EXHIBIT 3(i).1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 27, 2017
BLACKSTAR ENTERPRISE GROUP, INC.
(Exact name of Registrant as specified in its charter)
| Delaware | 000-55730 | 27-1120628 |
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
4450 Arapahoe Ave., Suite 100
Boulder, CO 80303
(Address of Principal Executive Offices)
(303) 500-5073
(Registrant's Telephone Number, Including Area Code)
BlackStar Energy Group, Inc.
________________________________________
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS
Item 1.01 Entry into a Material Definitive Agreement
The Board of Directors of BEGI approved the Agreement by unanimous consent on September 27, 2017, determining that it is in the best interests of the shareholders and the Company to settle its debt with International Hedge Group, Inc. by assignment of the MeshWorks notes, in an ongoing effort to develop and acquire other businesses with new and broader business interests.
On September 27, 2017, BlackStar Enterprise Group, Inc. (“BEGI”) entered into an Agreement to Settle Debt (the “Agreement”) with International Hedge Group, Inc. (“IHG”), the parent company of BEGI. Under the Agreement, IHG agreed to compromise and settle the Principal Amount under the verbal working capital loan agreement of BEGI, as of November 2016, in the amount of $400,000.00, by assignment, without recourse, of the MeshWorks Media Corp. Promissory Notes together with all collateral agreements. Upon signing of the Agreement, a promissory note was delivered for the difference from IHG to BEGI in the amount of $145,000.00 for BEGI return of principle of $100,000 and all of the accrued interest to date under the MeshWorks Media Corp. notes, payable in twelve months with interest of 1% per quarter on the last day of each quarter until paid. The assignment of the MeshWorks Media Corp. Promissory Notes and the note from IHG to BEGI in the amount of $145,000 is full and complete payment and consideration for the transaction referenced hereinabove.
A copy of the Agreement is attached to this Report as Exhibit 10.1.
SECTION 3 – SECURITIES AND TRADING MARKETS
Item 3.02 Unregistered Sales of Equity Securities
On September 27, 2017, the Board of Directors approved the issuance of 16,320,000 shares of restricted common stock underlying warrants exercised on June 14, 2017. The warrants were issued to purchase up to 17,000,000 shares of restricted common stock at $0.05 per share and were exercised on a cashless basis, netting 16,320,000 shares of restricted common stock.
Additionally, the Board of Directors approved the retirement to treasury of 16,420,000 shares of restricted common stock held by International Hedge Group, Inc. In BEGI’s most recent periodic report on Form 10-Q, International Hedge Group, Inc. had agreed to retire 16,320,000 shares of restricted common stock. The number to be retired increased by 100,000 shares.
On July 3, 2017, in consideration for $30,000, BEGI sold 100,000 units, each unit consisting of one share of restricted common stock and one warrant to purchase common stock, in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act, and/or Section 4(a)(2) of the 1933 Act..
SECTION 8 – OTHER EVENTS
Item 8.01 Other Events
On September 30, 2017, BEGI formed a wholly-owned subsidiary corporation, Crypto Equity Management Corp. (“CEMC”) in the State of Colorado. BEGI intends to use CEMC to pursue business opportunities in the cryptocurrency sphere. The articles of incorporation for CEMC are attached hereto as Exhibit 3(i).1.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following is a complete list of exhibits filed as part of this Report. Exhibit numbers correspond to the numbers in the exhibit table of Item 601 of Regulation S-K.
| Exhibit No. | Description |
| 3(i).1 | Articles of Incorporation for Crypto Equity Management Corp. |
| 10.1 | Agreement to Settle Debt |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BlackStar Enterprise Group, Inc.
