UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2023~~ 2024

[_ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to ___________

Commission file number: 000-55730

BLACKSTAR ENTERPRISE GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware		27-1120628
(State of Incorporation)		(IRS Employer ID Number)

4450 Arapahoe Ave., Suite 100, Boulder, CO 80303

(Address of principal executive offices)

(303) 500-3210

(Registrant’s Telephone number)

______________________________

(Former Address and phone of principal executive offices)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

Yes [X] No [_ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 for 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 such files).

Yes [X] No [_ ]

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

Large accelerated filer [_ ] Accelerated filer [_ ] Non-accelerated filer [X] Smaller reporting company [X] 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 to Section 7(a)(2)(B) of the Securities Act. [X]

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

Yes [_ ] No [X]

Indicate the number of share outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~November~~June 128, ~~2023~~2024, there were 1,~~244~~740,~~572~~316,~~435~~947 shares of the registrant’s common stock, $0.001 par value, issued and outstanding, not including shares reserved for conversion of notes.

TABLE OF CONTENTS

		Page
	PART 1 – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets – December 31, 2022 and September 30, 2023	3
	Consolidated Balance Sheets – December 31, 2023 and March 31, 2024	3
	Consolidated Statements of Operations – Three and nine months ended September 30, 2023 and 2022	4
	Consolidated Statements of Operations – Three months ended March 31, 2024	4
	Consolidated Statements of Stockholder’s Deficit – Three and nine months ended September 30, 2023 and 2022	5
	Consolidated Statements of Stockholder’s Deficit – Three months ended March 31, 2024	5
	Consolidated Statements of Cash Flows –Nine months ended September 30, 2023 and 2022	7
	Consolidated Statements of Cash Flows – Three months ended March 31, 2024	6
	Notes to the Financial Statements	87
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk – Not Applicable	1817
Item 4.	Controls and Procedures	1817
	PART II- OTHER INFORMATION
Item 1.	Legal Proceedings	1918
Item 1A.	Risk Factors – Not Applicable	1918
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1918
Item 3.	Defaults Upon Senior Securities – Not Applicable	2019
Item 4.	Mine Safety Disclosure – Not Applicable	2019
Item 5.	Other Information ~~– Not Applicable~~	2019
Item 6.	Exhibits	2120
	Signatures	2221

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2023 AND DECEMBER 31, 2022
MARCH 31, 2024 AND DECEMBER 31, 2023
	2023			2022
	2024			2023
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash	$	5117,~~099~~433		$	6233,~~085~~550
Prepaid expenses		6,890			—
Total current assets		17,433			33,550
Total current assets		57,989			62,085
Intangibles		358,653			348,652
Intangibles		314,287			241,685
Total Assets	$	376,086		$	382,202
Total Assets	$	372,276		$	303,770
LIABILITIES & STOCKHOLDERS’ DEFICIT
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	~~167~~671,~~000~~424		$	97358,~~750~~001
Accrued interest payable		233,527			150,691
Accrued payables		293,492			247,020
Notes payable		225,000			—
Notes payable, net of discount of $35,800 (2024)		403,200			325,000
Convertible notes payable, net of discounts of $373
Convertible notes payable		584,079			584,079
and $7,835 at September 30, 2023 and December 31, 2022		681,918			784,939
Total current liabilities		1,952,195			1,514,100
Total current liabilities		1,307,445			1,033,380
Notes payable - long term		75,000			75,000
Stockholders' Deficit
Total Liabilities		2,027,195			1,589,100
Stockholders’ Deficit
Preferred stock, 10,000,000 shares authorized;
$0.001 par value; 1,000,000 shares issued and outstanding		1,000			1,000
Common stock, 2,000,000,000 shares authorized; $0.001 par value
Common stock- 2,000,000,000 shares authorized; $0.001 par value
1,244,572,435 and 546,495,214 issued and outstanding
1,740,316,947 and 1,544,696,448 shares issued and outstanding
at September 30, 2023 and December 31, 2022		1,244,572			546,495
at March 31, 2024 and December 31, 2023		1,740,317			1,544,696
Additional paid in capital		7,~~516~~482,~~510~~271			87,~~097~~666,~~862~~156
Common stock to be issued		1646,325			—3,200
Accumulated deficit		(910,~~713~~921,~~576~~022	)		(910,~~374~~421,~~967~~950	)
Total stockholders' deficit		(935,169	)		(729,610	)
Total stockholders’ deficit		(1,651,109	)		(1,206,898	)
Total Liabilities and Stockholders' Deficit	$	372,276		$	303,770
Total Liabilities and Stockholders’ Deficit	$	376,086		$	382,202
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited)
	Three months ended						Nine months ended
	2024			2023
	September 30,						September 30,
Revenue	$	—		$	—
	2023			2022			2023			2022
Operating expenses
Revenue	$	—		$	—		$	—		$	—
Legal and professional		363,253			44,652
Operating expenses
Management consulting - related party		47,000			31,500
Legal and professional		25,140			19,727			116,028			96,352
General and administrative		23,285			12,252
Management consulting - related party		29,000			70,028			87,250			235,301
Total operating expenses		433,538			88,404
General and administrative		8,520			11,434			32,555			57,040
Other expense (income)
Total operating expenses		62,660			101,189			235,833			388,693
Amortization of convertible debt issuance costs		—			3,390
Other expense (income)
Interest expense		65,534			25,410
Amortization of discount on convertible notes		—			56,071			—			472,440
Other expense (income)		65,534			28,800
Amortization of convertible debt issuance costs		1,060			6,617			7,462			36,087
Net (loss)	$	(499,072	)	$	(117,204	)
Interest expense		35,702			50,452			95,314			142,744
Net (loss) per share - basic and diluted	$	(0.0003	)	$	(0.0002	)
Other expense (income)		36,762			113,140			102,776			651,271
Weighted average number of common shares
Net (loss)	$	(99,422	)	$	(214,329	)	$	(338,609	)	$	(1,039,964	)
outstanding - basic and diluted		1,639,548,083			597,028,323
Net (loss) per share - basic and diluted
The accompanying notes are an integral part of these consolidated financial statements.
	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of common shares
outstanding - basic and diluted		1,195,842,088			227,046,325			843,324,617			291,826,837
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited)
	Common Stock				Preferred Stock
	Shares		Amount		Shares		Amount		Additional Paid in Capital			Common Stock to be Issued		Accumulated Deficit			Stockholders'’ Deficit
Balances - June 30, 2023		1,034,080,127	$	1,034,080		1,000,000	$	1,000	$	7,695,872		$	9,000	$	(9,614,154	)	$	(874,202	)
Three Months Ended March 31, 2024
Shares issued for conversion of notes and interest		210,492,308		210,492		—		—		(179,362	)		—		—			31,130
Balances - December 31, 2023		1,544,696,448	$	1,544,696		1,000,000	$	1,000	$	7,666,155		$	3,200	$	(10,421,950	)	$	(1,206,898	)
Shares to be issued for loan costs		—		—		—		—		—			4,125		—			4,125
Shares issued for debt extinguishment		195,620,499		195,621		—		—		(183,884	)		—		—			11,737
Shares to be issued to officers/directors		—		—		—		—		—			3,200		—			3,200
Shares to be issued for loan extension		—		—		—		—		—			19,125		—			19,125
Net loss		—		—		—		—		—			—		(99,422	)		(99,422	)
Shares to be issued for loan costs		—		—		—		—		—			24,000		—			24,000
Balances - September 30, 2023		1,244,572,435	$	1,244,572		1,000,000	$	1,000	$	7,516,510		$	16,325	$	(9,713,576	)	$	(935,169	)
Net loss		—		—				—		—			—		(499,072	)		(499,072	)
Balances - June 30, 2022		285,357,307	$	285,357		1,000,000	$	1,000	$	8,201,373		$	—	$	(8,975,395	)	$	(487,665	)
Balances - March 31, 2024		1,740,316,947	$	1,740,317		1,000,000	$	1,000	$	7,482,271		$	46,325	$	(10,921,022	)	$	(1,651,109	)
Shares issued for conversion of notes and interest		53,024,674		53,025		—		—		13,603			—		—			66,628
Three Months Ended March 31, 2023
Net loss		—		—		—		—		—			—		(214,329	)		(214,329	)
Balances - December 31, 2022		546,495,214	$	546,495		1,000,000	$	1,000	$	8,097,862		$	—	$	(9,374,967	)	$	(729,610	)
Balances -September 30, 2022		338,381,981	$	338,382		1,000,000	$	1,000	$	8,214,976		$	—	$	(9,189,724	)	$	(635,366	)
Shares issued for conversion of notes and interest		104,643,939		104,644		—		—		(70,717	)		—		—			33,927
Shares to be issued for notes payable		—		—		—		—		—			4,500		—			4,500
Net loss		—		—		—		—		—			—		(117,204	)		(117,204	)
Balances - March 31, 2023		651,139,153	$	651,139		1,000,000	$	1,000	$	8,027,145		$	4,500	$	(9,492,171	)	$	(808,387	)
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited)
	Common Stock						Preferred Stock
	2024			2023
	Shares			Amount			Shares		Amount		Additional Paid in Capital			Common Stock to be Issued		Accumulated Deficit			Stockholders' Deficit
Cash Flows From Operating Activities
Balances - December 31, 2022		546,495,214		$	546,495			1,000,000	$	1,000	$	8,097,862		$	—	$	(9,374,967	)	$	(729,610	)
Net (loss)	$	(499,072	)	$	(117,204	)
Shares issued for conversion of notes and interest		698,077,221			698,077			—		—		(581,352	)		—		—			116,725
Adjustments to reconcile net loss to net cash used
Shares to be issued for loan costs		—			—			—		—		—			13,125		—			13,125
in operating activities
Shares to be issued to officers/directors		—			—			—		—		—			3,200		—			3,200
Amortization of convertible note issue costs		—			3,390
Net loss		—			—			—		—		—			—		(338,609	)		(338,609	)
Amortization of note discount		7,325			—
Balances - September 30, 2023		1,244,572,435		$	1,244,572			1,000,000	$	1,000	$	7,516,510		$	16,325	$	(9,713,576	)	$	(935,169	)
Interest paid in stock		11,737			491
Balances - December 31, 2021		128,689,319		$	128,689			1,000,000	$	1,000	$	7,896,457		$	—	$	(8,149,760	)	$	(123,614	)
Changes in operating assets and liabilities
Shares issued for conversion of notes and interest		196,896,962			196,897			—		—		331,315			—		—			528,212
Increase in accounts payable		313,422			19,924
Shares issued for cashless warrant exercise		12,795,700			12,796			—		—		(12,796	)		—		—			—
Increase in accrued interest payable		46,472			24,918
Net loss		—			—			—		—		—			—		(1,039,964	)		(1,039,964	)
Cash used in operating activities		(120,116	)		(68,481	)
Balances - September 30, 2022		338,381,981		$	338,382			1,000,000	$	1,000	$	8,214,976		$	—	$	(9,189,724	)	$	(635,366	)
Cash Flows From Investing Activities
The accompanying notes are an integral part of these consolidated financial statements.
Software costs		(10,001	)		(7,001	)
Cash used in investing activities		(10,001	)		(7,001	)
Cash Flows From Financing Activities
Proceeds from notes payable		114,000			50,000
Net cash provided by financing activities		114,000			50,000
Net increase (decrease) in cash		(16,117	)		(25,482	)
Cash, beginning of period		33,550			62,085
Cash, end of period	$	17,433		$	36,603
Supplemental disclosure of non-cash investing
and financing activities
Notes payable and interest converted to common stock	$	11,737		$	33,927
Common stock issuable for loan costs	$	43,125		$	—
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(Unaudited)
	2023			2022
Cash Flows From Operating Activities
Net (loss)	$	(338,609	)	$	(1,039,964	)
Adjustments to reconcile net loss to net cash used
in operating activities
Amortization of convertible note issue costs		7,462			36,087
Amortization of discounts on convertible notes		—			472,440
Amortization of discounts on convertible note interest		—			19,578
Interest paid in stock		6,235			—
Stock based compensation to officers/directors		3,200			—
Changes in operating assets and liabilities
Decrease in prepaids		—			3,730
Increase in accounts payable		24,649			(22,281	)
Increase in accrued payables		89,078			74,133
Cash used in operating activities		(207,985	)		(456,277	)
Cash Flows From Investing Activities
Purchase of software		(28,001	)		(11,634	)
Cash used in investing activities		(28,001	)		(11,634	)
Cash Flows From Financing Activities
Proceeds from notes payable		225,000			—
Payments on convertible debt		—			(95,966	)
Proceeds from convertible notes, net of offering costs
and original issue discount		—			144,000
Net cash provided by financing activities		225,000			48,034
Net (decrease) increase in cash		(10,986	)		(419,877	)
Cash, beginning of period		62,085			518,539
Cash, end of period	$	51,099		$	98,662
Supplemental disclosure of non-cash investing
and financing activities
Notes payable and interest converted to common stock	$	116,725		$	528,212
Common stock to be issued to officers/directors	$	3,200		$	—
Common stock to be issued for loan costs	$	13,125		$	—
Accounts payable for intangibles	$	70,251		$	52,307
Cashless exercise of common stock warrant	$	—		$	29,430
Cash paid for interest on debt	$	—		$	10,647
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2023~~2024

