U.
S. SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549




FORM
10-K




(Mark
One)




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




For the
fiscal year ended December 31, 2009




o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934




For the
transition period from ___________ to _____________




Commission
File Number 000-49672




THE
BLACKHAWK FUND


(Name
of small business issuer as specified in its charter)




Nevada
              
              88-0408213(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)





1802
N. Carson Street, Suite 212-3018


Carson
City, NV 89701


(Address of principal
executive offices, including zip code)




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


Securities
registered pursuant to Section 12(b) of the Act: None


Securities
registered pursuant to Section 12(g) of the Act:  Common Stock, $.0001 par
value





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. oYes
x
No




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act: o Yes x No




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




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




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 if the Exchange Act.




Large
      accelerated filter o
                    Accelerated
      filter oNon-accelerated
      filter o (Do not
      check if a smaller reporting company)
                    Smaller
      reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.  Yes  o No x




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
sold, or the average bid and asked prices of such common equity, as of the last
business day of the registrant's most recently completed second fiscal quarter.
$112,459 on June 30, 2009.




As of
March 31, 2010, 910,293,791shares of our common stock were issued and
outstanding.





Documents
Incorporated by
Reference:      None.





PART
I




The
Blackhawk Fund, including all its subsidiaries, are collectively referred to
herein as “The Blackhawk Fund,” “Blackhawk,” “the Company,” “us,” or
“we”.




Item
1.  DESCRIPTION OF BUSINESS




General




We were
incorporated in November 1998 in the state of Nevada as USA Telcom and
subsequently changed our name in 2000 to USA Telcom Internationale. In 2004, we
changed our name to ZannWell, Inc. and, in 2005, we changed our name to
Blackhawk Fund.





Our
executive offices are located at 1802 N. Carson Street, Suite 212-3018. Our
telephone number is (775) 887-0670.





Changes
in Control





2004





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.





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.





2008





On April
24, 2008, in connection with the consummation of the purchase and sale of our
Series C Preferred Stock, we entered into a stock purchase agreement with
Terminus, Inc. (“Terminus”) and Palomar whereby Terminus purchased 10,000,000
shares of our Series C Preferred Stock from Palomar. Each share of Series C
Preferred Stock was entitled to 100 votes per share. As of the date thereof, we
had approximately 562,293,791 million shares of our common stock outstanding. As
a result, the sale of the Series C Preferred Stock by Palomar to Terminus
effectively transferred Palomar’s control of the company to Terminus, giving
Terminus approximately 62% of all votes entitled to be cast in any matter
requiring or permitting a vote of stockholders. The funds for the acquisition
were obtained pursuant to the issuance of the $550,000 promissory
note.  The sale of the shares of Series C Preferred Stock was exempt
from registration under the Securities Act of 1933, as amended, pursuant to
Section 4(1) of the Securities Act (under the so-called “4(1 1⁄2) exemption” of
the Securities Act).


2





On April
24, 2008, in connection with the stock purchase agreement described above, Steve
Bonenberger resigned as our President and Chief Executive Officer, and Brent
Fouch resigned as our Secretary and Chief Financial Officer. In connection
therewith, the board of directors increased the number of authorized directors
from two to three and appointed Frank Marshik to fill the newly created vacancy
on the board. The board of directors then appointed Mr. Marshik as our
President, Chief Financial Officer, and Secretary. Thereafter, Mr. Bonenberger
and Mr. Fouch resigned as directors. Their resignations as directors were not
based on any disagreement with us on any matter relating to our operations,
policies or practices. Mr. Marshik, as the sole remaining director, appointed
Terry Ross to fill one of the two vacancies resulting from these
resignations.





Fiscal
2008 and Fiscal 2009 Developments





Website Launch. On July 20,
2009, we launched our new corporate website at www.blackhawkfund.com.
Information contained on our website shall not be deemed to be part of this
report.





Amendment of Note Issued in April
2008 Financing.On May 4, 2009, we and Terminus, Inc., as co-issuers,
both defaulted on repayment of a $550,000 12% secured promissory note issued in
April 2008.  Prior to the default, we were considered a guarantor of
the note, and accordingly, classified the guaranty a contingent liability and as
an “off-balance sheet arrangement.”  As a result of the default on the
note, we became unconditionally liable for repayment of all principal and
interest due under the note, we recorded the full amount of all such principal
and interest as a liability, and we have incurred an expense for such
amount.  Accordingly, on July 10, 2009 we, along with Terminus, Inc.,
entered into a first amendment to the April 2008 Note with the holder of such
note.  The amended note extends the maturity date until July 10,
2010.  In addition, the amendment provides that the note may be
converted into shares of our common stock   The conversion price
for the amended note is the greater of (i) the then existing par value of the
Company’s common stock or (ii) 75 % of the average of the per shares market
values (as defined in the amended note) during the 20 trading days immediately
preceding a conversion date.  If at any time after September 10, 2009,
there is either (i) insufficient shares of our common stock to permit
conversions pursuant to the amended note or (ii) the per share market value is
less than the then existing par value of our common stock for
a  period of 5 consecutive trading days, we will use its best efforts
to amend its capital structure by means of either a reverse split of its common
stock, an increase in its authorized common stock, or a reduction of the par
value of its common stock, or any combination of the foregoing as determined by
our board of directors in its reasonable judgment.





Distribution of Certain Real
Property Held for Sale.In February 2009, we
entered into settlement agreements with certain prior affiliated parties
pursuant to which we transferred our condominium located in Carlsbad, CA and our
residential property located in Oceanside, California.  We entered
into a settlement agreement with Angel Acquisition Corp. (“Angel”) under which
Angel agreed to cancel and forgive a promissory note made by us in the aggregate
principal amount of $841,828 in exchange for the Carlsbad condominium
property.   This property also is subject to a $496,000 mortgage
which is now the responsibility of Angel.  We also entered into a
settlement agreement with Debbie Avey with whom we had previously entered into a
joint venture in relation to the residential property in Oceanside,
CA.  Pursuant to the agreement, Ms. Avey released us from any and all
liability pursuant to the joint venture as well as any liability associated with
the 2 mortgage notes on this property ($1,120,000 and $320,000) in exchange for
the property.





Purchase of Land in Riverside
County, City of Desert Hot Springs.In December 2008, we
purchased two parcels of undeveloped land in Riverside County, City of Desert
Hot Springs for a purchase price of $1,000 promissory
note.    The land approximates 3.5 acres.  This
property is zoned for residential dwellings.  Management is
determining whether to build finished lots or in the alternative to sell the
land to a developer.  The property has not yet been
entitled.





Change in Control and
Management.  In April 2008, there was a change in control and
in management of our company.  See “Changes in Control—2008”
above





April 2008
Financing.  In April 2008, we, along with Terminus, Inc. as
co-issuers, issued and sold to a single accredited investor: (i) a $550,000 12%
secured promissory note and (ii) 500,000 shares of our series A preferred
stock.  To secure payment of the note, Terminus pledged the 10,000,000
shares of its series C preferred stock.


3





Current
Business Plan





The
Blackhawk Fund acquires and redevelops residential and commercial real estate
for investment.  Once we acquire a property, we redevelop and
refurbish the properties, seeking to enhance the value of the
properties.  Once a property is refurbished, we seek to generate
revenue by rental of the property, and we also seek to resell the properties if
market conditions permit.  We currently hold one property as discussed
under “2009 Developments.”





Historically,
we have also operated a media and television production division.  In
this division, we have sought to manage and implement proprietary media
properties, including cable television shows, infomercials, online video
magazines, and DVDs.  However, as discussed below, management has
determined that the ongoing media and television production operations are not
viable, and accordingly has determined to discontinue the media and television
production operations.




Business
Objectives and Strategies




Our
primary business objective is to acquire, develop and manage real estate
properties that will provide cash for distributions to shareholders while also
creating the potential for capital appreciation to enhance investor
returns.




Investment
Strategy — External Growth through Opportunistic Acquisition
Platforms




The
requirements that acquisitions be accretive on a long-term basis based on our
cost of capital, as well as increase the overall portfolio quality and value,
are core to our acquisition program. We may also engage in discussions with
public and private entities regarding business combinations.




Capital
Strategy — Balance Sheet Focus and Access to Capital




Given the
significant turmoil in the capital markets and the unprecedented disruption of
the economy, our primary capital objective is to maintain a flexible balance
sheet through conservative financial practices while seeking access to
sufficient capital to fund future growth. We intend to finance acquisitions and
property redevelopment with sources of capital determined by management to be
the most appropriate based on, among other factors, availability in the current
capital markets, pricing and other commercial and financial terms. The sources
of capital may include the issuance of public equity, unsecured
debt.




Operating
Strategy — Experienced Management Team with Proven Track Record




Our
management team has experience in the real estate industry. We believe our
management team has the ability to create value internally through property
development and strategic dispositions. We intend to capitalize on our expertise
in the acquisition, redevelopment, leasing and management of retail real estate
by establishing joint ventures, in which we intend to earn, in addition to a
return on our investment, management, fees.




We intend
that in some instances, operating functions such as leasing, property
management, construction, finance and legal (collectively, the “Operating
Departments”) will be provided by our personnel, providing for fully integrated
property management and development. Because we intend that that Operating
Departments will have involvement with, and corresponding understanding of, the
acquisition process, we expect that transition time is minimized and management
can immediately execute on its strategic plan for each asset.




We intend
to hold properties in our portfolio for long-term investment. As such, we intend
to review our existing portfolio and implement programs to enhance the
property’s market position.





Property
Acquisitions





Purchase of
Desert Hot Springs Real Estate.In December 2008, we purchased two lots
consisting of 3.5 acres in Desert Hot Springs, California. This property is
zoned for residential dwellings. We are determining whether to build finished
lots or in the alternative to sell the land to a developer. The value of the
property has been assessed at $100,814.





Asset
Dispositions





Distribution of
San Diego County Real Estate. In February 2009, we transferred a
condominium located in Carlsbad, California and a residential property located
in Oceanside, California. We recognized a gain on sale of assets of $1,015,179
in connection with this transaction resulting from the reduction and elimination
of the debt associated with these properties.


4





Competition





There are
numerous entities that compete with us in seeking properties for acquisition and
tenants that will lease space in our properties. Our competitors include real
estate investment trusts, financial institutions, private companies and
individuals. We expect our properties to compete for tenants with similar
properties primarily on the basis of location, total occupancy costs (including
base rent and operating expenses) and the design and condition of the
improvements.




Company
Website




All of
our filings with the Securities and Exchange Commission, including our annual
reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form
8-K and amendments to those reports filed or furnished pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, are available free of charge at
our website at www.blackhawkfund.com, as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the Securities and
Exchange Commission. These filings can also be accessed through the Securities
and Exchange Commission’s website at www.sec.gov.





Employees





We
currently employ one person.  None of our employees are represented by
a labor union, and we have not entered into a collective bargaining agreement
with any union.  We have not experienced any work stoppages and
consider the relations with our employees to be good.





