10KSB 1 stqn10k2005.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB (Mark One) [x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2005 [ ] TRANSITION REPORT UNDER 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 small business issuer as specified in its charter) Nevada 13-3506506 ------ ---------- (State or Other Jurisdiction of (IRS Employer Identification No.) Incorporation or Organization) 10 West Street, Suite 28-C, New York, NY 10004 ---------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) 25 Broad Street, Suite 20-I, New York, NY 10004 ---------------------------------------------- ----- (Former name, former address and former (Zip Code) fiscal year, if changed since last report) (212) 750-3355 -------------- (Issuer's Telephone Number) Securities registered under Section 12(b) of the Act: None Securities under Section 12(g) of the Act: Common Stock ------------ (Title of Class) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ] Issuer's income for fiscal year 2005 was $1,486. The aggregate market value of the voting and non-voting common equity held by the issuer's nonaffiliates, as of March 15, 2006, was $55,300. As of December 31, 2005, a total of 1,610,000 shares of common stock were issued and outstanding. Transitional Small Business Format: No. TABLE OF CONTENTS Page PART I......................................................... 1 Item 1. Description of Business.............................. 1 Item 2. Description of Property.............................. 2 Item 3. Legal Proceedings.................................... 2 Item 4. Submission of Matters to a Vote of Security ......... 2 Holders PART II........................................................ 2 Item 5. Market for Common Equity and Related Shareholder..... 2 Matters Item 6. Management's Discussion and Analysis or Plan of...... 3 Operations Item 7. Financial Statements................................. 3-4 Item 8. Changes in and Disagreements with Accountants on..... 5 Accounting and Financial Disclosure Item 8A. Controls and Procedures.............................. 5 PART III....................................................... 5 Item 9. Directors, Executive Officers, Promoters and......... 5 Control Persons; Compliance With Section 16(a) of the Exchange Act. Item 10. Executive Compensation............................... 5 Item 11. Security Ownership of Certain Beneficial Owners...... 6 Item 12. Certain Relationships and Related Transactions....... 7 Item 13. Exhibits and Reports on Form 8-K..................... 7 Item 14. Principal Accountant Fees and Services............... 8 Signatures..................................................... 9 i PART I Item 1. Business. General Strategic Acquisitions, Inc. (the "Company" or "Strategic") was incorporated under the laws of the State of Nevada on January 27, 1989, and is in the developmental stage. 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 a stock exchange. The business development process is more fully described in the Company's FORM 10-SB Registration Statement filed with the Securities and Exchange Commission January 18, 2000, incorporated herein by this reference. Since such filing there has been no change in the Company's business. 1 ITEM 2. Description of Property. The Company has no property. The Company does not currently maintain an office or any other facilities. It does currently maintain a mailing address at the home of its President, John P. O'Shea, 10 West Street, Suite 28-C, New York, New York 10004. The Company pays no rent for the use of this mailing address. The Company does not believe that it will need to maintain an office at any time in the foreseeable future in order to carry out its plan of operations described herein. 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. Submission of Matters to a Vote of Security Holders. None. PART II ITEM 5. Market for Common Equity and Related Shareholder Matters. There is a limited public trading market for the Company's shares of common stock on the Over-the-Counter Bulletin Board, under the symbol STQN. The following table shows the quarterly high and low bid prices during 2004 and 2005 as reported by Bloomberg, LP. These are the inter-dealer bid quotations, without retail mark-up, mark-down or commission, and may not represent actual transactions. YEAR PERIOD HIGH LOW ------ ------------- ---- ---- 2004 First Quarter 0.23 0.31 Second Quarter 0.31 0.31 Third Quarter 0.31 0.31 Fourth Quarter 0.31 0.31 2005 First Quarter 0.35 0.35 Second Quarter 0.35 0.25 Third Quarter 0.25 0.16 Fourth Quarter 0.25 0.20 At March 15, 2006, there were 61 record holders and approximately 87 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. 2 ITEM 6. Management's Discussion and Analysis or Plan of Operation. PLAN OF OPERATION The following Plan of Operation should be read in conjunction with the accompanying audited financial statements for the year ended December 31, 2005. The Company remains in the development stage and has limited capital resources and stockholder's equity. At December 31, 2005, the Company had current assets in the form of cash and cash equivalents of $85,694 and liabilities of $0. 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. The Company can provide no assurance that it will continue to satisfy its cash requirements for the next twelve months if a suitable acquisition/merger is completed. 