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EX-32.1 - STRATEGIC ACQUISITIONS INC /NV/ex32-1.htm
EX-31.1 - STRATEGIC ACQUISITIONS INC /NV/ex31-1.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-K

 

 

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

 

For the fiscal year ended December 31, 2020

 

[  ] 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: 0-28963

 

 

STRATEGIC ACQUISITIONS, INC.

(Exact name of Registrant as specified in its charter)

 

 

Nevada   13-3506506
(State or other jurisdiction of   (IRS Employer
incorporation or organization)   Identification Number)

 

30 Broad Street, 14th Floor, New York, NY 10004

(Address of principal executive offices, including zip code)

 

(212) 878-6532

(Registrant’s telephone number, including area code)

 

 

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

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock

(Title of class)

 

 

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

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [  ] No [X]

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 days. Yes [X] No [  ]

 

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

 

Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [X]
  Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [X] No [  ]

 

As of June 30, 2020, the aggregate market value of the Common Stock held by non-affiliates of the registrant was approximately $44,000, based upon the closing bid price of the registrant’s Common Stock on such date, as reported by Bloomberg, LP. Shares of Common Stock held by each executive officer, director and each person owning more than 10% of the outstanding Common Stock of the registrant have been excluded in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

 

As of March 31, 2021, the registrant had 2,515,000 shares of common stock outstanding.

 

 

 

 
 

 

STRATEGIC ACQUISITIONS, INC.

 

TABLE OF CONTENTS

 

  Page
PART I  
     
  ITEM 1 — Business 3
     
  ITEM 2 — Properties 9
     
  ITEM 3 — Legal Proceedings 9
     
  ITEM 4 — Mine Safety Disclosures 9
     
PART II  
     
  ITEM 5 — Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 10
     
  ITEM 6 — Selected Financial Data 10
     
  ITEM 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations 11
     
  ITEM 8 — Financial Statements and Supplementary Data 12
     
  ITEM 9 — Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 23
     
  ITEM 9A — Controls and Procedures 23
     
  ITEM 9B — Other Information 23
     
PART III  
     
  ITEM 10 — Directors, Executive Officers and Corporate Governance 24
     
  ITEM 11 — Executive Compensation 25
     
  ITEM 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 25
     
  ITEM 13 — Certain Relationships and Related Transactions, and Director Independence 26
     
  ITEM 14 — Principal Accounting Fees and Services 27
     
PART IV  
     
  ITEM 15 — Exhibits, Financial Statement Schedules 28
     
SIGNATURES 29

 

1
 

 

PART I

 

FORWARD-LOOKING STATEMENTS

 

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements include statements regarding our expectations, hopes or intentions regarding the future, including but not limited to, statements regarding our strategy and business plan, our compliance with laws and regulations, our beliefs regarding the applicability of tax regulations and positions and our expectations regarding the impact of accounting pronouncements.

 

Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Factors that could cause actual results to differ materially from such forward-looking statements include the risks described under the heading “Business” in Part I, Item 1 of this report. All forward-looking statements in this document are made as of the date hereof, based on information available to us as of the date hereof, and, except as otherwise required by law, we assume no obligation to update any forward-looking statement or other information contained herein to reflect new information, events or circumstances after the date hereof.

 

***

 

2
 

 

ITEM 1. BUSINESS

 

Strategic Acquisitions, Inc. (the “Company” or “Strategic”) was incorporated under the laws of the State of Nevada on January 27, 1989. Since inception the Company had no revenues other than nominal interest income. As of the date hereof, the Company has no commercial operations, has no full- or part-time employees, and owns no real estate.

 

The Company’s current business plan is to seek, investigate, and, if warranted, acquire a business, and to pursue other related activities intended to enhance shareholder value. The acquisition of a business opportunity may be made by purchase, merger, exchange of stock, or otherwise, and may encompass assets or a business entity, such as a corporation, joint venture, or partnership. The Company has limited capital, and it is unlikely that the Company will be able to take advantage of more than one such business opportunity. The Company intends to seek opportunities demonstrating the potential of long-term growth as opposed to short-term earnings.

 

At the present time the Company has not identified any business opportunity that it plans to pursue, nor has the Company reached any agreement or definitive understanding with any person concerning an acquisition.

 

No assurance can be given that the Company will be successful in finding or acquiring a desirable business opportunity, given that limited funds are available for acquisitions, or that any acquisition that occurs will be on terms that are favorable to the Company or its stockholders.

 

The Company’s search will be directed toward small and medium-sized enterprises which have a desire to become public corporations and which are able to satisfy, or anticipate in the reasonably near future being able to satisfy, the minimum asset requirements in order to qualify shares for trading on NASDAQ or another stock exchange.