Item
1A.  RISK FACTORS AND CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION




We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this item.




Item 1B.  UNRESOLVED STAFF
COMMENTS




We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this item.




Item
2.  PROPERTIES




We lease
office space at 1802 N. Carson Street, Suite 212, Carson City, Nevada, 89701.
Our Carson Street lease costs $100 per month and expired on December 31,
2008.  However, we currently occupy the office space on a
month-to-month lease.





The
existing facilities are adequate for our current operations.  We
anticipate that additional facilities may be leased or purchased as needed and
that facilities that are adequate for our needs are readily
available.





Item
3.   LEGAL PROCEEDINGS





We are not a party to material legal
proceedings as of the date of this report.





Item
4.   (REMOVED AND RESERVED).


5


PART
II




Item
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS




Until
January 3, 2005, our common stock was quoted on the OTC Bulletin 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 to BHWF.OB.





These quotations reflect
inter-dealer prices, without mark-up, mark-down or commission, and may not
represent actual transactions.The following table shows the
high and low bid prices for our common stock for each quarter since January 1,
2008 as reported by the OTC Bulletin Board.





We
consider our stock to be “thinly traded” and any reported sale prices may not be
a true market-based valuation of our stock.  Some of the bid
quotations from the OTC Bulletin Board set forth below may reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.





2008 (OTC Bulletin Board)
                    
                    High Bid
                    
                    
                    Low BidFirst
      quarter
                    
                    $
                    0.002
                    
                    
                    $
                    0.001Second
      quarter
                    
                    
                    0.001
                    
                    
                    
                    0.001Third
      quarter
                    
                    
                    0.00
                    
                    
                    
                    0.10Fourth
      quarter
                    
                    
                    0.00
                    
                    
                    
                    0.00





2009 (OTC Bulletin Board)
                  
                  High Bid
                  
                  
                  Low BidFirst
      quarter
                  
                  $
                  0.0002
                  
                  
                  $
                  0.0001Second
      quarter
                  
                  
                  0.0010
                  
                  
                  
                  0.0001Third
      quarter
                  
                  
                  0.0045
                  
                  
                  
                  0.0003Fourth
      quarter
                  
                  
                  0.0011
                  
                  
                  
                  0.0003





As of
March 31, 2010 there were approximately 56 record holders of our common stock.
This does not include an indeterminate number of shareholders whose shares are
held by brokers in street name.





We have
not paid cash dividends since our inception and we do not contemplate paying
dividends in the foreseeable future.





Shares
eligible for future sale could depress the price of our common stock and lower
the value of your investment.  Sales of substantial amounts of our
common stock, or the perception that such sales could occur, could adversely
affect prevailing market prices for shares of our common stock.





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.


6





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.





Securities Authorized for Issuance
Under Equity Compensation Plans.The following provides
information concerning compensation plans under which our equity securities are
authorized for issuance as of December 31, 2009:





(a)
                    
                    
                    (b)
                    
                    
                    (c)Plan
      Category
                    
                    Number
      of
                      securitiesto
      be
                      issued
      upon
                      exercise
      of
                      outstanding
                      options,warrants
                      and
      rights
                    
                    
                    Weighted-average
                      exercise
      price of
                      outstanding
                      options,warrants
                      and
      rights
                    
                    
                    Number
      of securities
                      remaining
      available
                      for
      future issuance
                      under
      equity
                      compensation
      plans
                      (excluding
      securities
                      reflected
      in column
                      (a))Equity
      compensation plans approved by security holders (1)(2)
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    612,611,979Equity
      compensation plans not approved by security holders (3)(4)
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    126,500,000Total
                    
                    
                    -
                    
                    
                    
                    —
                    
                    
                    
                    729,111,979





(1) Amended and Restated 2004 Stock
Plan.On June 15, 2004, our board of directors adopted (and further
amended and restated on July 22, 2004 and December 6, 2004) our Amended and
Restated 2004 Stock Plan. The purpose of the 2004 Stock Plan is to provide
incentives to attract, retain and motivate eligible persons whose present and
potential contributions are important to the success of The Blackhawk Fund and
our subsidiaries, by offering them an opportunity to participate in our future
performance through awards of options, restricted stock and stock bonuses The
maximum aggregate number of shares of common stock that may be issued and sold
under all awards granted under the plan is 207,500,000 shares, and as of
December 31, 2009, we have issued 207,500,000 shares under the plan, and there
are no options outstanding under this plan.





(2) 2005 Stock Plans.On
February 25, 2005, our board of directors adopted our 2005 Stock Plans
(consisting of tEmployee Stock Incentive Plan and the Non-Employee Directors and
Consultants Retainer Stock Plan). The purpose of the 2005 Stock Plans is to
provide incentives to attract, retain and motivate eligible persons whose
present and potential contributions are important to the success of The
Blackhawk Fund and our subsidiaries, by offering them an opportunity to
participate in our future performance through awards of options, restricted
stock and stock bonuses. The maximum aggregate number of shares of common stock
that may be issued and sold under all awards granted under the 2005 Stock Plans
is 975,000,000 shares, and as of December 31, 2009, we have issued 362.388,021
shares under the plan, and there are no options outstanding under these
plans.





(3)
2007 Stock Incentive Plan.OnJune 7, 2007, our board of directors
adoptedour
2007Stock Incentive Plan.The purpose
of the plan is intendedto secure for the Company and its Affiliates the
benefits arising from ownership of the Company’s Common Stock by the Employees,
Officers, Directors and Consultants of the Company and its Affiliates, all of
whom are and will be responsible for the Company’s future growth. The Plan is
designed to help attract and retain for the Company and its Affiliates personnel
of superior ability for positions of exceptional responsibility, to reward
Employees, Officers, Directors and Consultants for their services and to
motivate such individuals through added incentives to further contribute to the
success of the Company and its AffiliatesThe maximum aggregate
number of shares of common stock that may be issued and sold under all awards
granted under the plan is 250,000,000 shares, and as of December 31, 2009, we
have issued 200,000,000 shares under the plan, and there are no options
outstanding under this plan.


7




(4) 2009 Stock Incentive Plan.The
purpose of our 2009 Stock Incentive Plan is to advance the best interests of the
company by providing those persons who have a substantial responsibility for our
management and growth with additional incentive and by increasing their
proprietary interest in the success of the company, thereby encouraging them to
maintain their relationships with us. Further, the availability and offering of
stock options and common stock under the plan supports and increases our ability
to attract and retain individuals of exceptional talent upon whom, in large
measure, the sustained progress, growth and profitability which we depend. The
total number of shares available for the grant of either stock options or
compensation stock under the plan is 200,500,000 shares, subject to adjustment,
and as of December 31, 2009, we have issued 124,000,000 shares.





Our
compensation committee which is appointed by our board of directors administers
our plan and has full power to grant stock options and common stock, construe
and interpret the plan, establish rules and regulations and perform all other
acts, including the delegation of administrative responsibilities, it believes
reasonable an proper. Any decision made, or action taken, by the compensation
committee or our board of directors arising out of or in connection with the
interpretation and administration of the plan is final and
conclusive.





The
compensation committee or our board of directors, in its absolute discretion,
may award common stock to employees of, consultants to, and directors of the
company, and such other persons as the board of directors or compensation
committee may select, and permit holders of common stock options to exercise
such options prior to full vesting therein and hold the common stock issued upon
exercise of the option as common stock. Stock options may also be granted by our
board of directors or compensation committee to non-employee directors of the
company or other persons who are performing or who have been engaged to perform
services of special importance to the management, operation or development of
the company.





In the
event that our outstanding common stock is changed into or exchanged for a
different number or kind of shares or other securities of the company by reason
of merger, consolidation, other reorganization, recapitalization, combination of
shares, stock split-up or stock dividend, prompt, proportionate, equitable,
lawful and adequate adjustment shall be made of the aggregate number and kind of
shares subject to stock options which may be granted under the
plan.





Our board
of directors may at any time, and from time to time, suspend or terminate the
plan in whole or in part or amend it from time to time in such respects as our
board of directors may deem appropriate and in our best interest.





Recent
Sales of Unregistered Securities





On March
19, 2010, we issued an 8% $50,000 convertible promissory note to a single
accredited investor.  The note is due and payable on March 19,
2015.  In addition, the note is convertible into shares of our common
stock.   The conversion price for the note is the greater of (i)
the then existing par value of the Company's common stock or (ii) 75 % of the
average of the per shares market values (as defined in the amended note) during
the 20 trading days immediately preceding a conversion date. If at any time
after September 10, 2009, there is either (i) insufficient shares of the
Company's common stock to permit conversions pursuant to the amended note or
(ii) the per share market value is less than the then existing par value of the
Company's common stock for a period of 5 consecutive trading days, the Company
will use its best efforts to amend its capital structure by means of either a
reverse split of its common stock, an increase in its authorized common stock,
or a reduction of the par value of its common stock, or any combination of the
foregoing as determined by the Company's board of directors in its reasonable
judgment.  The proceeds for the sale of the note were for working
capital and general corporate purposes.  The issuance was exempt under
Section 4(2) and Rule 506 of the Securities Act of 1933, as
amended.


8




Item
6.  SELECTED FINANCIAL DATA




We are a
smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are
not required to provide the information required under this item.





Item
7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS





The
following discussion and analysis should be read in conjunction with our
financial statements and related notes included in this report.  This
report contains “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995.  The statements contained in
this report that are not historic in nature, particularly those that utilize
terminology such as “may,” “will,” “should,” “expects,” “anticipates,”
“estimates,” “believes,” or “plans” or comparable terminology are
forward-looking statements based on current expectations and
assumptions.  Various risks and uncertainties could cause actual
results to differ materially from those expressed in forward-looking
statements.





All
forward-looking statements in this document are based on information currently
available to us as of the date of this report, and we assume no obligation to
update any forward-looking statements.  Forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual results to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking
statements.





General





The Blackhawk Fund acquires and
redevelops residential and commercial real estate for
investment.  Once we acquire a property, we redevelop and refurbish
the properties, seeking to enhance the value of the properties.  Once
a property is refurbished, we seek to generate revenue by rental of the
property, and we also seek to resell the properties if market conditions
permit.  We currently hold one property in our real estate
portfolio.





Historically, we have also operated a
media and television production division.  In this division, we have
sought to manage and implement proprietary media properties, including cable
television shows, infomercials, online video magazines, and
DVDs.  However, as discussed below, management has determined that the
ongoing media and television production operations are not viable, and
accordingly has determined to discontinue the media and television production
operations.





Change
of Control and Change in Management





On April
24, 2008, we entered into a stock purchase agreement with Terminus, Inc. and
Palomar Enterprises, Inc. pursuant to which Terminus purchased 10,000,000 shares
of our Series C Preferred Stock from Palomar for $363,000.  As a
result, the sale of the Series C Preferred Stock by Palomar to Terminus
effectively transferred Palomar’s control of our company to
Terminus.





