10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2007

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 814-00678

BLACKHAWK CAPITAL GROUP BDC, INC.
(Exact Name of Registrant as specified in its charter)
Delaware	20-1031329
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

14 Wall Street, 11^th Floor, New York, New York 10005

(Address of principal executive offices) (Zip Code)

(212) 566-8300

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.00001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes xNo o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer oAccelerated filer o

Non-accelerated filer (Do not check if a smaller reporting company) x

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes xNo o

The number of shares outstanding of Blackhawk's common stock on March 28, 2008 was 31,867,484.

TABLE OF CONTENTS

				Page
GENERAL NOTE
PART I
		Item 1.	Business	2
		Item 1A.	Risk Factors	6
		Item 1B.	Unresolved Staff Comments	19
		Item 2.	Properties	19
		Item 3.	Legal Proceedings	20
		Item 4.	Submission of Matters to a Vote of Security Holders	20
PART II
		Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities	20
		Item 6.	Selected Financial Data	22
		Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operation	24
		Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	27
		Item 8.	Financial Statements and Supplementary Data	28
		Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	28
		Item 9A.	Controls and Procedures	28
		Item 9A(T).	Controls and Procedures	28
		Item 9B.	Other Information	29
PART III
		Item 10.	Directors, Executive Officers of the Registrant	30
		Item 11.	Executive Compensation	34
		Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	35
		Item 13.	Certain Relationships And Related Transactions	35
		Item 14.	Principal Accounting Fees and Services	37
	PART IV
		Item 15.	Exhibits and Financial Statement Schedules	38

PART I

Forward Looking Statements

The matters discussed in this section and in certain other sections of this Form 10-K contain forward-looking statements within the meaning of Section 21D of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words "may", "will", "could", "should", "intends", "thinks", "believes", "anticipates", "estimates", "plans", "expects", or the negative of such terms and similar expressions are intended to identify assumptions and uncertainties which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this report. The following cautionary statements identify important factors that could cause Blackhawk Capital Group BDC, Inc. ("Blackhawk," "we" or "Company") actual results to differ materially from those projected in the forward-looking statements made in this Report. Among the key factors that have a direct bearing on Blackhawk's results of operations include:

· General economic and business conditions; the existence or absence of adverse publicity; changes in, or failure to comply with, government regulations; changes in marketing and technology; changes in political, social and economic conditions;

· Success of operating initiatives; changes in business strategy or development plans; management of growth;

· Availability, terms and deployment of capital;

· Legal, administrative and accounting expenses;

· Dependence on senior management; business abilities and judgment of personnel; availability of qualified personnel; labor and employee benefit costs;

· Development risks; risks relating to the availability of financing, and

· Other factors referenced in this Report.

Because the risks factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by Blackhawk, you should not place undue reliance on any such forward-looking statements. Other factors may be described from time to time in Blackhawk's other filings with the Securities and Exchange Commission, news releases and other communications. Further, any forward-looking statement speaks only as of the date on which it is made and Blackhawk undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for Blackhawk to predict which will arise. In addition, Blackhawk cannot assess the impact of each factor on Blackhawk's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Subsequent written and oral forward-looking statements attributable to Blackhawk or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements set forth above and contained elsewhere in this Annual Report on Form 10-K.

Blackhawk has been and is currently subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with those requirements, we file reports and other information with the Securities and Exchange Commission. Such reports and other information can be inspected and copied at the public reference facilities maintained by the SEC. Please call the SEC at 1-800-SEC-0330 for more information on the operation of its public reference rooms. The SEC also maintains a Web site that contains reports, proxy and information statements and other materials that are filed through the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. This Web Site can be accessed at http://www.sec.gov. Our reports, registration statements, proxy and information statements and other information that we file electronically with the SEC are available on this site.

Item 1. Business

On September 20, 2004, Blackhawk filed a Form N-54A Notification with the Securities and Exchange Commission, electing to become a Business Development Company pursuant to Section 54 of the Investment Company Act.

Blackhawk was incorporated on April 22, 2004 under the laws of the State of Delaware to engage in any lawful corporate undertaking. Blackhawk's operations to date have been limited to issuing shares to its original shareholders, organizational and administrative activities, and conducting three (3) offerings under Regulation E of the Securities Act.

Blackhawk will attempt to locate and negotiate with eligible portfolio companies for Blackhawk to invest in, lend funds to, acquire an interest in and/or possibly manage. Blackhawk intends to offer managerial assistance to eligible portfolio companies in which it invests.

In addition to the broad investment strategy to be pursued by Blackhawk discussed herein, Blackhawk also intends to develop a strategy to invest in special purpose vehicles developing products and seeking exemptive relief to issue securities registered under the Investment Company Act and Securities Act identified with the Exchange Traded Funds ("ETFs") industry. Blackhawk may only invest in these entities if they are not investment companies under the Investment Company Act or investment advisers registered under the Investment Advisers Act. The investment strategy will be in compliance with, and consistent with, the BDC provisions of the Investment Company Act. Additionally, Blackhawk would seek to invest in ETF distribution companies focusing on the expanding ETF broker models that are not associated with the traditional mutual fund industry. Finally, Blackhawk plans to invest in companies that invest in specialized ETF focused companies seeking to establish alliance or acquisitions in traditional unit investment trusts, closed-end funds and traditional mutual fund companies that use commissions, loads and annual revenue sharing to achieve their current distribution goals. Blackhawk does not intend to invest directly in ETFs.

2

Blackhawk would seek to invest in companies seeking broad and generic ETF exemptive relief for specific asset classes such as equity, debt, commodities, currency and other asset classes. The Blackhawk investments would include index and active based investment strategies.

All of the above investment categories are subject to the investment restrictions in the BDC provisions of the Investment Company Act applicable to Blackhawk, including without limitation that Blackhawk not invest in an "investment company" registered under the Investment Company Act.

As a business development company or BDC, Blackhawk is able to raise money to acquire interests in small private businesses, as well as larger private companies, and distressed public companies as defined under the BDC provisions of the Investment Company Act. We intend to seek equity positions and on going relationships with companies offering sustainable and profitable growth. We do not intend to limit our acquisitions to a single line of business or industry.

All acquisitions will be designed to enhance shareholder value through capital appreciation and dividend payments.

Consistent with Section 58 of the Investment Company Act, we may not, unless authorized by the vote of a majority of our outstanding common stock, change the nature of our business so as to cease to be, or to withdraw our election as, a business development company. In addition, as a BDC, we will not make any significant material changes in our investment guidelines and policies without obtaining the approval of our Board of Directors.

Blackhawk may invest in a variety of securities, including bonds, convertible debentures, preferred stock and common stock. We have not set a policy as to what proportion of our assets may be invested in any type of security, nor have we set a policy regarding a potential concentration in any particular industry or group of industries.

3

Blackhawk will seek to render significant managerial assistance to and/or control of eligible companies. While we do not currently intend to invest as part of a group, we have not set any policy to that effect, and may determine to so invest in the future without seeking shareholder approval. We have not yet set a policy with respect to any assets that are not required to be invested in eligible portfolio companies or other companies qualifying under Section 55 of the Investment Company Act.

Consistent with its objective of long-term capital appreciation, Blackhawk will consult with its investees with respect to obtaining capital and offer managerial assistance to selected businesses that, in the opinion of our management, have a significant potential for growth.

In addition to acquiring investment positions in new and developing companies, Blackhawk may also occasionally invest in more mature privately and publicly-held companies, some of which may be experiencing financial difficulties, but which, Blackhawk believes, have potential for further development or revitalization, and which, in the long-term, could experience growth and achieve profitability.

On behalf of Blackhawk, Network 1 Financial Securities, Inc. ("Network 1") submitted an application on Form 211 on July 5, 2006 to the National Association of Securities Dealers, Inc. ("NASD") to initiate quotations in the OTC Bulletin Board Service for Blackhawk's common stock, par value $.00001 per share ("Common Stock"). On August 22, 2006, the NASD issued a letter to Network 1 stating that unpriced quotations could begin on the OTC Bulletin Board on Blackhawk's Common Stock and that if Network 1 decides to enter a priced quotation (bid or offer) in the Common Stock in any quotation medium, Network 1 must supplement its filing with the Form 211. This supplemental filing must include the basis and factors for Network 1's priced quotation and be received by the NASD three days before the priced entry appears in a quotations medium. The symbol for the Common Stock is "BHCG."

Pursuant to Blackhawk's second Regulation E Offering, Blackhawk sold as of June 4, 2007 an aggregate of 502,891 shares of common stock, $.00001 par value per share ("Common Stock"), at a purchase price of $1.00 per share, to four (4) accredited investors for an aggregate amount of $502,891. The sale consisted of the following: (1) 370,000 shares sold to three (3) accredited investors for the purchase price of $1.00 per share, or an aggregate of $370,000; and (ii) the issuance of 132,891 to Concorde, an affiliate and the largest stockholder of Blackhawk, in exchange for (x) $107,391 in a convertible note (consisting of $100,000 in principal and $7,391 in accrued and unpaid interest) owed by Blackhawk to Concorde and issued on August 1, 2006 and (y) $25,500 in a convertible note owed by Blackhawk to Concorde and issued on May 29, 2007. The conversion price for both of these notes was $1.00 per share of Common Stock. In June and July 2007, Blackhawk sold an additional 150,000 and 5,000, respectively, shares of its Common Stock for an aggregate of $155,000 in cash in its second Regulation E offering. The second offering was terminated on November 15, 2007. The net cash proceeds from the second Regulation E offering was $525,001.

4

On June 21, 2006, Blackhawk entered into an Exchange Agreement ("Exchange Agreement") with The Concorde Group, Inc. ("Concorde"), the largest stockholder and affiliate of Blackhawk, pursuant to which a non-interest bearing promissory note (the "Note") issued by Blackhawk on May 3, 2006 to Concorde in the principal amount of $68,847 was exchanged for 6,884,700 shares ("Shares") of the common stock, par value $.00001 per share ("Common Stock") of Blackhawk. The Shares are "restricted securities" as defined in Rule 144 of the Securities Act. Pursuant to the Exchange Agreement, Concorde acquired 6,884,700 shares ("Shares") of the Common Stock of Blackhawk in exchange for the Note. The stock has issued in the exchange at $.01 per share. This exchange took place pursuant to Section 3(a)(9) of the Securities Act as an exchange by an issuer with an existing security holder where no commission or other remuneration was paid or given to Concorde or any other party for soliciting such exchange. This transaction was approved by all of the directors of Blackhawk pursuant to action by unanimous written consent as fair and in the best interests of Blackhawk and its stockholders.

Blackhawk became aware that certain of its state blue-sky filings were not correctly made in connection with its first Regulation E offering made in 2004 and 2005. To rectify this, Blackhawk made a rescission offer to its stockholders with respect to their shares of Common Stock and filed such offer with each applicable State. Before making the rescission offer, legal counsel for Blackhawk notified each applicable state's securities commission of Blackhawk's intention and submitted Blackhawk's proposed rescission offer letter for comments and approval. To date, all stockholders have either rejected the rescission offer or the thirty (30) day period which they were given to either accept or reject the rescission offer has expired. Blackhawk also has made post-rescission offer filings which were requested by each applicable state.

Blackhawk has engaged Barak Asset Management, LLC, a New York limited liability company ("Barak"), and an investment adviser registered under the Investment Advisers Act of 1940, as amended, to serve as an investment adviser to Blackhawk and manage its portfolio of investments at such time as when the Company has portfolio investments. Barak was formed by Sharon Highland in 2006. From 2002 to 2006, Ms. Highland was Director of Product Development and Management in the Private Client Group for managed accounts, open and closed-end funds at BlackRock. From 1997 to 2002, she was Senior Vice President and Head of Wrap Fee Investments at PIMCO Allianz. Barak’s engagement is pursuant to an investment advisory management agreement dated October 31, 2006, with a one-year term (extendable for one year periods) subject to Blackhawk's right to terminate upon sixty (60) days notice, and has fees ranging from 0.50% to 1.80% of assets managed. The term of this agreement was extended to October 31, 2008. Barak will manage assets of Blackhawk on a non-exclusive basis consistent with Blackhawk's business development company (“BDC”) investment guidelines and policies and consistent with the BDC provisions under the Investment Company Act of 1940. As of the date of this Form 10-K, Barak has been paid fees of $3,117 by Blackhawk.