(Unaudited)

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

BlackStar Enterprise Group, Inc. (the “Company” or “BlackStar”) was incorporated in the State of Delaware on December 18, 2007. On January 25, 2016, International Hedge Group, Inc. (“IHG”) ~~signed~~acquired ~~an agreement to acquire~~ a ~~95%~~controlling interest in the Company. ~~IHG~~through ~~was issued 44,400,000 shares of common stock and~~ 1,000,000 shares of Series A Preferred Stock. IHG is our controlling shareholder and is engaged in providing management services and capital consulting to companies. IHG and BlackStar are currently managed and controlled by ~~two~~the ~~individuals each~~CEO, ofMr. ~~whom~~Kurczodyna, who is also a beneficial owner of anless ~~additional~~than 91% of the Company’s common stock.

The Company intends to act as a merchant banking firm seeking to facilitate venture capital to early stage revenue companies. BlackStar 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~~digital inshare ~~crypto-~~related ventures through a wholly-owned subsidiary, Blockchain Equity Management Corp (“BEMC”). BlackStar intends to serve businesses in their early corporate lifecycles and may provide funding in the forms of ventures in which they control the venture until divestiture or spin-off by developing the businesses with capital. BlackStar formed a subsidiary nonprofit company, Blockchain ~~Industry~~Equity SRO Inc. (“BIBESRO”) in 2017. BIBESRO’s business plan is 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.

Basis of presentation

The accompanying unaudited financial ~~statements~~ statements have been prepared in accordance with United States generally accepted accounting principles for financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted ~~accounting~~ accounting principles (US GAAP) for complete financial statements. However, except as disclosed herein, there has been no material ~~change~~ change in the information disclosed in the notes to the financial statements for the year ended December 31, ~~2022~~2023 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. These unaudited financial statements are condensed and should be read in conjunction with those financial statements included in the Form 10-K and interim disclosures generally do not repeat those in the annual statements. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~ 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2023~~2024.

These unaudited consolidated financial ~~statements~~ statements include BlackStar and its wholly owned subsidiaries: Blockchain Equity Management Corp. and Blockchain ~~Industry~~Equity SRO Inc. (neither of which was operating as of March 31, 2024), and were prepared from the accounts of the Company in accordance with US GAAP. All transaction have been included in the Company's books and records and all significant intercompany transactions and balances have been eliminated on consolidation.

NOTE 2 – GOING CONCERN

The Company'’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and the year ended ~~December~~ December 31, ~~2022~~2023, the Company has generated no revenues and has incurred losses. As of ~~September~~March 3031, ~~2023~~2024, the Company had cash of $5117,~~009~~433, working capital deficiency of $111,~~249~~934,~~456~~762 and an accumulated deficit of $910,~~713~~921,~~576~~022. These conditions raise substantial doubt as to the Company'’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The continuation of the Company as a going concern is dependent upon the ability to raise equity or debt financing, and the attainment of profitable operations from the Company'’s planned business. Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2024

(Unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its consolidated financial position or or results of operations. Management has evaluated accounting standards and interpretations issued but not yet effective as of ~~September~~ 30March 31, ~~2023~~2024 and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.

Reclassifications

Certain amounts in the consolidated financial statements for prior year periods have been reclassified to conform with the current year presentation.