Concurrently,
Steve Bonenberger resigned as our President and Chief Executive Officer, and
Brent Fouch resigned as our Secretary and Chief Financial Officer.  In
connection therewith, the board of directors increased the number of authorized
directors from two to three and appointed Frank Marshik to fill the newly
created vacancy on the board.  The board of directors then appointed
Mr. Marshik as our President, Chief Financial Officer, and
Secretary.  Thereafter, Mr. Bonenberger and Mr. Fouch resigned as
directors.  Mr. Marshik, as the sole remaining director, appointed
Terry Ross to fill one of the two vacancies resulting from these
resignations.





On August
19, 2008, the board of directors reduced the number of authorized directors from
three (3) to one (1).  Concurrently therewith, Terry Ross resigned as
a director.  Mr. Ross’ resignation was not due to any disagreements
with The Blackhawk Fund on matters relating to its operations, policies, and
practices.


9





Plan
of Operation





Our new management determined that our
company has incurred operating and net losses in each of the last two fiscal
years, had a working capital deficit as of the end of the latest fiscal year and
as of the latest fiscal quarter, and has a large accumulated
deficit.  Accordingly, new management commenced an analysis of each of
our two business lines to determine the viability of each line during the second
and third quarters of 2008.  Within each line of business, management
has evaluated and is evaluating historical and projected costs in running the
line, existing and potential revenue streams, and the availability of additional
capital for expansion of the business line.  In particular, with
respect to the real estate business, management is evaluating our current real
estate portfolio in light of current market conditions, both in the real estate
markets and the credit markets.  Upon completion of the analysis,
management will determine whether to seek to expand the business line or to
discontinue or divest of the division.





In 2008, management determined that,
based on its analysis of the foregoing factors, the media and television
production operations are not viable.  Accordingly, management has
determined to discontinue the media and television production
operations.  Management is continuing the evaluation of our real
estate business, the existing real estate portfolio valuations, the existing and
potential rental possibilities, the current market values, and the existing
financing arrangements.  In addition, in light of the distress in the
real estate markets, management is looking at potential real estate acquisition
opportunities that, if consummated, would increase and diversify our real estate
portfolio.  Management is also considering diversifying into
additional lines of business.  In all cases, management may seek to
form one or more partnerships, enter into one or more joint ventures, or conduct
one or more strategic acquisitions.





We are
currently focused on expanding our real estate development
business.   We currently have one property in our portfolio and
are engaged in preliminary discussion for the acquisition of two
others.  We expect to have at least two properties in our portfolio at
the end of fiscal 2010.





Critical
Accounting Policies





The
discussion and analysis of our financial conditions and results of operations is
based upon our consolidated financial statements, which have been prepared in
accordance with generally accepted accounting principles in the United
States.  The preparation of financial statements requires managers to
make estimates and disclosures on the date of the financial
statements.  On an on-going basis, we evaluate our estimates,
including, but not limited to, those related to revenue
recognition.  We use authoritative pronouncements, historical
experience, and other assumptions as the basis for making
judgments.  Actual results could differ from those
estimates.  We believe the following critical accounting policies
affect our more significant judgments and estimates in the preparation of our
consolidated financial statements.  A summary of our critical
accounting policies can be found in the notes to our annual financial statements
included this report.





Results
of Operations





Basis
of Presentation





The
following table sets forth, for the periods indicated, certain unaudited
selected financial data:





Year
      EndedDecember
      31,2009
                      
                      
                      2008Revenues
                      
                      $
                      —
                      
                      
                      $
                      31,765Costs
      of Sales
                      
                      
                      —
                      
                      
                      
                      —General
      and administrative
                      
                      
                      82,165
                      
                      
                      
                      344,462Gain
      on sale of assets
                      
                      
                      1,015,179
                      
                      
                      
                      —Loss
      on guarantee
                      
                      
                      (618,750
                      )
                      
                      
                      —Interest
      Expense
                      
                      
                      (489,982
                      )
                      
                      
                      632,483Operating
      loss
                      
                      $
                      (175,718
                      )
                      
                      $
                      (945,180
                      )


10





Comparison
of the year ended December 31, 2009 and 2008





Net sales. Our revenues were $0
for the year ended December 31, 2009 as compared to 31,765 for the year ended
December 31, 2008.  This decrease resulted from our prior decision to
cease our media operations in the end of fiscal 2008.  In addition,
the decrease resulted from a lack of sales of any real estate properties held
for development or any real estate properties generating rental
revenue.  The disposition of property in 2009 did not result in
revenues to us, rather it was in exchange for a settlement in which prior
affiliates forgave amounts due under promissory notes in exchange for the
properties.  Our revenues were generated from rental income from our
real estate properties and revenues from our former media
operations.





Cost of
Sales.  Costs of sales were $0 for the years ended December 31,
2009 and 2008.





General and
administrative.  General and administrative expenses decreased
to $82,165 for the year ended December 31, 2009 as compared to 344,462 for the
year ended December 31, 2008.   This decrease resulted from a
significant reduction in shares and options issued for services in 2009 as
compared to 2008.





Gain on sale of
assets. We recognized a non-cash gain on sale of assets of
$1,015,179 in 2009.  This gain was related to our settlements with
former affiliates pursuant to which they forgave amounts due under promissory
notes made by us as released us from liability under mortgage notes in exchange
for the real estate properties.





Loss on
guarantee.We recognized a loss on guarantee of $618,750 in
2009.  This loss on guarantee is a result of the default under a
promissory note on which we are the guarantor.  The issuer defaulted
on the note in 2009 giving rise to obligations under the note which became due
and payable.





Interest.Interest
expense decreased to $489,982 for the year ended December 31, 2009 as
compared to interest expense of $632,483 for the year ended December 31,
2008. The decrease in interest was primarily attributed to the forgiveness of
promissory notes made by us and former affiliates assuming liability under
mortgage notes in exchange for real estate properties.





Net loss.  We
incurred an operating loss of $175,718 for the year ended December 31, 2009 as
compared to $945,180 for the year ended December 31, 2008.   The
reduction in net loss resulted primarily from non-cash gain on sale of asset in
2009 as well as a reduction in shares and options issued for services in 2009 as
compared to 2008.





Liquidity
and Capital Resources





We have
financed our operations, debt service, and capital requirements through cash
flows generated from operations and through issuance of debt and equity
securities.  Our working capital deficit at December 31, 2009 was
$416,784, and we had cash of $2,719 as of December 31, 2009.





We used
$31,942 of net cash in operating activities for the year ended December 31,
2009, compared to using $247,796 in the year ended December 31,
2008.  The net loss of $175,718 was offset by a non-cash gain on
the sale of assets of $1,105,178 as well as non-cash expenses of $420,516 in
discount accretion on a note, 618,750 loss on guarantee, $24,000 of stock and
options issued for services, an increase of $71,984 in accounts payable, and an
increase of $23,704 in prepaid financing costs.





We
generated no cash flows from investing activities for the year ended December
31, 2009, whereas we used $3,550 in net cash flows from investing activities for
the year ended December 31, 2008.  The cash flow generated from
investing activities related to the disposition of certain
equipment.





Net cash
flows provided by financing activities were $23,500 for the year ended December
31, 2009, compared to net cash flows provided by financing activities of
$253,026 for the year ended December 31, 2008.  The only proceeds
received in 2009 was generated from a note payable from related
party.  In 2008, our cash provided by financing activities was due to
proceeds from the exercise of stock options and receipt of stock subscriptions
of $186,260, proceeds from a note payable of $26,251, and proceeds from related
party notes payable of $40,515.





Capital
Requirements





Our
financial statements for the fiscal year ended December 31, 2009 state that we
have incurred significant losses, have a negative capital, and a negative
current ratio.  These factors, among others indicate that we may not
be able to continue as a going concern.  We believe that, as of the
date of this report, in order to fund our plan of operations over the next 12
months, we will need to fund operations out of cash flows generated from
operations, from the borrowing of money, and from the sale of additional
securities.  It is possible that we will be unable to obtain
sufficient additional capital through the borrowing of money or the sale of our
securities as needed.


11





Part of
our growth strategy may include diversifying into additional lines of business,
forming one or more partnerships, entering into one or more joint ventures, or
conducting one or more strategic acquisitions, which may require us to raise
additional capital.  We do not currently have binding agreements or
understandings to acquire any other companies.





We intend
to retain any future earnings to pay our debts, finance the operation and
expansion of our business and any necessary capital expenditures, and for
general corporate purposes.





Off-Balance
Sheet Arrangements





None.


12


Item
8.  FINANCIAL STATEMENTS





GRUBER
& COMPANY, LLC


121
Civic Center Drive, Suite 225


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


Carson
City, Nevada





We have
audited the accompanying balance sheet of The Blackhawk Fund (“Blackhawk” or the
“Company”) as of December 31, 2009 and 2008 and the related statements of
operations, stockholders’ deficit, and cash flows for the years then ended.
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. The company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
company’s internal control over financial reporting. Accordingly, we express no
such opinion.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, 2009
and 2008 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 9 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 9. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.





/s/
Gruber & Company, LLC





Gruber
& Company, LLC


Lake St.
Louis, MO.


April 13,
2010


13


THE
BLACKHAWK FUND
 BALANCE
SHEETS
 
 December
      31,
                                  
                                  
                                  December
      31,2009
                                  
                                  
                                  2008ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                                  
                                  $
                                  2,719
                                  
                                  
                                  $
                                  11,161Prepaid
      financing costs
                                  
                                  
                                  -
                                  
                                  
                                  
                                  829Total
      current assets
                                  
                                  
                                  2,719
                                  
                                  
                                  
                                  11,990PROPERTY
      — HELD FOR SALE
                                  
                                  
                                  1,000
                                  
                                  
                                  
                                  1,775,900PREPAID
      FINANCING COSTS
                                  
                                  
                                  0
                                  
                                  
                                  
                                  22,875TOTAL
      ASSETS
                                  
                                  $
                                  3,719
                                  
                                  
                                  $
                                  1,810,765LIABILITIES
      AND STOCKHOLDERS’ DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
                                  
                                  $
                                  199,256
                                  
                                  
                                  $
                                  107,990Note
      payable, net of discount of $420,516 and $0, respectively
                                  
                                  
                                  130,483
                                  
                                  
                                  
                                  854,079Notes
      payable - related party
                                  
                                  
                                  89,764
                                  
                                  
                                  
                                  62,515Total
      current liabilities
                                  
                                  
                                  419,503
                                  
                                  
                                  
                                  1,024,584LONG
      TERM LIABILITIESNote
      payable
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,936,000TOTAL
      LIABILITIES
                                  
                                  
                                  419,503
                                  
                                  
                                  
                                  2,960,584COMMITMENTS
      AND CONTINGENCIES
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -STOCKHOLDERS’
      DEFICITPreferred
      stock, $0.0001 par value, 50,000,000 shares
      authorized:Series
      A, 500,000 issued and outstanding
                                  
