Strategic Acquisitions Inc 10-Q for FY2022 Q3
Strategic Acquisitions Inc (STQN)
About this 10-Q
Strategic Acquisitions Inc filed this 10-Q on November 14, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).
Headline figures
Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $72.6K
- compared with a net loss of $4627 a year earlier
- Diluted EPS
- -$0.03
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| 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:
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification Number) |
(Address of principal executive offices, including zip code)
(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: | |
| (Title of class) |
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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
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 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
As of November 10, 2022, the registrant had shares of common stock outstanding.
STRATEGIC ACQUISITIONS, INC.
TABLE OF CONTENTS
| 1 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STRATEGIC ACQUISITIONS, INC.
BALANCE SHEETS
September 30, 2022 (Unaudited) | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Total current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| 2 |
STRATEGIC ACQUISITIONS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Expenses | ||||||||||||||||
| General & Administrative | ||||||||||||||||
| General & Administrative – related party | ||||||||||||||||
| General & Administrative – stock-based compensation – related party warrants | ||||||||||||||||
| Total Expenses | ||||||||||||||||
| Other Income | ||||||||||||||||
| Interest Income | ||||||||||||||||
| Total Other Income | ||||||||||||||||
| Net (loss) before provision for taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income tax provision | ||||||||||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net (Loss) Per Common Share – Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net (Loss) Per Common Share – Diluted | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Weighted average number of shares of common stock outstanding – Basic | ||||||||||||||||
| Weighted average number of shares of common stock outstanding – Diluted | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| 3 |
STRATEGIC ACQUISITIONS, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in- | Accumulated | Stockholders’ | |||||||||||||||||
| Outstanding | Amount | Capital | (Loss) | Equity | ||||||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at June 30, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Issuance of | - | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Balance at December 31, 2020 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at June 30, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Issuance of common stock on September 8, 2021 at $ per share for cash | ||||||||||||||||||||
| Issuance of common stock on September 13, 2021 at $ per share for cash | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance at September 30, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
| 4 |
STRATEGIC ACQUISITIONS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
| 2022 | 2021 | |||||||
Nine Months Ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net (loss) to net cash (used in) operating activities: | ||||||||
| Issuance of warrants for services – related party | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Decrease in prepaid expense | ||||||||
| (Decrease) in accounts payable | ( | ) | ( | ) | ||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Net cash flows from financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash at beginning of the period | ||||||||
| Cash at end of the period | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| 5 |
STRATEGIC ACQUISITIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying unaudited financial information as of and for the three and nine months ended September 30, 2022 and 2021 has been prepared in accordance with generally accepted accounting principles (GAAP) in the U.S. for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) as set forth in the instructions to Quarterly Report on Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows for such periods. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2022.
The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP in the U.S. for complete financial statements.
Note 2. Stockholders’ Equity
The Company is authorized to issue shares of its $ par value Common Stock.
There were no issuances of Common Stock for the three- or nine-month periods ended September 30, 2022.
The
Company issued an aggregate of
Schedule of Weighted Average Assumptions Used to Estimate Fair Value
| August 31, 2022 Issuance | ||||
| Expected volatility | % | |||
| Expected Risk free interest rate | % | |||
| Expected term (years) | ||||
| Expected dividend rate | % | |||
| 6 |
Note 3. Related Party Transactions
The Company may periodically issue payment to certain officers and directors or their affiliates for services in connection with maintaining the company’s financial statements and regulatory status in good standing and evaluating potential business opportunities.
For
the three- and nine-month periods ended September 30, 2022, the total payment for services to related parties was: $
For the three- and nine-month periods ended September 30, 2021, there were no payments for services issued to officers or directors.
As
disclosed in Note 2, on August 31, 2022, the Company issued an aggregate of
Note 4. Change in Control
On August 31, 2022, the Company underwent a change in control. As further discussed in Item 5 of this report, Exworth Management LLC (“Exworth”) became the controlling shareholder of the Company, and Yuanyuan Huang and Wei Huang, managing partners of Exworth, became officers and directors of the Company. Marika Tonay and Jonathan Braun resigned their respective positions with the Company.
