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 ~~March~~September 3130, 2025

[ ]	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]

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]

[ ]

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

[ ]

[X]

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

As of February 49, 2026, there were 2,978,706,965 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, 2024 and March 31, 2025	3
	Consolidated Balance Sheets –September 30, 2025 and December 31, 2024	3
	Consolidated Statements of Operations – Three months ended March 31, 2025 and 2024	4
	Consolidated Statements of Operations – Three and Nine months ended September 30, 2025 and 2024	4
	Consolidated Statements of Stockholder’s Deficit – Three months ended March 31, 2025 and 2024	5
	Consolidated Statements of Stockholder’s Deficit – Nine months ended September 30, 2025 and 2024	5
	Consolidated Statements of Cash Flows – Three months ended March 31, 2025 and 2024	6
	Consolidated Statements of Stockholder’s Deficit – Three months ended September 30, 2025 and 2024	6
	Notes to the Financial Statements	7
	Consolidated Statements of Cash Flows – Nine months ended September 30, 2025 and 2024	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	Notes to the Financial Statements	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk – Not Applicable	18
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4.	Controls and Procedures	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk – Not Applicable	20
Item 4.	Controls and Procedures	20
	PART II- OTHER INFORMATION
Item 1.	Legal Proceedings	1921
Item 1A.	Risk Factors – Not Applicable	2021
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2021
Item 3.	Defaults Upon Senior Securities – Not Applicable	2021
Item 4.	Mine Safety Disclosure – Not Applicable	2021
Item 5.	Other Information	2021
Item 6.	Exhibits	2122
	Signatures	2223

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2025 AND DECEMBER 31, 2024
SEPTEMBER 30, 2025 AND DECEMBER 31, 2024
	2025			2024
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash	$	~~193~~125		$	3,642
Prepaid expenses		41,~~950~~980			—
Total current assets		52,~~143~~105			3,642
Intangibles, net of amortization of $9,598 (2025) and $6,990 (2024)		397,155			394,763
Intangibles, net of amortization of $14,814 (2025) and $6,990 (2024)		391,939			394,763
Total Assets	$	~~402~~394,~~298~~044		$	398,405
LIABILITIES & STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	~~992~~1,~~256~~012,405		$	1,031,072
Accrued payables		~~552~~658,~~398~~522			500,317
Notes payable, net of discount-$7,962 (2025) and $22,924 (2024)		602,038			587,076
Notes payable, net of discount - $0 (2025) and $22,924 (2024)		610,000			587,076
Convertible notes payable, net of discount of $6,440 (2025) and $0 (2024)		626,839			584,079
Convertible notes payable, net of discount of $920 (2025) and $0 (2024)		629,359			584,079
Preferred stock subscribed		70236,~~000~~563			—
Total current liabilities		23,~~843~~146,~~531~~849			2,702,544
Notes payable, net of discount -$1,117 (2025) and $1,293 (2024)		23,883			23,707
Notes payable, net of discount - $763 (2025) and $1,293 (2024)		24,237			23,707
Total Liabilities		23,~~867~~171,~~414~~086			2,726,251
Commitments and Contingencies
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- 6 billion shares authorized; $0.001 par value;
1,854,894,873 shares issued and outstanding		1,854,895			1,854,895
Issued and outstanding- 2,254,894,873 (2025) and 1,854,894,873 (2024)		2,254,895			1,854,895
Additional paid in capital		7,~~576~~336,378			7,576,378
Common stock to be issued		46,775			46,775
Accumulated deficit		(1112,~~944~~416,~~164~~090	)		(11,806,894	)
Total stockholders' deficit		(2,~~465~~777,~~116~~042	)		(2,327,846	)
Total Liabilities and Stockholders' Deficit	$	~~402~~394,~~298~~044		$	398,405
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 MONTHS ENDED MARCH 31, 2025 AND 2024
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(Unaudited)
	2025			2024
	Three months ended						Nine months ended
Revenue	$	—		$	—
	September 30,						September 30,
Operating expenses
	2025			2024			2025			2024
Legal and professional		46,166			363,253
Revenue	$	—		$	—		$	—		$	—
Management consulting - related party		—			47,000
Operating expenses
General and administrative		21,125			23,285
Legal and professional		37,363			142,451			200,273			738,646
Total operating expenses		67,291			433,538
Management consulting - related party		1,927			25,500			3,941			106,025
Other expenses (income)
General and administrative		16,744			27,700			215,043			59,288
Interest expense		69,979			65,534
Total operating expenses		56,034			195,651			419,257			903,959
Total Other expenses (income)		69,979			65,534
Other expense (income)
Net (loss)	$	(137,270	)	$	(499,072	)
Interest expense		58,385			72,308			189,939			203,435
Net (loss) per share - basic and diluted	$	(0.0001	)	$	(0.0003	)
Total other expense		58,385			72,308			189,939			203,435
Weighted average number of common shares
Net (loss)	$	(114,419	)	$	(267,959	)	$	(609,196	)	$	(1,107,394	)
outstanding - basic and diluted		1,854,894,873			1,639,548,083
Net (loss) per share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
The accompanying notes are an integral part of these consolidated financial statements.
Weighted average number of common shares
outstanding - basic and diluted		2,184,565,203			1,750,218,046			1,964,784,983			1,710,138,237
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(Unaudited)
	Common Stock				Preferred Stock
	Shares		Amount		Shares		Amount		Additional Paid in Capital			Common Stock to be Issued			Accumulated Deficit			Stockholders' Deficit
Three Months Ended March 31, 2025
Balances - December 31, 2024		1,854,894,873	$	1,854,895		1,000,000	$	1,000	$	7,576,378		$	46,775		$	(11,806,894	)	$	(2,327,846	)
Net loss		—		—		—		—		—			—			(137,270	)		(137,270	)
Shares issued for compensation		400,000,000		400,000		—		—		(240,000	)		—			—			160,000
Balances - March 31, 2025		1,854,894,873	$	1,854,895		1,000,000	$	1,000	$	7,576,378		$	46,775		$	(11,944,164	)	$	(2,465,116	)
Net loss		—		—		—		—		—			—			(609,196	)		(609,196	)
Three Months Ended March 31, 2024
Balances -September 30, 2025		2,254,894,873	$	2,254,895		1,000,000	$	1,000	$	7,336,378		$	46,775		$	(12,416,090	)	$	(2,777,042	)
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 issued to officers, advisors & directors		17,000,000		17,000		—		—		1,500			(3,200	)		—			15,300
Shares issued for debt extinguishment		195,620,499		195,621		—		—		(183,884	)		—			—			11,737
Shares to be issued for loan extension		—		—		—		—		—			19,125			—			19,125
Shares to be issued for loan costs		—		—		—		—		—			2456,~~000~~474			—			2456,~~000~~474
Net loss		—		—		—		—		—			—			(~~499~~1,~~072~~107,394	)		(~~499~~1,~~072~~107,394	)
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	)
Balances - September 30, 2024		1,757,316,947	$	1,757,317		1,000,000	$	1,000	$	7,483,771		$	75,599		$	(11,529,344	)	$	(2,211,657	)
The accompanying notes are an integral part of these consolidated financial statements.