NOTE 4 – INTANGIBLES

Intangibles at ~~September~~March 3031, ~~2023~~2024 and ~~December~~ December 31, ~~2022~~2023 consist of capitalized costs for the Company’s proprietary software and patents as follows:

	2023		2022
	2024		2023
Software	$	~~118~~150,~~001~~002	$	90140,~~000~~001
Patents		~~196~~208,~~286~~651		~~151~~208,~~685~~651
	$	~~314~~358,~~287~~653	$	~~241~~348,~~685~~652

9As of March 31, 2024, the patents and related software have not been placed in service nor marketed to potential customers, and therefore no depreciation/amortization was recorded for the period.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2024

(Unaudited)

NOTE 5 – STOCKHOLDERS’ DEFICIT

Preferred Stock

The Company has authorized 10,000,000 preferred shares, with a par value of $0.001 per share. The Company issued 1,000,000 shares of its Series A Preferred Series stock to IHG in fulfillment of the purchase agreement. These shares are convertible at a ratio of 100 shares of the common stock of the Company for each share of preferred stock of the Company.

Common Stock

In July 2022, the Company’s authorized common stock was increased from 700,000,000 to 2,000,000,000 shares, with an effective date of the Amendment to the Articles of Incorporation of August 5, 2022. There was no change in the shares outstanding of either the common stock or preferred stock as a result of the increase.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2023,~~ 2024, the Company issued shares of its common stock as follows:

● ~~698~~195,~~077~~620,~~221~~499 shares as consideration for conversion of ~~$116,725~~ principal and interest on convertible notes payable valued at $11,737.

During the ~~nine~~three months ended ~~September 30,~~March ~~2022~~31, 2023, the Company issued shares of its common stock as follows:

● ~~196~~104,~~896~~643,~~962~~939 shares for conversion of $~~528~~33,~~212~~927 principal and interest on convertible notes payable.

●At 12March 31,~~795,700~~ shares for exercise of previously issued warrants at $0.0023 per share. The exercise price was revised to $0.0023 per share from $0.25 per share as per antidilution provision of the warrant agreement. The warrants were exercised on a cashless or “net” basis. Accordingly2024, ~~we did not receive any proceeds from such exercises. The cashless exercise of such warrants resulted in~~ the ~~cancellation~~Company has ofrecorded ~~previously~~common ~~issued~~stock ~~warrants~~ to ~~purchase~~be anissued ~~aggregate~~as ~~of 118,800 shares of common stock.~~follows:

At● ~~September~~11,250,000 30shares, ~~2023~~valued at $19,125, as consideration for extension of loans previously made to the Company. The Company has recorded ~~common~~ ~~stock~~the shares to be issued to the lenders at a discount to debt, based on the closing trading price of the Company’s common stock as ~~follows:~~of the date of the loan extensions, and is amortizing the discount to interest expense over the term of the extensions.

● 3315,~~750~~000,000 shares, valued at $1324,~~125,~~000 as ~~additional~~ consideration for ~~loans~~loan ~~made~~costs toon ~~the~~new ~~Company~~loans. ~~during the period~~ (See Note 8).

●

8,000,000 shares, valued at $3,200, to officers/directors/advisors to the Company (See Note 9).

NOTE 6 – WARRANTS

In April 2019, the Company issued a convertible note for $110,000. Pursuant to the terms of the note agreement, the Company issued warrants to the holder for the purchase 440,000 shares of the Company’s common stock. The warrants are exercisable at $0.25 per share for a term of 5 years. The $132,953 fair value of the warrants was calculated using the Black-Scholes pricing model with the following assumptions: stock price $0.38; strike price $0.25; volatility 98%; risk free rate 2.25% and term of 5 years. The ~~$132.953~~Company ~~fair~~recognized ~~value~~a ofwarrant ~~the~~expense ~~warrants~~of ~~was charged~~$132,593 toat ~~operations when issued during~~ the ~~year~~time ~~ended~~of ~~December~~grant ~~31,~~of ~~2019~~the warrants. At ~~September~~March 3031, ~~2023~~2024, the intrinsic value of the outstanding warrants was $0, as the trading price of the Company’s common stock at that date was less than the underlying exercise price of the warrants.

109

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2024

(Unaudited)

NOTE 6 – WARRANTS (continued)

A summary of warrant activity during the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 is presented below:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding and exercisable – December 31, 2022		321,200	$	0.25		1.57
Outstanding and exercisable – December 31, 2023		173,200	$	0.25		0.33
Exercised		—
Expired		—
Outstanding and exercisable – September 30, 2023		321,200	$	0.25		.57
Outstanding and exercisable – March 31, 2024		173,200	$	0.25		0.08

NOTE 7 – CONVERTIBLE NOTES

~~During~~The ~~the~~Company ~~nine~~has ~~months~~outstanding ~~ended~~convertible ~~September~~notes due 30to SE Holding LLC and Adar Alef LLC which, as of March 31, 2024 and December 31, 2023, are in default. Accordingly, the Company has ~~had~~accrued default interest at the ~~following~~rate ~~transactions~~of ~~related~~24% toper ~~its~~annum ~~convertible~~on ~~note~~the ~~financings:~~outstanding debt.

●Convertible ~~1800~~notes ~~Diagonal~~payable ~~Lending~~at ~~LLC~~March ~~converted~~31, ~~in three tranches, the outstanding principal balance of $23,600 together with accrued~~ 2024 and ~~unpaid~~December ~~interest thereon of $2~~31,~~787~~ ~~due~~2023 onare ~~their~~summarized ~~note~~as ~~of May 5, 2022 into 75,643,939 shares of the Company’s common stock at conversion prices of $0.00033 to $0.00036 per share under the conversion provision and terms of the note agreement.~~follows:

● 1800 Diagonal Lending LLC converted the total outstanding principal balance of $43,750 together with accrued and unpaid interest thereon of $2,788 due on their note of August 30, 2022 into 305,250,000 shares of the Company’s common stock at conversion prices of $0.00013 to $0.00026 per share under the conversion provision and terms of the note agreement.

Note Holder	Face Amount		Interest Rate			Due Date	2024		2023
SE Holdings LLC	$	220,000		10	%	Jan 26, 2022	$	220,000	$	220,000
Adar Alef LLC	$	550,000		10	%	April 29, 2022	$	364,079	$	364,079
							$	584,079	$	584,079

●On ~~1800~~January ~~Diagonal~~23, ~~Lending~~2024, the managing member of SE Holdings, LLC, ~~converted~~individually, inand ~~four~~Adar ~~tranches~~Alef, ~~$37~~LLC,~~200~~ asalso ~~partial~~managed ~~conversions~~by of the ~~principal~~same ~~portion~~individual, ofas ~~their~~the ~~October 31~~entity, ~~2022~~settled ~~note~~charges ~~into~~with ~~210~~the SEC ordering them,~~492~~ in part,~~308~~ to surrender for cancellation all remaining shares of the Company’s ~~common~~they ~~stock~~obtained atthrough conversion of ~~prices~~notes, ofas ~~$0.00013~~well toas $conversion rights under any remaining convertible notes.~~0002~~ ~~per~~The ~~share~~Company ~~under~~is evaluating what this means for the remaining outstanding conversion ~~provision~~rights under the two convertible promissory notes held by SE Holdings, LLC ($220,000) and ~~terms~~Adar Alef, LLC (original face amount of $550,000), and for the ~~note~~current ~~agreement~~holdings of Adar Alef, LLC (5,000,000 shares of common stock of BlackStar) The Company is of the opinion that the notes are no longer convertible and are classified as ordinary debt.

● GS Capital Partners made a $5,933 partial conversion, in two tranches, of the principal portion of their October 11, 2021 note together with accrued and unpaid interest of $1,267 into 59,998,666 shares of the Company’s common stock at a conversion price of $0.00012 per share under the conversion provision and terms of the note agreement.10

In April 2022, Quick Capital LLC issued a notice of default on its $33,275 convertible note to the Company dated November 16, 2020 and stated that the outstanding amount due on the note is $133,317, the default interest per annum is 24%, and that the conversion price is the lowest trading price during the delinquency period with a 50% discount. The Company has recorded accrued default interest on the note at the rate of 24% per annum from May 24, 2021 (date of default) to September 30, 2023 based on the original loan value of $33,275. At September 30, 2023, the accompanying financial statements reflects an outstanding loan balance due to Quick Capital LLC of $33,275 and accrued interest of $9,569. The Company and Quick Capital LLC have been in discussions to reach a reasonable and fair settlement of the balance due on the financing agreement.

Table of Contents

~~NOTE~~BLACKSTAR 7ENTERPRISE –GROUP, ~~CONVERTIBLE NOTES (continued)~~INC.