                                  
                                  50
                                  
                                  
                                  
                                  50Series
      B, 10,000,000 issued and outstanding
                                  
                                  
                                  1,000
                                  
                                  
                                  
                                  1,000Series
      C, 10,000,000 issued and outstanding
                                  
                                  
                                  1,000
                                  
                                  
                                  
                                  1,000Common
      stock,  $0.0001 par value, 4,000,000,000 shares authorized,
      896,293,791 and 562,293,791 shares issued and outstanding,
      respectively
                                  
                                  
                                  89,629
                                  
                                  
                                  
                                  56,229Common
      stock B, 30,000,000 issued and outstanding
                                  
                                  
                                  3,000
                                  
                                  
                                  
                                  3,000Additional
      paid in capital
                                  
                                  
                                  38,013,284
                                  
                                  
                                  
                                  37,136,931Accumulated
      deficit
                                  
                                  
                                  (38,523,747
                                  )
                                  
                                  
                                  (38,348,029
                                  )Total
      stockholders’ deficit
                                  
                                  
                                  (415,784
                                  )
                                  
                                  
                                  (1,149,819
                                  )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                                  
                                  $
                                  3,719
                                  
                                  
                                  $
                                  1,810,765
  14
 
 THE
BLACKHAWK FUND
 STATEMENTS
OF OPERATIONS
 Years
Ended December 31, 2009 and 2008
  2009
                  
                  
                  2008Revenues
                  
                  $
                  -
                  
                  
                  $
                  31,765Cost
      of sales
                  
                  
                  -
                  
                  
                  
                  -Gross
      profit
                  
                  
                  -
                  
                  
                  
                  31,765OPERATING
      EXPENSESGeneral
      and administrative
                  
                  
                  82,165
                  
                  
                  
                  344,462OTHER
      INCOME / (EXPENSES)Gain
      on sale of assets
                  
                  
                  1,015,179
                  
                  
                  
                  -Loss
      on guarantee
                  
                  
                  (618,750
                  )
                  
                  
                  -Interest
      Expense
                  
                  
                  (489,982
                  )
                  
                  
                  (632,483
                  )NET
      LOSS
                  
                  $
                  (175,718
                  )
                  
                  $
                  (945,180
                  )Basic
      and Diluted net loss per common share
                  
                  $
                  -
                  
                  
                  $
                  (0.01
                  )Weighted
      average number of shares outstanding
                  
                  
                  693,574,011
                  
                  
                  
                  507,018,791
  15
 
 THE
BLACKHAWK FUND
 Statement
of Stockholders’ Deficit
 For
the Years Ended December 31, 2009 and 2008
 
 Preferred Stock Series
    A
                    
                    
                    Preferred Stock Series B &
      CShares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    AmountBalances,
      December 31, 2007
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    
                    20,000,000
                    
                    
                    $
                    2,000Issuance
                    
                    
                    500,000
                    
                    
                    
                    50
                    
                    
                    
                    -
                    
                    
                    
                    -Stock
      for cash and services
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Subscription
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Options/net
      loss for year
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Balances,
      December 31, 2008
                    
                    
                    500,000
                    
                    
                    
                    50
                    
                    
                    
                    20,000,000
                    
                    
                    
                    2,000Issuance
      of common stock to retire debt
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Issuance
      of stock for professional services
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Balances,
      December 31, 2009
                    
                    
                    500,000
                    
                    
                    $
                    50
                    
                    
                    
                    20,000,000
                    
                    
                    $
                    2,000
  16
 
 THE
BLACKHAWK FUND
 Statement
of Stockholders’ Deficit
 For
the Years Ended December 31, 2009 and 2008
 
 Common
      Stock Series B
                        
                        
                        Common
      StockShares
                        
                        
                        Amount
                        
                        
                        Shares
                        
                        
                        AmountBalances,
      December 31, 2007
                        
                        
                        30,000,000
                        
                        
                        $
                        3,000
                        
                        
                        
                        341,193,791
                        
                        
                        $
                        34,119Issuance
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Stock
      for cash and services
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        221,100,000
                        
                        
                        
                        22,110Subscription
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Options/net
      loss for year
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Balances,
      December 31, 2008
                        
                        
                        30,000,000
                        
                        
                        
                        3,000
                        
                        
                        
                        562,293,791
                        
                        
                        
                        56,229Issuance
      of common stock to retire debt
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        210,000,000
                        
                        
                        
                        21,000Issuance
      of stock for professional services
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        124,000,000
                        
                        
                        
                        12,400Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Balances,
      December 31, 2009
                        
                        
                        30,000,000
                        
                        
                        $
                        3,000
                        
                        
                        
                        896,293,791
                        
                        
                        $
                        89,629
  17
 
 THE
BLACKHAWK FUND
 Statement
of Stockholders’ Deficit
 For
the Years Ended December 31, 2009 and 2008
 
 Additional
                        
                        
                        
                        
                        
                        
                        
                        
                        TotalPaid-In
                        
                        
                        Stock
                        
                        
                        Accumulated
                        
                        
                        Stockholders'Capital
                        
                        
                        Receivable
                        
                        
                        Deficit
                        
                        
                        DeficitBalances,
      December 31, 2007
                        
                        $
                        36,604,393
                        
                        
                        $
                        (223,862
                        )
                        
                        $
                        (37,402,849
                        )
                        
                        $
                        (983,199
                        )Issuance
                        
                        
                        499,950
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        500,000Stock
      for cash and services
                        
                        
                        96,227
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        118,337Subscription
                        
                        
                        (179,124
                        )
                        
                        
                        223,862
                        
                        
                        
                        -
                        
                        
                        
                        44,738Options/net
      loss for year
                        
                        
                        115,485
                        
                        
                        
                        -
                        
                        
                        
                        (945,180
                        )
                        
                        
                        (829,695
                        )Balances,
      December 31, 2008
                        
                        
                        37,136,931
                        
                        
                        
                        -
                        
                        
                        
                        (38,348,029
                        )
                        
                        
                        (1,149,819
                        )Issuance
      of common stock to retire debt
                        
                        
                        820,033
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        841,033Issuance
      of stock for professional services
                        
                        
                        56,320
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        68,720Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (175,718
                        )
                        
                        
                        (175,718
                        )-Balances,
      December 31, 2009
                        
                        $
                        38,013,284
                        
                        
                        $
                        -
                        
                        
                        $
                        (38,523,747
                        )
                        
                        $
                        (415,784
                        )
  18
 
 THE
BLACKHAWK FUND
 STATEMENTS
OF CASH FLOWS
 Years
Ended December 31, 2009 and 2008
 
 2009
                        
                        
                        2008Cash
      Flows From Operating ActivitiesNet
      loss
                        
                        $
                        (175,718
                        )
                        
                        $
                        (945,180
                        )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                        
                        
                        -
                        
                        
                        
                        505Discount
      accretion on note
                        
                        
                        420,516Gain
      on sale of assets
                        
                        
                        (1,015,178
                        )
                        
                        
                        -Loss
      on guarantee
                        
                        
                        618,750
                        
                        
                        
                        -Stock
      issued for services and financing
                        
                        
                        24,000
                        
                        
                        
                        592,300Prepaid
      financing costs
                        
                        
                        23,704
                        
                        
                        
                        829Accounts
      payable and accrued liabilities
                        
                        
                        71,984
                        
                        
                        
                        103,750Net
      cash used in operating activities
                        
                        
                        (31,942
                        )
                        
                        
                        (247,796
                        )Cash
      Flows From Investing Activities:Proceeds
      from sale of assets
                        
                        
                        -
                        
                        
                        
                        3,550Net
      cash provided by investing activities
                        
                        
                        
                        
                        
                        
                        3,550Cash
      Flows From Financing Activities:Proceeds
      from notes payable
                        
                        
                        -
                        
                        
                        
                        26,251Proceeds
      from stock issuances, subscriptions and option exercises
                        
                        
                        -
                        
                        
                        
                        186,260Proceeds
      from notes payable - related party
                        
                        
                        23,500
                        
                        
                        
                        40,515Net
      cash provided by financing activities
                        
                        
                        23,500
                        
                        
                        
                        253,026Net
      Change in Cash
                        
                        
                        (8,442
                        )
                        
                        
                        8,780Cash
      Beginning of Period
                        
                        
                        11,161
                        
                        
                        
                        2,381Cash
      End of Period
                        
                        $
                        2,719
                        
                        
                        $
                        11,161Supplemental
      disclosures:Cash
      paid for:Interest
                        
                        
                        -
                        
                        
                        
                        95,549Income
      Taxes
                        
                        
                        -
                        
                        
                        
                        -Supplemental
      disclosure of non-cash investing and financing activities:Controlling
      shareholder assumption of mortgage related to the Carlsbad
      property
                        
                        $
                        496,000
                        
                        
                        
                        -Debt
      forgiveness and transfer of Carlsbad and Oceanside
property
                        
                        $
                        2,287,079
                        
                        
                        
                        -Purchase
      of undeveloped land for issuance of note payable
                        
                        $
                        1,000
                        
                        
                        
                        -
  19
 
 THE
BLACKHAWK FUND
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature of
Business
  The
Blackhawk Fund (“Blackhawk” or the “Company”) was organized on 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, 2009 the Company was in
the business of residential and commercial real estate acquisition and
development.
  Cash and cash
equivalents
 
 The
Company considers all cash on hand and in banks, including accounts in book
overdraft positions, certificates of deposit and other highly- liquid
investments with maturities of three months or less, when purchased, to be cash
and cash equivalents.
 
 Advertising
expenses
 
 Advertising
and marketing expenses are charged to operations as incurred there were no
expenses in 2009 or 2008.
 
 Revenue
recognition
 
 The
Company generates revenue from the sale of real estate, brokerage commissions,
and rental income from rental properties. Revenues from real estate sales and
commissions are recognized on execution of the sales contract. The Company
records gross commissions on the sales of properties closed. The Company pays
the broker of record five percent of all transactions and 100 percent of
personal sales. This is in accordance with standard procedures. The Company
compensates its independent agents on a sliding scale between 70 and 80 percent
based on productivity. The Company also recognizes sales when it sells
properties that have been held for sale when their renovation is complete.
Revenue is recognized at “closing”.
 
 The
Company has not recognized any revenue from its new business plan other than
rental income.
 
 Income
Taxes
 
 The
Company utilizes the asset and liability method of accounting for income taxes.
Temporary differences represent differences in the recognition of assets and
liabilities for tax and financial reporting purposes, primarily accumulated
depreciation and amortization.
 
 As of
December 31, 2009, the deferred tax asset is related solely to the Company’s net
operating loss carry forward and is fully reserved.
 
