BlackStar Posts $1.5M Loss, Bets on Blockchain for Future Revenue

TL;DR

**BEGI is a speculative bet on an unproven blockchain trading platform, with a history of losses and no clear path to profitability without significant external funding and regulatory wins.**

AI Summary

BLACKSTAR ENTERPRISE GROUP, INC. (BEGI) reported a net loss of $1,514,839 for the fiscal year ended December 31, 2024, continuing its history of losses. The company, based in Boulder, Colorado, is primarily engaged in merchant banking and finance, focusing on early-stage revenue companies. Since 2018, BEGI has also been developing a blockchain-based software platform, the BlackStar Digital Trading Platform (BDTP), designed to trade electronic fungible shares of its common stock. This platform, which is not yet operational and requires further funding, is intended to be licensed as a Platform as a Service (PaaS) to other publicly traded companies, generating revenue to support its merchant banking activities. The completion and regulatory approval of the BDTP, potentially through licensing to an existing Alternative Trading System (ATS), are critical for this new line of business. BEGI has historically relied on sales of securities, convertible note financing, and private loans to fund its operations and plans to raise additional funds for both its merchant banking and blockchain initiatives. The company's market value of common stock held by non-affiliates was $3,494,302 as of December 31, 2024, with 2,254,894,873 common shares outstanding as of November 25, 2025.

Why It Matters

BEGI's persistent losses and reliance on external financing highlight significant operational challenges, making its pivot to blockchain technology a high-stakes gamble for investors. The success of its BlackStar Digital Trading Platform (BDTP) could disrupt traditional equity trading by offering a more efficient, lower-cost back-office function for securities transactions, potentially attracting other public companies as licensees. However, the platform's non-operational status and dependence on regulatory approval and licensing to an Alternative Trading System (ATS) introduce substantial uncertainty. For employees, the company's future hinges on securing additional funding and successfully commercializing its blockchain venture, while customers of its merchant banking services face a firm with limited transactional history and a speculative growth strategy. Competitively, BEGI aims to carve a niche in the distributed ledger technology (DLT) space, but faces established financial infrastructure and regulatory hurdles.

Risk Assessment

Risk Level: high — The company reported net losses of $1,514,839 for the year ended December 31, 2024, and has a history of losses since its inception, including $1,819,530 over a three-year period in its prior energy business. BEGI explicitly states it has relied solely on sales of securities, convertible note financing, and private loans to fund operations, and that the completion of its blockchain platform depends on its ability to license it to an existing Alternative Trading System (ATS) or register as one, which it does not intend to do at this time, indicating significant operational and financial uncertainty.

Analyst Insight

Investors should approach BEGI with extreme caution, recognizing it as a highly speculative investment. Given the company's history of losses and the unproven nature of its blockchain platform, potential investors should await concrete evidence of regulatory approval, successful ATS licensing, and sustained revenue generation before considering a position.

Key Numbers

• $1,514,839 — Net Loss (Net loss for the fiscal year ended December 31, 2024, indicating continued unprofitability.)
• $3,494,302 — Market Value of Non-Affiliate Common Stock (Aggregate market value of common shares held by non-affiliates as of December 31, 2024, reflecting the company's small market capitalization.)
• 2,254,894,873 — Common Shares Outstanding (Total common shares outstanding as of November 25, 2025, indicating significant share dilution.)
• $0.0019 — Common Stock Price (Price at which common equity was last sold as of June 30, 2024, highlighting its penny stock status.)
• 2018 — Year Blockchain Development Started (The year BlackStar began developing its blockchain-based software platform, indicating a multi-year development cycle without commercialization.)
• $1,235,000,000 — Emerging Growth Company Revenue Threshold (Annual gross revenue threshold for losing 'emerging growth company' status, which BEGI is well below.)
• 95% — Original Acquisition Stake by IHG (Percentage of outstanding stock International Hedge Group, Inc. contracted to acquire in January 2016, demonstrating IHG's initial controlling interest.)
• 44,400,000 — Common Shares Received by IHG (Number of common shares received by International Hedge Group, Inc. in the 2016 acquisition.)
• 1,000,000 — Class A Preferred Stock Received by IHG (Number of Class A Preferred Stock received by International Hedge Group, Inc. in the 2016 acquisition.)
• $1,819,530 — Prior Energy Business Losses (Total losses incurred over a three-year period in the company's unsuccessful energy business, highlighting a history of failed ventures.)