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. ITEM 7. Financial Statements. THIS AREA INTENTIONALLY LEFT BLANK Item 7. Financial Statements Begin on Page 4 3 PART F/S STRATEGIC ACQUISITIONS INC. (A DEVELOPMENT STAGE COMPANY) INDEX TO FINANCIAL STATEMENTS CONTENTS PAGE ---- Report of Independent Registered Public Accounting Firm F1 Balance Sheet, December 31, 2005 F2 Statements of Operations for the Years Ended December 31, 2005 and 2004 and for the period from F3 Inception (January 27, 1989) to December 31, 2005 Statements of Stockholders' Equity, period from Inception (January 27, 1989) to December 31, 2005 F4 Statements of Cash Flows for the Years Ended December 31, 2005 and 2004 and for the period from F5 Inception (January 27, 1989) to December 31, 2005 Notes to Financial Statements F6-9 4 [COMISKEY & CO. LETTERHEAD] REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors Strategic Acquisitions, Inc. New York, NY We have audited the accompanying balance sheet of Strategic Acquisitions, Inc. (the "Company") (a development stage company), as of December 31, 2005, and the related statements of operations, stockholders' equity, and cash flows for the years ended December 31, 2005 and 2004, and for the period from inception (January 27, 1989) to December 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strategic Acquisitions, Inc. as of December 31, 2005, and the results of its operations and cash flows for the years ended December 31, 2005 and 2004, and for the period from inception (January 27, 1989) to December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. Denver, CO March 31, 2006 /s/ Comiskey & Company Professional Corporation F1 STRATEGIC ACQUISITIONS INC. (A Development Stage Company) BALANCE SHEET December 31, 2005 ---- ASSETS Current Assets: Cash and Equivalents $ 85,694 ------- TOTAL CURRENT ASSETS $ 85,694 ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ - ------- TOTAL CURRENT LIABILITIES $ - ======= Stockholders' Equity Common Stock, $0.001 par value; 50,000,000 Shares authorized; 1,610,000 shares and 1,600,000 shares issued and outstanding, respectively $ 1,610 Additional Paid-In Capital 186,793 Accumulated Deficit (102,709) -------- TOTAL STOCKHOLDERS' EQUITY 85,694 ------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 85,694 ======= The accompanying notes are an integral part of these financial statements. F2 STRATEGIC ACQUISITIONS INC. (A Development Stage Company) STATEMENTS OF OPERATIONS For the period from inception For the year For the year (January 27, 1989) ended ended to December 31, December 31, December 31, 2005 2005 2004 ------------ ------------ ------------ Revenue $ - $ - $ - ------------ ------------ ------------ Expenses: General & Administrative 198,591 12,312 13,193 General & Administrative - related party 8,100 - 8,100 ------------ ------------ ------------ Total Expenses 206,691 12,312 21,293 ------------ ------------ ------------ Other Income: Interest Income 59,001 1,486 1,116 Miscellaneous Income 30,013 Gain on Debt Extinguishment 14,968 - 14,968 ------------ ------------ ------------ Total Other Income 103,982 1,486 16,084 NET LOSS $ (102,709) $ (10,826) $ (5,209) ============ ============ ============ Weighted Average Number of Common Stock Outstanding - Basic 1,598,434 1,610,000 1,605,000 ============ ============ ============ Basic Loss Per Common Share $ (0.06) $ (0.01) $ (0.00) ============ ============ ============ The accompanying notes are an integral part of these financial statements. F3 STRATEGIC ACQUISITIONS INC. (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' EQUITY Additional Total Common Stock Paid-In Accumulated Stockholder's Shares Amount Capital (Deficit) Equity ----------- ---------- ---------- -------- ----------- Issuance of common stock on July 31, 1989 for cash of $0.0044 per share 1,360,000 $ 1,360 $ 4,640 $ - $ 6,000 Public offering - 40,000 units (six shares per unit) @ $6.00 per unit, net of costs 240,000 240 179,063 - 179,303 Net (Loss), Inception to December 31, 2000 (73,432) (73,432) ---------- --------- --------- --------- --------- Balance, December 31, 2000 1,600,000 1,600 183,703 (73,432) 111,871 Net (Loss), December 31, 2001 (2,250) (2,250) ---------- --------- --------- --------- --------- Balance, December 31, 2001 1,600,000 1,600 183,703 (75,682) 109,621 Net (Loss), December 31, 2002 (5,115) (5,115) ---------- --------- --------- --------- --------- Balance, December 31, 2002 1,600,000 1,600 $ 183,703 (80,797) 104,506 Net (Loss), December 31, 2003 (5,877) (5,877) ---------- --------- --------- --------- --------- Balance - December 31, 2003 1,600,000 1,600 $ 183,703 (86,674) 98,269 Issuance of common stock on June 30, 2004 at market value ($0.31 per share) for services 10,000 10 3,090 3,100 Net (Loss), December 31, 2004 (5,209) (5,209) ---------- --------- --------- --------- --------- Balance, December 31, 2004 1,610,000 $ 1,610 $ 186,793 $(91,883) $ 96,520 Net (Loss), December 31, 2005 (10,826) (10,826) ---------- --------- --------- --------- --------- Balance - December 31, 2005 1,610,000 1,610 $ 186,793 (102,709) 85,694 ========== ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements. F4 STRATEGIC ACQUISITIONS INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS For the period from inception