Blackstar Enterprise Group Files 10-Q for Q2 2024

TL;DR

Blackstar Enterprise Group (BSGE) filed its Q2 2024 10-Q. All systems go.

AI Summary

Blackstar Enterprise Group, Inc. filed its 10-Q for the period ending June 30, 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 Blackstar Enterprise Group's financial performance and operational status for the second quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial and business information.

Key Players & Entities

• BLACKSTAR ENTERPRISE GROUP, INC. (company) — Registrant
• BLACKSTAR ENERGY GROUP, INC. (company) — Former company name
• June 30, 2024 (date) — Quarterly period end date
• 20240819 (date) — Filing date
• Boulder, CO (location) — Principal executive offices location

FAQ

Key Financial Figures

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

Filing Documents

• begi-20240630.htm (10-Q) — 466KB
• 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
• 0001065949-24-000098.txt ( ) — 3135KB
• begi-20240630.xsd (EX-101.SCH) — 48KB
• begi-20240630_cal.xml (EX-101.CAL) — 16KB
• begi-20240630_def.xml (EX-101.DEF) — 161KB
• begi-20240630_lab.xml (EX-101.LAB) — 306KB
• begi-20240630_pre.xml (EX-101.PRE) — 154KB
• begi-20240630_htm.xml (XML) — 258KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Consolidated Balance Sheets – June 30, 2024 and December 31, 2023 3 Consolidated Statements of Operations – Three and six months ended June 30, 2024 and 2023 4 Consolidated Statements of Stockholder's Deficit – Six months ended June 30, 2024 and 2023 5 Consolidated Statements of Stockholder's Deficit – Three months ended June 30, 2024 and 2023 6 Consolidated Statements of Cash Flows – Six months ended June 30, 2024 and 2023 7 Notes to the Financial Statements 8 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 15 Item 3 .

Quantitative and Qualitative Disclosures About Market Risk – Not Applicable

Quantitative and Qualitative Disclosures About Market Risk – Not Applicable 19 Item 4 .

Controls and Procedures

Controls and Procedures 19

- OTHER INFORMATION

PART II- OTHER INFORMATION Item 1 .

Legal Proceedings

Legal Proceedings 19 Item 1A . Risk Factors – Not Applicable 20 Item 2 . Unregistered Sales of Equity Securities and Use of Proceeds 20 Item 3 . Defaults Upon Senior Securities – Not Applicable 20 Item 4 . Mine Safety Disclosure – Not Applicable 21 Item 5 . Other Information 21 Item 6 . Exhibits 22

Signatures

Signatures 23 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS BLACKSTAR ENTERPRISE GROUP, INC. CONSOLIDATED BALANCE SHEETS JUNE 30, 2024 AND DECEMBER 31, 2023 2024 2023 (Unaudited) (Audited) ASSETS Current Assets Cash $ 10,339 $ 33,550 Total current assets 10,339 33,550 Intangibles 368,653 348,652 Total Assets $ 378,992 $ 382,202 LIABILITIES & STOCKHOLDERS' DEFICIT Current liabilities Accounts payable $ 874,101 $ 358,001 Accrued payables 343,949 247,020 Notes payable, net of discount of $ 36,790 (2024) 527,210 325,000 Convertible notes payable 584,079 584,079 Total current liabilities 2,329,339 1,514,100 Notes payable - long term 25,000 75,000 Total Liabilities 2,354,339 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 June 30, 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 62,450 3,200 Accumulated deficit ( 11,261,385 ) ( 10,421,950 ) Total stockholders' deficit ( 1,975,347 ) ( 1,206,898 ) Total Liabilities and Stockholders' Deficit $ 378,992 $ 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 THEREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 (Unaudited) Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023 Revenue $ — $ — $ — $ — Operating expenses Legal and professional 232,942 46,236 596,195 90,888 Management consulting - related party 33,525 26,750 80,525 58,250 General and administrative 8,303 11,783 31,588 24,036 Total operating expenses 274,770 84,769 708,308 173,174 Oth