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BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(Unaudited)
	2025			2024
	Common Stock						Preferred Stock
Cash Flows From Operating Activities
	Shares			Amount			Shares		Amount		Additional Paid in Capital			Common Stock to be Issued			Accumulated Deficit			Stockholders' Deficit
Net (loss)	$	(137,270	)	$	(499,072	)
Balances - June 30, 2025		1,854,894,873		$	1,854,895			1,000,000	$	1,000	$	7,576,378		$	206,775		$	(12,301,671	)	$	(2,662,623	)
Adjustments to reconcile net loss to net cash used
Shares issued for compensation		400,000,000			400,000			—		—		(240,000	)		(160,000	)		—			—
in operating activities
Net loss		—			—					—		—			—			(114,419	)		(114,419	)
Amortization of intangibles		2,608			—
Balances -September 30, 2025		2,254,894,873		$	2,254,895			1,000,000	$	1,000	$	7,336,378		$	46,775		$	(12,416,090	)	$	(2,777,042	)
Amortization of convertible note issue costs		2,760			—
Balances - June 30, 2024		1,740,316,947		$	1,740,317			1,000,000	$	1,000	$	7,482,271		$	62,450		$	(11,261,385	)	$	(1,975,347	)
Amortization of note discount		15,138			7,325
Shares issued to officers, advisors & directors		17,000,000			17,000			—		—		1,500			(3,200	)		—			15,300
Interest paid in stock		—			11,737
Shares to be issued for loan costs		—			—			—		—		—			16,349			—			16,349
Changes in operating assets and liabilities
Net loss		—			—			—		—		—			—			(267,959	)		(267,959	)
(Increase) in prepaids		(4,950	)		—
Balances -September 30, 2024		1,757,316,947		$	1,757,317			1,000,000	$	1,000	$	7,483,771		$	75,599		$	(11,529,344	)	$	(2,211,657	)
(Decrease) increase in accounts payable		(43,816	)		313,422
The accompanying notes are an integral part of these consolidated financial statements.
Increase in accrued interest payable		52,081			46,472
Cash used in operating activities		(113,449	)		(120,116	)
Cash Flows From Investing Activities
Software costs		—			(10,001	)
Cash used in investing activities		—			(10,001	)
Cash Flows From Financing Activities
Proceeds for convertible note		40,000			—
Preferred stock subscribed		70,000			—
Proceeds from notes payable		—			114,000
Net cash provided by financing activities		110,000			114,000
Net increase (decrease) in cash		(3,449	)		(16,117	)
Cash, beginning of period		3,642			33,550
Cash, end of period	$	193		$	17,433
Supplemental disclosure of non-cash investing and financing activities
Notes payable and interest converted to common stock	$	—		$	11,737
Common stock issuable for loan costs	$	—		$	43,125
Cash paid for interest on debt	$	—		$	—
Cash paid for income taxes	$	—		$	—
The accompanying notes are an integral part of these consolidated financial statements.

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BLACKSTAR ENTERPRISE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(Unaudited)

	2025			2024

Cash Flows From Operating Activities
Net (loss)	$	(609,196	)	$	(1,107,394	)
Adjustments to reconcile net loss to net cash used
in operating activities
Amortization of intangibles		7,824			—
Amortization of convertible note issue costs		8,280			—
Amortization of note discount		23,454			42,939
Interest paid in stock		—			11,736
Stock based compensation to officers/directors/advisors		160,000			15,300
Changes in operating assets and liabilities
(Increase) in prepaids		(1,980	)		—
(Decrease) increase in accounts payable		(23,667	)		646,391
Increase in accrued interest payable		158,205			148,758

Cash used in operating activities		(277,080	)		(242,270	)

Cash Flows From Investing Activities
Payments for intangibles		—			(28,101	)

Cash used in investing activities		—			(28,101	)


Cash Flows From Financing Activities
Preferred stock subscribed		236,563			—
Proceeds from convertible note		40,000			239,000
Repayment of convertible note		(3,000	)		—

