STQN 10-K & 10-Q changes, risk factors and insider trading

We continue to incur operating losses and have not generated positive cash flow from operations. The amounts of future losses and when, if ever, we will achieve profitability and positive cash flow from operations are uncertain.

Our industry is characterized by experimentation, changing customer needs, and frequent introductions of new products and services. As FinTech industry and digital asset and blockchain technologies become more widely available, we expect the services and products associated with them to continue to rapidly evolve, and our future business may be different from our current business as the result of adopting of new information technology. Thus, in order to stay current with the industry, our business model may need to evolve as well. From time to time, we may materially modify aspects of our business model relating to our product and service offerings. WeThe company plans to stay in the FINTECH business and is open to acquiring an operating company in the FINTECH space. However, we cannot offer any assurance that that these or any other modifications will be successful or will not harm our business. If changes to our business model are not successful, or if we fail to make appropriate changes, it would have a material adverse effect on our business, prospects or operations and potentially on our ability to continue as a going concern.

As an early-stage company, our business activity is very limited, and as of December 31, 2025 and 2024, we have zero outstanding loan as the only loan was fully repaid in July 2024.of And2024, if we cannot expand our borrower base or obtain sufficient funding, our revenue and business model may be adversely affected.

We cannot accurately estimate future quarterly revenue and operating expenses based on historicalhistorical, performance. Becauseas the loans we extend are collateralized by digital assets and because we may use those digital assets as collateral for debt that funds our business, our quarterly results are significantly impacted by and can vary widely based on the underlying value of those digital assets. Our quarterly operating results may also vary significantly based on many other factors, including:

To date, due to limited enforcement by U.S. and foreign regulators, many of these competitors have been able to operate while offering products and services to consumers, including in the United States and other highly regulated jurisdictions, without complying with the relevant licensing and other requirements in these jurisdictions, and seemingly without penalty. Due to our commitment to legal and regulatory compliance, we may not be able to effectively compete against 0unregulatedunregulated or less regulated competitors, which may adversely impact our our business, financial condition, and results of operations. We will have to expend significant managerial, operational, and compliance costs to meet the legal and regulatory requirements applicable to us in the United States and other jurisdictions in which we operate, and expect to continue to incur significant costs to comply with these requirements, which these unregulated or less regulated competitors have not had to incur.

The loans we make are secured solely by designated digital assets of the borrowers. We have no security interest in any other assets of the borrowers. If a borrower breaches its payment obligations under a loan, the value of the collateral may be insufficient to satisfy the full amount of the borrower’s outstanding payment obligations under the loan. At one time we were one of the few public companies offering this service, now it is commonplace and offered by companies with much larger resources. In addition, digital assets are subject to loss or theft due to cyber-attacks, and if collateral is stolen, we would have no recourse against a borrower for its payment obligations under under its loan.

WeDigital repledged all collateral digital assets to our own lender. Digital assets of borrowers securing the loans we hold may be rehypothecated, repledged, sold, or otherwise transferred or used at our risk (the “Repledged Collateral”) in transactions, including credit facilities or derivatives contracts, we enter into with third parties (each, a “Counterparty”) or at the risk of our Counterparties in transactions whereby they obtain capital. In the event we breach our contractual obligations or one of our Counterparties were to breach its obligation in respect of such transactions or the occurrence of certain conditions, the Counterparty may foreclose on the Repledged Collateral or otherwise require us to liquidate or transfer it or the Counterparty may forfeit to its lender its right to the Repledged Collateral. Additionally, to the extent that any Repledged Collateral is required to be transferred or made accessible to a third party in connection with the pledge, such collateral may be vulnerable to loss or theft due to cyber-attacks affecting such third parties or other forms of malfeasance.

Our principal stockholderstockholders owns a significant percentage of our stock and will be able to exert significant control over matters subject to to stockholder approval.

Our principal stockholderstockholders beneficially owns approximately 84%86% of our common stock assuming no exercise of outstanding options. This stockholder is able to control matters requiring stockholder approval. For example, it is able to control elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transactions. This concentration of ownership control may delay, discourage or prevent a change of control, including unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders, entrench our management and board of directors or delay or prevent a merger, consolidation, takeover or other business combination involving us that other stockholders may desire. The interests of this stockholder may not always coincide with your interests, or the interests of other stockholders and it may act in a manner that advances its best interests and not necessarily those of other stockholders.

The following discussion of our financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-lookingforward looking statements as a result of a number of factors, including those set forth under the Risk Factors, Forward-Looking Statements and Business sections in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward- looking statements.

The discussion below pertains to our financial results for the year ended December 31, 20242025 and for the year ended December 31, 2023.2024. For a discussion and analysis of our financial condition and results of operations prior to the formation of Exworth Union please refer to filings made with the U.S. Securities and Exchange Commission before consummation of the Merger Agreement.

