U.S.
        SECURITIES AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 
 FORM
        10-Q
 
 (X)
        QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
 EXCHANGE
        ACT OF 1934.
 
 For
        the
        six month period ended June 30, 2005.
 
 ( 
         ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
 SECURITIES
        EXCHANGE ACT OF 1934.
 
 For
        the
        transition period from to
 
 Commission
        File No. 814-00678
 
 BLACKHAWK
        CAPITAL GROUP BDC, INC.
 (Name
        of
        Small Business Issuer in its Charter)
 
 Delaware
              20-1031329(State
                  or other jurisdiction of
                incorporation
                  or organization)
              (I.R.S.
                  Employer
                Identification
                  No.)
 
 14
        Wall
        Street, 11 th Floor
 New
        York,
        New York 10005
 (Address
        of Principal Executive Offices)
 
 Registrant's
        telephone number, including area code (212) 566-8300
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15 (d) of the Exchange Act during the past 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.
 
 (1)
        Yes
x   No
o  (2)
        Yes x   No o
 
 State
        the
        number of shares outstanding of each of the Registrant's classes of common
        equity, as of the latest applicable date:
 
 28,126,781
        - June 30, 2005
 
 
 
 
 BLACKHAWK
        CAPITAL GROUP BDC, INC.
 FORM
        10-Q
 June
        30,
        2005
 
 INDEX
 
 PART
                  I - FINANCIAL INFORMATION
              PageItem
                  1 - Financial StatementsBalance
                  Sheet -June
                  30, 2005Statements
                  of Operations -For
                  the Six Months Ended June 30, 2005Statement
                  of Stockholders’ Equity -For
                  the Six Months Ended June 30, 2005Statements
                  of Cash Flows -For
                  the Six Months Ended June 30, 2005Notes
                  to Financial Statements -For
                  the Six Months Ended June 30, 2005Item
                  2 - Plan of OperationItem
                  3 - Quantitative and Qualitative Disclosures about Market
                  RiskItem
                  4 - Controls and ProceduresPART
                  II - OTHER INFORMATIONItem
                  1 - Legal ProceedingsItem
                  2 - Unregistered Sales of Equity Securities and Use of
                  ProceedsItem
                  3 - Default upon Senior SecuritiesItem
                  4 - Submission of Matters to a Vote of Security HoldersItem
                  5 - Other InformationItem
                  6 - Exhibits
   
 
 PART
        I. FINANCIAL
        INFORMATION
 
 ITEM
        1.
        FINANCIAL STATEMENTS
 
 ***Paritz
        & Company, P.A.***




**BLACKHAWK
        CAPITAL GROUP BDC INC.**
 **(A
        Development Stage Company)**
 
 *UNAUDITED
        FINANCIAL STATEMENTS*
 *WITH*
 *ACCOUNTANTS’
        REVIEW REPORT*
 
 *SIX
        MONTHS ENDED JUNE 30, 2005*
    
 
 
 
  **Paritz
                    & Company, P.A.**
                15
                    Warren Street, Suite 25
                  Hackensack,
                    New Jersey 07601
                  (201)342-7753
                  Fax:
                    (201) 342-7598
                  E-Mail:
                    paritz @paritz.comCertified
                    Public Accountants
 
 **ACCOUNTANTS** **=** **REVIEW REPORT**
  Board
            of
            Directors
 **Blackhawk
            Capital Group BDC Inc.**
 **(A
            Development Stage Company)**
 New
            York,
            New York
 
 
 We
            have
            reviewed the accompanying balance sheet of Blackhawk Capital Group DBC
            Inc. (A
            Development Stage Company) as of June 30, 2005 and the related statements
            of
            income and retained earnings and cash flows for the six months then ended
            in
            accordance with Statements on Standards for Accounting and Review Services
            issued by the American Institute of Certified Public Accountants. All
            information included in these financial statements is the representation
            of the
            management of Blackhawk Capital Group DBC Inc. (A Development Stage
            Company).
 
 A
            review
            consists principally of inquiries of company personnel and analytical
            procedures
            applied to financial data. It is substantially less in scope than an
            examination
            in accordance with generally accepted auditing standards, the objective
            of which
            is the expression of an opinion regarding the financial statements taken
            as a
            whole. Accordingly, we do not express such an opinion.
 
 Based
            on
            our review, we are not aware of any material modifications that should
            be made
            to the accompanying financial statements in order for them to be in conformity
            with generally accepted accounting principles.
 
