Blackstar Enterprise Group Files 10-Q for Q1 2024

TL;DR

Blackstar Enterprise Group (BSGE) filed its Q1 2024 10-Q. Financials are in.

AI Summary

Blackstar Enterprise Group, Inc. filed its 10-Q for the quarterly period ended March 31, 2024. The company, formerly known as Blackstar Energy Group, Inc., is incorporated in Delaware and operates in the Finance Services sector. Its principal executive offices are located in Boulder, Colorado.

Why It Matters

This filing provides investors with an update on the company's financial performance and operational status for the first quarter of 2024.

Risk Assessment

Risk Level: low — This is a standard quarterly filing providing financial information, not indicating immediate high risk.

Key Numbers

• 000-55730 — Commission file number (Identifies the company's SEC filing record)
• 27-1120628 — IRS Employer ID Number (Company's tax identification number)

Key Players & Entities

• BLACKSTAR ENTERPRISE GROUP, INC. (company) — Registrant
• 20240331 (date) — Quarterly period end date
• Boulder, CO (location) — Principal executive offices location
• BLACKSTAR ENERGY GROUP, INC. (company) — Former company name

FAQ

Key Financial Figures

• $0.001 — hares of the registrant's common stock, $0.001 par value, issued and outstanding, not

Filing Documents

• begi-20240331.htm.htm (10-Q) — 383KB
• 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
• 0001065949-24-000085.txt ( ) — 2948KB
• begi-20240331.xsd (EX-101.SCH) — 47KB
• begi-20240331_cal.xml (EX-101.CAL) — 16KB
• begi-20240331_def.xml (EX-101.DEF) — 157KB
• begi-20240331_lab.xml (EX-101.LAB) — 308KB
• begi-20240331_pre.xml (EX-101.PRE) — 151KB
• begi-20240331.htm_htm.xml (XML) — 216KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Consolidated Balance Sheets – December 31, 2023 and March 31, 2024 3 Consolidated Statements of Operations – Three months ended March 31, 2024 4 Consolidated Statements of Stockholder's Deficit – Three months ended March 31, 2024 5 Consolidated Statements of Cash Flows – Three months ended March 31, 2024 6 Notes to the Financial Statements 7 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 3.

Quantitative and Qualitative Disclosures About Market Risk – Not Applicable

Quantitative and Qualitative Disclosures About Market Risk – Not Applicable 17 Item 4.

Controls and Procedures

Controls and Procedures 17

- OTHER INFORMATION

PART II- OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 18 Item 1A. Risk Factors – Not Applicable 18 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18 Item 3. Defaults Upon Senior Securities – Not Applicable 19 Item 4. Mine Safety Disclosure – Not Applicable 19 Item 5. Other Information 19 Item 6. Exhibits 20

Signatures

Signatures 21 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS BLACKSTAR ENTERPRISE GROUP, INC. CONSOLIDATED BALANCE SHEETS MARCH 31, 2024 AND DECEMBER 31, 2023 2024 2023 (Unaudited) (Audited) ASSETS Current Assets Cash $ 17,433 $ 33,550 Total current assets 17,433 33,550 Intangibles 358,653 348,652 Total Assets $ 376,086 $ 382,202 LIABILITIES & STOCKHOLDERS' DEFICIT Current liabilities Accounts payable $ 671,424 $ 358,001 Accrued payables 293,492 247,020 Notes payable, net of discount of $ 35,800 (2024) 403,200 325,000 Convertible notes payable 584,079 584,079 Total current liabilities 1,952,195 1,514,100 Notes payable - long term 75,000 75,000 Total Liabilities 2,027,195 1,589,100 Stockholders' Deficit Preferred stock, 10,000,000 shares authorized; $ 0.001 par value; 1,000,000 shares issued and outstanding 1,000 1,000 Common stock- 2,000,000,000 shares authorized; $ 0.001 par value 1,740,316,947 and 1,544,696,448 shares issued and outstanding at March 31, 2024 and December 31, 2023 1,740,317 1,544,696 Additional paid in capital 7,482,271 7,666,156 Common stock to be issued 46,325 3,200 Accumulated deficit ( 10,921,022 ) ( 10,421,950 ) Total stockholders' deficit ( 1,651,109 ) ( 1,206,898 ) Total Liabilities and Stockholders' Deficit $ 376,086 $ 382,202 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents BLACKSTAR ENTERPRISE GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (Unaudited) 2024 2023 Revenue $ — $ — Operating expenses Legal and professional 363,253 44,652 Management consulting - related party 47,000 31,500 General and administrative 23,285 12,252 Total operating expenses 433,538 88,404 Other expense (income) Amortization of convertible debt issuance costs — 3,390 Interest expense 65,534 25,410 Other expense (income) 65,534 28,800

