Blackstar Enterprise Group, Inc. (BlackStar) operates as a specialized merchant banking company, facilitating joint venture capital to early-stage revenue companies. The company is a subsidiary of International Hedge Group, Inc.
The company engages in Merchant Banking and Finance in the United States.
Since 2018, the company has also been developing a blockchain-based software platform to trade electronic fungible shares of its stock. Once completed, the platform should enable the company to b...
Blackstar Enterprise Group, Inc. (BlackStar) operates as a specialized merchant banking company, facilitating joint venture capital to early-stage revenue companies. The company is a subsidiary of International Hedge Group, Inc.
The company engages in Merchant Banking and Finance in the United States.
Since 2018, the company has also been developing a blockchain-based software platform to trade electronic fungible shares of its stock. Once completed, the platform should enable the company to become a Platform as a Service (PaaS) provider for other publicly traded companies, providing revenue to finance its merchant banking. The company has relied solely on sales of its securities, convertible note financing, and private loans to fund its operations. The completion of its software platform depends on the company’s ability to license it to an existing Alternative Trading System (ATS) or registration as an ATS.
The company has designed and is finalizing development of a BlackStar Digital Trading Platform (BDTP) referenced above and anticipates the completion of the platform in the next several months. The company has designed the BDTP to trade electronic fungible shares of BEGI (or any other company), and intends to use the BDTP as proof-of-concept to other companies looking for a similar market solution. The platform can be adapted and customized to meet the needs of the particular registered issuer and a yearly subscription fee will be charged for the design and monitoring of the digital platform technology and execution; the issuer would decide who would quote and host their particular platform. This subscription income will then become the basis of the company’s revenues. The company has completed a working demonstration on Amazon Web Services Quantum Ledger Database (QLDB) designed to facilitate shareholder trading activity. The company is in the process of finalizing the software design and is trying to organize an arrangement with a broker-dealer, clearing firm, existing ATS, or other trading system in order to begin trading electronic fungible BEGI shares over the BDTP subject to approval by the SEC.
BlackStar intends to offer consulting and regulatory compliance services to crypto-equity companies and blockchain entrepreneurs for securities, tax, and commodity issues. BlackStar is conducting ongoing analysis for opportunities in involvement in crypto-related ventures through its 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 the company controls the venture until divestiture or spin-off by developing the businesses with capital. The company has only engaged in one transaction as a merchant bank form as of December 31, 2022.
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. BlackStar is 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.
BlackStar progress in 2022 focuses on pursuing the registration of shares underlying convertible notes, which entailed thoroughly describing many aspects of its new proposed line of business of trading common shares on a blockchain through the broker-dealer ecosystem. The company is finalizing the marketing plan to promote and roll out the three features of its blockchain platform. The company plans to offer its Private Funding and Corporate Governance Blockchain to individual private companies in 2023.
The company's next major step in its main feature, BlackStar's Digital Trading Platform (BDTP), will be to engage an operating partner (a broker-dealer, clearing firm, and/or registered Alternative Trading System (ATS)) 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 in accordance with existing laws and regulations. As of December 31, 2022, the core platform of BDTP is complete and will remain in the testing phase until it obtains an operating partner. BlackStar intends to continue to seek further input from various regulatory agencies and others on the functionality of the BDTP over the next 6 to 9 months. The BDTP 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. 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 in the final stages of quality assurance.
BlackStar is actively pursuing relationships with various broker-dealers, clearing firms, and ATS's to complete the final stages of this multi-year engineering effort. 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 the U.S. and foreign trademark offices for protection.
Since 2018, the company has also been developing a blockchain-based software platform to trade electronic fungible shares of its common stock. Once completed, the platform design might enable the company to license the technology as a Platform as a Service (PaaS) for other publicly traded companies, providing revenue to finance its merchant banking. The completion of its software platform depends on the company's ability to license it to an existing Alternative Trading System (ATS) or for the company to possibly register as an ATS, which it does not intend to do at this time as it would prefer to license its platform to an existing ATS. The platform is not operational or in use by anyone.
Services
As BlackStar focuses its merchant banking efforts on the DLT industry, BlackStar intends to seek investments through joint ventures in private or public emerging commercial-stage businesses within the blockchain ecosystem. BlackStar also intends to offer consulting and compliance services to member companies and blockchain entrepreneurs on securities and commodity futures.
The company will seek targeted joint ventures in the sector, primarily focusing on distributed ledger security features and technology, and the global equity trading arena. BlackStar, through BEMC, will seek to initially control and manage each venture into which it enters. While remaining compliant with current Securities and Exchange Commission (SEC) disclosure and reporting guidelines, BlackStar is conducting an in-depth analysis into the company's involvement in DLT-related ventures.