 

The Company anticipates that the business opportunities presented to it will (i) be recently organized with no operating history, or a history of losses attributable to under-capitalization or other factors; (ii) be experiencing financial or operating difficulties; (iii) be in need of funds to develop a new product or service or to expand into a new market; (iv) be relying upon an untested product or marketing concept; or (v) have a combination of the characteristics mentioned in (i) through (iv) above. The Company intends to concentrate its acquisition efforts on properties or businesses that it believes to be undervalued. Given the above factors, investors should expect that any acquisition candidate may have a history of losses or low profitability.

 

The Company does not propose to restrict its search for investment opportunities to any particular geographical area or industry, and may, therefore, engage in essentially any business, to the extent of its limited resources. The Company’s discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions, and other factors.

 

In connection with such a merger or acquisition, it is highly likely that an amount of stock constituting control of the Company would be issued by the Company or purchased from the current principal shareholders of the Company by the acquiring entity or its affiliates. If stock is purchased from the current shareholders, the transaction is very likely to result in substantial gains to them relative to their purchase price for such stock. In the Company’s judgment, none of its officers and directors would thereby become an “underwriter” within the meaning of the Section 2(11) of the Securities Act of 1933, as amended (the “Act”).

 

It is anticipated that business opportunities will come to the Company’s attention from various sources, including its officers and directors, its other stockholders, professional advisors such as attorneys and accountants, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals. The Company has no plans, understandings, agreements, or commitments with any individual for such person to act as a finder of opportunities for the Company, although its officers, directors and significant shareholders seek out such opportunities and respond to unsolicited proposals in their ordinary course of business.

 

3
 

 

The Company does not foresee that it would enter into a merger or acquisition transaction with any business with which its officers or directors are currently affiliated. Should the Company determine in the future, contrary to foregoing expectations, that a transaction with an affiliate would be in the best interests of the Company and its stockholders, the Company is in general permitted by Nevada law to enter into such a transaction if:

 

1. The material facts as to the relationship or interest of the affiliate and as to the contract or transaction are disclosed or are known to the Board of Directors, and the Board in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors constitute less than a quorum; or

 

2. The material facts as to the relationship or interest of the affiliate and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

 

3. The contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors or the stockholders.

 

Investigation and Selection of Business Opportunities

 

To a large extent, a decision to participate in a specific business opportunity may be made upon management’s analysis of the quality of the other company’s management and personnel, the anticipated acceptability of new products or marketing concepts, the merit of technological changes, and numerous other factors which are difficult, if not impossible, to analyze through the application of any objective criteria. In many instances, it is anticipated that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of the possible need to shift marketing approaches substantially, expand significantly, change product emphasis, change or substantially augment management, or make other changes. The Company will be dependent upon the owners of a business opportunity to identify any such problems which may exist and to implement, or be primarily responsible for the implementation of, required changes. Because the Company may participate in a business opportunity with a newly organized firm or with a firm which is entering a new phase of growth, it should be emphasized that the Company will incur further risks, because management in many instances will not have proven its abilities or effectiveness, the eventual market for such company’s products or services will likely not be established, and such company may not be profitable when acquired.

 

It is anticipated that the Company will not be able to diversify, but will essentially be limited to only one venture because of the Company’s limited financing. This lack of diversification will not permit the Company to offset potential losses from one business opportunity against profits from another, and should be considered an adverse factor affecting any decision to purchase the Company’s securities.

 

It is emphasized that management of the Company may effect transactions having a potentially adverse impact upon the Company’s shareholders pursuant to the authority and discretion of the Company’s management to complete acquisitions without submitting any proposal to the stockholders for their consideration. Holders of the Company’s securities should not anticipate that the Company necessarily will furnish such holders, prior to any merger or acquisition, with financial statements, or any other documentation, concerning a target company or its business. In some instances, however, the proposed participation in a business opportunity may be submitted to the stockholders for their consideration, either voluntarily by such directors, to seek the stockholders’ advice and consent, or because state law so requires.

 

The analysis of business opportunities will be undertaken by or under the supervision of the Company’s officers and directors. Although there are no current plans to do so, Company management might also hire an outside consultant to assist in the investigation and selection of business opportunities, and might pay a finder’s fee. Since Company management has no current plans to use any outside consultants or advisors to assist in the investigation and selection of business opportunities, no policies have been adopted regarding use of such consultants or advisors, the criteria to be used in selecting such consultants or advisors, the services to be provided, the term of service, or regarding the total amount of fees that may be paid. However, because of the limited resources of the Company, it is likely that any such fee would be paid in stock and not in cash.