Net cash provided by financing activities		273,563			239,000

Net increase (decrease) in cash		(3,517	)		(31,371	)

Cash, beginning of period		3,642			33,550

Cash, end of period	$	125		$	2,179

Supplemental disclosure of non-cash investing
and financing activities

Notes payable and interest converted to common stock	$	—		$	11,737
Accounts payable for intangibles	$	5,000		$	5,000
Common stock to be issued for loan costs	$	—		$	75,599

Cash paid for interest on debt	$	—		$	—

Cash paid for income taxes	$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~NINE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2025

(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”) acquired a controlling interest in the Company through 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 the CEO, Mr. Kurczodyna, who is also a beneficial owner of less than 1% 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 companies desiring to issue digital shares and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in digital share 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 Equity SRO Inc. (“BESRO”) in 2017. BESRO’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 consolidated financial statements include BlackStar and its wholly owned subsidiaries: Blockchain Equity Management Corp. and Blockchain Industry SRO Inc., both of which are non-operating with no material transactions, and 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 principles (US GAAP) for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements for the year ended December 31, 2024 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 ~~three~~nine months ~~ended~~ending ~~March~~September 3130, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

These unaudited consolidated financial statements were prepared from the accounts of the Company in accordance with US GAAP. All transactions 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 ~~three~~nine months ended ~~March~~September 3130, 2025 and the year ended December 31, 2024, the Company has generated no revenues and has incurred losses. As of ~~March~~September 3130, 2025, the Company had cash of $~~193~~125, working capital deficiency of $23,~~838~~144,~~388~~744 and an accumulated deficit of $1112,~~944~~416,~~164~~090. 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

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~NINE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2025

(Unaudited)

NOTE 2 – GOING CONCERN (continued)

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.

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~~since ~~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.

Capitalized Internal-Use Software Costs

Pursuant to ASC 350-40, Internal-Use Software, the Company capitalizes development costs for internal use software projects once the preliminary project stage is completed, management commits to funding the project, and it is probable that the project will be completed, and the software will be used to perform the function intended. The Company ceases capitalization at such time as the computer software project is substantially complete and ready for its intended use. The determination that a software project is eligible for capitalization and the ongoing assessment of recoverability of capitalized software development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, estimated economic life and changes in software and hardware technologies.

The Company capitalizes costs for internal-use software once project approval, funding, and feasibility are confirmed. These costs primarily consist of external consulting fees and direct labor costs. When the internal-use software is ready for its intended use, the Company reclassifies the internal-use software to developed software intangible assets and amortizes the asset over an estimated useful life ranging from 3 to 5 years. No impairment losses were recorded for the ~~current~~nine ~~quarter~~months ended September 30, 2025 and the year ended December 31, 2024.

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~NINE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2025

(Unaudited)

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Definite Lived Intangible Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of the asset exceeds its estimated undiscounted net cash flows, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. Generally, fair values are estimated using discounted cash flow, replacement cost, or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in an estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the asset. No impairment losses were recorded for the ~~current~~nine ~~quarter~~months ended September 30, 2025 and during the year ended December 31, 2024.

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 results of operations. Management has evaluated accounting standards and interpretations issued but not yet effective as of ~~March~~September 3130, 2025, 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 period presentation.

NOTE 4 – INTANGIBLES

Intangibles at ~~March~~September 3130, 2025 and December 31, 2024 consists of capitalized costs for the Company’s proprietary software and patents as follows:

	2025			2024
Software	$	198,102		$	193,102
Patents		208,651			208,651
Accumulated amortization		(914,~~598~~814	)		(6,990	)
	$	~~397~~391,~~155~~939		$	394,763

Amortization expense for capitalized patent costs was $27,~~608~~824 and $6,990 for the ~~three~~nine months ended ~~March~~September 3130, 2025 and the year ended December 31, 2024, respectively. Estimated amortization expense for capitalized patents cost is $10,400 for each of the years in the five-year period ended December 31, 2029, based on the estimated useful life of the patents of twenty (20) years.

910

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~NINE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2025

(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 December 2024, the Company’s Board of Directors authorized an increase in the Company’s common stock from 2,000,000,000 to 6,000,000,000 shares, with an effective date of the Amendment to the Articles of Incorporation of February 10, 2025. There was no change in the shares outstanding of either the common stock or preferred stock as a result of the increase.

During the ~~three~~nine months ended ~~March~~September 3130, ~~2024~~2025, the Company issued shares of its common stock as follows:

~~· 195~~400,~~620~~000,~~499~~000 shares, asvalued ~~consideration~~at $160,000, to officers/directors/advisors/consultants to the Company for ~~extinguishment~~services rendered at a value of ~~principal~~$0.0004 ~~and~~per ~~interest~~share, based on ~~convertible~~the ~~notes~~daily ~~payable~~closing ~~valued~~trading atprice ~~$11~~of the Company’s common stock,~~737~~ including 200,000,000 shares to the Company’s Chief Executive Officer/Director and 25,000,000 to an independent Director.

AtDuring ~~March~~the 31nine months ended September 30, ~~2025~~2024, the Company ~~has~~issued ~~recorded~~shares of its common stock ~~to be issued~~ as follows:

195,620,499 shares as consideration for extinguishment of principal and interest on convertible notes payable valued at $11,737.
9,000,000 shares to officers/directors/advisors of the Company for services, valued at $15,300.
8,000,000 shares, valued at $3,200, which was charged to operations during the year ended December 31, 2023.