The company intends to leverage its experience in the traditional world of public finance, including experience with securities, options, and SEC registration and compliance, into working with select organizations supporting the development and implementation of new technologies in the electronic share and DLT world. To facilitate this process, BlackStar plans to establish an advisory board in its subsidiary, Blockchain Equity SRO, Inc., with applicable technical and practical experience.
The company seeks venture investments in private, or public emerging commercial-stage businesses with perceived strong growth prospects within certain industry sectors. Companies that the company works with may engage in consulting agreements with its parent company, International Hedge Group, Inc. (IHG), to add additional monitoring as to their financial situations. The company may provide off-balance sheet financing to venture companies, through joint ventures or limited liability companies under structures it cannot now predict.
Proposed New Lines of Business
The company is seeking to license the BDTP platform to an existing ATS, broker-dealer, and/or clearing firm to host the BDTP platform so that it may comply with existing rules and regulations. If the company is unable to license it to an entity in this way, it may reevaluate whether to seek compliance with Regulation ATS as a standalone ATS.
BlackStar intends the BDTP to be a tool for trading securities within the existing FINRA and SEC regulated brokerage ecosystem, addressing many of the regulatory issues by operating within the existing confines of the system. For example, customers will continue to use brokerage accounts and broker-dealers and the transfer agent will continue to maintain the shareholder records. In addition, the BDTP platform is intended to seamlessly integrate with the order entry processes, priority rules, and execution procedures of the existing brokerage ecosystem. All custodial duties are intended to remain the same because the BDTP will pass encrypted customer and account information and buy/sell orders to the relevant parties.
Blockchain First: Financial services software for managing the trading of stocks or equities on a Distributed Ledger that prevents the disruption of order flow of customer trades.
BlackStar has built the technology based upon the Quantum Ledger Database, a blockchain framework from Amazon Web Services (AWS), and to use the AWS Cloud for transaction data storage. The BDTP would offer a web-based interface for trading transactions, as well as an Application Programming Interface (API) that directly accesses all transactions stored on the BDTP. As of September 21, 2022, the core platform and its software was complete and was in the testing phase. The BDTP platform 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. BlackStar intends to continue to seek further input from various regulatory agencies and others on the functionality of the BDTP over the next several months. It will remain in the testing phase until the company licenses the BDTP platform to a broker-dealer, clearing firm, and/or ATS. The BDTP platform is not designed to support transactions in any tokens, faux currencies, coins, crypto, or any crypto related assets.
The core platform has been designed for initial use with BlackStar common stock and is thus the BlackStar Digital Trading Platform (BDTP). The BDTP platform is not operational for any securities and any such securities must first be registered with the SEC under the Securities Act of 1933, as amended or have an available exemption from registration.
Licensing the BDTP Platform with An Existing Trading System
The BDTP platform is designed to be licensed to any company, together with an existing ATS arrangement to execute and process trades, for implementation by the licensee. These electronic fungible shares will trade on the BDTP platform exactly as shares of stock trade on OTC Markets, without markup or markdown in true 'spot transactions.' Any company will be able to license and use the company's system or platform to trade electronic fungible shares.
The company intends to seek a contractual arrangement such as a license with an existing ATS for a quoting service, similar to the listing of its common stock with OTC Markets Group. At this time, no ATS has committed to an arrangement. The company intends to continue having discussions with various ATS's until it has secured an arrangement that will allow the BDTP platform to operate.
The company will continue to seek out this licensee and have increased its efforts to reach out to various broker-dealers since completing the demonstration platform and hope to secure a licensee within the next three to six months. The ability to obtain a licensee may be dependent on the company's ability to confirm that FINRA and the SEC will allow trading on the BDTP platform as described. If this is the case, the company may alternatively seek to acquire an existing broker-dealer in order to become a registered broker-dealer. Once it has secured a licensee broker-dealer, clearing firm, or ATS for the operations of the BDTP platform, it will seek subscriber companies desiring customized platforms.
Once the BDTP platform is live and formal arrangements have been finalized with an existing ATS to execute and reports trades, the company intends to license the platform to other publicly traded companies as a subscription service with a company specific customizable interface operation through a substantially similar license with the existing ATS. This subscription service, BlackStar's 'Blockchain Equity Trading' or BET, would enable each subscribing company to have access to their own trading platform, based upon the company's core platform, where shares of their common stock could be traded. The technical platform operations and updates will be managed by Artuova, through its oversight and direction. The software building of additional platforms for subscriber companies may take as little as a few business days.
History
The company was founded in 2007. It was incorporated in 2007 as NPI08, Inc. in the state of Delaware. The company’s name was changed in 2010 to BlackStar Energy Group, Inc. In 2016, the company’s name was changed to BlackStar Enterprise Group, Inc.
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