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EX-10.1 - BLACKHAWK CAPITAL GROUP BDC INCv165619_ex10-1.htm
EX-31.2 - BLACKHAWK CAPITAL GROUP BDC INCv165619_ex31-2.htm
EX-10.2 - BLACKHAWK CAPITAL GROUP BDC INCv165619_ex10-2.htm
EX-32.1 - BLACKHAWK CAPITAL GROUP BDC INCv165619_ex32-1.htm
EX-32.2 - BLACKHAWK CAPITAL GROUP BDC INCv165619_ex32-2.htm
EX-31.1 - BLACKHAWK CAPITAL GROUP BDC INCv165619_ex31-1.htm

   
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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 


FORM 10-Q

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

For the quarterly period ended September 30, 2009

or

¨
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
(I.R.S. Employer
incorporation or organization)
Identification No.)

14 Wall Street, 11th Floor, New York, NY
10005
(Address of principal executive offices)   
(Zip Code)

(212) 566-8300
(Registrant’s telephone number, including area code)
 


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 x         No ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding twelve (12) month (or for such shorter period that the registrant was required to submit and post such files).    Yes o           No ¨

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

Large accelerated filer ¨                                                            Accelerated filer ¨

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

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

Yes         ¨                                        No         x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class
Outstanding on November 10, 2009
   
Common Stock, $0.00001 par value
32,467,484

SEC 1296 (12-05)
Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
 

 
BLACKHAWK CAPITAL GROUP BDC, INC.

INDEX

   
Page
     
PART I.
FINANCIAL INFORMATION
 
     
Item 1.
Financial Statements.
 
     
 
Condensed Statements of Assets and Liabilities as of September 30, 2009 (unaudited) and December 31, 2008
2
     
 
Condensed Schedule of Investments as of September 30, 2009 (unaudited)
3
     
 
Condensed Statements of Operations for the three and nine months ended September 30, 2009 (unaudited) and September 30, 2008 (unaudited)
4
     
 
Condensed Statements of Changes in Net Assets (Liabilities) for the nine months ended September 30, 2009 (unaudited) and year ended December 31, 2008
5
     
 
Condensed Statement of Stockholders' Equity (Capital Deficit) for the nine months ended September 30, 2009 (unaudited) and year ended December 31, 2008
6
     
 
Condensed Statements of Cash Flows for the nine months ended September 30, 2009 (unaudited) and September 30, 2008 (unaudited)
7
     
 
Notes to Condensed Financial Statements
8
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
17
     
Item 3.
Quantitative and Qualitative Disclosures about Market Risk.
19
     
Item 4T.
 Controls and Procedures.
20
     
PART II.
OTHER INFORMATION
 
     
Item 1.
Legal Proceedings.
20
     
Item 1A.
Risk Factors.
20
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
20
     
Item 3.
Defaults upon Senior Securities.
21
     
Item 4.
Submission of Matters to a Vote of Security Holders.
21
     
Item 5.
Other Information.
21
     
Item 6.
Exhibits.
21
 

 
BLACKHAWK CAPITAL GROUP BDC INC.

CONDENSED STATEMENTS OF ASSETS AND LIABILITIES


   
SEPTEMBER 30,
2009
   
DECEMBER 31,
2008
 
   
(Unaudited)
       
             
ASSETS:
           
Investment at fair value (cost $250,000 and $654,025)
  $ 250,000     $ 652,737  
Cash and cash equivalents
    194,919       172,797  
Prepaid expenses
    33,994       12,544  
                 
TOTAL ASSETS
  $ 478,913     $ 838,078  
                 
LIABILITIES
               
Accrued expenses
  $ 441,220     $ 118,102  
TOTAL LIABILITIES
    441,220       118,102  
                 
NET ASSETS
               
Common stock, par value $0.00001 per share 1,000,000,000 shares authorized, 32,467,484 shares issued and outstanding in 2009 and 2008
    325       325  
Additional paid-in capital
    2,106,641       1,974,641  
Accumulated net investment loss
    (2,069,273 )     (1,253,702 )
Net unrealized loss on investment
    -       (1,288 )
TOTAL NET ASSETS
    37,693       719,976  
                 
TOTAL LIABILITIES AND NET ASSETS
  $ 478,913     $ 838,078  
                 
NET ASSET VALUE PER COMMON SHARE
  $ 0.00116     $ 0.02218  


See notes to condensed financial statements
 
2

 
BLACKHAWK CAPITAL GROUP BDC INC.
CONDENSED SCHEDULE OF INVESTMENTS (Unaudited)
SEPTEMBER 30, 2009
 

COMPANY
 
INVESTMENT
 
INITIAL
ACQUISITION
DATE
 
SHARES
   
COST
   
FAIR
VALUE
   
% OF
TOTAL
ASSETS
 
MacroMarkets, LLC.
 
Capital Interests
 
1/21/09
    624,432     $ 250,000     $ 250,000       52.2 %
                    $ 250,000     $ 250,000          

See notes to condensed financial statements
 
3

 
BLACKHAWK CAPITAL GROUP BDC INC.

CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)


   
THREE MONTHS ENDED
SEPTEMBER 30,
   
NINE MONTHS ENDED
SEPTEMBER 30,
 
   
2009
   
2008
   
2009
   
2008
 
                         
INVESTMENT INCOME:
                       
Interest income
  $ 131     $ 3,275     $ 6,099     $ 12,827  
TOTAL INVESTMENT INCOME
    131       3,275       6,099       12,827  
                                 
EXPENSES:
                               
Compensation
    31,124       -       206,925       -  
Professional fees
    140,317       53,490       499,358       304,929  
Consulting Fees
    16,250       -       16,250       -  
Advisory fees
    2,188       3,115       12,030       6,882  
Rent-related party
    12,000       -       36,000       -  
Filing fees
    2,236       1,576       21,076       7,378  
Insurance
    14,516       5,127       26,476       15,724  
Other
    633       104       3,555       694  
TOTAL EXPENSES
    219,264       63,412       821,670       335,607  
                                 
NET INVESTMENT LOSS
    (219,133 )     (60,137 )     (815,571 )     (322,780 )
                                 
UNREALIZED GAIN (LOSS) ON INVESTMENTS
    1,288       2,943       1,288       (4,944 )
NET DECREASE IN ASSETS RESULTING FROM OPERATIONS
  $ (217,845 )   $ (57,194 )   $ (814,283 )   $ (327,724 )
                                 
LOSS PER COMMON SHARE, BASIC AND DILUTED
  $ (0.00671 )   $ (0.00177 )   $ (0.02508 )   $ (0.01026 )
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED
    32,467,484       32,382,701       32,467,484       31,933,241  
 

See notes to condensed financial statements
 
4

 
BLACKHAWK CAPITAL GROUP BDC INC.

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS (LIABILITIES)
 

 
   
NINE MONTHS
ENDED
SEPTEMBER 30
2009
   
YEAR ENDED
DECEMBER 31, 2008
 
   
(Unaudited)
       
             
DECREASE IN NET ASSETS FROM OPERATIONS
           
Net investment loss
  $ (815,571 )   $ (405,089 )
Unrealized (gain) loss on investments
    1,288       (6,501 )
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
    (814,283 )     (411,590 )
                 
CAPITAL STOCK TRANSACTIONS:
               
Stock-based compensation
    132,000       -  
Proceeds from common stock sold
    -       1,298,112  
Offering costs
    -       (129,311 )
                 
NET INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS
    132,000       1,168,801  
                 
TOTAL (DECREASE) INCREASE IN NET ASSETS
    (682,283 )     757,211  
                 
NET ASSETS (LIABILITIES) - BEGINNING OF PERIOD
    719,976       (37,235 )
                 
NET ASSETS - END OF PERIOD
  $ 37,693     $ 719,976  


See notes to condensed financial statements
 
5

 
BLACKHAWK CAPITAL GROUP BDC INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (CAPITAL DEFICIT)
 

 
         
- - - - COMMON STOCK - - - -
   
ADDITIONAL
PAID-IN
   
NET
UNREALIZED
APPRECIATION ON
   
ACCUMULATED
NET
INVESTMENT
 
   
TOTAL
   
SHARES
   
AMOUNT
   
CAPITAL
   
INVESTMENT
   
LOSS
 
Balance-December 31, 2007
  $ (37,235 )     31,169,372     $ 312     $ 805,853     $ 5,213     $ (848,613 )
                                                 
Net decrease in assets resulting from operations
    (411,590 )                             (6,501 )     (405,089 )
                                                 
Sale of stock pursuant to offering plan (at $1.00 per share)
    1,298,112       1,298,112       13       1,298,099                  
                                                 
Offering costs
    (129,311 )                     (129,311 )                
                                                 
Balance-December 31,2008
    719,976       32,467,484       325       1,974,641       (1,288 )     (1,253,702 )
                                                 
Net decrease in assets resulting from operations
    (814,283 )     -       -               1,288       (815,571 )
                                                 
Stock-based compensation
    132,000                       132,000                  
                                                 
Balance-September 30,2009 (unaudited)
  $ 37,693       32,467,484     $ 325     $ 2,106,641     $ -     $ (2,069,273 )

See notes to condensed financial statements
 
6

 
BLACKHAWK CAPITAL GROUP BDC INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


   
NINE MONTHS ENDED SEPTEMBER 30,
 
   
2009
   
2008
 
             
CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES:
           
Net investment loss and decrease in net assets resulting from operations
  $ (814,283 )   $ (327,724 )
Adjustments  to reconcile net investment loss and decrease in net assets to net cash provided by (used in) operating activities:
               
Unrealized gain on investments
    (1,288 )     (269 )
Stock Based Compensation
    132,000          
Change in operating assets and liabilities:
               
Increase (decrease) in accrued expenses
    323,119       (5,126 )
Increase in prepaid expenses
    (21,450 )     (148,486 )
Purchase of Investments
    (250,000 )     (1,619,737 )
Proceeds from sale and redemption of investments
    654,024       1,278,000  
                 