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 (Unaudited) NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION BlackStar Enterprise Group, Inc. (the "Company" or "BlackStar") was incorporated in the State of Delaware on December 18, 2007 . On January 25, 2016, International Hedge Group, Inc. ("IHG") 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 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 financial

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 (Unaudited) NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company's significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Recent Accounting Pronouncements Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have

financial statements for prior year periods have been reclassified to conform with the current year presentation

financial statements for prior year periods have been reclassified to conform with the current year presentation. NOTE 4 – INTANGIBLES Intangibles at March 31, 2024 and December 31, 2023 consist of capitalized costs for the Company's proprietary software and patents as follows: 2024 2023 Software $ 150,002 $ 140,001 Patents 208,651 208,651 $ 358,653 $ 348,652 As of March 31, 2024, the patents and related software have not been placed in service nor marketed to potential customers, and therefore no depreciation/amortization was recorded for the period. 8 Table of Contents BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 (Unaudited) NOTE 5 – STOCKHOLDERS' DEFICIT Preferred Stock The Company has authorized 10,000,000 preferred shares, with a par value of $ 0.001 per share. The Company issued 1,000,000 shares of its Series A Preferred Series stock to IHG in fulfillment of the purchase agreement. These shares are convertible at a ratio of 100 shares of the common stock of the Company for each share of preferred stock of the Company. Common Stock In July 2022, the Company's authorized common stock was increased from 700,000,000 to 2,000,000,000 shares, with an effective date of the Amendment to the Articles of Incorporation of August 5, 2022. There was no change in the shares outstanding of either the common stock or preferred stock as a result of the increase. During the three months ended March 31, 2024, the Company issued shares of its common stock as follows: 195,620,499 shares as consideration for conversion of principal and interest on convertible notes payable valued at $ 11,737 . During the three months ended March 31, 2023, the Company issued shares of its common stock as follows: 104,643,939 shares for conversion of $ 33,927 principal and interest on convertible notes payable. At March 31, 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. (See Note 8) 8,000,000 shares, valued at $ 3,200 , to officers/directors/advisors to the Company (See Note 9). NOTE 6 – WARRANTS In April 2019, the Company i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 (Unaudited) NOTE 6 – WARRANTS (continued) A summary of warrant activity during the three months ended March 31, 2024 is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding and exercisable – December 31, 2023 173,200 $ 0.25 0.33 Exercised — Expired — Outstanding and exercisable – March 31, 2024 173,200 $ 0.25 0.08 NOTE 7 – CONVERTIBLE NOTES The Company has outstanding convertible notes due to SE Holding LLC and Adar Alef LLC which, as of March 31, 2024 and December 31, 2023, are in default. Accordingly, the Company has accrued default interest at the rate of 24 % per annum on the outstanding debt. Convertible notes payable at March 31, 2024 and December 31, 2023 are summarized as follows: Note Holder Face Amount Interest Rate Due Date 2024 2023 SE Holdings LLC $ 220,000 10 % Jan 26, 2022 $ 220,000 $ 220,000 Adar Alef LLC $ 550,000 10 % April 29, 2022 $ 364,079 $ 364,079 $ 584,079 $ 584,079 On 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 and are classified as ordinary debt. 10 Table of Contents BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 (Unaudited) NOTE 8 – NOTES PAYABLE In January 2024, the Company borrowed $ 100,000 from an unrelated individual, repayable January 25, 2025 with interest at 11 % per annum. At maturity, the Company