 

4
 

 

In assessing a potential transaction, the Company anticipates that it will consider, among other things, the following factors:

 

1. Potential for growth and profitability, indicated by new technology, anticipated market expansion, or new products;

 

2. The Company’s perception of how any particular business opportunity will be received by the investment community and by the Company’s stockholders;

 

3. Whether, following the business combination, the financial condition of the business opportunity would be, or would have a significant prospect in the foreseeable future of becoming sufficient to enable the securities of the Company to qualify for trading in the over-the-counter markets or listing on a securities exchange;

 

4. Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements, or from other sources;

 

5. The extent to which the business opportunity can be advanced;

 

6. Competitive position as compared to other companies of similar size and experience within the industry;

 

7. Strength and diversity of existing management, or management prospects that are scheduled for recruitment; and

 

8. The accessibility of required management expertise, personnel, raw materials, services, professional assistance, and other required items.

 

No one of the factors described above will be controlling in the selection of a business opportunity, and management will attempt to analyze all factors appropriate to each opportunity and make a determination based upon reasonable investigative measures and available data. Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Potential investors must recognize that, because of the Company’s limited capital available for investigation and management’s limited experience in business analysis, the Company may not discover or adequately evaluate adverse facts about the opportunity to be acquired. It should be noted that the Company has not completed a transaction in over twenty years of its existence.

 

The Company is unable to predict when it may participate in a business opportunity. It expects, however, that the analysis of specific proposals, if and when any are received, and the selection of a business opportunity may take several months or more.

 

The Company has no business proposals under consideration as of the date of this annual report.

 

5
 

 

Prior to making a decision to participate in a business opportunity, the Company will generally request that it be provided with written materials regarding the business opportunity containing such items as a description of products, services and company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or services marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such company and its affiliates during relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if they are not available, unaudited financial statements, together with reasonable assurances that audited financial statements would be able to be produced prior to completion of a merger transaction; and other information deemed relevant.

 

As part of the Company’s investigation, the Company’s executive officers and directors may meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company’s limited financial resources and management expertise.

 

Company management believes that various types of potential merger or acquisition candidates might find a business combination with the Company to be attractive. These include acquisition candidates desiring to create a public market for their shares in order to enhance liquidity for current shareholders, acquisition candidates which have long-term plans for raising capital through the public sale of securities and believe that the possible prior existence of a public market for their securities would be beneficial, and acquisition candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the possibility of development of a public market for their securities will be of assistance in that process. Acquisition candidates which have a need for an immediate cash infusion are not likely to find a potential business combination with the Company to be an attractive alternative.

 

Form of Acquisition

 

It is impossible to predict the manner in which the Company may participate in a business opportunity. Specific business opportunities will be reviewed as well as the respective needs and desires of the Company and the promoters of the opportunity and, upon the basis of that review and the relative negotiating strength of the Company and such promoters, the legal structure or method deemed by management to be suitable will be selected. Such structure may include, but is not limited to leases, purchase and sale agreements, licenses, joint ventures and other contractual arrangements. The Company may act directly or indirectly through an interest in a partnership, corporation or other form of organization. Implementing such structure may require the merger, consolidation or reorganization of the Company with other corporations or forms of business organization, and although it is likely, there can be no assurance that the Company would be the surviving entity. In addition, the present management and stockholders of the Company most likely will not have control of a majority of the voting shares of the Company following a reorganization transaction. As part of such a transaction, the Company’s existing directors may resign and new directors may be appointed without any vote by stockholders.

 

6
 

 

It is likely that the Company will acquire its participation in a business opportunity through the issuance of common stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called “tax free” reorganization under the Internal Revenue Code of 1986 (the “Internal Revenue Code”), depends upon the issuance to the stockholders of the acquired company of a controlling interest (i.e., 80% or more) of the common stock of the combined entities immediately following the reorganization. If a transaction were structured to take advantage of these provisions rather than other “tax free” provisions provided under the Internal Revenue Code, the Company’s current stockholders would retain in the aggregate 20% or less of the total issued and outstanding shares. This could result in substantial additional dilution in the equity of those who were stockholders of the Company prior to such reorganization. Any such issuance of additional shares might also be done simultaneously with a sale or transfer of shares representing a controlling interest in the Company by the current officers, directors and principal shareholders.

 

It is anticipated that any new securities issued in any reorganization would be issued in reliance upon exemptions, if any are available, from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of the transaction, the Company may agree to register such securities either at the time the transaction is consummated, or under certain conditions or at specified times thereafter. The issuance of substantial additional securities and their potential sale into any trading market that might develop in the Company’s securities may have a depressive effect upon such market.

 

The Company will participate in a business opportunity only after the negotiation and execution of a written agreement. Although the terms of such agreement cannot be predicted, generally such an agreement would require specific representations and warranties by all of the parties thereto, specify certain events of default, detail the terms of closing and the conditions which must be satisfied by each of the parties thereto prior to such closing, outline the manner of bearing costs if the transaction is not closed, set forth remedies upon default, and include miscellaneous other terms.

