arrangement such as a license with an existing ATS for a quoting service, similar to the current listing of our common stock with OTC Markets Group. At this time, no ATS has committed to an arrangement. We intend to expend funds overcontinue having discussions with various ATS’s until we have secured an arrangement that will allow the BDTP™ platform to operate.

We have spoken to broker-dealers and clearing firms throughout the development process but have yet to secure a contractual relationship. We will continue to seek out this licensee and have increased our efforts to reach out to various broker-dealers since completing the demonstration platform and hope to secure a licensee within the next four quartersthree to six months. The ability to obtain a licensee may be dependent on our ability to confirm that FINRA and the SEC will allow trading on the BDTP™ platform as follows:described. If this is the case, the Company may alternatively seek to acquire an existing broker-dealer in order to become a registered broker-dealer. Once we have secured a licensee broker-dealer, clearing firm, or ATS for the operations of the BDTP™ platform, we will seek subscriber companies desiring customized platforms.

Our BudgetOnce the BDTP™ platform is live and formal arrangements have been finalized with an existing ATS to execute and reports trades, the Company intends to license the platform to other publicly traded companies as a subscription service with a company specific customizable interface operation through a substantially similar license with the existing ATS. This subscription service, BlackStar’s “Blockchain Equity Trading™” or BET™, would enable each subscribing company to have access to their own trading platform, based upon our core platform, where shares of their common stock could be traded. The technical platform operations and updates will be managed by Artuova, through our oversight and direction. The software building of additional platforms for subscriber companies may take as little as a few business days. We have not yet developed our marketing campaign to seek out these customers, but plan to do so after securing a license with an existing ATS. We anticipate our overall expansion of services into the blockchain industry within the next twelve months.

The initiation of operations of the BDTP™ platform will be dependent on the exact arrangement that we enter into and the regulatory approvals that may be required (see “Regulatory Challenges” below).

BDTP™ Patents

On December 26, 2023, the United States Patent and Trademark Office (USPTO) issued a patent to the Company for a patent application titled “System and Method for Matching Orders and Immutable Blockchain Ledger for all Customer Trading Activity with Settlement into the Broker Dealer Ecosystem.” The technology claimed in the patent, the BDTP™ platform, enables trading of common shares of a public company on a blockchain.

BlackStar received a ‘Notice of Allowance’ from the United States Patent and Trademark Office (USPTO) on February 14, 2024, for a patent application titled “System and Method for Preparing for a SEC Financial Statement Audit by Recording Corporate Governance Information on an Immutable Blockchain.” The technology claimed in the patent, which generally relates to recording corporate governance information on a blockchain, helps with the organization of public and private companies preparing for a financial audit, assists with compliance with rules and regulations of various regulatory authorities (e.g. Securities and Exchange Commission) and is compatible with use through any U.S. brokerage firm. The audit platform, which is nearing completion of the development phase, may help advance the transparency of internal corporate governance and controls, contributing to the corporate accountability movement. The patent is expected to be issued by May 2024.

Further patents related to various features of the platform are still pending.

Existing Financing

We currently have no committed source for funding our operations but have entered into convertible promissory notes and loans to continue operations in the next year is as follows:

Theinterim. Financings from the past two fiscal years are summarized here. On February 14, 2022, we entered into a convertible promissory note with Sixth Street Lending LLC for $55,750 (see the Current Report on Form 8-K filed on March 2, 2022 and incorporated by reference herein). On May 5, 2022, the Company may change any or allentered into a financing agreement with 1800 Diagonal Lending LLC to borrow $55,750 (see the Quarterly Report on Form 10-Q filed on November 21, 2022 and incorporated by reference herein). On August 30, 2022, the Company entered into a financing agreement with 1800 Diagonal Lending LLC to borrow $43,750 (see the Quarterly Report on Form 10-Q filed on November 21, 2022 and incorporated by reference herein). On October 31, 2022, the Company entered into a financing agreement with 1800 Diagonal Lending LLC to borrow $55,000 (see the Quarterly Report on Form 10-Q filed on November 21, 2022 and incorporated by reference herein). In 2023, we received loans of the budget categories in the execution of its business model. None of the line items are to be considered fixed or unchangeable. The Company may need substantial additional capital to support its budget. We have not recognized revenuesan aggregate $400,000 from our operational activities.

four investors, due nine months from receipt with interest at 11% per annum. Based on our current cash reserves of approximately $52,000$33,550 as of March 15, 2018,December 31, 2023, and our receipt in 2024 of $139,000 in short term loans from three investors, we estimate that we will have the cash for an operational budget of threeapproximately four (4) months. We intend to offer a private placement of stock or convertible Notespreferred shares to investors in order to achieve $1,200,000at least $5,000,000 in funding in the next year.year to scale our business plan. We intend to commence this offering in late Springspring of 2018.2024. If we are unable to generate enough revenue to cover our operational costs, we will need to seek additional sources of funds. Currently, we haveno committed source for any funds as of date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised if and when needed, we may not be able to carry out our business plan and could fail in business as a result of these uncertainties.

The independent registered public accounting firm’s report on our financial statements as of December 31, 2017, includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.

While our cash reserves were only $52,000 in March 2018, our parent company, IHG, has agreed to fund on an interim basis any shortfall in our cash reserves. We would use our funds to pay legal, accounting, office rent and general and administrative expense. Our estimates were that $24,000 was adequate for these items for the last quarter of 2017. We have estimated $50,000 per quarter in 2018 in operations costs which includes legal, accounting, travel, general and administrative, audit, rent, telephones and miscellaneous. In early 2018, we completed a private placement of units for $165,000 which increased our working capital.

We received the funding to loan the monies to our first borrower company, Meshworks Media Corporation, from our parent, IHG, in the form of two loans to BlackStar for a total of $500,000. The notes are three-year notes payable at 6% interest per year.

MATERIAL TERMS OF OUR LOANS TO MESHWORKS MEDIA CORPORATIONBlockchain Equity Management Corp.

Meshworks Media CorporationBlackStar is conducting a continuing analysis for the Company’s involvement in Distributed Ledger Technology (“Meshworks”DLT”) borrowed $250,000 fromrelated ventures. To pursue that end, the Company formed a subsidiary, Blockchain Equity Management Corp. (“BEMC”), formerly known as Crypto Equity Management Corp., on September 30, 2017. The name change occurred on February 3, 2023 in order to align the subsidiary more closely with our proposed business plan. As a merchant bank, BlackStar Enterprise Group, Inc. on November 1, 2016, bearing Interest atintends to seek to provide access to capital for companies and is specifically seeking out ventures involved in DLT. BlackStar recognizes the annual rate of 12 % and a second loan was made for $250,000similarities in January 2017, with the following material terms:

1. Payment. Commencing January 2, 2017, the venture shall issue paymentsrapidly evolving DLT ecosystem today compared to the lender(s) equal to 15% of the previous months’ revenue and said revenue payments, of principal and interest, shall continue thereafter, to be issued on the first day of each month, until the principal and interest have been paid in full to the lender(s) but in no case, later than January 1, 2019 (“Maturity Date”) when any unpaid principle and interest shall be due in full.

2. Security. The Note is secured to us by a security agreement covering all of Meshworks' assets and revenues.

3. Additional Consideration. We received, as additional consideration, 2 shares of Series B Convertible Preferred stock (Series B Stock) for each one dollar ($1.00) loaned to Meshworks. After repayment of the loan but no later than February 1, 2019 the Series B Stock, which we own is to receive dividends from profit based on 15% of the previous months’ revenue which will continue until such time as we have received distributions equal to the full amount of the loan. At that point, the Series B Preferred shall automatically convert to common stock of Meshworks at the rate of one share of common for each share of preferred converted. Until such time as all dividends have been paid, Meshworks shall not pay any dividends to or on its outstanding common stock.

Our Meshworks loan met our lending criteria as follows:

Update90’s, which present both challenges and opportunities. BlackStar intends to facilitate funding and management of DLT involved companies through majority controlled joint ventures BEMC. BlackStar, through BEMC, intends to initially control and manage each venture. Potential ventures for both BlackStar and BEMC will be analyzed using the Meshworks Loan:

On September 27, 2017, thecombined business experience of its executives, with BEMC looking to fill those venture criteria with companies in digital share related businesses such as blockchain or DLT technologies. The Company entered into an Agreement to Settle Debt with International Hedge Group, Inc. (“IHG”). the majority stockholder of the Company. Under the agreement, IHG agreed to compromise and settle the Principal Amount under the verbal working capital loan agreement of BEGI, as of November 2016, in the amount of $400,000, by assignment, without recourse, of the MeshWorks Media Corp, Promissory Notes together with all collateral agreements. Upon signing of the agreement, a promissory note was delivered for the difference from IHG to BEGI in the amount of $145,000 for BEGI return of principal of $100,000 and all of the accrued interest to date under the MeshWorks Media Corp. notes, payable in twelve-month with interest of 1% per quarter on the last day of each quarter until paid. The assignment of the MeshWorks Media Corp. Promissory Note and the note from IHG to BEGI in the amount of $145,000 is full and complete payment and consideration for the transaction referenced hereinabove. A copy of the agreement is available by accessing the Form 8-K filed by the Company with the Securities and Exchange Commission (www.sec.gov) on September 27, 2017.

As a result of our Agreement to settle debt we no longer have any loans to companies and we dodoes not intend to make loansdevelop Investment Objectives or “criteria” in any manner but will rely on the acumen and experience of its executives. BEMC is currently non-operational, inactive and has no business or clients at this time. It is intended to offer advisory services as to how to implement use of a custom platform for the client’s equity based off of the BDTP^TM. BEMC has not established any anticipated time frames or key milestones for BEMC business.

In addition, BlackStar intends to offer consulting and regulatory compliance services to blockchain and DLT companies and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in involvement in electronic fungible share-related ventures though BEMC, mainly in the future. Under our revised businessareas of blockchain and distributed ledger technologies. Our long-term plan we will control allfor provision of services is to finance the operations of BEMC through the successful production of the BDTP^TM platform and subsequent subscription of the platform’s design as a service. As a subsidiary of BlackStar, BEMC additionally intends to offer consulting and regulatory compliance services to digital share related entities and blockchain entrepreneurs for securities, tax, and commodity issues. Our Company has always operated under the assumption that cryptocurrencies and tokens are “securities” and regulated under the existing law, SEC rules and other financial regulations. Due to significant experience of our business ventures until divestiture, spin-off,management in the U.S. securities and commodities industry, we felt that we had regulatory compliance backgrounds that could be useful in assisting with regulatory compliance for former cryptocurrency offerors and token offerors. Management believes that there may be other companies offering unregistered securities in digital form with possible violations of securities and other laws including FinCen regulation, CFTC rules, exchange rules, AML, and tax laws. The concept of BEMC as a subsidiary of BlackStar is to provide compliance services for the multitude of laws that are applicable to digital securities. Currently in the testing and completion phase, BlackStar intends to build trading platforms for subscriber companies based on the BDTP^TM model and offer the platforms through a subscription service called BlackStar ‘Blockchain Equity Trading ^TM’ (“BET ^TM”), generating ongoing revenue for the Company.

Neither BEMC nor BlackStar intend to underwrite these entities or liquidation.entrepreneurial companies, nor do we intend to act as broker-dealers or investment companies, though we acknowledge the potential requirements to register as such or to claim exemption from registration.

REPORTS TO SECURITIES HOLDERSBlockchain Equity Management Corp. is not currently operational, nor has it been since inception. The specific type and nature of services to be provided by BEMC may change based on whether the BDTP^TM platform is able to ever begin services.

We provideBlockchain Equity SRO, Inc.

In addition to the services described above, on December 31, 2017, BlackStar formed a subsidiary nonprofit company, Crypto Industry SRO Inc., now known as Blockchain Equity SRO, Inc., a self-regulatory membership organization for the digital share industry. The name change was completed on February 3, 2023. It is not yet functioning in any capacity at this time.

Regulatory Challenges of our Business Concept (BDTP^TM)

BlackStar has always recognized that digital equities must be registered or otherwise have an annual report that includes audited financial informationexemption from registration within the existing SEC regulations and guidelines. BlackStar’s aim is to our shareholders. We will make our financial information equally availabledevelop BDTP^TM, a digital share trading platform, to any interested parties or investors throughtrade free-trading BlackStar common stock only. The regulatory challenges presented come from integration of the platform into the existing broker-dealer ecosystem, approvals/advice of and compliance with the disclosure rules forand regulations of OTC Markets Group, SEC, FinCen, IRS, anti-money laundering rules, or FINRA. These rules encompass the functionality of the system, cybersecurity laws, and state and federal financial laws. No assurance can be given that such regulatory approvals will be obtained in a small business issuer undertimely manner or at all.

SEC Approval

Our first regulatory challenge is seeking the Securities Exchange Actapproval of 1934. We are subject to disclosure filing requirements including filing Form 10K annually and Form 10Q quarterly. In addition, we will file Form 8K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission (“SEC”), of our concept for a security that could be traded on the BDTP^TM because the SEC has not yet adopted rules or regulations specific to the digital securities industry nor any regulations involving blockchain or distributed ledger transactions. The SEC has chosen to enforce its existing anti-fraud laws and the registration rules and regulations. Accordingly, we must work through an undefined SEC approval process for our proposed system. We anticipate many comments and questions from the SEC during any approval process for the BDTP platform. We anticipate that could take one to three years to complete the approval process for the BDTP platform.

The SEC may adopt new rules and regulations relating to our digital based concept for trading and securities, which rules and regulations are impossible to predict at this time. Any new rules and regulations could make our concept for digital trading and securities difficult to bring into compliance with new rules and regulations resulting in our inability to achieve commercialization and revenues. Such events could result in costly delays in achieving regulatory approval, resulting in increased legal, administrative, and accounting costs and delays, or denial of revenues from our concept.