 
 ***Paritz & Company,
                    P.A.***
  Hackensack,
            New Jersey
 August
            1,
            2005
   
 **BLACKHAWK
            CAPITAL GROUP BDC INC.**
 **(A
            Development Stage Company)**
 
 BALANCE
            SHEET
 
 JUNE
            30,
            2005
 (Unaudited)
 
 **ASSETS****CURRENT
                        ASSETS:**Cash
                        and cash equivalents
                    
                    $
                    90,811**TOTAL
                        CURRENT ASSETS**
                    
                    
                    **90,811****OTHER
                        ASSETS:****Deferred
                        offering costs**
                    
                    
                    **56,927****TOTAL
                        ASSETS**
                    
                    **$**
                    **147,738****LIABILITIES
                        AND STOCKHOLDERS****=****EQUITY****CURRENT
                        LIABILITIES:**Due
                        to affiliated company
                    
                    $
                    37,475Accrued
                        expenses
                    
                    
                    1,500**TOTAL
                        CURRENT LIABILITIES**
                    
                    
                    **38,975****STOCKHOLDERS’
                        EQUITY**
                    
                    
                    **108,763****TOTAL
                        LIABILITIES AND STOCKHOLDERS****=****EQUITY**
                    
                    **$**
                    **147,738**
 See
              accountants’ review report
 
 
 
 **BLACKHAWK
            CAPITAL GROUP BDC INC.**
 **(A
            Development Stage Company)**
 
 STATEMENT
            OF OPERATIONS
 
 SIX
            MONTHS ENDED JUNE 30, 2005
 (Unaudited)
 
 SIX
                        MONTHS
                      ENDED
                      JUNE
                        30, 2005
                    
                    
                    THREE
                        MONTHS
                      ENDED
                      JUNE
                        30, 2005**REVENUES:**Interest
                        income
                    
                    $
                    310
                    
                    $
                    273**TOTAL
                        REVENUES**
                    
                    
                    **310**
                    
                    
                    **273****EXPENSES:**Professional
                        fees
                    
                    
                    1,500
                    
                    
                    -Consulting
                        fees
                    
                    
                    12,000
                    
                    
                    1,000Filing
                        fees
                    
                    
                    1,560
                    
                    
                    1,075State
                        and local taxes
                    
                    
                    455
                    
                    
                    -**TOTAL
                        EXPENSES**
                    
                    
                    **15,515**
                    
                    
                    **2,075****NET
                        LOSS**
                    
                    **$**
                    **(15,205**
                    **)**
                    **$**
                    **(1,802**
                    **)**
  See
              accountants’ review report
 
 
 
 **BLACKHAWK
            CAPITAL GROUP BDC INC.**
 **(A
            Development Stage Company)**
 
 STATEMENT
            OF STOCKHOLDERS = EQUITY
 
 SIX
            MONTHS ENDED JUNE 30, 2005
 (Unaudited)
 
 TOTAL
                  
                  
                  --COMMON
                      STOCK--
                  
                  
                  --PREFERRED
                      STOCK--
                  
                  
                  ADDITIONAL
                    PAID-IN
                    CAPITAL
                  
                  
                  DEFICIT
                    ACCUMULATED
                    DURING
                    DEVELOPMENT
                    STAGESHARES
                  
                  
                  AMOUNT
                  
                  
                  SHARES
                  
                  
                  AMOUNTSale
                      of formation stock
                  
                  $
                  195
                  
                  
                  11,000,000
                  
                  $
                  110
                  
                  
                  8,500,000
                  
                  $
                  85
                  
                  $
                  -
                  
                  $
                  -Sale
                      of stock pursuant to offering plan
                  
                  
                  20,919
                  
                  
                  2,091,901
                  
                  
                  21
                  
                  
                  -
                  
                  
                  -
                  
                  
                  20,898
                  
                  
                  -Offering
                      costs
                  
                  
                  (4,272
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (4,272
                  )
                  
                  -Net
                      loss
                  
                  
                  (12,515
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (12,515
                  )Balance
                      - January 1, 2005
                  
                  
                  4,327
                  
                  
                  13,091,901
                  
                  
                  131
                  
                  
                  8,500,000
                  
                  
                  85
                  
                  
                  16,626
                  
                  
                  (12,515
                  )Sale
                      of stock pursuant to offering plan
                  