NET CASH PROVIDED BY (USED IN) OPERATING AND INVESTING ACTIVITIES
    22,122       (823,342 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Offering costs
    -       (129,311 )
Proceeds from the issuance of stock
    -       1,298,112  
                 
NET CASH PROVIDED BY FINANCING ACTIVITIES
    -       1,168,801  
                 
NET INCREASE IN CASH
    22,122       345,459  
                 
CASH AND EQUIVALENTS – BEGINNING OF PERIOD
    172,797       4,450  
                 
CASH AND EQUIVALENTS – END OF PERIOD
  $ 194,919     $ 349,909  
 

See notes to condensed financial statements
 
7

 
BLACKHAWK CAPITAL GROUP BDC INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009
(Unaudited)


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 14, 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 is able to acquire interests in small private businesses, as well as non-dividend paying public companies.

Blackhawk attempts 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 offers 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 FASB Accounting Standards Codification Topic 946, Financial Services - Investment Companies.

Interim financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X.  Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted.  In the opinion of management, all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods have been included.  The results of operations for the current period are not necessarily indicative of results that ultimately may be achieved for the year.  The interim unaudited financial statements and notes thereto should be read in conjunction with the December 31, 2008 financial statements and notes thereto included in the Company’s Form 10-K as filed with the SEC.

The Company had a decrease in net assets from operations for the nine-month period ended September 30, 2009 of $814,283 and total net assets of $37,693 as of September 30, 2009.  Since inception, the Company’s operations have been principally funded by Regulation E offerings and The Concorde Group, Inc. (“Concorde”), a corporation controlled by the founder and an affiliate of the Company.  The Company is currently trying to raise equity capital through a private placement offering of its common stock under Rule 506 of the Securities Act of 1933, as amended (“Securities Act”), although there can be no assurance such offering will be successful.  To the extent that current resources are not sufficient for the Company to pay its obligations as they become due, Concorde has agreed to provide sufficient capital to the Company to subsidize operational expenses to operate through October 1, 2010 to the extent that Concorde has such capital available.  If the Company is unable to raise equity capital or if Concorde is unable to provide sufficient capital to the Company to fund its operational expenses, it would have an adverse impact on liquidity and operations and the Company may be unable to continue as a going concern.  The financial statements have been prepared on a going concern basis and do not reflect any adjustments that might result from the outcome of this uncertainty.
 
8

 
Revenue recognition

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

 
·
Interest income is recorded on the accrual basis.

 
·
Realized gains or losses on investments are recorded on a trade date basis using the specific identification method.
 
Use of Estimates

The preparation of financial statements in conformity with 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.  Significant estimates include the valuation of investments and the valuation allowance for deferred tax assets.

Investments

The Company's investments are carried at fair value.

New Accounting Pronouncements

In June 2009, the FASB issued Accounting Standards Codification ("ASC" or "Codification") ASC 105 (FAS No. 168), "Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162."  FAS No. 168 replaces FAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" and establishes the FASB Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with GAAP.  All existing accounting standard documents are superseded by the Codification and any accounting literature not included in the Codification will not be authoritative.  However, rules and interpretive releases of the SEC issues under the authority of federal securities laws will continue to be sources of additional authoritative GAAP for SEC registrants.  ASC 105 is effective for interim and annual reporting periods ending after September 15, 2009.  The Company adopted ASC 105 in September 2009. All references made by the Company to GAAP in its consolidated financial statements use the new Codification numbering system.  The Codification does not change or alter existing GAAP and, therefore, did not have any impact on the Company's condensed financial position and results of operations.

Net loss per common share

Basic EPS is computed solely on the weighted average number of common shares outstanding during the period. Diluted EPS reflects all potential dilution of common stock as applicable.

The following table provides Basic and Diluted EPS for the three months ended September 30, 2009 and 2008:
 
9

 
   
Net Loss
   
Weighted
Average Shares
   
Per Share
 
                   
Three Months Ended September 30, 2009
                 
                   
Basic and diluted loss per share - Loss available to common stockholders
  $ (217,845 )     32,467,484     $ (0.00671 )

   
Net Loss
   
Weighted
Average Shares
   
Per Share
 
                   
Three Months Ended September 30, 2008
                 
                   
Basic and diluted loss per share - Loss available to common stockholders
  $ (57,194 )     32,382,701     $ (0.00177 )

The following table provides Basic and Diluted EPS for the nine months ended September 30, 2009 and 2008:

   
Net Loss
   
Weighted
Average Shares
   
Per Share
 
                   
Nine Months Ended September 30, 2009
                 
                   
Basic and diluted loss per share - Loss available to common stockholders
  $ (814,283 )     32,467,484     $ (0.02508 )

   
Net Loss
   
Weighted
Average Shares
   
Per Share
 
                   
Nine months ended September 30, 2008
                 
                   
Basic and diluted loss per share - Loss available to common stockholders
  $ (327,724 )     31,933,241     $ (0.01026 )

For the three and nine months ended September 30, 2009, 600,000 shares attributable to stock options were excluded from the calculation of diluted EPS because the effect was anti-dilutive.  There were no dilutive securities issued in 2008.