We anticipate initiating formal discussions with the SEC’sSEC and its relevant divisions and offices, including the Division of Trading and Markets, within the next six months with respect to providing a detailed demonstration of how the system works within the broker dealer ecosystem, and seeking the approval or clearance of our BEFS being eligible to be traded on our BDTP™ platform. We believe it may take between six to nine months to address SEC comments and questions, and there is no assurance that we will be successful in our BEFS being approved or cleared for trading on our BDTP^TM platform.

We have no way of knowing at this date what new rules and regulations the SEC or any other regulatory body may adopt which could impact the structure and the timing of approval or clearance of any uncertificated shares on our BDTP platform in the future and there is a significant potential impact of any future adoption of new rules and regulations, which could delay our attempt to trade uncertificated shares on our BDTP platform.

FINRA

Our next regulatory challenge is that our concept requires implementation by a broker dealer registered with FINRA. We do not anticipate registering our company as a broker dealer, but instead would contract with a broker dealer to act as our agent/intermediary for our concept, thereby alleviating our Company of all regulatory compliance issues of a broker dealer.

As with the SEC, the broker dealer may be challenged due to the fact FINRA has no developed rules and regulations involving digital trading of shares specifically. FINRA has, however, chosen to raise disclosure requirements and to conduct heightened examinations for broker dealers as to any involvement in the digital industry, with intent to bring enforcement actions for violations of SEC regulations or FINRA rules, and disciplinary actions against broker dealers for any such violations. As a direct result, it may be difficult to find a broker dealer willing to be in vanguard of the digital trading and securities industry involving our concept – even if we are able to achieve SEC approval for our digital trading platform. Although we will continue to pursue both formal and informal discussions with both the SEC and a FINRA regulated broker dealer concurrently, we do not believe it would be constructive to commence substantive negotiations with a FINRA regulated broker dealer until we have substantially completed the SEC approval process. Once we believe we have substantially completed the SEC approval process, we believe it may take an additional six to twelve months to reach agreement with a FINRA regulated broker dealer.

Public Reference Room

We do not believe that FINRA is a major regulatory hurdle because upon registration as a “Registered Security” FINRA broker dealers can choose to trade it or not. FINRA cannot directly regulate the security. It can regulate any ATS as to FINRA Rules if it is also FINRA registered (due to the requirement of a Broker Dealer license), but that depends primarily on SEC regulation of the ATS.

SEC Alternative Trading System

The final significant regulatory challenge involves the Alternative Trading System (“ATS”) as defined under 17 CFR §242.300. We understand the SEC position on digital securities to be that digital assets are required to be traded through an ATS, with which we agree. An ATS must comply with many control, regulatory, reporting, securities, inspection, procedural, and disclosure requirements. The SEC, however, has not yet proposed regulations for ATS trading of digital securities and is treating ATS applications under existing regulations.

We do not intend to attempt to register as an ATS but rather will seek to contract with an existing ATS to license our platform (if approved by regulatory agencies) for the ATS use and management. Our platform will operate just as any other software platform used for trading by an ATS or broker/dealer. We believe this is ultimately the best solution from a regulatory standpoint to have the existing ATS manage those requirements for compliance with SEC and FINRA rules and regulations.

It could take one year to eighteen months to prove the concept to an existing ATS and then to properly integrate operations into the ATS monitoring and regulatory systems. The ATS would need to obtain SEC approval to add the BDTP^TM platform to its existing trading platform which could take one year to eighteen months.

We cannot at 100 F Street NE, Washington, DC 20549. this time anticipate every regulatory action of the digital security industry in the future. No proposals for regulation have even reached published proposal stage. New regulations of the digital securities industry could render our business either impossible due to the nature of regulations, or uneconomical, which would doom our concept.

We do not have any time frame for achieving any of the regulatory challenges although we believe that it may take between one to three years before the BDTP^TM platform is operational with all required regulatory approvals.

The publicSEC may obtain informationplace additional oversight focus on broker-dealers in the following areas due to the digital nature of the securities: safekeeping of funds and operations that are unique to the safety and custody of Digital Asset Securities; broker-dealers’ and any affiliated entities’ compliance with registration requirements; adequate AML procedures, controls, and documentation regarding Digital Asset Securities; disclosure and due diligence obligations related to the offering of Digital Asset Securities; review of the existence and disclosures of conflicts of interest and the compliance policies and procedures to address them (e.g. broker-dealers may operate in multiple capacities, including as trading platforms or proprietary traders of Digital Asset Securities on their own and other platforms); and review of FINRA-member broker-dealer compliance processes in connection with the evaluation, approval, and monitoring of outside business activities related to digital assets. Many of these compliance issues will remain if we license with a broker-dealer instead of acquiring one.

Volatility of Cryptocurrencies and Tax Implications – Neither BlackStar nor BEMC will be trading in, accepting loan repayments in, or making loans in cryptocurrencies; the intent was to build a platform on which to trade digital securities of BlackStar on a private blockchain.

Cybersecurity Implications of DLT – Transactions on the operationdistributed ledger fabric are protected by public-key X.509 certificates. The protection of PII data is the Public Reference Roomresponsibility of each brokerage dealer. Any blockchain code used will be placed in a public repository after having been certified by callingan independent cybersecurity audit. Further, BEMC bases the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxyoperational requirements and information statements,cyber-security framework in part on the following publications the “Distributed Ledger Technology: Implications of Blockchain for the Securities Industry” published by FINRA, and other information regarding issuers that file electronically with the SEC.European Union Agency for Network and Information Security (ENISA) report entitled “Distributed Ledger Technology & Cybersecurity.”

ITEM 1A. RISK FACTORS.

Item 1A. Risk Factors.

FORWARD LOOKING STATEMENTS

THIS DOCUMENT INCLUDES FORWARD-LOOKING STATEMENTS, INCLUDING, WITHOUT LIMITATION, STATEMENTS RELATING TO BLACKSTAR’S PLANS, STRATEGIES, OBJECTIVES, EXPECTATIONS, INTENTIONS AND ADEQUACY OF RESOURCES. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS THAT MAY CAUSE OUR COMPANY’S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: OUR ABILITY OF TO IMPLEMENT OUR BUSINESS STRATEGY; ABILITY TO OBTAIN ADDITIONAL FINANCING; BLACKSTAR’S LIMITED OPERATING HISTORY; UNKNOWN LIABILITIES ASSOCIATED WITH FUTURE ACQUISITIONS; ABILITY TO MANAGE GROWTH; SIGNIFICANT COMPETITION; ABILITY TO ATTRACT AND RETAIN TALENTED EMPLOYEES; AND FUTURE GOVERNMENT REGULATIONS; AND OTHER FACTORS DESCRIBED IN THIS FILING OR IN OTHER OF BLACKSTAR’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. BLACKSTAR IS UNDER NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. 

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, and the following is a summary of key risk factors when considering an investment. This summary should be read together with the more detailed description of each risk factor contained in the subheadings further below and should not be relied upon as an exhaustive summary of the material risks facing our business:

Risk Factors Relating to Our Company

Risk Factors Relating to Our Business

Risks Relating to Our Venture Investments

Risk Factors Related to Our Platform and Blockchain/Distributed Ledger Technology

Risks Relating to Ownership of BlackStar Enterprise Group, Inc. Common Stock

RISK FACTORS RELATING TO OUR COMPANY

OUR SUCCESS WILL DEPEND, TO A LARGE DEGREE, ON THE EXPERTISE AND EXPERIENCE OF THE MEMBERS OF OUR MANAGEMENT TEAM.

We will rely exclusively on the skills and expertise of our management team in conducting our business. Our management team has experience in identifying, evaluating and acquiring prospective businesses for which we may ultimately provide loans, but there is no assurance our managements assessments will be successful in placing loans which are repaid with interest. Accordingly, there is only a limited basis upon which to evaluate our prospects for achieving our intended business objectives.

We will be wholly dependent for the selection, structuring, closing and monitoring of all of our investments on the diligence and skill of our management team, under the supervision of our Board of Directors. There can be no assurance that we will attain our investment objective. The management team will have primary responsibility for the selection of companies to which we will loan or finance, the terms of such loans and the monitoring of such investments after they are made. However, not all of the management team will devote all of their time to managing us. These factors may affect our returns.

We have limited resources and limited operating history.

OUR OPERATIONS AS A MERCHANT BANK MAY AFFECT OUR ABILITY TO, AND THE MANNER IN WHICH, WE RAISE ADDITIONAL CAPITAL, WHICH MAY EXPOSE US TO RISKS.

Our business will require a substantial amount of capital. We may acquire additional capital from the issuance of senior securities, including borrowings or other indebtedness, or the issuance of additional shares of our common stock. However, we may not be able to raise additional capital in the future on favorable terms or at all. We may issue debt securities, other evidences of indebtedness or preferred stock, and we may borrow money from banks or other financial institutions, which we refer to collectively as "senior securities"“senior securities”. If the value of our businesses declines, we may be unable to satisfy loan requirements. If that happens, we may be required to liquidate a portion of our ventures and repay a portion of our indebtedness at a time when such sales may be disadvantageous. As a

result of issuing senior securities, we would also be exposed to typical risks associated with leverage, including an increased risk of loss. If we issue preferred stock, the preferred stock would rank "senior" to common stock in our capital structure, preferred stockholders would have separate voting rights and might have rights, preferences, or privileges more favorable than those of our common stockholders. If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease.

WE MAY ENGAGE IN BUSINESS ACTIVITIES THAT COULD RESULT IN US HOLDING INVESTMENT INTERESTS IN A NUMBER OF ENTITIES WHICH COULD SUBJECT US TO REGULATION UNDER THE INVESTMENT COMPANY ACT OF 1940.

Although we will be subject to regulation under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, we believe we will not be subject to regulation under the Investment Company Act of 1940 (the "1940 Act") insofar as we will not be engaged in the business of investing or trading in securities within the definitions and parameters which would make us subject to the “1940 Act,” or holding unconsolidated minority interests in multiple companies and cash which might fall within the “holding company” definitions. In the event we engage in business activities that result in us holding investment interests in a number of nonconsolidated entities, we might become subject to regulation under the 1940 Act. In such event, we would be required to register as an Investment Company and incur significant registration and compliance costs. Additionally, the 1940 Act requires that a number of structural safeguards, such as an independent board of directors and a separate investment adviser whose contract must be approved by a majority of the company’s shareholders, be put in place within such companies. The 1940 Act also imposes significant disclosure and reporting requirements beyond those found in the Securities Act and the Exchange Act of 1934, as amended (the Exchange Act). Likewise, the 1940 Act contains its own anti-fraud provisions and private remedies, and it strictly limits investments made by one investment company in another to prevent pyramiding of investment companies, leading to consolidated investment companies acting in the interest of other investment companies rather than in the interest of securities holders. The labeling of the Company as an investment company could significantly impair our business plan and operations and have a material adverse effect on our financial condition. Compliance with the 1940 Act is prohibitively expensive for small companies, in our estimation, and even if it meant divestiture of assets, we would intend to avoid being classified as an Investment Company.

WE ARE DEPENDENT UPON OUR PART-TIMELIMITED MANAGEMENT FOR OUR SUCCESS WHICH IS A RISK TO OUR INVESTORS.

We currently have one full-time manager, our CEO Joe Kurczodyna. Our lack of full-time management may be an impediment to our business achievement. Without additional full-time officers, we may not have sufficient devoted time and effort to find successful loan prospects, additional capital, or manage our loan portfolio, which could impair our ability to succeed in our business plan and could cause investment in our Company to lose value.

WE HAVE A LIMITED AMOUNT OF FUNDS AVAILABLE FOR INVESTMENT IN VENTURES AND AS A RESULT OUR VENTURES MAY LACK DIVERSIFICATION.

Based on the amount of our existing available funds, it is unlikely that we will be able to commit our funds to loans to large number of ventures. We intend to operate as a diversified merchant bank. Prospective investors should

understand that our venture investments are not, and in the future may not be, substantially diversified. We may not achieve the same level of diversification as larger entities engaged in similar activities. Therefore, our assets may be subject to greater risk of loss than if they were more widely diversified. The loss of one or more of our limited number of investments could have a material adverse effect on our financial condition.

WE HAVE A LACK OF REVENUE HISTORY AND STOCKHOLDERS CANNOT VIEW OUR PAST PERFORMANCE SINCE WE HAVE A LIMITED OPERATING HISTORY.

We were incorporated on December 17, 2007 for the purpose of engaging in any lawful business and have adopted a plan as a small and micro-cap market merchant banking company. During the period of inception through December 31, 2017,2023, we didhave not recognizerecognized revenues. We are not profitable. We must be regarded as a new venture with all of the unforeseen costs, expenses, problems, risks and difficulties to which such ventures are subject.

WE ARE NOT DIVERSIFIED, AND WE WILL BE DEPENDENT ON ONLY ONE BUSINESS, MERCHANT BANKING.

Because of the limited financial resources that we have, it is unlikely that we will be able to diversify our operations. Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within the merchant banking industry and therefore increase the risks associated with our operations due to lack of diversification.

WE CAN GIVE NO ASSURANCE OF SUCCESS OR PROFITABILITY TO OUR STOCKHOLDERS.

There is no assurance that we will ever operate profitably. There is no assurance that we will generate revenues or profits, or that the market price of our common stock will be increased thereby.

WE MAY HAVE A SHORTAGE OF WORKING CAPITAL IN THE FUTURE WHICH COULD JEOPARDIZE OUR ABILITY TO CARRY OUT OUR BUSINESS PLAN.

Our capital needs consist primarily of expenses related to general and administrative, and legal and accounting, and software development and could exceed $200,000$500,000 in the next twelve months. Such funds are not currently committed, and we have cash of approximately $52,000$33,550 as of the date of this filing.

December 31, 2023.

WE WILL NEED ADDITIONAL FINANCING FOR WHICH WE HAVE NO COMMITMENTS, AND THIS MAY JEOPARDIZE EXECUTION OF OUR BUSINESS PLAN.

We have limited funds, and such funds may not be adequate to carry out our business plan in the small and micro-cap market merchant banking industry. Our ultimate success depends upon our ability to raise additional capital. We are investigating the availability, sources, and terms that might govern the acquisition of additional capital.