Blackhawk has entered into an agreement dated September 12, 2006 with Robert S. Tull, Jr. for a three-year term (the "Agreement"). Mr. Tull is Managing Director of Macro Securities. Prior to this, from 2000 to 2005, he was Vice President of New Product Development at the American Stock Exchange. Before this, he was Managing Director and Chief Operating Officer at Deutsche Bank USA. Prior to joining Deutsche Bank, Mr. Tull spent 14 years at Morgan Stanley. Under the Agreement, Mr. Tull will consult with the Blackhawk Board of Directors on investments and have the following duties: consulting Blackhawk's Board of Directors on investment decisions and strategies, consulting on investment diversification in the strategies and consulting on investment opportunities. Pursuant to the Agreement, the Blackhawk Board of Directors will determine Mr. Tull's compensation when it closes its third Regulation E offering and has sufficient proceeds to compensate Mr. Tull. Mr. Tull is not a registered investment adviser. As of the date of this Form 10-K, the Company has not incurred any liability to Mr. Tull.

5

Item 1A. Risk Factors

No Fixed Investment Policy; No Investments to Date

We have no fixed policy as to the business or industry group in which we may invest or as to the amount or type of securities or assets that we may acquire. To date, we have not made any investments in a portfolio company. Blackhawk has invested the net proceeds from its second and third Regulation E Offerings received to date in cash equivalents and in investments with maturity dates of less than one year. We seek to assist our investee companies and their management teams in devising realistic business strategies and obtaining necessary financing.

Management's Lack of BDC Experience

Management of the Company, including Craig A. Zabala, Chairman of the Board, President and Chief Executive Officer, and acting Chief Compliance Officer and Chief Financial Officer of the Company, have no experience in BDC investing and no BDC operations experience. There is no guarantee that management of the Company will be able to meet the regulatory requirements under the Investment Company Act applicable to BDCs on behalf of the Company.

A Failure on Our Part to Maintain Our Status as a Business Development Company ("BDC") Would Significantly Reduce Our Operating Flexibility

If we do not continue to qualify as a BDC, we might be regulated as a non-BDC closed-end investment company under the Investment Company Act, which would significantly decrease our operating flexibility.

Our Ability to Grow Will Depend on Our Ability to Raise Capital

Blackhawk has raised in its first two Regulation E offerings only $537,930, net of expenses of $91,907, in equity capital and has borrowed $255,779 from Concorde, the largest stockholder of Blackhawk ("Concorde") of which $255,779 along with $7,391 of accrued interest was converted into 13,160,791 shares of common stock by Concorde. On May 29, 2007, Blackhawk borrowed $25,500 from Concorde. This amount was converted into shares of Common Stock in Blackhawk's second Regulation E Offering at the exchange rate of $1.00 per share (25,500 shares). We will need to periodically access the equity markets to raise cash to fund new investments. An inability to successfully access the equity markets could limit our ability to grow our business and fully execute our business strategy. We cannot assure you that we will be able to raise adequate capital in the future.

6

Blackhawk Not Having Sufficient Funds For Expenses of Regulatory Compliance Under Investment Company Act of 1940

If Blackhawk does not raise sufficient net proceeds in its common stock offerings or operations, or is unable to borrow sufficient funds from its controlling shareholder Concorde, it may not have sufficient funds for paying for the expenses of regulatory compliance under the Investment Company Act of 1940.

Reliance on Strong Management Teams of Investee Companies

Blackhawk believes that it will be most likely to succeed in its investment strategies if its prospective investee companies have strong management teams. Generally, Blackhawk intends to focus as much or more on finding and supporting business executives who have the ability, entrepreneurial motivation and experience required to build independent companies with a significant potential for growth, as it will on identifying, selecting and financing investment opportunities based on promising ideas, products or marketing strategies. Consistent with this belief, Blackhawk believes it will be able to provide investee companies with managerial assistance. For example, we intend to encourage our investee companies to afford their management teams opportunities for meaningful equity participation and assist them in planning means to accomplish this result.

Start-up Operations; No Cash Dividend Payments to Date; Possibility of Substantial Losses

Blackhawk has never paid cash dividends nor does it have any present intent to do so.

Business development is by nature a high-risk activity that often results in substantial losses. The companies in which Blackhawk intends to invest often lack effective management, face operating problems and have incurred substantial losses. Potential investees include established businesses which may be experiencing severe financial or operating difficulties or may, in the opinion of their management, be managed ineffectively and yet have the potential for substantial growth or for reorganization into separate independent companies.

7

Blackhawk will attempt to reduce the level of its investment risks through one or more of the following factors:

· carefully investigating potential investees;

· financing only what it believes to be practical business opportunities, as contrasted to research projects;

· selecting effective, entrepreneurial management for its investees;

· providing managerial assistance and support to investees in areas, where the need is apparent;

· obtaining, alone or with others, actual or working control of its investees;

· supporting the investees in obtaining necessary financing, and, where feasible, arranging major contracts, joint ventures or mergers and acquisitions; and

· where possible, maintaining sufficient capital resources to make follow-on investments where necessary, appropriate and feasible.

The proposed operations of Blackhawk are speculative

The success of the proposed business plan of Blackhawk will depend to a great extent on the operations, financial condition and management of the identified target companies. While investments in entities having established operating histories are preferred, there can be no assurance that Blackhawk will be successful in locating candidates meeting such criteria. The decision to invest in a company will likely be made without detailed feasibility studies, independent analysis, market surveys or similar information which, if Blackhawk had more funds available to it, would be desirable. In the event Blackhawk completes one or more stock acquisitions, the success of its operations will be dependent upon management of those target companies and numerous other factors beyond the control of Blackhawk. There is no assurance that Blackhawk can identify a target company to invest in, or that such investments will be successful.

There is no agreement for any stock acquisitions and no minimum requirements for any stock acquisitions

As of the date of this Form 10-K, Blackhawk has no current arrangement, agreement or understanding with respect to engaging in an investment in a specific entity. There can be no assurance that Blackhawk will be successful in identifying and evaluating suitable business opportunities or in concluding an investment. No particular industry or specific business within an industry has been selected for a target company. Blackhawk has not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria, which it will require a target company to have achieved, or without which Blackhawk would not consider an investment. Accordingly, Blackhawk may invest in a company which has no significant operating history, losses, limited or no potential for immediate earnings, limited assets, negative net worth or other negative characteristics. There is no assurance that Blackhawk will be able to negotiate an investment on terms favorable to Blackhawk.

8

Reporting requirements may delay or preclude investments

Pursuant to the requirements of Section 13 of the Exchange Act, Blackhawk is required to provide certain information about significant acquisitions including audited financial statements of the acquired company. These audited financial statements normally must be furnished within 75 days following the effective date of a stock acquisition. Obtaining audited financial statements are the economic responsibility of the target company. The additional time and costs that may be incurred by some potential target companies to prepare such financial statements may significantly delay or essentially preclude consummation of an otherwise desirable investment by Blackhawk. Acquisition prospects that do not have or are unable to obtain the required audited statements may not be appropriate for investment so long as the reporting requirements of the Exchange Act are applicable. Notwithstanding a target company's agreement to obtain audited financial statements within the required time frame, such audited financial statements may not be available to Blackhawk at the time of effecting an investment in such target company. In cases where audited financial statements are unavailable, Blackhawk will have to rely upon information that has not been verified by outside auditors in making its decision to engage in a transaction with the business entity. This risk increases the prospect that an investment with such a target company might prove to be an unfavorable one for Blackhawk.

We May Change Our Investment Policies Without Further Shareholder Approval

Although we are limited by the Investment Company Act with respect to the percentage of our assets that must be invested in qualified investee companies, we are not limited with respect to the minimum standard that any investee company must meet, nor the industries in which those investee companies must operate. We may make investments without shareholder approval and such investments may deviate significantly from our historic operations. Any change in our investment policy or selection of investments could adversely affect our stock price, liquidity, and the ability of our shareholders to sell their stock. Any investment made by Blackhawk must be consistent with the BDC provisions of the Investment Company Act.

Our Investments May Not Generate Sufficient Income to Cover Our Operations

We intend to make investments into qualified companies that will provide the greatest overall return on our investment. However, certain of those investments may fail, in which case we will not receive any return on our investment. In addition, our investments may not generate income, either in the immediate future, or at all. As a result, we may have to sell additional stock, or borrow money, to cover our operating expenses. In the past, Blackhawk has borrowed money from its largest stockholder, Concorde, to fund its operating expenses and Concorde has agreed to fund operating expenses through December 31, 2008. However, there can be no assurance that Concorde will continue to lend money to Blackhawk after such date. The effect of such actions could cause our stock price to decline or, if we are not successful in raising additional capital, we could cease to continue as a going concern.

9

Regulatory Oversight; Compliance Requirements

As a business development company, Blackhawk is subject to the provisions of Sections 55 through 65 of the Investment Company Act, and certain additional provisions of that Act made applicable to business development companies by Section 59 of that Act. Under these regulations, Blackhawk's investment policies are defined and subject to certain limitations. Furthermore, under Section 58 of that Act, Blackhawk may not withdraw its election to be so regulated without the consent of the holders of a majority of its issued and outstanding voting securities.

Blackhawk has no fixed policy as to any particular business or industry group in which it may invest or as to the amount or type of securities or assets that it may acquire. Blackhawk may in the future invest in assets that are not qualifying assets as defined by Section 55 of the Investment Company Act; however, no such additional assets have been identified as of the date of this Form 10-K, and Blackhawk does not intend to fall below the 70% requirement as set forth in Section 55 of that Act.

Blackhawk seeks to achieve its objectives in accordance with the following general policies:

· Blackhawk intends to acquire securities through negotiated private placement transactions directly from the investee company, its affiliates, or third parties, or through open market transactions.

· Blackhawk will attempt to acquire, if possible and consistent with Blackhawk's capital resources, a large or controlling interest in its investees through purchases of equity securities, including warrants, options, and other rights to acquire such securities combined, if appropriate, with debt securities, including demand notes, term loans and guarantees, or debt instruments or preferred stock, convertible into, or with warrants to purchase additional equity securities.

· Blackhawk may make additional or "follow-on" investments in its investees, when appropriate to sustain the investees or to enhance or protect Blackhawk’s existing investment.

· Blackhawk will determine the length of time it will retain its investment by evaluating the facts and circumstances of each investee and Blackhawk’s relationship with such investee. Blackhawk may retain its investments for a relatively long period, sometimes as long as five to ten years, with the result that its rate of portfolio turnover may be low. Investments may be retained until, in the sole opinion of Blackhawk, the investee company has a demonstrated record of successful operations and there is a meaningful public market for its securities which reflects the investment value Blackhawk sought (or such a market can be readily established) or until Blackhawk, in its sole discretion, decides that its investment is not likely to result in future long-term capital appreciation.

10

Subject to compliance with the BDC provisions of the Investment Company Act, Blackhawk will invest in SPVs and other entities and vehicles seeking special strategies in the ETF marketplace.

Market Illiquidity

At the time of sale of Blackhawk’s portfolio securities, there may not be a market of sufficient stability to allow Blackhawk to sell its entire position, potentially resulting in Blackhawk not being able to sell such securities at prevailing market prices or at the prices at which Blackhawk may have valued its position in the investee's securities.

Market Price for Common Stock

Shares of Common Stock trade very infrequently on the OTC Bulletin Board under the symbol BHCG.OB. During the period from January 2007 to March 25, 2008, shares have traded between $.095 and $1.00, with little trading volume.

The shares do not trade frequently and there can be wide gaps in the bid and ask prices for the shares of Common Stock. Investors should be aware of these market conditions.

Difficulty in Valuing Investments and Portfolio Performance

Valuation-Policy Guidelines

Blackhawk's Board of Directors is responsible for the valuation of Blackhawk’s assets in accordance with its approved guidelines. Blackhawk's Board of Directors is responsible for recommending overall valuation guidelines and the valuation of the specific investments.

There is a range of values which are reasonable for an investment at any particular time. Fair value is generally defined as the price at which the investment in question could change hands, the “exit price”, assuming that both parties to the transaction are under no unusual pressure to buy or sell and both have reasonable knowledge of all the relevant facts. Statement of Financial Accounting Standards No. 157, “Fair Value Measurements,” further classifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. Therefore, the definition focuses on the price that would be received to sell the asset or paid to transfer the liability (an exit price), not the price that would be paid to acquire the asset or received to assume the liability (an entry price). To increase objectivity in valuing the securities, Blackhawk intends to use external measures of value such as public markets or significant third-party transactions whenever possible. Neither a long-term workout value nor an immediate liquidation value will be used, and no increment of value will be included for changes which may take place in the future. Certain members of Blackhawk's Board of Directors may hold positions in some of Blackhawk's investee companies and certain members of the Board of Directors may hold officer or director positions with some of Blackhawk's investee companies.

11

Valuations assume that, in the ordinary course of its business, Blackhawk will eventually sell its position in the private or public market or may distribute its larger positions to its stockholders. Accordingly, no premiums will be placed on investments to reflect the ability of Blackhawk to sell block positions or control of companies, either by itself or in conjunction with other investors.

