**SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**


____________________________________________________





**FORM
      10-KSB**





[X]
      ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
      EXCHANGE


ACT
      OF
      1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006.





[_]
      TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934 FOR THE TRANSITION PERIOD FROM





**COMMISSION
      FILE NO. 000-49672**





**THE
      BLACKHAWK FUND**


(Exact
      name of issuer as specified in its charter)





**NEVADA 88-0408213**


(State
      or
      other jurisdiction of (I.R.S. Employer


incorporation
      or organization) Identification No.)





**1802
      N. CARSON STREET, SUITE 212**


**CARSON
      CITY, NEVADA  89701**


(Address
      of principal executive offices) (Zip Code)





Registrant's
      telephone number, including area code: (775) 887-0670




Securities
      registered under Section 12(b) of
      the
      Exchange Act:   NONE





Securities
      registered under Section 12(g) of the Exchange Act:  Common
      Stock, Par Value $0.001 per share




Indicate
      by check mark whether the registrant (1) has filed all reports required
      to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding twelve months (or such shorter period that the registrant
      was required to file such reports), and (2) has been subject to such filing
      requirements for the past 90 days. Yes [ X ] No [   ]





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405
      of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of
      registrant's knowledge, in definitive proxy or information statements incorporated
      by reference in Part III of this Form 10-KSB or any amendment to this
      Form
      10-KSB. [  ]




Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer or a non-accelerated filer, as defined in Rule 12b-2 of
        the
        Exchange Act.
  Large accelerated filer [ ]   Accelerated filer [  ] Non-accelerated filer [ X]
  Indicate
        by check mark whether the registrant is a shell company (as defined By rule
        12b-2 of the Securities Exchange Act) Yes [  ] No [ X
        ]




State
      issuer's revenues for its most recent fiscal year: $149,451





State
      the
      aggregate market value of the voting and non-voting common equity held
      by
      non-affiliates computed by reference to the price at which the common equity
      was last sold, or the average bid and asked price of such common equity, as
      of
      January 23, 2007:  $319,007.





As
      of
      March 7, 2007, Issuer had a total of 166,996,792 shares of common stock issued
      and outstanding.





Documents
      incorporated by reference: None.





Transitional
      Small Business Disclosure Format (Check one): Yes [  ] No [X]





1











**TABLE
      OF CONTENTS**








Item
      1.
      Business............................................................................................
      1


Item
      2.
      Description of
      Property................................................................
      10


Item
      3.
      Legal Proceedings
      ........................................................................
      10


Item
      4.
      Submission of Matters to a Vote of Security Holders..............11


Item
      5.
      Market for Common Equity and Related Stockholder


Matters..........................................................................................................11


Item
      6.
      Management's Discussion and Analysis or Plan
      of


Operation......................................................................................................12


Item
      7.
      Financial
      Statements......................................................................18


Item
      8.
      Changes in and Disagreements With Accountants
      on


Accounting
      and Financial
      Disclosure..................................................... 18


Item
      8A.
      Controls and Procedures
      ...........................................................19


Item
      8B
      Other
      information.........................................................................
      19


Item
      9.
      Directors, Executive Officers, Promoters
      and


Control
      Persons; Compliance
      With Section 16(a)
      of


the
      Exchange
      Act.......................................................................................
      19


Item
      10.
      Executive
      Compensation.............................................................21


Item
      11.
      Security Ownership of Certain Beneficial Owners
      and


Management
      and Related
      Stockholder Matters ...................................22


Item
      12.
      Certain Relationships and Related
      Transactions....................23


Item
      13.
      Exhibits...........................................................................................23


Item
      14.
      Principal Accountant Fees and
      Services..................................24
























































2


**PART I**





**ITEM
      1. BUSINESS.**





**COMPANY
      OVERVIEW**





We
      were
      formed on or about November of 1998. USA Telcom, as we were previously
      called, acted as an agent in commercial transactions between Vietnamese
      purchasers and U.S. manufacturers.





**CHANGE
      OF CONTROL**





On
      March
      19, 2004, we issued 13,000,000 shares of common stock to Robert C. Simpson,
      Ph.D. for a purchase price of $260,000.00 which constituted approximately
      75 percent of our issued and outstanding shares of common stock. Before
      the purchase by Dr. Simpson, Allen Jones was our controlling stockholder. Following
      the purchase of our shares by Dr. Simpson, he and George Peterman were appointed
      to our board of directors. Dr. Simpson was also elected as our president,
      chief financial officer and secretary.





On
      May
      26, 2004, Mr. Peterman resigned as our director. On July 14, 2004, Dr.
      Simpson resigned as our president and became chairman of our board of directors.
      At that time, we elected Luther E. Lindner, M.D., Ph.D. as president and
      chief
      executive officer. We and Dr. Lindner have since mutually agreed that Dr.
      Lindner would resign as our president and chief executive officer in order to
      allow
      Dr. Lindner to accept a position as president and chief executive officer
      of Cryptobe, Inc., an affiliated privately-held company.





We
      retained AMVI, a company controlled by Mr. Jones, as a consultant. Under
      the
      terms of the consulting agreement, AMVI received a total of $141,516
      from March 19, 2004 through October 1, 2004, payable in four installments.
      In addition, we sold certain assets to AMVI for $10,300, which consisted
      of 5,000 shares of common stock of an unrelated corporation, certain computer
      equipment and a note receivable in the principal amount of $300,000. All
      monies were put into a trust managed by counsel and paid on
      schedule.





After
      Dr.
      Simpson initially acquired our shares, we intended to acquire Blue
      Kiwi, Inc., a company in which Dr. Simpson has an equity interest. However,
      we decided that we would not acquire Blue Kiwi, Inc. Instead, we entered
      into a strategic alliance with Blue Kiwi based on the synergies as seen by
      Dr.
      Simpson.





On
      July
      21, 2004, we filed certificates of designation establishing our Series
      A,
      B and C preferred stock. 20 million shares have been designated as our
      Series A preferred stock, 10 million shares have been designated as our Series
      B
      preferred stock, and 20 million shares have been designated as our Series
      C
      preferred stock.





Each
      share of our Series A preferred stock is convertible into 10 shares of our
      common stock. Each share of the Series B preferred stock is convertible into
      200
      shares of our common stock. The shares of our Series C preferred stock are
      not
      convertible into shares of our common stock.


3


The
      holders of shares of our Series A preferred stock do not have voting
      ri ghts
      on
      any matters submitted to a vote of our stockholders. On all matters submitted
      to a vote of our stockholders, each holder of shares of our Series B preferred
      stock is entitled to one vote per share of the Series B preferred stock
      held by such holder. On all matters submitted to a vote of our stockholders,
      each holder of shares of our Series C preferred stock is entitled to
      100
      votes per share of the Series C preferred stock held by such holder.





Effective
      November 29, 2004, we filed a certificate of correction to our certificate
      of designation establishing our Series B preferred stock. Our certificate
      of designation for the Series B preferred stock, as originally filed on
      June
      21, 2004, incorrectly stated that the shares of the Series B preferred stock
      were not convertible into the shares of our common stock. The certificate of
      correction, filed on November 29, 2004, corrected the error by stating
      that each
      share of the Series B preferred stock is convertible into 200 shares of our common
      stock.





On
      October 12, 2004, R. Patrick Liska was elected a director and appointed our
      president, secretary, treasurer, chairman of the board and chief executive officer.





On
      November 23, 2004, R. Patrick Liska was removed as our director, secretary,
      treasurer, president, chairman of the board and chief executive officer.
      The removal of R. Patrick Liska as our director and officer resulted from
      philosophical differences between our former management and Mr. Liska regarding
      business operations, policies and practices. The effective date of the
      removal was November 23, 2004.





Effective
      November 23, 2004, Robert C. Simpson was elected our sole director,
      president, chairman of the board and chief executive officer.





On
      November 29, 2004, a change in control occurred as the result of the acquisition
      of our series A, series B and series C preferred stock by Palomar Enterprises,
      Inc., a Nevada corporation ("Palomar").





Pursuant
      to that certain capital Stock Purchase Agreement dated November 9, 2004,
      between Robert C. Simpson, our then-sole director and officer and Palomar, on
      November 29, 2004, Palomar acquired from Dr. Simpson 19,000,000 shares of our series
      A
      preferred stock, 10,000,000 shares of our series B preferred stock and 10,000,000
      shares of our Series C preferred stock. Each share of the series A preferred
      stock is convertible into ten shares of our common stock. The shares of
      the
      series A preferred stock do not have voting rights. Each share of the series
      B
      preferred stock is convertible into two hundred shares of our common stock.
      On
      all matters submitted to a vote of the holders of the Common Stock, a holder
      of
      the Series B Preferred Stock is entitled to one vote per share of the Series
      B
      Preferred Stock held by such holder. The series C preferred stock is not
      convertible into our common shares. Each share of the series C preferred stock
      entitles the holder to 100 votes of our common stock on all matters brought
      before our stockholders.





All
      of
      the preferred shares acquired by Palomar carried a legend restricting
      the transfer thereof under the Securities Act of 1933, as amended. Palomar
      used $380,000 of its working capital as consideration for the preferred shares
      purchased by it pursuant to the Capital Stock Purchase
      Agreement.


4


Concurrently
      with the stock purchase transaction, Robert C. Simpson, our then-sole
      director and officer, nominated Steve Bonenberger and Brent Fouch as directors.
      Steve Bonenberger was also elected president and chief executive officer
      and Brent Fouch was elected Secretary and chief financial officer. Following
      the election of Messrs. Bonenberger and Fouch as our officers and directors,
      Robert C. Simpson resigned his positions as our director and
      officer.





**CURRENT
      BUSINESS PLAN**




The
      BlackHawk Fund is a principally owned company that is operated by
      its managing
      partner, Palomar Enterprises, Inc. (PLMA.OB).  The BlackHawk Fund operates
      as a business development company with the specific interest in Media and
      Television Production, as well as real estate (both residential and commercial)
      development projects.




We
      have
      the following business model in place and operating: The Company takes a lead role
      in
      managing and implementing proprietary media properties that are 100% owned,
      operated and managed by The Blackhawk Fund. These Media Properties are network
      quality cable television shows that air nationwide. This media content is
      converted into Online Video magazines and DVDs, which provide advertising
      opportunities to selected sponsors. We also re-develop residential and
      commercial properties to be sold at higher prices. Our purpose is to gain a
      higher valuation for the equity positions that are held by The BlackHawk Fund
      in
      both our redeveloped real properties and
      also
      in our media properties that are expanding their advertiser and viewer
      bases.