We have no commitment at this time for additional capital.  If we need additional capital, we have no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to us. If not available, our operations will be limited to those that can be financed with our modest capital.

WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD CAUSE A LOSS OF CONTROL BY OUR PRESENT MANAGEMENT AND CURRENT STOCKHOLDERS.

We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance, represent a majority of the voting power and equity of our Company. The result of such an issuance would be those new stockholders and management would control our Company, and persons unknown could replace our management at this time. Such an occurrence would result in a greatly reduced percentage of ownership of our Company by our current stockholders, which could present significant risks to stockholders.

WE HAVE AUTHORIZED AND DESIGNATED A CLASS A PREFERRED SUPER MAJORITY VOTING CONVERTIBLE STOCK, WHICH HAVING VOTING RIGHTS OF 60% TO OUR COMMON STOCK AT ALL TIMES.

Class A Preferred Super Majority Voting Convertible Stock (the “Class A Preferred Stock”) of which 10,000,000 shares of preferred stock have been authorized for the class. The Class A Preferred Stock are to have super majority voting rights over common stock voting 60% at all times. At this time, all shares of the Class A Preferred Stock have been issued to International Hedge Group, Inc. which is controlled by Mr. Harris and Mr. Kurczodyna, our officers and directors.

OUR OFFICERS AND DIRECTORS MAY HAVE CONFLICTS OF INTERESTS AS TO CORPORATE OPPORTUNITIES WHICH WE MAY NOT BE ABLE OR ALLOWED TO PARTICIPATE IN AND MAY RECEIVE COMPENSATION FROM OUR PARENT COMPANY.

Presently there is no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company. We have no intention of merging with or acquiring a business opportunity from any affiliate or officer or director. Our current officers and directors also currently serve our parent company, International Hedge Group, Inc., which may have consulting agreements with some of our venture companies and as such is a direct conflict and such officers and directors may be paid by such parent. We intend to diversify and/or expand our Board of Directors in the future.

WE HAVE AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED BY DELAWARE STATUTES.

Delaware General Corporation Laws provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person’s promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us that we will be unable to recoup.

OUR DIRECTORS’ LIABILITY TO US AND STOCKHOLDERS IS LIMITED

Delaware General Corporation Laws exclude personal liability of our directors and our stockholders for monetary damages for breach of fiduciary duty except in certain specified circumstances. Accordingly, we will have a much more limited right of action against our directors that otherwise would be the case. This provision does not affect the liability of any director under federal or applicable state securities laws.

We have no full-time employees which may impede our ability to carry on our business. Our officers are independent consultants who devote up to 2040 hours per week to Company business. The lack of full-time employees may very well prevent the Company’s operations from being efficient, and may impair the business progress and growth, which is a risk to any investor.

A LAWSUIT WAS FILED AGAINST THE COMPANY ON NOVEMBER 6, 2023.

On November 6, 2023, GS Capital Partners LLC filed a lawsuit against the Company in Nevada regarding the unavailability of conversion shares relating to the Promissory Note entered into on October 11, 2021 and the remaining principal balance of $33,682. At the outset of the case, a temporary restraining order was entered preventing the Company from trading any shares. As currently postured, Plaintiff seeks specific performance (a mandatory injunction) requiring the conversion of approximately 257,000,000 shares and possibly additional recovery of legal fees and interest. The lawsuit increases the Company’s financial and administrative burdens and is a risk to the Company’s capital.

On February 27, 2024, the Company, through its attorneys, filed an answer to Plaintiff’s complaint and counterclaims against Plaintiff. In addition to denying many of the allegations laid out in the lawsuit, the Company invokes several affirmative defenses that bar Plaintiff’s recovery in the action and alleges that Plaintiff breached the terms of the agreement, including, but not limited to, obtaining the conversion of BlackStar’s stock after the Promissory Note was fully paid off.

Amongst other claims, the Company alleges that the Plaintiff acted in bad faith and in violation of usury laws by recovering an estimated $600,000 dollars in BlackStar stock off of a $60,000 promissory note, estimated at a roughly 170% interest rate. The Company seeks a judgment in its favor and against Plaintiff, compensatory damages in an amount to be proven at trial, declaratory relief voiding the agreement as illegal under Section 29(b) of the Securities Act, punitive damages in an amount to be proven at trial, interest on all damages, and attorneys’ fees. The Company awaits a response to the counterclaims.

The risks of continued litigation on this matter are as follows: the Company may need to increase the authorized shares of common stock in order to accommodate any continued conversions, judgments, or settlements, and the Company could be exposed to further risks of lawsuits for similar issues. The Company will also expend additional resources in the ongoing litigation and any potential resolutions outside the above-reference conversions to common stock (which were already contemplated in the original convertible promissory note), negatively impacting its financial position.

RISK FACTORS OF THE COMPANY

WE MAY NOT REALIZE RETURNS ON OUR INVESTMENTS IN VENTURES FOR SEVERAL YEARS. THUS, AN INVESTMENT IN SHARES OF OUR COMMON STOCK IS ONLY APPROPRIATE FOR INVESTORS WHO DO NOT NEED SHORT TERM LIQUIDITY IN THEIR MONEY.

We intend to make loans as quickly as possible consistent with our business objectives in those investments that meet our criteria. However, it is likely that a significant period of time will be required before we are able to achieve repayment and any additional value from warrants or stock conversions that we hold in an eligible venture company.

ILLIQUID NATURE OF OUR INVESTMENTS.

We anticipate that substantially all of our ventures (other than short-term investments) will consist of controlling interests in ventures that at the time of acquisition are unmarketable, illiquid and for which no ready market will exist, if such a market does in fact exist. Our venture investments are intended to be in companies in which we will have controlling interest and will be privately negotiated transactions. There is not anticipated to be any market for the ventures until such until such have developed successful businesses.

Because of the illiquid nature of our venture investments, a substantial portion of our assets will be carried on our books adjusted for accrued losses, depreciation and impairment which could in some cases result in a write off. This value will not necessarily reflect the amount which could be realized upon a sale, or payoff in the future.

FAILURE TO COMPLY WITH ANTI-BRIBERY, ANTI-CORRUPTION, AND ANTI-MONEY LAUNDERING LAWS COULD SUBJECT US TO PENALTIES AND OTHER ADVERSE CONSEQUENCES.

We are subject to the Foreign Corrupt Practices Act ("FCPA") and other anti-corruption, anti-bribery and anti-money laundering laws in various jurisdictions. From time to time, we may leverage third parties to help conduct our businesses abroad. We and our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, channel partners, and agents, even if we do not explicitly authorize such activities. While we have policies and procedures to address compliance with such laws, we cannot assure you that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Any violation of the FCPA or other applicable anti-bribery, anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, or suspension or debarment from U.S. government contracts, all of which may have an adverse effect on our reputation, our business, results of operations and financial condition.

OUR REPORTED FINANCIAL RESULTS MAY BE MATERIALLY AND ADVERSELY AFFECTED BY CHANGES IN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES.

Generally accepted accounting principles in the United Sates are subject to interpretation by the Financial Accounting Standards Board ("FASB"), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and could materially and adversely affect the transactions completed before the announcement of a change. Additionally, the adoption of new or revised accounting principles may require that we make significant changes to our systems, processes and controls.

CONTINUED COMPLIANCE WITH REGULATORY AND ACCOUNTING REQUIREMENTS WILL BE CHALLENGING AND WILL REQUIRE SIGNIFICANT RESOURCES.

We spend a significant amount of management time and external resources to comply with changing laws, regulations and standards relating to corporate governance and public disclosure, including evolving SEC rules and regulations, Nasdaq Market rules, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Sarbanes-Oxley Act of 2002, which requires management’s annual review and evaluation of internal control over financial reporting. Failure to comply with these laws and rules could lead to investigation by regulatory authorities, de-listing from the Nasdaq Market, or penalties imposed on us.

IF WE ARE UNABLE TO MAINTAIN EFFECTIVE DISCLOSURE CONTROLS AND INTERNAL CONTROLS OVER FINANCIAL REPORTING, INVESTORS MAY LOSE CONFIDENCE IN THE ACCURACY AND COMPLETENESS OF OUR FINANCIAL REPORTS, AND THE MARKET PRICE OF OUR STOCK MAY BE AFFECTED.

If we are unable to maintain effective disclosure controls and internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports. Additionally, if any new internal control procedures which may be adopted or our existing internal control procedures are deemed inadequate, or if we identify material weaknesses in our disclosure controls or internal controls over financial reporting in the future, we will be unable to assert that our internal controls are effective. If we are unable to do so, or if our auditors are unable to attest to the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock.

INCREASED ATTENTION ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG") MATTERS MAY HAVE A NEGATIVE IMPACT ON OUR BUSINESS, IMPOSE ADDITIONAL COSTS ON US, AND EXPOSE US TO ADDITIONAL RISKS.

Companies are facing increasing attention from investors, customers, partners, consumers and other stakeholders relating to ESG matters, including environmental stewardship, social responsibility, diversity and inclusion, racial justice and workplace conduct. In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings may lead to negative investor sentiment toward the Company, which could have a negative impact on our stock price and our access to and costs of capital.

RISK FACTORS RELATING TO OUR BUSINESS

WE HAVE INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES.

As of December 31, 2023, we had an accumulated deficit of $(10,421,950).

Future losses are likely to occur until we are able to receive returns on our loans and investments since we have no other sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2014 through 2023, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

OUR EXISTING FINANCIAL RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING EXPENSES.

We have no sources of income at this time and insufficient assets to meet our ongoing operating expenses. In the short term, unless we are able to raise additional debt and, or, equity we shall be unable to meet our ongoing operating expenses. On a longer-term basis, we intend to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can be no assurance that these events will be successfully completed.

Unfavorable conditions in our industry or the global economy or reduCED ACCESS TO LENDING MARKETS could harm our business.

Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our potential customers. Current or future economic uncertainties or downturns could adversely affect our business and results of operations. Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, warfare, public health issues, and terrorist attacks on the United States, Europe, the Asia Pacific region, or elsewhere, could cause a decrease in business investments or decrease access to financing which would harm our business. To the extent that our platform is perceived by potential customers as too costly, or difficult

to deploy or migrate to, our revenue may be disproportionately affected by delays or reductions in general technology spending. Also, we may have competitors, many of whom may be larger and have greater financial resources than we do and may respond to market conditions by attempting to lure away our customers. We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry.

THERE CAN BE NO CERTAINTY AS TO MARKET ACCEPTANCE OF THE PROPOSED BDTP ^TM.

The Company has no certainty as to whether the market will accept our proposed business concept and use the idea of the BDTP ^TM, should it become operational, nor is there any certainty as to how the BDTP ^TM translates to profits for the Company. There is no assurance of market acceptance or profitability of the concept or Company. The BDTP ^TM is not yet functional and may never be functional.

WE MAY FAIL TO MEET THE EVOLVING NEEDS OF OUR MARKETS, FAIL TO IDENTIFY NEW PRODUCTS, SERVICES, OR TECHNOLOGIES, OR FAIL TO COMPETE SUCCESSFULLY IN OUR TARGET MARKETS, ADVERSELY IMPACTING OUR REVENUE AND FINANCIAL RESULTS.

We design, develop and market our blockchain-based trading platform, BDTP^TM. Our success depends to a significant extent on our ability to meet the evolving needs of these markets and to enhance our existing products, solutions and technologies. In addition, our success depends on our ability to identify emerging industry trends and to develop new products, solutions, and technologies. Our existing markets and products and new markets and products may require a considerable investment of technical, financial, compliance, sales and marketing resources. We cannot assure you that our strategic direction will result in innovative products and technologies that provide value to our customers and partners. If we fail to anticipate the changing needs of our target markets and emerging technology trends, or adapt that strategy as market conditions evolve, in a timely manner to exploit potential market opportunities our business will be harmed. In addition, if demand for products and solutions from these markets is below our expectations, if we fail to achieve consumer or market acceptance of them or if we are not able to develop these products and solutions in a cost effective or efficient manner, we may not realize benefits from our strategy. Our target markets remain extremely competitive, and we expect competition to intensify as current competitors expand their product and/or service offerings, industry standards continue to evolve and new competitors enter these markets. If we are unable to successfully compete in our target markets, demand for our products, solutions and technologies could decrease, which would cause our revenue to decline and our financial results to suffer.

SYSTEM SECURITY AND DATA PROTECTION BREACHES, AS WELL AS CYBER-ATTACKS, COULD DISRUPT OUR OPERATIONS, REDUCE OUR EXPECTED REVENUE AND INCREASE OUR EXPENSES, WHICH COULD ADVERSELY AFFECT OUR STOCK PRICE AND DAMAGE OUR REPUTATION.

Security breaches, computer malware and cyber-attacks have become more prevalent and sophisticated in recent years. These attacks have occurred on our systems in the past and are expected to occur in the future. Experienced computer programmers, hackers and employees may be able to penetrate our security controls and misappropriate or compromise our confidential information, or that of our employees or third parties. These attacks may create system disruptions or cause shutdowns. For portions of our IT infrastructure, including business management and communication software products, we rely on products and services provided by third parties. These providers may also experience breaches and attacks to their products which may impact our systems. Data security breaches may also result from non-technical means, such as actions by an employee with access to our systems.

Actual or perceived breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us, our partners, our customers or third parties could expose the parties affected to a risk of loss, or misuse of this information, resulting in litigation and potential liability, damage to our brand and reputation or other harm to our business. Our efforts to prevent and overcome these challenges could increase our expenses and may not be successful. We may experience interruptions, delays, cessation of service and loss of existing or potential customers. Such disruptions could adversely impact our ability to fulfill orders and interrupt other critical functions. Delayed sales, lower margins or lost customers as a result of these disruptions could adversely affect our financial results, stock price and reputation.

AN ARTICLE PUBLISHED ON APRIL 17, 2023 BY COINTELEGRAPH.COM MAY EXPOSE US TO LIABILITY FOR VIOLATIONS OF SECTION 5 OF THE SECURITIES ACT.