In fact, in certain circumstances, Blackhawk may have to sell the securities it owns of its investees in the open market at discounts to market prices at the time of sale, due to the large position it may hold relative to the average daily trading volume.

Blackhawk intends to use four basic methods of valuation for its investments and there are variations within each of these methods. Blackhawk's Board of Directors, in its sole discretion, has determined that Blackhawk's four basic valuation methods constitute fair value. As an investee evolves, its progress may sometime require changes in Blackhawk's method of valuing the investee's securities. Blackhawk's investment will be separated into its component parts (such as debt, preferred stock, common stock or warrants), and each component will be valued separately to arrive at a total value. Blackhawk believes that a mixture of valuation methods is often essential to represent a fair value of Blackhawk's investment position in any particular investee. For example, one method may be appropriate for the equity securities of a company while another method may be appropriate for the senior securities of the same company. In various instances of valuation, the board of directors of Blackhawk may modify the valuation methods mentioned below based on the Board of Directors best judgment in any particular situation.

The cost method values an investment based on its original cost to Blackhawk, adjusted for the amortization of original issue discount, accrued interest and certain capitalized expenditures of Blackhawk. While the cost method is the simplest method of valuation, it is often the most unreliable because it is applied in the early stages of an investee's development and is often not directly tied to objective measurements. All investments are carried at cost until significant positive or adverse events subsequent to the date of the original investment warrant a change to another method. Some examples of such events are: (1) a major recapitalization; (2) a major refinancing; (3) a significant third-party transaction; (4) the development of a meaningful public market for the investee's common stock; and (5) material positive or adverse changes in the investee's business.

12

The appraisal method is used to value an investment position based upon a careful analysis of the best available outside information when there is no established public or private market in the investee company's securities and it is no longer appropriate to use the cost method. Comparisons are made using factors (such as earnings, sales or net worth) that influence the market value of similar public companies or that are used in the pricing of private transactions of comparable companies. Major discounts, usually 50%, are taken when private companies are appraised by comparing private companies to similar public companies. Liquidation value may be used when an investee company is performing substantially below plan and its continuation as an operating entity is in doubt. Under the appraisal method, the differences among companies in terms of the source and type of revenues, quality of earnings, and capital structure are carefully considered.

An appraisal method value can be defined as the price at which the investment in question could change hands, assuming that both parties to the transaction are under no unusual pressure to buy or to sell, and both have reasonable knowledge of all the relevant facts. In the case of start-up companies where the entire assets may consist of only one or more of the following: (1) a marketing plan, (2) management or (3) a pilot operation, an evaluation may be established by capitalizing the amount of the investment that could reasonably be obtained for a predetermined percentage of the ownership in the particular company. Valuations under the appraisal method are considered to be more subjective than the cost, public market or private market methods.

The private market method uses third-party transactions (actual or proposed) in the investee's securities as the basis for valuation. This method is considered to be an objective measure of value since it depends upon the judgment of a sophisticated, independent investor. Actual firm offers are used as well as historical transactions, provided that any offer used was seriously considered and well documented.

The public market method is the preferred method of valuation when there is an established public market for the investee's securities, since that market provides the most objective basis for valuation. In determining whether the public market is sufficiently established for valuation purposes, we intend to examine the trading volumes, the number of stockholders and the number of market makers. Under the public market method, as well as under the other valuation methods, we may discount investment positions that are subject to significant legal, contractual or practical restrictions. When an investee's securities are valued under the public market method, common stock equivalents such as presently exercisable warrants or options are valued based on the difference between the exercise price and the market value, subject to management and board discretion, of the underlying common stock.

13

Regulation - Business Development Companies

The following is a summary description of the Investment Company Act, as applied to business development companies. This description is qualified in its entirety by reference to the full text of the Investment Company Act and the rules promulgated thereunder by the United States Securities and Exchange Commission (the "SEC").

The Small Business Investment Incentive Act of 1980 became law on October 21, 1980. This law modified the provisions of the Investment Company Act, that are applicable to a company, such as Blackhawk, which elects to be treated as a "business development company." Blackhawk elected to be treated as a business development company on September 20, 2004. Blackhawk may not withdraw its election without first obtaining the approval of holders of a majority of its outstanding voting securities.

A business development company must be operated for the purpose of investing in the securities of certain present and former "eligible portfolio companies" and certain bankrupt or insolvent companies and must make available significant managerial assistance to its investee companies. An eligible portfolio company generally is a United States company that is not an investment company (except for wholly-owned SBIC's licensed by the U.S. Small Business Administration) and (1) does not have a class of securities included in the Federal Reserve Board's over-the-counter margin list, (2) is actively controlled by the business development company and has an affiliate of the business development company on its board of directors, or (3) meets such other criteria as may be established by the SEC. Control, under the Investment Company Act, as amended, is presumed to exist where the business development company, and its affiliates or related parties, own 25% or more of the issued and outstanding voting securities of the investee. The SEC recently adopted new rules expanding certain definitions of eligible portfolio companies. The SEC also reproposed for comment a rule that would expand the definition of eligible portfolio company to include certain publicly traded companies.

The Investment Company Act prohibits or restricts a registrant from investing in certain types of companies, such as brokerage firms, insurance companies, investment banking firms and investment companies. Moreover, the Investment Company Act limits the type of assets that Blackhawk may acquire to "qualifying assets" and certain other assets necessary for its operations (such as office furniture, equipment and facilities) if, at the time of the acquisition, less than 70% of the value of Blackhawk's assets consists of qualifying assets. The effect of this regulation is to require that at least 70% of a business development company's assets be maintained in qualifying assets. Qualifying assets include: (1) securities of companies that were eligible portfolio companies at the time Blackhawk acquired their securities; (2) securities of bankrupt or insolvent companies that are not otherwise eligible portfolio companies; (3) securities acquired as follow-on investments in companies that were eligible at the time of Blackhawk's initial acquisition of their securities but are no longer eligible, provided that Blackhawk has maintained a substantial portion of its initial investment in those companies; (4) securities received in exchange for or distributed on or with respect to any of the foregoing; and (5) cash items, government securities and high-quality, short-term debt. The Investment Company Act also places restrictions on the nature of the transactions in which, and the persons from whom, securities can be purchased in order for the securities to be considered to be qualifying assets. As of the date of this Form 10-K, Blackhawk has not yet made any portfolio investments.

14

Blackhawk is permitted by the Investment Company Act, under specified conditions, to issue multiple classes of senior debt and preferred stock, if its asset coverage, as defined in the Investment Company Act, is at least 200% after the issuance of the debt or the preferred stock. Blackhawk currently has no policy regarding issuing of multiple classes of senior debt.

Blackhawk may issue, in limited amounts, warrants, options and rights to purchase its securities to its directors, officers and employees (and provide loans to such persons for the exercise thereof) in connection with an executive compensation plan, if certain conditions are met. These conditions include the authorization of such issuance by a majority of Blackhawk's voting securities (as defined below) and the approval by a majority of the independent members of the board of directors and by a majority of the directors who have no financial interest in the transaction. The issuance of options, warrants or rights to directors who are not also officers requires the prior approval of the SEC.

As defined in the Investment Company Act, the term "majority of a registrant 's issued and outstanding voting securities" means the vote of (a) 67% or more of a registrant 's issued and outstanding common stock present at a meeting, if the holders of more than 50% of the issued and outstanding common stock are present or represented by proxy, or (b) more than 50% of a registrant's outstanding common stock, whichever is less.

Blackhawk may sell its securities at a price that is below the prevailing net asset value per share only upon the approval of the policy by the holders of a majority of its issued and outstanding voting securities, including a majority of the voting securities held by non-affiliated persons, at its last annual meeting or within one year prior to the transaction. In addition, Blackhawk may repurchase its common stock, subject to the restrictions of the Investment Company Act.

In accordance with the Investment Company Act, a majority of the members of Blackhawk's Board of Directors must not be "interested persons" of Blackhawk, as that term is defined in the Investment Company Act. Generally, "interested persons" of Blackhawk include all affiliated persons of Blackhawk and members of their immediate families, any "interested person" of an underwriter or of an "investment advisor" to Blackhawk, any person who has acted as legal counsel to Blackhawk within the last two fiscal years, or any broker or dealer, or affiliate of a broker or dealer.

Most of the transactions involving Blackhawk and its affiliates (as well as affiliates of those affiliates) which were prohibited without the prior approval of the SEC under the Investment Company Act, prior to its amendment by the Small Business Investment Incentive Act now require the prior approval of a majority of Blackhawk's independent directors and a majority of the directors having no financial interest in the transactions. The effect of this amendment is that Blackhawk may engage in certain affiliated transactions that would be prohibited, absent prior SEC approval in the case of investment companies, which are not business development companies. However, transactions involving certain closely affiliated persons of Blackhawk, including its directors, officers and employees, still require the prior approval of the SEC. In general, "affiliated persons" of a person include: (a) any person who owns, controls or holds with power to vote, more than five percent of Blackhawk's issued and outstanding common stock, (b) any director, executive officer or general partner of that person, (c) any person who directly or indirectly controls, is controlled by, or is under common control with that person, and (d) any person five percent or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote, by such other person. Such persons generally must obtain the prior approval of a majority of Blackhawk's independent directors and, in some situations, the prior approval of the SEC, before engaging in certain transactions involving Blackhawk or any company controlled by Blackhawk. In accordance with the Investment Company Act, a majority of the members of Blackhawk's board of directors are not interested persons as defined in the Act. The Investment Company Act generally does not restrict transactions between Blackhawk and its investee companies.

15

Finally, notwithstanding restrictions imposed under federal securities laws, it is anticipated that Blackhawk will acquire securities of investee companies pursuant to stock purchase agreements or other agreements that may further limit Blackhawk's ability to distribute, sell or transfer such securities. And as a practical matter, even if such transfers are legally or contractually permissible, there may be no market, or a very limited market, for such securities. Economic conditions may also make the price and terms of a sale or transfer transactions unattractive.

Other Securities Law Considerations

In addition to the above-described provisions of the Investment Company Act, there are a number of other provisions of the federal securities laws that affect Blackhawk's operations. For example, restrictions imposed by the federal securities laws, in addition to possible contractual provisions, may adversely affect the ability of Blackhawk to sell or otherwise to distribute or dispose of its portfolio securities.

Most if not all securities which Blackhawk acquires as venture capital investments will be "restricted securities" within the meaning of the Securities Act and will not be permitted to be resold without compliance with the Securities Act. Thus, Blackhawk will not be permitted to resell portfolio securities unless a registration statement has been declared effective by the SEC with respect to such securities or Blackhawk is able to rely on an available exemption from such registration requirements. In most cases Blackhawk will endeavor to obtain from its investee companies "registration rights," pursuant to which Blackhawk will be able to demand that an investee company register the securities owned by Blackhawk at the expense of the investee company. Even if the investee company bears this expense, however, the registration of any securities owned by Blackhawk is likely to be a time-consuming process, and Blackhawk always bears the risk, because of these delays, that it will be unable to resell such securities, or that it will not be able to obtain an attractive price for such securities.

16

At times Blackhawk will not register portfolio securities for sale but will seek to sell and sometimes seek an exemption from registration. The most likely exemption available to Blackhawk is section 4(1) of the Securities Act, which, in effect, exempts sales of securities by any person other than an issuer, an underwriter or dealer. This exemption will likely be available to permit a private sale of portfolio securities and in some cases a public sale, if the provisions of Rule 144 under the Securities Act, are complied with. Among other things, Rule 144 generally requires that securities be sold in "broker transactions," and imposes a six-month holding period prior to any resale of restricted securities by a non-affiliate.

Blackhawk may elect to distribute in-kind securities of investee companies to its stockholders. Prior to any such distribution, Blackhawk expects that it will need to file, or cause the issuers of such distributed securities, to file, a registration statement or, in the alternative, an information statement, which when declared effective by the SEC, will permit the distribution of such securities and also permit distributee stockholders of Blackhawk to sell such distributed securities.

Federal Income Tax Matters

For federal and state income tax purposes, Blackhawk is taxed at regular corporate rates on ordinary income and realized gain. It is not entitled to the special tax treatment available to more regulated investment companies, although Blackhawk plans to conduct its affairs, if possible, to minimize or eliminate federal and state income taxes. Distributions of cash or property by Blackhawk to its stockholders will be taxable as ordinary income only to the extent that Blackhawk has current or accumulated earnings and profits.

Regular "C" corporations are currently taxed at a 35% rate on long-term capital gains under the Internal Revenue Code of 1986, as amended. A corporation generally may offset capital loss only against capital gain. Generally, if Blackhawk realizes a net capital loss for any taxable year, it can carry back such net capital loss only against capital gain. Such a net capital loss for any taxable year can generally be carried back to each of the three preceding taxable years, and then any unused portion thereof may be carried over into the subsequent taxable years for a period of five years. The above only addresses capital loss carryovers, and not net operating losses. If Blackhawk elects regulated investment company (RIC) treatment, the capital loss carryover period is 8 years, not 5, and there is no carry back period. Alternative minimum tax rate for corporations is at 20%, but that can only result in an increase of tax, not a decrease.

