|                                **OMB                    PPROVAL           **OMB                    Number:       3235-0070Expires:                        January 31, 2008Estimated                  average burden hours                  per response...192.00 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**UNITED      STATES**

**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** |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------|

| **o ** | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------|

**_________________________**

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

|  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, NY**                                                     | **10005**                                                                |
| (Address                of principal executive                offices)                                                 | (Zip                Code)                                                |
|                                                                                                                   |                                                                     |
| **(212)                566-8300**                                                                                      |
| (Registrant’s                telephone number, including area code)                                              |
| **_________________________**                                                                                          |

----

**o      **
**o      **
**x**

| ClassCommon                Stock, $0.00001 par value | Outstanding                on August 11, 200630,511,481 |
|------------------------------------------------------|---------------------------------------------------------|

| 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.** |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**BLACKHAWK      CAPITAL GROUP BDC, INC.**

**INDEX**

| **PART                I. **  | ** FINANCIAL                INFORMATION**                                                                                                                                                                                                                         |  **Page** |
|-----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                1.      | Financial                Statements.                                                                                                                                                                                                                                   | 4              |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              |  Report                of Independent Registered Public Accounting Firm                                                                                                                                                                                           |  6        |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              | Condensed                Statements of Assets and Liabilities as of June 30, 2006 (unaudited)                and                December 31, 2005                                                                                                                      | 7              |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              | Condensed                Statements of Operations for the six months ended June 30, 2006                (unaudited) and June 30, 2005 (unaudited) and for the three months                ended                June 30, 2006 (unaudited) and June 30, 2005 (unaudited) |  8        |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              | Condensed                Statements of Changes in Net Assets (Liabilities) for the six months                ended                June 30, 2006 (unaudited) and Year Ended December 31, 2005                                                                           |  9        |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              | Condensed                Statement of Stockholders' Equity (Capital Deficit) for the six months                ended June 30, 2006 (unaudited) and Years Ended December 31, 2005                and                December 31, 2004                                   | 10             |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              | Condensed                Statements of Cash Flows for the six months ended June 30, 2006                (unaudited) and June 30, 2005 (unaudited)                                                                                                                      |  11       |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              | Notes                to Condensed Financial Statements                                                                                                                                                                                                                 | 12             |
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                2.      | Management’s                Discussion and Analysis of Financial Condition and Results of Operations.                                                                                                                                                            | 14             |
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                3.      | Quantitative                and Qualitative Disclosures about Market Risk.                                                                                                                                                                                             | 17             |
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                4.      | Controls                and Procedures.                                                                                                                                                                                                                                | 17             |
|                              |                                                                                                                                                                                                                                                                   |           |
|                              |                                                                                                                                                                                                                                                                   |
| ** PART                II.** | **OTHER                INFORMATION**                                                                                                                                                                                                                                   |           |
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                1.      | Legal                Proceedings.                                                                                                                                                                                                                                      | 18             |
|  Item                1A.     |  Risk                Factors                                                                                                                                                                                                                                      |  18       |
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                2.      | Unregistered                Sales of Equity Securities and Use of Proceeds.                                                                                                                                                                                            | 18             |
|                              |                                                                                                                                                                                                                                                                   |           |
| Item                3.       | Defaults                upon Senior Securities.                                                                                                                                                                                                                        | 18             |
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                4.      | Submission                of Matters to a Vote of Security Holders.                                                                                                                                                                                                    | 18             |
|                              |                                                                                                                                                                                                                                                                   |           |
|  Item                5.      | Other                Information.                                                                                                                                                                                                                                      | 18             |
|                              |                                                                                                                                                                                                                                                                   |           |

|  Item                6. | Exhibits. | 18  |
|------------------------------|-----------|----------|

