BlackStar Enterprise Group Inc (BEGI)

[Bubae]

The Quick Capital note is particularly nasty. The $33,275 note matured on July 16, 2021 and was declared in default in April 2022 with a stated balance of $133,317 due under the default terms of the note at that time. That note now would be worth more than $200K with accrued default interest of $24%. The company in return is completely ignoring the default terms of the note and recognized accrued interest of only $9,569 in the Q3 filing statement. So Blackstar states "...and the Company could be exposed to further risks of lawsuits for similar issues." This is an obvious one but there are other notes that matured a couple of years ago.

The Quick Capital note defines “Market Price” and “Trading Price” separately. The term “Market Price” is used when discussing the conversion rights under the regular terms of the note. The terms “Trading Price” and “Market Price” is used when describing the default conversion terms. The lowest trading price during the delinquency period was just days before this runup in October at $0.0001. The lowest two closing prices were $0.0002, so best case is a conversion price of $0.0001. Worst case using “Trading Price” is $0.00005.

Either way this Blackstar has been converting heavily since the notice of default so Quick Capital is faced with something of a conundrum. They have nice conversion rights buy how do you execute with the ongoing conversions and share structure destruction. Even is Quick Capital wins a judgement and receives the minimum of one billion shares to cover what is in excess of $200K in debt how do you move that many shares and still get good value under the current share structure? They finally got an attractive share price in October but now there is the GS Capital lawsuit, the S-1 offering that is effective, the May regulation "D" offering, a series of eight, nine month notes that began to mature in December and so on. Quick Capital may just wait, continue to let the balance accrue at the default rate, and move forward after a reverse split if the debt ever settles out. Qucik Capital isn't the only one sitting on note that matured a couple of years ago.



For the quarterly period ended March 31, 2022
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001483646/000106594922000068/begi-20220331.htm.htm
As of April 30, 2022, there were 209,818,602 shares of the registrant’s common stock,...

For the quarterly period ended March 31, 2023
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001483646/000106594923000051/begi-20230331.htm.htm
As of May 5, 2023, there were 683,446,845 shares of the registrant’s common stock,...

Current Outstanding Share Count 1,671,892,114


For the quarterly period ended June 30, 2022
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001483646/000106594922000124/begi-20220630.htm

NOTE 7 – CONVERTIBLE NOTES (continued)
(ix) In April 2022, Quick Capital, LLC issued a notice of default on the $33,275 convertible note dated November 16, 2020 and stated that the outstanding amount due on the note is $133,317.38, the default interest per annum is 24%, and that the conversion price is the lowest trading price during the delinquency period with a 50% discount. The Company has continued to accure interest on the note at the rate of 10% per annum.



November 2020 Quick Capital Note 8K
https://www.sec.gov/Archives/edgar/data/1483646/000106594920000165/blackstar8knov252020.htm

“Market Price” means the average of the two (2) lowest closing trades for the Common Stock during the twenty (20) Trading Day period preceding the conversion date. “Trading Price” and “Trading Prices” means, for any security as of any date, the lesser of: (i) the lowest trade price on the OTC Pink, OTCQB or applicable trading market as reported by a reliable reporting service (“Reporting Service”)

Amounts Due in Events of Default:

Upon the failure to pay principal and interest, the Note shall become immediately due and payable. Upon the failure to issue conversion shares when Holder exercises said right, or other events of default outlined in the Note, then two times (2x) the Default Amount of the Note will become due and payable immediately. Any other form of default will entitle the Holder to (i) an immediate payment of one hundred fifty percent (150%) of the Default Amount, being the outstanding principal amount of the Note, plus accrued and unpaid interest on the unpaid principal amount of the Note, plus any default interest and any other amounts owed or ...

...and the Holder shall be entitled to use the lowest Trading Price during the delinquency period as a base price for the conversion with the Variable Conversion Price shall at the option of the Holder be redefined to mean fifty percent (50%) multiplied by the Market Price, subject to adjustment as provided in the Note.


For the quarterly period ended September 30, 2023
https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0001483646/000106594923000100/begi-20230930.htm

NOTE 7 – CONVERTIBLE NOTES
In April 2022, Quick Capital LLC issued a notice of default on its $33,275 convertible note to the Company dated November 16, 2020 and stated that the outstanding amount due on the note is $133,317, the default interest per annum is 24%, and that the conversion price is the lowest trading price during the delinquency period with a 50% discount. The Company has recorded accrued default interest on the note at the rate of 24% per annum from May 24, 2021 (date of default) to September 30, 2023 based on the original loan value of $33,275. At September 30, 2023, the accompanying financial statements reflects an outstanding loan balance due to Quick Capital LLC of $33,275 and accrued interest of $9,569. The Company and Quick Capital LLC have been in discussions to reach a reasonable and fair settlement of the balance due on the financing agreement.


Update to November 6, 2023 Nevada Lawsuit
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001483646/000106594924000023/blackstarmarch2024v2.htm

The risks of continued litigation on this matter are as follows: the Company may need to increase the authorized shares of common stock in order to accommodate any continued conversions, judgments, or settlements, and the Company could be exposed to further risks of lawsuits for similar issues. The Company will also expend additional resources in the ongoing litigation and any potential resolutions outside the above-reference conversions to common stock (which were already contemplated in the original convertible promissory note), negatively impacting its financial position.