~~Convertible~~NOTES ~~notes~~TO ~~payable~~CONSOLIDATED atFINANCIAL ~~September 30, 2023 and December 31, 2022 are summarized as follows:~~STATEMENTS

Note Holder	Face Amount		Interest Rate			Due Date	September 30, 2023			December 31, 2022
GS Capital Partners LLC	$	60,000		8	%	October 11, 2022	$	33,682		$	39,615
SE Holdings LLC	$	220,000		10	%	January 26, 2022	$	220,000		$	220,000
Quick Capital LLC	$	33,275		10	%	July 16, 2021	$	33,275		$	33,275
Adar Alef LLC	$	550,000		10	%	April 29, 2022	$	377,534		$	377,534
1800 Diagonal Lending LLC	$	55,750		10	%	May 5, 2023		—		$	23,600
	$	43,750		10	%	August 30, 2022		—		$	43,750
	$	55,000		10	%	October 31, 2022	$	17,800		$	55,000
Discount							$	(373	)	$	(7,835	)
							$	681,918		$	784,939

THREE MONTHS ENDED MARCH 31, 2024

(Unaudited)

NOTE 8 – NOTES PAYABLE

In ~~March~~January ~~2023~~2024, the Company borrowed $25100,000 from ~~each~~an ofunrelated ~~two individuals~~individual, repayable ~~nine~~January ~~months~~25, ~~from~~2025 ~~date of borrowing~~ with interest at 11% per annum. At maturity, the Company will repay the face amount of ~~each of~~ the ~~loans~~loan in cash, including unpaid and accrued interest at 11% and, in addition, ~~will~~has agreed to issue 3as additional consideration 15,~~750~~000,000 shares of the Company’s common stock to ~~each of~~ the ~~lenders~~lender. At maturity ~~each of~~ the ~~lenders~~lender ~~have~~has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 315,~~750~~000,000 shares of the Company’s common ~~stock~~ instock as full satisfaction of the principal loan ~~amount~~amounts ~~of $25,000~~ and related unpaid and accrued interest thereon. The Company has recorded the ~~initial aggregate 7~~$24,~~500,~~000 ~~common~~value of shares to be issued to the ~~two~~lender ~~lenders~~for atloan ~~$4,500,~~consideration as a discount to debt, based on the ~~$0.0006~~ closing trading price of the Company’'s common stock as of the date of the ~~loan~~note, ~~as a component of stockholders’ deficit classified as common stock to be issued~~ and is amortizing the ~~$4,500~~discount to ~~value of the shares as~~ interest expense over the term of the ~~loans~~note. ~~Amortization for the nine months ended September 30, 2023 is $3,453.~~

In ~~May~~January ~~2023~~2024, the Company borrowed ~~$50,000 and~~ $2514,000 from ~~two~~an unrelated ~~individuals~~individual, repayable ~~nine~~April ~~months~~25, ~~from~~2024 ~~date of borrowings~~ with interest at 11% per annum. At maturity, the Company will repay the face amount of the ~~loans~~loan in cash, including unpaid and accrued interest at 11% ~~and~~, inor ~~addition~~at option of the lender, will issue 7,~~500,~~000 ~~and 3~~,~~750,~~000 shares of the Company’s common stock, ~~respectively, to the lenders. At maturity the lenders have the option to be issued,~~ in lieu of cash payment of the outstanding debt, ~~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 has recorded the initial aggregate 11,250,000 common shares to be issued to the two lenders at $4,500, based on the $0.0004 closing trading price of the Company’s common stock as of the date of the loans, as a component of stockholders’ deficit classified as common stock to be issued and is amortizing the $4,500 value of the shares as interest expense over the term of the loans. Amortization for the nine months ended September 30, 2023 is $2,283.

12Notes payable at March 31, 2024 and December 31, 2023 are summarized as follows:

	Face Amount		Interest Rate			Due Date	2024			2023
Current notes payable	$	25,000		11	%	Sept 1, 2024	$	25,000		$	25,000
	$	50,000		11	%	May 1, 2024	$	50,000		$	50,000
	$	50,000		11	%	Jun 29, 2024	$	50,000		$	50,000
	$	14,000		11	%	Apr 25, 2024	$	14,000			—
	$	25,000		11	%	Sept 1, 2024	$	25,000		$	25,000
	$	100,000		11	%	Feb 25, 2025	$	100,000			—
	$	50,000		11	%	Dec 9, 2024	$	50,000		$	50,000
	$	25,000		11	%	Dec 18, 2024	$	25,000		$	25,000
	$	25,000		11	%	Aug 17, 2024	$	25,000		$	25,000
	$	50,000		11	%	Aug 6, 2024	$	50,000		$	50,000
	$	25,000		11	%	Aug 8, 2024	$	25,000		$	25,000
Note discount							$	(35,800	)
							$	403,200		$	325,000

Long-term notes payable	$	25,000		5.5	%	Nov 13, 2026	$	25,000		$	25,000
	$	50,000		5.5	%	May 17, 2025	$	50,000		$	50,000
							$	75,000		$	75,000

Table of Contents

~~NOTE~~BLACKSTAR 8ENTERPRISE –GROUP, ~~NOTES PAYABLE (continued)~~INC.

InNOTES ~~August~~TO ~~2023,~~CONSOLIDATED ~~the~~FINANCIAL 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 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 has recorded the 7,500,000 common shares to be issued to the lender at $2,250, based on the $0.0003 closing trading price of the Company’s common stock as of the date of the loan, as a component of stockholders’ deficit classified as common stock to be issued and is amortizing the $2.250 value of the shares as interest expense over the term of the loan. Amortization for the nine months ended September 30, 2023 is $493.STATEMENTS

InTHREE ~~September~~MONTHS ~~2023,~~ENDED ~~the~~MARCH ~~Company borrowed $50~~31,~~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 has recorded the 7,500,000 common shares to be issued to the lender at $1,875, based on the $0.00025 closing trading price of the Company’s common stock as of the date of the loan, as a component of stockholders’ deficit classified as common stock to be issued and is amortizing the $1,875 value of the shares as interest expense over the term of the loan. Amortization for the nine months ended September 30, 2023 is $7.

(Unaudited)

NOTE 9 – RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, the Company has relied on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. The advances are considered temporary in nature and have not been formalized by a promissory note.

IHG, the controlling shareholder of the Company, provides management consulting services to the Company. There is no formal written agreement that defines the compensation to be paid. For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, the Company recorded related party management fees of $8747,~~250~~000 and $~~235~~31,~~301~~500, respectively. ~~For the three months ended September 30, 2023 and 2022, the Company recorded related party management fees of $29,000 and $70,028, respectively.~~

On July 1, 2023, the Board of Directors ~~approved~~ approved and authorized the issuance of shares of the Company’s common stock as follows: 1,000,000 shares 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~~At ~~period~~March ~~ended September 30~~31, ~~2023~~2024, the Company has recorded as common stock to be 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.

NOTE 10 –- ~~SUBSEQUENT~~COMMITMENTS ~~EVENTS~~AND CONTINGENCIES

InOn November 6, 2023, the Company was ~~borrowed~~notified ~~$50~~of a lawsuit filed in Clark County,~~000~~ NV against the Company by GS Capital regarding the unavailability of conversion shares relating to the Promissory Note entered into on October 11, 2021 and the remaining principal balance of $2533,682. The Plaintiff is seeking specific performance for the reserve of 700,000,000 ~~from~~shares, ~~each~~or damages in excess of ~~two~~$15,000, ~~unrelated~~plus ~~individuals~~interest, ~~repayable~~costs, and ~~nine~~legal ~~months~~fees. ~~from~~At ~~date~~the outset of the ~~notes~~case, ~~with~~a ~~interest~~temporary atrestraining ~~11%~~order ~~per~~was ~~annum~~entered preventing the Company from trading any shares. AtAs ~~maturity~~currently postured, ~~the~~Plaintiff ~~Company~~seeks ~~will~~specific ~~repay~~performance ~~the~~(a ~~face~~mandatory ~~amount~~injunction) ofrequiring the ~~loans~~conversion inof ~~cash~~approximately 257,000,000 ~~including~~shares ~~unpaid~~ and ~~accrued~~possibly ~~interest~~additional atrecovery ~~11%~~of legal fees and, ~~in addition,~~interest. ~~will~~On ~~issue~~February 727,~~500~~ 2024,~~000~~ ~~and~~the 3Company,~~750~~ through its attorneys,~~000~~ 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 ~~common~~recovery in ~~stock~~the action and alleges that Plaintiff breached the terms of the agreement, ~~respectively~~including, but not limited to, ~~each~~obtaining the conversion of BlackStar’s stock after the ~~lenders~~Promissory Note was fully paid off. AtAmongst ~~maturity~~ other claims, the ~~lenders~~Company ~~have~~alleges that the ~~option~~Plaintiff acted toin bebad ~~issued,~~faith and in ~~lieu~~violation of ~~cash~~usury ~~payment~~laws ofby ~~the~~recovering ~~outstanding~~an ~~debts~~estimated $600,000 andollars ~~additional~~in 7BlackStar stock off of a $60,~~500,~~000 promissory note, estimated at a roughly 170% interest rate. The Company seeks a judgment in its favor and 3against Plaintiff,~~750,000~~ compensatory ~~shares~~damages in an amount to be proven at trial, declaratory relief voiding the agreement as illegal under Section 29(b) of the ~~Company’s~~Securities Act, ~~common~~punitive ~~stock~~damages in an amount to be proven at trial, ~~respectively~~interest on all damages, asand ~~full~~attorneys’ ~~satisfaction~~fees. As a result of the counterclaims, ~~principal~~there ~~loan~~can ~~amounts~~be ~~and~~no ~~related~~reasonable ~~unpaid~~estimate of any contingencies as of March 31, 2024.. At an April 22, 2024 hearing, the ~~and~~Plaintiff’s ~~accrued~~motion ~~interest~~to ~~thereon~~dismiss our counterclaims was denied.