17

Future Distributions

Blackhawk does not currently intend to pay cash dividends. Blackhawk's current dividend policy is to make in-kind distributions of its larger investment positions to its stockholders when Blackhawk's board of directors deems such distributions appropriate. Because Blackhawk does not intend to make cash distributions, stockholders would need to sell securities distributed in-kind, when and if distributed, in order to realize a return on their investment.

An in-kind distribution will be made only when, in the judgment of Blackhawk’s board of directors, it is in the best interest of Blackhawk's stockholders to do so. The board of directors will review, among other things, the investment quality and marketability of the securities considered for distribution; the impact of a distribution of the investee's securities on the investee's customers, joint venture associates, other investors, financial institutions and management; tax consequences and the market effects of an initial or broader distribution of such securities. Securities of Blackhawk's larger investment positions in more mature investee companies with established public markets are most likely to be considered for distribution. It is possible that Blackhawk may make an in-kind distribution of securities that are substantially liquid irrespective of the distributee's stockholder rights to sell such securities. Any such in-kind distribution would require stockholder approval only if the distribution represents substantially all of Blackhawk's assets. It is possible that Blackhawk may make an in-kind distribution of securities that have appreciated or depreciated from the time of purchase depending upon the particular distribution. Blackhawk has not established a policy as to the frequency or size of distributions and indeed there can be no assurance that any distributions will be made. As of the date of this Form 10-K, no investments or distributions have been made.

Managerial Assistance

Blackhawk believes that providing managerial assistance to its investees is critical to its business development activities. "Making available significant managerial assistance" as defined in the Investment Company Act, with respect to a business development company such as Blackhawk means (a) any arrangement whereby a business development company, through its directors, officers, employees or general partners, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations, or business objectives and policies of a portfolio company; or (b) the exercise by a business development company of a controlling influence over the management or policies of a portfolio company by the business development company acting individually or as a part of a group acting together which controls such portfolio company. Blackhawk is required by the Investment Company Act to make significant managerial assistance available at least with respect to investee companies that Blackhawk will treat as qualifying assets for purposes of the 70% test. The nature, timing and amount of managerial assistance provided by Blackhawk varies depending upon the particular requirements of each investee company.

18

Blackhawk may be involved with its investees in recruiting management, product planning, marketing and advertising and the development of financial plans, operating strategies and corporate goals. In this connection, Blackhawk may assist clients in developing and utilizing accounting procedures to record efficiently and accurately, transactions in books of account which will facilitate asset and cost control and the ready determination of results of operations. Blackhawk may also seek capital for its investees from other potential investors and occasionally subordinates its own investment to those of other investors. Where possible, Blackhawk may introduce its investees to potential suppliers, customers and joint venture partners and assists its investees in establishing relationships with commercial and investment bankers and other professionals, including management consultants, recruiters, legal counsel and independent accountants. Blackhawk also assists with joint ventures, acquisitions and mergers.

In connection with its managerial assistance, Blackhawk may be represented by one or more of its officers or directors who are members of the board of directors of an investee. As an investment matures and the investee develops management depth and experience, Blackhawk's role will become progressively less active. However, when Blackhawk owns or, on a pro forma basis, could acquire a substantial proportion of a more mature investee company's equity, Blackhawk may remain active in, and may frequently be involved in, the planning of major transactions by the investee. Blackhawk's goal is to assist each investee company in establishing its own independent and effective board of directors and management.

Competition

Blackhawk is subject to substantial competition from business development companies, venture capital firms, new product development companies, marketing companies and diversified manufacturers, most of whom are larger than Blackhawk and have significantly larger net worth, financial and personnel resources than does Blackhawk. In addition, Blackhawk competes with companies and individuals engaged in the business of providing management consulting services.

Employees

As of December 31, Blackhawk had two employees.

Item 1B. Unresolved Staff Comments

This Section is not applicable.

Item 2. Properties

Blackhawk subleases office space at 14 Wall Street, 11^th Floor, New York, New York from Concorde, an affiliate of Blackhawk, at no cost to Blackhawk. The lease is on a month-to-month basis. Concorde intends to set the lease cost to market rates once Blackhawk has raised sufficient net proceeds in its Regulation E offerings.

19

Item 3. Legal Proceedings

Blackhawk is not a party in any legal proceedings. Blackhawk knows of no material legal proceedings pending or threatened, or judgments entered against any of its directors or officers in their capacity as such.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of 2007, the stockholders of Blackhawk, voting by written consent, voted to extend the investment advisory agreement between Blackhawk and Barak Asset Management, LLC one year to October 31, 2008 ("Extension"). Stockholders owning 55.98% of the shares of common stock signed written consents dated November 20, 2007 approving the Extension.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a)Market Information

The common stock of Blackhawk is not listed on any principal United States market or exchange. It trades on the OTC Bulletin Board under the symbol "BHCG.OB." The stock was added to the OTC Bulletin Board effective August 23, 2006. The stock first started trading on the OTC Bulletin Board on January 24, 2007 as reported by BigCharts.com. However, the common stock trades infrequently and sporadically and thus there is not an established public trading market for the common stock. Listed below is the range of high and low bid quotations as reported by OTC Bulletin Board, Historical Research Reports (dated March 26, 2008), for four quarters in 2007 and the first quarter of 2008 (to February 29, 2008).

20

	BID
	HIGH		LOW
2007
First Quarter	$	.50	$	.08
Second Quarter	$	.77	$	.10
Third Quarter	$	.40	$	.10
Fourth Quarter	$	.20	$	.12
2008
First Quarter (through February 29, 2008)	$	.36	$	.12

Such over-the counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Holders

As of March 26, 2008, the approximate numbers of holders of the Company's common stock is 92.

Dividends

Blackhawk has paid no cash or other dividends on its common stock and for the foreseeable future has no plans to pay cash or other dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

Blackhawk does not have any equity compensation plans, or individual compensation arrangements with any employee, officer or director.

Sale of Unregistered Securities

Blackhawk reported the sale of its unregistered securities during 2007 on Current Reports on Form 8-K.

(b)Not applicable.

(c)Not applicable.

21

Item 6. Selected Financial Data

The following selected financial and other data for the years ended December 31, 2007, December 31, 2006, December 31, 2005 and for the period from inception (April 22, 2004) to December 31, 2004 are derived from our financial statements which have been audited for the year December 31, 2005 and from inception (April 22, 2004) to December 31, 2004, by Paritz & Company, P.A. an independent registered public accounting firm whose report for 2005 is included with this Annual Report, and for the years ended December 31, 2007 and December 31, 2006, by Eisner LLP, an independent registered public accounting firm whose report thereon is included with this Annual Report. The data should be read in conjunction with our financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are included elsewhere in this Annual Report.

22

BLACKHAWK CAPITAL GROUP BDC, INC.

SELECTED FINANCIAL DATA

Years Ended December 31, 2007, December 31, 2006, December 31, 2005 and

Period from Inception (April 22, 2004) through December 31, 2004

	Year Ended December 31, 2007			Year Ended December 31, 2006			Year Ended December 31, 2005			For the Period Inception (April 22, 2004) Through December 31, 2004
Total Investment Income	$	3,263		$	460		$	1,139		$	15
Total Expenses		(407,179	)		(387,707	)		(46,074	)		(12,530	)
Net Investment (Loss)		(403,916	)		(387,247	)		(44,935	)		(12,515	)
Net Decrease in Assets Resulting from Operations		(398,703	)		(387,247	)		(44,935	)		(12,515	)
Per Share Data:
Loss Per Common Share, Basic and Diluted:*		(0.01290	)		(0.01371	)		(0.00220	)		(0.00179	)
Cash Dividend Declared					0			0			0
Total Assets	$	261,023		$	9,637		$	83,399		$	101,235
Total Liabilities		298,258			306,061			61,423			96,953
Total Net Assets (Liabilities)		(37,235	)		(296,424	)		21,976			4,282
Other Data:
Total Return Per Share Based on Net Asset Value**		(135	%)		(1,474	%)		(440	%)		(17,900	%)

* Calculated based on weighted average shares outstanding.

** Total returns for periods of less than one year are not annualized.

23

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Company's financial statements and the notes thereto.

Overview

Blackhawk is a business development company formed to engage in the business of investing primarily in small to mid-sized companies. The Company also intends to provide managerial assistance to developing companies.

Accounting Policies

Basis of Presentation

The financial statements have been prepared in accordance with the presentation requirements of the AICPA Auditing and Accounting Guide for Investment Companies.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of actual and contingent assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income or loss and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation of investments.

Portfolio and Investment Activity

Blackhawk has not made any portfolio investment since its inception.

Results of Operations

Sales Revenues

From January 1, 2005 through December 31, 2005, we had $0 revenues. We had a net loss of $44,935 for that same period.

From January 1, 2006 through December 31, 2006, we had $0 revenues. We had a net loss of $387,247 for that same period.

From January 1, 2007 through December 31, 2007, we had $0 revenues. We had a net loss of $398,703 for that same period.

24

General and Administrative Expenses

From January 1, 2005 through December 31, 2005, general and administrative expenses were $46,074.

From January 1, 2006 through December 31, 2006, general and administrative expenses were $ 387,707.

From January 1, 2007 through December 31, 2007, general and administrative expenses were $407,179.

Other Income (Expenses)

For the period January 1, 2005 through December 31, 2005, the Company achieved other income of $1,139.

For the period January 1, 2006 through December 31, 2006, the Company achieved other income of $460.

For the period January 1, 2007 through December 31, 2007, the Company achieved other income of $3,263.

Liquidity and Capital Resources

From inception (April 22, 2004) through December 31, 2007, Blackhawk funded its cash operating requirements through the sale of its common stock and loans from an affiliated company, Concorde.

In 2004, Blackhawk received $65 from the founders and $16,647, net of costs of $4,272, from the sale of stock under its Regulation E offering.

In 2005, Blackhawk received $1,282, net of costs of $87,635, from the sale of stock under its Regulation E offering.

During 2004, 2005 and 2006, Blackhawk borrowed $91,908, $13,281 and $133,005 respectively, from Concorde to fund the formation of Blackhawk, offering costs for the offering plan and operating expenses. Of the amount borrowed in 2006, $100,000 was evidenced by a demand convertible note bearing interest at 8.25% per annum convertible after November 1, 2006 into common stock of Blackhawk at a price of $1.00 per share or the price per share of Blackhawk's next Regulation E offering. The balance of borrowings were non-interest bearing and are due on demand. The borrowings were approved unanimously by the Board of Directors of Blackhawk as fair and in the best interest of Blackhawk.

At December 31, 2007 and 2006 outstanding non-interest bearing borrowings due to Concorde amounted to $0 and $8,000, respectively.

25

Pursuant to the Company's second Regulation E Offering, as of June 4, 2007, the Company sold an aggregate of 502,891 shares of common stock, $.00001 par value per share ("Common Stock"), at a purchase price of $1.00 per share, to four (4) accredited investors for an aggregate amount of $502,891. The sale consisted of the following: (1) 370,000 shares sold to three (3) accredited investors for the purchase price of $1.00 per share, or an aggregate of $370,000; and (ii) the issuance of 132,891 to Concorde, an affiliate and the largest stockholder of the Company, in exchange for (x) $107,391 in a convertible note (consisting of $100,000 in principal and $7,391 in accrued and unpaid interest) owed by the Company to Concorde and issued on August 1, 2006 and (y) $25,500 in a convertible note owed by the Company to Concorde and issued on May 29, 2007. The conversion price for both of these notes was $1.00 per share of Common Stock.

In June and July 2007, the Company sold an additional 150,000 and 5,000, respectively, shares of its Common Stock for an aggregate of $155,000 in cash in the second Regulation E offering. The Offering Circular was amended on August 30, 2007 to keep the offering open until October 15, 2007. On October 16, 2007, the Company extended the offering until November 15, 2007. The net cash proceeds from the second Regulation E offering have been $525,001 through October 31, 2007. No sales of shares of Common Stock in the second Regulation E offering were made by the Company from August-December 2007.