 Loss per
share
 
 Basic
loss per share are computed by dividing the net loss by the weighted-average
number of shares of common stock and common stock equivalents (primarily
outstanding options and warrants). Common stock equivalents represent the
dilutive effect of the assumed exercise of the outstanding stock options and
warrants, using the treasury stock method. The calculation of fully diluted loss
per share assumes the dilutive effect of the exercise of outstanding options and
warrants at either the beginning of the respective period presented or the date
of issuance, whichever is later. As of December 31, 2009, the Company’s
outstanding warrants are considered anti-dilutive.
  20
  Use of
Estimates
  The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the accounting period. Actual results could differ from those
estimates.
  Recent Accounting
Pronouncements
  In
February 2010, Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Update (“ASU”) 2010-9 Subsequent Events (Topic 855)
Amendments to Certain Recognition and Disclosure Requirements(“ASU
2010-9”). ASU 2010-9 amends disclosure requirements within Subtopic 855-10. An
entity that is an Securities and Exchange Commission (“SEC”) filer is not
required to disclose the date through which subsequent events have been
evaluated. This change alleviates potential conflicts between Subtopic 855-10
and the SEC's requirements. ASU 2010-9 is effective for interim and annual
periods ending after June 15, 2010. The Company does not expect the
adoption of ASU 2010-09 to have a material impact on its consolidated results of
operations or financial position.
  In
January 2010, FASB issued ASU 2010-6 Improving Disclosures about Fair
Measurements ("ASU 2010-6"). ASU 2010-6 provides amendments to
subtopic 820-10 that require separate disclosure of significant transfers in and
out of Level 1 and Level 2 fair value measurements and the
presentation of separate information regarding purchases, sales, issuances and
settlements for Level 3 fair value measurements. Additionally, ASU 2010-6
provides amendments to subtopic 820-10 that clarify existing disclosures about
the level of disaggregation and inputs and valuation techniques. ASU 2010-6 is
effective for financial statements issued for interim and annual periods ending
after December 15, 2010. The Company does not expect the adoption of ASU
2010-06 to have a material impact on its consolidated results of operations or
financial position.
  In
January 2010, FASB issued ASU 2010-2 Accounting and Reporting for
Decreases in Ownership of a Subsidiary- a Scope Clarification ("ASU
2010-2"). ASU 2010-2 addresses implementation issues related to the changes in
ownership provisions in the Consolidation—Overall Subtopic (Subtopic 810-10) of
the FASB Accounting Standards
Codification, originally issued as FASB Statement of Financial
Accounting Standards (“FAS”)
No. 160, Noncontrolling
Interests in Consolidated Financial Statements. Subtopic 810-10
establishes the accounting and reporting guidance for noncontrolling interests
and changes in ownership interests of a subsidiary. An entity is required to
deconsolidate a subsidiary when the entity ceases to have a controlling
financial interest in the subsidiary. Upon deconsolidation of a subsidiary, an
entity recognizes a gain or loss on the transaction and measures any retained
investment in the subsidiary at fair value. The gain or loss includes any gain
or loss associated with the difference between the fair value of the retained
investment in the subsidiary and its carrying amount at the date the subsidiary
is deconsolidated. In contrast, an entity is required to account for a decrease
in ownership interest of a subsidiary that does not result in a change of
control of the subsidiary as an equity transaction. ASU 2010-2 is effective
for the Company starting January 1, 2010. The Company does not expect the
adoption of ASU 2010-2 to have a material impact on the Company's consolidated
results of operations or financial position.
  In
December 2009, FASB issued ASU 2009-17 Consolidations (Topic 810)
Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities ("ASU 2009-17"). ASU 2009-17 amends the FASB Accounting
Standards Codification (“ASC”)for the
issuance of FASB Statement No. 167, Amendments to FASB Interpretation
No. 46(R). The amendments in ASU 2009-17 replace the
quantitative-based risks and rewards calculation for determining which
enterprise, if any, has a controlling financial interest in a variable interest
entity with an approach focused on identifying which enterprise has the power to
direct the activities of a variable interest entity that most significantly
impact the entity's economic performance and (1) the obligation to absorb
losses of the entity or (2) the right to receive benefits from the entity.
ASU 2009-17 also requires additional disclosures about an enterprise's
involvement in variable interest entities. ASU 2009-17 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009. The Company does not expect the adoption of ASU
2009-17 to have a material impact on its consolidated results of operations or
financial position.
  In
December 2009, FASB issued ASU 2009-16 Transfers and Servicing (Topic 860)
Accounting for Transfers of Financial Assets ("ASU 2009-16"). ASU 2009-16
amends the FASB Accounting Standards Codification for the issuance of FASB
Statement No. 166, Accounting for Transfers of
Financial Assets—an amendment of FASB SFAS No. 140. The amendments
in ASU 2009-16 improve financial reporting by eliminating the exceptions for
qualifying special-purpose entities from the consolidation guidance and the
exception that permitted sale accounting for certain mortgage securitizations
when a transferor has not surrendered control over the transferred financial
assets. In addition, the amendments require enhanced disclosures about the risks
that a transferor continues to be exposed to because of its continuing
involvement in transferred financial assets. ASU 2009-16 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009.  The Company does not expect the
adoption of ASU 2009-16 to have a material impact on its results of operations
or financial position.
  21
  In August
2009, FASB issued ASU 2009-5 Fair Value Measurements and
Disclosures (Topic 820) Measuring Liabilities at Fair Value ("ASU
2009-5"). ASU 2009-5 provides amendments to Subtopic 820-10, Fair Value Measurements and
Disclosures-Overall, for the fair value measurement of liabilities. ASU
2009-5 clarifies that in circumstances in which a quoted price in an active
market for the identical liability is not available, a reporting entity is
required to measure fair value. ASU 2009-5 was effective for the Company
for interim and annual periods ending after September 30, 2009. The adoption of
ASU 2009-5 did not have a material impact on the Company's results of
operations or financial position.
  In
August 2009, FASB issued ASU 2009-4 Accounting for Redeemable Equity
Instruments—an Amendment to Section 480-10-S99 ("ASU 2009-4"). ASU
2009-4 represents a SEC update to Section 480-10-S99, Distinguishing Liabilities from
Equity. The adoption of guidance within ASU 2009-4 did not have an impact
on the Company's results of operations or financial position.
  In
June 2009, FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles—A
Replacement of FASB Statement No. 162, (now codified within ASC 105,
Generally Accepted Accounting
Principles ("ASC 105")). ASC 105 establishes the Codification as the
single source of authoritative GAAP recognized by the FASB to be applied by
nongovernmental entities. All guidance contained in the Codification carries an
equal level of authority. Following this statement, FASB will not issue new
standards in the form of statements, FASB Staff Positions, or Emerging Issues
Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which
will serve only to: (1) update the Codification; (2) provide
background information about the guidance; and (3) provide the bases for
conclusions on the change(s) in the Codification. ASC 105 was effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. The Codification supersedes all existing non-SEC
accounting and reporting standards. The adoption of ASC 105 did not have an
impact on the Company's results of operations or financial position.
  In
May 2009, FASB issued SFAS No. 165, Subsequent Events, (now
codified within ASC 855, Subsequent Events ("ASC
855")). ASC 855 establishes the general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. ASC 855 was
effective for the Company on April 1, 2009. The adoption of ASC 855 did not
have a material impact on the Company's results of operations or financial
position.
  In April
2009, FASB issued FSP FAS 115-2 and FSP 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments (now codified within ASC 320, Investments—Debt and Equity
Securities ("ASC 320")). ASC 320 provides greater clarity about the
credit and noncredit component of an other-than-temporary impairment event and
more effectively communicates when an other-than-temporary impairment event has
occurred. ASC 320 amends the other-than-temporary impairment model for debt
securities. The impairment model for equity securities was not affected. Under
ASC 320, an other-than-temporary impairment must be recognized through earnings
if an investor has the intent to sell the debt security or if it is more likely
than not that the investor will be required to sell the debt security before
recovery of its amortized cost basis. This standard was effective for interim
periods ending after June 15, 2009. The adoption of ASC 320 did not have a
material impact on the Company's results of operations or financial position.
  In
April 2009, FASB issued FSP 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly (now codified
within ASC 820, Fair
Value Measurements and Disclosures). ASC 820 provides guidelines for
making fair value measurements more consistent and provides additional
authoritative guidance in determining whether a market is active or inactive and
whether a transaction is distressed. ASC 820 is applied to all assets and
liabilities (i.e., financial and non-financial) and requires enhanced
disclosures. This standard was effective for periods ending after June 15,
2009. The adoption of ASC 820 did not have a material impact on the
Company's results of operations or financial position.
  In
April 2009, FASB issued FSP 107-1 and Accounting Principles Board 28-1, Interim Disclosures about Fair Value
of Financial Instruments (now codified within ASC 825, Financial Instruments
("ASC 825")). ASC 825 requires disclosures about fair value of financial
instruments in interim financial statements as well as in annual financial
statements. ASC 825 was effective for interim periods ending after June 15,
2009. The adoption of ASC 825 did not have a material impact on the Company's
consolidated results of operations or financial position.
  In June
2008, FASB issued FSP—Emerging Issues Task Force 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities
(now codified within ASC 260, Earnings Per Share ("ASC
260")). Under ASC 260, unvested share based payment awards that contain
non-forfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and shall be included in the computation of
earnings per share pursuant to the two-class method. ASC 260 was effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those years and requires retrospective
application. The adoption of ASC 260 did not have a material impact on the
Company's earnings per share calculations.
  22
  In April
2008, FASB issued FSP FAS 142-3, Determination of the Useful Life of
Intangible Assets (now codified within ASC 350, Intangibles—Goodwill and
Other ("ASC 350")). ASC 350 provides guidance for determining the useful
life of a recognized intangible asset and requires enhanced disclosures so that
users of financial statements are able to assess the extent to which the
expected future cash flows associated with the asset are affected by our intent
and/or ability to renew or extend the arrangement. ASC 350 was effective for
financial statements issued for fiscal years and interim periods beginning after
December 15, 2008. The adoption of ASC 350 on January 1, 2009 did not
impact the Company's results of operations or financial position.
  In March
2008, FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities (now codified within ASC 815, Derivatives and Hedging ("ASC
815")). ASC 815 requires enhanced disclosures about an entity's derivative and
hedging activities aimed at improving the transparency of financial reporting.
ASC 815 was effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. The adoption of ASC 815
did not have any impact on the Company's results of operations or financial
position.
  In
December 2007, FASB issued SFAS No. 141(R), Business Combinations (now
codified within ASC 805, Business Combinations ("ASC
805")). ASC 805 establishes principles and requirements for how the acquirer in
a business combination recognizes and measures in its financial statements the
fair value of identifiable assets acquired, the liabilities assumed and any
noncontrolling interest in the acquiree at the acquisition date. ASC 805
significantly changes the accounting for business combinations in a number of
areas, including the treatment of contingent consideration, preacquisition
contingencies, transaction costs and restructuring costs. In addition, under ASC
805, changes in an acquired entity's deferred tax assets and uncertain tax
positions after the measurement period will impact income tax expense. The
provisions of this standard applied to any acquisitions completed on or after
December 15, 2008. The adoption of ASC 805 did not have an impact on the
Company's results of operations or financial position.
  In
December 2007, FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an Amendment of ARB No. 51 (now
codified within ASC 810,
Consolidation ("ASC 810")). ASC 810 changes the accounting and reporting
for minority interests, which is recharacterized as noncontrolling interests and
classified as a component of equity. This new consolidation method significantly
changes the accounting for transactions with minority interest holders. The
provisions of ASC 810 were applied to all noncontrolling interests
prospectively, except for the presentation and disclosure requirements, which
were applied retrospectively to all periods presented and have been disclosed as
such in our consolidated financial statements herein. ASC 810 became effective
for fiscal years beginning on or after December 15, 2008. The Company
adopted ASC 810 effective January 4, 2009. The adoption of ASC 810 did not
have an initial material impact on the Company’s results of operations or
financial position.
  In
September 2006, FASB issued SFAS No. 157, Fair Value Measurements (now
codified within ASC 820). ASC 820 provides guidance for using fair value to
measure assets and liabilities. Under ASC 820, fair value refers to the
price that would be received to sell an asset or paid to transfer a liability in
the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants at the measurement date. The
guidance within ASC 820 became effective for financial statements issued for
fiscal years beginning after November 15, 2007; however, the FASB provided
a one year deferral for implementation of the standard for non-recurring,
non-financial assets and liabilities. The Company adopted ASC 820 for
non-financial assets and non-financial liabilities effective January 1,
2009, which did not have any effect on its results of operations or financial
position.
  NOTE
2 - STOCK BASED COMPENSATION
  Prior to
January 1, 2006, we accounted for stock based compensation under SFAS No. 123,
“Accounting for Stock-Based Compensation” (“SFAS 123”). As permitted under this
standard, compensation cost was recognized using the intrinsic value method
described in Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for
Stock Issued to Employees” (“APB 25”). Effective January 1, 2006, the Company
has adopted SFAS No. 123 (Revised 2004), “Share-Based Payment” (“SFAS 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 SFAS 123R, stock-based compensation
expense recognized during the year ended December 31, 2008 includes compensation
expense for all share-based payments granted on or prior to, but not yet vested
as of December 31, 2006, based on the grant date fair value estimated in
accordance with the original provisions of SFAS 123, and compensation cost 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 SFAS
123R.
  23
  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 SFAS 123R.
 