By: /s/ Joseph E. Kurczodyna
___________________________
Joseph E. Kurczodyna
Title: CFO
Date: October 9, 2017
EXHIBIT 3(i).1
EXHIBIT 10.1
AGREEMENT TO SETTLE DEBT
For and in consideration of mutual benefits, detriments and the considerations contained herein, the adequacy of which is hereby acknowledged as full, complete and valuable consideration, the parties, International Hedge Group, Inc., (IHG) and Blackstar Enterprise Group, Inc., (BEGI), agree as follows:
1. Compromise and Settlement. IHG hereby agrees to compromise and settle the Principal Amount under the verbal working capital loan agreement of BEGI, a Delaware corporation, as of November 2016, in the amount of $400,000.00, by assignment, without recourse, of the MeshWorks Media Corp. Promissory Notes attached hereto together with all collateral agreements, as of the date written below and upon receipt and delivery of this Agreement, duly executed, and delivery of a promissory note for the difference from IHG to BEGI in the amount of $ 145,000.00 for BEGI return of principle of $100,000 and all of the accrued interest to date under the MeshWorks Media Corp. notes, payable in 12 month with interest of 1% per quarter on the last day of each quarter until paid..
2. Release. IHG hereby releases, discharges, and hold harmless BEGI, Inc. (as well as its respective officers, directors, shareholders, managers, subsidiaries, members, partners, owners, principals, affiliates, divisions, subsidiaries, parents, contractors, attorneys, predecessors, successors, assigns, insurers, associates, agents, representatives, employers, and employees) from all actions, claims, damages, and liabilities (of any kind or nature, without regard to amount, known or unknown, accrued or unaccrued) arising from or relating to working capital loan in the amount of $ 400,000.00 from IHG to BEGI, referenced herein or the any other matters whatsoever in which liability may be asserted for any claim or cause of action except as performance is required as set forth in this Agreement.
3. No Release for Breach of This Agreement. Nothing contained herein shall release any party hereto from any claims arising from or relating to a breach of this Agreement.
4. Consideration: The assignment is full and complete payment and consideration for the note to IHG referenced hereinabove, and this agreement shall be deemed self executing, and complete and fully performed by BEGI..
5. Releases Valid Even if Additional or Different Facts. The Parties acknowledge they may discover facts which are additional to or different from those which they now know or believe to be true regarding the subject matter of this Agreement. Nonetheless, except as otherwise provided herein, it is the Parties' intent to fully and finally compromise and settle all claims which exist between them arising from or relating to the Promissory Note referenced herein or any other matter whatsoever, asserted or unasserted. To effectuate that intention, the release given herein shall remain a full and complete release, of any and all claims or causes of action, asserted or not, notwithstanding discovery of any additional or different facts, at any time hereafter.
6. Headings. The headings contained in this Agreement are for convenience and reference purposes only, and shall not in any way be construed as effecting the meaning or interpretation of the text of this Agreement.
7. Opportunity to Consult With Legal Counsel. The Parties acknowledge they have had a full and fair opportunity to consult with legal counsel of their own choosing throughout all negotiations which preceded the execution of this Agreement, and in connection with their execution of this Agreement.
8. Modified Only in Writing. This Agreement may only be modified by express written agreement of the Parties.
9. Severability. Every provision of this Agreement is intended to be severable. Accordingly, should any provision be declared illegal, invalid, or otherwise unenforceable by a court of competent jurisdiction, such illegality, invalidity, or unenforceability shall not effect the remaining provisions, which shall remain fully valid, binding, and enforceable.
10. No Drafting Party. No party shall be deemed the "drafting party" of this Agreement. Consequently, this Agreement shall be construed as a whole, according to its fair meaning and intent, and not strictly for or against any party hereto.
11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.
12. Binding Agreement/Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties, as well as their respective successors, representatives, and assigns.
13. Authority/Capacity/Entities. Each person signing this Agreement represents and warrants that he or she has complete authority and legal capacity to enter into this Agreement.
Date: September 27, 2017
International Hedge Group, Inc.
By: /s/ John Noble Harris
________________________________
Officer: Pres / CEO
_____________________________
Blackstar Enterprise Group, Inc.
By: /s/ Joseph E. Kurczodyna
_________________________________
Officer: CFO
______________________________