At September 30, 2025, the Company recorded common stock to be issued as follows:

11,250,000 shares, valued at $4,500, as consideration for extension of loans previously made to the Company. The Company has recorded 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 of the date of the loan extensions, and is amortizing the discount to interest expense over the term of the extensions.
42,275,00,000 shares valued at $42,275 as consideration for loan costs on new loans. The Company has recorded 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 of the date of the loans, and is amortizing the discount to interest expense over the term of the loans.

At ~~March~~September 3130, 2024, the Company ~~has~~ recorded common stock to be issued as follows:

· 11,250,000 shares, valued at $19,125, as consideration for extension of loans previously made to the Company. The Company has recorded 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 of the date of the loan extensions, and is amortizing the discount to interest expense over the term of the extensions.

~~· 15,000,000 shares valued at $24,000 as consideration for loan costs on new loans.~~11

· 8,000,000 shares, valued at $3,200, to officers/directors/advisors to the Company.

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~NINE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2025

(Unaudited)

NOTE 5 – STOCKHOLDERS’ DEFICIT (continued)

37,525,00,000 shares valued at $56,474 as consideration for loan costs on new loans. The Company has recorded 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 of the date of the loans, and is amortizing the discount to interest expense over the term of the loans.

NOTE 6 – CONVERTIBLE NOTES

Convertible notes payable at ~~March~~September 3130, 2025 and December 31, 2024 are summarized as follows:

Note Holder	Face Amount		Interest Rate	Due Date	2025			2024
SE Holdings LLC	$	220,000	Stated 10% Default 24%	Jan 26, 2022	$	220,000		$	220,000
Adar Alef LLC	$	550,000	Stated 10% Default 24%	April 29, 2022	$	364,079		$	364,079
1800 Diagonal Lending	$	49,200	Stated 12%	October 30, 2025	$	4946,200		$	—
Discount on debt					$	(~~6,440~~920	)
					$	~~626~~629,~~839~~359		$	584,079

The Company’s outstanding convertible notes due to SE Holding LLC and Adar Alef LLC which, as of ~~March~~September 3130, 2025 and December 31, 2024, are in default. Accordingly, the Company has accrued default interest at the rate of 24% per annum on the outstanding debt. On January 23, 2024, the managing member of SE Holdings, LLC, individually, and Adar Alef, LLC, also managed by the same individual, as the entity, settled charges with the SEC ordering them, in part, to surrender for cancellation all remaining shares of the Company 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 (original face amount of $550,000), and for the current 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, but continues to classify the notes as convertible until final determination and settlement amongst the parties is made.

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~NINE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2025

(Unaudited)

NOTE 7– NOTES PAYABLE

Notes payable at ~~March~~September 3130, 2025 and December 31, 2024 consist of unsecured loans from unrelated individuals, as follows:

	Face Amount		Interest Rate			Due Date	2025			2024
Note Holder	Face Amount		Interest Rate			Due Date	2025			2024
Current notes payable	$	25,000		11	%	September 1, 2024	$	25,000		$	25,000
	$	50,000		11	%	May 1, 2024		50,000			50,000
	$	50,000		11	%	June 29, 2024		50,000			50,000
	$	25,000		11	%	September 1, 2024		25,000			25,000
	$	100,000		11	%	February 25, 2025		100,000			100,000
	$	50,000		11	%	December 9, 2024		50,000			50,000
	$	25,000		11	%	December 18, 2024		25,000			25,000
	$	25,000		11	%	August 17, 2024		25,000			25,000
	$	50,000		11	%	August 6, 2024		50,000			50,000
	$	25,000		11	%	August 8, 2024		25,000			25,000
	$	50,000		5.5	%	May 17, 2025		50,000			50,000
	$	25,000		11	%	April 2, 2025		25,000			25,000
	$	50,000		11	%	April 19, 2025		50,000			50,000
	$	25,000		11	%	April 15, 2025		25,000			25,000
	$	10,000		11	%	September 16, 2025		10,000			10,000
	$	25,000		11	%	August 19, 2025		25,000			25,000
Note discount								~~(7,962~~—	)		(22,924	)
Current notes payable, net							$	~~602~~610,~~038~~000		$	587,076
Long-term notes payable	$	25,000		5.5	%	November 13, 2026	$	25,000		$	25,000
Note discount								(~~1,117~~763	)		(1,293	)
Long-term notes payable, net							$	2324,~~883~~237		$	23,707

NOTE 8 – PREFERRED STOCK OFFERING

As of ~~March~~September 3130, 2025, the Company received a $70236,~~000~~563 cash investment ~~from one investor~~ pursuant to a unit offering of Common and Preferred Securities (See Note 11 - Subsequent Events).

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~THREE~~NINE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2025

(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~~attain 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 ~~three~~nine months ended ~~March~~September 3130, 2025 and 2024, the Company recorded related party management fees of $03,941 and $47106,~~000~~025, respectively.