will repay the face amount of the loan in cash, including unpaid and accrued interest at 11 % and, in addition, has agreed to issue as additional consideration 15,000,000 shares of the Company's common stock to the lender. At maturity the lender has the option to be issued, in lieu of cash payment of the outstanding debt, an additional 15,000,000 shares of the Company's common stock as full satisfaction of the principal loan amounts and related unpaid and accrued interest thereon. The Company has recorded the $ 24,000 value of shares to be issued to the lender for loan consideration as a discount to debt, based on the closing trading price of the Company's common stock as of the date of the note, and is amortizing the discount to interest expense over the term of the note. In January 2024, the Company borrowed $ 14,000 from an unrelated individual, repayable April 25, 2024 with interest at 11 % per annum. At maturity, the Company will repay the face amount of the loan in cash, including unpaid and accrued interest at 11 %, or at option of the lender, will issue 7,000,000 shares of the Company's common stock in lieu of cash payment of the outstanding debt as full satisfaction of the principal loan amounts and related unpaid and accrued interest thereon. Notes payable at March 31, 2024 and December 31, 2023 are summarized as follows: Face Amount Interest Rate Due Date 2024 2023 Current notes payable $ 25,000 11 % Sept 1, 2024 $ 25,000 $ 25,000 $ 50,000 11 % May 1, 2024 $ 50,000 $ 50,000 $ 50,000 11 % Jun 29, 2024 $ 50,000 $ 50,000 $ 14,000 11 % Apr 25, 2024 $ 14,000 — $ 25,000 11 % Sept 1, 2024 $ 25,000 $ 25,000 $ 100,000 11 % Feb 25, 2025 $ 100,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 (Unaudited) NOTE 9 – RELATED PARTY TRANSACTIONS In support of the Company's efforts and cash requirements, the Company has relied on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. The advances are considered temporary in nature and have not been formalized by a promissory note. IHG, the controlling shareholder of the Company, provides management consulting services to the Company. There is no formal written agreement that defines the compensation to be paid. For the three months ended March 31, 2024 and 2023, the Company recorded related party management fees of $ 47,000 and $ 31,500 , respectively. On July 1, 2023, the Board of Directors approved and authorized the issuance of shares of the Company's common stock as follows: 1,000,000 shares each to Directors of the Company; 2,000,000 shares each to new officers of the Company; 1,000,000 shares each to new advisors of the Company. At March 31, 2024, the Company has recorded as common stock to be issued an aggregate 8,000,000 shares of its common stock to four individuals, valued at $ 3,200 ($ 0.0004 per share), based on the trading price of the Company's common stock as of the date of grant. NOTE 10 - 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 . The Plaintiff is seeking specific performance for the reserve of 700,000,000 shares, or damages in excess of $ 15,000 , plus interest, costs, and legal fees. At the outset of the case, a temporary restraining order w

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 (Unaudited) NOTE 11 – SUBSEQUENT EVENTS (continued) On May 3, 2024, the Securities and Exchange Commission ("SEC") entered an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC and its sole audit partner Benjamin F. Borgers CPA (individually and together, "BF Borgers"), the Company's former public accountant. The Order denies BF Borgers the privilege of appearing or practicing before the SEC as an accountant. As a result, the Company retained a new public accountant, Fruci & Associates II, PLLC, to review the financials presented in this report. The Company has analyzed its operations subsequent to March 31, 2024 through the date that these financial statements were issued, and has determined that it does not have any additional material subsequent events to disclose. 13 Table of Contents

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

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

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