 

As a general matter, the Company anticipates that it, and/or its officers and principal shareholders will enter into a letter of intent with the management, principals or owners of a prospective business opportunity prior to signing a binding agreement. Such a letter of intent will set forth the terms of the proposed acquisition but will not bind any of the parties to consummate the transaction. Execution of a letter of intent will by no means indicate that consummation of an acquisition is probable. Neither the Company nor any of the other parties to the letter of intent will be bound to consummate the acquisition unless and until a definitive agreement concerning the acquisition as described in the preceding paragraph is executed. Even after a definitive agreement is executed, it is possible that the acquisition would not be consummated should any party elect to exercise any right provided in the agreement to terminate it on specified grounds.

 

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision were made not to participate in a specific business opportunity, the costs theretofore incurred in the related investigation would not be recoverable. Moreover, because many providers of goods and services require compensation at the time or soon after the goods and services are provided, the inability of the Company to pay until an indeterminate future time may make it impossible to procure goods and services.

 

An acquisition made by the Company may be in an industry which is regulated or licensed by federal, state or local authorities. Compliance with such regulations can be expected to be a time-consuming and expensive process.

 

7
 

 

Competition

 

The Company expects to encounter substantial competition in its efforts to locate attractive opportunities, primarily from business development companies, venture capital partnerships and corporations, venture capital affiliates of large industrial and financial companies, small investment companies, and wealthy individuals. Many of these entities will have significantly greater experience, resources and managerial capabilities than the Company and will therefore be in a better position than the Company to obtain access to attractive business opportunities. The Company also will possibly experience competition from other public “Blank Check” companies, some of which may have more funds available than does the Company.

 

No Rights of Dissenting Shareholders

 

The Company does not intend to provide its shareholders with disclosure documentation concerning a possible target company prior to acquisition, because the Nevada Business Corporation Act vests authority in the board of directors to decide and approve matters involving acquisitions within certain restrictions. If any transaction is structured as an acquisition, not a merger, with the Company being the parent company and the acquire being merged into a wholly owned subsidiary, a shareholder will have no right of dissent under Nevada law.

 

Employees

 

The Company has no employees. Management of the Company expects to use consultants, attorneys and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as it is seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities. The Company has periodically paid its Secretary/Treasurer for services in bookkeeping, recordkeeping, filing tax forms and filing of reports with the SEC. The Company has also recently paid a director and an entity controlled by the Company’s President for consulting services in connection with evaluating certain business opportunities on behalf of the Company. Although there is no current plan with respect to its nature or amount, additional remuneration may be paid to or accrued for the benefit of, the Company’s officers or directors prior to, or in conjunction with, the completion of a business acquisition for services actually rendered.

 

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

 

8
 

 

ITEM 2. PROPERTIES

 

The Company has no property. The Company has a month-to-month lease to rent office space at 30 Broad Street, New York, NY 10004.

 

ITEM 3. LEGAL PROCEEDINGS

 

The Company is not a party to any legal proceedings, and no such proceedings are known to be contemplated.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

***

 

9
 

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

There is a limited public trading market for the Company’s shares of common stock, under the symbol STQN. The shares are traded on the OTC Pink marketplace. The following table shows the quarterly high and low bid prices during 2019 and 2020 as reported by Bloomberg, LP. These are the inter-dealer bid quotations, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.

 

  

Inter-dealer bid quotations for

Common Stock

 
   High   Low 
Year Ended December 31, 2020          
First Quarter  $0.151   $0.12 
Second Quarter   0.18    0.10 
Third Quarter   0.21    0.05 
Fourth Quarter   0.165    0.151 
Year Ended December 31, 2019          
First Quarter  $0.40   $0.40 
Second Quarter   0.40    0.40 
Third Quarter   0.40    0.40 
Fourth Quarter   0.40    0.13 

 

As of February 25, 2021, there were approximately 55 holders of record and 80 beneficial owners of the Company’s common stock.

 

The Board of Directors has never declared a dividend and the Company does not anticipate paying dividends at any time in the foreseeable future. Also, in the event of the acquisition of a business by the Company, control of the Company and its Board of Directors may pass to others and the payment of dividends would be wholly dependent upon the decisions of such persons.

 

The Company does not have an equity compensation plan.

 

The Company did not repurchase any equity securities during the last fiscal year.

 

ITEM 6. SELECTED FINANCIAL DATA

 

Not applicable. As a smaller reporting company, we are not required to provide the information otherwise required by this item.

 

10
 

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations together with the accompanying financial statements and related notes thereto included elsewhere in this report.

 

Liquidity and Capital Resources

 

At December 31, 2020, the Company had liquid assets in the form of cash of $19,530 and prepaid expense in the amount of $500 and liabilities of $205. This compares to cash of $64,615 and prepaid expense in the amount of $1,750 and liabilities of $0 as of December 31, 2019. The Company’s decrease in assets over the period was due to expenses incurred in maintaining the Company’s public status and seeking a suitable acquisition/merger candidate.

 

The Company had no material commitments for capital expenditures at December 31, 2020.