                  
                  39,118
                  
                  
                  3,911,762
                  
                  
                  39
                  
                  
                  -
                  
                  
                  -
                  
                  
                  39,079
                  
                  
                  -Offering
                      costs
                  
                  
                  (7,990
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (7,990
                  )
                  
                  -Net
                      loss
                  
                  
                  (13,403
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (13,403
                  )Balance
                      - April 1, 2005
                  
                  
                  22,052
                  
                  
                  17,003,663
                  
                  
                  170
                  
                  
                  8,500,000
                  
                  
                  85
                  
                  
                  47,715
                  
                  
                  (25,918
                  )Sale
                      of stock pursuant to offering plan
                  
                  
                  111,231
                  
                  
                  11,123,118
                  
                  
                  111
                  
                  
                  -
                  
                  
                  -
                  
                  
                  111,120
                  
                  
                  -Offering
                      costs
                  
                  
                  (22,718
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (22,718
                  )
                  
                  -Net
                      loss
                  
                  
                  (1,802
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1,802
                  )Balance
                      - June 30, 2005
                  
                  $
                  108,763
                  
                  
                  28,126,781
                  
                  
                  281
                  
                  
                  8,500,000
                  
                  $
                  85
                  
                  $
                  136,117
                  
                  $
                  (27,720
                  )
  See
            accountants’ review report
  
  **BLACKHAWK
            CAPITAL GROUP BDC INC.**
 **(A
            Development Stage Company)**
 
 STATEMENT
            OF CASH FLOWS
 
 SIX
            MONTHS ENDED JUNE 30, 2005
 (Unaudited)
  **OPERATING
                        ACTIVITIES:**Net
                        loss
                    
                    $
                    (15,205
                    )Changes
                        in operating assets and liabilities:Due
                        to affiliated company
                    
                    
                    7,000Deferred
                        offering costs
                    
                    
                    30,708Accrued
                        expenses
                    
                    
                    (3,500
                    )**NET
                        CASH PROVIDED BY OPERATING ACTIVITIES**
                    
                    
                    **19,003****FINANCING
                        ACTIVITIES:**Net
                        proceeds from the issuance of stock
                    
                    
                    58,208**NET
                        CASH PROVIDED BY FINANCING ACTIVITIES**
                    
                    
                    **58,208****INCREASE
                        IN CASH**
                    
                    
                    **77,211****CASH
                        - BEGINNING OF PERIOD**
                    
                    
                    **13,600****CASH
                        - END OF PERIOD**
                    
                    **$**
                    **90,811**
  See
              accountants’ review report
 
 
  **BLACKHAWK
            CAPITAL GROUP BDC INC.**
 **(A
            Development Stage Company)**
 
 NOTES
            TO
            FINANCIAL STATEMENTS
 
 JUNE
            30,
            2005
 (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 26, 2004.
 
 On
            September 14, 2004 the Company filed a Form N-54A, Notification with
            the
            Securities and Exchange Commission electing to become a Business Development
            Company pursuant to Section 54(a) of the Investment Company Act of
            1940.
 
 Blackhawk
            has been in the developmental stage since inception and its operations
            to date
            have been limited to issuing shares, other organizational matters and
            developing
            potential investment opportunities.
 
 Blackhawk
            will attempt 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 intends to offer managerial assistance to eligible
            portfolio
            companies in which it invests.
 
 As
            a
            business development company, Blackhawk will be able to raise money to
            acquire
            interests in small private business, as well as non-dividend paying public
            companies.
 
 ***Uses
            of estimates in the preparation of financial
            statements***
 
 The
            preparation of financial statements in conformity with generally accepted
            accounting principles 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.
 
 ***Deferred
            income taxes***
 
 The
            Company accounts for income taxes in accordance with Statement of Financial
            Accounting Standards No. 109 (SFAS 109) which requires that deferred
            tax assets
            and liabilities be recognized for future tax consequences attributable
            to
            differences between financial statement carrying amounts of existing
            assets and
            liabilities and their respective tax bases. In addition, SFAS 109 requires
            recognition of future tax benefits, such as carryforwards, to the extent
            that
            realization of such benefits is more likely than not and that a valuation
            allowance be provided when it is more likely than not that some portion
            of the
            deferred tax asset will not be realized
 
 **BLACKHAWK
                CAPITAL GROUP BDC INC.**
 **(A
                Development Stage Company)**
 
 NOTES
                TO
                FINANCIAL STATEMENTS
 
 JUNE
                30,
                2005
 (Unaudited)
 **2**  **STOCKHOLDERS’
            EQUITY**
 
 The
            Company is authorized to issue 1,000,000,000 shares of common stock and
            15,000,000 shares of preferred stock, both with a par value of $.00001
            per
            share. Shortly after formation, the Company sold 11,000,000 shares of
            common
            stock and 8,500,000 shares of preferred stock to its founders for an
            aggregate
            of $195.
 