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 $
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 global pandemic, COVID-19, and deteriorating global economic conditions, including risk of recession, could adversely affect the Company’s ability to obtain additional financing or identify a potential merger or acquisition candidate. 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
In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to September 30, 2022 to the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.
| 7 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion should be read in conjunction with the accompanying financial statements for the three- and nine-month periods ended September 30, 2022 and the Form 10-K for the fiscal year ended December 31, 2021.
Liquidity and Capital Resources
At September 30, 2022, the Company had current assets in the form of cash of $12,100 and $0 liabilities. This compares with cash of $39,732 and liabilities of $2,000 as of December 31, 2021. The decrease in cash was due to expenses associated with maintaining the Company’s public status and evaluating business opportunities.
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 quarters ended September 30, 2022 and 2021, the Company showed net losses of $72,598 and $4,267, respectively. The increase in net loss was due primarily to expense associated with related party compensation for services, including non-cash expense of warrants issued for services.
For the nine-month periods ended September 30, 2022 and 2021, the Company showed net losses of $84,032 and $18,353, respectively. The increase in net loss was due primarily to expense associated with related party compensation for services, including non-cash expense of warrants issued for services.
| ITEM 4. | 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.
There was no change in the Company’s internal control over financial reporting during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
***
| 8 |
PART II – OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
None.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
None.
| ITEM 5. | OTHER INFORMATION |
As previously disclosed on Form 8-K filed September 6, 2022, which is incorporated by reference as an exhibit hereto, the Company underwent a change in control on August 31, 2022. Exworth Management LLC (“Exworth”) purchased an aggregate of 2,013,000 shares of Common Stock in a private transaction from existing shareholders and now owns 74.1% of outstanding shares of the Company. Additionally, Dr. Yuanyuan Huang was appointed Secretary/Treasurer and a Director of the Company and Dr. Wei Huang was appointed a Director of the Company. Yuanyuan Huang and Wei Huang are both managing partners of Exworth. John P. O’Shea has retained his positions as President and Director of the Company. Marika X. Tonay resigned as Secretary/Treasurer and Director of the Company and Jonathan Braun resigned as Director and Chairman of the Board of the Company.
| 9 |
| ITEM 6. | EXHIBITS |
The following exhibits are filed with this Report or incorporated by reference:
EXHIBIT LIST
| Exhibit Number |
Description | |
| 5.1 | Current Report on Form 8-K filed September 6, 2022 | |
| 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 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| 10 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| STRATEGIC ACQUISITIONS, INC. | ||
| (Registrant) | ||
| Date: November 14, 2022 | By: | /s/ JOHN P. O’SHEA |
| John P. O’Shea | ||
President and Principal Financial Officer | ||
***
| 11 |
EXHIBIT 31.1
STRATEGIC ACQUISITIONS, INC.
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
| I, | John P. O’Shea, certify that: |
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Strategic Acquisitions, Inc. (the “registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant is made known to me by others within the registrant, particularly during the period in which this report is being prepared. The registrant has no consolidated or unconsolidated subsidiaries; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ JOHN P. O’SHEA | November 14, 2022 |
| John P. O’Shea | |
| Principal Executive Officer and | |
| Principal Financial Officer |
EXHIBIT 32.1
STRATEGIC ACQUISITIONS, INC.
CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the filing of the Quarterly Report on Form 10-Q of Strategic Acquisitions, Inc. (the “Company”) for the period ended September 30, 2022 as filed with the Securities and Exchange Commission (the “Report”), I, John P. O’Shea, President of the Company certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and | |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods indicated. |
| /s/ JOHN P. O’SHEA | November 14, 2022 |
| John P. O’Shea | |
| Principal Executive Officer and | |
| Principal Financial Officer |