 During
the year ended December 31, 2009 and 2008, the Company recorded stock based
consulting expense of $24,000 and $592,300, respectively, as determined under
SFAS 123R.
 
 NOTE
3 - PROPERTY - HELD FOR SALE/FIXED ASSETS
 
 In late
March 2006, the Company purchased a condominium located in Carlsbad, California
for $625,083 (“Carlsbad Property”). The Company intended to renovate and sell
the condominium upon completion of the planned renovations, and, accordingly, it
has been designated as “held-for-sale.” Therefore, it will be carried at the
lower cost or fair value (net of expected sales costs) during the renovation
period and will not be depreciated. Major improvements and renovations were
capitalized.
 
 In June
of 2006, the Company entered into a joint venture agreement to renovate and then
sell a residential home located in Oceanside, California (“Oceanside Property”).
The Company is a 50% joint venture partner, but has the right to exercise
control. The Company is 100% responsible for improvement costs, with these costs
to be reimbursed upon sale and any remaining profits allocated evenly. The
Company has valued the house at the original value of the liability assumed of
$1,000,000. As the intention on this property is identical to the Carlsbad
Property, the Oceanside Property has been designated as “held for sale”. The
Company has capitalized improvements on this property of $149,817.
 
 In
February 2009, the Company entered into settlement agreements with certain prior
affiliated parties pursuant to which the Company transferred the Carlsbad
Property and Oceanside Property.  The Company entered into a
settlement agreement with the former controlling stockholder of the Company
under which the former controlling stockholder agreed to cancel and forgive a
promissory note made by the Company in the aggregate principal amount of
$841,828 in exchange for the Carlsbad Property.   The Carlsbad
Property is also subject to a $496,000 mortgage which is now the responsibility
of the former controlling stockholder.
 
 The
Company also entered into a settlement agreement with a joint venture partner in
relation to the Oceanside, Property.  Pursuant to the agreement, the
joint venture partner released the Company from any and all liability pursuant
to the joint venture as well as any liability associated with the two mortgage
notes on this property ($1,120,000 and $320,000) in exchange for the
property.
  The
Company recognized a gain on of $1,015,178 in connection with the settlement
agreements for the Carlsbad Property and the Oceanside Property.
  In
December 2008, the Company purchased two parcels of undeveloped land in
Riverside County, City of Desert Hot Springs, California, for a purchase price
of a $1,000 promissory note.  The land approximates 3.5
acres.  This property is zoned for residential
dwellings.  The Company is determining whether to build finished lots
or in the alternative to sell the land to a developer.  The property
comprised of these two parcels has not yet been entitled.
  NOTE
4 - PREFERRED STOCK
 
 Series
A Preferred Stock
 
 On April
24, 2008, the Company withdrew its certificate of designation establishing the
Company’s Series A Preferred Stock and filed a new certificate of designation
for 500,000 shares of Series A Preferred Stock, par value $0.001 per share.
Anytime after October 24, 2008, the Series A Preferred Stock is convertible
based upon the average of the per shares market value of the Company’s common
stock during the 20 trading days immediately preceding a conversion date. In
addition, upon the consummation of a bona fide sale third party sale by the
Company of its securities resulting in gross proceeds of at least $1,000,000,
the Series A Preferred Stock will automatically convert into the securities
being sold in such offering. The Series A Preferred Stock has no voting rights,
dividend rights, liquidation preference, redemption rights, or preemptive
rights.
  24
 
 On April
24, 2008, the Company issued 500,000 shares of the newly designated Series A
Preferred Stock as part of a financing transaction with Teriminus, Inc.
(“Terminus”). See Note 6. The Company has valued the convertible shares using
the Black-Scholes model and has recognized a financing expense equivalent to the
stated value of the Series A Preferred Stock of $500,000.
 
 On August
19, 2008, the Company amended and restated its articles of incorporation
(“August Amendment”) to increase the aggregate number of shares of all classes
of preferred stock which the Company shall have authority to issue to 50,000,000
shares with a par of $0.0001 per share.
 
 Series
B Preferred Stock
 
 On April
24, 2008, the Company amended the certificate of designation establishing the
Company’s Series B Preferred Stock. Pursuant to this amendment, the Company’s
Series B Preferred Stock now contains on limitation on conversions such that no
holder of Series B Preferred Stock can convert such shares into the Company’s
common stock if such conversion would result in the holder owning in excess of
4.99% of the Company’s issued and outstanding common stock.
 
 Series
C Preferred Stock
 
 On April
24, 2008, the Company amended the certificate of designation for its Series C
Preferred Stock. Pursuant to the Amendment, on all matters submitted to a vote
of the holders of the common stock, including, without limitation, the election
of directors, a holder of shares of the Series C Preferred Stock shall be
entitled to the number of votes on such matters equal to the product of (a) the
number of shares of the Series C Preferred Stock held by such holder, (b) the
number of issued and outstanding shares of the Company’s common stock, on a
fully-diluted basis, as of the record date for the vote, or, if no such record
date is established, as of the date such vote is taken or any written consent of
stockholders is solicited, and (c) 0.0000002.
 
 NOTE
5 - COMMON STOCK
 
 During
the year ended December 31, 2008, the Company issued 221,100,000 shares of
common stock under its stock option plan resulting in an expense of $592,300 and
cash received $186,260.
  During
the year ended December 31, 2009, the Company issued 210,000,000 shares of
common stock to retire debt (See Note 6). The Company also issued 124,000,000
shares of common stock for professional services rendered.
  In
connection with the August Amendment, the Company’s changed the par value of its
common stock from $0.001 to $0.0001.
 
 NOTE
6 – PROMISSORY NOTES
 
 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%. 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 payments were $3,225 and have since
been reduced to $2,273. The note payable is personally guaranteed by the
Company’s former president. This note is arrears at December 31,
2008.
 
 In
conjunction with the joint venture property described in Note 3 above, the
Company refinanced this note in July 2007 and assumed a 50% interest and
corresponding promissory note debt of $1,440,000. Terms indicate that the first
note is for $1,120,000 over 30 years, with interest only payments required for
the first 10 years. The second note is carried for $320,000 with interest at
9.875% over 30 years, with interest only payments required for the first 10
years. Monthly amounts are presently $9,983. Both of the above notes are
classified as long term notes payable. This amount is in arrears at December 31,
2008.
 
 On April
24, 2008, the Company issued, and the formerly related party accepted, a
subordinated secured non-recourse note in the principal amount of $841,828, due
December 31, 2008. The balance on this note as of December 31, 2008 is $854,079.
See Note 7.
  25
 
 On April
24, 2008, the Company and Terminus,, as co-issuers, issued and sold to a single
accredited investor: (i) a $550,000 due on demand secured promissory note with
an interest rate of 12% per annum (“Terminus Note Payable”) and (ii) 500,000
shares of the Company’s Series A Preferred Stock. To secure payment of the note,
Terminus pledged the 10,000,000 shares of the Company’s Series C Preferred
Stock. The Company is a guarantor of the Terminus Note, and accordingly, has
treated the note as a contingent liability and as an “off-balance
sheet arrangement.”
 
 On May 4,
2009, the Company and Terminus both defaulted on repayment of the Terminus Note.
As a result of the default on the Terminus Note, the Company has become
unconditionally liable for repayment of all principal and interest due under the
note, has recorded the full amount of $550,000 in principal and $68,750 in
accrued interest as a liability, and has incurred an expense for such amounts.
In addition, the Company continues to accrue interest from the date of
default.
 
 On July
10, 2009, the Company, along with Terminus, entered into a first amendment to
the Terminus Note with the holder of the note. The amended note extends the
maturity date until July 10, 2010. In addition, the amendment provides that the
note may be converted into shares of the Company's common stock. The conversion
price for the amended note is the greater of (i) the then existing par value of
the Company's common stock or (ii) 75 % of the average of the per shares market
values (as defined in the amended note) during the 20 trading days immediately
preceding a conversion date. If at any time after September 10, 2009, there is
either (i) insufficient shares of the Company's common stock to permit
conversions pursuant to the amended note or (ii) the per share market value is
less than the then existing par value of the Company's common stock for a period
of 5 consecutive trading days, the Company will use its best efforts to amend
its capital structure by means of either a reverse split of its common stock, an
increase in its authorized common stock, or a reduction of the par value of its
common stock, or any combination of the foregoing as determined by the Company's
board of directors in its reasonable judgment.
 