 Pursuant
            to an offering circular dated September 15, 2004, the Company has sold
            17,126,781 shares of common stock at $.01 per share for aggregate proceeds
            of
            $171,378.
 
 Holders
            of shares of common stock are entitled to one vote for each share on
            all matters
            to be voted on by the stockholders. Holders of common stock do not have
            cumulative voting rights. In the event of liquidation, dissolution or
            winding up
            of the Company, the holders of common stock are entitled to share pro
            rata all
            assets remaining after payment in full of all liabilities. All of the
            outstanding shares of common stock are fully paid and
            non-assessable.
 
 The
            Board
            of Directors is authorized to provide for the issuance of shares of preferred
            stock in series and to establish the number of shares to be included
            in each
            such series, and to fix the designation, powers, preferences and rights
            of the
            shares of each such series and the qualifications, limitations or restrictions
            thereof without any further vote or action by the stockholders. Any shares
            of
            preferred stock so issued would have priority over the common stock with
            respect
            to dividend or liquidation rights.
 
 **3**  **INCOME
            TAXES**
 
 Blackhawk
            has available net operating loss carryforwards for income tax purposes
            of
            approximately $27,000 which expire in 2024.
 
 The
            Company has a deferred tax asset of approximately $5,400. Since Blackhawk
            is a
            development stage company with no operating history, a 100% valuation
            allowance
            has been provided.
 
 **4**  **DUE
            TO AFFILIATED COMPANY**
 
 Amount
            due to affiliated company is non-interest bearing and is due according
            to the
            terms of the offering plan.
 
 **5**  **RELATED
            PARTY TRANSACTIONS**
 
 The
            Company shares office space and other administrative functions with affiliated
            companies, at no charge to the Company.
 
 
 
 ITEM
              2.
              PLAN OF OPERATION
 
 GENERAL
 
 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
              the Company's business strategy, and other risks and uncertainties
              currently
              unknown to management.
 
 CRITICAL
              ACCOUNTING POLICIES
 
 The
              Company's financial statements and related public financial information
              are
              based on the application of accounting principles generally accepted
              in the
              United States of America ("GAAP"). GAAP requires the use of estimates,
              assumptions, judgments and subjective interpretations of accounting
              principles
              that have an impact on the assets, liabilities, revenue and expense
              amounts
              reported. These estimates can also affect supplemental information
              contained in
              the external disclosures of the Company including information regarding
              contingencies, risk and financial condition. We believe our use of
              estimates and
              underlying accounting assumptions adhere to GAAP and are consistently
              and
              conservatively applied. Valuations based on estimates are reviewed
              by us for
              reasonableness and conservatism on a consistent basis throughout the
              Company.
              Primary areas where financial information of the Company is subject
              to the use
              of estimates, assumptions and the application of judgment include acquisitions,
              valuation of investments, and the realizability of deferred tax assets.
              We base
              our estimates on historical experience and on various other assumptions
              that we
              believe to be reasonable under the circumstances. Actual results may
              differ
              materially from these estimates under different assumptions or
              conditions.
 
 VALUATION
              OF LONG-LIVED AND INTANGIBLE ASSETS
 
 The
              recoverability of long-lived assets requires considerable judgment
              and is
              evaluated on an annual basis or more frequently if events or circumstances
              indicate that the assets may be impaired. As it relates to definite
              life
              intangible assets, we apply the impairment rules as required by SFAS
              No. 121,
              "Accounting for the Impairment of Long-Lived Assets and Assets to Be
              Disposed
              Of" as amended by SFAS No. 144, which also requires significant judgment
              and
              assumptions related to the expected future cash flows attributable
              to the
              intangible asset. The impact of modifying any of these assumptions
              can have a
              significant impact on the estimate of fair value and, thus, the recoverability
              of the asset.
 
 
 INCOME
              TAXES
 
 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 June 30, 2005, we estimated the allowance on net
              deferred tax
              assets to be one hundred percent of the net deferred tax assets.
 