 

Results of Operations

 

The Company has not realized any revenues from operations in the past two years, and its plan of operation for the next twelve months shall be to continue its efforts to locate a suitable acquisition/merger candidate.

 

It is unlikely the Company will have any revenue, other than interest income, unless it is able to effect an acquisition of or merger with an operating company, of which there can be no assurance.

 

For the years ended December 31, 2020 and 2019, the Company showed net losses of $46,540 and $87,464, respectively. The decrease in net loss was due primarily to decreased related party expenses, including rent expense as the Company changed office locations and consulting fees as there was less activity given the COVID-19 pandemic.

 

Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements.

 

***

 

11
 

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

INDEX TO FINANCIAL STATEMENTS

 

Financial Statements and Supplementary Data  
   
Reports of independent registered public accounting firms 13
   
Balance Sheets at December 31, 2020 and 2019 15
   
Statements of Operations for the Years Ended December 31, 2020 and 2019 16
   
Statements of Stockholders’ Equity for the Years Ended December 31, 2020 and 2019 17
   
Statements of Cash Flows for the Years Ended December 31, 2020 and 2019 18
   
Notes to Financial Statements 19

 

12
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Stockholders of Strategic Acquisitions, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of Strategic Acquisitions, Inc. (the “Company”) as of December 31, 2020 and the related statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

 

Critical Audit Matters

 

The critical audit matters communicated below “Going Concern” are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

The principal considerations for our determination that performing procedures relating to the Company’s ability to continue as a going concern is a critical audit matter are there was significant judgment by management in determining the Company’s ability to continue as a going concern. This in turn led to significant auditor judgement, subjectivity, and effort in performing procedures to evaluate the estimate of the nature, frequency, and costs of future claims, and the audit effort involved the use of professionals with specialized skill and knowledge.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has no revenues, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, 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.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

/s/ Berkower LLC  
   
We have served as the Company’s auditor since 2020  
Iselin, NJ  
March 31, 2021  

 

13
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and

Stockholders of Strategic Acquisitions, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of Strategic Acquisitions, Inc. (the “Company”) as of December 31, 2019 and the related statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has no revenues, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, 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.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Prager Metis CPAs, LLC  
   
We have served as the Company’s auditor since 2019  
Las Vegas, NV  
April 14, 2020  

 

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STRATEGIC ACQUISITIONS, INC.

BALANCE SHEETS

 

   December 31, 2020   December 31, 2019 
ASSETS          
Current assets:          
Cash  $19,530   $64,615 
Prepaid expense   500    1,750 
Total current assets   20,030    66,365 
Total assets  $20,030   $66,365 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $205   $- 
Total current liabilities   205    - 
Total liabilities   205    - 
Stockholders’ equity:          
Common stock, $0.001 par value; 50,000,000 shares authorized; 2,515,000 shares issued and outstanding   2,515    2,515 
Additional paid-in capital   535,888    535,888 
Accumulated deficit   (518,578)   (472,038)
Total stockholders’ equity   19,825    66,365 
Total liabilities and stockholders’ equity  $20,030   $66,365 

 

The accompanying notes are an integral part of these financial statements.

 

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STRATEGIC ACQUISITIONS, INC.

STATEMENTS OF OPERATIONS

 

   Years Ended December 31, 
   2020   2019 
Revenues  $-   $- 
           
Expenses          
General & Administrative   22,301    17,981 
General & Administrative – related party   24,250    69,550 
Total Expenses   46,551    87,531 
           
Other Income          
Interest Income   11    67 
Total Other Income   11    67 
           
Net loss before provision for taxes  (46,540)  (87,464)
Income tax provision   -    - 
Net loss  $(46,540)  $(87,464)
           
Net Loss Per Common Share – Basic & Fully Diluted  $(0.02)  $(0.03)
           
Weighted average number of shares of common stock outstanding – Basic & Fully Diluted   2,515,000    2,515,000 

 

The accompanying notes are an integral part of these financial statements.

 

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STRATEGIC ACQUISITIONS, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2020 AND 2019

 

                     
           Additional       Total 
   Common Stock   Paid-in   Accumulated   Stockholders’ 
   Outstanding   Amount   Capital   Deficit   Equity 
Balance at December 31, 2018   2,515,000   $2,515   $535,888   $(384,574)  $153,829 
Net Loss, December 31, 2019                  (87,464)   (87,464)
Balance at December 31, 2019   2,515,000    2,515    535,888    (472,038)   66,365 
Net Loss, December 31, 2020                  (46,540)   (46,540)
Balance at December 31, 2020   2,515,000   $2,515   $535,888   $(518,578)  $19,825 

 

The accompanying notes are an integral part of these financial statements.

 

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STRATEGIC ACQUISITIONS, INC.