On June 21, 2006, Blackhawk entered into an Exchange Agreement ("Exchange Agreement") with Concorde, the largest stockholder and affiliate of Blackhawk, pursuant to which a promissory note (the "Note") issued by Blackhawk on May 3, 2006 to Concorde in the principal amount of $68,847 was exchanged for 6,884,700 shares ("Shares") of the common stock, par value $.00001 per share ("Common Stock") of Blackhawk. The Shares are "restricted securities" as defined in Rule 144 of the Securities Act. Pursuant to the Exchange Agreement, Concorde acquired 6,884,700 shares ("Shares") of the Common Stock of Blackhawk in exchange for the Note. The stock has issued in the exchange at $.01 per share. This exchange took place pursuant to Section 3(a)(9) of the Securities Act as an exchange by an issuer with an existing security holder where no commission or other remuneration was paid or given to Concorde or any other party for soliciting such exchange. This transaction was approved by all of the directors of Blackhawk pursuant to action by unanimous written consent as fair and in the best interests of Blackhawk and its stockholders.

Concorde converted a portion of amount due from Blackhawk totalling $61,432 into 6,143,200 shares of Common Stock at the offering price of $.01 per share in 2005.

On April 23, 2004, Blackhawk issued 8,500,000 shares of Series A preferred stock and 11,000,000 shares of common stock to its founders at $.00001 per share for a total of $195. Between September 27, 2004 and December 31, 2005, Blackhawk sold 17,126,781 shares of its common stock at $.01 per share for a total of $171,268, which includes 6,143,200 shares issued to Concorde paid for by reducing a portion of amounts owing to Concorde of $61,432. These shares were sold pursuant to an offering under Regulation E under the Securities Act. On November 9, 2005, the board of directors rescinded the issuance of shares of preferred stock to Concorde. Blackhawk refunded to Concorde the $85 that Concorde paid for the shares. Concorde waived any rights it may have against Blackhawk in connection with the issuance and stated that it will not assert any claim against Blackhawk. On November 12, 2005, certain investors returned 4,500,000 shares of common stock and were refunded $45 on March 22, 2006. Each investor waived any rights he or she may have against Blackhawk in connection with the issuance and stated that he or she will not assert any claim against Blackhawk. On November 29, 2005, Blackhawk amended its Certificate of Incorporation in the State of Delaware to eliminate the right to issue preferred shares. As of November 29, 2005, all outstanding shares are common shares.

26

Blackhawk has a net loss for the year ended December 31, 2007, liabilities in excess of assets at December 31, 2007 and has not yet invested in eligible companies. Blackhawk intends to raise capital through another proposed offering and access the equity markets to raise cash to fund investments. Since inception, Blackhawk's operations have been principally funded by Concorde. Blackhawk is presently dependent on Concorde to provide capital and liquidity needs. Concorde has agreed to provide sufficient capital to operate through December 31, 2008.

Subsequent Events

Pursuant to the Company's third Regulation E offering which commenced on November 30, 2007, as of March 24, 2008, the Company sold an aggregate of 698,112 shares of common stock to five purchasers at a purchase price of $1.00 per share for an aggregate of $698,112. Selling commissions of $69,311 were paid to Richard J. Kelly, prior selling agent for the Company, out of the $698,112, netting $628,801 to the Company. The Offering is open until November 28, 2008. Sales of additional shares in the Offering was suspended on March 24, 2008 after the Company received a comment letter from the SEC on its Form 1-E/A for the Offering on file with the SEC; the Company will resume the Offering after it files a response letter and amended Form 1-E/A with the SEC. The Company received another $100,000 from an investor for the purchase of shares which the Company is holding in escrow; the Company plans on closing on this money out of escrow when it complies with the SEC matters described above.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates and the valuation of investments.

Interest Rate Risk

This Section is not applicable. Blackhawk does not have any interest-bearing liabilities at this time.

27

Portfolio Valuation

Blackhawk intends to use the U.S. Private Equity Valuation Guidelines ("Guidelines") to provide its managers with a framework for valuing investments in portfolio companies at fair value and to provide greater consistency within the private equity industry with regard to valuation. These Guidelines are intended to assist managers in their estimation of fair value and are intended to be consistent with GAAP. Blackhawk has made no investments to date.

Item 8. Financial Statements and Supplementary Data

The response to this is enclosed in a separate section of this report, see page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

There have not been any significant changes in Blackhawk's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, Blackhawk's internal control over financial reporting.

Item 9A(T). Controls and Procedures

Management Report on Internal Control Over Financial Reporting

The management of Blackhawk is responsible for establishing and maintaining adequate internal control over financial reporting. Blackhawk's internal control system is a process designed to provide reasonable assurance to management and the board of directors regarding the preparation and fair presentation of published financial statements.

Blackhawk's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors of Blackhawk; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Blackhawk's assets that could have a material effect on Blackhawk financial statements.

28

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of Blackhawk's internal control over financial reporting as of December 31, 2007. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on our assessment management believes that, as of December 31, 2007, Blackhawk's internal control over financial reporting is ineffective for two reasons: (1) Blackhawk has a material weakness in its internal controls due to a lack of segregation of duties, and (2) Blackhawk lacks the resources to hire additional personnel to perform this function until it raises additional capital. 

This annual report does not include an attestation report of Blackhawk's independent registered public accounting firm, Eisner LLP, regarding internal control over financial reporting. Management's report was not subject to attestation by Blackhawk's independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

There have been no significant changes in our internal control or in other factors that could significantly affect those controls subsequent to our evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Item 9B. Other Information

This Section is not applicable.

29

PART III

Item 10. Directors and Executive Officers of the Registrant

The following table sets forth information concerning our directors and executive officers:

Name and Address	Age	Position Held with Company
Dr. Craig A. Zabala(1)	56	President, Chief Executive
P.O. Box 360		Officer, Acting Chief
Greene Street Station		Financial Officer, Acting
New York, New York 10012		Chief Compliance Officer, Secretary, Chairman
Robert M. Fujii(2)(3)	58	Vice President
1624 Acton Street
Berkeley, California 94702
Robert J. Francis(3)	37	Director
5416 South 161st Street Omaha, NE 68135
Janet Buxman Kurihara(3)	49	Director
11007 North Cottontail Lane
Parker, Colorado 80138
Randy Tejral(3)	52	Director
6529 Pine Ridge Road
Elkhorn, Nebraska 68022
Mick Woodwards(1)(3)	49	Director
4849 Woodruff Avenue
Lakewood, California 90713

(1) Control person as defined in Section 2(a)(1) of the Investment Company Act.

(2) Resigned as Chief Financial Officer on March 17, 2006; assumed the position of Vice President on March 24, 2006.

(3) Minority shareholder of The Concorde Group, Inc.

The following is a brief summary of the background of each executive officer and director:

Dr. Craig A. Zabala is the Founder, Chairman, President, and Chief Executive Officer of The Concorde Group, Inc., a financial services holding company, since February 1998; Chairman, President, and Chief Executive Officer of Concorde Europe Inc. founded September 12, 2002; Chairman, President, and Chief Executive Officer of Concorde Europe, Ltd., a company formed under the Laws of Wales and England, founded April 18, 2001; Founder, Chairman, President and Chief Executive Officer of DBL Holdings, LLC (dba Drexel Burnham Lambert) founded May 9, 2000; and Founder, Chairman, President and Chief Executive Officer of Blackhawk Capital Group BDC, Inc. (OTCBB: BHCG) founded April 22, 2004.

30

From 1998 to 2002, he was Scholar in Residence and Visiting Lecturer at the Zicklin School of Business and the Department of Finance, Graduate School, Baruch College, City University of New York, where he taught an MBA course on Entrepreneurial Strategy and a course on Special Topics in Investment Banking for the M.S. degree in Finance. Additionally, Dr. Zabala was on the editorial board of Global Focus, an academic journal on international business, economics, and social policy at the Zicklin School of Business.

From 2002 to 2003, he was a Registered Representative and an Investment Advisor with Brean Murray & Co., Inc. in New York City. From 1999 to 2001, Dr. Zabala was Senior Vice President of Merchant Banking and Investment Advisor with Trautman, Wasserman & Company, a merchant bank and broker dealer in New York City under a joint venture with Concorde. Prior to this, from 1997 to 1998, Dr. Zabala was Vice President and Investment Advisor, Private Client Group, Merrill Lynch & Co., New York City. From 1996 to 1997, Dr. Zabala was an investment banker at Baird Patrick & Company, Inc., New York City. Prior to this, from 1994 to 1995, Dr. Zabala was an Acting Chief Financial Officer and Investment Banker at Gilman Securities, Inc. in New York City. From 1992 through April 1996, Dr. Zabala was Vice Chairman of the Board of Directors of Golf Reservations of America, Inc., Sherman Oaks, California.

From 1991 to 1993, Dr. Zabala was a Visiting Scholar and Visiting Lecturer, teaching the following courses, Entrepreneurship, Venture Capital and Applied Finance, at the Walter A. Hass School of Business, University of California at Berkeley. From 1990 to 1991, he was a Visiting Fellow at the School of Industrial and Business Studies, University of Warwick, Coventry, England. From 1989 to 1990, he was Vice President of Corporate Finance at D.H. Blair and Company. From 1986 to 1990, he served as Assistant Professor of Management at the School of Management, Rensselaer Polytechnic Institute, in Troy, New York.

Dr. Zabala was a Doctoral Fellow conferred by the U.S. Senate (1979 to 1981) and an Economist at the U.S. Department of Labor (1979 to 1982) and an Economist at the U.S. Department of Commerce (1982 to 1986) in Washington, D.C. During part of his career in Washington, D.C., he was also employed full-time as an autoworker from 1976 to 1983 at the General Motors Assembly Division, General Motors Corporation, Van Nuys, California, where he worked and also carried out research on production relations for his doctoral research on the U.S. automobile industry.

Dr. Zabala received his A.B., magna cum laude, Pi Gamma Mu and Phi Beta Kappa, in 1974, and Chancellor Fellow conferred by the Graduate Division (1974 to 1983) leading to the M.A. in 1977 and Ph.D. in 1983 from the University of California, Los Angeles, and was also a Postdoctoral Scholar in 1986 at the University of California, Los Angeles. He also pursued graduate studies in production theory and econometrics in the Department of Economics, The George Washington University, Washington, D.C., from 1980 to 1984. He is currently pursuing a MSc degree in finance with a focus on globalization at the Center for Financial and Management Studies, School of Oriental and African Studies, University of London, United Kingdom since 2003.

31

Robert M. Fujii is a Vice President at Blackhawk. He also holds positions as Chief Financial Officer of The Concorde Group, Inc. and Acting Chief Financial Officer of Concorde Commercial Finance, LLC. Mr. Fujii was previously a financial consultant for Craig A. Zabala & Company, a business consulting company in New York City. From 1992 to 1993, Mr. Fujii worked as a financial analyst for Nichirei Foods America sales office in San Francisco. From 1979 to 1992, Mr. Fujii worked as the Supervisor of Budgets and General Accounting for Varian Associates, Inc., a manufacturer of scientific measuring instruments, located in Walnut Creek, California. He received his BA in Biochemistry in 1971 from the University of California at Berkeley and an MBA in International Business and Finance from the Haas School of Business, University of California at Berkeley in 1993.

Robert J. Francis is the founder and Vice President of Omaha Telecom, LLC, a telecommunications construction and service company in Omaha, Nebraska. Mr. Francis has been a director of Blackhawk since March 2005.

Janet Buxman Kurihara has been a director of Blackhawk since August 2004. Ms. Kurihara was regional director at Telenisus Corp., a network security and data storage company from 2000-2001. From January 2001 to October 2001, she was regional director at Riptechi Inc., a network security company. From October 2001 to March 2003, she owned Definitive Market Consultants, a consulting company. Since March 2003, Ms. Kurihara has been a senior manager of new product development and product strategy at Qwest.

Randy Tejral is retired and is a private investor in residential real estate. Mr. Tejral was the founder and President of Tejral Masonry, Inc., a masonry construction firm in Omaha, Nebraska. Mr. Tejral has been a director of Blackhawk since March 2005.

Mick Woodwards has been a director of Blackhawk since August 2004. Since November 1993, Mr. Woodwards has been owner of Lakewood Rent-All, a party rental firm in Lakewood, California.

Except as indicated above, none of our directors holds any directorships in companies with a class of securities registered pursuant to Section 12 of the Securities Exchange Act or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act.

There are no family relationships among any of our directors or executive officers.

32

Board Composition

Blackhawk's Board of Directors consists of five directors. At each annual meeting of its stockholders, all of its directors are elected to serve from the time of election and qualification until the next annual meeting following election. In addition, Blackhawk's bylaws provide that the maximum authorized number of directors may be changed by resolution of the stockholders or by resolution of the board of directors.

Meetings and Committees of the Board of Directors

Our Board of Directors conducts its business through meetings of the Board and by acting pursuant to unanimous written consent without a meeting. From January 1, 2007 to December 31, 2007, the Board of Directors held four (4) meetings in person or by teleconference. During 2007, the Board of Directors also acted by unanimous written consent seven (7) times.

Blackhawk does not have any board committees, including an audit committee.