 VALUATION
              OF INVESTMENTS
 
 As
              required by ASR 118, the investment committee of the company is required
              to
              assign a fair value to all investments. To comply with Section 2(a)
              (41) of the
              Investment Company Act and Rule 2a-4 under the Investment Company Act,
              it is
              incumbent upon the board of directors to satisfy themselves that all
              appropriate
              factors relevant to the value of securities for which market quotations
              are not
              readily available have been considered and to determine the method
              of arriving
              at the fair value of each such security. To the extent considered necessary,
              the
              board may appoint persons to assist them in the determination of such
              value, and
              to make the actual calculations pursuant to the board's direction.
              The board
              must also, consistent with this responsibility, continuously review
              the
              appropriateness of the method used in valuing each issue of security
              in the
              company's portfolio. The directors must recognize their responsibilities
              in this
              matter and whenever technical assistance is requested from individuals
              who are
              not directors, the findings of such intervals must be carefully reviewed
              by the
              directors in order to satisfy themselves that the resulting valuations
              are
              fair.
 
 No
              single
              standard for determining "fair value...in good faith" can be laid down,
              since
              fair value depends upon the circumstances of each individual case.
              As a general
              principle, the current "fair value" of an issue of securities being
              valued by
              the board of directors would appear to be the amount which the owner
              might
              reasonably expect to receive for them upon their current sale. Methods
              which are
              in accord with this principle may, for example, be based on a multiple
              of
              earnings, or a discount from market of a similar freely traded security,
              or
              yield to maturity with respect to debt issues, or a combination of
              these and
              other methods. Some of the general factors which the directors should
              consider
              in determining a valuation method for an individual issue of securities
              include:
              1) the fundamental analytical data relating to the investment, 2) the
              nature and
              duration of restrictions on disposition of the securities, and 3) an
              evaluation
              of the forces which influence the market in which these securities
              are purchased
              and sold. Among the more specific factors which are to be considered
              are: type
              of security, financial statements, cost at date of purchase, size of
              holding,
              discount from market value of unrestricted securities of the same class
              at time
              of purchase, special reports prepared by analysis, information as to
              any
              transactions or offers with respect to the security, existence of merger
              proposals or tender offers affecting the securities, price and extent
              of public
              trading in similar securities of the issuer or comparable companies,
              and other
              relevant matters.
  
  The
              board
              has arrived at the following valuation method for its investments.
              Where there
              is not a readily available source for determining the market value
              of any
              investment, either because the investment is not publicly traded, or
              is thinly
              traded, and in absence of a recent appraisal, the value of the investment
              shall
              be based on the following criteria:
  1.  Total
              amount
              of Blackhawk's actual investment ("AI"). This amount shall include
              all loans,
              purchase price of securities, and fair value of securities given at
              the time of
              exchange.
 
 2. 
              Total
              revenues for the preceding twelve months ("R").
 
 3. Earnings
              before interest, taxes and
              depreciation ("EBITD").
 
 4. Estimate
              of likely sale price of
              investment ("ESP").
 
 5. Net
              assets of investment
              ("NA").
 
 6. Likelihood
              of investment generating
              positive returns (going concern).
 
 The
              estimated value of each investment shall be determined as follows:
 
 ·
                    Where
                        no or limited revenues or earnings are present, then the
                        value shall be
                        the greater of the investment's a) net assets, b) estimated
                        sales price,
                        or c) total amount of actual
                        investment.
 
 ·
                    Where
                        revenues and/or earnings are present, then the value shall
                        be the greater
                        of one time (1x) revenues or three times (3x) earnings, plus
                        the greater
                        of the net assets of the investment or the total amount of
                        the actual
                        investment.
 
 ·
                    Under
                        both scenarios, the value of the investment shall be adjusted
                        down if
                        there is a reasonable expectation that the Company will not
                        be able to
                        recoup the investment or if there is reasonable doubt about
                        the
                        investments ability to continue as a going
                        concern.
 
 Blackhawk
              has not retained independent appraisers to assist in the valuation
              of the
              portfolio investments because the cost was determined to be prohibitive
              for the
              current levels of investments.
 
 COMPANY
              STRATEGY
 
 Blackhawk
              Capital Group BDC, Inc. (the "Company” or “Blackhawk") is a closed-end, non -
              diversified Investment Company under the Investment Company Act of
              1940, as
              amended (the "Investment Company Act"). Blackhawk is engaged in the
              business of
              investing in small to mid-sized companies. A business development company
              is a
              type of Investment Company that generally must maintain 70% of its
              assets in
              new, financially troubled or otherwise qualified companies and offers
              significant managerial assistance to such companies.
 