 Subsequent
to the Terminus Note amendment, the holder of the note has effected a series of
partial conversions and was issued an aggregate of 210,000,000 shares of common
stock at a conversion price of $0.001 per share. In the aggregate, these
issuances reduced the debt by $210,000 in principal.
  The
Company has recorded a beneficial conversion feature relating to this note
payable in the amount of $631,033, and recorded $420,516 of the beneficial
conversion feature as additional interest expense for the year
ended.
 
 The
balance of the note is recorded on the Company's balance sheet at the net amount
of $130,483 after deducting the remaining beneficial conversion
feature.
 
 NOTE
7 - RELATED PARTY TRANSACTIONS
 
 At March
31, 2008, the Company was indebted to a formerly related party for $801,616.
Interest had been imputed at 6% per year. On April 24, 2008, the Company issued,
and the formerly related party accepted, a subordinated secured non-recourse
note in the principal amount of $841,828, due October 24, 2008. The note is
secured by the real estate described in Note 3 above, but is subordinated to the
notes described above. The lender’s recovery for default on payment of this note
is limited to limited solely to the real estate described above. The balance on
this note as of December 31, 2008 is $854,079.
 
 At
December 31, 2009 and 2008, Terminus, Inc. the holder of the Company’s Series C
Preferred Stock, has loaned the Company $81,127 and $58,627, respectively. The
loan is payable upon demand with interest at 12% per annum. At December 31, 2009
and 2008 interest accrued to this loan was $8,637 and $3,888,
respectively.
 
 During
the year ended December 31, 2008, the Company made payments totaling $65,000 to
entities controlled by the former CEO and CFO for consulting services. No such
payments were made during the year ended December 31, 2009.
 
 NOTE
8 – 2009 STOCK INCENTIVE PLAN
 
 On August
10, 2009, the Company’s Board of Directors adopted its 2009 Stock Incentive
Plan. The Board of Directors approved the issuance of 124,000,000 shares of
common stock pursuant to the 2009 Stock Incentive Plan in payment of legal
services.
  26
 
 NOTE
9 - GOING CONCERN
 
 The
Company has incurred significant losses, has a negative capital, and negative
current ratio. These factors, among others indicate that the Company may not be
able to continue as a going concern. No adjustments have been made to the
carrying value of assets and liabilities should the company not continue as a
going concern.
 
 NOTE
10 - SUBSEQUENT EVENT
 
 On March
19, 2010, we issued an 8% $50,000 convertible promissory note to a single
accredited investor.  The note is due and payable on March 19, 2015. 
In addition, the note is convertible into shares of our common
stock.   The conversion price for the note is the greater of (i) the
then existing par value of the Company's common stock or (ii) 75 % of the
average of the per shares market values (as defined in the amended note) during
the 20 trading days immediately preceding a conversion date. If at any time
after September 10, 2009, there is either (i) insufficient shares of the
Company's common stock to permit conversions pursuant to the amended note or
(ii) the per share market value is less than the then existing par value of the
Company's common stock for a period of 5 consecutive trading days, the Company
will use its best efforts to amend its capital structure by means of either a
reverse split of its common stock, an increase in its authorized common stock,
or a reduction of the par value of its common stock, or any combination of the
foregoing as determined by the Company's board of directors in its reasonable
judgment.  The proceeds for the sale of the note were for working capital
and general corporate purposes.  The issuance was exempt under Section 4(2)
and Rule 506 of the Securities Act of 1933, as amended.
 
 On March
25, 2010, the holder of the Terminus Note effected a partial conversion and was
issued 14,000,000 shares of common stock. On April 5, 2010, the holder of the
Terminus Note effected another partial conversion and was issued 45,000,000
shares of common stock. In the aggregate, these issuances reduced the debt by
$20,700 in principal.
  The Company has evaluated subsequent
events through the April 13, 2010 which is the date these financial statements
were available to be issued.
  27
  Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
  None.
 
 Item
9A. CONTROLS AND PROCEDURES.
 
 We maintain disclosure controls and
procedures that are designed to ensure that information required to be disclosed
in our reports that we file under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized, and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms,
and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure based on
the definition of “disclosure controls and procedures” in Rule 13a-15(e). In
designing and evaluating the disclosure controls and procedures, our management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and
procedures.
 
 At the
end of the period covered by this Annual Report on Form 10-K, we carried out an
evaluation, under the supervision and with the participation of our former
management, including our former Chief Executive Officer and former Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our former Chief
Executive Officer and our former Chief Financial Officer concluded that our
disclosure controls and procedures were effective to ensure that all material
information required to be disclosed in this Annual Report on Form 10-K has been
made known to them in a timely fashion.
  Our Chief
Executive Officer and Chief Financial Officer have also evaluated whether any
change in our internal controls occurred during the last fiscal quarter and have
concluded that there were no material changes in our internal controls or in
other factors that occurred during the last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, these
controls.
 
 Item 9B. OTHER
INFORMATION.
 
 None.
  28
  PART
III
 
 Item
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
 
 Set forth
below is certain information concerning our directors and executive
officers:
  Name
                
                Age
                
                PositionFrancis
      X. Marshik
                
                83
                
                President,
      Chief Executive Officer, Treasurer and
director
 
 Francis X. Marshik has served
as President, Chief Executive Officer, Treasurer and director since April 24,
2008. Mr. Marshik retired in 1986 from M.W. Kellogg, an engineering,
construction and fabrication company, where he served as its Senior Vice
President of Global Business Development since 1980. From 1974 to 1980, Mr.
Marshik was Commercial Vice President of M.W. Kellogg in London, and from 1968
to 1972, he was the head of the Far East as General Manager of Japan. From 1950
to 1966, Mr. Marshik held various positions at C.F. Braun, an engineering
company. He received a Bachelor of Science from Oregon State University. Mr.
Marshik has served as a director of Hemiwedge Industries, Inc., a publicly
traded company on the OTC Bulletin Board since 2002.
 
 Director
Independence
 
 Our board of
directors has determined that currently none of it members  qualify as
“independent” as the term is used in Item 407 of Regulation S-B as promulgated
by the SEC and in the listing standards of The Nasdaq Stock Market, Inc. -
Marketplace Rule 4200.
 
 Involvement
in Certain Legal Proceedings
 
 None of
our directors or executive officers has, during the past five
years:
  ·
              been
      convicted in a criminal proceeding or been subject to a pending criminal
      proceeding (excluding traffic violations and other minor
      offences);
 
 ·
              had
      any bankruptcy petition filed by or against any business of which he was a
      general partner or executive officer, either at the time of the bankruptcy
      or within two years prior to that
time;
 
 ·
              been
      subject to any order, judgment, or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities, futures, commodities or
      banking activities; or
 
 ·
              been
      found by a court of competent jurisdiction (in a civil action), the
      Securities and Exchange Commission or the Commodity Futures Trading
      Commission to have violated a federal or state securities or commodities
      law, and the judgment has not been reversed, suspended, or
      vacated.
 
 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
  29
  §
              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 our Form 10-KSB for the
fiscal year end December 31, 2006.
  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.
 
 AUDIT
COMMITTEE
 
 The
entire board of directors acts as our audit committee. We do not have an audit
committee financial expert serving on our audit committee at this time. We
propose to expand our board of directors in the near future to include a
financial expert.
 
 Communications
with the Board of Directors
 
 Stockholders
can send communications to the Board of Directors by sending a certified or
registered letter to the Chairman of the Board, care of the Secretary, at our
main business address set forth above. Communications that are threatening,
illegal, or similarly inappropriate, and advertisements, solicitations for
periodical or other subscriptions, and other similar communications will
generally not be forwarded to the Chairman.
 
 Item
11. EXECUTIVE COMPENSATION
 
 The
following table sets forth the compensation paid to the Chief Executive Officer
and our other executive officers for services rendered during the fiscal years
ended December 31, 2009, 2008 and 2007.
  Summary
      Compensation TableStock
                                              
                                              
                                              Option
                                              
                                              
                                              All
      OtherName
      and Position
                                              
                                              Year
                                              
                                              Salary
                                              
                                              
                                              Bonus
                                              
                                              
                                              Awards
      ($)
                                              
                                              
                                              Awards
      ($)
                                              
                                              
                                              Compensation
                                              
                                              
                                              Total
      ($)Francis X. Marshiik
                                              
                                              2009
                                              
                                              $
                                              0
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              $
                                              0President
                                              
                                              2008
                                              
                                              $
                                              0
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              $
                                              0Chief Executive
                                                Officer, Treasurer and
                                                Director
                                              
                                              2007
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A(since April 24, 2008)Steve Bonenberger
                                              
                                              2009
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/APresident, Chief
                                                Executive Officer and
                                                Director
                                              
                                              2008
                                              
                                              $
                                              37,500
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              $
                                              37,500(until April 24, 2008
                                              
                                              2007
                                              
                                              $
                                              165,000
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              $
                                              165,000Brent Fouch
                                              
                                              2009
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/A
                                              
                                              
                                              
                                              N/AExecutive Vice
                                                President
                                              
                                              2008
                                              
                                              $
                                              37,500
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              $
                                              37,500Treasurer and Director
                                              
                                              2007
                                              
                                              $
                                              150,000
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              $
                                              150,000(until April 24, 2008)
 Outstanding
Equity Awards
 
 There
were no outstanding equity awards, unexercised options, unvested stock, or
equity incentive plan awards as of December 31, 2009 for any of the executive
officers named in the Summary Compensation Table above.
  30
  Potential
Payments upon Termination
 
 None.
 
 Compensation
of Directors
 
 None.
 
 Section
16(a) Beneficial Ownership Reporting Compliance
  Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires our directors,
executive officers, and stockholders holding more than 10% of our outstanding
common stock, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in beneficial ownership of our
common stock. Executive officers, directors and greater-than-10% stockholders
are required by SEC regulations to furnish us with copies of all
Section 16(a) reports they file. To our knowledge, based solely on review
of the copies of such reports furnished to us for the period ended
December 31, 2009, all of the Section 16(a) reports required to be
filed by our executive officers, directors, and greater-than-10% stockholders
were filed on a timely basis.
 
 Item
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 31, 2010 by the following
persons:
 
 ·
              each person who is known to be
      the beneficial owner of more than five percent (5%) of our issued and
      outstanding shares of common
stock;
 
 ·
              each of our directors and
      executive officers; and
 
 ·
              all of our directors and
      executive officers as a
group.
 
 Beneficial
ownership is determined in accordance with the rules and regulations of the SEC.
The number of shares and the percentage beneficially owned by each individual
listed above include shares that are subject to options held by that individual
that are immediately exercisable or exercisable within 60 days from March 31,
2010, and the number of shares and the percentage beneficially owned by all
officers and directors as a group includes shares subject to options held by all
officers and directors as a group that are immediately exercisable or
exercisable within 60 days from March 31, 2010.
 