During
      the past twelve months, the company has accomplished the following:




a.   
      Real property redevelopment:  the company successfully purchased a property
      in the St. Louis, MO region out of foreclosure, completed the renovation
      and refurbishments and re-sold the property for a profit




b.   
      Real property redevelopment:  the company successfully purchased a property
      in Carlsbad, CA and completely renovated this existing structure. The
      company currently has this property in its held for sale portfolio. The
      company has this property leased on a month-to-month basis.  The property
      is currently on the market to be sold and the company expects this to
      occur
      sometime in the first or second quarter of 2007




c.   
      Real property redevelopment:  the company engaged SAN DIEGO REAL ESTATE
      EXPERTS in a joint-venture development in Oceanside, CA.  This property
      has undergone a complete and exhaustive renovation.  The company is nearing
      completion of this redevelopment project. The property located within
      yards of the beach is expected to be placed for re-sale in the short-term. 
      The company expects to recognize the revenue and profit from this
      joint-venture in the first or second quarter of 2007




d.   
      Joint-venture of media properties:  the company signed a business
      development agreement in 2006 with Maximum Impact Television Group to develop
      GOLF SHOW USA.  This project was launched in the last quarter of
      2006.  GOLF SHOW USA is now functional
      and the company expects to begin receiving revenue and its portion
      of the profit from this program in the first quarter of 2007 .   
      Subsequent events: In January of 2007, the company expanded its relationship
      with Maximum Impact Television Group to develop nine (9) more


proprietary
      media properties and the attending revenue and profit zones associated
      with them.  The company will be unveiling these nine (9) programs throughout
      fiscal 2007.





5






The
      company has identified the following benchmarks for the next 12-24 months:




a.   
      Raise enough capital to expand our core real property redevelopment projects




b.   
      Raise additional capital to strengthen and expand our media properties,
      with a look to bring our advertiser partners a substantial return
      on
      their media investments




c.   
      Maintain good corporate relationships with all of our advertising partners
      and the vendors that assist us in the redevelopment projects.




In
      2006,
      The BlackHawk Fund was able to establish firm footings in its two core business
      sectors.  The company looks for 2007 to be the largest year in its
      existence in terms of revenue produced, potential profits retained and
      shareholder equity increased.





**KEY
      PERSONNEL**





Our
      future financial success depends to a large degree upon the efforts of Messrs.
      Bonenberger and Fouch, our officers and directors. Messrs. Bonenberger and
      Fouch
      have played major roles in developing and executing our business strategy.
      The loss of Messrs. Bonenberger and Fouch could have an adverse effect
      on
      our business and our chances for profitable operations. While we intend
      to
      employ additional management and marketing personnel in order to minimize
      the critical dependency upon any one person, there can be no assurance that
      we
      will be successful in attracting and retaining the persons needed. If we
      do not
      succeed in retaining and motivating our current employees and attracting
      new high quality employees, our business could be adversely affected. We
      do not
      maintain key man life insurance on the lives of Messrs. Bonenberger and
      Fouch.





**OUR
      FINANCIAL RESULTS MAY BE AFFECTED BY FACTORS OUTSIDE OF OUR
      CONTROL**





Our
      future operating results may vary significantly from quarter to quarter due
      to a
      variety of factors, many of which are outside our control. Our anticipated
      expense levels are based, in part, on our estimates of future revenues
      and may vary from our projections. We may be unable to adjust spending rapidly
      enough to compensate for any unexpected revenues  shortfall. Accordingly,
      any significant shortfall in revenues in relation to our planned expenditures
      would materially adversely affect our business, operating results
      and financial condition.





We
      cannot
      predict with certainty our revenues and operating results. Further,
      we believe that period-to-period comparisons of our operating results are
      not
      necessarily a meaningful indication of future performance.





**CORPORATE
      OFFICES**





Our
      executive office is located at 1802 N. Carson Street, Suite 212, Carson City,
      Nevada, 89701, telephone number (775) 887-0670.





**RECENT
      EVENTS**





Effective
      January 3, 2005, we changed our name from "Zannwell Inc." to "The Blackhawk
      Fund" and implemented a one for 800 reverse split of our common
      stock.


6


All
      share
      and per share amounts presented in our financial statements which are part
      of
      this Annual Report on Form 10-KSB have been restated retroactively to reflect
      the split as if it had occurred on the first day of the first period presented,
      or January 1, 2003. However, all share and per share amounts have not
      been
      restated retroactively to reflect the split in the narrative portion of this
      Annual Report on Form 10-KSB. Consequently, the retroactive restatement may
      cause
      some apparent inconsistencies between the narrative portion of this


Annual
      Report on Form 10-KSB and our other filings with the Securities and Exchange
      Commission on one hand, and the financial statements and accompanying notes
      forming part of this Annual Report on Form 10-KSB on the other
      hand.





Effective
      January 4, 2005, we amended our articles of incorporation to authorize
      4,000,000,000 shares of common stock, par value $0.001 per share, and 50,000,000
      shares of preferred stock, par value $0.001 per share.




On
      November 17, 2005, the Company effected a 800 to 1 reverse split.





**EMPLOYEES**





We
      have
      two full-time employees and two part-time employees as of February 15,2007.
      As we grow, we will need to attract an unknown number of additional qualified
      employees. Although we have experienced no work stoppages and believe our
      relationships with our employees are good, we could be unsuccessful in attracting
      and retaining the persons needed. None of our employees are currently
      represented by a labor union.





**RISK
      FACTORS**





***NEED
      FOR ONGOING FINANCING.***





We
      will
      need additional capital to continue our operations and will endeavor
      to raise funds through the sale of equity shares and revenues from operations.





There
      can
      be no assurance that we will generate sufficient revenues from operations or
      obtain sufficient capital on acceptable terms, if at all. Failure to obtain
      such
      capital or generate such operating revenues would have an adverse impact on
      our
      financial position and results of operations and ability to continue as a going
      concern. Our operating and capital requirements during the next fiscal year
      and
      thereafter will vary based on a number of factors, including the level of
      sales
      and marketing activities for our services and products. There can be no
      assurance that additional private or public financing, including debt or equity
      financing, will be available as needed, or, if available, on terms favorable
      to us. Any additional equity financing may be dilutive to stockholders
      and such additional equity securities may have rights, preferences or
      privileges that are senior to those of our existing common stock.





Furthermore,
      debt financing, if available, will require payment of interest and
      may
      involve restrictive covenants that could impose limitations on our operating
      flexibility. Our failure to successfully obtain additional future funding
      may jeopardize our ability to continue our business and operations.





If
      we
      raise additional funds by issuing equity securities, existing stockholders
      may experience a dilution in their ownership. In addition, as a condition
      to giving additional funds to us, future investors may demand, and may be
      granted, rights superior to those of existing stockholders.





***BUSINESS
      CONCENTRATION.***





While
      we
      consider our relationships with our customers to be satisfactory, given
      the
      concentration of our sales to a few key customers, our continued relationships
      may be subject to the policies and practices of the customers. We continue
      to concentrate our efforts on expanding our customer base in order to reduce
      our reliance on our current customers.





***INFLATION.***





In
      our
      opinion, inflation has not had a material effect on our financial condition
      or results of our operations.





***TRENDS,
      RISKS AND UNCERTAINTIES.***





We
      have
      sought to identify what we believe to be the most significant risks to
      our
      business, but we cannot predict whether, or to what extent, any of such risks
      may
      be realized nor can we guarantee that we have identified all possible risks
      that might arise. Investors should carefully consider all of such risk factors
      before making an investment decision with respect to our common
      stock.





***CAUTIONARY
      FACTORS THAT MAY AFFECT FUTURE RESULTS.***





We
      provide the following cautionary discussion of risks, uncertainties and possible
      inaccurate assumptions relevant to our business and our products. These
      are
      factors that we think could cause our actual results to differ materially
      from expected results. Other factors besides those listed here could adversely
      affect us.







7




***POTENTIAL
      FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.***





Our
      quarterly operating results may fluctuate significantly in the future as
      a
      result of a variety of factors, most of which are outside our control, including
      the demand for our services, seasonal trends in purchasing, the amount and
      timing of capital expenditures; price competition or pricing changes in the industry;
      technical difficulties or system downtime; general economic conditions,
      and economic conditions specific to our industry. Our quarterly results
      may also be significantly impacted by the impact of the accounting treatment
      of acquisitions, financing transactions or other matters. Particularly
      at our early stage of development, occurrences such as accounting treatment
      can have a material impact on the results for any quarter. Due to the foregoing
      factors, among others, it is likely that our operating results will fall
      below our expectations or those of investors in some future
      quarter.





***LACK
      OF INDEPENDENT DIRECTORS.***





We
      cannot
      guarantee that our board of directors will have a majority of independent
      directors in the future. In the absence of a majority of independent
      directors, our executive officers, could establish policies and enter
      into transactions without independent review and approval thereof. This could
      present the potential for a conflict of interest between us and our


stockholders
      generally and the controlling officers, stockholders or directors.





***LIMITATION
      OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND
      DIRECTORS.***





Our
      officers and directors are required to exercise good faith and high integrity
      in our management affairs. Our articles of incorporation provide, however,
      that our officers and directors shall have no liability to our stockholders
      for losses sustained or liabilities incurred which arise from any transaction
      in their respective managerial capacities unless they violated
      their


duty
      of
      loyalty, did not act in good faith, engaged in intentional misconduct or knowingly
      violated the law, approved an improper dividend or stock repurchase, or
      derived an improper benefit from the transaction. Our articles and bylaws also
      provide for the indemnification by us of the officers and directors against any
      losses or liabilities they may incur as a result of the manner in which they operate
      our business or conduct the internal affairs, provided that in connection
      with these activities they act in good faith and
      in a
      manner that they reasonably believe to be in, or not opposed to, our best
      interests, and their conduct does not constitute gross negligence, misconduct
      or breach of fiduciary obligations.





***MANAGEMENT
      OF POTENTIAL GROWTH.***





We
      may
      experience rapid growth which will place a significant strain on our managerial,
      operational, and financial systems resources. To accommodate our current
      size and manage growth, we must continue to implement and improve our financial
      strength and our operational systems, and expand, train and manage our sales
      and
      distribution base. There is no guarantee that we will be able to effectively
      manage the expansion of our operations, or that our facilities, systems,
      procedures or controls will be adequate to support our expanded


operations.
      Our inability to effectively manage our future growth would have a material
      adverse effect on us.