 
 Blackhawk
              is currently engaged in an Application to the NASD for Authority for
              its shares
              to be quoted and traded on the OTC Bulletin Board. We have not yet
              acquired an
              interest in any companies, nor are we providing managerial assistance
              to any
              companies.
 
 Business
              development companies are not subject to the full extent of regulation
              under the
              Investment Company Act. Blackhawk is primarily engaged in the business
              of
              investing in and providing managerial assistance to developing companies,
              which,
              in its opinion, have significant potential for growth. Blackhawk's
              investment
              objective is to achieve long-term capital appreciation, rather than
              current
              income, on its investments. Currently, our investment activity is limited
              by our
              working capital. There is no assurance that our objective will be
              achieved.
 
 On
              September 20, 2004, the Company's Board of Directors elected to be
              regulated as
              a business investment company under the Investment Company Act of 1940.
              As a
              business development company ("BDC"), the Company is required to maintain
              at
              least 70% of its assets invested in "eligible portfolio companies",
              which are
              loosely defined as any domestic company which is not publicly traded
              or that has
              assets less than $4 million.
 
 SEARCH
              FOR TARGET COMPANIES
 
 Blackhawk
              will search for target companies as potential candidates for an investment,
              loan, or stock acquisition.
 
 Blackhawk
              has not entered into agreements with any third parties to locate potential
              investment and acquisition candidates.
 
 Blackhawk
              may seek to locate a target company through solicitation. Such solicitation
              may
              include newspaper or magazine advertisements, mailings and other distributions
              to law firms, accounting firms, investment bankers, financial advisors
              and
              similar persons, the use of one or more World Wide Web sites and similar
              methods. If Blackhawk engages in solicitation, no estimate can be made
              as to the
              number of persons who may be contacted or solicited. Blackhawk may
              utilize
              consultants in the business and financial communities for referrals
              of potential
              target companies. There is no assurance that Blackhawk will locate
              a target
              company or that an acquisition or investment will be successful.
 
 To
              date
              Blackhawk has not made any investments.
 
 
 MANAGEMENT
              OF BLACKHAWK
 
 Blackhawk
              has no full time employees. There are three officers all of whom are
              shareholders of Blackhawk, as well: Craig A. Zabala, President, Chief
              Executive
              Officer and Chairman of the Board; Robert M. Fujii, Chief Financial
              Officer; and
              Brad D. Silver, Executive Vice President, Secretary and director. Each
              member of
              management has agreed to allocate a limited portion of his time to
              the
              activities of Blackhawk after the effective date of the registration
              statement
              without compensation. Potential conflicts may arise with respect to
              the limited
              time commitment by Management and the potential demands of the activities
              of
              Blackhawk.
 
 GENERAL
              BUSINESS PLAN
 
 The
              purpose of Blackhawk is to seek, investigate and, if such investigation
              warrants, acquire an interest in a business entity. Blackhawk will
              not restrict
              its search to any specific business, industry, or geographical location.
              Blackhawk may participate in a business venture of virtually any kind
              or nature.
              Management anticipates that initially, Blackhawk will be able to participate
              in
              only a small number of potential business ventures because Blackhawk
              has nominal
              assets and limited financial resources. This lack of diversification
              should be
              considered a substantial risk to the shareholders of Blackhawk because
              it will
              not permit Blackhawk to offset potential losses from one venture against
              gains
              from another.
 
 On
              September 20, 2004, Blackhawk elected to be treated as a Business Development
              Company and subject itself to the rules and regulations under the Investment
              Company Act of 1940. Currently, Blackhawk is engaged in an offering
              to raise
              between $7,500 and $450,000 to invest in additional companies. As of
              June 30,
              2005, Blackhawk has sold 17,126,781 shares for a total of $171,267.
 
 Blackhawk
              may seek an investment and stock acquisition of entities which have
              recently
              commenced operations, or which wish to raise additional capital in
              order to
              expand into new products or markets, to develop a new product or service,
              or for
              other corporate purposes.
 
 Blackhawk
              seeks to invest in small operating companies, and in return, to receive
              an
              interest in such companies. Blackhawk will also offer managerial services
              to
              both companies in which it invest, as well as others.
 