During the ~~three~~nine months ~~ended~~ending ~~March~~September 3130, 2025, the Company’s Chief Executive Officer advanced $1216,~~630~~697 to the Company for working capital purposes. The advances ~~are included in accounts payable at March 31, 2025 and~~ were repaid ~~during~~as ~~the~~of ~~2025~~September ~~fiscal~~30, ~~year~~2025.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

On November 6, 2023, the Company was notified of a lawsuit filed in Clark County, 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 $33,682. Shortly after the Plaintiff filed the lawsuit, BlackStar repaid the remaining principal balance. At the outset of the case, a temporary restraining order was entered and required the transfer of 257,000,000 shares of BlackStar’s stock to the Plaintiff to be sold on the open market, which occurred in Q1 and Q2 of 2024. BlackStar has appealed the temporary restraining order to the Nevada Supreme Court and seeks the return of the 257,000,000 shares, among other damages. While the appeal is pending, the Company, through its attorneys, filed an answer to Plaintiff’s complaint and counterclaims against Plaintiff on February 27, 2024. In addition to denying many of the allegations laid out in the lawsuit, the Company invokes several affirmative defenses that bar Plaintiff’s recovery in the action and alleges that Plaintiff breached the terms of the agreement, including, but not limited to, obtaining the conversion of BlackStar’s stock after the Promissory Note was fully paid off. Amongst other claims, the Company alleges that the Plaintiff acted in bad faith and in violation of usury laws by recovering an estimated $600,000 dollars in BlackStar stock off of a $60,000 promissory note, estimated at a roughly 170% interest rate. The Company seeks a judgment in its favor and against Plaintiff, compensatory damages in an amount to be proven at trial, declaratory relief voiding the agreement as illegal under Section 29(b) of the Securities Act, punitive damages in an amount to be proven at trial, interest on all damages, and attorneys’ fees.. At an April 22, 2024 hearing, the Plaintiff’s motion to dismiss our counterclaims was denied, and again on July 18, 2024 the Court refused to dismiss BlackStar’s counterclaims against Plaintiff. BlackStar intends to pursue those counterclaims for securities violations. In November 2025, BlackStar and GS Capital entered into a Settlement Agreement and Release with both parties agreeing that the litigation shall be dismissed with prejudice and each party being responsible for its own legal and other costs and expenses related to the matter.

At ~~March~~September 3130, 2025, there were no legal proceedings against the Company, other than the beforementioned.

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BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2025

(Unaudited)

NOTE 11 – SUBSEQUENT EVENTS

In ~~July~~October 2025, the Company ~~issued~~commenced ~~pursuant~~a to$1 ~~the~~million ~~Board~~fractional unit offering, in increments of ~~Directors~~$5,000, ~~authorization~~consisting of Common and Preferred Securities under a term sheet to certain accredited investors, who had advanced monies to the Company in ~~May~~the 2025, fiscal year. The Company has received an aggregate ~~400~~$459,208 consideration from six investors consisting of $278,979 cash and conversion of $150,000 in outstanding notes and related accrued interest of $30,229, all of which is converted by the documents into the fractional units set forth above. The Fractional Units were offered at $5,000 per one twentieth of one Unit consist of 7,500,000 shares of common stock toand ~~officers~~5,000 shares of Series B Preferred Stock which participates in 1/~~directors/advisors/consultants~~20th toof ~~the~~1% ~~Company~~of an assigned royalty of licensing fees for ~~services~~life ~~rendered~~of atpatents aand ~~value~~licenses of $0BlackStar.~~0004~~ ~~per~~(for each share, ~~based~~of onSeries B Preferred Stock -0.0025%). Pursuant to the ~~daily~~unit ~~closing~~offering, ~~trading~~in ~~price~~December of2025, the Company’s ~~common~~issued ~~stock,~~an ~~including~~aggregate ~~200~~688,~~000~~812,~~000~~092 shares of common stock to the ~~Company’s~~investors; ~~Chief~~and ~~Executive~~will ~~Officer/Director~~issue ~~and~~an 25aggregate 459,~~000,000~~208 toshares anof ~~independent~~Preferred ~~Director~~Series B stock to the investors.

In October 2025, the Company commenced a $1 million fractional unit offering, in increments of $5,000, consisting of Common and Preferred Securities under a term sheet to certain accredited investors, who had advanced monies to the Company in the 2025 fiscal year. The Company has received an aggregate $459,208 consideration from six investors consisting of $278,979 cash and conversion of $150,000 in outstanding notes and related accrued interest of $30,229, all of which is converted by the documents into the fractional units set forth above. The Fractional Units were offered at $5,000 per one twentieth of one Unit consist of 7,500,000 shares of common stock and 5,000 shares of Series B Preferred Stock which participates in 1/20th of 1% of an assigned royalty of licensing fees for life of patents and licenses of BlackStar. (for each share of Series B Preferred Stock -0.0025%). The Company will issue an aggregate 688,812,092 shares of common stock and 459,208 shares of Preferred Series B stock to the investors. In December 2025, the Company issued 688,812,092 shares of its common stock pursuant to the unit offering.

In December 2025, the Company issued pursuant to the Board of Directors authorization, an aggregate 35,000,000 shares of the common stock to three advisors/consultants to the Company for services rendered at a value of $0.0002 per share, based on the daily closing trading price of the Company’s common stock.

The Company has analyzed its operations subsequent to ~~March~~September 3130, 2025 through the date that these financial statements were issued, and has determined that it does not have any additional material subsequent events to disclose.

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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 ~~March~~September 3130, 2025, we had an accumulated deficit of $1112,~~944~~416,~~164~~090 and a working capital deficiency of $23,~~838~~144,~~388~~744. 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. Our common stock is currently quoted on the OTC Expert Market and was previously quoted on OTC Pink 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 blockchain and DLT companies and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in involvement in electronic fungible share-related ventures though our wholly owned subsidiary, Blockchain Equity Management Corp., (“BEMC”), mainly in the areas of blockchain and distributed ledger technologies (“DLT”). 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 company and its activities and its financial statement ratios of assets and cash will be carefully monitored and other 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. BlackStar is currently building a digital equity trading platform in order to trade registered BlackStar common shares in digital form (DWAC), and intends to use the platform design to provide custom subscription services to other public companies.