***WE
      PAY NO DIVIDENDS.***





We
      have
      never declared nor paid cash dividends on our capital stock. We currently
      intend to retain any earnings for funding growth however these plans may
      change depending upon capital raising requirements.





***QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.***





We
      believe that we do not have any material exposure to interest or commodity
      risks. Our financial results are quantified in U.S. dollars and a majority
      of our obligations and  expenditures with respect to our operations are incurred
      in U.S. dollars. Although we do not believe we currently have any materially
      significant market risks relating to our operations resulting from foreign
      exchange rates, if we enter into financing or other business arrangements
      denominated in currency other than the U.S. dollars, variations in the
      exchange rate may give rise to foreign exchange gains or losses that may be significant.





We
      do not
      use financial instruments for trading purposes and we are not a party to any
      leverage derivatives.





**RISKS
      RELATING TO OUR BUSINESS**





***WE
      ARE NOT LIKELY TO SUCCEED UNLESS WE CAN OVERCOME THE MANY OBSTACLES WE
      FACE.***





As
      an
      investor, you should be aware of the difficulties, delays and expenses
      we encounter, many of which are beyond our control, including unanticipated
      market trends, employment costs, and administrative expenses. We cannot
      assure our investors that our proposed business plans as described in this
      report will materialize or prove successful, or that we will ever be able to
      finalize development of our products or services or operate profitably. If we
      cannot
      operate profitably, you could lose your entire investment. As a result
      of
      the nature of our business, initially we expect to sustain substantial operating
      expenses without generating significant revenues.





***OUR
      AUDITORS HAVE STATED WE MAY NOT BE ABLE TO STAY IN
      BUSINESS.***





Our
      auditors have issued a going concern opinion, which means that there is substantial
      doubt that we can continue as an ongoing business for the next
      12
      months. Unless we can raise additional capital, we may not be able
      to achieve
      Our objectives and may have to suspend or cease operations. See "Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations."





8




***OUR
      NEW BUSINESS STRATEGY INVOLVES A NUMBER OF RISKS.***





We
      intend
      to pursue growth through the expanding of the media business. This strategy
      involves certain risks, including difficulties in the
      integration of operations and systems, the diversion of our management's attention
      from other business concerns, and the potential loss of key employees. We may
      not be able to successfully integrate this businesses into our
      operations.





**RISKS
      RELATING TO OUR STOCK**





***WE
      MAY NEED TO RAISE ADDITIONAL CAPITAL. IF WE ARE UNABLE TO RAISE
      NECESSARY***


***ADDITIONAL
      CAPITAL, OUR BUSINESS MAY FAIL OR OUR OPERATING RESULTS AND OUR
      STOCK***


***PRICE
      MAY BE MATERIALLY ADVERSELY AFFECTED.***





Due
      to
      the lack of profitability, we need to secure adequate funding.
      If we are unable to obtain adequate funding, we may not be able to successfully
      develop and market our products and services and our business will most
      likely fail. We do not have commitments for additional financing. To secure
      additional financing, we may need to borrow money or sell more


securities,
      which may reduce the value of our outstanding securities. Under these
      circumstances, we may be unable to secure additional financing on favorable
      terms or at all.





Selling
      additional stock, either privately or publicly, would dilute the equity
      interests of our stockholders. If we borrow more money, we will have to pay
      interest and may also have to agree to restrictions that limit our operating flexibility.
      If we are unable to obtain adequate financing, we may have to curtail
      business operations which would have a material negative effect on operating
      results and most likely result in a lower stock price.





***OUR
      COMMON STOCK HAS EXPERIENCED IN THE PAST, AND IS EXPECTED TO EXPERIENCE
      IN***


***THE
      FUTURE, SIGNIFICANT PRICE AND VOLUME VOLATILITY, WHICH
      SUBSTANTIALLY***


***INCREASES
      THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT OR ABOVE
      THE***


***PRICE
      THAT YOU PAY FOR THE SHARES.***





Because
      of the limited trading market for our common stock, and because of the
      possible price volatility, you may not be able to sell your shares of common stock
      when you desire to do so. During 2005 and 2006, our common stock was sold and
      purchased at prices that ranged from a high of $0.08 to a low of $0.008 per
      share. The inability to sell your shares in a rapidly declining market may substantially
      increase your risk of loss because of such illiquidity because the price
      for
      our common stock may suffer greater declines due to its price


volatility.





The
      price
      of our common stock that will prevail in the market after this filing
      may be higher or lower than the price you pay. Certain factors, some of
      which
      are beyond our control, that may cause our share price to fluctuate significantly
      include, but are not limited to, the following:





-
      Variations in our quarterly operating results;





-
      The
      development of a market in general for our products and services;





-
      Changes
      in market valuations of similar companies;





-
      Announcement by us or our competitors of significant contracts, acquisitions,
      strategic partnerships, joint ventures or capital commitments;





-
      Loss of
      a major customer or failure to complete significant transactions;





-
      Additions or departures of key personnel; and





-
      Fluctuations in stock market price and volume.





Additionally,
      in recent years the stock market in general, and the OTC Bulletin
      Board and technology stocks in particular, have experienced extreme price
      and
      volume fluctuations. In some cases, these fluctuations are unrelated or
      disproportionate to the operating performance of the underlying company. These
      market and industry factors may materially and adversely affect our stock price,
      regardless of our operating performance.





Over
      the
      past few months, there have been periods of significant increases in
      trading volume of our common stock during which the price of our stock has both
      increased and decreased. The historical trading of our common stock is not necessarily
      an indicator of how it will trade in the future and our trading price
      as
      of the date of this report does not necessarily portend what the trading
      price of our common stock might be in the future.





In
      the
      past, class action litigation has often been brought against companies
      following periods of volatility in the market price of the common stock
      of
      those companies. If we become involved in this type of litigation in the
      future, it could result in substantial costs and diversion of management attention
      and resources, which could have a further negative effect on your investment
      in our stock.






9





***OUR
      DIRECTORS HAVE THE RIGHT TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK
      AND***


***ADDITIONAL
      SHARES OF OUR COMMON STOCK.***





Our
      directors, within the limitations and restrictions contained in our articles
      of incorporation and without further action by our stockholders, have the
      authority to issue shares of preferred stock from time to time in one or more
      series and to fix the number of shares and the relative rights, conversion rights,
      voting rights, and terms of redemption, liquidation preferences and any other
      preferences, special rights and qualifications of any such series. We have
      no
      intention of issuing preferred stock at the present time. Any
      issuance


of
      preferred stock could adversely affect the rights of holders of our common stock.





Should
      we
      issue additional shares of our common stock at a later time, each investor's
      ownership interest in The Blackhawk Fund would be proportionally reduced.
      No investor will have any preemptive right to acquire additional shares
      of
      our common stock, or any of our other securities.





***THE
      ISSUANCE OF SHARES UPON THE EXERCISE OF OUTSTANDING WARRANTS MAY
      CAUSE***


***IMMEDIATE
      AND SUBSTANTIAL DILUTION TO OUR EXISTING
      STOCKHOLDERS.***





The
      issuance of shares upon the exercise of warrants may result in substantial
      dilution to the interests of other stockholders since the selling stockholders
      may ultimately convert and sell the full amount issuable on conversion.
      There is no upper limit on the number of shares that may be issued which
      will have the effect of further diluting the proportionate equity interest and
      voting power of holders of our common stock, including investors in this offering.





***IF
      WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE
      REMOVED***


***FROM
      THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS
      TO***


***SELL
      OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES
      IN***


***THE
      SECONDARY MARKET.***





Companies
      trading on the OTC Bulletin Board, such as The Blackhawk Fund, must
      be
      reporting issuers under Section 12 of the Securities Exchange Act of 1934,
      as
      amended (the "Exchange Act"), and must be current in their reports under
      Section 13, in order to maintain price quotation privileges on the OTC Bulletin
      Board. If we fail to remain current on our reporting requirements, we could
      be
      removed from the OTC Bulletin Board. As a result, the market liquidity for
      our
      securities could be severely adversely affected by limiting the
      ability


of
      broker-dealers to sell our securities and the ability of stockholders to sell their
      securities in the secondary market.





***OUR
      COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND
      THE***


***TRADING
      MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN
      OUR***


***STOCK
      CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR
      STOCK.***





The
      Securities and Exchange Commission has adopted Rule 15g-9 which establishes
      the definition of a "penny stock," for the purposes relevant to us, as
      any
      equity security that has a market price of less than $5.00 per share or with
      an
      exercise price of less than $5.00 per share, subject to certain exceptions.
      Inasmuch as that the current bid and ask price of common stock is less
      than
      $5.00 per share, our shares are classified as "penny stock" under the rules
      of
      the SEC. For any transaction involving a penny stock, unless exempt, the
      rules
      require:





-
      That a
      broker or dealer approve a person's account for transactions in penny
      stocks; and





-
      The
      broker or dealer receives from the investor a written agreement to the transaction,
      setting forth the identity and quantity of the penny stock to be
      purchased.





In
      order
      to approve a person's account for transactions in penny stocks, the
      broker or dealer must:





-
      Obtain
      financial information and investment experience objectives of the person;
      and





-
      Make a
      reasonable determination that the transactions in penny stocks are suitable
      for that person and the person has sufficient knowledge and experience
      in financial matters to be capable of evaluating the risks of transactions
      in penny stocks.






10


The
      broker or dealer must also deliver, prior to any transaction in a penny stock,
      a
      disclosure schedule prescribed by the Commission relating to the penny stock
      market, which, in highlight form:





-
      Sets
      forth the basis on which the broker or dealer made the suitability determination;
      and





-
      That
      the broker or dealer received a signed, written agreement from the investor
      prior to the transaction.





Generally,
      brokers may be less willing to execute transactions in securities
      subject to the "penny stock" rules. This may make it more difficult for
      investors to dispose of our common stock and cause a decline in the market value
      of
      our stock.





Disclosure
      also has to be made about the risks of investing in penny stocks in
      both
      public offerings and in secondary trading and about the commissions payable
      to both the broker-dealer and the registered representative, current quotations
      for the securities and the rights and remedies available to an investor
      in cases of fraud in penny stock transactions. Finally, monthly statements
      have to be sent disclosing recent price information for the penny stock
      held in the account and information on the limited market in penny
      stocks





**ITEM
      2. DESCRIPTION OF PROPERTY.**





We
      lease
      office space at 1802 N. Carson Street, Suite 212, Carson City, Nevada,
      89701. Our Carson Street lease costs $100 per month and is scheduled to expire
      on
      December 31, 2007.