 Amount and Nature of Beneficial OwnershipName And
                          Address (1)
                        
                        Number Of
                          Common
                          Shares
                          Beneficially
                          Owned
                        
                        Percentage
                          Owned (2)
                        
                        Number Of
                          Series B
                          Preferred
                          Shares
                          Beneficially
                          Owned
                        
                        Percentage
                          Owned (2)
                        
                        Number Of
                          Series C
                          Preferred
                          Shares
                          Beneficially
                          Owned
                        
                        Percentage
                          Owned (2)
                        
                        Percentage
                          of Total
                          Voting
                          Power (3)Terminus,
      Inc.
                        
                        
                        —
                        
                        *
                        
                        
                        —
                        
                        *
                        
                        
                        10,000,000
                        (4)
                        100
                        %
                        
                        89.2
                        %Craig
      B. Garner (5)
                        
                        
                        45,423,660
                        (5)
                        4.99
                        %
                        
                        10,000,000
                        
                        100
                        %
                        
                        —
                        
                        *
                        
                        
                        *
                        %Frank
      Marshik
                        
                        
                        —
                        
                        *
                        
                        
                        —
                        
                        *
                        
                        
                        10,000,000
                        (4)
                        100
                        %
                        
                        89.2
                        %All
      directors and
                          officers
      as a group (1 person)
                        
                        
                        —
                        
                        *
                        
                        
                        —
                        
                        *
                        
                        
                        10,000,000
                        (4)
                        100
                        %
                        
                        89.2
                        %
  31
 
 *Less
than 1%
 (1)
              Unless otherwise noted, the
      address is 1802 N. Carson Street, Suite 212, Carson City, Nevada
      89701.
 (2)
              Based on 910,293,791common
      shares, 10,000,000 Series B Preferred Shares, and 10,000,000 Series C
      Preferred Shares issued and
outstanding.
 (3)
              Holders of our common stock are
      entitled to one vote per share, for a total of 910,293,791 votes. Holders
      of our Series A preferred stock are not entitled to vote. Holders of our
      Series B preferred stock are entitled to one vote per share, for a total
      of 10,000,000 votes. Holders of our Series C preferred stock are entitled
      to the number of votes on such matters equal to the product of (a) the
      number of shares of the Series C Preferred Stock held by such holder, (b)
      the number of issued and outstanding shares of the Company’s common stock,
      on a fully-diluted basis, as of the record date for the vote, or, if no
      such record date is established, as of the date such vote is taken or any
      written consent of stockholders is solicited, and (c) 0.0000002, for a
      total of 9,100,760,438 votes, or approximately 89% of the outstanding
      votes on all matters presented to our stockholders as of the record
      date.
 (4)
              Mr. Marshik has voting and
      investment control over the securities owned by Terminus,
      Inc.
 (5)
              Includes shares issuable upon
      conversion of Series B Preferred Stock. Mr. Garner’s address is P.O. Box
      11418, Marina del Rey, CA
90295.
 
 Item
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
 At March
31, 2008, the Company was indebted to a formerly related party for $801,616.
Interest had been imputed at 6% per year. On April 24, 2008, the Company issued,
and the formerly related party accepted, a subordinated secured non-recourse
note in the principal amount of $841,828, due October 24, 2008. The note is
secured by the real estate described in Note 3 above, but is subordinated to the
notes described above. The lender’s recovery for default on payment of this note
is limited to limited solely to the real estate described above. The note was
cancelled in exchange for the property securing the note pursuant to a
settlement agreement executed in February 2009.
 
 At
December 31, 2009, Terminus, Inc. the holder of the Company’s Series C Preferred
Stock, has loaned the company approximately $46,000. The loan is payable upon
demand with interest at 12%.
  During
the year ended December 31, 2008, we paid $37,500 in consulting fees to BMM,
LLC, a Limited liability company owned and controlled by Steve Bonenberger, our
former officer and director. We also paid $ 37,500 in consulting fees to Prize
Entertainment, Inc., a corporation owned and controlled by Brent Fouch, our
former officer and director.
 
 During
the year ended December 31, 2007, we paid $165,000 in consulting fees to BMM,
LLC, a Limited liability company owned and controlled by Steve Bonenberger, our
former officer and director. We also paid $ 150,000 in consulting fees to Prize
Entertainment, Inc., a corporation owned and controlled by Brent Fouch, our
former officer and director.
 
 We
believe that the foregoing transactions were in our best interests. Consistent
with the Nevada Revised Statutes, it is our current policy that all transactions
between us and our officers, directors and their affiliates will be entered into
only if such transactions are approved by a majority of the disinterested
directors, are approved by vote of the stockholders, or are fair to us as a
corporation as of the time it is us at is authorized, approved or ratified by
the board. We will conduct an appropriate review of all related party
transactions on an ongoing basis, and, where appropriate, we will utilize our
audit committee for the review of potential conflicts of interest.
 
 Item
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 
 AUDIT
FEES
 
 Gruber
& Company, LLC, billed us $7,500 in fees for our annual audit for the year
ended December 31, 2009, and $7,000 in fees for the review of our quarterly
financial statements for that year.
 
 Gruber
& Company, LLC, billed us $7,500 in fees for our annual audit for the year
ended December 31, 2008, and $9,000 in fees for the review of our quarterly
financial statements for that year.
  32
 
 AUDIT-RELATED
FEES
 
 We did
not pay any fees Gruber & Company, LLC for assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements for fiscal years 2009 and 2008.
 
 TAX
FEES
 
 We did
not pay any fees to Gruber & Company, LLC for tax compliance, tax advice,
tax planning or other work during our fiscal years 2009 and 2008.
 
 ALL
OTHER FEES
 
 There
were no other fees billed by Gruber & Company, LLC for professional services
rendered, other than as stated under the captions Audit Fees, Audit-Related
Fees, and Tax Fees.
 
 With
respect to the audit of our financial statements as of December 31, 2009
and 2008 and for the years then ended, none of the hours expended on Gruber
& Company, LLC engagement to audit those financial statements were
attributed to work by persons other than Gruber & Company, LLC’s full-time,
permanent employees.
 
 Item
15. EXHIBITS.
  (a)           Exhibits
 
 Exhibit No.
              
              Description3.1**
              
              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,
      20053.7
              
              Amendment
      to Certificate of Designation After Issuance of Class or Series filed with
      the Nevada Secretary of State on April 24, 2008, filed as an exhibit to
      our Current Report on Form 8-K filed on April 30, 2008 and incorporated
      herein by reference.3.8
              
              Certificate
      of Correction filed with the Nevada Secretary of State on April 24, 2008,
      filed as an exhibit to our Current Report on Form 8-K filed on April 30,
      2008 and incorporated herein by reference.3.9
              
              Certificate
      of Withdrawal of Certificate of Designation filed with the Nevada
      Secretary of State on April 24, 2008, filed as an exhibit to our Current
      Report on Form 8-K filed on April 30, 2008 and incorporated herein by
      reference.3.10
              
              Certificate
      of Designation filed with the Nevada Secretary of State on April 24, 2008,
      filed as an exhibit to our Current Report on Form 8-K filed on April 30,
      2008 and incorporated herein by reference.3.11
              
              Amendment
      to Certificate of Designation After Issuance of Class or Series filed with
      the Nevada Secretary of State on April 24, 2008, filed as an exhibit to
      our Current Report on Form 8-K filed on April 30, 2008 and incorporated
      herein by reference.3.12
              
              Amended
      and Restated Articles of Incorporation filed with the Nevada Secretary of
      State on August 19, 2008, filed as an exhibit to our Quarterly Report on
      Form 10-Q for the period ended June 30, 2008 and incorporated herein by
      reference.3.7**
              
              Amended
      Bylaws of Zannwell, Inc.10.1**
              
              Zannwell
      Inc. Capital Stock Purchase Agreement, dated November 29,
      2004.10.2
              
              2004
      Amended and Restated Stock Plan, filed as an exhibit to our Registration
      Statement on Form S-8 filed on December 8, 2004(file no. 333-116498) and
      incorporated herein by reference.10.3
              
              2005
      Stock Plans, filed as an exhibit to our Registration Statement on Form S-8
      filed on March 2, 2005 (file no 333-123083) and incorporated herein by
      reference.
  33
 
 10.4
              
              2007
      Stock Plan, filed as an exhibit to our Registration Statement on Form S-8
      filed on June 13, 2007 (file no.333-143702) and incorporated herein by
      reference.10.5
              
              Stock
      Purchase Agreement dated April 24, 2008 by and among Terminus, Inc., The
      Blackhawk Fund, and Palomar Enterprises, Inc., filed as an exhibit to our
      Current Report on Form 8-K filed on April 30, 2008 and incorporated herein
      by reference.10.6
              
              Subscription
      Agreement dated as of April 24, 2008 by and among Terminus, Inc., The
      Blackhawk Fund, and the subscriber set forth on the signature pages
      thereto , filed as an exhibit to our Current Report on Form 8-K filed on
      April 30, 2008 and incorporated herein by reference.10.7
              
              Secured
      Promissory Note dated as of April 24, 2008, filed as an exhibit to our
      Current Report on Form 8-K filed on April 30, 2008 and incorporated herein
      by reference.10.8
              
              Subordinated
      Secured Promissory Note, filed as an exhibit to our Quarterly Report on
      Form 10-Q for the period ended June 30, 2008 and incorporated herein by
      reference.10.9
              
              Settlement
      Agreement between The Blackhawk Fund and Angel Acquisition Corp, filed as
      an exhibit to our Annual Report on Form 10-K filed on April 15, 2008 and
      incorporated herein by reference.10.10
              
              Settlement
      Agreement between The Blackhawk Fund and Debbie Avey, filed as an exhibit
      to our Annual Report on Form 10-K filed on April 15, 2008 and incorporated
      herein by reference.10.11
              
              First
      Amendment to Secured Promissory Note dated as of July 10, 2009, filed as
      an exhibit to our Quarterly Report on Form 10Q for the period ended June
      30, 2009 filed on August 14, 2009 and incorporated herein by
      reference.10.12
              
              2009
      Stock Incentive Plan, filed as an exhibit to our Registration Statement on
      Form S-8 filed on August 14, 2009 and incorporated herein by
      reference.10.13*
              
              Convertible
      Promissory Note dated March 19, 2010.14**
              
              Code
      of Ethics21**
              
              Subsidiaries23.1*
              
              Consent
      of Gruber & Company, LLC,31.1*
              
              Certification
      of Frank Marshik, 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, to be
      filed by amendment32.1*
              
              Certification
      of Frank Marshik, 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, to be filed by
      amendment.
 
 *filed
herewith
 **
Previously Filed
 34
  SIGNATURES
  In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant caused this amended report to be signed on its behalf by the
undersigned, thereunto duly authorized.
  THE
      BLACKHAWK FUNDBy:
                /s/ Francis X. MarshikFrancis X. Marshik, Chairman, Presidentand Chief Executive Officer
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
amended report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.
 
 Signatures
                    
                    Title
                    
                    Date/s/ Francis X. Marshik
                    
                    Chairman
      of the Board, President,
                    
                    April
      15, 2010Francis
      X. Marshik
                    
                    Chief
      Executive Officer
  35