Recent Updates – BlackStar’s progress in 2024 and 2025 was focused on strengthening our intellectual property portfolio for our new proposed line of business of trading common shares on a blockchain through the broker-dealer ecosystem. The Company is continuing to strategize on how to secure a host ATS or Broker Dealer to enable live trading on the Company’s blockchain platform. The Company plans to offer its Private Funding and Corporate Governance Blockchain to individual private companies in 2026. The Company’s next major step in its main feature, BlackStar’s Digital Trading Platform (“BDTPTM”), will be to engage an operating partner (a broker-dealer, clearing firm, and/or registered Alternative Trading System (“ATS”))

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to host the platform 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. 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. During 2021, BlackStar and Artuova successfully completed a production ready and feature-complete user interface for the digital platform which is now in the final stages of quality assurance. In 2023, BlackStar 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 final stages, while considering applying for a Broker Dealer or ATS license. During 2021-2022, BlackStar filed with the U.S. Patent and Trademark 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 USPTO issued Patent 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 an Immutable Blockchain,” which was subsequently issued on April 23, 2024. 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.”

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. 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, anticipated within the next twelve months. We anticipate our Corporate Governance platform to be subscribed to by US corporations in 2026, with overall expansion of services into the blockchain industry within the next twelve months.

Based on our current cash reserves of approximately $~~193~~125 as of ~~March~~September 3130, 2025, ~~our receipt in January 2025 of $40,000, net, in convertible debt,~~ and the receipt in ~~the remainder of~~ 2025 of $~~279~~278,979 in advances from accredited investors for subscription agreements pursuant to a term sheet in October 2025, we estimate that we will have cash for an operational budget through the end of 2025. We intend to continue to offer a private placement of preferred shares to select accredited investors in order to achieve at least $5,000,000 in funding in the next year to scale our business plan. 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 $50100,000 ~~for~~in ~~each of~~ the ~~second and~~fourth ~~third quarters~~ quarter of 2025 and $~~100~~50,000 infor each of the ~~fourth~~first ~~quarter~~and second quarters of ~~2025~~2026 and for operational costs which includes legal, accounting, travel, general and administrative, audit, rent, telephones and miscellaneous.

The independent registered public accounting firm’s report on our financial statements as of December 31, 2024, includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.

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Results of Operations

For the Three Months Ended ~~March~~September 3130, ~~2025~~ 2025 compared to same period in 2024

Net loss for the three months ended ~~March 31,~~September 30, 2025 was $~~137~~114,~~270~~419 as compared to $~~499~~267,~~072~~959 for the three months ended ~~March~~September 3130, 2024, a decrease of $~~361~~153,~~802~~540.

General and administrative expenses in ~~2025~~the three months ended September 30, 2025 were $2116,~~125~~744, a decrease of $210,~~160~~956 from general and administrative expenses of $2327,~~285~~700 in the same period of 2024. General and administrative costs for the 2025 and 2024 quarters were for investor relations, website management, filing fees, transfer agent fees and overhead operational costs, and were consistent between the periods.

The Company paid management consulting fees to IHG of $01,927 for the three months ended ~~March~~September 3130, 2025 as compared to $4725,~~000~~500 paid for the comparable 2024 period. The decrease was due predominantly to all available funds being utilized for maintenance of corporate operations.

Legal and professional fees of $4637,~~166~~363 for the three months ended ~~March~~September 3130, 2025 decreased by $~~317~~105,~~087~~088 from $~~363~~142,~~253~~451 for the comparable 2024 period. For both periods ~~the~~ 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 fees for the 2024 period included significant fees for the litigation matters which were subsequently settled/dismissed.

Interest expense ~~increased~~decreased by $413,~~445~~923 to $6958,~~979~~385 for the 2025 period as compared to $6572,~~534~~308 for the 2024 period. The ~~increase~~decrease is primarily attributable to the amortization of discount on non-convertible debt being completed.

For the Nine Months Ended September 30, 2025 compared to same period in 2024

Net loss for the nine months ended September 30, 2025 was $609,196 as compared to $1,107,394 for the nine months ended September 30 2024, a decrease of $498,198.

General and administrative expenses in 2025 were $215,043 an increase of $155,755 from general and administrative expenses of $59,288 in 2024. General and administrative costs for the 2025 period includes 400,000,000 shares of common stock, valued at $160,000, issued to officers/directors/advisors/consultants to the Company for services rendered; additional general and administrative costs for the 2025 and 2024 quarters were for investor relations, website management, filing fees, transfer agent fees and overhead operational costs which were consistent between the periods. The Company paid management consulting fees to IHG of $3,941 for the nine months ended September 30, 2025 as compared to $106,025 paid for the comparable 2024 period. The decrease was due predominantly to all available funds being utilized for maintenance of corporate operations.

Legal and professional fees of $200,273 for the nine months ended September 30, 2025 decreased by $538,373 from $738,646 for the comparable 2024 period. For both periods the Company’s legal and professional fees included SEC regulatory and statutory filings, and auditor-related fees for the Company’s annual audit; legal fees for the 2024 period included significant fees for the litigation matters which were subsequently settled/dismissed.

Interest expense decreased by $13,496 to $189,939 for the 2025 period as compared to $203,435 for the 2024 period. The decrease is primarily attributable to the amortization of discount on non-convertible debt being completed.

