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): April 24, 2019
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)
________________________________________
(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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging Growth Company /_/
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. /_/
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01 Entry into a Material Definitive Agreement
On April 24 and April 29, 2019, BlackStar Enterprise Group, Inc. (the “Company” or “we”) and two individual accredited investors (“Holders”) entered into unsecured promissory notes totaling $30,000 (“Notes”, Form of Note attached as Exhibit 10.1). Holders additionally executed subscription agreements containing standard representations and warranties regarding the purchase and their accredited investor status.
The Company executed six-month, 11% annual interest rate promissory notes of the Company with Holders, in the principal amount of $20,000 and $10,000 (the “Notes”), upon the terms and subject to the limitations and conditions set forth in such Notes. The Form of the Notes is attached as Exhibit 10.1 and incorporated by reference herein. The Holders received 100,000 and 50,000 restricted shares of Common Stock of the Company, respectively, as consideration. The Notes mature on October 24 and October 29, 2019, respectively.
The Company may prepay the Notes in whole or in part at any time, but no prepayment shall entitle the Company to reduce the total amount of principal and interest due under the Notes.
Amounts Due in Events of Default:
If the indebtedness is not paid in full by the Maturity Date, interest will continue to accrue at a rate of 11% annually.
SECTION 2 – FINANCIAL INFORMATION
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
See the disclosures under Item 1.01 of this Current Report on Form 8-K, incorporated herein by this reference.
SECTION 3 – SECURITIES AND TRADING MARKETS
Item 3.02 Unregistered Sales of Equity Securities
The Company and the Holders executed the transaction 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. The SPA outlines the purchase of the Note (the “Securities”), and the Holders understand that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of the 1933 Act and state securities laws and that the Company is relying upon the truth and accuracy of, and the Holders’ compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holders set forth in the promissory note and subscription agreements in order to determine the availability of such exemptions and the eligibility of the Holders to acquire the Securities.
See the disclosures under Item 1.01 of this Current Report on Form 8-K, incorporated herein by this reference.
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SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Exhibits.
The following exhibits are filed with this report on Form 8-K.
| Exhibit Number | Exhibit | |
| 10.1 | Form of Promissory Note |
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 Kurczodyna
Joseph Kurczodyna, Chief Financial Officer
Date: June 5, 2019
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EXHIBIT 10.1
Promissory Note
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REQUIREMENTS FOR SUCH REGISTRATION FOR NONPUBLIC OFFERINGS. ACCORDINGLY, THE SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED HEREBY OR ANY PORTION THEREOF OR INTEREST THEREIN MAY NOT BE ACCOMPLISHED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THAT ACT OR AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE ISSUERS TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
| $ 10,000 | _____________, 2019 |
FOR VALUE RECEIVED, BlackStar Enterprise Group, Inc., having an office and address for purposes of notices and legal process at 4450 Arapahoe Ave., Suite 100, Boulder, Colorado 80303 (“Borrower”) promises to pay to the order of ___________ (“Lender”), at _______________ or at any such other place as may be designated in writing by Lender, the principal sum of $ 10,000 in lawful money of the United States of America, together with interest thereon to be computed from _____________, 2019 at the Interest Rate (as defined below), and to be paid in accordance with the terms of this Promissory Note (“Note”).
INTEREST. Interest at the annual rate of 11 % shall be payable on the principal in accordance with the terms set forth immediately below.
PAYMENT. On or before _____________, 2019, (“Maturity Date”) when any unpaid principle and interest shall be due in full, the borrower shall pay the entire amount due unless 30-day extension granted by both parties.
APPLICATION OF PAYMENTS. The Lender shall first apply the payments to interest and, after all interest is paid in full the balance of any payment shall be applied to the principal amount of the Note.
SECURITY. The Note shall be secured by good faith of BlackStar Enterprise Group, Inc.
ADDITIONAL CONSIDERATION FOR LENDER Lender(s) shall receive, as additional consideration, 50,000 restricted shares of BlackStar Enterprise Group, Inc.
DEFAULT INTEREST/LATE CHARGES.
If the indebtedness is not paid in full on the Maturity Date, interest shall continue to accrue until paid in full.
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BORROWER AGREES THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS NOTE MAY BE INITIATED AND PROSECUTED IN THE STATE OR FEDERAL COURTS, AS THE CASE MAY BE, LOCATED IN BOULDER COUNTY, STATE OF COLORADO. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER CONSENTS TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER THE SUBJECT MATTER, WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON HIM AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE BORROWER AT HIS ADDRESS SET FORTH ABOVE OR TO ANY OTHER ADDRESS AS MAY APPEAR IN THE LENDER’S RECORDS AS THE ADDRESS OF THE BORROWER (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW).
PREPAYMENT. The Borrower shall have the right to prepay the Note, but no prepayment shall entitle the Borrower to reduce the total amount of principal and interest due hereunder.
NOTICES. All notices to be given pursuant to this Note shall be in writing and sufficient if given by personal service, by guaranteed overnight delivery service, or by being mailed postage prepaid, by registered or certified mail, to the address of the parties first hereinabove set forth or to such other address as either party may request in writing from time to time. Any time period provided in the giving of any notice hereunder shall commence upon the date of personal service, the date after delivery to the guaranteed overnight delivery service, or three (3) days after any notices are deposited, postage prepaid, in the United States mail, certified or registered mail. Notices may be given by a party's attorneys or agents with the same force and effect as though given by such party.
IN WITNESS WHEREOF, the undersigned have executed the foregoing instrument as of the date first above written.
BORROWER:
BlackStar Enterprise Group, Inc.
By: ______________________________
Its: CFO Joseph E Kurczodyna
Authorized Officer
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