----

**PART      I. FINANCIAL INFORMATION**

**Item      1. Financial Statements.**

----

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

**BLACKHAWK      CAPITAL GROUP BDC INC.**

*WITH*

*REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM*

*SIX      MONTHS ENDED JUNE 30, 2006 AND JUNE 30, 2005*

----

|  **Paritz                & Company, P.A.** |  15                Warren Street, Suite 25Hackensack,                New Jersey 07601(201)342-7753Fax:                (201) 342-7598E-Mail:                paritz @paritz.com |
|-----------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Certified                Public Accountants   |                                                                                                                                                                               |

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**Blackhawk      Capital Group BDC Inc.**

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

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**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

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|                                                                                               |   | June                30, 2006 |         | DECEMBER                31, 2005 |   |
|----------------------------------------------------------------------------------------------------|--------|------------------------------|--------------|----------------------------------|--------|
|                                                                                               |   | (Unaudited)                  |         |                             |   |
| **ASSETS:**                                                                                        |   |                         |         |                             |   |
|                  Cash                                                                         |   | $                            | 27,242       |                             | $      | 77,877 |   |
|                  Prepaid insurance                                                            |   |                         | 15,372       |                             |   | 5,522 |   |
|                                                                                               |   |                         |         |                             |   |   |   |
| **                   TOTAL ASSETS**                                                 |   | **$**                        | **42,614**   |                             | **$**  | **83,399** |   |
|                                                                                               |   |                         |         |                             |   |   |   |
|                                                                                               |   |                         |         |                             |   |   |   |
| **LIABILITIES**                                                                                    |   |                         |         |                             |   |   |   |
|                  Due to affiliated company                                                    |   | $                            | -            |                             | $      | 43,842 |   |
|                  Accrued expenses                                                             |   |                         | 160,475      |                             |   | 17,536 |   |
|                  Due to former stockholder in connection with stock                rescission |   |                         | -            |                             |   | 45 |   |
| **                   TOTAL LIABILITIES**                                            |   |                         | **160,475**  |                             |   | **61,423** |   |
|                                                                                               |   |                         |         |                             |   |   |   |
|                                                                                               |   |                         |         |                             |   |   |   |
| **NET                ASSETS (LIABILITIES)**                                                        |   |                         |         |                             |   |   |   |
|                  Common stock, par value $.00001 per share                                    |   |                         |         |                             |   |   |   |
|                    1,000,000,000 shares authorized,                                 |   |                         |         |                             |   |   |   |
|                    30,511,481 and 23,626,781 shares issued                          |   |                         |         |                             |   |   |   |
|                     and outstanding in 2006 and 2005, respectively             |   |                         | 305          |                             |   | 236 |   |
| Additional                paid-in capital                                                          |   |                         | 147,968      |                             |   | 79,190 |   |
| Accumulated                net investment loss                                                     |   |                         | (266,134     | )                                |   | (57,450 | ) |
| **                   TOTAL NET ASSETS (LIABILITIES)**                               |   |                         | **(117,861** | **)**                            |   | **21,976** |   |
|                                                                                               |   |                         |         |                             |   |   |   |
| **TOTAL**                                                                                          |   | **$**                        | **42,614**   |                             | **$**  | **83,399** |   |
|                                                                                               |   |                         |         |                             |   |   |   |
|                                                                                               |   |                         |         |                             |   |   |   |
|                                                                                               |   |                         |         |                             |   |   |   |
| **NET                ASSET (LIABILITY) VALUE PER COMMON SHARE**                                    |   | **$**                        | **(.00386**  | **)**                            | **$**  | **.00093** |   |
|                                                                                               |   |                         |         |                             |   |   |   |

----

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**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

