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 3
month period ended March 31, 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    (2) Yes X   No





State the
number of shares outstanding of each of the Registrant's classes of common
equity, as of the latest applicable date:





17,003,663
- March 31, 2005











BLACKHAWK
CAPITAL GROUP BDC, INC.


FORM
10-Q


March 31,
2005





INDEX





PART
      I - FINANCIAL INFORMATION
    PageItem
      1 - Financial StatementsBalance
      Sheet -March
      31, 2005Statements
      of Operations -For
      the Three Months Ended March 31, 2005Statement
      of Stockholders’ Equity -For
      the Three Months Ended March 31, 2005Statements
      of Cash Flows -For
      the Three Months Ended March 31, 2005Notes
      to Financial Statements -For
      the Three Months Ended March 31, 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)**





*FINANCIAL
STATEMENTS*


*WITH*


*INDEPENDENT
AUDITORS* *'* *REPORT*





*THREE
MONTHS ENDED MARCH 31, 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







**INDEPENDENT
AUDITORS' REPORT**














Board of
Directors


**Blackhawk
Capital Group BDC Inc.**


**(A
Development Stage Company)**


New York,
New York










We have
audited the accompanying balance sheet of **Blackhawk
Capital Group BDC Inc. (A Development Stage Company)** as of
March 31, 2005 and the accompanying statements of operations,
stockholders ' equity
and cash flows for the three months then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.





We
conducted our audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.





In our
opinion, the financial statement referred to above presents fairly, in all
material respects, the financial position of **Blackhawk
Capital Group BDC Inc.**  **(A
Development Stage Company)** as of
March 31, 2005 and the results of its operations and its cash flows for the
three months then ended in conformity with accounting principles generally
accepted in the United States of America.








***Paritz
& Company, P.A.***

















Hackensack,
New Jersey


April 15,
2005













**BLACKHAWK
CAPITAL GROUP BDC INC.**


**(A
Development Stage Company)**





BALANCE
SHEET





MARCH 31,
2005








**ASSETS****CURRENT
      ASSETS:**Cash
      and cash equivalents
    $
      42,815**TOTAL
      CURRENT ASSETS**
    **42,815****OTHER
      ASSETS:****Deferred
      offering costs**
    **79,645****TOTAL
      ASSETS**
    **$122,460****LIABILITIES
      AND STOCKHOLDERS****'****EQUITY****CURRENT
      LIABILITIES:**Due
      to affiliated company
    $
      98,908Accrued
      expenses
    1,500**TOTAL
      CURRENT LIABILITIES**
    **100,408****STOCKHOLDERS’
      EQUITY**
    **22,052****TOTAL
      LIABILITIES AND STOCKHOLDERS****'****EQUITY**
    **$122,460**





See notes
to financial statements
















**BLACKHAWK
CAPITAL GROUP BDC INC.**


**(A
Development Stage Company)**





STATEMENT
OF OPERATIONS





THREE
MONTHS ENDED MARCH 31, 2005


**REVENUES:**Interest
      income
    $
      37**TOTAL
      REVENUES**
    **37****EXPENSES:**Professional
      fees
    1,500Consulting
      fees
    11,485State
      and local taxes
    455**TOTAL
      EXPENSES**
    **13,440****NET
      LOSS**
    $(13,403)





See notes
to financial statements













**BLACKHAWK
CAPITAL GROUP BDC INC.**


**(A
Development Stage Company)**





STATEMENT
OF STOCKHOLDERS = EQUITY





THREE
MONTHS ENDED MARCH 31, 2005


TOTAL
    -COMMON
      STOCK---
    ---PREFERRED
      STOCK---
    ADDITIONAL
      PAID-IN
      CAPITAL
    DEFICIT
      ACCUMULATED
      DURING
      DEVELOPMENT
      STAGESHARES
    AMOUNT
    SHARES
    AMOUNT





Sale
      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
      - March 31, 2005
    $22,052
    
    17,003,663
    
    $170
    
    8,500,000
    
    $
      85
    
    $47,715
    
    $(25,918)


See notes
to financial statements










**BLACKHAWK
CAPITAL GROUP BDC INC.**


**(A
Development Stage Company)**





STATEMENT
OF CASH FLOWS





THREE
MONTHS ENDED MARCH 31, 2005


**OPERATING
      ACTIVITIES:******Net
      loss
    $(13,403)****Changes
      in operating assets and liabilities:****Due
      to affiliated company
    7,000****Deferred
      offering costs
    7,990****Accrued
      expenses
    (3,500)**NET
      CASH USED IN OPERATING ACTIVITIES**
    **(1,913)****FINANCING
      ACTIVITIES:******Net
      proceeds from the issuance of stock
    31,128**NET
      CASH PROVIDED BY FINANCING ACTIVITIES**
    **31,128****INCREASE
      IN CASH**
    **29,215****CASH
      - BEGINNING OF PERIOD**
    **13,600****CASH
      - END OF PERIOD**
    **$
      42,815**








See notes
to financial statements










**BLACKHAWK
CAPITAL GROUP BDC INC.**


**(A
Development Stage Company)**





NOTES TO
FINANCIAL STATEMENTS





MARCH 31,
2005











**1**
    **SIGNIFICANT
      ACCOUNTING POLICIES**





***Business
description***





Blackhawk
Capital Group BDC Inc. ( A 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-S4A, Notification with the
Securities and Exchange Commission electing to become a Business Development
Company pursuant to Section 54 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 and other organizational
matters.





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 larger 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





**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 is attempting to
sell a minimum of 750,000 and a maximum of 45,000,000 shares of common stock at
$.01 per share. As of March 31, 2005 the Company has sold 6,003,663 shares for
aggregate proceeds of $60,037.










**2**  **STOCKHOLDERS’
EQUITY**





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 $25,000 which expire in 2024.





The
Company has a deferred tax asset of approximately $5,000. 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 March 31, 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 offering of its securities pursuant to Regulation E
under the Investment Company Act. 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 and
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 March 31,
2005, Blackhawk has sold 6,003,663 shares for a total of $60,037.





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 ended March 31, 2005 we sold 3,911,762 shares of our common
stock under Regulation E at $.01 per share for a total of $39,118. We are still
engaged in this offering. The maximum offering is $450,000.





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:
      April 21, 2005
    
    By:
      /s/ Craig A. ZabalaCraig
      A. Zabala, Chief Executive OfficerDate:
      April 21, 2005
    
    By:
      /s/ Robert M. FujiiRobert
      M. Fujii, Chief Financial Officer