OnAt ~~November~~March 631, ~~2023~~2024, ~~the~~there ~~Company~~were ~~was~~no ~~notified of~~legal aproceedings ~~lawsuit filed in Clark County, NV~~ against the Company ~~by GS Capital Partners LLC 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. The plaintiff~~ ~~sought~~other ~~specific~~than ~~performance for~~ the ~~reserve of 700,000,000 shares, or damages in excess of $15,000, plus interest, costs, and legal fees~~beforementioned. ~~The Company has paid the note in full on November 15, 2023 totaling $51,196.71 in cash and issued no shares. The Company is attempting to settle the dispute.~~

~~The~~NOTE ~~Company~~11 ~~has~~– ~~analyzed~~SUBSEQUENT its operations subsequent to September 30, 2023 through the date that these financial statements were issued, and has determined that it does not have any additional material subsequent events to disclose. EVENTS

In April 2024, the Company borrowed $25,000 and $50,000 from each of two unrelated individuals, repayable one year from date of the notes with interest at 11% per annum. At maturity, the Company will repay the face amount of the loans in cash, including unpaid and accrued interest at 11% and, in addition, has agreed to issue as additional consideration 3,750,000 and 7,500,000 shares 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 3,750,000 and 7,500,000 shares of the Company’s common stock, respectively, as full satisfaction of the principal loan amounts and related unpaid and accrued interest thereon.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2024

(Unaudited)

NOTE 11 – SUBSEQUENT EVENTS (continued)

On May 3, 2024, the Securities and Exchange Commission (“SEC”) entered an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC and its sole audit partner Benjamin F. Borgers CPA (individually and together, “BF Borgers”), the Company’s former public accountant. The Order denies BF Borgers the privilege of appearing or practicing before the SEC as an accountant. As a result, the Company retained a new public accountant, Fruci & Associates II, PLLC, to review the financials presented in this report.

The Company has analyzed its operations subsequent to March 31, 2024 through the date that these financial statements were issued, and has determined that it does not have any additional material subsequent events to disclose.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements and Associated Risks.

This Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern. As reflected in the accompanying financial statements, as of ~~September~~March 3031, ~~2023~~2024, we had an accumulated deficit of $910,~~713~~921,~~576~~022 and a working capital deficiency of $1,~~249~~934,~~456~~762. This raises substantial doubts about our ability to continue as a going concern.

Overview

BlackStar Enterprise Group, Inc. (the “Company” or “BlackStar”) intends to act as a merchant bank as of the date of these financial statements. We currently trade on the OTC Pink Sheets under the symbol “BEGI”. The Company is a merchant banking firm seeking to facilitate venture capital to early-stage revenue companies. BlackStar intends to offer consulting and regulatory compliance services to ~~crypto-equity~~blockchain ~~companies~~and DLT companies and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in involvement in ~~crypto~~electronic fungible share-related ventures though our wholly-owned subsidiary, Blockchain Equity Management Corp., (“BEMC”), mainly in the areas of blockchain and distributed ledger technologies (“DLT”). 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 BDTPTM. BEMC has not established any anticipated time frames or key milestones for BEMC business. 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.

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 growth companies."” Under no circumstances does the Company intend to become an ~~investment~~ investment company and its activities and its financial statement ratios of assets and cash will be carefully monitored and other ~~activities~~ activities reviewed by its Board of Directors 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 merchant bank, BlackStar intends to seek to provide access to capital for companies and is specifically seeking out ventures involved in DLT or blockchain. BlackStar intends to facilitate funding and management of DLT-involved companies through majority controlled joint ventures through its subsidiary BEMC . BlackStar, through BEMC, intends to initially control and manage each venture. Potential ventures for both BlackStar and BEMC will be analyzed using the combined business experience of its executives, with BEMC looking to fill those venture criteria with companies in crypto-related businesses such as blockchain or DLT technologies. The Company does not intend to develop Investment Objectives or “criteria” in any manner but will rely on the acumen and experience of its executives. ~~BEMC~~BlackStar is currently ~~non-operational,~~building ~~inactive~~a ~~and~~digital ~~has~~equity notrading ~~business~~platform orin ~~clients~~order atto ~~this~~trade ~~time.~~registered ItBlackStar iscommon ~~intended~~shares toin ~~offer~~digital ~~advisory~~form ~~services~~(DWAC), asand intends to ~~how to implement~~ use ofthe ~~a custom~~ platform ~~for~~design ~~the~~to ~~client’s~~provide ~~equity~~custom ~~based~~subscription ~~off~~services ofto ~~the~~other ~~BDTPTM.~~public ~~BEMC has not established any anticipated time frames or key milestones for BEMC business~~companies.

Recent Updates – BlackStar’s progress isin ~~currently~~2023 ~~developing~~was focused on thoroughly planning and describing many aspects of our new proposed line of business of trading common shares on a blockchain through the broker-~~based software~~dealer ~~platform~~ecosystem. ~~(“BDTP~~The ~~TM”)~~Company is finalizing the marketing plan to ~~trade~~promote ~~electronic~~and roll ~~fungible~~out ~~shares~~the three features of ~~our~~its ~~common~~blockchain ~~stock~~platform. ~~equal~~The Company plans to ~~the~~offer ~~shares held~~its Private Funding and ~~transferred~~Corporate byGovernance Blockchain ~~DTCC~~to ~~Brokers~~individual ~~(DWAC)~~private companies in 2024. ~~Once~~The ~~completed~~Company’s next major step in its main feature, ~~the~~BlackStar’s Digital ~~platform~~Trading ~~design~~Platform ~~might~~(“BDTP ~~enable~~TM”), uswill be to ~~license~~engage ~~the~~an ~~technology~~operating aspartner (a broker-dealer, clearing ~~Platform~~firm, asand/or aregistered ~~Service~~Alternative Trading System (“~~PaaS~~ATS”)) ~~for~~to ~~other~~host ~~publicly~~the ~~traded~~platform ~~companies,~~prior ~~providing revenue~~ to ~~finance~~implementation. ~~our~~To ~~merchant~~that ~~banking.~~end, ~~The~~the ~~completion~~Company ofhas ~~our~~been ~~software~~exploring ~~platform~~partnerships ~~depends~~with onbroker-dealers ~~our~~and ~~ability~~existing toATS’s ~~license~~and itother strategies to ango ~~existing~~live