Blackhawk does not have a nominating committee or committee performing similar functions. Blackhawk's Board of Directors believes that it is appropriate for Blackhawk not to have such a committee because of the costs associated with such process and that Blackhawk has not yet raised sufficient capital or made its first portfolio investment. All directors participate in the consideration of director nominees.

Blackhawk does not have any procedures by which security holders may recommend nominees to its board of directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Based upon a review of filings with the Securities and Exchange Commission, we believe that all our directors, executive officers and 10% beneficial owners complied during fiscal 2007 with the reporting requirements of Section 16(a) of the Exchange Act.

Limitations of Liability and Indemnification of Directors and Officers

Our bylaws limit the liability of directors and officers to the maximum extent permitted by Delaware law. We will indemnify any person who was or is a party, or is threatened to be made a party to, an action, suit or proceeding, whether civil, criminal, administrative or investigative, if that person is or was a director, officer, employee or agent of ours or serves or served any other enterprise at our request.

We have been advised that it is the position of the Commission that insofar as the indemnification provisions referenced above may be invoked to disclaim liability for damages arising under the Securities Act, these provisions are against public policy as expressed in the Securities Act and are, therefore, unenforceable.

33

Code of Ethics

Blackhawk has adopted a Code of Ethics under Rule 17j-1 of the Investment Company Act that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. For purposes of this item, the term code of ethics means written standards that are reasonably designed to deter wrongdoing and to promote:

· honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

· full, fair, accurate, timely, and understandable disclosure in reports and documents that Blackhawk files with, or submits to, the Commission and in other public communications made by the issuer;

· compliance with applicable governmental laws, rules and regulations;

· the prompt internal reporting of violations of the code to the board of directors or another appropriate person or persons; and

· accountability for adherence to the code.

The Board of Directors voted by unanimous written consent on August 17, 2006 to amend and restate the Code of Ethics to include additional compliance provisions applicable to Blackhawk's directors, officers and employees recommended by a consulting firm specializing in SEC compliance matters for business development companies registered under the Investment Company Act of 1940, as amended, such as Blackhawk. The Company does not have an audit committee.

Blackhawk hereby undertakes to provide to any person without charge, upon request, a copy of such code of ethics. Such request may be made in writing to the Chairman of the Board of Directors at Blackhawk Capital Group BDC, Inc., 14 Wall Street, 11^th Floor, New York, New York 10005.

Item 11. Executive Compensation

Since its inception (April 2004), Blackhawk has not paid any compensation to its executive officers or directors, except to Brad Silver, a former officer and director of Blackhawk who resigned on December 8, 2005, was paid $12,000 in consulting fees to assist Blackhawk in extraordinary administration duties during fiscal year 2005. Blackhawk does not presently have and never has had any stock option plans, equity incentive or award plans, pension or retirement plans, non-qualified deferred compensation plans, director compensation plans, or any other similar plan.

Blackhawk's Board of Directors does not have a standing compensation committee or committee performing similar functions. It is the view of the Board of Directors that it is inappropriate for Blackhawk to have such a committee because Blackhawk to date has not raised sufficient capital, has not made its first portfolio investment and except as noted in the previous paragraph, has not paid any compensation to its officers and directors.

34

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth each person known by Blackhawk to be the beneficial owner of five percent or more of the common stock of Blackhawk, all directors and executive officers individually and all directors and executive officers of Blackhawk as a group. Except as noted, each person has sole voting and investment power with respect to the shares shown.

Name and Address of Beneficial Owner	Amount of Beneficial Ownership			Percentage of Class
Dr. Craig A. Zabala		1,832,500	(1)(2)		5.75	%
P.O. Box 360
Greene Street Station
New York, New York 10012
The Concorde Group, Inc.		10,317,681	(3)		32.38	%
14 Wall Street, 11th Floor
New York, New York 10005
Robert M. Fujii(4)		500,000			1.57	%
1624 Acton Street
Berkeley, California 94702
Robert J. Francis(4) 5416 South 161st Street Omaha, Nebraska 68135		0			0	%
Janet Buxman Kurihara(4)		0			0	%
11007 North Cottontail Lane
Parker, Colorado 80138
Randy Tejral(4) 6529 Pine Ridge Road Elkhorn, Nebraska 68022		0			0	%
Mick Woodwards(4)		1,320,269			4.14	%
4849 Woodruff Avenue Lakewood, California 90713
Doreen McCarthy(5) 426 Broome Street New York, NY 10013		2,245,000			7.04	%
All Executive Officers and		3,652,769			11.46	%
Directors as a Group (6 Persons)

(1) Excludes 10,317,681shares of common stock and held by The Concorde Group, Inc. of which Dr. Zabala is the control person. Includes 100,000 shares held in Uniform Transfer to Minors accounts for Dr. Zabala's two nieces.

(2) Dr. Craig A. Zabala may be deemed to be a control person of Blackhawk as defined in Section 2(a)(1) of the Investment Company Act of 1940, as amended.

(3) Dr. Craig A. Zabala is an officer, director and controlling stockholder of The Concorde Group, Inc.

(4) The individual listed is a less than one percent (1%) shareholder of The Concorde Group, Inc.

(5) An aggregate of 165,000 shares are held in UTMA accounts for Ms. McCarthy's nieces, nephews and close family friends.

Item 13. Certain Relationships and Related Transactions

Concorde owns 10,317,681 shares of Blackhawk Common Stock, representing 33% of the outstanding shares of Common Stock. Craig A. Zabala, Chairman and President of Concorde, is also Chairman and President of Blackhawk, and controls Concorde through his 73% stock ownership of Concorde. He also owns or controls 1,832,500 shares of Blackhawk Common Stock, representing 5.86% of the outstanding shares of Blackhawk Common Stock. Concorde and Zabala may be deemed to control Blackhawk.

During 2004, 2005 and 2006, the Company borrowed $91,908, $13,281 and $133,005, respectively, from Concorde to fund the formation of Blackhawk, offering costs for the offering plan and operating expenses. Of the amount borrowed in 2006, $100,000 was evidenced by a demand convertible note bearing interest at 8.25% per annum convertible after November 1, 2006 into common stock of the company at a price of $1.00 per share. The balance of borrowings were non-interest bearing and are due on demand. The borrowings were approved unanimously by the board of directors of Blackhawk as fair and in the best interest of Blackhawk.

35

In 2007, 2006 and 2005, the Board of Directors unanimously voted to allow Concorde to convert amounts due to Concorde of $68,847 (evidenced by a non-interest bearing promissory note due on demand) and $61,432, respectively into 6,884,700 and 6,143,200 shares respectively of common stock at $.01 per share, which was the offering price set forth in Blackhawk’s Form 1-E and its Offering Circular for its first Regulation E offering, which the Board of Directors approved unanimously and determined was in the fair and best interest of Blackhawk.

At December 31, 2007 and 2006, outstanding non-interest bearing borrowings due to Concorde amount to $0 and $8,000, respectively.

Blackhawk paid a consulting fee of $12,000 to a former vice president and stockholder of the Company during the year ended December 31, 2005.

The Company shares office space and other administrative functions with Concorde at no charge to the Company. The Company expects to pay fair market value for such services on a prospective basis following the close of its next offering. At December 31, 2006, the Company owed Concorde $100,000 which was evidenced by a demand convertible note bearing interest at 8.25% per annum convertible after November 1, 2006 into common stock of the Company at a price of $1.00 per share, or the price per share of the Company’s Regulation E Offering. On June 4, 2007 Concorde converted the note (including accrued interest of $7,391) into 107,391 shares of common stock.

On May 29, 2007, Blackhawk issued a convertible note in the principal amount of $25,500 ("Note") to Concorde. The Note evidenced a loan from Concorde to the Company for advances of $17,500 during the nine months ended September 30, 2007 together with $8,000 of advances made to the Company prior to January 1, 2007. The advances were used to fund a portion of expenses incurred by the Company consisting of legal fees and expenses, accounting fees and expenses, general and administrative expenses. The Note is repayable upon demand and does not bear interest. The Note is convertible into shares of common stock of the Company at a conversion rate of one share of common stock per $1.00 of principal amount of Note converted, the price per share in the Company's second Regulation E offering. The transaction was approved by unanimous written consent by the Board of Directors of the Company as being fair and in the best interests of the Company. On June 4, 2007, pursuant to the terms of the Note, Concorde converted the $25,500 principal amount of the Note into 25,500 shares of Common Stock at $1.00 of principal amount of Note converted, the price per share in the Company's second Regulation E offering.

Review, Approval or Ratification of Transactions with Related Persons

Blackhawk has a Code of Ethics which governs, in part, review, approval and ratification of transactions between Blackhawk and an affiliated party. Blackhawk also complies with the provisions of the Investment Company Act applicable to transactions by a business development company and an affiliated or related party. All affiliated transactions must be approved by all of the independent directors of Blackhawk and be fair and reasonable to Blackhawk and its stockholders.

36

Director Independence

The Board of Directors has determined that all of the directors except Craig A. Zabala and Mick Woodwards are "independent" under NASDAQ Corporate Governance Listing Standards, as well as in the assessment of the Board of Directors. Blackhawk does not have any audit, compensation, nominating or governance committee of the Board of Directors. The Board of Directors based this determination on a review of the responses of the directors and executive officers to oral questions regarding employment and compensation history, affiliations and family and other relationships and on discussions with directors.

Item 14. Principal Accountant Fees and Services

1. AUDIT FEES

The aggregate fees billed by Eisner LLP for professional services rendered for the audit of our financial statements for fiscal year 2007 and 2006 were $61,219 and 14,223, respectively.

The aggregate fees billed by Paritz & Company, P.A. for professional services rendered for the audit of our financial statements for fiscal year 2005 were $3,915.

2. AUDIT-RELATED FEES

The aggregate fees billed during the period of December 31, 2007 for assurance and related services by Eisner LLP that are reasonably related to the performance of the audit or review of Blackhawk's financial statements was $0.

The aggregate fees billed during the year ended December 31, 2005 for assurance and related services by Paritz & Company, P.A. that are reasonably related to the performance of the audit or review of Blackhawk's financial statements was $0.

3. TAX FEES

The aggregate fees billed for the period ended December 31, 2007 for professional services rendered by Eisner LLP for tax compliance, tax advice and tax planning was $0.

The aggregate fees billed for the year ended December 31, 2005 for professional services rendered by Paritz & Company, P.A. for tax compliance, tax advice, and tax planning was $0.

37

4. ALL OTHER FEES

The aggregate fees billed for the year ended December 31, 2007 by Eisner LLP other than services reported above was $0.

The aggregate fees billed for the fiscal year ended December 31, 2005 for products and services provided by Paritz & Company, P.A., other than the services reported above was $0.

5. PRE-APPROVAL POLICIES AND PROCEDURES

Before the accountant is engaged by Blackhawk to render audit or non-audit services, the engagement is nominated and approved by Blackhawk's board of directors.

Item 15. Exhibits and Financial Statement Schedules

(a) Exhibits

31.1	Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002
31.2	Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002
32.1	Certification by Chief Executive Officer Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
32.2	Certification by Chief Financial Officer Pursuant to Section 906 of the Sarbanes Oxley Act of 2002

38

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant had duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLACKHAWK CAPITAL GROUP BDC, INC. (Registrant)
BY:	/s/ Craig A. Zabala
	Craig A. Zabala Chairman, President and Chief Executive Officer Dated: March 28, 2008

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Craig A. Zabala	/s/ Robert M. Fujii
Craig A. Zabala	Robert M. Fujii
Chairman, President and Chief Executive Officer	Vice President
Dated: March 28, 2008	Dated: March 28, 2008
/s/ Craig A. Zabala	/s/ Robert J. Francis
Craig A. Zabala	Robert J. Francis
Acting Chief Financial Officer Principal Accounting Officer	Director
Dated: March 28, 2008	Dated: March 28, 2008
/s/ Janet Buxman Kurihara	/s/ Randy Tejral
Janet Buxman Kurihara	Randy Tejral
Director	Director
Dated: March 28, 2008	Dated: March 28, 2008
/s/ Mick Woodwards
Mick Woodwards
Director
Dated: March 28, 2008

39

BLACKHAWK CAPITAL GROUP BDC INC.

INDEX TO FINANCIAL STATEMENTS

REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNT FIRMS	F-1 & F-2
STATEMENTS OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2007 AND 2006	F-3
SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2007	F-4
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005	F-5
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005	F-6
STATEMENTS OF STOCKHOLDERS’ EQUITY (CAPITAL DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2007 2006 AND 2005	F-7
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005	F-8
NOTES TO FINANCIAL STATEMENTS	F-9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors

Blackhawk Capital Group BDC, Inc.