STATEMENTS OF CASH FLOWS

 

   Years Ended December 31, 
   2020   2019 
Cash Flows From Operating Activities          
Net loss  $(46,540)  $(87,464)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Increase (Decrease) in accounts payable   205      
(Increase) Decrease in prepaid rent – related party   -    1,750 
(Increase) Decrease in security deposit – related party   -    3,500 
(Increase) Decrease in prepaid expense   1250    (1,750)
Net cash provided by (used in) operating activities   (45,085)   (83,964)
Net increase (decrease) in cash   (45,085)   (83,964)
Cash at beginning of the period   64,615    148,579 
Cash at end of the period  $19,530   $64,615 

 

The accompanying notes are an integral part of these financial statements.

 

18
 

 

STRATEGIC ACQUISITIONS, INC.

 

NOTES TO FINANCIAL STATEMENTS

 

Note 1. Significant Accounting Policies and Procedures

 

Organization

 

The Company was organized January 27, 1989 (Date of Inception) under the laws of the State of Nevada, as Strategic Acquisitions, Inc.

 

Since inception, the Company has not engaged in any business other than organizational efforts, the sale of stock, and the evaluation of potential acquisition targets. It has no full-time employees and owns no real property. The Company intends to seek to acquire one or more existing businesses that have existing management, through merger or acquisition. Management of the Company will have virtually unlimited discretion in determining the business activities in which the Company might engage.

 

No assurance can be given that the Company will be successful in finding or acquiring a desirable business opportunity, given that limited funds are available for acquisitions, or that any acquisition that occurs will be on terms that are favorable to the Company or its stockholders.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash

 

The Company maintains a cash balance in an interest-bearing account that currently does not exceed federally insured limits.

 

Concentration of Credit Risk

 

At December 31, 2020, and 2019, the Company maintained all of its cash in one commercial bank. The Company has not experienced any losses on such accounts.

 

Start-Up Costs

 

ASC 720-15, “Start-Up Costs,” which provides guidance on the financial reporting of start-up costs and organizational costs, requires costs of start-up activities and organizational costs to be expensed as incurred.

 

Loss Per Share

 

Net loss per share is provided in accordance with ASC 260, “Earnings Per Share”. Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. The Company had no dilutive common stock equivalents, such as stock options or warrants, as of December 31, 2020 and December 31, 2019.

 

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Fair Value of Financial Instruments

 

The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

 

Level 1 - Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurable date

 

Level 2 - Inputs, other than quoted prices included in Level 1, that are observable for the asset or liability through coorboration with market data at the measurement date

 

Level 3 - Unobservable inputs that reflect management’s best estimate of what participants would use in pricing the asset or liability at the measurement date

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2020. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

 

Income Taxes

 

The Company follows ASC 740, “Income Taxes” for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

 

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as non-current. The Company will recognize interest and penalties related to uncertain tax positions as a component of income tax expense.

 

As of December 31, 2020, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations.

 

Recently Issued Accounting Pronouncements

 

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. All other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

 

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Note 2. Income Taxes

 

The Company accounts for income taxes under ASC 740, “Income Taxes”, which requires use of the liability method. ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate of 21% to income before provision for income taxes. The sources and tax effects of the differences are as follows:

 

U.S. federal statutory rate   (21.0%)
Valuation reserve   21.0%
Total   -%

 

The tax effects of temporary differences that give rise to the Company’s net deferred tax assets are as follows:

 

   December 31, 
   2020   2019 
Net Operating Loss carryforward  $94,407   $90,465 
Valuation allowance   (94,407)   (90,465)
Net deferred tax asset  $-   $- 

 

As of December 31, 2020, the Company has a net operating loss carryforward of approximately $450,000 for tax purposes, which it expects to be available to offset future taxable income. If not used, the portion of the carryforward for tax years prior to 2018 will expire between 2021 and 2037. The carryforward for tax years after 2018 can be carried forward indefinitely and can offset up to 80% of taxable income. Management has provided a full valuation allowance of all deferred tax assets relating to net operating loss carryforwards as of December 31, 2020. The availability of this operating loss to offset future earnings may be limited under the change of control provisions of Internal Revenue Code Section 381. For the years ended December 31, 2020 and 2019, the valuation allowance increased by approximately $4,000 and $17,000, respectively.

 

Management has concluded that the Company has no uncertain tax positions requiring disclosure pursuant to ASC 740. The tax years open for audit are 2017 to 2020.

 

Note 3. Related Party Transactions

 

The Company previously rented office space on a month-to-month basis from Westminster Securities Corp., an entity controlled by the Company’s President, John O’Shea, at the rate of $3,500 per month. Effective May 15, 2019, the rental agreement terminated. The security deposit of $3,500 was applied to the final month’s rent. The total related party rent expense was $0 for 2020 and $15,750 for 2019.