On April 17, 2023, cointelegraph.com published an article by Ana Paula Pereira making various statements which were erroneous about BlackStar and our platform. When the publication of the article came to the attention of the Company, management felt that it was necessary to issue a press release (see the Current Report on Form 8-K) correcting the article such that the public and existing security holders received factual information and were not misled by the article. In responding to the article, the Company made statements about this Registration Statement, which was not yet effective, in order to remove any confusion that the article may have caused and to reinforce that it was NOT effective; the Company also clarified that the SEC was not approving the BDTP^TM platform and that this Registration Statement is a resale registration for common shares underlying convertible notes for select noteholders. While the Company believes that the article and the Company’s response do not constitute offers or sales of securities in the absence of an effective registration statement, the Company cannot eliminate the possibility that it may have liability for a violation of the Securities Act of 1933 (the “’33 Act”). Violations of the registration provisions of Section 5 of the ’33 Act give a purchaser of securities a one-year right to rescind the transaction, pursuant to Sections 12(a)(1) and 13 of the Act, as against any “seller” of the securities who has violated Section 5. In the event that there is a finding of a violation of Section 5 of the ’33 Act, certain investors may have a right of rescission. Section 5 allows purchasers to sue sellers for offering or selling a non-exempt security without registering it. If the purchaser can prove a direct link between the purchaser and the seller, and the suit is within the statute of limitations, the purchaser may obtain rescission with interest, or damages if the investor sold his securities for less than he purchased them.

In addition to the civil liability from lawsuits brought by investors, the Company and management could face civil or criminal action brought by the federal or state government, depending on the nature of the violation. Criminal liability under Section 5 subjects the defendant to not more than $10,000 in fines and not more than five years imprisonment. Any lawsuits, judgments, penalties, or orders against the Company or its management could have a significant impact on the Company, may prevent or delay it from pursuing the proposed business plan, and would likely have a negative effect on the stock price.

RISKS RELATING TO OUR VENTURE INVESTMENTS

WE HAVE NOT IDENTIFIED ANY OTHER VENTURES IN WHICH WE MAY INVEST IN A VENTURE.

We have only loaned money to one company, Meshworks Media Corporation, (and that loan has been assigned) and it may take time to find other ventures, none of which are identified as of the date of this filing.

COMPETITION FOR LOANS AND INVESTMENTS.

We expect to encounter competition from other entities having similar business objectives, some of whom may have greater resources than us. Historically, the primary competition for venture capital investments has been from venture capital funds and corporations, venture capital affiliates of large industrial and financial companies, small business investment companies, and wealthy individuals. Additional competition is anticipated from foreign investors and from large industrial and financial companies investing directly rather than through venture capital affiliates. Virtually all of our competitors will have a competitive advantage and are much larger. The need to compete for loans or investment opportunities may make it necessary for us to offer venture companies more attractive transaction terms than otherwise might be the case. We anticipate being a co-investor with other venture capital groups, and these relationships with other groups may expand our access to business opportunities.

RISKS OF COMPETITION FOR OUR VENTURE COMPANIES.

Most emerging markets are highly competitive. We anticipate that nearly all our venture companies will compete against firms with greater financial resources, more extensive development, manufacturing, marketing, and service capabilities, and a larger number of qualified managerial and technical personnel.

ILLIQUID NATURE OF OUR INVESTMENTS.

We anticipate that substantially all of our ventures (other than short-term investments) will consist of controlling interests in ventures that at the time of acquisition are unmarketable, illiquid and for which no ready market will exist, if such a market does in fact exist. Our venture investments are intended to be in companies in which we will have controlling interest and will be privately negotiated transactions. There is not anticipated to be any market for the ventures until such until such have developed successful businesses.

Because of the illiquid nature of our venture investments, a substantial portion of our assets will be carried on our books adjusted for accrued losses, depreciation and impairment which could in some cases result in a write off. This value will not necessarily reflect the amount which could be realized upon a sale, or payoff in the future.

RISKS OF OUR NEED FOR ADDITIONAL CAPITAL TO FUND OUR VENTURE COMPANIES.

We expect that most venture companies will require additional financing to satisfy their working capital requirements. The amount of additional financing needed will depend upon the maturity and objectives of the particular opportunity. Each round of venture financing (whether from us or other investors) is typically intended to provide a venture company with enough capital to reach the next major valuation milestone. If the funds provided are not sufficient, a company may have to raise additional capital at a price or at terms unfavorable to the existing investors, including our Company. This additional financing or the availability of any form of equity or debt capital is generally a function of capital market conditions that are beyond our control or any venture company. Our management team may not be able to predict accurately the future capital requirements necessary for success of our Company or venture companies. Additional funds may not be available from any source.

OUR VENTURE PORTFOLIO IS AND MAY CONTINUE TO BE CONCENTRATED IN A LIMITED NUMBER OF VENTURE COMPANIES AND INDUSTRIES, WHICH WILL SUBJECT US TO A RISK OF SIGNIFICANT LOSS IF ANY OF THESE COMPANIES FAIL OR BY A DOWNTURN IN THE PARTICULAR INDUSTRY.

Our venture is and may continue to be concentrated in a limited number of venture companies and industries. We do not have fixed guidelines for diversification, and since we are targeting some specific industries, our venture investments could continue to be, concentrated in relatively few industries. As a result, the aggregate returns we realize may be significantly adversely affected if our venture investments perform poorly or if we need to write down the value of any one investment. Additionally, a downturn in any particular industry in which we are invested could also significantly impact the aggregate returns we realize.

WE INTEND TO CONTROL ALL OF OUR VENTURES.

We will control all of our venture companies, and we will maintain financial supervision until divestiture, spin-off or liquidation.

WE MAY NOT REALIZE GAINS FROM OUR VENTURES.

Our goal is ultimately to dispose of our control interests we receive from our venture companies to attempt to realize gains upon our disposition of such interests by sale, for cash spin-off, or liquidation. However, any interests we hold may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from any venture interests, and any gains that we do realize on the disposition of any venture interests may not be sufficient to offset any other losses we experience.

THE INABILITY OF OUR VENTURE COMPANIES TO COMMERCIALIZE THEIR TECHNOLOGIES OR CREATE OR DEVELOP COMMERCIALLY VIABLE PRODUCTS OR BUSINESSES WOULD HAVE A NEGATIVE IMPACT ON OUR INVESTMENT RETURNS.

The possibility that our venture companies will not be able to commercialize their technology, products or business concepts presents significant risks to the value of our ventures. Additionally, although some of our venture companies may already have a commercially successful product or product line when we invest, technology related products and services often have a more limited market or life span than have products in other industries. Thus, the ultimate success of these venture companies often depends on their ability to continually innovate in increasingly competitive markets. Their inability to do so could affect our investment return. We cannot assure you that any of our venture companies will successfully acquire or develop any new technologies, or that the intellectual property the companies currently hold will remain viable. Even if our venture companies are able to develop commercially viable products, the market for new products and services is highly competitive and rapidly changing. Neither our venture companies nor we have any control over the pace of technology development. Commercial success is difficult to predict, and the marketing efforts of our venture companies may not be successful.

RISK FACTORS RELATING TO OUR BUSINESS

WE HAVE INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES.

As of December 31, 2017, we had an accumulated deficit of ($3,109,953).

Future losses are likely to occur until we are able to receive returns on our loans and investments since we have no other sources of income to meet our operating expenses. As a result of these, among other factors, we received from our registered independent public accountants in their report for the financial statements for the years ended December 31, 2017, 2016, 2015, and 2014, an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

OUR EXISTING FINANCIAL RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING EXPENSES.

We have no sources of income at this time and insufficient assets to meet our ongoing operating expenses. In the short term, unless we are able to raise additional debt and, or, equity we shall be unable to meet our ongoing operating expenses. On a longer-term basis, we intend to merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. There can be no assurance that these events will be successfully completed.

BECAUSE INSIDERS CONTROL OUR ACTIVITIES, THAT MAY CAUSE US TO ACT IN A MANNER THAT IS MOST BENEFICIAL TO THEM AND NOT TO OUTSIDE SHAREHOLDERS WHICH COULD CAUSE US NOT TO TAKE ACTIONS THAT OUTSIDE INVESTORS MIGHT VIEW FAVORABLY

Our executive officers, directors, and holders of 5% or more of our issued and outstanding common stock through International Hedge Group, Inc. beneficially own approximately 95% of our issued and outstanding common stock and the Super Majority Voting Class A Preferred Stock. As a result, they effectively control all matters requiring director and stockholder approval, including the election of directors, the approval of significant corporate transactions, such as mergers and related party transaction. These insiders also have the ability to delay or perhaps even block, by their ownership of our stock, an unsolicited tender offer. This concentration of ownership could have the effect of delaying, deterring or preventing a change in control of our company that you might view favorably.

OUR TWO OFFICERS AND DIRECTORS HAVE THE ABILITY TO EFFECTIVELY CONTROL SUBSTANTIALLY ALL ACTIONS TAKEN BY STOCKHOLDERS.

Mr. Harris and Mr. Kurczodyna, the officers and directors of the Company and of our parent, International Hedge Group, Inc. (“IHG”) control in excess of our 95% of our issued and outstanding common stock through IHG and are able to effectively control substantially all actions taken by our stockholders, including the election of directors. Such concentration of ownership could also have the effect of delaying, deterring or preventing a change in control that might otherwise be beneficial to stockholders and may also discourage the market for our stock due to the concentration.

WE MAY DEPEND UPON OUTSIDE ADVISORS, WHO MAY NOT BE AVAILABLE ON REASONABLE TERMS AND AS NEEDED.

To supplement the business experience of our officers and directors, we may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. Our Board without any input from stockholders will make the selection of any such advisors. Furthermore, it is anticipated that such persons may be engaged on an "as needed" basis without a continuing fiduciary or other obligation to us. In the event we consider it necessary to hire outside advisors, we may elect to hire persons who are affiliates, if they are able to provide the required services.

RISKS RELATING TO OUR VENTURE INVESTMENTS

THE INABILITY OF OUR VENTURE COMPANIES TO ADEQUATELY EXECUTE THEIR GROWTH OR EXPANSION STRATEGIES WOULD HAVE A NEGATIVE IMPACT ON OUR LOAN OR INVESTMENT RETURNS.

The possibility that our venture companies will not be able to fully carry out or execute on their expansion or growth plans presents significant risk. Our venture investments success in our subsidiary companies will ultimately depend on the success of our ventures. If the intended expansion or growth plan that was one of the main reasons we had originally formed the venture does not come to fruition or is otherwise impeded, the value of the venture may negatively reflect this information, making our investment not profitable or may subject us to a substantial loss. In such case, we may incur an entire loss of our investment.

OUR VENTURE COMPANIES WILL LIKELY HAVE SIGNIFICANT COMPETITION FROM MORE ESTABLISHED COMPANIES AS WELL AS INNOVATIVE EARLY STAGEEARLY-STAGE COMPANIES.

Emerging growth companies often face significant competition, both from early stageearly-stage companies and from more established companies. Early stageEarly-stage competitors may have strategic capabilities such as an innovative management team or an ability to react quickly to changing market conditions, while more established companies may possess significantly more experience and greater financial resources than our venture companies. These factors could affect our investment returns.

OUR INVESTMENT RETURNS WILL DEPEND ON THE SUCCESS OF OUR VENTURES AND, ULTIMATELY, THE ABILITIES OF THEIR KEY PERSONNEL.

Our success will depend upon the success of our ventures. Their success, in turn, will depend in large part upon the abilities of their key personnel. The day-to-day operations of our ventures will remain the responsibility of their key personnel. The loss of one or a few key managers can hinder or delay a company'scompany’s implementation of its business plan. Our ventures may not be able to attract qualified managers and personnel. Any inability to do so may negatively impact our financial picture.

SOME OF OUR VENTURE COMPANIES MAY NEED ADDITIONAL CAPITAL, WHICH MAY NOT BE READILY AVAILABLE.

Ventures in which we may make investments will often require substantial additional financing to fully execute their growth strategies. Each round of venture financing is typically intended to provide a company with only enough capital to reach the next stage of development, or in the case of our financings, the turn-around stage or offering stage which might provide us with a liquidity event. We cannot predict the circumstances or market conditions under which our ventures may seek additional capital. It is possible that one or more of our ventures will not be able to raise additional financing or may be able to do so at a price or on terms which are unfavorable to us, either of which could negatively impact our success. A likely economic downturn due to the recent pandemic known as coronavirus (COVID-19) may also cause lasting damage to the markets and potential ventures, from capital access and lack of investment issues to staffing and supply chain issues.

RISK FACTORS RELATED TO

OUR PLATFORM AND BLOCKCHAIN/DISTRIBUTED LEDGER TECHNOLOGY

THE OPERABILITY OF OUR PLATFORM DEPENDS ON OUR ABILITY TO ENTER INTO A LICENSE AGREEMENT WITH A BROKER DEALER OR AN ALTERNATIVE TRADING SYSTEM.

Our plan to operate the BlackStar Digital Trading Platform ^TM relies on our ability to enter into a license agreement with a broker dealer or an alternative trading system (“ATS”). The BDTP ^TM operates as an encrypted platform for the transmission of customer information, dollar amount, number of shares, and account number to be sent over a secured network to/from the broker dealer and/or customer. Whether we license the platform to a broker dealer or an ATS, we will rely on the licensee to comply with all relevant laws, rules and regulations including, but not limited to, FINRA and/or SEC registration, the Customer Protection Rule (Rule 15c3-3 of the Securities Exchange Act of 1934, as amended), the Exchange Act requirements for books, records and financial reporting, and the Securities Investor Protection Act of 1970 (“SIPA”), as applicable. The duties of settlement, safekeeping, and reporting of customers’

assets will remain with the traditional custodians – the Broker Dealers retained by customers for their own account. The BDTP ^TM will provide encrypted transmission of order information, as discussed above. Once established, any disruption in our relationship with a broker dealer or ATS may cause a temporary or permanent service disruption of BDTP ^TM, unless and until we are able to reestablish a new licensee. If we are unable at any time to establish the necessary relationship, BDTP ^TM may never become functional. If we are unable to license BDTP ^TM to an ATS in this way, we may reevaluate whether we may apply for ATS status.