Key Players & Entities

• BLACKSTAR ENTERPRISE GROUP, INC. (company) — Registrant and primary subject of the 10-K filing
• International Hedge Group, Inc. (company) — Parent company and controlling shareholder of BlackStar Enterprise Group, Inc.
• Blockchain Equity Management Corp. (company) — Wholly-owned subsidiary of BlackStar Enterprise Group, Inc., formed in September 2017, currently non-operational
• Blockchain Equity SRO, Inc. (company) — Subsidiary nonprofit company of BlackStar Enterprise Group, Inc., formed December 31, 2017, intended as a self-regulatory membership organization
• SEC (regulator) — Securities and Exchange Commission, regulatory body for filings and platform approval
• Alternative Trading System (regulator) — Regulatory designation for trading platforms, crucial for BEGI's blockchain platform
• Sarbanes-Oxley Act of 2002 (regulator) — Legislation from which BEGI is exempt from Section 404(b) as an emerging growth company
• Dodd-Frank Act (regulator) — Legislation from which BEGI is exempt from Section 14A(a) and (b) of the Securities Exchange Act of 1934

FAQ

Risk Factors

• History of Net Losses [high — financial]: The company has a history of net losses, reporting a net loss of $1,514,839 for the fiscal year ended December 31, 2024. This continued unprofitability raises concerns about the company's ability to sustain operations without continuous external funding.
• Dependence on External Financing [high — financial]: BEGI relies solely on sales of securities, convertible note financing, and private loans to fund its operations. The company plans to raise additional funds, but these are not yet committed, creating uncertainty regarding future operational capacity and development of its blockchain platform.
• Unproven Blockchain Platform [high — operational]: The BlackStar Digital Trading Platform (BDTP) is not yet operational and requires further funding for completion and regulatory approval. Its success is contingent on licensing to an existing Alternative Trading System (ATS) or BEGI potentially registering as an ATS, which it currently does not intend to do.
• Penny Stock Status [medium — market]: The common stock price was last sold at $0.0019 as of June 30, 2024, indicating its status as a penny stock. This low valuation and potential for volatility can deter institutional investors and limit access to capital markets.
• Significant Share Dilution [medium — financial]: As of November 25, 2025, there were 2,254,894,873 common shares outstanding. This large number of shares, coupled with the company's history of relying on securities sales for funding, suggests significant historical dilution for existing shareholders.
• Past Business Failures [medium — operational]: The company incurred $1,819,530 in losses over a three-year period from its prior energy business, highlighting a history of unsuccessful ventures. This track record may impact investor confidence in new initiatives like the BDTP.

Industry Context

BlackStar operates in the merchant banking and finance sector, which is highly competitive and often requires significant capital and expertise. The company is also attempting to enter the nascent blockchain-based financial technology space, an area characterized by rapid innovation, evolving regulatory landscapes, and significant investment risk.

Regulatory Implications

As a publicly traded company subject to SEC reporting requirements, BEGI faces ongoing compliance obligations. The development and potential licensing of its blockchain platform may also introduce new regulatory considerations, particularly if it involves trading of securities or requires registration as an ATS.

What Investors Should Do

1. Monitor funding announcements closely: BEGI's ability to secure additional, uncommitted funds is critical for its survival and the development of its blockchain platform.
2. Evaluate the viability of the BDTP: Assess the progress and regulatory pathway for the BlackStar Digital Trading Platform, as it represents the company's primary future revenue hope.
3. Consider the impact of share dilution: Given the large number of outstanding shares and reliance on equity financing, investors should be aware of potential ongoing dilution.
4. Assess management's track record: The company's history of net losses and past failed ventures warrants careful consideration of management's ability to execute its current strategy.

Key Dates

• 2016-01-01: International Hedge Group, Inc. (IHG) contracted to acquire 95% stake — Demonstrates a significant past controlling interest by IHG, which may have influenced company direction or strategy.
• 2018-01-01: BlackStar began developing blockchain-based software platform (BDTP) — Marks the start of a long-term, uncommercialized development effort for a new revenue stream.
• 2024-12-31: Fiscal year end with net loss of $1,514,839 — Confirms continued unprofitability and the ongoing need for funding.
• 2024-06-30: Common stock last sold at $0.0019 — Highlights the company's penny stock status and low market valuation.
• 2024-12-31: Market value of common stock held by non-affiliates was $3,494,302 — Indicates a small market capitalization, reflecting investor sentiment and liquidity.
• 2025-11-25: 2,254,894,873 common shares outstanding — Represents a very large number of shares, suggesting significant dilution over time.

Glossary

Merchant Banking

A type of banking that involves providing financial advisory services and capital to businesses, often focusing on mergers, acquisitions, and underwriting. (This is BEGI's primary stated business activity, though it has historically been unprofitable.)

Platform as a Service (PaaS)

A cloud computing model where a third-party provider delivers hardware and software tools—usually those needed for application development—to users over the internet. (BEGI intends to license its blockchain platform as a PaaS, which is a key component of its future revenue strategy.)

Alternative Trading System (ATS)

A trading venue that brings together buyers and sellers of securities but does not execute orders as a national securities exchange. They are regulated by the SEC. (BEGI's blockchain platform's operational success depends on licensing to an existing ATS or potentially becoming one.)