 

The Company paid compensation to certain officers and directors or their affiliates for services in connection with identifying and evaluating potential business opportunities and maintaining the Company’s financial statements and regulatory status in good standing. The total paid during 2020 to related parties was: $750 to Westminster Securities Corp., $19,000 to Jonathan Braun, a director of the Company, and $4,500 to Marika Tonay, an officer and director of the Company. In 2019, the total was: $1,800 to Westminster Securities Corp., $47,500 to Jonathan Braun and $4,500 to Marika Tonay.

 

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

 

21
 

 

Note 4. Stockholders’ Equity

 

The Company is authorized to issue 50,000,000 shares of its $0.001 par value Common Stock.

 

There were no issuances of Common Stock during the years ended December 31, 2020 and December 31, 2019.

 

Note 5. Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any revenue since inception, incurred accumulated losses of approximately $520,000 for the period from January 27, 1989 (Inception) through December 31, 2020 and has commenced limited operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include that the Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.

 

The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Note 6. Subsequent Events

 

Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were available to be issued.

 

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Additionally, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure.

 

Management’s Report on Internal Control Over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) of the Securities Exchange Act of 1934, as amended. A company’s internal control over financial reporting is a process designed by the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and includes those policies and procedures that:

 

  pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
  provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and directors; and
  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Management, including the President/Principal Financial Officer and Secretary/Treasurer, has conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. Management’s evaluation of the effectiveness of the Company’s internal control over financial reporting is based on the framework described in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

 

Based on its assessment, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2020, with the following aspect being noted as a potential material weakness:

 

  Lack of segregation of duties

 

This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this Annual Report.

 

This report shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Changes in Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting during the quarter ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

None.

 

23
 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The following is a list of directors and executive officers of the Company as of December 31, 2020, their ages and all positions held by each of them during the past five years.

 

Jonathan Braun, 70, is the Company’s Chairman of the Board and a director since 2017. Mr. Braun has been President of NextCoal International, Inc. since 2012. Since 2017, he is also President of the nonprofit American Jewish Japan Society. He has been a member of the board of directors of Prometheum, Inc. since January 2021, Acting President of Phinmed IP, Inc. since 2020, a Manager of ST Oil Company, LLC since 2020 and a Vice President of Adirondack Holdings and Supply Corp since 2015. Mr. Braun holds an MS from Columbia University’s Graduate School of Journalism and a BA in Political Science from the City College of New York, graduating Phi Beta Kappa, Magna Cum Laude.

 

John P. O’Shea, 64, is the Company’s President and a director since 2004. Mr. O’Shea has been Chairman of Global Alliance Securities LLC since 2010. Since 1997, Mr. O’Shea has been an officer and director of Westminster Securities Corp, currently as Chairman, CEO and Director. Previously he was a non-executive director of BlueRock Energy Holdings, Inc. from 2007 to 2018. Mr. O’Shea holds a BA and MA in Economics from the University of Cincinnati.

 

Marika Xirouhakis Tonay, 40, is the Company’s Secretary/Treasurer and a director since 2004. Ms. Tonay has been registered with a FINRA-member firm since January 2012, currently as a Senior Compliance Manager. She attended New York University, Stern School of Business, graduating Magna Cum Laude with a BS in Finance and Management.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Each of the Company’s officers, directors and beneficial owners of more than 10% of its common stock is in compliance with Section 16(a) of the Exchange Act.

 

Code of Ethics

 

The Company has adopted a code of ethics which applies to its principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions. A copy of this code of ethics was previously included as an exhibit to our annual report on Form 10-KSB for the fiscal year ended December 31, 2005. We will also provide a copy of our code of ethics, without charge, to any person who requests it by contacting us via mail, telephone or facsimile transmission.

 

Corporate Governance

 

There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s board of directors.

 

The Company is not a listed issuer and therefore is not required to have a separately-designated standing audit committee, nor an audit committee financial expert. The entire board of directors of the Company serves as its audit committee.

 

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ITEM 11. EXECUTIVE COMPENSATION

 

The Company has no employees and does not pay any salary or bonus to officers, or director fees to directors. During the fiscal year, the Company issued payment to officers and directors of the Company, or their affiliates, for invoiced services in connection with maintaining the Company’s public status and seeking business opportunities, as disclosed in Item 13 “Certain Relationships and Related Transactions”. Each of the Company’s officers may from time to time be reimbursed for out-of-pocket expenses incurred on behalf of the Company. The Company has no stock option, retirement, pension, or profit-sharing programs for the benefit of directors, officers or other employees, but the Board of Directors may recommend adoption of one or more such programs in the future.

 

Compensation Committee Interlocks and Insider Participation

 

The Company has no compensation committee. Its officers, John O’Shea and Marika Tonay, and director Jonathan Braun, participate in deliberations of the board of directors concerning executive officer compensation.