2. INCOME TAXES

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amount and the tax bases of assets and liabilities.  We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences.
 
10

 
As of September 30, 2009, net deferred tax assets aggregated approximately $881,000, which was fully reserved based on the likelihood of realization.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.  As of September 30, 2009 and December 31, 2008, the Company has not recorded any unrecognized tax benefits.  The Company’s policy is to recognize accrued interest and penalties in general and administrative expense.

The tax years 2006 through 2008 remain open to examination by the major tax jurisdictions to which the Company is subject.

3. FAIR VALUE MEASUREMENT 

Effective January 1, 2008, the Company adopted the accounting topics for investments measured at fair value on a recurring basis included in FASB ASC 820 “Fair Value Measurements and Disclosures,” which accomplishes the following key objectives:

 
Defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date;
 
Establishes a three-level hierarchy ("Valuation Hierarchy") for fair value measurements;
 
Requires consideration of the Company’s creditworthiness when valuing liabilities; and
 
Expands disclosures about instruments measured at fair value.

The Valuation Hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the Valuation Hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  The three levels of the Valuation Hierarchy and the distribution of the Company’s financial assets within it are as follows:

 
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
 
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1, consist of active listed equities.

Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2.  These generally include certain U.S. government obligations and investment-grade corporate bonds.

Investments whose values are classified as Level 3 have significant unobservable inputs, as they may trade infrequently or not at all.  Investments whose values are classified as Level 3 generally include private investments.  When observable prices are not available for these securities, the Company uses one or more valuation techniques (e.g., the market approach or the income approach) for which sufficient and reliable data is available.

Within Level 3 of the fair value hierarchy, the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of the net present value of estimated future cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors.
 
11

 
The inputs used by the Company in estimating the value of investments classified as Level 3 may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows.

The carrying values and estimated fair values of the Company's financial instruments for the periods presented are as follows:

   
Carrying Value
   
Quote Prices in
Active Markets
(Level 1)
   
Significant Other
Observable Inputs
(Level 2)
   
Significant
Unobservable
Inputs 
(Level 3)
 
September 30, 2009:
                       
                         
Financial Assets
                       
Membership interest in LLC
  $ 250,000     $     $     $ 250,000  
Total Financial Assets
  $ 250,000     $     $     $ 250,000  
                                 
December 31, 2008:
                               
                                 
Financial Assets
                               
Notes
  $ 652,737     $     $ 652,737     $  
Total Financial Assets
  $ 652,737     $     $ 652,737     $  

The following table presents additional information about assets measured at fair value using Level 3 inputs for the nine months ended September 30, 2009:

   
Membership Interest In LLC
 
Balance as of January 1, 2009
  $  
Purchases
    250,000  
Balance as of September 30, 2009
  $ 250,000  

4. RELATED PARTY TRANSACTIONS

The Company shares office space and other administrative functions with Concorde.  The Board voted to start paying Concorde monthly rent of $4,000 beginning January 1, 2009.  Rent incurred during the three and nine months ended September 30, 2009 amounted to $12,000 and $36,000, respectively.

5. INVESTMENT ADVISORY AGREEMENTS

Pursuant to an investment advisory management agreement dated October 31, 2006, Blackhawk engaged Barak Asset Management, LLC (“Barak”), a Delaware limited liability company who is 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.  The agreement is for a one-year term and extendable for one year periods.  The agreement with Barak was extended and expires on October 31, 2009.  Any one-year extension of the Barak agreement must be approved by (a) the vote of the Company’s board of directors, or the vote of a majority of the Company’s outstanding voting securities, and (b) the vote of the majority of the Company’s independent directors.

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 are billed and payable quarterly in arrears (or a prorated period when applicable).
 
12

 
For the three and nine months ended September 30, 2009, the Company incurred fees in the amount of $2,188 and $12,030, respectively, and $3,115 and 6,882, respectively, for the same corresponding periods in 2008.

Blackhawk has entered into a consulting 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 September 30, 2009, the Company had not incurred any liability to Mr. Tull.

6. ACCRUED EXPENSES

Accrued expenses at September 30, 2009 and December 31, 2008 consist principally of professional fees.

7. STOCKHOLDERS’ EQUITY

During 2008, pursuant to a Regulation E Offering, the Company sold an aggregate of 1,298,112 shares of Common Stock, at a purchase price of $1.00 per share for aggregate proceeds of $1,168,801, net of expense of $129,311.

8. FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights for the nine months ended September 30, 2009 and 2008, and the year ended December 31, 2008.