**ITEM
      3. LEGAL PROCEEDINGS.**





On
      December 28, 2004, R. Patrick Liska, who served as our director and officer
      at the time when we were called Zannwell, Inc., filed a lawsuit against us
      in the
      Hennepin county, Minnesota District Court. Mr. Liska alleges that he is
      entitled to receive 1,000,000 shares of our series A convertible preferred stock,
      and 5,000,000 shares of our common stock, both of which we deny vigorously.
      In 2005 this lawsuit was settled out of court for 23,000 dollars.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**





On
      January 3, 2005 the holder of the majority of our voting capital stock acted
      by
      written consent to effect the following corporate actions:





1.
      Amend
      our articles of incorporation to change our name from "ZannWell
      Inc." to "The BlackHawk Fund";


2.
      Approve an amendment to our articles of incorporation to increase the
      authorized number of shares of our common stock from 900,000,000 to 4,000,000,000
      shares;





3.
      Grant
      discretionary authority to our board of directors to implement a
      reverse
      stock split of our common stock on the basis of one post-consolidation share
      for
      up to each 800 pre-consolidation shares to occur at some time within 12
      months
      of the date of this information statement, with the exact time of the
      r everse
      split to be determined by the board of directors;





4.
      Grant
      discretionary authority to the directors to implement a proposal
      for ZannWell Inc. to become a Business Development Corporation to occur at
      some
      time within 12 months of the date of this information statement, with the
      exact
      time of such conversion to be determined by the board of directors;





5.
      Ratify
      the removal of R. Patrick Liska from our board of directors; and





6.
      Ratify
      the election of Steve Bonenberger and Brent Fouch as our directors.






11




We
      had a
      consenting stockholder, Palomar Enterprises, Inc., a Nevada corporation,
      ("Palomar"), which held 19,000,000 shares of our series A preferred stock,
      10,000,000 shares of our series B preferred stock, and 10,000,000 shares of
      our
      series C preferred stock on the record date. The shares of the series A preferred
      stock do not have voting rights. Each share of the series B preferred stock
      entitles the holder to one vote of our common stock on all matters
      brought before
      our stockholders. Each share of the series C preferred stock entitles the
      holder to 100 votes of our common stock on all matters brought before our stockholders.
      Therefore, Palomar had the power to vote 1,010,000,000 shares of the
      common stock, which number exceeded the 167,750,000 issued and outstanding shares
      of
      our common stock on the record date.





Palomar
      voted in favor of the proposed amendments to our articles of incorporation,
      to ratify the removal of a director and the election of new directors,
      and for the grant of discretionary authority to the board with respect
      to the stock split and conversion to a Business Development
      Corporation.





Palomar
      had the power to pass the proposed corporate actions without the concurrence
      of any of our other stockholders.





**PART II**





**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS.**





Until
      January 3, 2005, our common stock was quoted on the OTC Board
      under the symbol "ZWLL.OB." On January 3, 2005, in connection with our name
      change and 1-800 reverse stock split, our symbol changed from "ZWLL.OB." to "BHWK.OB."
      These quotations reflect inter-dealer prices, without mark-up, mark-down
      or commission, and may not represent actual transactions.





**CALENDAR
      YEAR 2005  HIGH  LOW**


First
      Quarter    0.15  
      0.0003


Second
      Quarter      0.0002  
      0.0002


Third
      Quarter         
      0.0002  
0.0002


Fourth
      Quarter      
      0.0002   0.0006





**CALENDAR
      YEAR 2006  HIGH  LOW**


First
      Quarter    0.08  0.04


Second
      Quarter   0.04            
       0.02


Third
      Quarter                                  
0.02            
0.014


Fourth
      Quarter                              
0.014           
 0.008





As
      of
      January 25, 2007 we had 24,664,792 shares of our common stock outstanding.
      Our shares of common stock are held by approximately 35 stockholders of record.
      The number of record holders was determined from the records
      of our transfer agent and does not include beneficial owners of common stock
      whose shares are held in the names of various security brokers, dealers, and
      registered clearing agencies.





**SECTION
      15(G) OF THE EXCHANGE ACT**





The
      shares of our common stock are covered by Section 15(g) of the Exchange Act,
      and
      Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional
      sales practice requirements on broker-dealers who sell our securities to
      persons other than established customers and accredited investors.





Rule
      15g-2 declares unlawful any broker-dealer transactions in "penny stocks"
      unless the broker-dealer has first provided to the customer a standardized
      disclosure document.





Rule
      15g-3 provides that it is unlawful for a broker-dealer to engage in a "penny
      stock" transaction unless the broker-dealer first discloses and subsequently
      confirms to the customer the current quotation prices or similar market
      information concerning the penny stock in question.





Rule
      15g-4 prohibits broker-dealers from completing "penny stock" transactions
      for a customer unless the broker-dealer first discloses to the customer
      the amount of compensation or other remuneration received as a result of
      the
      penny stock transaction.





Rule
      15g-5 requires that a broker-dealer executing a "penny stock" transaction,
      other than one exempt under Rule 15g-1, disclose to its customer, at
      the
      time of or prior to the transaction, information about the sales person's compensation.





Our
      common stock may be subject to the foregoing rules. The application of the
      "penny stock" rules may affect our stockholders' ability to sell their shares
      because some broker-dealers may not be willing to make a market in our common
      stock because of the burdens imposed upon them by the "penny stock" rules.


12


The
      following table provides information about purchases by us and our affiliated
      purchasers during the quarter ended December 31, 2006 of equity securities
      that are registered by us pursuant to Section 12 of the Securities Exchange
      Act of 1934:





**SMALL
      BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES**




**Maximum**


**Total
      number                     
number (or**


**of
      shares  (or                  
 approximate**


**units)                         
dollar value)of**


**purchased
      as                     
shares (or**


**part
      of                         
 units) that may**


**Total
      number                                                                          
 publicly                                
yet be**


**of shares
      (or                     
Average
      price                          
announced                        
purchased**


**units)                                
 paid
      per                                   
plans
      or                        under
      the plans**


**Period                                                          
purchased                       
share (or
      unit)                            
 programs                         
or
      programs**




October
      2006                                                               
 -0-                                       
 -0-                                            
 -0-                                      
-0-


November
      2006                                                           
 -0-                                       
 -0-                                             
-0-                                       -0-


December
      2006 -0-                                       
       
-0-                                              -0-                                     
 -0-




Total                                                                             
      -0-                                        
 -0-                                            
 -0-                                       -0-




**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION.**





**FORWARD-LOOKING
      INFORMATION**





Much
      of
      the discussion in this Item is "forward looking" as that term is used
      in
      Section 27A of the Securities Act and Section 21E of the Exchange Act. Actual
      operations and results may materially differ from present plans and projections
      due to changes in economic conditions, new business opportunities, changed
      business conditions, and other developments. Other factors that could cause
      results to differ materially are described in our filings with the Securities
      and Exchange Commission.





There
      are
      several factors that could cause actual results or events to differ
      materially from those anticipated, and include, but are not limited to general
      economic, financial and business conditions, changes in and compliance with
      governmental laws and regulations, including various state and federal environmental
      regulations, our ability to obtain additional financing from outside
      investors and/or bank and mezzanine lenders and our ability to generate sufficient
      revenues to cover operating losses and position us to achieve positive
      cash flow.





Readers
      are cautioned not to place undue reliance on the forward-looking Statements
      contained herein, which speak only as of the date hereof. We believe the
      information contained in this Form 10-KSB to be accurate as of the date hereof.
      Changes may occur after that date. We will not update that information
      except as required by law in the normal course of its public disclosure
      practices.


13


**MANAGEMENT'S
      PLAN OF OPERATIONS**





The
      Management of The Blackhawk Fund plans to aggressively market the real estate
      properties held, that have been renovated and ready for sale. The Company plans
      to generate the highest return on their investment, by selling these properties
      at substantial profits. The Management believes we will sell all three
      properties held between the first and second quarter of 2007.





The
      Management plans to expand the Media Division significantly, by developing
      and
      airing the cable television productions, produced by Maximum Impact Television
      Group. The Blackhawk Fund plans to begin receiving revenue in the first quarter
      from these media properties, which is generated by sponsors paying for air
      time
      and commercial productions. The company plans to have all ten cable television
      shows airing in 2007. The Media Division will generate additional revenue by
      converting the content from the cable television shows to Online Video Magazines
      and DVDs, which provide additional advertising vehicles for our sponsors to
      reach their target audience.





The
      company has identified the following benchmarks for the next 12-24 months:




a.   
      Raise enough capital to expand our core real property redevelopment projects


b.   
      Raise additional capital to strengthen and expand our media properties,
      with a look to bring our advertiser partners a substantial return
      on
      their media investments


c.   
      Maintain good corporate relationships with all of our advertising partners
      and the vendors that assist us in the redevelopment projects.




In
      2006,
      The BlackHawk Fund was able to establish firm footings in its two core business
      sectors.  The company looks for 2007 to be the largest year in its
      existence in terms of revenue produced, potential profits retained and
      shareholder equity increased.





**RESULTS
      OF OPERATIONS**





**TWELVE
      MONTHS ENDED DECEMBER 31, 2006 COMPARED TO THE TWELVE MONTHS ENDED** **DECEMBER
      31, 2005.**





**REVENUE**





Revenue
      for the 12 months ended December 31, 2006 was $149,451 compared to $23,751
      for the 12 months ended December 31, 2005. Revenue reflected the start of the
      acquisition of and sale of residential property. Cost
      of
      Sales was 140,000 in 2006 compared to 0 in 2005.




**GENERAL
      AND ADMINISTRATIVE EXPENSES**





General
      and administrative expenses ("G&A") were $472,780 for the 12 months
      ended December 31, 2006, compared to $4,803,251 for the 12
      months ended
      December 31, 2005, a decrease of $4,324,471. The decrease in G&A is due
      primarily to stock issued for services.





We
      expect
      G&A expenses to increase substantially in the coming 12 months due
      to
      the increase in sales activities within our business units. We intend to focus
      on
      operating efficiencies, increasing revenues, and ensuring profitability in
      our
      core business units during this period.