Exworth Union, a Delaware corporation, was formed on March 16, 2022. It provides loans that are collateralized by digital assets including Bitcoin and will acceptaccepts other types of alternative collaterals such as eCommerce account receivables, recursive payments of subscriptions, IP and and copyrights, though the only form of collateral that has been accepted to date is Bitcoin. The target customers are individuals and commercial commercial enterprises that hold digital assets and are seeking liquidity without selling their digital assets, with limited or no access to obtain credit lines or business loans from conventional financial institutions. We provide term loans, up to two years, to these individuals and commercial enterprises.

Selling, general and administrative expenses was $145,820$40,223 for the year ended December 31, 2024,2025, which consist mostly of professional fees, and $179,541 $144,822 for the period from the year ended December 31, 2023.2024. It primarily includes the legal and various professional expenses related to our daily operation.operations.

Interest expense was $0 for the year ended December 31, 2025, and $18,804 for the year ended December 31, 2024, and $34,714 for the the year ended December 31, 2023, incurred pursuant to a master loan agreement we entered with a U.S. based lender. The loan hashad a term of 24 months with quarterly interest-only payments with principal to be paid at maturity. No margin call was initiated by our lender during the period from inception to the payment of the loan to December 31, 2024.loan.

Our lender charged a 1% origination fee of the principal amount that we borrowed. The origination fee was deducted from the loan principal and will be amortized evenly through the loan term. Total amortization of loan origination fee was $3,761 forwhich was fully amortized during 2024. During the yearyears ended December 31, 2024,2024 and $6,9432025, forthere thewas theno yearloan endedorigination December 31, 2023.fee.

Our net loss was $124,714$40,223 and $162,260$123,716 for the year ended December 31, 2024 2025 and 2023,2024, respectively. Among the more significant factors that may cause our net income (loss) to vary from period to period are: 1) the number of loans (receivables and payables) issued and outstanding; 2) the interest rates that we charge our borrowers; 3) the interest rate thatcharged we pay toby our lenderslender; and 4) The allowance for loanpotential lossnon-collection of our loans. TheIn netJuly loss2024, incurredthe Company’s loan receivable portfolio was paid in 2024full. wasThese primarilyloans attributablehad topreviously represented the sizecompany’s only source of ournominal loan portfolio, which is not large enough to cover our operating expenses.income.

In assessing our liquidity, we monitor and analyze our cash-on-hand, operating and capital expenditure commitments. We believereport our current working capital of $(7,931) for the year ended December 31, 2025, which is not sufficient capital to support our operations for the next twelve months. However, if we are unable to raise additional capital, we may not be able to execute our business plan. We will use our limited personnel and financial resources in connection with developing our business plan, including developing a proprietary software platform, issuing equity or debt securities, or obtaining additional credit facilities. The issuance and sale of additional equity would result in dilution to our existing shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. Our obligation to bear credit risk for certain financing transactions we facilitate may also strain our operating cash flow. We have no commitments for the purchase of our equity and, should we need to raise capital, we cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

There are no limitations in our certificate of incorporation on our ability to borrow funds or raise funds through the issuance of capital stock to fund our working capital requirements. Our limited resources and lack of recent operating history may make it difficult to borrow funds or raise capital. Such inability to borrow funds or raise funds through the issuance of capital stock required to facilitate our business plan may have a material adverse effect on our financial condition and future prospects, including the ability to fund our business plan. To the extent that debt financing ultimately proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest, including debt of an acquired business.interest.

Cash used in operating activities resulted primarily from operating expenses for related to the operation of ourcompany’s digital asset-backedasset backed loan business business, as well as general and administrative expenses. Net cash used in operating activities was $30,473 for the year ended December 31 2025 primarily attributed to a net loss of $40,223. Net cash used in operating activities was $110,124 for the year ended December 31, 2024, which was 2024 primarily attributableattributed to oura net loss of $124,714,$123,716, partially offset by a decrease in interest receivable and prepaid expenses.

As used in this Quarterly Report and unless otherwise indicated, the terms “Company,” “we,” “us,” and “our,” refer to Strategic Acquisitions, Inc. and its wholly-owned subsidiary Exworth,Exworth Union, a NevadaDelaware corporation.

Strategic Acquisitions, Inc. (the “Company,” “we,” “us” and words of similar import) was incorporated under the laws of the State of Nevada on January 27, 1989. The Company is a private lending company that provides digital asset backed loan service to businesses. On December 22, 2022, we entered into and consummated an Agreement and Plan of Merger (“Merger Agreement”) with Exworth Union Inc. (“Exworth Union”) and the owners of all of its outstanding shares of capital stock — Exworth Management LLC (“Exworth Management”) and World Class Global Technology PTE LTD. (“World Class,” collectively with Exworth Management, the “Stockholders”) whereby we acquired Exworth Union (the “Merger”). Exworth Union is engaged in providing loans collateralized by digital assets. Prior to the Merger, we were a “shell” company with no commercial operations and had generated no revenues other than nominal interest income. Since the merger, we generated revenues from interest income and fees from loan receivable issuance. During 2023, we initiated loan administrations services and ceased providing services. During July 2024, all loan receivable issued were settled by borrowers and we have temporarily ceased lending operations from this date as of the date of this SEC filing.