   
NINE MONTHS ENDED
SEPTEMBER 30, 2009
(unaudited)
   
NINE MONTHS ENDED
SEPTEMBER 30, 2008
(unaudited)
   
YEAR ENDED
DECEMBER 31,
2008
 
Per Share Data:
                 
Net asset value – beginning of period
  $ 0.02218     $ (0.00119 )   $ (0.00119 )
Net investment loss *
    (0.02512 )     (0.01011 )     (0.01263 )
Issuance of common stock
    -       1.00000       1.00000  
Net realized and unrealized gain (loss)**
    0.00410       (0.96394 )     (0.96400 )
                         
Net asset value – end of period
  $ 0.00116     $ 0.02476     $ 0.02218  
                         
Total return based on net asset value ***
    (95 )%     (849 )%     (1,061 )%
                         
Common shares outstanding – end of period
    32,467,484       32,467,484       32,467,484  
Ratio/Supplemental Data:
                       
Net assets – end of period
  $ 37,693     $ 803,842     $ 719,976  
                         
Ratio of net investment loss to average net assets****
    (294 )%     (108 )%     (88 )%
                         
Ratio of operating expenses to average net assets****
    296 %     112 %     91 %

Calculated based on weighted average shares outstanding during period.
 
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**
Net realized and unrealized gain (loss), per share, which is balancing amount necessary to reconcile the change in net asset value per share with the other per share information presented.

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

**** 
Annualized for periods less than one year.
 
9. STOCK-BASED COMPENSATION

In December 2008, the stockholders approved the Company's Stock Option Plan ("Stock Option Plan") which provides for 3,000,000 shares of common stock available for grant, of which 2,500,000 are reserved for incentive stock options, to the Company's officers, directors and key employees.  A grant must be approved by the stock option committee of the Company (“Committee”).

The Committee may grant either incentive stock options (for purposes of Section 422 of the Internal Revenue Code of 1986, as amended), or nonqualified stock options.  Except as described below for incentive stock options, the Committee generally has the discretion to determine the persons to whom stock options will be granted, the number of shares subject to such options, the exercise prices of such options, the vesting schedules with respect to such options, the terms of such options, as well as the period, if any, following a participant's termination of service during which such option may be exercised, and the circumstances in which all or a portion of an option may become immediately exercisable or be forfeited.

The Company accounts for stock-based payments by regarding stock-based compensation expense in the statement of operations over the vesting period based on the fair value of the award at the grant date.

The following table summarizes activity under the Company's stock option plans for the nine months ended September 30, 2009:

   
Shares Under
Options
   
Weighted Average
Exercise Price
   
Remaining
Contractual Life
(In Years)
   
Aggregate
Intrinsic Value
 
                         
Outstanding at beginning of period
                       
Grants
    600,000     $ 0.40              
Exercised
                       
Forfeited
                       
Outstanding at end of period
    600,000     $ 0.40       9.33        
Exercisable at end of period
    600,000     $ 0.40       9.33        

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of the Company's common stock on the date of determination for those awards that have an exercise price currently below the closing price.  As of September 30, 2009, there were no options outstanding to purchase shares with an exercise price below the quoted price of the Company's common stock.

The fair value of stock options is determined at the date of grant and is charged to compensation expense over the vesting period of the options.  The fair value of options at date of grant was estimated using the Black-Scholes option pricing model utilizing the following assumptions:
 
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Nine-Months Ended
  September 30, 2009  
 
Risk-free interest rate
    1.88 %
Expected option life in years
    5  
Expected stock price volatility
    200 %
Expected dividend yield
    0 %

The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.  The expected life was determined using the simplified method as the Company does not have sufficient historical stock option exercise experience on which to base the expected term.  Expected volatilities are based on historical volatility of the Company's common stock.  The Company has not paid any dividends in the past and does not expect to pay any in the near future.

The weighted average fair value at date of grant for options granted during the nine months ended September 30, 2009 was $0.22.  The Company recorded $132,000 of compensation expense for the nine months ended September 30, 2009.  Estimated unrecognized stock-based compensation relating to stock options as of September 30, 2009 is $0.

10.  OTHER

Employment Agreement.  On January 30, 2009, the Company entered into an Employment Agreement with Craig A. Zabala ("Zabala"), founder, Chairman, President and Chief Executive Officer, and acting Chief Financial Officer and Chief Compliance Officer, of the Company.

The term of the Employment Agreement is three (3) years (“Employment Period”).  The Employment Period will be automatically renewed for one (1) additional year each year unless ninety (90) calendar days prior to the end of the term, the Company advises Zabala in writing that it does not wish to extend the Employment Period for an additional year.

Pursuant to the Employment Agreement, Zabala serves as President and Chief Executive Officer of the Company, provided that if the Company hires and/or enters into an employment agreement with any executive who serves as President and Chief Operating Officer of the Company, Zabala shall resign his position as President, but would keep his position as Chief Executive Officer.  Zabala also agrees to serve as acting Chief Financial Officer and acting Chief Compliance Officer until the Company retains employees for such positions.  The Employment Agreement also permits Zabala to perform work for Concorde and another affiliate, provided that such work does not compete with the business and business opportunities of the Company.