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|                                                          |   | THREE                MONTHS ENDED  |           | SIX                MONTHS ENDED  |   |
|---------------------------------------------------------------|--------|-----------------------------------------|----------------|---------------------------------------|--------|
|                                                          |   | JUNE                30,                 |           | JUNE                30,          |   |
|                                                          |   | 2006                               |           | 2005                             |   | 2006 |   | 2005  |   |
| **INVESTMENT                INCOME:**                         |   |                                    |           |                                  |   |   |   |   |   |
|                  Interest income                         |   | $                                       | 116            |                                  | $      | 273 |   | $ | 403 |   | $ | 310 |   |
| **                   TOTAL INVESTMENT INCOME** |   |                                    | **116**        |                                  |   | **273** |   |   | **403** |   |   | **310** |   |
|                                                          |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **EXPENSES:**                                                 |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
|                  Professional fees                       |   |                                    | 93,847         |                                  |   | - |   |   | 170,455 |   |   | 1,500 |    |
|                  Consulting fees                         |   |                                    | 5,985          |                                  |   | 1,000 |   |   | 19,177 |   |   | 12,000 |   |
|                  Filing fees                             |   |                                    | 3,785          |                                  |   | 1,075 |   |   | 7,001 |   |   | 1,560 |   |
|                  Insurance                               |   |                                    | 9,951          |                                  |   | - |   |   | 12,454 |   |   | - |   |
|                  Other                                   |   |                                    | -              |                                  |   | - |   |   | - |   |   | 455 |   |
| **                   TOTAL EXPENSES**          |   |                                    | **113,568**    |                                  |   | **2,075** |   |   | **209,087** |   |   | **15,515** |   |
|                                                          |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **NET                INVESTMENT (LOSS) AND**                  |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **NET                DECREASE IN ASSETS**                     |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **RESULTING                FROM OPERATIONS**                  |   | **$**                                   | **(113,452**   | **)**                                 | **$**  | **(1,802** | **)** | **$** | **(208,684** | **)** | **$** | **(15,205** | **)** |
|                                                          |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **LOSS                PER COMMON SHARE,**                     |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **BASIC                AND DILUTED**                          |   | **$**                                   | **(0.00402**   | **)**                                 | **$**  | **(0.00008** | **)** | **$** | **(0.00804** | **)** | **$** | **(0.00088** | **)** |
|                                                          |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **WEIGHTED                AVERAGE SHARES OUTSTANDING,**       |   |                                    |           |                                  |   |   |   |   |   |   |   |   |   |
| **BASIC                AND DILUTED**                          |   |                                    | **28,241,800** |                                  |   | **23,521,286** |   |   | **25,947,039** |   |   | **17,193,896** |   |

----

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**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

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|                                                                                          |   | SIX                MONTHSENDEDJUNE                30, 2006 (Unaudited) |         | YEAR                ENDEDDECEMBER                31, 2005 |   |
|-----------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------------|-----------------------------------------------------------|--------|
|                                                                                          |   |                                                                   |         |                                                      |   |
| **DECREASE                IN NET ASSETS FROM OPERATIONS**                                     |   |                                                                   |         |                                                      |   |
|                  Net investment loss                                                     |   | $                                                                      | (208,684     | )                                                         | $      | (44,935 | ) |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
| **                 NET DECREASE IN NET ASSETS**                                          |   |                                                                   |         |                                                      |   |   |   |
| **                 RESULTING FROM OPERATIONS**                                           |   |                                                                   | **(208,684** | **)**                                                     |   | **(44,935** | **)** |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
| **CAPITAL                STOCK TRANSACTIONS:**                                                |   |                                                                   |         |                                                      |   |   |   |
|                  Proceeds from common stock sold                                         |   |                                                                   | -            |                                                      |   | 88,917 |   |
|                  Conversion of a portion of amounts owed                                 |   |                                                                   |         |                                                      |   |   |   |
|                    to affiliate into common stock                              |   |                                                                   | 68,847       |                                                      |   | 61,432 |   |
|                  Offering costs                                                          |   |                                                                   | -            |                                                      |   | (87,635 | ) |
|                  Rescission of preferred stock - founder                                 |   |                                                                   | -            |                                                      |   | (85 | ) |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
|                        **NET INCREASE IN NET ASSETS FROM** |   |                                                                   |         |                                                      |   |   |   |
| **                       CAPITAL STOCK TRANSACTIONS**      |   |                                                                   | **68,847**   |                                                      |   | **62,629** |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
| **TOTAL                (DECREASE) INCREASE IN NET ASSETS**                                    |   |                                                                   | **(139,837** | **)**                                                     |   | **17,694** |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
| **NET                ASSETS - BEGINNING OF PERIOD**                                           |   |                                                                   | **21,976**   |                                                      |   | **4,282** |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
|                                                                                          |   |                                                                   |         |                                                      |   |   |   |
| **NET                ASSETS (LIABILITIES) - END OF PERIOD**                                   |   | **$**                                                                  | **(117,861** | **)**                                                     | **$**  | **21,976** |   |