Liquidity and Capital Resources

At ~~March~~September 3130, 2025, we had a working capital deficit of $23,~~838~~144,~~388~~744 and cash of $~~193~~125 as compared to a working capital deficit of $2,698,~~902and~~902 and cash of $3,642, at December 31, 2024. The decrease in cash and increase in working capital deficit was due primarily to the ~~utilization~~increase ofin ~~available~~financing ~~cash~~activities from subscription agreements for ~~operations~~ preferred and ancommon ~~increase~~stock inand debt funding ~~from~~classified ~~$40,000~~as ofa ~~loans~~current ~~received~~liability inat ~~the~~September ~~three months ended March 31~~30, 2025. The Company used new and existing fundings to maintain operating activities and for legal matters. During the ~~three~~nine months ended September ~~March 31~~30, 2025, operating activities utilized cash of $~~113~~277,~~449~~080 and investing activities for software development costs utilized cash of $0; in the comparable 2024 period, we used $~~120~~242,~~116~~270 of cash for operating activities and paid $1028,~~001~~101 in investing activities for software development costs.

Substantially all of our funding in the 2025 and 2024 periods has been from note financings from non-related entities/individuals. During the three months ended March 31, 2025, we borrowed $40,000 (net proceeds) from 1800 Diagonal Lending LLC through a convertible promissory note bearing interest at 12%, and reserved 114,000,000 shares of common stock for conversion of $49,200 face value of debt and related accrued interest and fees. The Company also received $70,000 cash investment from a subscription agreement for common and preferred stock through March 31, 2025 (see “Availability of Additional Capital” below). During the three months ended March 31, 2024, we borrowed $114,000 from two individuals, due with interest at 11%, and we issued 195,620,499 shares of common stock for debt extinguishment valued at $11,737.18

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Substantially all of our funding in the 2025 and 2024 periods has been from note financings from non-related entities/individuals and subscription agreements pursuant to a term sheet in October 2025. During the nine months ended September 30, 2025, we borrowed $40,000 (net proceeds) from 1800 Diagonal Lending LLC through a convertible promissory note bearing interest at 12%, and reserved 114,000,000 shares of common stock for conversion of $49,200 face value of debt and related accrued interest and fees. The Company also received $236,563 cash investment from a subscription agreement for common and preferred stock through September 30, 2025 (see “Availability of Additional Capital” below). The Company also issued 195,620,499 shares as consideration for extinguishment on principal and interest on convertible notes payable valued at $11,737. During the nine months ended September 30, 2024, the Company borrowed $239,000 from two individuals, due with interest at 11%, and we issued 195,620,499 shares of common stock for debt extinguishment valued at $11,737.

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 commencing generating revenues from our 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 $40,000, net, in debt financing and $236,563 cash investment from subscription agreements for common and preferred stock through September 30, 2025. In October 2025, the Company commenced a $1 million fractional unit offering, in increments of $5,000, consisting of Common and Preferred Securities under a term sheet to certain accredited investors, who had advanced monies to the Company in the 2025 fiscal year. The Company has received through December 2025 an aggregate $459,208 consideration from six investors consisting of $278,979 cash and conversion of $150,000 in outstanding notes and related accrued interest of $30,229, all of which is converted by the documents into the fractional units set forth above. The Fractional Units were offered at $5,000 per one twentieth of one Unit consist of 7,500,000 shares of common stock and 5,000 shares of Series B Preferred Stock which participates in 1/20th of 1% of an assigned royalty of licensing fees for life of patents and licenses of BlackStar (for each share of Series B Preferred Stock – 0.0025%). Pursuant to the unit offering, in December 2025, the Company issued an aggregate 688,812,092 shares of common stock to the investors; and will issue an aggregate 459,208 shares of Preferred Series B stock to the investors in the first quarter of 2026. As of September 30, 2025, the Company had received a $236,563 cash investment from a subscription agreement from accredited investors.

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and $70,000 cash investment from a subscription agreement for common and preferred stock through March 31, 2025. In October 2025, the Company commenced a $1 million fractional unit offering, in increments of $5,000, consisting of Common and Preferred Securities under a term sheet to certain accredited investors, who had advanced monies to the Company in the 2025 fiscal year. The Company has received an aggregate $459,208 consideration from six investors consisting of $278,979 cash and conversion of $150,000 in outstanding notes and related accrued interest of $30,229, all of which is converted by the documents into the fractional units set forth above. The Fractional Units were offered at $5,000 per one twentieth of one Unit consist of 7,500,000 shares of common stock and 5,000 shares of Series B Preferred Stock which participates in 1/20th of 1% of an assigned royalty of licensing fees for life of patents and licenses of BlackStar (for each share of Series B Preferred Stock – 0.0025%). The Company will issue in the first quarter of 2026 an aggregate 688,812,092 shares of common stock and 459,208 shares of Preferred Series B stock to the investors. As of March 31, 2025, the Company had received a $70,000 cash investment from a subscription agreement from one investor.

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.

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 ~~March~~September 3130, 2025 and December 31, 2024, we had accumulated deficit of $1112,~~944~~416,~~164~~090 and $11,806,894, respectively, and we will require additional working capital to to fund operations through 2025 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 registered independent auditors have issued an opinion on our financial statements as of December 31, 2024 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 and no revenues are anticipated until we obtain final SEC approval for our digital trading platform. There is no assurance that any revenue will be realized in the future. Accordingly, we must raise capital from sources other than the actual revenue from issuance of memberships in our digital trading platform.

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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 and no revenues are anticipated until we obtain final SEC approval for our digital trading platform. There is no assurance that any revenue will be realized in the future. Accordingly, we must raise capital from sources other than the actual revenue 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.