Emerging Growth Company (EGC)

A company that has total annual gross revenues of less than $1,235,000,000 during its most recently completed fiscal year, as defined by the JOBS Act. (BEGI qualifies as an EGC, which allows for certain regulatory and reporting accommodations, but this status can be lost.)

Exchange Act

The Securities Exchange Act of 1934, which governs the trading of securities in the secondary market. (BEGI is subject to its reporting requirements, including filing required disclosures with the SEC.)

Year-Over-Year Comparison

The provided text does not contain comparative data from a previous filing. Therefore, a comparison of key metrics such as revenue growth, margin changes, or new risks cannot be performed.

Key Financial Figures

• $0.0019 — which the common equity was last sold ($0.0019), as of the last business day of the re
• $0.001 — there were 2,254,894,873 common shares, $0.001 par value, issued and outstanding. TAB
• $1,514,839 — nyone. We have recognized net losses of $1,514,839 for the year ended December 31, 2024. W
• $1,235,000,000 — JOBS Act") as we did not have more than $1,235,000,000 in annual gross revenue and did not hav
• $1,819,530 — t success, resulting in losses totaling $1,819,530 over a three-year period. Our Company w
• $1 million — ial situations. We seek to invest up to $1 million per company in business ventures. We ma

Filing Documents

• begi-20241231.htm (10-K) — 1399KB
• ex3_10.htm (EX-3.10) — 0KB
• ex21.htm (EX-21) — 1KB
• ex31_1.htm (EX-31.1) — 7KB
• ex31_2.htm (EX-31.2) — 7KB
• ex32_1.htm (EX-32.1) — 4KB
• ex32_2.htm (EX-32.2) — 4KB
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• 0001065949-25-000042.txt ( ) — 6597KB
• begi-20241231.xsd (EX-101.SCH) — 52KB
• begi-20241231_cal.xml (EX-101.CAL) — 36KB
• begi-20241231_def.xml (EX-101.DEF) — 254KB
• begi-20241231_lab.xml (EX-101.LAB) — 457KB
• begi-20241231_pre.xml (EX-101.PRE) — 278KB
• begi-20241231_htm.xml (XML) — 647KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 57 Item 7A .

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 61 Item 8 .

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data. 62 Item 9 . Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 63 Item 9A .

Controls and Procedures

Controls and Procedures. 63 Item 9B . Other Information. 65 Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 65 Item 10 . Directors, Executive Officers and Corporate Governance. 65 Item 11 .

Executive Compensation

Executive Compensation. 68 Item 12 .

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 71 Item 13 . Certain Relationships and Related Transactions, and Director Independence. 74 Item 14 . Principal Accountant Fees and Services. 74 Item 15 . Exhibits, Financial Statement Schedules. 75 Item 16 . Form 10-K Summary 76

SIGNATURES

SIGNATURES 77 2 Table of Contents PART I

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS This Form 10-K contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" and the risks set out below, any of which may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation: the uncertainty of profitability based upon our history of losses; risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern; risks related to our operations and other risks and uncertainties related to our business plan and business strategy. This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully, and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future resu

forward-looking statements to conform these statements to actual results

forward-looking statements to conform these statements to actual results. Our financial statements are stated in United to "common stock" refer to the common shares in our capital stock.

BUSINESS

ITEM 1. BUSINESS. GENERAL The following is a summary of some of the information contained in this document. Unless the context requires otherwise, references in this document to "our Company," "us," "we," "our," "BlackStar," or the "Company" are to BlackStar Enterprise Group, Inc. DESCRIPTION OF BUSINESS We are based in Boulder, Colorado and are engaged in Merchant Banking and Finance in the United States. Since 2018 we have also been developing a blockchain-based software platform to trade electronic fungible shares of our common stock. Once completed, the platform design might enable us to license the technology as a Platform as a Service ("PaaS") for other publicly traded companies, providing revenue to finance our merchant banking. The completion of our software platform depends on our ability to license it to an existing Alternative Trading System ("ATS") or for us to possibly register as an ATS, which we do not intend to do at this time as we would prefer to license our platform to an existing ATS. The platform is not currently operational or in use by anyone. We have recognized net losses of $1,514,839 for the year ended December 31, 2024. We have relied solely on sales of our securities, convertible note financing, and private loans to fund our operations. 3 Table of Contents The Company intends to raise additional funds in order to fund operations of the merchant bank, and to expand its services into the blockchain industry. To fund ongoing operations, we may raise funds in the future, which are not yet committed. Reports to Security Holders We are subject to the reporting requirements of Section 12(g) of the Exchange Act, and as such, we intend to file all required disclosures. You may read and copy any materials we file with the SEC in the SEC's Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Add

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