**LIQUIDITY
      AND CAPITAL RESOURCES**





During
      the twelve-month period ended December 31, 2006, cash used in operating
      activities was 499,722. We intend to continue to find ways to expand our business
      through new product development . We believe that revenues and earnings
      will increase as we grow. We anticipate that we will incur smaller losses
      in
      the near future if we are able to expand our business and the marketing
      of our products and services now under development. The losses will be created
      to the extent of the excess of technology development and marketing


expenses
      over the income from operations. Our operating losses as shown may be perceived
      as alarming and possibly indicate a downward spiral leading to the demise
      of
      the company; however, from management's point of view, there is a bright
      side to the operating losses which are tapering off. We feel now by adopting
      our
      new media business we will be profitable in 2007.





During
      the 12 months ended December 31, 2006, we generated a net loss of $564,065.
      Cash provided by operating activities was $695,361.





In
      order
      to execute our business plan, we will need to acquire additional capital
      from debt or equity financing. In the absence of significant revenue
      and profits, we will be completely dependent on additional debt and equity
      financing arrangements. There is no assurance that any financing will be
      sufficient to fund our capital expenditures, working capital and other
      cash requirements
      for the fiscal year ending December 31, 2007. No assurance can be
      given
      that any such additional funding will be available or that, if available, can
      be
      obtained on terms favorable to us. If we are unable to raise needed funds
      on
      acceptable terms, we will not be able to execute our business plan, develop
      or enhance existing services, take advantage of future opportunities or respond
      to competitive pressures or unanticipated requirements. A material shortage
      of capital will require us to take drastic steps such as further reducing our
      level of operations, disposing of selected assets or seeking an
      acquisition partner.






14





**CRITICAL
      ACCOUNTING POLICIES**





The
      preparation of our financial statements in conformity with accounting principles
      generally accepted in the United States requires us to make estimates and
      judgments that affect our reported assets, liabilities, revenues,
      and expenses, and the disclosure of contingent assets and liabilities. We
      base
      our estimates and judgments on historical experience and on various


other
      assumptions we believe to be reasonable under the circumstances. Future events,
      however, may differ markedly from our current expectations and assumptions.
      While there are a number of significant accounting policies affecting
      our consolidated financial statements, we believe the following critical
      accounting policy involve the most complex, difficult and subjective estimates
      and judgments.





**STOCK-BASED
      COMPENSATION**





In
      December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based Compensation
      - Transition and Disclosure. This statement amends SFAS No. 123 - Accounting
      for Stock-Based Compensation, providing alternative methods of voluntarily
      transitioning to the fair market value based method of accounting for
      stock
      based employee compensation. SFAS 148 also requires disclosure of the method
      used to account for stock-based employee compensation and the effect of the
      method in both the annual and interim financial statements. The provisions of
      this
      statement related to transition methods are effective for fiscal years ending
      after December 15, 2002, while provisions related to disclosure


requirements
      are effective in financial reports for interim periods beginning after
      December 31, 2002.





We
      adopted SFAS No. 123 effective January 1, 2006.




**RECENT
      ACCOUNTING PRONOUNCEMENTS**





We
      adopted SFAS No. 142. Under the new rules, we will no longer amortize goodwill
      and other intangible assets with indefinite lives, but such assets will be
      subject to periodic testing for impairment. On an annual basis, and when there
      is
      reason to suspect that their values have been diminished or impaired, these
      assets must be tested for impairment, and write-downs to be included in results
      from operations may be necessary. SFAS No. 142 also requires us to complete
      a transitional goodwill impairment test six months from the date of


adoption.





Any
      goodwill impairment loss recognized as a result of the transitional goodwill
      impairment test will be recorded as a cumulative effect of a change in accounting
      principle no later than the end of fiscal year 2002. The adoption of SFAS
      No.
      142 had no material impact on our consolidated financial statements





**OFF-BALANCE
      SHEET ARRANGEMENTS**





We
      do not
      have any off-balance sheet arrangements.





**ITEM
      7. FINANCIAL STATEMENTS.**





Please
      see the audited financial statements and notes thereto included as a part of
      this report.





**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND**


**FINANCIAL
      DISCLOSURE.**





On
      June
      22, 2004 we engaged Malone & Bailey, PC as our independent accountants.
      On January 24, 2007 we dismissed Malone & Bailey, PC.





The
      reports of Malone & Bailey, PC on our financial statements for the fiscal
      years ended December 31, 2004 and 2005 did not contain an adverse opinion or
      a
      disclaimer of opinion, nor were such reports qualified or modified as to uncertainty,
      audit scope or accounting principles.





The
      decision to dismiss Malone & Bailey, PC was approved by our board of directors.





During
      that time, there were no "reportable events" as set forth in Item 304(a)(1)(i-v)
      of Regulation S-B adopted by the Securities and Exchange Commission.





We
      engaged Gruber & Company, LLC as our independent accountants in January
      2007. The decision to engage this firm was recommended by our board of
      directors.


15


During
      our two most recent fiscal years and any subsequent interim period prior to
      the
      engagement of Gruber & Company, LLC, neither we nor anyone on our behalf
      consulted with Gruber & Company, LLC regarding either (i) the application of
      accounting principles to a spcified transaction, either contemplated or proposed,
      or the type of audit opinion that might be rendered on our financial statements
      or (ii) any matter that was either the subject of a "disagreement" or a
      "reportable event."





We
      have
      provided Malone & Bailey, PC with a copy of our current report on
      Form
      8-K prior to its filing with the Commission, and we have requested that they
      furnish a letter addressed to the Commission stating whether it agreed with
      the
      statements made by us in that report and if not, stating the reasons it did
      not.








**ITEM
      8A. CONTROLS AND PROCEDURES.**





Disclosure
      controls and procedures are controls and other procedures that are
      designed to ensure that information required to be disclosed by us in the reports
      that we file or submit under the Exchange Act is recorded, processed, summarized
      and reported, within the time periods specified in the Securities and Exchange
      Commission's rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed by us in the reports that we file under
      the


Exchange
      Act is accumulated and communicated to our management, including our principal
      executive and financial officers, as appropriate to allow timely decisions
      regarding required disclosure.





Evaluation
      of disclosure and controls and procedures. As of the end of the period
      covered by this Annual report, we conducted an evaluation, under the supervision
      and with the participation of our chief executive officer and chief financial
      officer, of our disclosure controls and procedures (as defined in Rules
      13a-15(e) of the Exchange Act). Based on this evaluation, our chief executive
      officer and chief financial officer concluded that our disclosure controls
      and procedures are effective to ensure that information required to
      be


disclosed
      by us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in
      Securities and Exchange Commission rules and forms.





Changes
      in internal controls over financial reporting. There was no change in
      our
      internal controls, which are included within disclosure controls and procedures,
      during our most recently completed fiscal quarter that has materially
      affected, or is reasonably likely to materially affect, our internal controls.





**ITEM
      8B. OTHER INFORMATION.**





None.








16





**PART
      III**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;** **COMPLIANCE
      WITH SECTION 16(A) OF THE EXCHANGE ACT.**





Our
      directors and executive officers are:





**NAME                                                   
      AGE                       POSITION(S)                                                                          
POSITION HELD SINCE**





Steve
      Bonenberger                              
50                          President,
      director and chief executive
      officer                                          
2004





Brent
      Fouch                                           37                         
Secretary, director and chief financial
      officer                                            
2004




Our
      executive officers are elected annually by our board of directors.





Steve
      Bonenberger: During the past five years, Mr. Bonenberger was the owner,operator
      of a corporate consulting firm. Going forward, he intends to devote a
      significant portion of his time to the furtherance of our
      operations.





Brent
      Fouch: Over the past four years, Mr. Fouch has been a corporate con sultant.
      Mr. Fouch intends to serve as our chief financial officer, director and
      secretary. In the period encompassing from 2003 to present, Mr. Fouch
      has
      served as chief operating officer of Palomar Enterprises, Inc., prior to that
      he
      owned and operated a corporate consulting firm, where he performed business
      consulting services.





**SECTION
      16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**





Under
      Section 16(a) of the Exchange Act, our directors and certain of our officers,
      and persons holding more than 10 percent of our common stock are required
      to file forms reporting their beneficial ownership of our common stock and
      subsequent changes in that ownership with the Securities and Exchange Commission.
      Such persons are also required to furnish us with copies of all forms
      so
      filed.





**CODE
      OF ETHICS**





We
      have
      adopted a code of ethics that applies to our principal executive officer,
      principal financial officer, principal accounting officer or controller,
      or persons performing similar functions. The code of ethics is designed
      to deter wrongdoing and to promote:





-
      Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional relationships;





-
      Full,
      fair, accurate, timely, and understandable disclosure in reports and documents
      that we file with, or submits to, the SEC and in other public communications
      made by us;





-
      Compliance with applicable governmental laws, rules and
      regulations;





-
      The
      prompt internal reporting of violations of the code to an appropriate person
      or
      persons identified in the code; and





-
      Accountability for adherence to the code.





A
      copy of
      our code of ethics that applies to our principal executive officer,
      principal financial officer, principal accounting officer or controller,
      or persons performing similar functions is filed as an exhibit to this
      Annual report. We have posted a copy of the code of ethics on our
      website.





We
      will
      provide to any person without charge, upon request, a copy of our code
      of
      ethics. Any such request should be directed to our corporate secretary at
      1802
      N. Carson Street, Suite 212, Carson City, Nevada, 89701.







17




**ITEM
      10. EXECUTIVE COMPENSATION.**





**SUMMARY
      OF CASH AND CERTAIN OTHER COMPENSATION**





The
      following table provides certain summary information concerning the compensation
      earned by the named executive officers (determined as of the end of the
      last
      fiscal year) for services rendered in all capacities to The Blackhawk Fund
      and
      our subsidiaries:




**SUMMARY
                COMPENSATION TABLE****FISCAL
                YEAR COMPENSATION**
            
            **LONG
                TERM COMPENSATION****-**
            
            
            **Awards**
            
            **Payouts****Name
                and Principal Position(s)**
            
            **Year**
            
            **Salary**
              **($)**
            
            **Bonus**
              **($)**
            
            **Other**
              **Annual**
              **Compensation****(4)**
            
            **Securities**
              **Underlying**
              **Option/SARs**
              **Granted**
            
            **Restricted
                Shares**
              **or
                Restricted Share**
              **Units**
            
            **LTIP
                Payouts**
              **($)**
            
            **All
                other**
              **Compensation**
              **($)**Steve
                Bonenberger, President, Chief Executive Officer and
                Director
            
            
            2006
              2005
            
            
            -
              -
            
            
            0
              0
            -
              -
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0Brent
                Fouch, Secretary, Treasurer, Principal Accounting Officer and
              Director
            
            
            2006
              2005
            
            
            -
              -
            
            
            0
              0
            -
              -
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0





**EMPLOYMENT
      AGREEMENTS**





We
      do not
      have employment agreements with either of our officers or directors at this
      time. However, we do intend to enter into employment agreements with each of
      Mr.
      Steve Bonenberger and Mr. Brent Fouch in the near future. We will promptly
      report our entry into such employment agreements with Messrs. Bonenberger
      and Fouch by making appropriate filing(s) with the Commission. We also
      plan
      to enter into consulting agreements with various consulting entities owned
      by
      our officers and directors. We will promptly report our entry into such consulting
      agreements by making appropriate filing(s) with the Commission.





