NOTE 10 - COMMITMENTS AND CONTINGENCIES

On November 6, 2023, the Company was notified of a lawsuit filed in Clark County, NV against the Company by GS Capital regarding the unavailability of conversion shares relating to the Promissory Note entered into on October 11, 2021 and the remaining principal balance of $33,682. Shortly after the Plaintiff filed the lawsuit, BlackStar repaid the remaining principal balance. At the outset of the case, a temporary restraining order was entered and required the transfer of 257,000,000 shares of BlackStar’s stock to the Plaintiff to be sold on the open market, which occurred in Q1 and Q2 of 2024. BlackStar has appealed the temporary restraining order to the Nevada Supreme Court and seeks the return of the 257,000,000 shares, among other damages. While the appeal is pending, the Company, through its attorneys, filed an answer to Plaintiff’s complaint and counterclaims against Plaintiff on February 27, 2024. In addition to denying many of the allegations laid out in the lawsuit, the Company invokes several affirmative defenses that bar Plaintiff’s recovery in the action and alleges that Plaintiff breached the terms of the agreement, including, but not limited to, obtaining the conversion of BlackStar’s stock after the Promissory Note was fully paid off. Amongst other claims, the Company alleges that the Plaintiff acted in bad faith and in violation of usury laws by recovering an estimated $600,000 dollars in BlackStar stock off of a $60,000 promissory note, estimated at a roughly 170% interest rate. The Company seeks a judgment in its favor and against Plaintiff, compensatory damages in an amount to be proven at trial, declaratory relief voiding the agreement as illegal under Section 29(b) of the Securities Act, punitive damages in an amount to be proven at trial, interest on all damages, and attorneys’ fees. At an April 22, 2024 hearing, the Plaintiff’s motion to dismiss our counterclaims was denied, and again on July 18, 2024 the Court refused to dismiss BlackStar’s counterclaims against Plaintiff. BlackStar intends to pursue those counterclaims for securities violations. In November 2025, BlackStar and GS Capital entered into a Settlement Agreement and Release with both parties agreeing that the litigation shall be dismissed with prejudice and each party being responsible for its own legal and other costs and expenses related to the matter.

At September 30, 2025, there were no legal proceedings against the Company, other than the beforementioned.