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**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

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|                                                                                                               |   |   |        |   |   | COMMON                STOCK |   |   | PREFERRED                STOCK |   |   | ADDITIONALPAID-IN  |   |   | ACCUMULATEDNETINVESTMENT  |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|-----------------------------|--------|--------|--------------------------------|--------|--------|-------------------------|--------|--------|--------------------------------|--------|
|                                                                                                               |   |   | TOTAL  |   |   | SHARES                 |   |   | AMOUNT                    |   |   | SHARES             |   |   | AMOUNT                    |   |   | CAPITAL  |   |   | LOSS  |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Balance                - December 31, 2004                                                                         |   | $      | 4,282       |   |   | 8,591,901                   |   | $      | 86                             |   |   | 8,500,000               |   | $      | 85                             |   | $ | 16,626 |   | $ | (12,515 | ) |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Sale                of stock pursuant tooffering                plan (at $.01 pershare)                            |   |   | 88,917      |   |   | 8,891,680                   |   |   | 89                             |   |   | -                       |   |   | -                              |   |   | 88,828 |   |   | - |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Conversion                of a portionof                amount owed to affiliate(at                $.01 per share) |   |   | 61,432      |   |   | 6,143,200                   |   |   | 61                             |   |   | -                       |   |   | -                              |   |   | 61,371 |   |   | - |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Rescinded                preferred stock                                                                           |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| from                founder (at $.00001per                share)                                                   |   |   | (85         | )      |   | -                           |   |   | -                              |   |   | (8,500,000              | )      |   | (85                            | )      |   | - |   |   | - |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Offering                costs                                                                                      |   |   | (87,635     | )      |   | -                           |   |   | -                              |   |   | -                       |   |   | -                              |   |   | (87,635 | ) |   | - |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Net                loss                                                                                            |   |   | (44,935     | )      |   | -                           |   |   | -                              |   |   | -                       |   |   | -                              |   |   | - |   |   | (44,935 | ) |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Balance-December                31, 2005                                                                           |   |   | 21,976      |   |   | 23,626,781                  |   |   | 236                            |   |   | -                       |   |   | -                              |   |   | 79,190 |   |   | (57,450 | ) |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Net                loss                                                                                            |   |   | (208,684    | )      |   | -                           |   |   | -                              |   |   | -                       |   |   | -                              |   |   | - |   |   | (208,684 | ) |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Conversion                of a portionof                amount owed to                                             |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| affiliate                (at $.01 per share)                                                                       |   |   | 68,847      |   |   | 6,884,700                   |   |   | 69                             |   |   | -                       |   |   | -                              |   |   | 68,778 |   |   | - |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
|                                                                                                               |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |
| Balance-June                30, 2006                                                                               |   | $      | (117,861    | )      |   | 30,511,481                  |   | $      | 305                            |   | $      | -                       |   | $      | -                              |   | $ | 147,968 |   | $ | (266,134 | ) |
|                      (Unaudited)                                                          |   |   |        |   |   |                        |   |   |                           |   |   |                    |   |   |                           |   |   |   |   |   |   |   |

----

----

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**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