Table of Contents

~~Alternative~~with ~~Trading~~BDTP ~~System~~TM ~~(“ATS”)~~in accordance with orexisting ~~for~~laws usand toregulations. ~~possibly~~As ~~register~~of asthe andate ~~ATS~~of this filing, ~~which~~the wecore doplatform ~~not~~of ~~intend~~BDTP toTM dois atcomplete ~~this~~and ~~time~~will asremain in the testing phase until we ~~would~~obtain ~~prefer~~an operating partner, or acquires a broker-dealer to ~~license~~operate ~~our~~the platform. BlackStar intends to ancontinue ~~existing~~to ~~ATS~~seek further input from various regulatory agencies and others on the functionality of the BDTP TM. The BDTP TM 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. The software is complete in demonstrating a proof-of-concept trading ability, while recording activity using an immutable blockchain ledger. Currently, the working model platform is ~~not~~hosted ~~currently~~on ~~operational~~Amazon’s orQuantum Ledger Database. During 2021, BlackStar and Artuova successfully completed a production ready and feature-complete user interface for the digital platform which is now in ~~use~~the byfinal ~~anyone~~stages of quality assurance. ~~More~~In ~~details~~2023, BlackStar ~~regarding~~and Artuova completed a production ready and feature-complete user interface for our Corporate Governance feature on a blockchain. BlackStar is actively pursuing relationships with various broker-dealers, clearing firms, and ATS’s to complete the ~~BDTP~~final TMstages, ~~can~~while considering applying for a Broker Dealer or ATS license. During 2021-2022, BlackStar filed with the U.S. bePatent ~~found~~and inTrademark Office (“USPTO”) for patent protection of its proprietary software. During 2022, BlackStar also filed with U.S. and foreign trademark offices for protection. On December 26, 2023, the ~~most~~USPTO ~~recent~~issued ~~registration~~Patent ~~statement~~No. US 11,854,080 B2, “System And Method For Matching Orders And Immutable Blockchain Ledger For All Customer Trading Activity With Settlement Into The Broker Dealer Ecosystem”. In February 2024, BlackStar was allowed its Corporate Governance patent “System and Method for Preparing for a SEC Financial Statement Audit by Recording Corporate Governance Information on ~~Form~~an Immutable Blockchain,” ~~S-1~~which was subsequently issued on April 23, as2024. ~~amended~~On May 6, 2024, the USPTO allowed BlackStar’s patent “Systems And Methods For Using A Digital Trading Platform To Trade Securities On A Blockchain.”

Recent Updates – BlackStar’s progress in 2022 and 2023 was focused on thoroughly planning and describing many aspects of our new proposed line of business of trading common shares on a blockchain through the broker-dealer ecosystem. The Company is finalizing the marketing plan to promote and roll out the three features of its blockchain platform. The Company plans to offer its Private Funding and Corporate Governance Blockchain to individual private companies in 2023. The Company’s next major step in its main feature, BlackStar’s Digital Trading Platform (“BDTP TM”), will be to engage an operating partner (a broker-dealer, clearing firm, and/or registered Alternative Trading System (“ATS”)) to to host the platform and quote the shares prior to implementation. To that end, the Company is exploring partnerships with broker-dealers and existing ATS’s and other strategies to go live with BDTP TM in accordance with existing laws and regulations. As of the date of this filing, the core platform of BDTP TM is complete and will remain in the testing phase until we obtain an operating partner. BlackStar intends to continue to seek further input from various regulatory agencies and others on the functionality of the BDTP TM over the next 6 to 9 months. The BDTP TM 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. The software is complete in demonstrating a proof-of-concept trading ability, while recording activity using an immutable blockchain ledger. Currently, the working model platform is hosted on Amazon’s Quantum Ledger Database. BlackStar and its outside software developer, Artuova, previously successfully completed a production ready and feature-complete user interface for the digital platform which is now in the final stages of quality assurance. BlackStar is actively pursuing relationships with various broker-dealers, clearing firms, and ATS’s to complete the final stages of this multi-year engineering effort. BlackStar has filed with the U.S. Patent and Trademark Office (“USPTO”) for patent protection of its proprietary software and, during 2022, also filed with U.S. and foreign trademark offices for protection. On October 19, 2023, BlackStar received a ‘Notice of Allowance’ from the United States Patent and Trademark Office (USPTO), 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 application enables trading of common shares of a public company on a blockchain. This revolutionary software is our BDTPTM, a trading platform for electronic fungible shares in book-entry, and compliant at any U.S. Brokerage Firm. The patent has not yet been issued.

The Company’s success will be dependent upon its ability to analyze and manage the opportunities presented and is contingent upon successfully raising funds and ultimately SEC approval of our digital trading platform.

Currently in the testing phase, we estimate $100,000 to finalize the integration of the digital platform into the broker-dealer eco system ~~once the SEC and FINRA clear BlackStar to promote broker dealers and or exchanges~~. The ability to obtain a licensee may be dependent on our ability to confirm that FINRA and the SEC will allow trading on our platform as described. If this is the case, the Company may alternatively seek to acquire an existing broker-dealer in order to become a FINRA-registered broker-dealer. Once we have secured a licensee broker-dealer, clearing firm, or ATS for the operations of the BDTP TM and begun operating the BDTP TM, we will seek subscriber companies desiring customized platforms. At that point, we will have the ability to showcase BDTP TM’s live operations. 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 48 hours. We have not yet developed our marketing campaign to seek out these customers, but plan to do so after securing our operating licensee, ~~likely~~anticipated within the next ~~six~~twelve months. We anticipate our Corporate Governance platform to be subscribed to by US corporations in 2024, with overall expansion of services into the blockchain industry within the next twelve months.

AtBased ~~September~~on ~~30,~~our ~~2023,~~current ~~we have~~ cash reserves of approximately $17,433 as of March 31, 2024, and our receipt in April 2024 of $5175,~~099~~000 in short term loans, ~~which~~we ~~enables~~estimate usthat towe ~~only~~have ~~sustain~~the ~~limited~~cash ~~operations.~~for an operational budget of approximately three (3) months. We intend to offer a private placement of preferred shares to investors in order to achieve at least $5,000,000 in funding in the next year to scale our business plan. We intend to commence this offering in the ~~first~~second quarter of 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 have no 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. We have estimated we will require approximately $100,000 quarterly for operational costs which includes legal, accounting, travel, general and administrative, audit, rent, telephones and miscellaneous. In the year ended December 31, 2022, we received funding through convertible promissory notes totaling $194,750 being received in net cash proceeds. In 2023, we received loans of an aggregate $225,000 from four investors, due nine months from receipt with interest at 11% per annum.

We have estimated $100,000 for each of the second and third quarters of 2024 and $150,000 in the fourth quarter of 2024 for operational costs which includes legal, accounting, travel, general and administrative, audit, rent, telephones and miscellaneous. Thus far in 2024, we received loans of an aggregate $189,000 in short term loans from investors, due with interest at 11% per annum.

The independent registered public accounting firm’s report on our financial statements as of December 31, 2023, includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.

Table of Contents

The independent registered public accounting firm’s report on our financial statements as of December 31, 2022, includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.

Results of Operations

For the Three Months Ended ~~September~~March 3031, ~~2023~~ 2024 compared to same period in ~~2022~~2023

Net loss for the three months ended ~~September 30~~March 31, 2024 ~~2023~~ was $99499,~~422~~072 as compared to $~~214~~117,~~329~~204 for the three months ended ~~September~~March 3031, ~~2022~~2023, aan ~~decrease~~increase of $~~114~~381,~~907~~868. ~~As explained below, the decrease is predominately attributable to non-cash transactions from the issuance of convertible debt and other financings.~~

~~For~~General ~~the~~and ~~three~~administrative ~~months~~expenses ~~ended~~in ~~September 30, 2022,~~2024 wewere ~~had significantly higher non-operating (other) expenses as compared to the 2023 period~~$23,285 ~~substantially~~an ~~all~~increase of ~~which are non-cash~~$11, ~~predominately~~073 ~~due~~from togeneral ~~amortization of discounts on debt issuance~~ and ~~conversion~~administrative ~~features of the convertible promissory notes that we have used to finance our continued operations. This resulted in total other~~ expenses of $~~113~~12,~~140~~252 ~~for~~in ~~the three months ended September 30, 2022 as compared to $36,762 for the three months ended September 30,~~ 2023. ~~For~~General ~~the~~and ~~three~~administrative ~~months ended September 30,~~costs ~~2022, the Company recognized $56,071~~ for ~~amortization of discount on convertible notes, as compared to none for~~ the ~~three~~2024 ~~months ended~~and ~~September 30,~~ 2023. ~~The~~quarters ~~decrease~~were infor ~~2023~~investor ~~is attributable to the maturity of convertible loans outstanding and convertible debt conversions in the 2022 period. Interest expense decreased to $35~~relations,~~702~~ inwebsite ~~2023 as compared to $50~~management,~~452~~ infiling ~~the 2022 period~~fees, ~~as loans~~transfer ~~were~~agent ~~converted~~fees ~~from~~and ~~debt~~overhead ~~to equity~~operational costs.

~~General~~The ~~and~~Company ~~administrative~~paid ~~expenses~~management inconsulting ~~2023~~fees ~~were~~to ~~$8,520~~IHG ~~a decrease~~ of $247,~~914~~000 ~~from~~for ~~general~~the ~~and~~three ~~administrative~~months ~~expenses~~ended ofMarch ~~$11~~31,~~434~~ in2024 ~~2022.~~as ~~General~~compared ~~and~~to ~~administrative costs~~$31, ~~which~~500 ~~were~~paid ~~comparable~~ for the comparable 2023 ~~to 2022 quarters, were for investor relations, filing fees, transfer agent fees and overhead operational costs~~period.