We have audited the accompanying statement of assets and liabilities of Blackhawk Capital Group BDC, Inc. (the “Company”) as of December 31, 2007 and 2006, including the schedule of investments as of December 31, 2007 and the related statements of operations, changes in net assets, capital deficit, cash flows and the financial highlights for each of the years in the two year period ended December 2007. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principle used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Blackhawk Capital Group BDC, Inc. as of December 31, 2007 and 2006, the results of its operations, the changes in its net assets, its cash flows and financial highlights for each of the years in the two year period ended December 2007 in conformity with accounting principles generally accepted in the United States of America.

/s/ Eisner LLP

New York, New York

March 26, 2008

F-1

Paritz & Company, P.A.	15 Warren Street, Suite 25 Hackensack, New Jersey 07601 (201)342-7753 Fax: (201) 342-7598 E-Mail: paritz @paritz.com
Certified Public Accountants

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Blackhawk Capital Group BDC Inc.

New York, New York

We have audited the accompanying statements of operations, changes in net assets, stockholders’ equity and cash flows for the year ended December 31, 2005 and the financial highlights for the year ended December 31, 2005 and for the period from inception (April 22, 2004) to December 31, 2004. These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, Blackhawk Capital Group BDC Inc.’s results of operations , its cash flows changes in stockholders’ equity and the changes in its net assets for the year ended December 31, 2005 and its financial highlights for the year ended December 31, 2005 and for the period from inception (April 22, 2004) to December 31, 2004 in conformity with accounting principles generally accepted in the United States of America.

Paritz & Company, P.A.

Hackensack, New Jersey

March 27, 2006

F-2

BLACKHAWK CAPITAL GROUP BDC INC.

STATEMENTS OF ASSETS AND LIABILITIES
	December 31,
	2007			2006
MONEY MARKET
ASSETS:
Investment at fair value (cost $242,815)	$	248,028		$	-
Cash		4,450			637
Prepaid insurance		8,545			9,000
TOTAL ASSETS		261,023			9,637
LIABILITIES
Convertible note payable to affiliated company, including interest of $4,125	$	-		$	104,125
Due to affiliated company		-			8,000
Accrued expenses		298,258			193,936
TOTAL LIABILITIES		298,258			306,061
NET ASSETS (LIABILITIES)
Common stock, par value $.00001 per share
1,000,000,000 shares authorized,
31,169,372 and 30,511,481 shares issued
and outstanding in 2007 and 2006, respectively		312			305
Additional paid-in capital		805,853			147,968
Accumulated net investment loss		(848,613	)		(444,697	)
Net unrealized gain on investment		5,213			-
TOTAL NET (LIABILITIES)		(37,235	)		(296,424	)
TOTAL LIABILITIES AND NET (LIABILITIES)		261,023		$	9,637
NET (LIABILITIES) PER COMMON SHARE	$	(.00119	)	$	(.00972	)

See notes to financial statements

F-3

BLACKHAWK CAPITAL GROUP BDC INC.

SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
COMPANY	INVESTMENT		INITIAL ACQUISITION DATE		PRINCIPAL AMOUNT		COST		FAIR VALUE		% OF TOTAL ASSETS
General Electric Capital Company 0% Due 2/29/08		Commercial paper		6/7/07	$	168,000	$	161,917	$	168,000		64.4	%
Federal Home Line Bank 5% due 1/28/08		Notes		11/2/07	$	20,000		20,293		20,012		7.7	%
Caterpillar Financial 5.75% due 3/15/08		Notes		11/2/07	$	35,000		35,323		35,033		13.4	%
Lehman Brother Holdings 4% Due 1/22/08		Notes		11/2/07	$	25,000		25,282		24,983		9.6	%
								242,815		248,028		95.0%

See notes to financial statements

F-4

BLACKHAWK CAPITAL GROUP BDC INC.

STATEMENTS OF OPERATIONS
		YEAR ENDED DECEMBER 31,
		2007			2006			2005
INVESTMENT INCOME:
Interest income	$	3,263		$	460		$	1,139
TOTAL INVESTMENT INCOME		3,263			460			1,139
EXPENSES:
Professional fees		366,147			315,222			19,171
Advisory fee		3,117			-			-
Consulting fees to (affiliate in 2005)		-			21,502			12,000
Filing fees		8,767			12,914			8,848
Insurance		21,053			33,360			5,145
Interest expense to affiliate		3,266			4,125			-
Other		4,829			584			910
TOTAL EXPENSES		407,179			387,707			46,074
NET INVESTMENT (LOSS)	$	(403,916	)	$	(387,247	)	$	(44,935	)
UNREALIZED GAIN ON INVESTMENTS		5,213			-			-
NET DECREASE IN ASSETS RESULTING FROM OPERATIONS		(398,703	)	$	(387,247	)	$	(44,935	)
LOSS PER COMMON SHARE, BASIC AND DILUTED	$	(0.01290	)	$	(0.01371	)	$	(0.00220	)
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED		30,896,792			28,248,018			20,436,775

See notes to financial statements

F-5

BLACKHAWK CAPITAL GROUP BDC INC.

STATEMENTS OF CHANGES IN NET ASSETS
	YEAR ENDED DECEMBER 31,
	2007			2006			2005
DECREASE IN NET ASSETS (LIABILITIES) FROM OPERATIONS
Net investment loss	$	(403,916	)	$	(387,247	)	$	(44,935	)
Unrealized gain on investments		5,213			-			-
NET DECREASE IN NET ASSETS (LIABILITIES)
RESULTING FROM OPERATIONS		(398,703	)		(387,247	)		(44,935	)
CAPITAL STOCK TRANSACTIONS:
Proceeds from common stock sold		525,001			-			88,917
Conversion of notes and advances
to affiliate into common stock		132,891			68,847			61,432
Offering costs					-			(87,635	)
Rescission of preferred stock - founder					-			(85	)
NET INCREASE IN NET ASSETS (LIABILITIES)
FROM CAPITAL STOCK TRANSACTIONS		657,892			68,847			62,629
TOTAL INCREASE (DECREASE) IN NET ASSETS		259,189			(318,400	)		17,694
NET ASSETS (LIABILITIES)- BEGINNING OF YEAR		(296,424	)		21,976			4,282
NET ASSETS (LIABILITIES) END OF YEAR	$	(37,235	)	$	(296,424	)	$	21,976

See notes to financial statements

F-6

BLACKHAWK CAPITAL GROUP BDC INC.

STATEMENTS OF STOCKHOLDERS‘ EQUITY (CAPITAL DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 

				COMMON STOCK				PREFERRED STOCK						ADDITIONAL PAID-IN			NET UNREALIZED APPRECIATION ON		ACCUMULATED NET INVESTMENT
	TOTAL			SHARES		AMOUNT		SHARES			AMOUNT			CAPITAL			INVESTMENT		LOSS
Balance- December 31, 2004	$	4,282			8,591,901	$	86		8,500,000		$	85		$	16,626		$	-	$	(12,515	)
Sale of stock pursuant tooffering plan (at $.01 per share)		88,917			8,891,680		89		-			-			88,828			-		-
Conversion of a portion of amount owed to affiliate (at $.01 per share)		61,432			6,143,200		61		-			-			61,371			-		-
Rescinded preferred stock from founder (at $0.00001 per share)		(85	)		-		-		(8,500,000	)		(85	)		-			-		-
Offering costs		(87,635	)		-		-		-			-			(87,635	)		-		-
Net decrease in assets resulting from operations		(44,935	)		-		-		-			-			-			-		(44,935	)
Balance-December 31, 2005		21,976			23,626,781		236								79,190			-		(57,450	)
Net decrease in assets resulting from operations		(387,247	)		-		-		-			-			-			-		(387,247	)
Conversion of a portion of amount owed to affiliate (at $.01 per share)		68,847			6,884,700		69		-			-			68,778			-		-
Balance - December 31, 2006		(296,424	)		30,511,481		305		-			-			147,968			-		(444,697	)
Net decrease in assets resulting from operations		(398,703	)		-		-		-			-						5,213		(403,916	)
Sale of stock pursuant to offering plan (at $1.00 per share)		525,001			525,000		6		-			-			524,995			-		-
Conversion of amount owed to affiliate (at $1.00 per share)		132,891			132,891		1		-			-			132,890			-		-
Balance-December 31,2007	$	(37,235	)		31,169,372	$	312		-		$	-		$	805,853		$	5,213	$	(848,613	)

See notes to financial statements

F-7

BLACKHAWK CAPITAL GROUP BDC INC.

STATEMENTS OF CASH FLOWS
	YEAR ENDED DECEMBER 31,
	2007			2006			2005
CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES:
Net investment loss and decrease in
net assets resulting from operations	$	(398,703	)	$	(387,247	)	$	(44,935	)
Unrealized gain on investments		(5,213	)
Purchase of Investments		(391,226	)		-			-
Proceeds from sale and redemption of investments		151,676
Adjustments to reconcile net decrease:
Increase in accrued expenses and interest		104,323			180,525			12,536
(Decrease) Increase in prepaid expenses		455			(3,478	)		(5,522	)
NET CASH USED IN OPERATING
AND INVESTING ACTIVITIES		(538,688	)		(210,200	)		(37,921	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Offering costs		-			-			-
Deferred offering costs		-			-			-
Net proceeds from the issuance of stock		525,001			-			88,917
Proceeds from issuance of convertible note to affiliated company		-			100,000			-
Advance from affiliated company		17,500			33,005			13,281
Due to former stockholder in connection with common stock rescission		-			(45	)		-
NET CASH PROVIDED BY FINANCING ACTIVITIES		542,501			132,960			102,198
NET INCREASE (DECREASE) IN CASH		3,813			(77,240	)		64,277
CASH - BEGINNING OF YEAR		637			77,877			13,600
CASH - END OF YEAR	$	4,450		$	637		$	77,877
Non-cash financing activities:
Conversion of amount due affiliated company into Common stock	$	132,891		$	68,847		$	61,432
Rescinded preferred stock	$	-		$	-		$	85
Deferred offering costs charged to additional paid-in capital	$	-		$	-		$	87,635

See notes to financial statements

F-8

BLACKHAWK CAPITAL GROUP BDC INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2007

1 SIGNIFICANT ACCOUNTING POLICIES

Business description

Blackhawk Capital Group BDC Inc. (“The Company” or “Blackhawk”) was incorporated in the State of Delaware on April 22, 2004.

On September 20, 2004 the Company filed a Form N-54A, Notification with the Securities and Exchange Commission (“SEC”) electing to become a Business Development Company pursuant to Section 54(a) of the Investment Company Act of 1940. As a business development company, Blackhawk will be able to acquire interests in small private businesses, as well as non-dividend paying public companies.

Blackhawk will attempt to locate and negotiate with eligible portfolio companies for Blackhawk to invest in, lend funds to, acquire an interest in and/or possibly manage. Blackhawk will offer managerial assistance to eligible portfolio companies in which it invests.

Basis of presentation

The financial statements have been prepared in accordance with the presentation requirements of the AICPA Audit and Accounting Guide for Investment Companies.

The Company has a net loss for the year ended December 31, 2007 of $398,703 and liabilities in excess of assets of ($37,235) as of December 31, 2007. For the year ended December 31, 2007, the Company raised net cash proceeds of $525,001 through a Regulation E offering under the Securities Act of 1933, as amended (“Securities Act”) which commenced on November 16, 2006. Prior to such offering, the Company’s operations have been principally funded by The Concorde Group Inc. (“Concorde”), a corporation controlling Blackhawk and controlled by the founder and an affiliate of the Company. The Company is presently dependent on Concorde to provide capital and liquidity needs. Concorde has agreed to provide sufficient capital to operate through January 1, 2009.

Uses of estimates in the preparation of financial statements

The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the 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 net revenue and expenses during each reporting period. Actual results could differ from those estimates.

Income Taxes

The Company accounts for income taxes using the asset and liability method described in SFAS No. 109, "Accounting For Income Taxes," the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting and the tax bases of the Company's assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

F-9

The Company adopted the provisions of Financial Accounting Standards Board interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of FASB Statement No. 109 (“SFAS 109”) effective January 1, 2007.  As a result of the implementation of FIN 48, the Company recognized no adjustment for uncertain tax provisions.  At the adoption date of January 1, 2007, the Company had a deferred tax asset which was fully reserved by a valuation allowance to reduce the deferred tax asset to the amount that is more likely than not to be realized.

The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense.  As of December 31, 2007, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

The tax years 2004 through 2007 remain open to examination by the major tax jurisdictions to which we are subject.

Revenue recognition

· Unrealized gain and losses resulting from the change in the valuation of investments are reflected in the statement of operations.

· Interest income is recorded on the accrual basis.

· Realized gains or losses on investments are recorded on a trade date basis.

Investments

The Company's investments are carried at fair value.