Zabala will receive a base annual salary of $60,000 under the Employment Agreement.  Each year, the Board of Directors may increase the base salary in its discretion.  In the event that the Company sells a minimum of $3,000,000 of shares of its common stock in its current private placement offering ("Offering"), which expires December 31, 2009, unless extended by the Company in its sole discretion, under Rule 506 under Regulation D under the Securities Act, the Company shall increase Zabala's annual base salary to $250,000 and pay him a $50,000 bonus (which bonus may be increased proportionately if the Company raises more than $3,000,000 in the Offering but the amount of the bonus shall not be greater than $100,000).  If the minimum amount is not raised in the Offering, Zabala's base salary remains at $60,000.  The Offering expires December 31, 2009, unless extended by the Company in its sole discretion.

The Employment Agreement terminates upon the earliest to occur of (i) Zabala's death or disability; (ii) cause or non-cause termination of Zabala by the Company; (iii) a termination by Zabala for "good reason" or Zabala resigns from the Company without "good reason" or (iv) Zabala is replaced as President and Chief Executive Officer of the Company (except if another executive is hired as President and Chief Operating Officer).

If Zabala is terminated without cause, or if he resigns for "good reason," he would receive accrued salary and bonuses, if any, to the end of the employment term.  In addition, if Zabala is terminated without cause or if he resigns for "good reason," the Company must pay to Concorde rental payments (for rental of space at 14 Wall Street, New York, New York 10005) of $4,000 per month from April 2004 until the month Zabala is terminated without cause or resigns for "good reason."  If he is terminated for cause, he is not entitled to any rights or compensation under the Employment Agreement, provided that the Company must make the $4,000 monthly rental payment to its affiliate Concorde.  If Zabala is terminated in the event of death or disability, or he resigns without "good reason," he shall only be entitled to receive accrued and unpaid base salary and benefits through the date of his employment termination.  If the Company hires a replacement for Zabala who does not serve as President and Chief Operating Officer, but serves as Chief Executive Officer, Zabala would be entitled to the benefits above for a non-cause termination.
 
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Stock Option Grant.  Pursuant to the Employment Agreement, Zabala was granted 600,000 options to purchase shares of Common Stock at an exercise price of $0.40 per share (above the market value of $0.22 on date of grant) which expires on February 1, 2019.  The options were fully vested upon issuance.

Macromarkets Investment.  On January 12, 2009, Blackhawk entered into a Voting Capital Interests Purchase Agreement ("Purchase Agreement") with MacroMarkets LLC, a Delaware limited liability company ("MacroMarkets").  Pursuant to the Purchase Agreement, Blackhawk purchased a five percent (5%) membership interest in MacroMarkets for $250,000 and Craig A. Zabala, Chairman and Chief Executive Officer of Blackhawk, was appointed a non-voting board member of MacroMarkets.  The Purchase Agreement contains standard representations, warranties and indemnification provisions.  The transaction closed on January 12, 2009.  Blackhawk used funds from working capital to make the equity investment.

MacroMarkets is the parent company founded by Robert Shiller, Sam Masucci and Allan Weiss in 2002 to develop financial products and new risk management tools on assets that are difficult to own and hedge.  Macro Financial, LLC, a FINRA member broker dealer, is a subsidiary of MacroMarkets that provides sales and marketing support for Macro Securities Depositor, LLC, Macro Inflation Depositor, LLC and Macro Housing Depositor, LLC, which use proprietary product structures to deliver performance on commodities, inflation and real estate.

Placement Agent Agreements.  The Company retained placement agents to raise equity capital in its private placement offering ("Offering") under Rule 506 of the Securities Act for Blackhawk pursuant to placement agent agreements with John W. Loofbourrow Associates, Inc., Direct Access Partners, Lombardi & Co., Bentley Securities Corporation and Growthink Securities, Inc., respectively, dated July 8, July 20, July 27, 2009, August 3, 2009, and August 21, 2009, respectively ("Placement Agent Agreements").  All five of these agreements contain nearly identical terms.  The Placement Agents will solicit interest from a limited number of potential investors who are “qualified institutional buyers” ("QIBs") as defined under Rule 144A under the Securities Act and "accredited investors" as defined under Regulation D under the Securities Act in connection with raising equity capital for Blackhawk in the Offering.  There is no minimum amount to be raised by the Placement Agents for the Offering and the maximum amount is $250,000,000.  In return for the Placement Agent services, Blackhawk will pay a Placement Agent a cash fee equal to five percent (5%) of the purchase price ($5.00 per share) of any securities placed with a prospective investor by a Placement Agent and purchased and paid for by the investor.  Other than Bentley Securities Corporation, where Blackhawk will reimburse it for any out-of-pocket expenses reasonably incurred in connection with its placement agent agreement (provided that any such expenses in excess of $1,000.00 requires prior approval by Blackhawk), Blackhawk does not have to reimburse the Placement Agents for their expenses.  The Placement Agent Agreements commenced on the date of the agreement or, in the case of Bentley Securities Corporation, the day immediately thereafter, and terminate on the earliest to occur of: (i) ten calendar days after written notice is given to the Company by the Placement Agent of a potential investor purchasing at least 50,0000,000 shares that will close on the purchase of the shares within five calendar days of the date of such written notice; (ii) 180 calendar days from the date of the agreement or, in the case of Bentley Securities Corporation, the day immediately thereafter; (iii) the date of closing and funding by an investor of a subscription agreement for a minimum of 50,000,000 shares; or (iv) ten calendar days after written notice is given to the Placement Agent by the Company that the Offering will be closed at the sole discretion of the Company (the "Term"), provided further that with respect to Bentley Securities Corporation, its placement agent agreement also terminates upon ten (10) days written notice by either party under the agreement and such termination right is included as a new (v) within the definition of “Term.”   The parties may extend the Term by mutual agreement.
 