 In
              analyzing prospective business opportunities, Blackhawk may consider
              such
              matters as the available technical, financial and managerial resources;
              working
              capital and other financial requirements; history of operations, if
              any;
              prospects for the future; nature of present and expected competition;
              the
              quality and experience of management services which may be available
              and the
              depth of that management; the potential for further research, development,
              or
              exploration; specific risk factors not now foreseeable but which then
              may be
              anticipated to impact the proposed activities of Blackhawk; the potential
              for
              growth or expansion; the potential for profit; the perceived public
              recognition
              or acceptance of products, services, or trades; name identification;
              and other
              relevant factors. This discussion of the proposed criteria is not meant
              to be
              restrictive of the virtually unlimited discretion of Blackhawk to search
              for and
              enter into potential business opportunities. Blackhawk’s investment committee
              will assign a fair value to its investments.
 
 
 Blackhawk
              will not restrict its search for any specific kind of business entities,
              but may
              acquire an interest in a venture which is in its preliminary or development
              stage, which is already in operation, or in essentially any stage of
              its
              business life. It is impossible to predict at this time the status
              of any
              business in which Blackhawk may become engaged, or whether such business
              may
              need to seek additional capital.
 
 TERMS
              OF
              A STOCK ACQUISITION
 
 In
              implementing a structure for a particular stock acquisition or investment,
              Blackhawk may become a party to a consolidation, joint venture, licensing
              agreement or other arrangement with another corporation or entity.
              Blackhawk may
              offer to take control of its board of directors and/or management.
 
 It
              is
              anticipated that any securities issued in any such stock acquisition
              would be
              issued in reliance upon exemption from registration under applicable
              federal and
              state securities laws. In some circumstances, however, as a negotiated
              element
              of its transaction, the target company may agree to register all or
              a part of
              such securities immediately after the transaction is consummated or
              at specified
              times thereafter.
 
 Blackhawk
              will participate in a stock acquisition only after the negotiation
              and execution
              of appropriate agreements. Although the terms of such agreements cannot
              be
              predicted, generally such agreements will require certain representations
              and
              warranties of the parties thereto, will specify certain events of default,
              will
              detail the terms of closing and the conditions which must be satisfied
              by the
              parties prior to and after such closing and will include miscellaneous
              other
              terms.
 
 If
              Blackhawk stops or becomes unable to continue to pay its operating
              expenses
              Blackhawk may not be able to timely make its periodic reports required
              under the
              Exchange Act nor to continue to search for an acquisition target.
 
 The
              Board
              of Directors has passed a resolution which establishes a policy that
              Blackhawk
              will not seek an acquisition with any entity in which an officer, director,
              shareholder or any affiliate or associate of Blackhawk serves as an
              officer or
              director or affiliate.
 
 UNDERTAKINGS
              AND UNDERSTANDINGS REQUIRED OF TARGET COMPANIES
 
 As
              part
              of a subscription agreement to purchase shares of a target company,
              Blackhawk
              intends to obtain certain representations and warranties from a target
              company
              as to its conduct following the stock acquisition. The target company
              may also
              request certain representation from Blackhawk such as (i) the agreement
              of
              Blackhawk to make all necessary filings and to take all other steps
              necessary to
              remain a reporting company under the Exchange Act for at least a specified
              period of time; (ii) giving assurances of ongoing compliance with the
              Securities
              Act, the Exchange Act, the Investment Company Act, the General Rules
              and
              Regulations of the Securities and Exchange Commission, and other applicable
              laws, rules and regulations.
 
 
 Prior
              to
              completion of an investment and/or share acquisition, Blackhawk may
              require that
              it be provided with written materials regarding the target company
              containing
              such items as a description of products, services and company history;
              management resumes; financial information; available projections, with
              related
              assumptions upon which they are based; an explanation of proprietary
              products
              and services; evidence of existing patents, trademarks, or service
              marks, or
              rights thereto; present and proposed forms of compensation to management;
              a
              description of transactions between such company and its affiliates
              during
              relevant periods; a description of present and required facilities;
              an analysis
              of risks and competitive conditions; a financial plan of operation
              and estimated
              capital requirements; audited financial statements; and other information
              deemed
              relevant.
 
 COMPETITION
 
 Blackhawk
              will remain an insignificant participant among business development
              companies.
              There are many established venture capital and financial concerns which
              have
              significantly greater financial and personnel resources and technical
              expertise
              than Blackhawk. In view of Blackhawk's combined limited financial resources,
              Blackhawk will continue to be at a significant competitive disadvantage
              compared
              to Blackhawk's competitors.
 