For the For the (January 27, 1989) year ended year ended to December 31, December 31, December 31, 2005 2005 2004 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (102,709) $ (10,826) $ (5,209) Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities: Stock issued for Services-related party 3,100 - 3,100 Increase (Decrease) in accounts payable - - (14,968) ---------- ---------- ---------- Net cash flows from Operating Activities (99,609) (10,826) (17,077) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock, net of costs 185,303 - - ---------- ---------- ---------- Net cash flows from financing activities 185,303 - - ---------- ---------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 85,694 (10,826) (17,077) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 96,520 113,597 ---------- ---------- ---------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 85,694 $ 85,694 $ 96,520 ========== ========== ========== The accompanying notes are an integral part of these financial statements. F5 STRATEGIC ACQUISITIONS INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2005 AND 2004 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. The Company is an enterprise in the development stage as defined by Statement No. 7 of the Financial Accounting Standards Board and has not engaged in any business other than organizational efforts, the sale of stock in a public offering, 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. 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 AND CASH EQUIVALENTS The Company maintains a cash balance in an interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. CONCENTRATION OF CREDIT RISK At December 31, 2005, and 2004, the Company maintained all of its cash in one commercial bank. The Company has not experienced any losses on such accounts. REVENUE RECOGNITION The Company recognizes revenue on an accrual basis as it invoices for services. REPORTING ON THE COSTS OF START-UP ACTIVITIES Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up Activities," which provides guidance on the financial reporting of start-up costs and organizational costs, requires most costs of start-up activities and organizational costs to be expensed as incurred. SOP 98-5 is effective for fiscal years beginning after December 15, 1998. With the adoption of SOP 98-5, there has been little or no effect on the Company's financial statements. LOSS PER SHARE Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128) "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, 2005. F6 ADVERTISING COSTS The Company expenses all costs of advertising as incurred. There were no advertising costs included in selling, general and administrative expenses for the years ended December 31, 2005 and 2004. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2005. 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. SEGMENT REPORTING The Company follows Statement of Financial Accounting Standards No. 130, "Disclosures About Segments of an Enterprise and Related Information". The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations. DIVIDENDS The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid or declared since inception. INCOME TAXES The Company follows Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes" ("SFAS No. 109") 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 current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. F7 RECENT PRONOUNCEMENTS In December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No.25, Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No.123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for the Company in the first interim or annual reporting period beginning after December 15, 2005. The Company expects the adoption of this standard will have a material impact on its financial statements assuming employee stock options are granted in the future. In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections." SFAS 154 replaces APB 20, "Accounting Changes" and SFAS 3, "Reporting Accounting Changes in Interim Financial Statements" and establishes retrospective application as the required method for reporting a change in accounting principle. SFAS 154 provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The reporting of a correction of an error by restating previously issued financial statements is also addressed. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of this statement to have a material impact on the financial statements. NOTE 2 - INCOME TAXES The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which requires use of the liability method. SFAS No. 109 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 to income before provision for income taxes. The sources and tax effects of the differences are as follows: U.S federal statutory rate (34.0%) Valuation reserve 34.0% Total - % As of December 31, 2005, the Company has a net operating loss carryforward of approximately $103,000 for tax purposes, which will be available to offset future taxable income. If not used, this carryforward will expire between 2009 and 2025. The deferred tax asset relating to the operating loss carryforward has been fully reserved at December 31, 2005. 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. F8 NOTE 3 - RELATED PARTY TRANSACTIONS The Company currently utilizes the home of its president as a mailing address "rent free". 