As a result of the acquisition of Exworth Union we are in the business of providing loans collateralized by digital assets. Our loan business is currently limited due to the early stage of the digital asset industry, changing economic conditions and the need to develop a proprietary software technology platform, to facilitate the origination and servicing of digital asset backed loans, and as of MarchJune 31,30, 2026, we have not begun development of software due to lack of funding. Our target customers are small businesses and individuals that hold intangible assets including digital currencies seeking loans secured by such assets. We intend to provide term loans to these enterprises and individuals which are collateralized with intangible assets, such as Bitcoin. We intend to generate revenue from interest income and transaction-based services fees. We intend to design a Platform to originate and service loans backed by various assets. Nevertheless, to date, Bitcoin is the only asset we have accepted as collateral for a loan and we intend to focus on the market for loans secured by digital currencies for the immediate future.

In assessing our business operations, we expect to expend significant managerial, operational, and compliance costs to meet the legal and regulatory requirements applicable to us in the United States and other jurisdictions, all of which will incur significant costs to comply with these requirements before we could grow our business. For these reasons, management is accessingassessing its business model. Based on the Company’s limited resources, management is currently evaluating areas to build its business and is focusing on identifying their future customer base.

Management is also considering the divestiture of its wholly owned subsidiary, Exworth Union. As the Company’s business focus evolves, the the importance of this subsidiary is no longer strategic to the Company. At this time, management does not believe that the divestiture of its subsidiary would have any impact on the business, results of operations, cash flows and financial condition of the Company.

Comparison of the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025:

There was no revenue for the three months ended MarchJune 31,30, 2026 and 2025.

Total operating expenses increasedwere by $13,673, or 54%,$24,563 for the three months ended MarchJune 31,30, 2026, as compared to $2,547 for the three months ended March 31,June 30, 2025. The increase inof operatingapproximately expenses$22,016 was primarily dueattributable to anhigher increaseprofessional infees generalassociated with the Company’s public company reporting activities and administrativeconsulting wagesservices andrendered relatedduring expenses ofthe $38,717 due to an increase in professional fees.period.

As of MarchJune 31,30, 2026, we had cash on hand of $2,927,$32,349, as compared to cash on hand of $508 as of December 31, 2025. The increase in cash on on hand of $31,841 is aprimarily the result of $60,000 in proceeds from non-recourse related party notes payable and $40,000 in proceeds from the sale of 40,000,000 common sharesstock, ofpartially stockoffset forby $40,000.$68,159 in cash used in operating activities.

The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared assuming that that the Company will continue as a going concern. The Company has an accumulated lossesdeficit fromas inceptionof throughJune March 31,30, 2026 of $520,380. $544,943.

During the threesix months ended MarchJune 31,30, 2026, the Company received net$60,000 cashin proceedsnon-recourse ofrelated party loans and $40,000 from the sale of 40,000,000common stock. of its common shares. If the Company does not generate additional revenue or equity and other debt financing from third parties, it will not have sufficient cash to meet its obligations for the next twelve months following the date of this Quarterly Report on Form 10-Q. There currently are no other arrangements or agreements for financing, and there can be no assurances that any other debt or equity financing will be available, or if available, on favorable terms. As such, these matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of this Quarterly Report on Form 10-Q. The condensed consolidated financial statements in this Quarterly Report on Form 10-Q do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Net cash used in operating activities was $(37,58168,159) for the threesix months ended MarchJune 31,30, 2026, dueconsisting toof a net loss of $38,717,$(63,280), adjusted for non-cash share-based compensation of $1,000, an increase in prepaid expenses of $(3,560), and a decrease in accounts payable and accrued expenses of $(2,319). Net cash used in operating activities was $24,194$(27,278) for the threesix months ended MarchJune 31,30, 2025, dueconsisting toof a net loss of $25,044.$(27,591), adjusted for a decrease in prepaid expenses of $864 and a decrease in accounts payable and accrued expenses of $(551).

There were no investing activities in the threesix months ended MarchJune 31,30, 2026 and 2025.

For the threesix months ended MarchJune 31,30, 2026, net cash provided by financing activities was $40,000,$100,000, consisting of $60,000 in proceeds from non-recourse related party notes payable and $40,000 from the sale of 40,000,000 shares of common stock. For the threesix months ended MarchJune 31,30, 2025, net cash provided by financing activities was $7,200,$7,700 , consisting of proceeds advances from a related party to keep the Company operational.party.