**CONFIDENTIALITY
      AGREEMENTS**





None.




**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND**


**RELATED
      STOCKHOLDER MATTERS.**





**EQUITY
      COMPENSATION PLAN INFORMATION -** **SECURITIES
      AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS**





The
      following table provides information as of the end of the most recently
      completed fiscal year with respect to compensation plans (including individual
      compensation arrangements) under which equity securities of the registrant
      are
      authorized for issuance, aggregated as follows:





-
      All
      compensation plans previously approved by security holders; and





-
      All
      compensation plans not previously approved by security holders.







**NUMBER OF SECURITIES REMAINING**


**NUMBER OF SECURITIES TO
      BE                                                                                               AVAILABLE
      FOR FUTURE ISSUANCE**


**ISSUED UPON EXERCISE
      OF               
WEIGHTED-AVERAGE
      EXERCISE                     
UNDER EQUITY COMPENSATION**


**OUTSTANDING OPTIONS,
      WARRANTS           OF
      OUTSTANDING
      OPTIONS,                       
PLANS (EXCLUDING SECURITIES**


**AND
      RIGHTS                                         
WARRANTS AND
      RIGHTS                                 
REFLECTED IN COLUMN (A))**


**** **PLAN
      CATEGORY                                                           
(A)                                                                       
(B)                                                                                   
(C)**





Equity
      compensation
      plans                                                                    -0-                                                                      
 N/A                                                                                 
N/A


approved
      by security holders




Equity
      compensation plans
      not 207,500,000                                                                    0.001                                                                               
       N/A


approved
      by security holders





Total                                                                                             
      207,500,000                                                                  
$0.001                                                                                
 -0-








18


**SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**





The
      following table sets forth, as of December 31, 2006, information concerning
      ownership of our securities by:





-
      Each
      person who owns beneficially more than five percent of the outstanding shares
      of
      our common stock;





-
      Each
      person who owns beneficially outstanding shares of our preferred stock;





-
      Each
      director;





-
      Each
      named executive officer; and





-  All
      directors and officers as a group.





**COMMON STOCK
      BENEFICIALLY                                         
PREFERRED STOCK BENEFICIALLY**


**OWNED
      (2)                                           OWNED
      (2)**


**NAME
      AND ADDRESS OF BENEFICIAL OWNER
      (1)                               NUMBER                       
PERCENT                                              NUMBER                         
PERCENT**




Steve
      Bonenberger                                                                                                    
 -0-                                     -0-                                                           
-0-                                      
 -0-


Brent
      Fouch                                                                                                         -0-                                    
-0-                                               -0-                                       
-0-




All
      directors and officers as a group (two
      persons)                                             
-0-                                    
-0-                                                          
 -0-                                      
 -0-




Palomar
      Enterprises
      (6)                                                                                             
  -0-                                    
-0-                                                       
19,000,000
      (3)                     
 95 (3)


10,000,000
      (4)                   
100 (4)


10,000,000
      (5)                   
100 (4)






(1)
      Unless otherwise indicated, the address for each of these stockholders is c/o
      The
      Blackhawk Fund, 1802 N. Carson Street, Suite 212, Carson City, Nevada,
      89701, telephone number (775) 887-0670. Also, unless otherwise indicated,
      each person named in the table above has the sole voting and investment
      power with respect to the shares of our common and preferred stock
      which he beneficially owns.





(2)
      Beneficial ownership is determined in accordance with the rules of the SEC. As
      of
      December 31, 2006 the total number of outstanding shares of the common stock
      is
      24,664,792, the total number of outstanding shares of the Series A
      preferred stock is 9,000,000, the total number of outstanding shares of the
      Series B preferred stock is 10,000,000 and the total number of outstanding
      shares of the Series C preferred stock is 10,00,000.





(3)
      Series A preferred stock.




(4)
      Series B preferred stock.





(5)
      Series C preferred stock.





(6)
      Palomar Enterprises, Inc., a Nevada publicly-traded corporation, is controlled
      by Messrs. Steve Bonenberger and Brent Fouch, our officers and directors.
      Palomar Enterprises, Inc. holds 9,000,000 shares of our Series A
      preferred stock, 10,000,000 shares of our Series B preferred stock and 10,000,000
      shares of our series C preferred stock, equivalent to the voting


power
      of
      2,090,000,000 shares of our common stock as of December 31, 2006.





There
      are
      no arrangements, known to us, including any pledge by any person of
      our
      securities, the operation of which may at a subsequent date result in a change
      in
      control of The Blackhawk Fund.





There
      are
      no arrangements or understandings among members of both the former
      and the new control groups and their associates with respect to election of
      directors or other matters.





**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**





During
      the year ended December 31, 2006, we paid $ 90,000 in consulting fees to BMM,
      LLC, a Limited liability company owned and controlled by Steve Bonenberger,
      our officer
      and director. We also paid $ 90,000 in consulting fees to Prize Entertainment,
      Inc., a corporation owned and controlled by Brent Fouch, our officer
      and director.





19





**ITEM
      13. EXHIBITS.**





**EXHIBIT
      NO.  IDENTIFICATION OF
      EXHIBIT**




3.1** Articles
      of Incorporation.


3.2** Certificate
      of Amendment to Articles of Incorporation, filed on June 30,
      2004.


3.3** Certificate
      of Designation establishing our Series A, B and C Preferred Stock,
      filed effective July 21, 2004.


3.4** Certificate
      of Correction to the Certificate of Designation for our Series
      B
      Preferred Stock, filed effective on November 29, 2004.


3.5** Certificate
      of Amendment to Articles of Incorporation, filed effective January
      3, 2005.


3.6** Certificate
      of Amendment to Articles of Incorporation, filed effective January
      4, 2005


3.7** Amended
      Bylaws of Zannwell, Inc.


10.1** Zannwell
      Inc. Capital Stock Purchase Agreement, dated November 29,2004.


14** Code
      of
      Ethics


21** Subsidiaries


23.1                             Consent
      of Gruber & Company, LLC


23 .2                           
      Consent of Malone & Bailey, PC


31.1 Certification
      of Steve Bonenberger, President and Chief Executive Officer of
      The Blackhawk
      Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to


Sec.302 of  the
      Sarbanes-Oxley Act of 2002


31.2 Certification
      of Brent Fouch, Secretary and Chief Financial Officer of The Blackhawk
      Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.302 of


the
      Sarbanes-Oxley
      Act of 2002


32.1 Certification
      of Steve Bonenberger, President and Chief Executive Officer of
      The Blackhawk
      Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.906


of the
      Sarbanes-Oxley Act of 2002.


32.2 Certification
      of Brent Fouch, Secretary and Chief Financial Officer of The Blackhawk
      Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.906 of


the
      Sarbanes-Oxley
      Act of 2002.


_________


**
      Previously Filed




**AUDIT-RELATED
      FEES**




The
        aggregate fees billed by Malone & Bailey, PC for professional services
        rendered for the audit of our annual financial statements and the reviews
        of our
        quarterly financial statements were approximately $25,000.
 The
        aggregate fees billed by Malone & Bailey, PC for assurance and related
        services that are reasonably related to the performance of the audit or review
        of our financial statements for fiscal year 2005 were $0.





The
      aggregate fees billed by Malone & Bailey, PC for assurance and related
      services that are reasonably related to the performance of the audit or review
      of our financial statements for fiscal year 2005 were $0.





**ALL
      OTHER FEES**





There
      were no other fees billed by Malone & Bailey, PC for professional
      services rendered, other than as stated under the captions Audit Fees,
      Audit-Related Fees, and Tax Fees.







20


**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      as
      amended, the Registrant has duly caused this Annual report to be signed on
      its
      behalf by the undersigned, thereunto duly authorized.





**The
      Blackhawk Fund**





Date:
      March 15, 2007  /s/
      Steve Bonenberger


By:
      Steve Bonenberger, President and
      Chief Executive Officer








Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended,
      this Annual report has been signed by the following persons on behalf of
      the
      registrant and in the capacities and on the dates indicated.





SignatureTitle(s)         Date




/s/
      Steve
      Bonenberger     President,
      Chief
      Executive Officer and
      Director                            March
      15, 2007


By:  Steve Bonenberger





/s/
      Brent
      Fouch      Secretary,
      Chief
      Financial Officer and
 Director                            March
      15, 2007


By:  Brent Fouch






































21




**GRUBER
        & COMPANY, LLC**
 **400
        Lake Saint** **Louis
        Blvd.**
 **Lake
        Saint Louis, MO, United States**
 **Phone:
        (636) 561-5639**













**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**








To
      the
      Board of Directors


The
      Blackhawk Fund


Cardiff,
      California





We
      have
      audited the accompanying balance sheet of The Blackhawk Fund ("Blackhawk")
      as of December 31, 2006 and the related statements of operations,
      stockholders' deficit, and cash flows for the year then ended.
      These financialstatements are the responsibility of Blackhawk's management.
      Our responsibility is to express an opinion on these financial
      statements based on our audits.





We
      conducted our audits in accordance with standards of the
      Public CompanyAccounting
      Oversight Board (United States). 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 audits
      provide a reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Blackhawk as of  December 31,
      2006
      and the results of its operations and its cash flows for the period described
      in conformity with accounting principles generally accepted in the United
      States of America.





The
      accompanying financial statements have been prepared assuming that Blackhawk
      will continue as a going concern. As discussed in Note 11 to the financial statements,
      Blackhawk has suffered recurring losses from operations and a net capital
      deficiency that raise substantial doubt about its ability to continue as
      a
      going concern. Management's plans in regard to these matters are also describedin
      note 11. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.





/s/
      Gruber & Company, LLC


Lake
      St.
      Louis, MO.


February
      1, 2007


22















**REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 To
        the
        Board of Directors
 The
        Blackhawk Fund
 (Formerly
        ZannWell,Inc.
 And
        USA
        Telcom Internationale)
 Cardiff,
        California
 
 We
        have
        audited the accompanying statements of operations, stockholders' deficit
        and
        cash flows of The Blackhawk Fund ("Blackhawk") for the year ended December
        31,
        2005. These financial statements are the responsibility of Blackhawk's
        management. Our responsibility is to express an opinion on these financial
        statements based on our audits.
 