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. NOTE 4 - STOCKHOLDERS' EQUITY The Company is authorized to issue 50,000,000 shares of its $0.001 par value Common Stock. On July 31, 1989, the Company issued 1,360,000 shares of its $0.001 par value Common Stock to its directors for cash in the amount of $6,000. During the fourth quarter 1989, the Company's public offering was declared effective. In connection therewith, the Company sold 40,000 units of Common Stock at $6.00 per unit. Each unit consisted of six shares of $0.001 par value common stock, thirty Class A Warrants, thirty Class B Warrants, and thirty Class C Warrants. The Class A Warrants, Class B Warrants, and Class C Warrants expired on July 15, 2004. The Company granted the underwriters of its initial public offering Warrants to purchase an aggregate of 4,000 units that were identical in all respects to the units sold to the public, pursuant to the terms of the underwriting agreement, at an exercise price of $6.42 per unit. The underwriter's warrants expired on July 15, 2004. On June 30, 2004, the Company issued 10,000 shares of its $0.001 par value Common Stock to an officer and director of the Company for services valued at $3,100. There have been no other issuances of Common Stock. NOTE 5 - GAIN ON DEBT EXTINGUISHMENT In 2004, the Company recorded $14,968 related to trade accounts payable from a previous year which had been written off by the creditor. The amount is shown as a gain from debt extinguishment in the other income and expense section of the Statements of Operations. F9 ITEM 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. On November 8, 2005, the Company dismissed Beckstead and Watts LLP, its independent registered public accounting firm. The Company appointed Comiskey & Company, P.C. as its new independent registered public accounting firm on November 8, 2005. The change in accountants was approved by the Company's Board of Directors and reported on Form 8-K filed on November 14, 2005. ITEM 8A. Controls and Procedures. The issuer is not an operating entity. Its sole asset is cash and cash equivalents in an account in a major banking institution. Our controls and procedures provide reasonable assurance as to the reliability of the financial statements and other disclosure included in this report, as well as safeguard its cash assets from unauthorized use or disposition. The effectiveness of our disclosure controls and procedures are under the supervision of our Principal Executive Officer and Principal Financial Officer. No changes were made to our internal controls or other factors that could significantly affect these controls and procedures as of a date within 90 days of the filing date of this report. PART III ITEM 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act. The following is a list of directors and executive officers of the Company as of December 31, 2005 their ages and all positions held by each of them during the past five years. John P. O'Shea, 49, is the Company's President and a director since 2004. Since 1997, Mr. O'Shea has been President of Westminster Securities Corporation, a full-service brokerage firm headquartered in New York City. In addition, Mr. O'Shea has served as a director of Laidlaw Global Corporation from 1999 to 2001. He is an Allied Member of the New York Stock Exchange and a Member of the New York Board of Trade. Marika Xirouhakis, 25, is the Company's Secretary/Treasurer and a director since 2004. Ms. Xirouhakis has been employed by Westminster Securities Corporation since 1999, presently serving as a Vice President in the Corporate Finance department. She attended New York University, Stern School of Business from 1998 to 2002, graduating Magna Cum Laude with a BS in Finance and Management. Each of the Company's officers and directors is in compliance with Section 16(a) of the Exchange Act. The entire board of directors of the Company serves as its audit committee. The Company does not have an audit committee financial expert serving on its audit committee because it believes that the time and expense associated with locating such a financial expert is not justified during the time that the Company remains in the development stage as a blind pool or blank check company. 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 is attached to this Form 10KSB as Exhibit 14.1. 5 Item 10. Executive Compensation. None. Item 11. Security Ownership of Certain Beneficial Owners and Management. The following table sets forth, as of December 31, 2005, 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. MANAGEMENT AND 5% OR GREATER NUMBER OWNERSHIP SHAREHOLDERS/BENEFICIAL OWNERS OF SHARES PERCENTAGE ------------------------------ --------- ---------- John P. O'Shea 921,467 57.23% c/o 100 Wall Street 7th Floor New York, NY 10005 Marika Xirouhakis 14,000 0.87% c/o 100 Wall Street 7th Floor New York, NY 10005 Deborah A. Salerno 453,333 28.16% 355 South End Avenue Apartment 22B New York, NY 10280 All directors and executive 935,467 58.10% officers as a group (2 persons) Each principal shareholder has sole investment power and sole voting power over the shares owned. Possible Change in Control. In the event of a purchase of control by other persons, or a merger, the shareholders and management listed above will no longer own the