IF WE ARE UNABLE TO PROTECT THE CONFIDENTIALITY OF OUR TRADE SECRETS AND OUR INTELLECTUAL PROPERTY, OUR BUSINESS AND COMPETITIVE POSITION COULD BE HARMED.

We plan to rely upon trademarks, copyrights, trade secret protection and patents, as well as non-disclosure agreements and invention assignment agreements with employees, consultants and third parties, to protect all confidential and proprietary information. Significant elements of our intended products and services are based on unpatented trade secrets and know-how that are not publicly disclosed. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. The security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and the recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time consuming, and the outcome is unpredictable. In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed.

We believe the protection of our intellectual property is critical to our success. We seek to protect our intellectual property rights by relying on applicable laws and regulations in the United States and internationally, as well as a variety of administrative procedures. Effective protection may not be available in every country in which our products and services may be made available, and contractual measures and other steps we have taken to protect our intellectual property may not prevent third party infringement or misappropriation or deter independent development of similar intellectual property rights by others. Intellectual property protection is very expensive to maintain and may require litigation. We likely need to protect our intellectual property rights and other proprietary rights in an increasing number of jurisdictions, at great expense. We may license in the future certain of our proprietary rights, such as trademarks or copyrighted material, to others, which could diminish the value of our proprietary rights or harm our reputation. Any failure to adequately protect or enforce our intellectual property rights, or significant costs incurred in doing so, could materially harm our business.

As the number of products in the blockchain industry increases and the functionality of these products further overlap, and as we acquire technology, we may become increasingly subject to infringement claims, including patent, copyright, and trademark claims. It may be necessary to litigate the validity and scope of the patent and other intellectual property rights of others, through time-consuming, costly litigation and potentially disrupting our business, or requiring us to pay substantial judgments or settlements.

INTELLECTUAL PROPERTY RIGHTS CLAIMS MAY ADVERSELY AFFECT THE DISTRIBUTED LEDGER TECHNOLOGY.

Third parties may assert intellectual property claims relating to their source code, including Distributed Ledger Technology. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in distributed ledger technology’s long-term viability may adversely affect an investment in us. Additionally, a meritorious intellectual property claim could prevent us, our ventures, and other end-users from accessing the distributed ledger technology. As a result, an intellectual property claim against us could adversely affect an investment in us.

WE MAY DEPEND ON THIRD PARTIES TO PROVIDE EXECUTION OF OUR TRADING PLATFORM, INTERNET, TELECOMMUNICATION AND FIBER OPTIC NETWORK CONNECTIVITY TO OUR DATA CENTER, AND ANY DELAYS OR DISRUPTIONS IN SERVICE COULD ADVERSELY AFFECT AN INVESTMENT IN US.

We may rely on third-party service providers. In particular, we will depend on third parties to provide real time quotation and trading execution with our trading platform, Internet, telecommunication, and fiber optic network connectivity to our servers in our data center, and we have no control over the reliability of the services provided by these suppliers. We may in the future experience difficulties due to service failures unrelated to our systems and services.

OUR INTERACTIONS WITH A BLOCKCHAIN MAY EXPOSE US TO SDN OR BLOCKED PERSONS OR CAUSE US TO VIOLATE PROVISIONS OF LAW THAT DID NOT CONTEMPLATE DISTRIBUTE LEDGER TECHNOLOGY.

If our BDTP ^TM becomes operational, we may be required to comply with the Office of Financial Assets Control (“OFAC”) of the U.S. Department of Treasury’s sanction program and not conduct business with persons named on its specially designated nationals (“SDN”) list. We anticipate that we will not to our knowledge engage in transactions with persons named on OFAC’s SDN list, as the sales of shares occurring with the use of the platform will be required to comply with existing rules and regulations applicable to the information required to transfer securities. Moreover, federal law prohibits any U.S. person from knowingly or unknowingly possessing any visual depiction commonly known as child pornography. Recent media reports have suggested that persons have imbedded such depictions on one or more blockchains. Because our business requires us to download and retain one or more blockchains to effectuate our ongoing business, it is possible that such digital ledgers contain prohibited depictions without our knowledge or consent. To the extent government enforcement authorities literally enforce these and other laws and regulations that are impacted by decentralized distributed ledger technology, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and affect the value of our common stock.

THE POSSIBILITY OF TRADING OCCURRING ON MULTIPLE EXCHANGES MEANS THAT THERE MAY BE DISCREPANCIES IN TRADING PRICES OF COMMON STOCK.

The trading market operating on the BDTP ^TM, once operational, is distinct and separate from the OTC market on which the common shares currently trade, which could cause discrepancies between the trading prices of common shares between the two venues, whether resulting from different liquidity in the markets or otherwise. If approved for trading, shareholders may take advantage of any discrepancies between the trading prices and trade shares of common stock where it is beneficial to them.

THE POSSIBILITY OF REGULATORY DEVELOPMENTS RELATED TO CRYPTO ASSETS AND CRYPTO ASSET MARKETS MAY POSE AN UNINTENDED RISK TO OUR PROPOSED BUSINESS.

The Company does not believe that any pending crypto legislation or regulation is likely to affect the business, financial condition, or results of operations at this stage. In the event that our proposed business plans, including BDTP ^TM, fall into the definitions of any future crypto legislation or regulation, the Company will evaluate the operations to ensure compliance with any new rules or laws. The Company has worked to create the proposed business plan within the confines of the existing rules, regulations, and laws. If, however, abundant operational changes are necessary for compliance, there may be material effects on the business.

THE COMPANY MAY FACE REPUTATIONAL HARM, LOSS OF FINANCING, STOCK PRICE VOLATILITY, AND/OR LOW DEMAND FOR SERVICES BY PROXIMITY TO THE CRYPTO ASSET MARKET.

The Company does not operate in the crypto asset markets, does not have crypto asset holdings, and is not proposing to participate in the crypto asset industry, including crypto securities, crypto currencies, and tokens. The use of a blockchain in our proposed platform often gets conflated with crypto asset markets due to blockchain’s use in those industries as well. Although the Company does not believe that any reputational harm, loss of financing, stock price volatility, risk of legal proceedings, and/or low demand for our services will occur as a result of disruptions to and volatility in the crypto asset markets, the Company could nonetheless potentially be harmed as a result of our proximity to crypto asset markets.

RISKS RELATING TO OWNERSHIP OF

BLACKSTAR ENTERPRISE GROUP, INC. COMMON STOCK

WE MAY IN THE FUTURE ISSUE MORE SHARES WHICH COULD CAUSE A LOSS OF CONTROL BY OUR PRESENT MANAGEMENT AND CURRENT STOCKHOLDERS.

We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance, represent a majority of the voting power and equity of our Company. The result of such an issuance would be those new stockholders and management would control our Company, and persons unknown could replace our management at this time. Such an occurrence would result in a greatly reduced percentage of ownership of our Company by our current stockholders, which could present significant risks to stockholders.

WE HAVE AUTHORIZED AND DESIGNATED A CLASS A PREFERRED SUPER MAJORITY VOTING CONVERTIBLE STOCK, WHICH HAVE VOTING RIGHTS OF 60% OF OUR COMMON STOCK AT ALL TIMES.

Class A Preferred Super Majority Voting Convertible Stock (the “Class A Preferred Stock”), of which 1,000,000 shares of preferred stock have been authorized for the Class A out of 10,000,000 total preferred shares authorized, and which have super majority voting rights (60%) over common stock voting at all times. At this time, all shares of the Class A Preferred Stock have been issued to International Hedge Group, Inc. which is controlled by Mr. Kurczodyna, an officer and director.

A LIMITED PUBLIC MARKET EXISTS FOR OUR COMMON STOCK AT THIS TIME, AND THERE IS NO ASSURANCE OF A FUTURE MARKET.

There is a limited public market for our common stock, and no assurance can be given that a market will continue or that a shareholder ever will be able to liquidate his investment without considerable delay, if at all. If a market should continue, the price may be highly volatile. Factors such as those discussed in the “Risk Factors” section may have a significant impact upon the market price of the shares offered hereby. Due to the low price of our securities, many brokerage firms may not be willing to effect transactions in our securities. Even if a purchaser finds a broker willing to effect a transaction in our shares, the combination of brokerage commissions, state transfer taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of our shares as collateral for any loans.

OUR STOCK WILL, IN ALL LIKELIHOOD, BE THINLY TRADED AND AS A RESULT YOU MAY BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR SHARES.

The shares of our common stock may be thinly-traded.thinly-traded and even more so as our shares trade on OTC Pink. We are a small company which is relatively unknown to stock analysts, stock brokers, institutional stockholders and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of any of our securities until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our securities is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on Securities price. We cannot give you any assurance that a broader or more active public trading market for our common securities will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give stockholders no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their securities.

THERE CURRENTLY IS A LIMITED LIQUID TRADING MARKET FOR OUR COMMON STOCK AND WE CANNOT ASSURE INVESTORS THAT A ROBUST TRADING MARKET WILL EVER DEVELOP OR BE SUSTAINED FOR OUR COMMON STOCK.

To date, there has been a limited trading market for our common stock on the OTC Pink Market. We cannot predict how liquid the market for our common stock may become. A lack of an active market may impair an investor’s ability to sell their shares at the time they wish to sell them or at a price they consider reasonable. The lack of an active trading market may impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies by using our common stock as consideration. For companies where securities are traded in the OTC Pink Market, it is generally more difficult to obtain accurate quotations, to obtain coverage for significant news events (because major media channels generally do not publish presses releases about such contingencies) and to obtain needed capital.

OUR COMMON STOCK MAY BE VOLATILE, WHICH SUBSTANTIALLY INCREASES THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SECURITIES AT OR ABOVE THE PRICE THAT YOU MAY PAY FOR THE SECURITY.

Because of the possible price volatility, you may not be able to sell your shares of common stock when you desire to do so. The inability to sell your securities in a rapidly declining market may substantially increase your risk of loss because of such illiquidity and because the price for our securities may suffer greater declines because of our price volatility.

The price of our common stock that will prevail in the market after this offering may be higher or lower than the price you may pay. Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to the following:

• Variations in our quarterly operating results;
• Loss of a key relationship or failure to complete significant transactions;
• Additions or departures of key personnel;
• Fluctuations in stock market price and volume;
• Changes to the Distributed Ledger Technology industry; and
• Regulatory developments, particularly those affecting cryptocurrency.
  
  digital shares.
  
  

Additionally, in recent years the stock market in general, has experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price, regardless of our operating performance. In the past, class action litigation often has been brought against companies following periods of volatility in the market price of those company’s common stock. If we become involved in this type of litigation in the future, it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on your investment in our stock.

THE REGULATION OF PENNY STOCKS BY THE SEC AND FINRA MAY DISCOURAGE THE TRADABILITY OF OUR SECURITIES.

We are a “penny stock” company, as our stock price is less than $5.00 per share. If we are able to obtain an exchange listing for our stock, we cannot make an assurance that we will be able to maintain a stock price greater than $5.00 per share and if the share price was to fall to such prices, that we wouldn’t be subject to the Penny Stocks rules. None of our securities currently trade in any market and, if ever available for trading, will be subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited stockholders. For purposes of the rule, the phrase “accredited stockholders” means, in general terms, institutions with assets in excess of $5,000,000, or

individuals having a net worth in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse’s income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Effectively, this discourages broker-dealers from executing trades in penny stocks. Consequently, the

rule will affect the ability of purchasers in this offering to sell their securities in any market that might develop therefore because it imposes additional regulatory burdens on penny stock transactions.

In addition, the Securities and Exchange Commission has adopted a number of rules to regulate “penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute “penny stocks” within the meaning of the rules, the rules would apply to us and to our securities. The rules will further affect the ability of owners of shares to sell our securities in any market that might develop for them because it imposes additional regulatory burdens on penny stock transactions.

Stockholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.

Inventory in penny stocks have limited remedies in the event of violations of penny stock rules. While the courts are always available to seek remedies for fraud against us, most, if not all, brokerages require their customers to sign mandatory arbitration agreements in conjunctions with opening trading accounts. Such arbitration may be through an independent arbiter. Stockholders may file a complaint with FINRA against the broker allegedly at fault, and FINRA may be the arbiter, under FINRA rules. Arbitration rules generally limit discovery and provide more expedient adjudication, but also provide limited remedies in damages usually only the actual economic loss in the account. Stockholders should understand that if a fraud case is filed an against a company in the courts it may be vigorously defended and may take years and great legal expenses and costs to pursue, which may not be economically feasible for small stockholders.

That absent arbitration agreements, specific legal remedies available to stockholders of penny stocks include the following:

If a penny stock is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment.

If a penny stock is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages.

The fact that we are a penny stock company will cause many brokers to refuse to handle transactions in the stocks, and may discourage trading activity and volume, or result in wide disparities between bid and ask prices. These may cause stockholders significant illiquidity of the stock at a price at which they may wish to sell or in the opportunity to complete a sale. Stockholders will have no effective legal remedies for these illiquidity issues.

WE WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE.

We have not paid dividends on our common stock and do not ever anticipate paying such dividends in the foreseeable future. Stockholders whose investment criteria are dependent on dividends should not invest in our common stock.

RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE.

All of the outstanding shares of common stock are held by our present officers, directors, and affiliate stockholders as "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of

Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that a person who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a company's outstanding common stock or the average weekly trading volume during the four calendar weeks prior to the sale. There is no limit on the amount of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of two years. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.

OUR STOCKHOLDERS MAY SUFFER CURRENT OR FUTURE DILUTION DUE TO ISSUANCES OF SHARES FOR VARIOUS CONSIDERATIONS IN THE FUTURE.

There may be substantial dilution to BlackStar Enterprise Group, Inc. stockholders as a result of future decisions of the Board to issue shares without shareholder approval for cash, services, or acquisitions.