 We
        conducted our audits in accordance with standards of the Public Company
        Accounting Oversight Board (United States). 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 audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the statements of operations, stockholders' deficit and cash flows
        for
        the year ended December 31, 2005 are presented fairly, in all material respects,
        in conformity with accounting principles generally accepted in the United
        States
        of America.
 
 The
        accompanying financial statements have been prepared assuming that Blackhawk
        will continue as a going concern. As discussed in Note 11 to the financial
        statements, Blackhawk has suffered recurring losses from operations and a
        net
        capital deficiency that raise substantial doubt about its ability to continue
        as
        a going concern. Management's plans in regard to these matters are also
        described in Note 11. The financial statements do not include any adjustments
        that might result from the outcome of this uncertainty.
 
 
 /s/
        Malone & Bailey, PC
 www.malone-bailey.com
 Houston,
        Texas
 
 February
        24, 2006











23





**THE
      BLACKHAWK FUND**


**BALANCE
      SHEET**


**DECEMBER
      31, 2006**





**ASSETS**
              **2006**Cash
              $                                                          11,748Total
                  Current Assets
              11,748Property
                  Held For Sale
              1,692,600Total
                  Assets
              1,704,348**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**Current
                  LiabilitiesAccounts
                  Payable
              1,219Note
                  Payable- related party
              590,700Total
                  Current Liabilities
              591,919Long-
                  Term LiabilitiesNote
                  Payable
              1,496,000Commitments
                  and Contingencies
              -Stockholders'
                  DeficitPreferred
                  Stock, $.001 par value:Series
                  A: Authorized 20,000,000, 9,000,000 issued
              9,000Series
                  B: Authorized 10,000,000,10,000,000 issued
              10,000Series
                  C: Authorized 20,000,000,10,000,000 issued
              10,000Common
                  Stock, $.001 par value:4,000,000,000
                  shares authorized,24,664,792
                  issued and outstanding
              24,665Additional
                  Paid-In Capital
              34,646,962Subscriptions
                  Subscribed Not Received
              -Retained
                  Deficit
              (35,084,198)Total
                  Stockholders' Deficit
              (383,571)Total
                  Liabilities and Stockholders' Deficit
              1,704,348


See
      accompanying summary of significant accounting policiesand
      notes
      to financial statements.











24








**THE
      BLACKHAWK FUND**


**STATEMENTS
      OF OPERATIONS**


**Years
      Ended December 31, 2006 and 2005**





**December
                  31**
              **December
                  31****2006**
              **2005**Revenues
              $
                  149,451
              $
                  23,751Cost
                  of Sales
              140,000
              -Gross
                  Profit
              9,451
              23,751**OPERATING
                  EXPENSES**General
                  & Administrative
              472,780
              4,803,251Interest
                  Expense
              100,736
              907**NET
                  LOSS**
              **$
                  (564,065)**
              **$
                  (4,780,407)**Basic
                  and Diluted Net Income (Loss) Per Common Share
              **$
                  (0.03)**
              **$
                  (4.52)**Weighted
                  Average Number of Shares Outstanding
              **18,424,741**
              **1,057,350**





























See
      accompanying summary of significant accounting policiesand
      notes
      to financial statements.





25












**Preferred
                  Stock**
              
              **Preferred
                  Stock**
              
              **Preferred
                  Stock**
              
              
              
              **Additional**
              **Stock**
              **Retained**
              **Total****Series
                  A**
              
              **Series
                  B**
              
              **Series
                  C**
              
              **Common
                  Stock**
              
              **Paid-In**
              **Subscriptions**
              **Earnings**
              **Stockholders'****Shares**
              **Amount**
              **Shares**
              **Amount**
              **Shares**
              **Amount**
              **Shares**
              **Amount**
              **Capital**
              **Receivable**
              **(Deficit)**
              **(Deficit)****$**
              
              **$**
              
              **$**
              
              **$**
              **$**
              **$**
              **$**
              **$**Balances,
                  December 31, 2004
              19,000,000
              19,000
              10,000,000
              10,000
              10,000,000
              10,000
              10,000
              (262)
              29,700,726
              -
              (29,739,726)
              -Common
                  Stock Issued for Cash
              -
              -
              -
              -
              -
              -
              740,000,014
              740,000
              (477,187)
              -
              -
              292,813Common
                  Stock Issued for Services
              -
              -
              -
              -
              -
              -
              226,875,000
              226,875
              3,787,825
              -
              -
              4,014,700Preferred
                  Series A Converted toCommon
                  Shares
              (10,000,000)
              (10,000)
              -
              -
              -
              -
              125,000
              125
              9,875
              
              
              401,121Stock
                  Option Expense
              -
              -
              -
              -
              -
              -
              -
              -
              401,121
              -
              -
              401,121Imputed
                  Interest
              -
              -
              -
              -
              -
              -
              -
              -
              907
              -
              -
              907Adjustment
                  for 800 to 1Reverse
                  Stock SplitDeclared
                  November 2005
              -
              -
              -
              -
              -
              -
              (965,791,269)
              (965,791)
              965,791
              -
              -
              -Stock
                  Issued forSubscriptions
                  Receivable
              -
              -
              -
              -
              -
              -
              2,000,000
              2,000
              38,000
              (40,000)
              -
              -Net
                  Loss
              -
              -
              -
              -
              -
              -
              -
              -
              -
              -
              (4,780,407)
              (4,780,407)Balances,
                  December 31, 2005
              9,000,000
              9,000
              10,000,000
              10,000
              10,000,000
              10,000
              3,209,007
              3,209
              34,457,058
              (40,000)
              (34,520,133)
              (70,866)Proceeds
              -
              -
              -
              -
              -
              -
              14,000,000
              14,000
              
              40,000
              -
              49,000Proceeds
              -
              -
              -
              -
              -
              -
              -
              -
              135,168
              -
              -
              135,168Stock
                  For Services
              -
              -
              -
              -
              -
              -
              1,000,000
              1,000
              12,000
              -
              -
              13,000Subscription
                  Agreement
              -
              -
              -
              -
              -
              -
              2,000,000
              2,000
              28,001
              -
              -
              40,000Stock
                  Cancelled
              -
              -
              -
              -
              -
              -
              (5,544,215)
              (5,544)
              5,544
              -
              -
              10,506Proceeds
                  on Agreement
              -
              -
              -
              -
              -
              -
              9,191
              -
              -
              -
              -
              9,191Net
                  Loss
              -
              -
              -
              -
              -
              -
              -
              -
              -
              -
              (564,065)
              (564,065)**Balances,
                  December 31, 2006**
              **9,000,000**
              **9,000**
              **10,000,000**
              **10,000**
              **10,000,000**
              **10,000**
              **24,664,792**
              **24,665**
              **34,646,962**
              **-**
              **(35,084,198)**
              **(383,572)**




See
        accompanying summary of significant accounting policiesand
        notes
        to financial statements.




26




THE
      BLACKHAWK FUND


**STATEMENTS
      OF CASH FLOWS**


**Years
      Ended December 31, 2006 and 2005**


**2006**
              **2005****Cash
                  Flows From Operating Activities**Net
                  Income (Loss)
              $
                  (564,065)
              $
                  (4,780,407)Adjustments
                  to reconcile net income (loss) to net cash
                  provided
                    by (used in) operating activities:Stock
                  Option Expense
              -
              401,121Stock
                  Issued for Services
              51,000
              4,014,700Imputed
                  Interest
              18,204
              907Changes
                  in Operating Assets and Liabilities:Increase
                  (Decrease) in Accounts Payable
              (4,861)
              6,080Net
                  cash used in operating activities
              (499,722)
              (357,599)Cash
                  Flows From Investing Activities:Purchase
                  of Building
              (196,600)
              -Net
                  cash provided by (used in) investing activities
              (196,600)
              -Cash
                  Flows From Financing Activities:Proceeds
                  from the sale of common stock
              200,360
              292,813Proceeds
                  from related party loan
              518,001
              77,495Payments
                  on loan payable-Shareholder
              (23,000)
              -Net
                  cash provided by financing activities
              695,361
              370,308Net
                  Change in Cash
              (961)
              12,709Cash
                  Beginning of Period
              12,709
              -Cash
                  End of Period
              11,748
              12,709Supplemental
                  information:Interest
                  Paid
              $
                  82,532
              -Income
                  Taxes Paid
              -
              -






See
        accompanying summary of significant accounting policiesand
        notes
        to financial statements.


27





**THE
      BLACKHAWK FUND**




**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





Nature
      of
      business. The Blackhawk Fund ("Blackhawk") was organized November 5, 1998
      in
      Nevada as USA Telecom. In 1998, the entity amended its articles of incorporation
      to change its name to USA Telcom, in 2000 it amended its articles of
      incorporation to change its name to USA Telcom Internationale, in 2004 it amended
      its articles of incorporation to change its name to ZannWell Inc., and in
      January 2005, it amended its articles of incorporation to change its name to Blackhawk
      Fund. For the year ended December 31, 2006 the Company was in
      the business
      of residential development and sales. For 2007 the company intends to enter
      the
      media business. ( See Note 3)




Use
      of
      Estimates. In preparing financial statements, management makes estimates and
      assumptions that affect the reported amounts of assets and liabilities in the
      balance sheet and revenue and expenses in the statement of expenses. Actual results
      could differ from those estimates.





Cash
      and
      Cash Equivalents. For purposes of the statement of cash flows, Blackhawk
      considers all highly liquid investments purchased with an original maturity
      of three months or less to be cash equivalents.





Revenue
      Recognition. Blackhawk recognizes revenue when it sells property and a
      "closing" takes place.





Property
      held for sale is valued at lower of faire value or cost. Additions are
      capitalized Gains and losses on dispositions of property are reflected in operations.
      As property is held
      for
      resale, no depreciation is taken.





Impairment
      of Long-Lived Assets. Blackhawk reviews the carrying value of its long-lived
      assets annually or whenever events or changes in circumstances indicate
      that the historical cost-carrying value of an asset may no longer be appropriate.
      Blackhawk assesses recoverability of the carrying value of the asset by
      estimating the future net cash flows expected to result from the asset, including
      eventual disposition. If the future net cash flows are less than the carrying
      value of the asset, an impairment loss is recorded equal to the difference
      between the asset's carrying value and fair value.