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The Placement Agent Agreements also provide that for 180 calendar days from the date of the agreement or, in the case of Bentley Securities Corporation, the day immediately thereafter (the "Period"), the Placement Agents shall have the non-exclusive right on behalf of the Company to solicit prospective investors who are QIBs and/or accredited investors regarding the possible sale to such investors of shares.  During the Period, the Placement Agents do not have the right to conduct any other discussions on behalf of the Company regarding any matter other than the sale of the shares to the prospective investors.  For purposes of clarification, the Company during the Period agreed to deal non-exclusively with the Placement Agents concerning the sale of the shares.  The Placement Agent Agreements contain customary indemnification and confidentiality provisions.  With the exception of the Bentley Securities Corporation placement agent agreement, the Company’s indemnification obligations under each agreement is limited to $25,000.  The Placement Agent Agreements also provide that for a period of one year (two years for the agreement with Growthink Securities, Inc.) from the termination date of the Placement Agent Agreements, if a Placement Agent enters into a selling group in any subsequent securities offerings of Blackhawk, then the Placement Agent shall receive additional financing fees if Blackhawk sells securities to those investors previously introduced by the Placement Agent.  The additional fees payable to the Placement Agent will be at the same rate as any underwriting or placement fees that are listed in any Blackhawk future offering memorandum or prospectus.

The Company entered into a consultation agreement dated August 21, 2009 ("Consulting Agreement") with Growthink, Incorporated, a Delaware corporation and affiliate of Growthink Securities, Inc. ("Consultant").  Pursuant to the Consulting Agreement, Consultant will provide to the Company research, analysis and data relating to business development company ("BDC") and hedge fund investments, and include coverage and analysis of similar BDC's and hedge funds, as well as data on targeted investments.  Consultant will also syndicate its research and analysis reports into coverage channels to individual and institutional investors.  Consultant will prepare and distribute in the appropriate investment channels a research report on the Company.  Consultant may not release any research or report without (i) the Company's consent and (ii) during the period of the Company’s private placement offering.
 
The Company paid Consultant $25,000 upon execution of the Consulting Agreement and must pay it $25,000 every sixty (60) days thereafter unless either party terminates the agreement upon seven (7) days notice.  The term of the Consulting Agreement is sixty (60) days, and thereafter for a total of eight (8) months.  It is automatically renewed thereafter in sixty (60) day increments until terminated in writing by either party upon seven (7) calendar days advance written notice.
 
In the Consulting Agreement, the Company provides Consultant with indemnification against certain specified losses.  The Consulting Agreement also provides that no research or report may be released by the Consultant without the consent of the Company and review by its legal counsel.
 
The Company has evaluated its activity through November 10, 2009, the date its financial statements were issued.

Item 2.  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.

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts may contain forward-looking statements that involve a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management.  Potential risks and uncertainties include, among other factors, general business conditions, government regulations, competitive market conditions, success of Blackhawk's business strategy, and other risks and uncertainties currently unknown to management.

Overview

Blackhawk is a business development company registered under the Investment Company Act of 1940 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.  To date, the Company has made one investment in a portfolio company, MacroMarkets.
 
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Accounting Policies

Basis of Presentation

Interim financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X.  Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with GAAP are omitted.  In the opinion of management, all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods have been included.  The results of operations for the current period are not necessarily indicative of results that ultimately may be achieved for the year.  The interim unaudited financial statements and notes thereto should be read in conjunction with the December 31, 2008 audited financial statements and notes thereto included in the Company’s Form 10-K as filed with the SEC.
 
Blackhawk had a decrease in net assets from operations of $814,283 for the nine months ended September 30, 2009, and had total net assets of $37,693 at September 30, 2009 and to date has made one investment in an eligible portfolio company, which is MacroMarkets, LLC.  Blackhawk intends to raise capital through another proposed offering and access the equity markets to raise cash to fund investments.  The ability of Blackhawk to raise capital in this current market environment will be very difficult.  Business development companies similar to Blackhawk are encountering trying market conditions in attempts to raise capital.  There can be no assurance that Blackhawk will be able to raise equity capital in its offering.  Since inception, Blackhawk's operations have been principally funded by three Regulation E offerings and by loans from Concorde.  Blackhawk is presently dependent on Concorde to subsidize its capital and liquidity needs.  Concorde has agreed to provide sufficient capital to Blackhawk to subsidize operational expenses to operate through October 1, 2010 to the extent Concorde has such funds.  If the Company is unable to raise equity capital or if Concorde is unable to provide sufficient capital to the Company to fund its operational expenses, it would have an adverse impact on liquidity and operations and the Company may be unable to continue as a going concern.  The financial statements have been prepared on a going concern basis and do not reflect any adjustments that might result from the outcome of this uncertainty.
 