Significant dilution has already occurred related to the conversion of shares from the convertible promissory notes discussed herein. Dilution is likely to continue for as long as the notes are due.

WE ARE A REPORTING COMPANYCOMPANY.

We are subject to the reporting requirements under the Securities and Exchange Act of 1934, Section 13a, due to the effectiveness of our Registration Statement on Form 10 under Section 12(g) which became effective.effective on or about February 27, 2017. As a result, stockholders will have access to the information required to be reported by publicly held companies under the Exchange Act and the regulations thereunder. As a result, we will be subject to legal and accounting expenses that private companies are not subject to and this could affect our ability to generate operating income.

WE HAVEOUR OTC MARKET STATUS WAS LOWERED FROM OTCQB TO OTC PINK.

Due to the low trading price of the common stock of the Company, we were demoted from the OTCQB to OTC Pink in 2022 for not maintaining the $0.01 bid test. The Company has sought financing through convertible promissory notes in order to develop the BDTP ^TM app; some of the notes have in turn been converted to common stock and then traded on the market in large quantities, lowering the bid prices. The change in status from OTCQB to OTC Pink will make it harder to access investors and financing to continue to fund our operations.

OTC Markets may choose to downgrade our profile further if we do not maintain adequate proof that we are not, in fact, a shell company.

BLACKSTAR ELECTRONIC FUNGIBLE SHARES AND DIGITAL SHARES IN GENERAL MAY BE SUBJECT TO UNIQUE RISKS NOT IDENTIFIED ANY OTHER VENTURES IN WHICH WE MAY INVEST IN A VENTURE.ASSOCIATED WITH PAPER CERTIFICATED SHARES.

WeThe digital form of BlackStar common stock (BlackStar Electronic Fungible Shares when traded on BDTP ^TM) and digital or electronic shares in general may be subject to timing delays, electronic transfer errors, electronic systems outages, and cybersecurity threats. BlackStar Electronic Fungible Shares carry the same risks as electronic fungible shares from DTCC that have been DWAC and placed in Broker Dealers accounts for customers. The intended functionality of the BlackStar Digital Trading Platform ^TM is to encrypt the buy/sell orders (including all transaction and customer information) placed by broker dealers and customers, in order to provide additional security and ease of access over the existing systems, but not all risks can be mitigated due to unforeseen future threats and/or disruptions, transmission errors, and electronic systems issues. Electronic fungible shares of common stock, including BlackStar Electronic Fungible Shares, are the same class of common stock and hold the same rights as paper certificated shares of common stock; the only loaned money to one company, Meshworks Media Corporation, (anddifference is the format. Digital shares would be the electronic fungible shares on account. The difference in the two is the mode of sale or transfer; however, the transfer agent maintains records of all shareholder activity, regardless of the form. While electronic fungible shares are now commonplace, there is still risk involved with electronic transmission of information and that loan has been assigned)transmission may be compromised. The record-keeping requirements of transfer agents, broker dealers, and it may take time to find other ventures, noneissuers remain unchanged with electronic fungible shares, however, the risk of which are identified.error or omission cannot be ruled out.

RISK FACTORS RELATED TO CRYPTOEQUITY

AND DISTRIBUTIVE LEDGER TECHNOLOGY

The further development and acceptance of cryptocurrency networks (AND DISTRIBUTIVE LEDGER TECHNOLOGY UPONINSURANCE WILL NOT BE OBTAINED FOR OUR ELECTRONIC FUNGIBLE SHARES WHICH IT RELIES), which represents a new and rapidly changing industry, are subjectPOSES RISKS.

We do not intend to a variety of factors that are difficultattempt to evaluate. The slowing or stopping of the development or acceptance of digital currency systems may adversely affect our business.

Digital currencies mayobtain any insurance at this time for shares in electronic fungible form, so there will be used, among other things, to buy and sell goods and services are a new and rapidly evolving industry. The growth of the digital currency industry in general, and in particular the Bitcoin industry, Ethereum industry, and Litecoin industry, are subject to a high degree of uncertainty. The factors affecting the further development of the digital currencies industry, as well as the Bitcoin, Ethereum and Litecoin industries, include:

• Continued worldwide growthno insurance for covering liability in the adoption and useevent of Bitcoins, Ethereum, and Litecoins, and other cryptocurrency;
• Government and quasi-government regulation of Bitcoin, Ethereum, and Litecoin, and other cryptocurrency and their use, or restrictions on or regulation of access to and operation of cryptocurrency networks and system;
• The maintenance and development of the open-source software protocol of various cryptocurrency networks;
• The availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies; and
• General economic conditions and the regulatory environment relating to digital currencies.

A decline in the popularity or acceptance of the Bitcoin Network, Ethereum Network, or Litecoin Network could adversely affect our business plan and an investment in us.

Currently, there is relatively small use of cryptocurrency in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect OUR ABILITY TO DEVELOP BUSINESS IN DISTRIBUTIVE LEDGER TECHNOLOGY WHICH IS OFTEN TIED TO CRYPTO CURRENCIES.

As relatively new products and technologies, cryptocurrency has only recently become widely accepted as a means of payment for goods and services by many major retail and commercial outlets and use of cryptocurrency by consumers to pay such retail and commercial outlets remains limited. Conversely, a significant portion of cryptocurrency demand is generated by speculators and investors seeking to profitlosses from the short-form or long-term holdingmode of cryptocurrency. A lack of expansion by cryptocurrency into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in the price of cryptocurrencies, either of which could adversely impact the clients that we may service, and in turn affect our business plan and outcomes. It may restrict development of distributed ledger technology.

Intellectual property rights claims may adversely affect the operation of cryptocurrency networks AND DISTRIBUTE LEDGER TECHNOLOGY.

Third parties may assert intellectual property claims relating to the holding and transfer of digital currencies and their source code, including Distributed Ledger Technology. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in cryptocurrency networks’ long-term viability or the ability of end-users to hold and transfer cryptocurrency may adversely affect an investment in us. Additionally, a meritorious intellectual property claim could prevent us, our ventures, and other end-users from accessing cryptocurrency networks. As a result, an intellectual property claim against us or other large cryptocurrency network participants could adversely affect an investment in us.Electronic Fungible Shares.

The cryptocurrency exchanges on which cryptocurrency trade are relatively new and, in most cases, OPERATED IN AN unregulated MANNER and may therefore HAVE BEEN more exposed to fraud and failure than established, regulated exchanges for other products. To the extent that the cryptocurrency exchanges representing a substantial portion of the volume in cryptocurrency trading are involved in fraud or experience security failures or other operational issues, such cryptocurrency exchanges’ failures may adversely affect OUR PARTICIPATION IN THE INDUSTRY.

The cryptocurrency exchanges on which cryptocurrency trade are new and, in most cases, operated as unregulated (even though the SEC and CFTC has now strongly asserted regulatory oversight). Furthermore, many cryptocurrency exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate practices, or regulatory compliance. These potential consequences of a cryptocurrency exchange’s failure could reduce the demand and use of cryptocurrency, reduce the value of cryptocurrency, and/or adversely affect an investment in us.

Over the past four years, many cryptocurrency exchanges have been closed due to fraud, failure, or security breaches. Cryptocurrency relies entirely on distributive ledger technology for trades and its asserted legitimacy.

A lack of stability in the cryptocurrency exchange market and the closure or temporary shutdown of cryptocurrency exchanges due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in cryptocurrency networks and result in greater volatility in cryptocurrency value. These potential consequences of cryptocurrency exchange failures could adversely affect an investment in our company.

Political or economic crises AND REGULATION may motivate large-scale sales of cryptocurrency, which could result in a reduction in cryptocurrency valueS and adversely affect OUR BUSINESS.

As an alternative to fiat currencies that are backed by central governments, digital currencies such as Bitcoin, Ethereum, and Litecoin, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of Bitcoins, Ethereum, or Litecoins, either globally or locally. Large-scale sales of Bitcoins, Ethereum, or Litecoins, would result in a reduction in the respective cryptocurrency value or failures of cryptocurrencies, in part, and could adversely affect an investment in us.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.NONE.

ITEM 1C. CYBERSECURITY

We place the utmost importance on the security of our systems and the data we will handle once BDTP^TM is operational. We plan to implement a comprehensive process for identifying, assessing, and managing material risks from cybersecurity threats as part of our broader risk management system and processes.

To identify and assess risks from cybersecurity threats, we will evaluate a variety of developments including threat intelligence, vulnerabilities of third parties, including any auditors or consultants who advise on our cybersecurity systems, evolving regulatory requirements, and observed cybersecurity incidents, among others. We will regularly conduct risk assessments to evaluate the maturity and effectiveness of our systems and processes in addressing cybersecurity threats and to identify any areas for remediation and opportunities for enhancements. The results of such assessments will be evaluated by management and reported to our board of directors, and we will continue to adjust our cybersecurity policies, standards, processes, and practices as necessary.

Our Board is responsible for the oversight of risks from cybersecurity threats and directly oversees our cybersecurity policies and practices, internal controls regarding information security, and compliance with legal and regulatory requirements regarding cybersecurity risks. The Board receives regular reports and updates on cybersecurity matters from our management, including developments on existing and new cybersecurity risks and how management is addressing and/or mitigating such risks, cybersecurity and data privacy incidents (if any), the status of key information security initiatives, vulnerability assessments, as well as on existing and emerging threat landscapes. Additionally, on at least an annual basis, the Board reviews and discusses with management our policies and programs with respect to cybersecurity threats.

We do not have a dedicated security team, but our Chief Executive Officer monitors the prevention, detection, mitigation, and remediation of cybersecurity threats and incidents in accordance with our incident response and recovery plans. Threats and incidents that are identified as potentially significant are promptly reported to the Board.

While risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition, we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents. See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for further information regarding cybersecurity risks.

ITEM 2. PROPERTIES.

REAL ESTATE.DESCRIPTION OF PROPERTIES/ASSETS

None.

OIL AND GAS.

None.

PATENTS.

None.

Our executive offices are located in Boulder, Colorado. We do not own any real property but lease office space. We believe that substantially all of our property and equipment is in good condition, subject to normal wear and tear, and that our facilities have sufficient capacity to meet the current needs of our business.

PATENTS, TRADE NAMES, TRADEMARKS AND COPYRIGHTS

On December 26, 2023, the United States Patent and Trademark Office (USPTO) issued a patent to the Company for a patent application titled “System and Method for Matching Orders and Immutable Blockchain Ledger for all Customer Trading Activity with Settlement into the Broker Dealer Ecosystem.” The technology claimed in the patent, the BDTP™ platform, enables trading of common shares of a public company on a blockchain.

BlackStar received a ‘Notice of Allowance’ from the United States Patent and Trademark Office (USPTO) on February 14, 2024, for a patent application titled “System and Method for Preparing for a SEC Financial Statement Audit by Recording Corporate Governance Information on an Immutable Blockchain.” The technology claimed in the patent, which generally relates to recording corporate governance information on a blockchain, helps with the organization of public and private companies preparing for a financial audit, assists with compliance with rules and regulations of various regulatory authorities (e.g. Securities and Exchange Commission) and is compatible with use through any U.S. brokerage firm. The audit platform, which is nearing completion of the development phase, may help advance the transparency of internal corporate governance and controls, contributing to the corporate accountability movement. The patent is expected to be issued by May 2024.

Further patents related to various features of the platform are still pending.

Either directly or through our subsidiaries, we may have rights in various patents, trade names, trademarks, copyrights and other intellectual property necessary to conduct our business. Our services may use the intellectual property of others, including licensed software. We may occasionally license any future intellectual property to others as we deem appropriate.

We regard the protection of our intellectual property, including our trademarks, patents, copyrights, domain names, trade dress and trade secrets as critical to our success. We aggressively protect our intellectual property rights by relying on federal, state and common law rights in the U.S. and internationally, as well as a variety of administrative procedures. We also rely on contractual restrictions to protect our proprietary rights in products and services. We routinely enter into confidentiality and invention assignment agreements with our employees and contractors and nondisclosure agreements with parties with whom we conduct business to limit access to and disclosure of our proprietary information.

We pursue the registration of our domain names, trademarks and service marks in the U.S. Additionally, we have filed U.S. patent applications covering certain aspects of our proprietary technology. Effective trademark, copyright, patent, domain name, trade dress and trade secret protection is typically expensive to maintain and may require litigation. We must protect our intellectual property rights and other proprietary rights in an increasing number of jurisdictions, a process that is expensive and time consuming and may not be successful.

We have registered our core brands as trademarks and domain names in the U.S. If we are unable to register or protect our trademarks or domain names, we could be adversely affected in any jurisdiction in which our trademarks or domain names are not registered or protected. We may license, in the future, certain of our proprietary rights, such as trademarks or copyrighted material, to others.

ITEM 3. LEGAL PROCEEDINGS.

We are not currently involvedOn November 6, 2023, we were notified of a lawsuit filed in any litigation that we believe could have a material adverse effect on our financial condition or resultsClark County, NV against the Company by GS Capital (“Plaintiff”) regarding the unavailability of operations. There is no action, suite, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or,conversion shares relating to the knowledgePromissory Note entered into on October 11, 2021 and the remaining principal balance of $33,682. The Plaintiff is seeking specific performance for the reserve of 700,000,000 shares, or damages in excess of $15,000, plus interest, costs, and legal fees. At the outset of the executive officerscase, a temporary restraining order was entered preventing the Company from trading any shares. As currently postured, Plaintiff seeks specific performance (a mandatory injunction) requiring the conversion of our company or anyapproximately 257,000,000 shares and possibly additional recovery of our subsidiaries, threatenedlegal fees and interest. On February 27, 2024, the Company, through its

attorneys, filed an answer to Plaintiff’s complaint and counterclaims against or affecting our company, our common stock, anyPlaintiff. In addition to denying many of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. We anticipate that we (including current and any future subsidiaries) will from time to time become subject to claims and legal proceedings arisingthe allegations laid out in the ordinary courselawsuit, the Company invokes several affirmative defenses that bar Plaintiff’s recovery in the action and alleges that Plaintiff breached the terms of business. It isthe agreement, including, but not feasiblelimited to, predictobtaining the outcomeconversion of any such proceedingsBlackStar’s stock after the Promissory Note was fully paid off. Amongst other claims, the Company alleges that the Plaintiff acted in bad faith and we cannot assure that their ultimate disposition will not havein violation of usury laws by recovering an estimated $600,000 in BlackStar stock off of a materially adverse effect$60,000 promissory note, estimated at a roughly 170% interest rate. We seek a judgment in our favor and against Plaintiff, compensatory damages in an amount to be proven at trial, declaratory relief voiding the agreement as illegal under Section 29(b) of the Securities Act, punitive damages in an amount to be proven at trial, interest on our business, financial condition, cash flows or results of operations.all damages, and attorneys’ fees. We await a response to the counterclaims.