~~The~~Legal ~~Company~~and ~~paid~~professional ~~management consulting~~ fees to ~~IHG~~ of $29363,~~000~~253 for the three months ended ~~September~~March 3031, ~~2023~~2024 asincreased ~~compared~~by to $70318,~~028~~601 ~~paid~~from $44,652 for the comparable ~~2022~~2023 period. The increase in legal fees for the 2024 period was predominately for fees related to litigation for convertible debt issues. For both periods the Company’s legal and professional fees included SEC regulatory and statutory filings, registration statement filings and amendments thereto and auditor related fees for the Company’s annual audit.

~~Legal~~Interest ~~and~~expense ~~professional~~increase ~~fees~~by of$40,124 to $2565,~~140~~534 for the ~~three~~2024 ~~months~~period ~~ended~~as ~~September~~compared ~~30,~~to ~~2023 increased by~~ $525,~~413~~410 ~~from $19,727~~ for the ~~comparable~~2023 ~~2022~~ period. The ~~Fees~~increase ~~for~~includes $11,737 as the ~~2023~~value ~~and 2022~~of ~~periods~~common ~~were~~stock ~~predominately~~issued for ~~SEC~~debt ~~regulatory~~ extinguishment,and ~~statutory filings~~$7,325 ~~registration~~amortization ~~statement~~of ~~filings~~the ~~and amendments thereto~~value ~~and~~of ~~auditor~~common ~~related~~stock ~~fees~~issuable for ~~quarterly~~loan ~~reviews~~costs and loan extension costs.

For the Nine Months Ended September 30, 2023 compared to same period in 2022

Net loss for the nine months ended September 30, 2023 was $338,609 as compared to $1,039,964 for the nine months ended September 30, 2022, a decrease of $701,355. As explained below, a significant portion of the losses in those periods was attributable to non-cash transactions from the issuance of convertible debt and other financings.

Operating expenses for the nine months ended September 30, 2023 include $87,250 in related party management consulting fees, $116,028 in legal and professional fees, and $32,555 in general and administrative fees, for total operating expenses of $235,833. In the comparable 2022 period, operating expenses include $235,301 in related party management consulting fees, $96,352 in legal and professional fees, and $57,040 in general and administrative fees, for a total of $388,693 for the nine months ended September 30, 2022. For the 2022 period, there were higher related party management consulting fees and costs for fund raising as compared to the 2023 period resulting in a decrease in total operating expenses of $152,860 for 2023.

For the nine months ended September 30, 2022, we had significantly higher non-operating (other) expenses as compared to the 2023 period, substantially all of which are non-cash, predominately due to amortization of discounts on debt issuance and conversion features of the convertible promissory notes that we have used to finance our continued operations. This resulted in total other expenses of $651,271 for the nine months ended September 30, 2022 as compared to $102,776 for the nine months ended September 30, 2023. For the nine months ended September 30, 2022, the Company recognized $472,440 for amortization of discount on convertible notes, as compared to none for the nine months ended September 30, 2023. The decrease in 2023 is attributable to the maturity of convertible loans outstanding and convertible debt conversions in the 2022 period. Interest expense decreased to $95,314 in 2023 as compared to $142,744 in the 2022 period, as loans were converted from debt to equity.

General and administrative expenses in 2023 were $32,555 a decrease of $24,485 from general and administrative expenses of $57,040 in 2022. The decrease in general and administrative costs is attributable to cost containment efforts by management as

Table of Contents

the Company allocated all available resources to SEC filings and patent prosecution. General and administrative costs included investor relations, filing fees, transfer agent fees and overhead operational costs.

The Company paid management consulting fees to IHG of $87,250 for the nine months ended September 30, 2023 as compared to $235,301 paid in the comparable 2022 period.

Legal and professional fees of $116,028 for the nine months ended September 30, 2023 increased by $19,676 from $96,352 for the comparable 2022 period. Fees for the 2023 and 2022 periods were predominately for SEC regulatory and statutory filings, registration statement filings and amendments thereto and auditor related fees for annual audits and quarterly reviews.

Liquidity and Capital Resources

At ~~September~~March 3031, ~~2023~~2024, we had a working capital deficit of $1,~~249~~934,~~456~~762 and cash of $5117,~~099~~433 as compared to a working capital deficit of $~~971~~1,~~295~~480,550 and cash of $6233,~~085~~550, at December 31, ~~2022~~2023. The decrease in cash and increase in working capital deficit was due primarily to the utilization of available cash for operations and an increase in debt funding from $~~225~~114,000 of loans received in the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024. The Company used new and existing fundings to maintain operating activities and ~~complete~~for ~~filings~~legal ~~of amendments to the Company’s Registration Statement on Form S-1~~matters. During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~ 2024, we used $~~207~~120,~~985~~116 of cash for operating activities and paid $2810,001 in investing activities for software development ~~and patent~~ costs. In the comparable ~~2022~~2023 period, operating activities utilized cash of $~~456~~68,~~277~~481 and investing activities for software development ~~and patent~~ costs utilized cash of $117,~~634~~001.

Substantially all of our funding in ~~2023~~the ~~and~~2024 ~~2022~~and 2023 periods has been from ~~notes~~note ~~and convertible debt~~ financings from non-related ~~investment firms and~~ individuals. During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, we borrowed $~~225~~114,000 from ~~four~~two individuals, due ~~nine months from issuance~~ with interest at 11%~~. During the nine months ended September 30~~, ~~2022,~~and we issued ~~convertible debt with a face value of $155~~195,~~250~~620,499 ~~receiving~~shares ~~cash proceeds, net~~ of ~~financing~~common ~~costs,~~stock offor ~~$144,000. The convertible~~ debt ~~instruments were with non-related investment firms, carried an interest rate~~extinguishment ofvalued ~~10%, matured six months to one year from date of financing and were convertible into shares of the Company’s common stock~~ at ~~a discount to the trading prices of the common shares of 35% to 40%~~$11,737. During the ~~nine~~three months ended ~~September~~March 3031, 2023, ~~note~~we ~~holders were~~borrowed ~~issued 698~~$50,~~077,221~~000 ~~shares~~from oftwo ~~common stock for conversion of $116~~individuals,~~725~~ ~~face value of debt~~ and ~~related accrued interest. In the comparable 2022 period,~~ convertible note holders were issued ~~196~~104,~~896~~643,~~962~~949 shares of common stock for conversion of $~~528~~33,~~212~~927 face value of debt and related accrued interest and fees.

While management of the Company believes that the Company will be successful in its current and planned activities, there can be no assurance that the Company will be successful in obtaining sufficient revenues from our planned operations and raise sufficient equity, debt capital or strategic relationships to sustain the operations and future business of the Company.

Our ability to create sufficient working capital to sustain us over the next twelve-month period, and beyond, is dependent on our raising additional equity or debt capital, and ultimately to commence revenues form or digital trading platform.

There can be no assurance that sufficient capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

Availability of Additional Capital

Notwithstanding our previous success in fund raising from notes and convertible debt financings there can be no assurance that we will continue to be successful in raising capital and have adequate capital resources to fund our operations or that any additional funds will be available to us on favorable terms or in amounts required by us. We estimate that we will need to raise $5,000,000 over the next twelve months to scale up our current plan. The Company received $~~225~~189,000 in debt financing ~~during the nine months ended September 30, 2023 which enabled us~~ to ~~sustain~~date ~~operations~~ in ~~the first three quarters of 2023~~2024.

Any additional financings may be dilutive to our stockholders, new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of common stock. Debt or equity financing may subject us to restrictive covenants and significant interest costs.16

Table of Contents

Going Concern

We have only a very limited amount of cash and have incurred operating losses and limited cash flows from operations since inception. As of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~ 2023, we had accumulated deficit of $910,~~713~~921,~~576~~022 and $910,~~374~~421,~~967~~950, respectively, and we will require additional working capital to to fund operations through ~~2023~~2024 and beyond. These factors, among others, raise substantial doubt about our ability to continue as as a going concern. Our financial statements included in this Form 10-Q do not include any adjustments related to recoverability ~~and~~ and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern. The audited financial statements included in the Company’s recent annual report on Form 10-K have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result if we cease to continue as a going concern.