percentages set forth above, and shareholders may be subject to decisions by the new control parties to which they may not assent. The Company does not have an Equity Compensation Plan nor are any securities authorized for issuance under such type plan. 6 ITEM 12. Certain Relationships and Related Transactions. No officer, director, or affiliate of the Company has during the last two years, or proposes to have, any direct or indirect material interest in any asset proposed to be acquired by the Company through security holdings, contracts, options, or otherwise. The Company has adopted a policy under which any consulting or finder's fee that may be paid to a third party or affiliate for consulting services to assist management in evaluating a prospective business opportunity would be paid in stock or in cash. Any such issuance of stock would be made on an ad hoc basis. Accordingly, the Company is unable to predict whether or in what amount such stock issuance might be made. Although there is no current plan in existence, it is possible that the Company will adopt a plan to pay or accrue compensation to its officers and directors for services related to seeking business opportunities and completing a merger or acquisition transaction. The Company maintains a mailing address at 10 West Street, Suite 28-C, New York, NY 10004, the home of its President, John P. O'Shea, but otherwise does not maintain an office. As a result, it pays no rent and incurs no expenses for maintenance of an office and does not anticipate paying rent or incurring office expenses in the future. It is likely that the Company will establish and maintain an office after completion of a business combination. ITEM 13. Exhibits and Reports on Form 8-K. (a) Exhibits 14.1 Code of Ethics 31.1 Certification by the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-0xley Act of 2002 32.1 Certification by 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 (b) Reports on Form 8-K: The Company's Form 8-K, filed on November 14, 2005, is incorporated here by reference. 7 ITEM 14. Principal Accountant 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-QSB (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 $500 for the fiscal year ended December 31, 2004 and $5,000 for the fiscal year ended December 31, 2005. (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. 8 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized. Date: April 13, 2006 STRATEGIC ACQUISITIONS, INC. By: /s/ JOHN P. O'SHEA ------------------------ John P. O'Shea President and Principal Financial Officer In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date ---- ----- ---- President /s/ JOHN P. O'SHEA Principal Financial Officer ---------------------- Director April 13, 2006 John P. O'Shea Secretary /s/ MARIKA XIROUHAKIS Treasurer ---------------------- Director April 13, 2006 Marika Xirouhakis 9 Exhibit 14.1 STRATEGIC ACQUISITIONS, INC. CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS The conduct of Senior Financial Officers shall be governed by this Code of Ethics, pursuant to Section 406 of the Sarbanes-Oxley Act, in order to deter wrongdoing and to promote: Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; Full, fair, accurate, timely and understandable disclosure in reports and documents that a company files with, or submits to, the Commission and in other public communications made by the Company; Compliance with applicable governmental laws, rules and regulations; The prompt internal reporting of violations of the Code to the appropriate person or persons identified in the Code; and Accountability for adherence to the Code. 1. The Chief Executive Officer, the Chief Financial Officer, the Controller, and other senior officers performing financial management functions shall maintain the highest standards in performing their duties. Federal law requires the Company to set forth guidelines pursuant to which the principal executive officer and senior financial management employees perform their duties. Employees subject to this requirement include the chief executive officer, the chief financial officer, controller or chief accounting officer, and any person who performs similar functions (the "Senior Financial Officers"). However, the Company expects that all employees who participate in the preparation of any part of the Company's financial statements should follow these guidelines: Act with honesty and integrity, avoiding violations of the Code, including actual or apparent conflicts of interest with the Company in personal and professional relationships. Disclose to any Ethics Committee designated by the Board of Directors to administer this Code of Ethics, or to the full Board of Directors if Ethics Committee has been appointed, any material transaction or relationship that reasonably could be expected to give rise to any violations of the Code, including actual or apparent conflicts of interest with the Company. Provide the Company's other employees, consultants, and advisors with information that is accurate, complete, objective, relevant, timely, and understandable. Endeavor to ensure full, fair, timely, accurate, and understandable disclosure in the Company's periodic reports and other public communications. Comply with all applicable governmental laws, rules and regulations, and adhere to the standards and restrictions imposed by those laws, rules and regulations. Act in good faith, responsibly, and with due care, competence and diligence, without knowingly misrepresenting material facts, causing others to misrepresent material facts, or allowing your independent judgment to be subordinated. Respect the confidentiality of information acquired in the course of your work except where you have Company approval or where disclosure is otherwise legally mandated. Confidential information acquired in the course of your work will not be used for personal advantage. Proactively promote ethical behavior among peers in your work environment. Record or participate in the recording of entries in the Company's books and records that are accurate to the best of your knowledge. 