NOTE 7 – CONVERTIBLE NOTES

GS CAPITAL PARTNERS

On October 11, 2021, the Company entered into a financing agreement with GS Capital Partners LLC (“GS Capital”) to borrow $60,000. The note matured on October 11, 2022, bears interest at 8%, with a default rate of 24%, and is convertible at the option of the holder, at any time after 180 days of the date of issuance. The conversion price is to be calculated at 60% of the lowest trading price of the Company’s common stock for the previous 20 trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to the note. There are no warrants or options attached to this note. The Company received net proceeds from the loan of $50,000, after legal and financing fees of $10,000. In August and October 2022, GS Capital made a partial conversion of $20,385 principal and $1,446 of accrued and unpaid interest on the note into 27,531,479 shares of the Company’s common stock at a conversion prices of $0.0012 to $0.00036 per share; in June 2023 made a $5,933 partial conversion, in two tranches, of the principal and accrued interest of $1,267 into 59,998,666 shares of the Company’s common stock at a conversion price of $0.00012 per share; and in November 2023, issued a notice of conversion for a partial conversion of $2,860 principal and $865 of accrued and unpaid interest on the note into 62,084,333 shares of the Company’s common stock at a conversion price of $0.00006 per share. In November 2023, the Company made a cash payment of $51,197 to GS Capital as full satisfaction of the Company’s obligations under the note agreement, recording the payment to principal of $30,822 and accrued interest of $20,375.

In January 2024, GS Capital filed notices of conversion and were issued in three tranches 195,620,499 shares of the Company’s common stock at a price of $0.00006 per share on their note of October 11, 2021. (See Note 5)

SE HOLDINGS LLC

On January 26, 2021, the Company entered into a financing agreement with SE Holdings LLC to borrow $220,000. The note bears interest at 10%, with a default rate of 24%, and is convertible, at any time after the date of issuance. The conversion price is to be calculated at 50% of the average of the three lowest trading prices of the Company’s common stock for the previous twenty trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less

than 4.99% of the total outstanding common stock. There are no warrants or options attached to this note, and the Company has reserved 44,000,000 shares for conversion. Net proceeds from the loan were $177,500, after original issue discount of $20,000 and legal fees and offering costs of $22,500. The Company recorded the conversion feature as a beneficial conversion feature. The fair value of $220,000 for the expense portion of the note was amortized over the original term of the note. This fair value has been determined based on the trading price of the Company’s common stock as of the date of the note. Management has determined that this treatment is appropriate given the uncertain nature of the value of the Company and its stock, and there will be no revaluations until the note is paid or redeemed for stock. The Company has recorded interest on the note at the default rate of 24% from the maturity date of the note through December 31, 2024.

ADAR ALEF, LLC

On April 29, 2021, the Company entered into a financing agreement with Adar Alef, LLC (“Adar Alef”) to borrow $550,000. The note matured on April 29, 2022. bears interest at 10%, with a default rate of 24%, and is convertible at the option of the holder, at any time after the date of issuance. The conversion price is to be calculated at 50% of the average of the three lowest closing bid prices of the Company’s common stock for the previous 20 trading days prior to the date of conversion. The lender agrees to limit the amount of stock received to less than 4.99% of the total outstanding common stock. There are no warrants or options attached to this note, and the Company has reserved 86,105,000 shares for conversion The Company received the net proceeds from the loan of $462,000, after original issue discount, legal fees and offering costs of $88,000. In February and March 2022, Adar Alef elected to make a partial conversion of $76,500 principal and $6,296 of accrued and unpaid interest thereon due on the note, in three tranches, into an aggregate 21,504,766 shares of the Company’s common stock at prices of $0.0023 to $0.0064 per share under the conversion provision and terms of the note agreement.

On April 27, 2022, the Company entered into an Amendment and Abatement Agreement (“Abatement Agreement”) with SE Holdings and Adar Alef (collectively “the Parties”) to address the Company’s default on the two outstanding convertible notes between the Parties, consisting of the remaining $473,500 principal balance to Adar Alef and face amount $220,000 note with SE Holdings. Under the terms of the Abatement Agreement, the Parties agreed to abate the conversion features under the notes for a period of forty-five (45) days from April 15, 2022, with the conversion features resuming no sooner than May 30, 2022. The Company has paid to Adar Alef a total of $50,000 upon execution of the Abatement Agreement for principal, redemption penalty and accrued interest. The remaining principal and accrued interest on the notes to SE Holdings and Adar Alef would be due on May 30, 2022. On May 25, 2022, the Abatement Agreement was extended for an additional thirty (30) days through June 30, 2022, upon an additional payment by the Company of $25,000 to Adar Alef for principal, redemption penalty and accrued interest. In July, August and September 2022, the Company made payments to Adar Alef for additional abatements on the notes for thirty-day periods of an aggregate $70,001 for principal reduction of $45,845, accrued interest of $5,818 and redemption penalty of $18,338.

In November 2023, Adar Alef issued a notice of conversion for a partial conversion of $13,455 principal into 62,100,000 shares of the Company’s common stock at a price of $0.0002167 per share under the conversion provision and terms of the note agreement. The Company has recorded interest on the note at the default rate of 24% from the maturity date of the note through December 31, 2024.

Convertible notes payable at December 31, 2024 and 2023 are summarized as follows:

On January 23, 2024, the managing member of SE Holdings, LLC, individually, and Adar Alef, LLC, also managed by the same individual, as the entity, settled charges with the SEC ordering them, in part, to surrender for cancellation all remaining shares of the Company they obtained through conversion of notes, as well as conversion rights under any remaining convertible notes. The Company is evaluating what this means for the remaining outstanding conversion rights under the two convertible promissory notes held by SE Holdings, LLC ($220,000) and Adar Alef, LLC (original face amount of $550,000), and for the current holdings of Adar Alef, LLC (5,000,000 shares of common stock of BlackStar). The Company is of the opinion that the notes are no longer convertible, but continues to classify the notes as convertible until final determination and settlement amongst the parties is made.