ITEM 4. MINE SAFETY DISCLOSURE.

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is currently quoted on the OTC QBPink under the symbol “BEGI”. Because we are quoted on the OTC QB,Pink, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

International Hedge Group, Inc. (“IHG”), our parent company, contracted to acquire 95% of our outstanding stock in January 2016 and closed on the purchase in summer of 2016. IHG is our controlling shareholder and is engaged in providing management services to companies, and, on occasion, capital consulting. IHG’s strategy in investing in BlackStar Enterprise Group, Inc. is to own a controlling interest in a publicly quoted company which has the legal ability and mission to do loan-based funding of start-up and developed business ventures using its stock for private placement or public offerings. Through anti-dilutive measures, IHG now owns less than 1% of common shares of BlackStar for the year ended December 31, 2022. IHG and BlackStar are managed and controlled by the same individuals, but IHG may seek its funding from different and as yet, undetermined sources, with funding structures of different natures. IHG, through its holding of 100% of the Class A Preferred Stock of BlackStar, has voting control over BlackStar. Mr. Kurczodyna, through his preferred shares in IHG, has voting control of IHG.

On December 18, 2020, IHG filed an amendment to their articles of incorporation designating 1,000,000 of their 20,000,000 authorized preferred shares to be Class A Preferred Stock and setting forth the Convertible Super Majority Voting Privileges. The IHG Board of Directors authorized a vote by the disinterested shareholders and a majority of shareholders voted in favor of issuing the 1,000,000 IHG Class A Preferred shares to Mr. Kurczodyna as compensation for services provided to IHG. The holders of the IHG Class A shall have that number of votes equal to that number of IHG common shares which is not less than 60% of the vote required to approve any action, and the holders of IHG Class A Preferred may choose to convert the IHG Class A Preferred Stock into shares of IHG common stock at the rate of one (1) IHG Class A Preferred for two-hundred ten (210) IHG common shares. This was a significant increase to the control of IHG by Mr. Kurczodyna and he has control of BlackStar Enterprise Group, Inc. through his IHG interest.

The following table setstables set forth the high and low bid quotations for our common stock as reported on the OTCQB/OTC QBPink for the periods indicated.

Holders.

* The shares moved from the OTC QB to the OTC Pink Market on June 30, 2022.

Holders

As of December 31, 2017,2023, there arewere approximately 373351 record holders of 52,000,0001,544,696,448 shares of our common stock. The Company has also reserved out of its authorized Common Stock approximately 259,683,053 shares of Common Stock for conversion pursuant to the convertible promissory notes as of March 29, 2024.

Dividends.Dividends

As of the filing of this Form 10-K, we have not paid any dividends to stockholders. There are no restrictions which

would limit our ability to pay dividends on common equity or that are likely to do so in the future. The Delaware General Corporation Laws, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend; we would not be able to pay our debts as they become due in the usual course of business; or our total assets would be less than the sum of the total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

DESCRIPTION OF SECURITIES

Common Stock

The total number of common shares authorized to be issued by the Company as of December 31, 2023 is 2,000,000,000 common shares with a par value of $0.001 per share. The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share. A total of 1,544,696,448 common shares are issued and outstanding as of December 31, 2023 and 1,000,000 preferred shares are issued and outstanding as of December 31, 2023. There are warrants to purchase 173,200 shares of common stock outstanding as of December 31, 2023.

Common Shares

All common shares are equal to each other with respect to voting, liquidation, and dividend rights. Special shareholders’ meetings may be called by the officers or director, or upon the request of holders of at least one-tenth (1/10th) of the outstanding shares. Holders of shares are entitled to one vote at any shareholders’ meeting for each share they own as of the record date fixed by the board of directors. There is a quorum requirement for shareholders’ meetings of one-third of the votes entitled to be cast on the matter by the voting group. Holders of shares are entitled to receive such dividends as may be declared by the board of directors out of funds legally available therefore, and upon liquidation are entitled to participate pro rata in a distribution of assets available for such a distribution to

shareholders. Other than as described in the ‘Preferred shares’ section below, there are no conversion, pre-emptive or other subscription rights or privileges with respect to any shares. Reference is made to our Certificate of Incorporation, as amended, and our Bylaws, both as filed with the Form 10 on December 29, 2016 and incorporated herein by reference, as well as to the applicable statutes of the State of Delaware for a more complete description of the rights and liabilities of holders of shares. It should be noted that the board of directors without notice to the shareholders may amend the Bylaws. Our shares do not have cumulative voting rights, which means that the holders of more than fifty percent (50%) of the shares voting for election of directors may elect all the directors if they choose to do so. In such event, the holders of the remaining shares aggregating less than fifty percent (50%) of the shares voting for election of directors may not be able to elect any director.

Our common stock is currently quoted on the OTC Pink under the symbol “BEGI”. Because we are quoted on the OTC Pink, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

Preferred shares

As of December 31, 2023, we had authorized ten million (10,000,000) shares of Preferred Stock, of which certain shares had been designated as Class A Preferred Super Majority VotingStock.

Class A Convertible Preferred Stock

The Certificate of Incorporation of the Company authorizes the issuance of up to ten million (10,000,000) shares of Preferred Stock, $0.001 par value per share (herein, “Preferred Stock” or “Preferred Shares”), and expressly vests in the Board of Directors of the Company the authority provided therein to issue any or all of the Preferred Shares in one (1) or more Class or classes and by resolution or resolutions to establish the designation and number and to fix the relative rights and preferences of each Class to be issued. The Board authorized One Million (1,000,000) of the Ten Million (10,000,000) authorized shares of Preferred Stock of the Company to be designated Class A Preferred Convertible Stock, $0.001 par value per share, and shall possess the rights and preferences set forth below:

Rank. The Class A Preferred Convertible Stock shall rank: (i) senior to any other class or Class of outstanding Preferred Shares or Class of capital stock of the Company; (ii) prior to all of the Company'sCompany’s Common Stock, ("(“Common Stock"Stock”); and (iii) prior to any other class or Class of capital stock of the Company hereafter created "Junior Securities"“Junior Securities”); and in each case as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (all such distributions being referred to collectively as "Distributions"“Distributions”).

Dividends. The Class A Preferred Convertible Stock shall bear no dividends, except that in the event dividends are declared for common stock, the same rate of dividend per share shall be due and payable to the Class A Preferred shareholders on the same terms.

Liquidation / Merger Preference.

(a)       So long as a majority of the shares of Class A Preferred authorized are outstanding, the Company will not, without the written consent of the holders of at least 51% of the Company’s outstanding Class A Preferred, either directly or by amendment, merger, consolidation, or otherwise: (i) liquidate, dissolve or wind-up the affairs of the Company, or effect any Liquidation Event; (ii) amend, alter, or repeal any provision of the Certificate of Incorporation or Bylaws in a manner adverse to the Class A Preferred (iii) create or authorize the creation of, or issue any other security convertible into or exercisable for, any equity security, having rights, preferences or privileges senior to the Class A Preferred, or (iv) purchase or redeem or pay any dividend on any capital stock prior to the Class A Preferred, other than stock repurchased from former employees or consultants in connection with the cessation of their employment/services.

(b)       In the event of any liquidation, merger, dissolution or winding up of the Company, either voluntary or involuntary, the holders of shares of Class A Preferred Convertible Stock (each a “Holder” and collectively the “Holders”) shall be entitled to receive, prior in preference to any distribution to Junior Securities, an amount per share equal to $.01 plus any allocable and due dividends per share.

(c)       Upon the completion of the distribution required to Class A holders, if assets remain in the Company, they shall be distributed to holders of Junior Securities in accordance with the Company'sCompany’s Certificate of Incorporation including any duly adopted Certificate(s) of Designation.

Conversion Rights:Rights:

The Holders of the Class A Preferred Convertible Stock shall, individually and collectively, have the right to convert all of their Class A Preferred Convertible Stock, in one transaction, by electing, in writing, to convert the 1,000,000 shares of Class A Preferred Stock into shares of Common Stock of the Company, on the basis of 100 common shares for each share of Class A Preferred Stock, subject to adjustmentadjustment.

Adjustment to Conversion Rate. The conversion price will be subject to adjustments for stock dividends,

splits, combinations and similar events and to Adjustment Due to Merger, Consolidation, Etc.If, prior to the conversion of all Class A Preferred Convertible Stock, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Company shall be changed into the same or a different number of shares of the same or another class or classes of stock or securities of the Company or another entity or there is a sale of all or substantially all the Company’s assets, then the Holders of Class A Preferred Convertible Stock shall thereafter have the right to receive upon conversion of Class A Preferred Convertible Stock, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities and/or other assets (“New Assets”) which the Holder would have been entitled to receive in such transaction had the Class A Preferred Convertible Stock been convertible into New Assets from the date hereof, at the market price of such New Assets on the date of conversion, and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holders of the Class A Preferred Convertible Stock to the end that the provisions hereof (including, without limitation, provisions for the adjustment of the conversion price and of the number of shares of Common Stock issuable or New Assets deliverable upon conversion of the Class A Preferred Convertible Stock) shall thereafter be applicable, as nearly as may be practicable in relation to any securities thereafter deliverable upon the exercise here.

Redemption by Company. The Company may, at its sole discretion redeem all or any portion of the Class A Preferred Convertible Stock by paying in cash by wire transfer the stated value of US $50.00 per share, plus all accrued and unpaid dividends on the Class A Preferred Convertible Stock to be redeemed, to the Holder pursuant to the Holder’s written instructions. The Holders may convert Class A Preferred Convertible Stock into Common Stock of the Company until such cash has been transmitted to the Holder, at which time conversion rights shall cease and the Holder shall surrender all redeemed Class A Preferred Certificates to the Company for cancellation.

Super Majority Voting Rights. The record Holders of the Class A Preferred Convertible Stock shall have the right to vote on any matter with holders of Common Stock and may vote as required on any action, which Delaware law provides may or must be approved by vote or consent of the holders of the specific Class of voting preferred shares and the holders of common shares. The Record Holders of the Class A Preferred Shares shall have the right to vote on any matter with holders of common stock voting together as one (1) class. The Record Holders of the Class A Preferred Shares shall have that number of votes (identical in every other respect to the voting rights of the holders of other Class of voting preferred shares and the holders of common stock entitled to vote at any Regular or Special Meeting of the Shareholders) equal to that number of common shares which is not less than 60% of the vote required to approve any action, which Delaware law provides may or must be approved by vote or consent of the holders of other Class of voting preferred shares and the holders of common shares or the holders of other securities entitled to vote, if any.

In 2016, BlackStar entered into an agreement whereby BlackStar’s parent, International Hedge Group, Inc., acquired 44,400,000 shares of common stock, 1,000,000 shares of our Class A Preferred Super Majority Voting Convertible Stock, and 34,000,000 warrants to purchase common stock @ $0.05 per share expiring in 3 years (cashless) for capital infusion of $200,000. Joseph E. Kurczodyna owns the controlling interest of International Hedge Group, Inc., which in turn controls the voting stock of BlackStar.

As part of management’s ongoing anti-dilutive strategy, 7,289,891 shares of IHG were cancelled as of December 31, 2019. On March 12, 2020, the Company increased its authorized shares to 700,000,000, par value $0.001.

On December 18, 2020, Mr. Kurczodyna became the controlling shareholder of IHG through the issuance of preferred super majority voting shares in IHG. On July 8, 2022, the majority shareholder of the Company submitted written consent to the resolution to increase the authorized common stock from 700,000,000 to 2,000,000,000, par value $0.001, with an effective date of August 5, 2022.

There were 1,544,696,448 shares of common stock outstanding, 173,200 warrants issued for common stock, and 1,000,000 Class A Preferred Shares outstanding (owned by International Hedge Group, Inc.) as of December 31, 2023.

Options & Warrants

Effective December 1, 2016, our Stock Option and Award Plan (the “Stock Incentive Plan”) was approved by our Board of Directors. Under the Stock Incentive Plan, the Board of Directors may grant options or purchase rights to purchase common stock to officers, employees, and other persons who provide services to us or any related company. The participants to whom awards are granted, the type of awards granted, the number of shares covered for each award, and the purchase or exercise price, conditions and other terms of each award are determined by the Board of Directors, except that the term of the options shall not exceed 10 years. A total of 10 million shares of our common stock are subject to the Stock Incentive Plan and may be either a qualified or non-qualified stock option. The shares issued for the Stock Incentive Plan may be either treasury or authorized and unissued shares. As of December 31, 2023, we have granted no stock options to purchase any shares of our common stock under the Plan.

As of December 31, 2023, there are warrants outstanding to purchase 173,200 shares of common stock of the Company as follows:

Transfer Agent

The transfer agent for our securities is EQ Shareowner Services, formerly known as Corporate Stock Transfer, with offices at 3200 Cherry Creek South Drive, Suite 430, Denver, Colorado 80209, Phone (303) 282-4800.

Securities Authorized for Issuance Under Equity Compensation Plans.

None.

Recent Sales of Unregistered Securities.

