Blackstar Enterp Stock Price, News & Analysis
Company Description
BlackStar Enterprise Group, Inc. (OTC Pink: BEGI) is a publicly traded merchant banking firm that focuses on facilitating joint venture capital to early-stage revenue companies and developing blockchain-based technology for trading securities. According to its business description, the company is conducting an in-depth analysis to trade its common shares through its wholly owned subsidiary, Blockchain Equity Management Corp. ("BEMC"). BlackStar states that it is particularly interested in clients and partners involved in blockchain technology and in accessing the peer-to-peer digital securities trading arena.
BlackStar describes itself as a merchant bank that intends to provide access to capital for companies, with an emphasis on businesses connected to blockchain. It may facilitate these companies through majority-controlled joint ventures with BEMC. The company reports that BEMC was formed on September 30, 2017, and is intended to offer advisory services on how to implement use of a custom platform for a client’s equity based on BlackStar’s digital trading technology. At the same time, BlackStar notes that BEMC is currently non-operational, inactive and has no business or clients, and that it has not established anticipated time frames or key milestones for BEMC’s business.
Blockchain-based digital trading platform
A central element of BlackStar’s strategy is the BlackStar Digital Trading Platform™ (BDTP™ or BDTPTM), which the company describes as software built on a blockchain to enable trading of securities. BlackStar reports that this platform is designed for trading digital common stock without the need for tokens and is intended to be compliant with U.S. broker-dealer back-office operations. The company states that BDTP™ is a trading platform for electronic fungible shares in book-entry form and that it is being developed using what it calls a private Ce/DeFi blockchain, combining centralized and decentralized finance concepts.
BlackStar indicates that it has designed and completed its digital trading platform on a blockchain for trading its digital common stock without tokens. Once the platform is live through a broker-dealer partnership, BlackStar states that it plans to replicate its blockchain trading system and offer it to other public companies as subscribers. The company also describes plans to enable an encrypted digital version of its current common stock, called BlackStar Electronic Fungible Shares ("BEFS") in book-entry, to be traded on the platform. According to BlackStar, the BDTP™ system is intended to integrate into broker-dealer back-office operations without the use of security tokens.
Patent portfolio and intellectual property focus
BlackStar emphasizes its intellectual property portfolio related to blockchain trading of securities. The company reports that it has been granted multiple U.S. patents covering digital trading of equities on a blockchain, public offerings and funding on blockchain, and corporate governance functions. In its news releases, BlackStar states that it has received a series of patents and notices of allowance from the United States Patent and Trademark Office (USPTO) for systems and methods that enable trading of both registered and unregistered securities on a blockchain, as well as facilitating public offerings of securities on an immutable blockchain.
According to BlackStar, its patents and patent applications cover technology for trading equity, securities, and derivatives of securities purchased on a blockchain within the traditional broker-dealer ecosystem. The company also notes a derivative blockchain trading patent titled "System and Method for Trading Derivatives of Securities Purchased on a Blockchain on a Digital Trading Platform that Integrates with the traditional Broker Dealer Eco System." BlackStar states that, taken together, its patents are intended to address three main areas: trading, funding, and corporate governance for securities on blockchain.
Stated business model and revenue intentions
BlackStar’s descriptions indicate a dual focus on merchant banking and technology. On the merchant banking side, the company states that it is in the business of consulting and facilitating access to capital, particularly for companies involved in blockchain technology. It notes that it may fund its merchant banking activities through subscription revenues from its digital trading platform or through future equity offerings.
On the technology and services side, BlackStar reports that it intends to offer consulting and regulatory compliance services to companies that want to issue digital shares and to blockchain entrepreneurs dealing with securities, tax, and commodity issues. The company also states that it is conducting ongoing analysis for opportunities in digital share-related ventures through BEMC. In addition, BlackStar mentions that it may receive blockchain exchange-traded fund (ETF) management fees in the future, subject to license agreements that could be negotiated with existing market participants whose activities may be covered by BlackStar’s patents.
Relationship with broker-dealers and regulatory framework
BlackStar’s public statements emphasize that its technology is intended to operate within existing U.S. securities regulations. The company notes that its BDTP™ platform is designed to work with SEC-registered broker-dealers and within the oversight of the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). In its news, BlackStar states that it is progressing in finding a broker-dealer to list its own shares on a blockchain and quote trading activity as a proof of concept for future public company subscribers.
The company has also disclosed in its SEC filings, as referenced in its press releases, that if it cannot secure a broker-dealer to participate in its digital blockchain platform, it would consider pursuing an application to register as a broker-dealer itself. BlackStar further notes that the process of obtaining regulatory approval for quoting blockchain-based trading of shares may take time, and it references broader SEC initiatives related to crypto and digital assets as context for its expectations.
Views on digital assets, CeDeFi, and securities markets
BlackStar’s news releases present the views of its CEO regarding cryptocurrency markets, decentralized finance (DeFi), and centralized-decentralized finance (CeDeFi). The company highlights opinions that blockchain, encryption, cryptographic tools, and smart contracts are the future of registered security trading for public companies on a hybrid CeDeFi blockchain. It also states that its intellectual property portfolio is intended to cover regulated, registered equities and securities traded on blockchain through broker-dealers.
The company’s communications discuss distinctions between tokens or coins and shares of stock, and they describe concerns about non-registered digital investment contracts. BlackStar positions its technology as a way to trade registered securities on blockchain through the broker-dealer ecosystem, with common shares in book-entry form being fungible with their digital form, rather than creating new tokenized securities.
Operational status and financing considerations
In its news, BlackStar notes that it continues to encounter delays in its ability to fund operations while it works toward completing audited and unaudited financial statements for certain past periods. The company also reports that some previously audited financial statements cannot be relied upon and are being reaudited. BlackStar states that it is committed to completing these audited financial statements and delayed reports.
The company has described various financing arrangements and intentions, including debt-related transactions and relationships with institutional investors, as well as consideration of debt purchases or other means to raise funds for continued operations. BlackStar also mentions that it is obtaining or may obtain valuations of its patent portfolio and that it views its patent portfolio as a potential basis for future licensing and revenue opportunities.
Subsidiary and advisory activities
BlackStar reports that its subsidiary, Blockchain Equity Management Corp. (BEMC), is wholly owned and was formed to support digital share-related ventures. According to the company, BEMC is intended to offer advisory services on implementing custom platforms for client equity based on BDTP™. However, BlackStar explicitly states that BEMC is currently non-operational, inactive, and has no business or clients, and that no specific time frames or milestones have been set for BEMC’s business.
Stock and market context
BlackStar Enterprise Group, Inc. trades under the symbol BEGI on the OTC Pink market. The company’s public communications frequently reference its status as a publicly traded entity and direct readers to its filings available through the SEC’s EDGAR system. BlackStar also notes that it has disclosed its intentions regarding digital trading of its own shares in its regulatory filings.