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 and the valuation allowance for deferred tax assets.

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities.  We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences.  As of September 30, 2009, net deferred tax assets aggregated $881,000, which was fully reserved based on the likelihood of realization.

The Company's investments are carried at fair value.  See Note 3 to our Condensed Financial Statements for additional information with respect to investments.
 
Portfolio and Investment Activity

Blackhawk did not make any portfolio investment in 2008 or in prior years.  However, on January 12, 2009, Blackhawk entered into a Voting Capital Interests Purchase Agreement ("Purchase Agreement") with MacroMarkets LLC, a Delaware limited liability company ("MacroMarkets").  Pursuant to the Purchase Agreement, Blackhawk purchased a five percent (5%) membership interest in MacroMarkets for $250,000 and Craig A. Zabala, Chairman and President of Blackhawk, was appointed a non-voting board member of MacroMarkets.  The Purchase Agreement contains standard representations, warranties and indemnification provisions.  The transaction closed on January 12, 2009. Blackhawk used funds from working capital to make the equity investment.
 
18

 
Results of Operations

Investment Income

For the three months ended September 30, 2009 and 2008, we had $131 and $3,275, respectively, of interest income.

For the nine months ended September 30, 2009 and 2008, we had $6,099 and $12,827, respectively, of interest income.

General and Administrative Expenses

For the three months ended September 30, 2009 and 2008, general and administrative expenses were $219,264 and $63,412, respectively, due to increases in professional and consulting fees, compensation, insurance and rent.

For the nine months ended September 30, 2009 and 2008, general and administrative expenses were $821,670 and $335,607, respectively, due to increases in professional fees, compensation, and rent.

New Accounting Pronouncements
 
See Note 1 to our interim Condensed Financial Statements for information with respect to new accounting pronouncements.
 
Liquidity and Capital Resources

From inception (April 22, 2004) through September 30, 2009, Blackhawk funded its cash operating requirements through the sale of its common stock and loans from an affiliated company, Concorde.

The net cash proceeds from the Regulation E offerings since inception have been $1,711,731 through September 30, 2009.

Blackhawk had a decrease in net assets from operations of $814,283 for the nine months ended September 30, 2009, and had total net assets of $37,693 at September 30, 2009 and to date has made one investment in an eligible portfolio company, which is MacroMarkets, LLC.  Blackhawk intends to raise capital through another proposed offering and access the equity markets to raise cash to fund investments.  The ability of Blackhawk to raise capital in this current market environment will be very difficult.  Business development companies similar to Blackhawk are encountering trying market conditions in attempts to raise capital.  There can be no assurance that Blackhawk will be able to raise equity capital in its offering.  Since inception, Blackhawk's operations have been principally funded by three Regulation E offerings and by loans from Concorde.  Blackhawk is presently dependent on Concorde to subsidize its capital and liquidity needs.  Concorde has agreed to provide sufficient capital to Blackhawk to subsidize operational expenses to operate through October 1, 2010 to the extent Concorde has such funds.  If the Company is unable to raise equity capital or if Concorde is unable to provide sufficient capital to the Company to fund its operational expenses, it would have an adverse impact on liquidity and operations and the Company may be unable to continue as a going concern.
 
Item 3. 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.
 
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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 generally accepted accounting principles.  Blackhawk has made one investment to date in MacroMarkets.

Item 4T. Controls and Procedures.

Management Report on Internal Control Over Financial Reporting.  The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.  The Company's internal control system is a process designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation and fair presentation of published financial statements.  

Our 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. generally accepted accounting principles and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on our consolidated financial statements.

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 the Company's internal control over financial reporting as of September 30, 2009.  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 September 30, 2009, the Company'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.

Changes in Internal Controls over Financial Reporting.  There have been no significant changes in our internal controls 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.
 
PART II.  OTHER INFORMATION

Item 1.  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 1A. Risk Factors

This Section is not applicable.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

This Section is not applicable.
 
20

 
Item 3.  Defaults upon Senior Securities.

This Section is not applicable.
 
Item 4.  Submission of Matters to a Vote of Security Holders.

There were no matters submitted to a vote of security holders during the third quarter ended September 30, 2009.

Item 5.  Other Information.

This Section is not applicable.
 
Item 6.  Exhibits.

10.1
 
Placement Agent Agreement dated August 21, 2009 between the Company and Growthink Securities Inc.
     
10.2
 
Consultation Agreement dated August 21, 2009 between the Company and Growthink, Incorporated
     
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
 
21


 
SIGNATURE

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
BLACKHAWK CAPITAL GROUP BDC, INC.
 
       
Date: November 10, 2009
By:
/s/ Craig A. Zabala
 
   
Craig A. Zabala, Chief Executive Officer
 
       
Date: November 10, 2009
By:
/s/ Craig A. Zabala
 
   
Craig A. Zabala, Acting Chief Financial Officer
 
 
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