 ITEM
              3.
              QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 We
              intend
              to invest in small and medium-sized companies, and our investments
              will
              considered speculative in nature. Our investments may include securities
              that
              are subject to legal or contractual restrictions on resale that adversely
              affect
              the liquidity and marketability of such securities. As a result, we
              may be
              subject to risk of loss which may prevent our stockholders from achieving
              price
              appreciation and dividend distributions. The portion of our portfolio
              consisting
              of investments in private companies will also be subject to valuation
              risk. We
              expect to value our privately held investments based on a determination
              of their
              fair value made in good faith by our board of directors on a quarterly
              basis in
              accordance with our established guidelines. In the absence of a readily
              ascertainable market value, the estimated values of our future investments
              may
              differ significantly from the values that would exist if a ready market
              for
              these securities existed. Any changes in valuation will be recorded
              in our
              statements of operations as "Net unrealized gain (loss) on
              investments."
 
 
 We
              consider the management of equity price risk essential to conducting
              our
              business and maintaining our profitability. It is our goal that in
              the near
              future our portfolio will consist of investments in private companies.
              We
              anticipate no impact on these investments from modest changes in public
              market
              equity prices. However, should significant changes in market prices
              occur, there
              could be a long-term effect on valuations of private companies, which
              could
              affect the carrying value and the amount and timing of gains realized
              on these
              investments. This could also affect our ability to generate cash through
              the
              sale of private equity investments, since there may not be realistic
              initial
              public offering opportunities.
 
 ITEM
              4.
              CONTROLS AND PROCEDURES
 
 (a)  As
              of the
              end of the period covered by this quarterly report on Form10-Q, the
              Company's
              chief executive officer and chief financial officer conducted an evaluation
              of
              the Company's disclosure controls and procedures (as defined in Rules
              13a-15 and
              15d-15 of the Securities Exchange Act of 1934). Based upon this evaluation,
              the
              Company's chief executive officer and chief financial officer concluded
              that the
              Company's disclosure controls and procedures are effective in timely
              alerting
              them of any material information relating to the Company that is required
              to be
              disclosed by the Company in the reports it files or submits under the
              Securities
              Exchange Act of 1934.
 
 (b)  There
              have not been any significant changes in the Company's internal control
              over
              financial reporting that occurred during our most recently completed
              fiscal
              quarter that have materially affected, or are reasonably likely to
              materially
              affect, the Company's internal control over financial reporting.
 
 PART
              II. OTHER
              INFORMATION
 
 ITEM
              1.
              LEGAL PROCEEDINGS
 
 None
 
 ITEM
              2.
              UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 During
              the three months ending June 30, 2005, the Company closed its Reg.
              E common
              stock offering. The issue sold 17,126,781 shares at $.01 per share
              for an
              aggregate of $171,267. The Company’s total expenditures to operate the business
              during the offering period were $27,590 which represents 16% of the
              proceeds
              from the offering.
 
 ITEM
              3.
              DEFAULTS UPON SENIOR SECURITIES
 
 None.
 
 ITEM
              4.
              SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 None.
 
 
 ITEM
              5.
              OTHER INFORMATION
 
 None.
 
 ITEM
              6.
              EXHIBITS AND REPORTS ON FORM 8-K
 
 (a)  Exhibits
  Exhibit
                        No.
                    Description31.1
                    Certification
                        by Chief Executive Officer Pursuant to Section 302 of the
                        Sarbanes Oxley
                        Act of 200231.2
                    Certification
                        by Chief Financial Officer Pursuant to Section 302 of the
                        Sarbanes Oxley
                        Act of 200232.1
                    Certification
                        by Chief Executive Officer Pursuant to Section 906 of the
                        Sarbanes Oxley
                        Act of 200232.2
                    Certification
                        by Chief Financial Officer Pursuant to Section 906 of the
                        Sarbanes Oxley
                        Act of 2002
 
 (b)  Reports
              on Form 8-K
 
 None.
  
 
 
 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.
 
 
 Date:
                        August 4, 2005
                    
                    By:/s/
                        Craig A. ZabalaCraig
                        A. Zabala, Chief Executive OfficerDate:
                        August 4, 2005
                    
                    By:/s/
                        Robert M. FujiiRobert
                        M. Fujii, Chief Financial Officer