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 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 and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2024 (Unaudited) NOTE 2 – GOING CONCERN (continued) 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 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. A

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. 9 Table of Contents BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2024 (Unaudited) NOTE 4 – INTANGIBLES Intangibles at June 30, 2024 and December 31, 2023 consist of capitalized costs for the Company's proprietary software and patents as follows: 2024 2023 Software $ 160,002 $ 140,001 Patents 208,651 208,651 $ 368,653 $ 348,652 As of June 30, 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. 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 six months ended June 30, 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 six months ended June 30, 2023, the Company issued shares of its common stock as follows: 487,584,913 shares for conversion of $ 85,595 principal and interest on convertible notes payable. At June 30, 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 di

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2024 (Unaudited) NOTE 5 – STOCKHOLDERS' DEFICIT (continued) At June 30, 2023, the Company has recorded common stock to be issued, valued at $ 9,000 , as additional consideration for loans made to the Company during the period. NOTE 6 – WARRANTS In April 2019, the Company issued a convertible note for $ 110,000 . Pursuant to the terms of the note agreement, the Company issued warrants to the holder for the purchase 440,000 shares of the Company's common stock. The warrants are exercisable at $ 0.25 per share for a term of 5 years. The $ 132,953 fair value of the warrants was calculated using the Black-Scholes pricing model with the following assumptions: stock price $ 0.38 ; strike price $ 0.25 ; volatility 98 %; risk free rate 2.25 % and term of 5 years. The Company recognized a warrant expense of $ 132,593 at the time of grant of the warrants. A summary of warrant activity during the six months ended June 30, 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 ( 173,200 ) Outstanding and exercisable – June 30, 2024 — NOTE 7 – CONVERTIBLE NOTES The Company has outstanding convertible notes due to SE Holding LLC and Adar Alef LLC which, as of June 30, 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 June 30, 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 11 Table of Contents BLACKSTAR ENTERPRISE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2024 (Unaudited) NOTE 7 – CONVERTIBLE NOTES (continued) 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. 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, repay

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2024 (Unaudited) NOTE 8 – NOTES PAYABLE (continued) Notes payable at June 30, 2024 and December 31, 2023 are summarized as follows: Face Amount Interest Rate Due Date 2024 2023 Current notes payable $ 25,000 11 % Sept 1, 2024 $ 25,000 $ 25,000 $ 50,000 11 % May 1, 2024 $ 50,000 $ 50,000 $ 50,000 11 % Jun 29, 2024 $ 50,000 $ 50,000 $ 14,000 11 % Apr 25, 2024 $ 14,000 — $ 25,000 11 % Sept 1, 2024 $ 25,000 $ 25,000 $ 100,000 11 % Feb 25, 2025 $ 100,000 — $ 50,000 11 % Dec 9, 2024 $ 50,000 $ 50,000 $ 25,000 11 % Dec 18, 2024 $ 25,000 $ 25,000 $ 25,000 11 % Aug 17, 2024 $ 25,000 $ 25,000 $ 50,000 11 % Aug 6, 2024 $ 50,000 $ 50,000 $ 25,000 11 % Aug 8, 2024 $ 25,000 $ 25,000 $ 50,000 5.5 % May 17, 2025 $ 50,000 — $ 25,000 11 % April 2, 2025 $ 25,000 — $ 50,000 11 % April 19, 2025 $ 50,000 — Note discount $ ( 36,790 ) Total current notes payable $ 527,210 $ 325,000 Long-term notes payable $ 25,000 5.5 % Nov 13, 2026 $ 25,000 $ 25,000 $ 50,000 5.5 % May 17, 2025 — $ 50,000 Total long-term notes payable $ 25,000 $ 75,000 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 six months ended June 30, 2024 and 2023, the Company recorded related party management fees of $ 80,525

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2024 (Unaudited) 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 was enter

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