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|                                                                                                  |   | SIX                MONTHS ENDED JUNE 30,  |        |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|-------------|
|                                                                                                  |   | 2006                                      |        | 2005  |   |
|                                                                                                  |   |                                           |        |   |   |
|                                                                                                  |   |                                           |        |   |   |
| **CASH                FLOWS FROM OPERATING****AND                INVESTING ACTIVITIES:**              |   |                                           |        |   |   |
| ** **Net investment loss and decrease in                                                         |   |                                           |        |   |   |
| **     **net assets resulting from operations                                |   | $                                              | (208,684    | ) | $ | (15,205 | ) |
| ** **Adjustments                to reconcile net decrease:                                       |   |                                           |        |   |   |   |   |
|                      Increase (decrease) in accrued expenses                 |   |                                           | 142,939     |   |   | (3,500 | ) |
| **     **Increase in prepaid expenses                                        |   |                                           | (9,850      | ) |   | - |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
| **NET                CASH USED IN OPERATING AND INVESTING ACTIVITIES**                                |   |                                           | **(75,595** | **)** |   | **(18,705** | **)** |
|                                                                                                  |   |                                           |        |   |   |   |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES:**                                              |   |                                           |        |   |   |   |   |
|                  Net proceeds from the issuance of stock                                         |   |                                           | -           |   |   | 88,917 |   |
|                  Loan from affiliated company                                                    |   |                                           | 25,005      |   |   | 6,999 |   |
|                  Due to former stockholder in connection with                                    |   |                                           |        |   |   |   |   |
|                    common stock rescission                                             |   |                                           | (45         | ) |   | - |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
| **NET                CASH PROVIDED BY FINANCING ACTIVITIES**                                          |   |                                           | **24,960**  |   |   | **95,916** |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
| **NET                (DECREASE) INCREASE IN CASH**                                                    |   |                                           | **(50,635** | **)** |   | **77,211** |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
| **CASH                - BEGINNING OF PERIOD**                                                         |   |                                           | **77,877**  |   |   | **13,600** |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
| **CASH                - END OF PERIOD**                                                               |   | **$**                                          | **27,242**  |   | **$** | **90,811** |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
| Non-cash                financing activities:                                                         |   |                                           |        |   |   |   |   |
|                  Conversion of amount due to affiliated company into common                stock |   | $                                              | 68,847      |   | $ | 61,432 |   |
|                                                                                                  |   |                                           |        |   |   |   |   |
|                  Deferred offering costs charged to additional paid-in                capital    |   | $                                              | -           |   | $ | 30,708 |   |

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**BLACKHAWK      CAPITAL GROUP BDC INC.**

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| **1** | **SIGNIFICANT                ACCOUNTING POLICIES** |
|-------|----------------------------------------------------|

***Business      description***

***Basis      of presentation***

| **2** | **INCOME                TAXES** |
|-------|---------------------------------|

| **3** |  **RELATED                PARTY TRANSACTIONS** |
|-------|-----------------------------------------------------|