2. Reporting and Accountability The Board of Directors may appoint an Ethics Committee to be responsible for applying this Code to specific situations in which questions are presented to it. In the event an Ethics Committee is appointed, it has the authority to interpret this Code in any particular situation. In the event no Ethics Committee has been appointed, the Board of Directors shall have the authority to interpret this Code in any particular situation. Any Senior Financial Officer who becomes aware of any existing or potential breach of this Code is required to notify the Ethics Committee or the Board of Directors promptly. Failure to do so is itself a breach of this Code. Specifically, each Senior Financial Officer must: Notify the Ethics Committee, if any, or the Board of Directors promptly of any existing or potential violation of this Code. Not retaliate against any employee or Senior Financial Officer for reports of potential violations that are made in good faith. The Ethics Committee, if any, or the Board of Directors shall take all action it considers appropriate to investigate any breaches reported to it. If a breach has occurred, the Company will take such disciplinary action or preventive action as the Board of Directors deems appropriate, after consultation with the Ethics Committee, if any. Specifically, the Company will follow the following procedures in investigating and enforcing this Code and in reporting on the Code: Breaches and potential breaches will be reported to the Ethics Committee, if any, or to the full Board of Directors. The Ethics Committee, if any, or the full Board of Directors will take all appropriate action to investigate any breaches reported to it. If any Ethics Committee determines that a breach has occurred, it will inform the Board of Directors. Upon being notified that a breach has occurred, the Board will take or authorize such disciplinary or preventive action as it deems appropriate, after consultation with the Ethics Committee, if any, up to and including dismissal or, in the event of criminal or other serious violations of law, notification of the SEC or other appropriate law enforcement authorities. Any changes or waivers of this Code will be disclosed in the Company's annual report on Form 10-KSB. 3. Waivers Any waiver (defined below) or an implicit waiver (defined below) from a provision of this Code is required to be disclosed in the Company's Annual Report on Form 10-KSB or a Report on Form 8-K filed with the SEC. A waiver is defined by SEC rules as a material departure from a provision of the Code, and an implicit waiver means failure to take action within a reasonable period of time regarding a material departure from a provision of the Code that has been made known to an executive officer of the Company. Senior Financial Officers should note that the Company expects full compliance with this Code and does not intend to grant or to permit waivers from the requirements of this Code. 4. Other Policies and Procedures The Company may, from time to time, adopt other procedures and separate requirements which are applicable to Senior Financial Officers and others. This Code of Ethics has been approved by the Board of Directors. Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, John P. O'Shea, certify that: 1. I have reviewed this annual report on Form 10-KSB of Strategic Acquisitions, Inc. (the "Registrant"); 2. Based on my knowledge, this annual 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 annual 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-14 and 15d-14) for the Registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant is made known to me, particularly during the period in which this annual report is being prepared. The Registrant has no consolidated or unconsolidated subsidiaries; b) 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 c) 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 April 13, 2006 --------------------------------------- John P. O'Shea Principal Executive Officer and Principal Financial Officer Exhibit 32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the filing of the Annual Report on Form 10-KSB of Strategic Acquisitions, Inc. (the "Company") for the year ended December 31, 2005 as filed with the Securities and Exchange Commission, 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) 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 or operations of the Company. /s/ JOHN P. O'SHEA April 13, 2006 --------------------------------- John P. O'Shea Principal Executive Officer and Principal Financial Officer