 

Compensation Committee Report

 

There was no Compensation Discussion and Analysis prepared during the fiscal year, as there was no compensation awarded by the Company during such time. The board of directors performs the functions of the compensation committee.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth, as of February 25, 2021, the number of shares of common stock owned of record and beneficially by executive officers, directors and any person who is the beneficial owner of more than 5% of the Company’s common stock. Also included are the shares held by all executive officers and directors as a group. The Company does not have outstanding any shares of preferred stock, any other securities convertible into common stock, or any options or warrants to acquire common stock.

 

Name and Address of Beneficial Owner  Number of Shares Owned Beneficially   Percent of Class 
John P. O’Shea
2464 Darts Cove Way
Charleston, SC 29466
   604,800    24.04%

Marika X. Tonay

c/o Strategic Acquisitions

30 Broad Street, 14th Floor

New York, NY 10004

   14,000    0.56%
All directors and executive officers as a group (2 persons)   618,800    24.60%
NextCoal International, Inc.
1459 Shunpike Road
Cambridge, NY 12816
   1,650,000    65.61%

 

John P. O’Shea and Marika X. Tonay each have sole investment power and sole voting power over their shares owned.

 

Jonathan Braun, President of NextCoal, has sole investment power and sole voting power over NextCoal’s shares owned. Jonathan Braun is also a Director of the Company.

 

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Transactions with Related Persons

 

During 2020, the Company issued payment for invoiced services to related parties as follows: $750 to Westminster Securities Corp., an entity controlled by John O’Shea, and $19,000 to Jonathan Braun, a Director, each for services relating to identifying and evaluating potential merger or acquisition candidates; and $4,500 to Marika Tonay, its Secretary/Treasurer, for services relating to preparing and filing financial and regulatory documentation.

 

Promoters and Certain Control Persons

 

NextCoal International, Inc. (“NCI”) acquired control of the Company on October 19, 2017. Jonathan Braun, President of NCI, is a Director of the Company. NCI acquired control in the following series of transactions, purchased with personal funds. All purchases were of restricted shares of the Company’s Common Stock.

 

125,000 shares purchased from an existing shareholder in a private transaction in December 2016.

 

125,000 and an additional 625,000 newly issued shares purchased from the Company in a private placement, at $0.40 per share in October 2017.

 

750,000 shares purchased from an existing shareholder in a private transaction in October 2017.

 

25,000 shares purchased from an existing shareholder in a private transaction in April 2018.

 

Following these transactions, NCI was the owner of 1,650,000 shares of common stock, or 65.6% of outstanding shares. No promoter was involved in any of these transactions.

 

Director Independence

 

The Company does not have any independent directors. Two of the Company’s directors are also executive officers of the Company, and the third director is President of the Company’s majority shareholder. The Company is not a listed issuer and is not required by any securities exchange or quotation system to have independent directors. There are no transactions, relationships or arrangements with any director undertaken or considered during the Company’s last two fiscal years, other than as discussed above under “Transactions with Related Persons” and “Promoters and Certain Control Persons”.

 

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

(1) Audit Fees

 

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountants for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Q (17 CFR 249.308b) or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were: $4,000 for the fiscal year ended December 31, 2020 to Berkower LLC; $7,055.45 for the fiscal year ended December 31, 2020 and $5,250 for the fiscal year ended December 31, 2019 to Prager Metis CPAs LLC; and $1,000 for the fiscal year ended December 31, 2020 and $4,546 for the fiscal year ended December 31, 2019 to AMC Auditing.

 

(2) Audit-Related Fees

 

There have been no fees billed in either of the last two fiscal years for assurance and related services by the principal accountant.

 

(3) Tax Fees

 

There have been no fees billed in either of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, or tax planning.

 

(4) All Other Fees

 

There have been no fees billed in either of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above.

 

(5) Pre-Approval Policies and Procedures

 

Before the principal accountant is engaged by the Company to render audit or non-audit services, the engagement is approved by the Company’s Board of Directors acting as the audit committee.

 

27
 

 

PART IV

 

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

(a) The following documents are filed as part of this report:

 

(1) Financial Statements – See Part II, Item 8
   
(2) Financial Statement Schedules – None
   
(3) Exhibits. The following exhibits are filed with this Report or incorporated by reference:

 

EXHIBIT LIST

 

Exhibit
Number
  Description
     
31.1   Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32.1   Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

  STRATEGIC ACQUISITIONS, INC.
  (Registrant)
     
Date: March 31, 2021 By: /s/ JOHN P. O’SHEA
    John P. O’Shea
   

President and

Principal Financial Officer

 

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

 

Signature   Title   Date
         
/s/ JOHN P. O’SHEA   President, Director   March 31, 2021
John P. O’Shea   (Principal Executive Officer and Principal Financial Officer)    
         
/s/ MARIKA X. TONAY   Secretary, Treasurer, Director   March 31, 2021
Marika X. Tonay        
         
/s/ JONATHAN BRAUN   Director   March 31, 2021
Jonathan Braun        

 

***

 

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