Income
      taxes. Blackhawk recognizes deferred tax assets and liabilities based on differences
      between the financial reporting and tax bases of assets and liabilities
      using the enacted tax rates and laws that are expected to be in effect
      when the differences are expected to be recovered. Blackhawk provides a valuation
      allowance for deferred tax assets for which it does not consider realization
      of such assets to be more likely than not.





Basic
      and
      diluted net income (loss) per share. The basic net loss per common share
      is
      computed by dividing the net income (loss) by the weighted average number
      of
      common shares outstanding. Diluted net income (loss) per common share is
      computed by dividing the net income (loss) adjusted on an "as if converted" basis,
      by
      the weighted average number of common shares outstanding plus potential
      dilutive securities. For the year ended December 31, 2006,there were no
      potential dilutitive securities.






28




**THE
      BLACKHAWK FUND**




**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      2-STOCK BASED COMPENSATION**





Prior
      to
      January 1, 2006 we accounted for stock based compensation under Statement of
      Financial Accounting Standards No. 123 “Accounting for Stock Based Compensation”
(“FAS 123”). As permitted under this standard, compensation cost was recognized
      using the intrinsic value method described in Accounting Principles Board
      Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Effective
      January 1, 2006, the Company has adopted Statement of Financial Accounting
      Standards No. 123 (revised 2004), “Share Based Payment” (“FAS 123R”) and applied
      the provisions of the Securities and Exchange Commission Staff Accounting
      bulletin No. 107 using the modified-prospective transition method. Prior periods
      were not restated to reflect the impact of adopting the new standard. As a
      result of the adoption of FAS 123R, stock based compensation expense recognized
      during the year ended includes compensation expense for all share based payments
      granted on or prior to, but not yet vested as of December 31, 2005, based on
      the
      grant date fair value estimated in accordance with the original provisions
      of
      FAS 123, and compensation costs for all share based payments granted on or
      subsequent to January 1 2006, based on the grant date fair value estimated
      in
      accordance with the provisions of FAS 123R.





Beginning
      on January 1, 2006, any future excess tax benefits derived from the exercise
      of
      stock options will be recorded prospectively and reported as cash flows from
      financing activities in accordance with FAS 123R.





During
      the year ended December 31, 2006, the Company did not make any stock option
      grants and therefore did not recognize any stock based compensation expense.





Blackhawk
      granted 740,000,014 options to purchase common stock to employees during the
      year ended December 31, 2005. All options vest immediately, have an exercise
      price of 85 percent of market value on the date of grant and expire 10 years
      from the date of grant. Blackhawk recorded compensation expense of $401,122
      under the intrinsic value method during the year ended December 31, 2005.





The
      following table illustrates the effect on net loss and net loss per share if
      Blackhawk had applied the fair value provisions of FAS No. 123, to stock-based
      employee compensation.




Net
      loss
      as
      reported ($4,731,357)


Add: stock based compensation determined
      under intrinsic  value-based
      method                                     
401,122


Less: stock-based compensation  determined
      under fair value-based
      method (2,674,146)




Pro
      forma
      net
      loss ($7,004,381)




Basic
      and
      diluted net loss per common share


As
      reported ($0.01)


Pro
      forma ($0.01)







29




**THE
      BLACKHAWK FUND**




**NOTES
      TO FINANCIAL STATEMENTS**








The
      weighted average fair value of the stock options granted during 2005 was $.004.
      Variables used in the Black-Scholes option-pricing model include (1) 1.5%
      risk-free interest rate (2) expected option life is the actual remaining life
      of
      the options as of each period end, (3) expected volatility was 728% and (4)
      zero
      expected dividends.





**NOTE
      3 - PROPERTIES- HELD FOR SALE**





In
      late
      March 2006, the Company purchased a condominium located in Carlsbad, California
      for $625,083. The Company intends to renovate and sell the condo. Since the
      Company intends to sell the condominium upon completion of the planned
      renovations, it has been designated as “held for sale”. Therefore it will be
      carried at the lower of cost or fair value (net of expected sales costs) during
      the renovation period and will not be depreciated.





In
      June
      of 2006, the Company entered into a joint venture with another group to renovate
      and then sell a residential home located in Oceanside, California. The Company
      is a 50% joint venture partner, but has the rights to exercise control.
      The Company is 100% responsible for improvement costs, with these costs to
      be
      reimbursed upon sale and any remaining profits split 50/50. The Company has
      valued the house at the value of the mortgage liability assumed of $1,000,000.
      As the intention on this property is identical to the condo described above
      the
      description related to “held for sale” and depreciation apply.





**NOTE
      4 - COMMON STOCK**





During
      the year ended December 31, 2006, the Company issued 21,455,785 shares of common
      stock. Of this amount 10,455,785 were issued at par value pursuant to a stock
      subscription agreement. The Balance of 11 million shares were issued for
      services at market rates valued at $53,000.





On
      November 7, 2005, the Company’s board of directors declared a 800 to 1 reverse
      stock split for shareholders of record as of November 17, 2005. All shares
      and
      per share information has been retroactively restated in the financial
      statements to reflect the reverse split.





**NOTE
      5-MORTGAGES PAYABLE**





In
      conjunction with the purchase of the condominium described in note 3 above,
      the
      Company executed a 30-year adjustable rate promissory note for $496,000. The
      initial interest rate on the note is 7.875 % and may change on April 1, 2008
      and
      on that date every six month thereafter. Pursuant to the terms of the note,
      the
      Company is required to make interest only payments for the first 10 years (first
      120 payments). The initial monthly payment will be $3,225 and may change
      beginning on April 1, 2008. The note is personally guaranteed by the Company’s
      president.





In
      conjunction with the joint venture property described in Note 3 above, the
      Company assumed a 50% interest and corresponding promissory note debt for
      $1,000,000. Terms indicate a fixed interest rate of 7.25% interest only payment
      for 120 payments. Monthly amounts are presently $6,042.


30


**THE
      BLACKHAWK FUND**




**NOTES
      TO FINANCIAL STATEMENTS**








**NOTE
      6 - RELATED PARTY TRANSACTIONS**





For
      the
      Year the Company made payments totaling $180,000 to entities controlled by
      the
      CEO and CFO for consulting services.


The
      Company is also obligated to a related party for a loan. Interest has been
      imputed at 6%.





**NOTE
      7 - SUBSEQUENT EVENT**





In
      January 2007 the Company entered into an agreement with Maximum Impact
      Television Group, whereby The Blackhawk Fund exchanged 15 million shares of
      common stock and $25,000 for the development of ten media properties. These
      media properties are network quality cable television shows that will air
      nationwide. The media content will be converted to Online Video magazines and
      DVDs. Revenue is generated from advertising sponsors, seeking to reach a target
      audience.





**NOTE
      8 - STOCK OPTION PLAN**





In
      2004
      Blackhawk adopted the 2004 Employee Stock Option Plan ("the Plan"). The Plan
      provides for the granting of stock options to employees and consultants of
      Blackhawk. Options granted under the Plan may be either incentive stock options
      or nonqualified stock options. Incentive stock options ("ISO") may be granted
      only to Company employees (including officers and directors who are also employees).
      Nonqualified stock options ("NSO") may be granted to Blackhawk employees
      and consultants. Blackhawk has reserved 232,500 shares of common stock for
      issuance under the Plan.





Options
      under the Plan may be granted for periods of up to ten years and at an exercise
      price of 85 percent of market value on the date of grant, provided, however,
      that the exercise price of an ISO and NSO granted to a 10% shareholder shall
      not
      be less than 110% of the estimated fair value of the shares on the date
      of
      grant. To date, options granted generally are exercisable immediately as
      of the
      effective date of the option agreement.





Summary
      information regarding options is as follows:





Exercise


Options                 
      Price




Outstanding
      at


December
      31,
      2003                                                                                                                                  
-                     
n/a





Year
      ended December 31, 2004:


Granted                                                                                                                                           
      95,000                   
$ 3.20


Exercised (95,000)                  
      $ 3.20




Outstanding
      at


December
      31,
      2004                                                                                                                                  -                       
n/a




Year
      ended December 31,


2005
      &
2006                                                                                                                                             
-                       n/a






There
        were no options outstanding and exercisable as of December 31, 2006 and
        2005.


31


**THE
      BLACKHAWK FUND**




**NOTES
      TO FINANCIAL STATEMENTS**








**NOTE
      9 - INCOME TAXES**





Blackhawk
      uses the liability method, where deferred tax assets and liabilities are
      determined based on the expected future tax consequences of temporary differences
      between the carrying amounts of assets and liabilities for financial and
      income tax reporting purposes.





Internal
      Revenue Section 382 restricts the ability to use these carry-forwards whenever
      an ownership change as defined occurs. Blackhawk incurred such an ownership
      change on March 19, 2004 and again on November 29, 2004.




**NOTE
      10 - PREFERRED STOCK**





There
      are
      three classes of preferred stock, A, B & C.





Each
      Series A holder is entitled to receive cash, stock, or other property, as dividends,
      and at any time, may redeem the whole or any part of the outstanding Series
      A
      Preferred Stock. Each share of Series A is convertible at the option of
      the
      holder into 10 shares of common stock. The Series A Preferred Stock will
      have
      no voting rights, prior to conversion into shares of common stock.





Each
      Series B holder is entitled to receive cash, stock or other property, as dividends,
      and at any time may redeem the whole or any part of the outstanding Series
      B
      Preferred Stock. Each share of Series B is convertible at the option of
      the
      holder into 200 shares of common stock. Series B holders are entitled to one
      vote
      per share.





Each
      Series C holder is entitled to receive cash, stock or other property, as dividends,
      and at any time may redeem the whole or any part of the outstanding Series
      C
      Preferred Stock. Series C is not convertible, but each share has 100 votes
      per
      share.




**NOTE
      11- GOING CONCERN**





While
      the
      Company has incurred significant losses and has a negative capital, Management
      is confident that its new business will be profitable and can continue to
      operate based upon affiliate funding or capital financing or
      profits.





**NOTE
      12- STOCK SPLIT**





On
      January 3, 2005, Blackhawk declared a 800 to 1 reverse stock split. All share
      and Per share information relating to this reverse split was retroactively
      restated in Blackhawk’s 2004 form 10KSB.





On
      November 7, 2005, the Company's Board of Directors declared a 800 to 1 reverse
      stock Split for shareholders of record as of November 17,2005. All share and
      per
      share information has been retroactively restated in the consolidated financial
      statements to reflect the reverse split.