We have sold securities in the past 2two fiscal years without registering the securities under the Securities Act of 1933 as shown in the following summaries:summaries, including transactions occurring to the date of this filing:

20182024

On February 5, 2018,January 25, 2024, the Company completedentered into note agreements with two unrelated individuals as follows:

• $100,000 from an unregistered private placement offeringunrelated individual, repayable one year from date of unitsthe note with interest at 11% per annum; and agreed to issue as additional consideration to the lender 15,000,000 shares of the Company’s common stock. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 15,000,000 shares of the Company’s common stock as full satisfaction of the principal loan amount and related unpaid and accrued interest thereon.
• $14,000 from an unrelated individual, repayable 90 days from date of the note with interest at 11%. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debt, 7,000 shares of the Company’s common stock as full satisfaction of the principal loan amount and related unpaid and accrued interest thereon.

In 2024, GS Capital filed notices of conversion and were issued, in three tranches, 195,620,499 shares of the Company’s common stock at a price of $0.00006 per share on their note of October 11, 2021. (See “Item 3. Legal Proceedings” for additional information related to GS Capital Partners).

In February 2024, the Company and each of the holders of two loans of $50,000 and $25,000 agreed to extend the maturity of the notes from February 2024 for a period of ten (10) months to December 2024 with interest continuing to be accrued at 11%. The Company agreed to issue 7,500,000 shares of common stock to the $50,000 note holder (valued at $12,000 ($0.0016 per share)) and 3,750,000 shares of common stock to the $25,000 note holder (valued at $7,125 ($0.0019 per share)) as consideration for extending the notes. The Company will value the shares to be issued based on the per share closing trading prices of the Company’s common stock as of the date of extensions.

In April 2024, the Company borrowed $25,000 from an unrelated individual, repayable twelve months from date of the note with interest at 11% per annum. As consideration for entering into the loan agreement, the Company has agreed to issue 3,750,000 of the Company’s common stock to the lender. At maturity, the Company will repay the face amount of the loan in cash, including unpaid and accrued interest at 11% and, the lender has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 3,750,000 shares of the Company’s common stock as full satisfaction of the principal loan amount and related unpaid and accrued interest thereon.

2023

In March 2023, the Company borrowed $25,000 from each of two individuals, repayable nine months from date of borrowing with interest at 11% per annum. At maturity, the Company will repay each of the loans in cash including interest at 11% and an additional 3,750,000 shares of the Company’s common stock to each of the lenders; or will issue each of the lenders 7,500,000 shares of the Company’s common stock in full satisfaction of the principal loan amount of $25,000 and related unpaid and accrued interest thereon. The Company and the holders executed the agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the United States Securities and Exchange Commission (the “SEC”)SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act.

In May 2023, the Company borrowed $50,000 from an unrelated individual, repayable nine months from date of borrowing with interest at 11% per annum. At maturity, the Company will repay the face amount of the loan in cash, including unpaid and accrued interest at 11% and, in addition, will issue 7,500,000 shares of the Company’s common stock to the lender. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 7,500,000 shares of the Company’s common stock as full satisfaction of the principal loan amount of $50,000 and related unpaid and accrued interest thereon. In February 2024, the Company and the note holder agreed to extend the maturity of the notes to December 2024. The Company raised $165,000 throughand the sale of restricted units at $0.50 each, with each unit consisting of one (1) share of restricted common stock of BlackStar Enterprise Group, Inc. (“BlackStar”), one (1) warrant exercisable into one (1) Digital Equity of BlackStar, (subject to and effective upon a registration statement) and one (1) warrant to purchase one (1) share of Crypto Equity Management Corp. (“CEMC”) at $10.00 per share.

2017

On September 27, 2017,holders executed the Board of Directors approved the issuance of 16,320,000 shares of restricted common stock underlying warrants exercised on June 14, 2017. The warrants were issued to purchase up to 17,000,000 shares of restricted common stock at $0.05 per share and were exercised on a cashless basis, netting 16,320,000 shares of restricted common stock.

On July 3, 2017, in consideration for $30,000, BEGI sold 100,000 units, each unit consisting of one share of restricted common stock and one warrant to purchase common stock,agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the United States Securities and Exchange Commission (the “SEC”)SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The Company intends to use the funds to continue limited operations, including finding a broker-dealer and/or ATS to host the BDTP ^TM, legal and professional fees, consulting fees, and general and administrative expenses.

2016

Shares IssuedIn May 2023, the Company borrowed $25,000 from an unrelated individual, repayable nine months from date of borrowing with interest at 11% per annum. At maturity, the Company will repay the face amount of the loan in Private Offering

44,400,000 Commoncash, including unpaid and accrued interest at 11% and, in addition, will issue 3,750,000 shares of the Company’s common stock to the lender. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 3,750,000 shares of the Company’s common stock as full satisfaction of the principal loan amount of $25,000 and related unpaid and accrued interest thereon. In February 2024, the Company and the note holder agreed to extend the maturity of the notes to December 2024. The Company and the holders executed the agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The Company intends to use the funds to continue limited operations, including

finding a broker-dealer and/or ATS to host the BDTP ^TM, legal and professional fees, consulting fees, and general and administrative expenses.

On July 1, 2023, the Board of Directors approved and authorized the issuance of shares of the Company’s common stock as follows: 1,000,000 Class A Preferred Super Majority Voting Convertible Sharesshares each to Directors of the Company; 2,000,000 shares each to new officers of the Company; 1,000,000 shares each to new advisors of the Company. During the period ended September 30, 2023, the Company issued an aggregate 8,000,000 shares of its common stock to four individuals, valued at $3,200 ($0.0004 per share), based on the trading price of the Company’s common stock as of the date of grant. The shares were issued to International Hedge Group, Inc., for $200,000services rendered and the issuance was made by us in cash considerationreliance upon Section 4(a)(2) of the Act and 34,000,000 (cashless) warrants exercisable in 3 years @ $0.05 per share were issued tounder an exemption of Rule 506(b) of Regulation D, or any other such exemptions as the transaction may qualify. The officers and directors are well known to us and seven individuals. 250,000our management, through pre-existing business relationships. The individuals were provided access to all material information and all information necessary to verify such information and were afforded access to our management in connection with the issuance. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

In August 2023, the Company borrowed $50,000 from an unrelated individual, repayable May 1, 2024 with interest at 11% per annum. At maturity, the Company will repay the face amount of the loan in cash, including unpaid and accrued interest at 11% and, in addition, will issue 7,500,000 shares of the Company’s common werestock to the lender. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 7,500,000 of the Company’s common stock as full satisfaction of the principal loan amounts and related unpaid and accrued interest thereon. The Company and the holders executed the agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to William Brand for services,accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The Company intends to use the funds to continue limited operations, including finding a broker-dealer and/or ATS to host the BDTP ^TM, legal and 162,579professional fees, consulting fees, and general and administrative expenses. A substantially similar form of the note is attached as Exhibit 10.1 to the Current Report on Form 8-K filed on June 10, 2019, but with the terms mentioned herein.

In September 2023, the Company borrowed $50,000 from an unrelated individual, repayable June 29, 2024 with interest at 11% per annum. At maturity, the Company will repay the face amount of the loan in cash, including unpaid and accrued interest at 11% and, in addition, will issue 7,500,000 shares of the Company’s common stock to the lender. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 7,500,000 of the Company’s common stock as full satisfaction of the principal loan amounts and related unpaid and accrued interest thereon. The Company and the holders executed the agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The Company intends to use the funds to continue limited operations, including finding a broker-dealer and/or ATS to host the BDTP ^TM, legal and professional fees, consulting fees, and general and administrative expenses. A substantially similar form of the note is attached as Exhibit 10.1 to the Current Report on Form 8-K filed on June 10, 2019, but with the terms mentioned herein.

In November 2023, the Company borrowed $25,000 from an unrelated individual, repayable November 13, 2026 with interest at 5.5% per annum. At maturity, the Company will repay the face amount of the loans in cash, including unpaid and accrued interest at 5.5% and, in addition, issued 7,500,000 of the Company’s common stock, to the lender. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debts, an additional 7,500,000 shares of the Company’s common stock as full satisfaction of the principal loan amounts and related unpaid and accrued interest thereon. The Company and the holders executed the agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The Company intends to use the funds to continue limited operations, including finding a broker-dealer and/or ATS to host the BDTP ^TM, legal and professional fees, consulting fees, and general and administrative expenses. A substantially similar form of the note is attached as Exhibit 10.1 to the Current Report on Form 8-K filed on June 10, 2019, but with the terms mentioned herein.

In November 2023, the Company borrowed $50,000 and $25,000 from each of two unrelated individuals, repayable May 17, 2025 and August 17, 2024, with interest at 5.5% and 11% per annum, respectively. At maturity, the Company will repay the face amount of the loans in cash, including unpaid and accrued interest at 11% and, in addition, will issue 7,500,000 and 3,750,000 of the Company’s common stock, respectively, to each of the lenders. At maturity the lenders have the option to be issued, in lieu of cash payment of the outstanding debts, an additional 7,500,000 and 3,750,000 shares of the Company’s common stock, respectively, as full satisfaction of the principal loan amounts and related unpaid and accrued interest thereon. The Company and the holders executed the agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. The Company intends to use the funds to continue limited operations, including finding a broker-dealer and/or ATS to host the BDTP ^TM, legal and professional fees, consulting fees, and general and administrative expenses. A substantially similar form of the note is attached as Exhibit 10.1 to the Current Report on Form 8-K filed on June 10, 2019, but with the terms mentioned herein.

2022

On February 14, 2022, BlackStar Enterprise Group, Inc. and Sixth Street Lending LLC entered into a convertible promissory note totaling $55,750 and a securities purchase agreement. Details of the promissory note and securities purchase agreement can be found in the Form 8-K and exhibits filed on March 2, 2022. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. In August through October 2022, 1800 Diagonal Lending LLC elected to make a conversion of the outstanding principal of $55,750 on their note of February 14, 2022 and related accrued and unpaid interest of $2,788, in four tranches, into an aggregate 53,250,406 shares of the Company’s common stock at prices of $0.0006 to $0.0017 per share under the conversion provision and terms of the note agreement

On May 5, 2022, the Company entered into a financing agreement with 1800 Diagonal Lending LLC (formerly Sixth Street Lending LLC) to borrow $55,750. Details of the promissory note and securities purchase agreement can be found in the Form 10-Q and exhibits filed on November 21, 2022. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. In November and December 2022, the lender elected to make a partial conversion of $32,150 principal due on the note of May 5, 2022 into an aggregate 55,377,648 shares of the Company’s common stock at conversion prices of $0.00046 to $0.00078 per share under the conversion provision and terms of the note agreement. In January and March 2023, 1800 Diagonal Lending LLC elected to convert, in three tranches, the outstanding principal balance of $23,600 and accrued and unpaid interest thereon of $2,788 due on their note of May 5, 2022 into 75,643,939 shares of the Company’s common stock at prices of $0.00033 to $0.00036 per share under the conversion provision and terms of the note agreement.

On August 30, 2022, the Company entered into a financing agreement with 1800 Diagonal Lending LLC to borrow $43,750. The note matures on August 30, 2023, bears interest at 10%, with a default rate of 22%, and is convertible, commencing 180 days after the date of issuance. The conversion price is to be calculated at 65% of the average of the two lowest trading prices of the Company’s common stock for the previous fifteen trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to this note, and the Company has reserved 100,000,000 shares for conversion. Net proceeds from the loan were issued$40,000, after legal fees and offering costs of $3,750. Details of the promissory note and securities purchase agreement can be found in the Form 10-Q and exhibits filed on November 21, 2022. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to Shelly D. Williamsaccredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act. In March 2023, 1800 Diagonal Lending LLC elected to make a $7,540 partial conversion of the principal portion of their August 30, 2022 note into 29,000,000 shares of the Company’s common stock at a conversion price of $0.00026 per share under the conversion provision and terms of the note agreement.

On October 31, 2022, the Company entered into a financing agreement with 1800 Diagonal Lending LLC to borrow $55,000. The note matures on October 31, 2023, bears interest at 10%, with a default rate of 22%, and is convertible, commencing 180 days after the date of issuance. The conversion price is to be calculated at 65% of the average of the two lowest trading prices of the Company’s common stock for services.the previous fifteen trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to this note, and the Company has reserved 423,076,923 shares for conversion. Net proceeds from the loan were $50,750, after legal fees and offering costs of $4,250. Details of the promissory note and securities purchase agreement can be found in the Form 10-Q and exhibits filed on November 21, 2022. The Company and the holder executed the securities purchase agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act.

Exemption from Registration Claimed

Sales and issuances by us of the unregistered securities listed above were made by us in reliance upon Rule 506 of Regulation D to the individuals listed above. All of the individuals and/or entities listed above that purchased the unregistered securities were all known to us and our management, through pre-existing business relationships, as long-standing business associates, friends, and employees. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to our management in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition. Each purchaser made written representation under Rule 506 of Regulation D, including net worth and sophistication. We required written representation that each purchaser who was not an accredited investor, either alone or with his purchaser representative, had such knowledge and experience in financial and business matters that he/she was capable of evaluating the merits and risks of the prospective investment, and the issuer reasonably believed (based on written representations) immediately prior to making any sale that the purchaser came within this description.

Shares or Warrants Issued for Compensation or Services

Since January 1, 2014 throughDetails of past issuances of shares for services can be found in the annual report on Form 10-K for the year ended December 31, 2017, we2016. No issuances for compensation have issued shares and Warrants of our common stockbeen made in exchange for services to the individuals and the amounts set forth below.past seven fiscal years.

MATERIAL RELATIONSHIPS

Exemption from Registration Claimed

All of the sales by us of the unregistered securities listed immediately above were made by us in reliance upon Section 4(a)(2) of the Act. All of the individuals and/or entities listed above that purchased the unregistered securities were all known to us and our management, through pre-existing business relationships, as long standinglong-standing business associates, friends, and employees. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to our management in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

ISSUER PURCHASES OF EQUITY SECURITIES

We did not repurchase any shares of our common stock during the year ended December 31, 2017, however, on September 29, 2017, International Hedge Group, Inc. (our parent company) retired 17,420,000 shares to treasury and exercised warrants.2023.

ITEM 6. SELECTED FINANCIAL DATA.RESERVED.

Not applicable.