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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 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 are 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

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~~September 3130, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On November 6, 2023, the Company was notified of a lawsuit filed in Clark County, 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 $33,682. Shortly after the Plaintiff filed the lawsuit, BlackStar repaid the remaining principal balance. At the outset of the case, a temporary restraining order was entered and required the transfer of 257,000,000 shares of BlackStar’s stock to the Plaintiff to be sold on the open market, which occurred in Q1 and Q2 of 2024. BlackStar has appealed the temporary restraining order to the Nevada Supreme Court and seeks the return of the 257,000,000, among other damages. While the appeal is pending, the Company, through its attorneys, filed an answer to Plaintiff’s complaint and counterclaims against Plaintiff on February 27, 2024. In addition to denying many of the allegations laid out in the lawsuit, the Company invokes several affirmative defenses that bar Plaintiff’s recovery in the action and alleges that Plaintiff breached the terms of the agreement, including, but not limited to, obtaining the conversion of BlackStar’s stock after the Promissory Note was fully paid off. Amongst other claims, the Company alleges that the Plaintiff acted in bad faith and in violation of usury laws by recovering an estimated $600,000 dollars in BlackStar stock off of a $60,000 promissory note, estimated at a roughly 170% interest rate. The Company seeks a judgment in its favor and against Plaintiff, compensatory damages in an amount to be proven at trial, declaratory relief voiding the agreement as illegal under Section 29(b) of the Securities Act, punitive damages in an amount to be proven at trial, interest on all damages, and attorneys’ fees. As a result of the counterclaims, there can be no reasonable estimate of any contingencies as of June 30, 2024. At an April 22, 2024 hearing, the Plaintiff’s motion to dismiss our counterclaims was denied, and again on July 18, 2024 the Court refused to dismiss BlackStar’s counterclaims against Plaintiff. BlackStar intended to pursue those counterclaims for securities violations. In November 2025, BlackStar and GS Capital entered into a Settlement Agreement and Release with both parties agreeing that the litigation ~~shall~~commenced on November 6, 2023 shall be dismissed with prejudice and each party being responsible for its own legal and other costs and expenses related to the matter.

On October 30, 2024, the Company entered into a Settlement Agreement with Continuation Capital, Inc. (“CCI”) for the purchase of $861,539.26 of debt owed to BlackStar’s creditors (for more details, see the Form 8-K filed November 5, 2024 and incorporated herein by reference). The Settlement Agreement was approved in Florida State court in compliance with the terms of Section 3(a)(10) of the Securities Act of 1933, as amended. Under the terms of the Settlement Agreement and Stipulation, CCI agreed to purchase the bona fide and outstanding and unpaid creditor claims in exchange for shares of BlackStar’s common stock. If satisfied in full, pursuant to the Settlement Agreement, the Company will reduce it’s debt obligations in exchange for the issuance of shares of Company’s common stock to CCI. The shares will be issued at a discount of 42.5% off the market price (the lowest closing sale price for twenty (20) trading days), in one or more tranches, pursuant to the terms of section 3(a)(l0) of the Securities Act of 1933, as amended. Upon closing, the Company issued to CCI 60,200,000 freely trading shares, valued at $138,640 based on the trading price of the Company’s common stock as of the date of the Settlement Agreement, as a fee for entering into the Settlement Agreement, pursuant to Section 3(a)(10) of the Securities Act. In November 2024, the Company issued to CCI an additional 13,377,926 shares of common stock for CCI’s payment of $10,000 to certain creditors of the Company. BlackStar and CCI have since terminated the debt purchase relationship. CCI received free-trading shares and

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sold those shares prior to fulfilling any debt obligations, and such obligations have returned to BlackStar.

The Company increased the authorized shares of common stock to 6,000,000,000 on February 10, 2025 in order to accommodate continued conversions, judgments, or settlements; the Company may need to increase again in the future or it could be exposed to further risks of lawsuits for similar issues. More details of the increase to the authorized shares of common stock can be found in the Schedule 14C Information Statement filed on December 17, 2024 and incorporated herein by reference.

ITEM 1A. RISK FACTORS

Not applicable.

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

On January 9, 2025, the Company entered into a financing agreement with 1800 Diagonal Lending LLC (“1800 Diagonal”) to borrow $49,200. The note matures on October 30, 2025, bears interest at 12%, with a default rate of 22%, and is convertible, commencing 180 days after the date of issuance, into common shares of the Company. The conversion price is to be calculated at 61% of the average of the lowest trading price of the Company’s common stock for the previous ten trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to this note, and the Company has reserved 114,000,000 shares of common stock for conversion. Net proceeds from the loan were $40,000, after legal fees and borrowing costs of $9,200. 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.

As of ~~March~~September 3130, 2025, the Company received a $70236,~~000~~563 in cash investment from ~~one~~a ~~accredited~~subscription ~~investor~~agreement ~~for~~from ~~subscription~~accredited ~~agreements~~investors pursuant to a term sheet in October 2025. The Company and the investor executed the subscription 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 BDTPTM, legal and professional fees, consulting fees, and general and administrative expenses.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

ITEM 5. OTHER INFORMATION

Not Applicable.

2021

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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)

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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: February 6, 2026	By:	/s/ Joseph E. Kurczodyna
Dated: February 13, 2026	By:	/s/ Joseph E. Kurczodyna
		Joseph E. Kurczodyna
		(Chief Executive Officer,
		Principal Executive Officer)
Dated: February 6, 2026	By:	/s/ Joseph E. Kurczodyna
Dated: February 13, 2026	By:	/s/ Joseph E. Kurczodyna
		Joseph E. Kurczodyna
		(Chief Financial Officer,
		Principal Accounting Officer)

2223

Filing Compare · BLACKSTAR ENTERPRISE GROUP, INC.