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| **4** | **FINANCIAL                HIGHLIGHTS** |
|-------|-----------------------------------------|
|   | The following is a schedule of financial highlights              for              the six months ended June 30, 2006 and 2005 and the year ended December              31, 2005: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|------------|---------------------------|--------|
|                                                                                                                                                                                                                                                                                    |   | Six                Months Ended June 30, |       | Year                Ended |   |
| **Per                Share Data:**                                                                                                                                                                                                                                                      |   | 2006                                     |       | 2005                      |   | December                31, 2005 |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |
| Net                asset value - beginning of period                                                                                                                                                                                                                                    |   | $                                        | 0.00093    |                      | $      | 0.00050 |   | $ | 0.00050 |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Net                investment loss *                                                                                                                                                                                                                                                    |   |                                     | (0.00804   | )                         |   | (0.00088 | ) |   | (0.00220 | ) |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Issuance                of common stock                                                                                                                                                                                                                                                 |   |                                     | 0.01000    |                      |   | 0.00796 |   |   | 0.00417 |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Net                realized and unrealized gain (loss)**                                                                                                                                                                                                                                |   |                                     | (0.00675   | )                         |   | (0.00298 | ) |   | (0.00154 | ) |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Net                asset (liability) value - end of period                                                                                                                                                                                                                              |   |                                     | (0.00386   | )                         |   | 0.00460 |   |   | 0.00093 |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| **Total                return based on net asset value *****                                                                                                                                                                                                                            |   |                                     | (865       | %)                        |   | (176 | %) |   | (440 | %) |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Common                shares outstanding - end of period ****                                                                                                                                                                                                                           |   |                                     | 30,511,481 |                      |   | 23,626,781 |   |   | 23,626,781 |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| **Ratio/Supplemental                Data**:                                                                                                                                                                                                                                             |   |                                     |       |                      |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Net                assets (liability) - end of period                                                                                                                                                                                                                                   |   | $                                        | (117,861   | )                         | $      | 108,718 |   | $ | 21,976 |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Ratio                of net investment loss to average net assets*****                                                                                                                                                                                                                  |   |                                     | (3,798     | %)                        |   | (68 | %) |   | (91 | %) |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| Ratio                of operating expenses to average net assets*****                                                                                                                                                                                                                   |   |                                     | 3,806      | %                         |   | 69 | % |   | 94 | % |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| * Calculated              based              on average shares outstanding during period                                                                                                                                                                                                |   |                                     |       |                      |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| ** Net                realized and unrealized gain (loss) represents the dilutive effect                of                share issuance.                This caption is used per the AICPA Audit and Accounting Guide for                Investment Companies section 7.69 ( c ). |   |                                     |       |                      |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| ***  Total              returns for periods of less than one year are not annualized                                                                                                                                                                                               |   |                                     |       |                      |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| **** Common              shares outstanding are reduced by rescinded shares                                                                                                                                                                                                        |   |                                     |       |                      |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                    |   |                                     |       |                      |   |   |   |   |   |   |
| ***** Annualized              for periods less than one year                                                                                                                                                                                                                       |   |                                     |       |                      |   |   |   |   |   |   |

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| **5** | **SUBSEQUENT                EVENTS** |
|-------|--------------------------------------|

**Item      2.    Management’s      Discussion and Analysis of Financial Condition and Results of      Operations.**

*Overview*

*Accounting      Policies*

*Basis      of Presentation*

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*Use      of Estimates in the Preparation of Financial Statements*

*Valuation      of Long-Lived and Intangible Assets*

*Income      Taxes*

*Portfolio      and Investment Activity*

*Investment      Strategy*

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*Results      of Operations*

*Sales      Revenues*

*General      and Administrative Expenses*

*Other      Income (Expenses)*

*Liquidity      and Capital Resources*

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**Item      3.    Quantitative and      Qualitative Disclosures about Market Risk.**

**Item      4.    Controls and      Procedures.**

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**PART      II. OTHER INFORMATION**

**Item      1. Legal Proceedings. **

**Item      1A. Risk Factors**

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

**Item      3. Defaults upon Senior Securities.**

**Item      4. Submission of Matters to a Vote of Security Holders.**

**Item      5. Other Information.**

**Item      6. Exhibits.**

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| Exhibit                No.   | Description                                                                                                                                     |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                                            |
|     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 |
|                         |                                                                                                                                            |

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**                        BLACKHAWK      CAPITAL      GROUP BDC, INC.**

| Date:                August 11, 2006 |   | By:                /s/                Craig A. Zabala                         |
|--------------------------------------|--------|-------------------------------------------------------------------------------|
|                                 |   | Craig                A. Zabala, Chief Executive Officer                       |
|                                 |   |                                                                          |
|                                 |   |                                                                          |
| Date:                August 11, 2006 |   | By:                /s/                Craig A. Zabala                         |
|                                 |   | Craig                A. Zabala, Acting Chief Financial                Officer |

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