New accounting pronouncement

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value and establishes a framework for measuring fair value. It also expands the disclosures about the use of fair value to measure assets and liabilities. SFAS 157 is effective the first fiscal year beginning after November 15, 2007 which for the company is January 1, 2008. The adoption of SFAS 157 will not have a material impact on the Company’s financial statements.

Net loss per common share

Basic and diluted loss per common share is calculated by dividing net loss by the weighted average number of outstanding common shares during the period. The Company has no potential shares that could dilute earnings per share in the future.

2STOCKHOLDERS’ EQUITY

The Company is authorized to issue 1,000,000,000 shares of common stock and, at December 31, 2004, was authorized to issue 15,000,000 shares of preferred stock, both with a par value of $.00001 per share. Shortly after formation, the Company sold 6,500,000 shares of common stock and 8,500,000 shares of preferred stock, net of 4,500,000 shares of common stock issued and subsequently rescinded, as discussed below, to its founders for an aggregate of $150.

Pursuant to an offering circular dated September 15, 2004, the Company commenced an offering to sell a minimum of 750,000 and a maximum of 45,000,000 shares of common stock at $.01 per share. During 2005 and 2004, the Company sold 8,891,680 and 2,091,091 shares, respectively, for aggregate gross proceeds of $88,917 and $20,919, respectively.

F-10

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights.

The Board of Directors was authorized to provide for the issuance of shares of preferred stock in series and to establish the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the stockholders. Any shares of preferred stock so issued would have priority over the common stock with respect to dividend or liquidation rights. The preferred stock had super voting rights entitling each share to 100 votes and had priority over the common stock with respect to dividend or liquidation rights.

On November 9, 2005 the Board of Directors rescinded the issuance of shares of preferred formation stock to The Concorde Group Inc. The Company refunded to Concorde the $85 that Concorde paid for the shares. Concorde waived any rights it may have against Blackhawk in connection with the issuance and stated that it will not assert any claim against the Company. On November 12, 2005 certain investors returned 4,500,000 shares of common stock and refunded $45 to the investors in 2006. Each investor waived any rights he or she may have against Blackhawk in connection with the issuance and stated that he or she will not assert any claim against the Company. On November 29, 2005, Blackhawk amended the Certificate of Incorporation in the State of Delaware to eliminate the right to issue preferred shares. As of November 29, 2005 all shares are to be common shares.

During 2006 and 2005 amount due to affiliates of $68,847 and $61,432 was converted into 6,884,700 and 6,143,200 shares of common stock (at $.01 per share), respectively.

Pursuant to the Company's Regulation E Offering, as of June 4, 2007, the Company sold an aggregate of 502,891 shares of common stock, $.00001 par value per share ("Common Stock"), at a purchase price of $1.00 per share, to four (4) accredited investors for an aggregate amount of $502,891. The sale consisted of the following: (i) 370,000 shares sold to three (3) accredited investors for the purchase price of $1.00 per share, or an aggregate of $370,000; and (ii) the issuance of 132,891 shares to Concorde, an affiliate and the largest stockholder of the Company, in exchange for (x) $107,391 in a convertible note (consisting of $100,000 in principal and $7,391 in accrued and unpaid interest) owed by the Company to Concorde and issued on August 1, 2006 and (y) $25,500 in a convertible note owed by the Company to Concorde and issued on May 29, 2007. The conversion price for both of these notes was $1.00 per share of Common Stock.

In June and July 2007, the Company sold an additional 150,000 and 5,000, respectively, shares of its Common Stock for an aggregate of $155,000 in cash in the Regulation E offering. The Offering Circular was amended on August 30, 2007 to keep the offering open until October 15, 2007. On October 16, 2007, the Company extended the offering until November 15, 2007. The net cash proceeds from the Regulation E offering have been $525,001 through October 31, 2007. No sales of shares of Common Stock in the Regulation E offering were made by the Company from August -December 2007.

3INCOME TAXES

The net deferred tax asset in the accompanying balance sheets include the following amounts of deferred tax assets and liabilities.

F-11

Deferred Tax Assets	2007			2006
Capitalized Startup Costs	$	382,000		$	200,000
Valuation Allowance		(382,000	)		(200,000	)
Net Deferred Tax Asset	$	-		$	-

The deferred tax assets represent the benefit of its capitalized startup costs. The Company has provided a full valuation allowance for such deferred tax assets due to uncertainty to realize such benefits in the future.

The difference between the statutory tax rate of 34% and the company's effective tax rate is due to the increase in the valuation allowance of $182,000 (2007) and $174,000 (2006) and certain expenses not deductible for tax purposes.

As of December 31, 2007, the Company had no net operating loss carryforward. All of the startup costs were capitalized for tax purposes.  

4RELATED PARTY TRANSACTIONS

During 2004, 2005 and 2006 the company borrowed $91,908, $13,281 and $133,005, respectively, from Concorde to fund the formation of Blackhawk, offering costs for the offering plan and operating expenses. Of the amount borrowed in 2006, $100,000 was evidenced by a demand convertible note bearing interest at 8.25% per annum convertible after November 1, 2006 into common stock of the company at a price of $1.00 per share or the price per share of the Company’s next Regulation E offering. The balance of borrowings were non-interest bearing and are due on demand. The borrowings were approved unanimously by the Board of directors of Blackhawk as fair and in the best interest of Blackhawk.

In 2006 and 2005, the Board of Directors unanimously voted to allow Concorde to convert amounts due to Concorde of $68,847 (evidenced by a non-interest bearing promissory note due on demand) and $61,432, respectively into 6,884,700 and 6,143,200 shares respectively of common stock at $.01 per share, which was the offering price set forth in Blackhawk’s Form 1-E and its Offering Circular, which the Board of Directors approved unanimously and determined was in the fair and best interest of Blackhawk.

At December 31, 2006, outstanding non-interest bearing borrowings due to Concorde amount to $ 8,000.

The Company owed Concorde $100,000 plus accrued interest of $4,125which was evidenced by a demand convertible note bearing interest at 8.25% per annum convertible after November 1, 2006 into common stock of the Company at a price of $1.00 per share, or the price per share of the Company’s Regulation E Offering. On June 4, 2007 Concorde converted the note (including accrued interest of $7,391) into 107,391 shares of common stock.

On May 29, 2007, Blackhawk issued a convertible note in the principal amount of $25,500 ("Note") to Concorde. The Note evidenced a loan from Concorde to the Company for advances of $17,500 during 2007 together with $8,000 of the advances referred to above made to the Company prior to January 1, 2007. The advances were used to fund a portion of expenses incurred by the Company consisting of legal fees and expenses, accounting fees and expenses, general and administrative expenses. The Note is repayable upon demand and does not bear interest. The Note is convertible into shares ("Shares") of common stock of the Company at a conversion rate of one share of common stock per $1.00 of principal amount of Note converted, the price per share in the Company's Regulation E offering. The transaction was approved by unanimous written consent by the Board of Directors of the Company as being fair and in the best interests of the Company. On June 4, 2007, pursuant to the terms of the Note, Concorde converted the $25,500 principal amount of the Note into 25,500 shares of Common Stock at $1.00 of principal amount of Note converted, the price per share in the Company's Regulation E offering.

F-12

Blackhawk paid a consulting fee of $12,000 to a former vice president and stockholder of the Company during the year ended December 31, 2005.

The Company shares office space and other administrative functions with Concorde at no charge to the Company. The Company expects to pay fair market value for such services on a prospective basis following the close of its next offering.

5. INVESTMENT ADVISORY AGREEMENT; CONSULTING AGREEMENT

Blackhawk has engaged Barak Asset Management, LLC, a Delaware limited liability company (“Barak”) and an investment adviser registered under the Investment Advisers Act of 1940 (“Advisers Act”), to serve as an investment adviser to Blackhawk and manage its portfolio of investments.

Investment advisory fees are calculated based upon the average cash value of assets at the end of each quarter including the value of any withdrawals from the assets made during that quarter ranging from 0.50% to 1.80% of assets managed. Fees shall be billed and payable quarterly (or a prorated period, when applicable)

For the year ended December 31, 2007, the Company incurred fees to Barak in the amount of $3,117.

Blackhawk has entered into an agreement dated September 12, 2006 with Robert S. Tull, Jr. for a three-year term (the "Agreement"). Under the Agreement, Mr. Tull will consult with the Blackhawk Board of Directors on investments and have the following duties: consulting Blackhawk's Board of Directors on investment decisions and strategies, consulting on investment diversification in the strategies and consulting on investment opportunities. Pursuant to the Agreement, the Blackhawk Board of Directors will determine Mr. Tull's compensation when it closes its third Regulation E offering and has sufficient proceeds to compensate Mr. Tull. Mr. Tull is not a registered investment adviser. As of December 31, 2007, the Company has not incurred any liability to Mr. Tull.

6ACCRUED EXPENSES

Accrued expenses at December 31, 2006 and 2005 consist principally of legal expense.

7SUBSEQUENT EVENTS

Pursuant to the Company’s third Regulation E offering which commenced on November 30, 2007, as of March 24, 2008, the Company sold an aggregate of 698,112 shares of common stock to five purchasers at a purchase price of $1.00 per share for an aggregate of $698,112. Selling commissions of $69,311 were paid to Richard J. Kelly, prior selling agent for the Company, out of the $698,112, netting $628,801 to the Company. The Offering is open until November 28, 2008. Sales of additional shares in the Offering was suspended on March 24, 2008 after the Company received a comment letter from the SEC on its Form 1-E/A for the Offering on file with the SEC; the Company will resume the Offering after it files a response letter and amended Form 1-E/A with the SEC. The Company received another $100,000 from an investor for the purchase of shares which the Company is holding in escrow; the Company plans on closing on this money out of escrow when it complies with the SEC matters described above.

F-13

8FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights for the years ended December 31, 2007, 2006 and 2005 and the period from inception (April 22, 2004) to December 31, 2004.

	YEAR ENDED DECEMBER 31,
	2007			2006			2005			FROM INCEPTION (APRIL 22, 2004) TO DECEMBER 31, 2004
Per Share Data:
Net asset value - beginning of period	$	(0.00972	)	$	0.00093		$	0.00050		$	0.00001
Net investment loss *		(0.01307	)		(0.01371	)		(0.00220	)		(0.00179	)
Issuance of common stock		1.00000			0.01000			0.00417			0.00796
Net realized and unrealized gain(loss)**	$	(0.97840	)		(0.00694	)		(0.00154	)		(0.00568	)
Net asset (liability) value - end of period	$	(0.00119	)		(0.00972	)		0.00093			.00050
Total return based on net asset value ***		(135	%)		(1,474	%)		(440	%)		(17,900	%)
Common shares outstanding - end of period****		31,169,372			30,511,481			23,626,781			8,591,901
Ratio/Supplemental Data:
Net assets (liabilities) - end of period		(37,235	)	$	(296,424	)	$	21,976		$	4,282
Ratio of net investment loss to average net assets*****		(813	%)		(3,524	%)		(91	%)		(1,212	%)
Ratio of operating expenses to average net assets*****		819	%		3,528	%		94	%		1,213	%

* Calculated based on average shares outstanding during period

** Net realized and unrealized gain(loss) represents the dilutive effect of share issuance. This caption used per the AICPA Audit and Accounting Guide for investment Companies Section 7.74 (c)

*** Total returns for periods of less than one year are not annualized

**** Common shares outstanding are reduced by rescinded shares

***** Annualized for periods less than one year

F-14

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRESIDENT OF PERIODIC

REPORT PURSUANT TO RULE 13a-14(a) and rule 15d-14(a)

I, Craig A. Zabala, certify that:

1.I have reviewed this Annual Report on Form 10-K of Blackhawk Capital Group BDC, Inc.;

1.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

2.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

3.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

4.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:March 28, 2008

/s/ Craig A. Zabala 

Craig A. Zabala

President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER OF PERIODIC

REPORT PURSUANT TO RULE 13a-14(a) and rule 15d-14(a)

I, Craig A. Zabala, certify that:

1.I have reviewed this Annual Report on Form 10-K of Blackhawk Capital Group BDC, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:March 28, 2008

/s/ Craig A. Zabala 

Craig A. Zabala

Acting Chief Financial Officer

(Principal Executive Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRESIDENT

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of Blackhawk Capital Group BDC, Inc. (the "Company") for the year ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Craig A. Zabala, as President of the Company, hereto certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:March 28, 2008

/s/ Craig A. Zabala 

Craig A. Zabala

President

(Principal Executive Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Blackhawk Capital Group BDC and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of Blackhawk Capital Group BDC, Inc. (the "Company") for the year ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Craig A. Zabala, as acting Chief Financial Officer of the Company, hereto certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:March 28, 2008

/s/ Craig A. Zabala 

Craig A. Zabala

Acting Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Blackhawk Capital Group BDC and furnished to the Securities and Exchange Commission or its staff upon request.