Our former registered independent auditors have issued an opinion on our financial statements as of December 31, ~~2022~~2023 which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any ~~revenues~~ revenues and no revenues are anticipated until we obtain final SEC approval for our digital trading platform. There is no assurance ~~that~~ that any revenue will be realized in the future. Accordingly, we must raise capital from sources other than the actual revenue ~~from~~ from issuance of memberships in our digital trading platform.

There can be no assurance that we will have adequate capital resources to fund planned operations or that any additional funds will be available to us when needed or at all, or, if available, will be available on favorable terms or in amounts required by us. If we are unable to obtain adequate capital resources to fund operations, we may be required to delay, scale back or eliminate some or all of our operations, which may have a material adverse effect on our business, results of operations and ability to operate as a going concern.

Off Balance Sheet Arrangements

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer/principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

Management has carried out an evaluation of of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Due to the lack of personnel and outside directors, management acknowledges that there may be deficiencies in these controls and procedures, but Management believes that the current procedures ~~have~~are ~~been~~not effective in disclosing all information required to be disclosed. The Company anticipates that with further resources, the Company will expand both management and the board of directors with additional officers and independent directors in order to provide sufficient disclosure controls and procedures.

~~Changes in Internal Control Over Financial Reporting~~17

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Table of Contents

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~Subsequent~~On ~~to the end of the period covered in this filing, on~~ November 6, 2023, ~~the~~we ~~Company~~were ~~was~~ notified of a lawsuit filed in Clark County, NV against the Company by GS Capital ~~Partners~~(“Plaintiff”) ~~LLC~~ 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. The ~~plaintiff~~Plaintiff is ~~sought~~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 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~~On February 27, 2024, the Company, ~~has~~through ~~paid~~its attorneys, filed an answer to Plaintiff’s complaint and counterclaims against Plaintiff. In addition to denying many of the ~~note~~allegations laid out in ~~full~~the onlawsuit, ~~November~~the Company invokes several affirmative defenses that bar Plaintiff’s recovery in the action and 15alleges that Plaintiff breached the terms of the agreement, ~~2023~~including, ~~totaling~~but ~~$51~~not limited to,~~196~~ obtaining the conversion of BlackStar’s stock after the Promissory Note was fully paid off.71 Amongst other claims, the Company alleges that the Plaintiff acted in ~~cash~~bad faith and ~~issued~~in noviolation ~~shares~~of usury laws by recovering an estimated $600,000 in BlackStar stock off of a $60,000 promissory note, estimated at a roughly 170% interest rate. ~~The~~We ~~Company~~seek isa ~~attempting~~judgment in our favor and against Plaintiff, compensatory damages in an amount to ~~settle~~be proven at trial, declaratory relief voiding the ~~dispute~~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. At an April 22, 2024 hearing, the Plaintiff’s motion to dismiss our counterclaims was denied.

ITEM 1A. RISK FACTORS

~~The~~Not ~~risk factor included in the periodic report for the prior quarter ended June 30, 2023, is incorporated herein by reference~~applicable.

The following additional risk factor shall be added:

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. 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. The lawsuit increases the company’s financial and administrative burdens and is a risk to the Company’s capital. Although the Company is attempting to settle the dispute by paying the note in full, there is no guarantee that this will settle the matter in its entirety. The Company may need to increase the authorized shares of common stock in order to accommodate any judgments or settlements, and the Company could be exposed to further risks of lawsuits for similar issues.

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

On ~~July~~January 125, ~~2023~~2024, ~~the Board of Directors approved~~ ~~and authorized~~ the ~~issuance of shares of the~~ Company’s ~~common~~entered ~~stock~~into asnote ~~follows:~~agreements ~~1,000,000~~with ~~shares~~two ~~each~~unrelated 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 for services rendered and the issuance was made by us in reliance upon Section 4(a)(2) of the Act and under 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 our 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.follows:

In● ~~August 2023, the Company borrowed~~ $50100,000 from an unrelated individual, repayable ~~May~~one 1,year ~~2024~~from date of the note with interest at 11% per annum.; Atand ~~maturity,~~agreed ~~the~~to ~~Company~~issue ~~will~~as ~~repay~~additional ~~the~~consideration ~~face amount~~to of the ~~loan~~lender ~~in cash~~15, ~~including unpaid and accrued interest at 11% and~~000, ~~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 715,~~500~~000,000 shares of the Company’s common stock as full satisfaction of the principal loan ~~amounts~~amount 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.~~

19● $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. 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.

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 1. Legal Proceedings” for additional information related to GS Capital Partners).

Table of Contents

In ~~September~~February ~~2023~~2024, the Company ~~borrowed~~and ~~$50,000 from~~each anof ~~unrelated~~the ~~individual,~~holders ~~repayable~~of ~~June~~two ~~29,~~loans ~~2024~~of ~~with~~$50,000 ~~interest~~and at$25,000 ~~11%~~agreed ~~per~~to ~~annum.~~extend Atthe maturity, of the ~~Company~~notes ~~will~~from ~~repay~~February ~~the face~~2024 ~~amount~~for ofa ~~the~~period ~~loan~~of inten ~~cash,~~(10) ~~including~~months ~~unpaid~~to ~~and~~December ~~accrued~~2024 with interest continuing to be accrued at 11%. ~~and,~~The inCompany ~~addition,~~agreed ~~will~~to issue 7,500,000 shares of ~~the Company’s~~ common stock to the ~~lender~~$50,000 note holder (valued at $12,000 ($0.0016 Atper ~~maturity~~share) ~~the~~and ~~lender~~3,750,000 ~~has~~shares ~~the~~of ~~option~~common stock to bethe ~~issued~~$25,000 innote ~~lieu~~holder of(valued ~~cash~~at ~~payment~~$7,125 of($0.0019 per share) as consideration for extending the ~~outstanding~~notes. ~~debt,~~The Company valued anthe ~~additional~~shares ~~7,500,000~~to be issued based on the per share closing trading prices of the Company’s common stock as ~~full satisfaction~~ of the ~~principal~~date ~~loan~~of ~~amounts and related unpaid and accrued interest thereon~~extensions. 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~~April ~~2023~~2024, the Company borrowed $5025,000 and $2550,000 from each of two unrelated individuals, repayable ~~nine~~one ~~months~~year from date of the notes with interest at 11% per annum. 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~~has agreed to issue 7as additional consideration 3,~~500~~750,000 and 37,~~750~~500,000 shares 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 73,~~500~~750,000 and 37,~~750~~500,000 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.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

ITEM 5. OTHER INFORMATION

~~None~~The Company is aware that on January 23, 2024, Aryeh Goldstein, Managing Member of SE Holdings, LLC, individually, and Adar Alef, LLC, also managed by Aryeh Goldstein, as the entity, settled charges with the SEC ordering them, in part, to surrender for cancellation all remaining shares they obtained through conversion of notes, as well as conversion rights under any remaining convertible notes. The Company is evaluating what this means for the remaining outstanding conversion rights under the two convertible promissory notes held by SE Holdings, LLC ($220,000) and Adar Alef, LLC ($550,000), and for the current holdings of Adar Alef, LLC (5,000,000 shares of common stock of BlackStar).

20On May 3, 2024, the Securities and Exchange Commission (“SEC”) entered an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC and its sole audit partner Benjamin F. Borgers CPA (individually and together, “BF Borgers”), the Company’s former public accountant. The Order denies BF Borgers the privilege of appearing or practicing before the SEC as an accountant. As a result, on June 3, 2024, the Company retained a new public accountant, Fruci & Associates II, PLLC, to review the financials presented in this report, and will have the previous fiscal year (ended December 31, 2023) reaudited by the new public accountant.

Table of Contents

ITEM 6. EXHIBITS

Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a–14(a) or 15d-14(a) of the Securities Exchange Act of 1934
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
32.1	Certification of Chief Executive Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer under Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as an Inline XBRL document and included in Exhibit 101)

2120

Table of Contents

SIGNATURES

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

	BLACKSTAR ENTERPRISE GROUP, INC.
	(Registrant)
Dated: November 19, 2023	By:	/s/ Joseph E. Kurczodyna
Dated: July 15, 2024	By:	/s/ Joseph E. Kurczodyna
		Joseph E. Kurczodyna
		(Chief Executive Officer,
		(Acting Chief Executive Officer,
		Principal Executive Officer)
		Acting Principal Executive Officer)
Dated: November 19, 2023	By:	/s/ Joseph E. Kurczodyna
Dated: July 15, 2024	By:	/s/ Joseph E. Kurczodyna
		Joseph E. Kurczodyna
		(Chief Financial Officer,
		Principal Accounting Officer)

2221

Filing Compare · BLACKSTAR ENTERPRISE GROUP, INC.