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, 1999

                                       OR

|_|  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.
                 (Name of Small Business Issuer in its Charter)

                     Nevada                                    13-3506506
(State or Other  Jurisdiction  of                         IRS Employer ID Number
  Incorporation or Organization)

   50 East 42nd Street, Suite 1805
            New York, NY                                          10017
(Address of Principal Executive Offices)                        (Zip Code)

                                 (212) 682-5058
                           (Issuer's Telephone Number)

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

                   Securities registered under Section 12(g) of the Act:

                                  Common Stock
                                (Title of Class)

                                Class A Warrants
                                (Title of Class)

                                Class B Warrants
                                (Title of Class)

                                Class C Warrants
                                (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 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 revenues for fiscal year 1999 were $5,200.

     The aggregate market value of the voting and non-voting  common equity held
by the issuer's non-affiliates, as of March 26, 2000, was $45,000.

     As of December 31,  1999, a total of 1,600,000  shares of common stock were
issued and outstanding.

     Documents incorporated by reference: None.

     Transitional Small Business Format: No.


<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I........................................................................1

Item 1.    Description of Business............................................1

Item 2.    Description of Property...........................................15

Item 3.    Legal Proceedings.................................................16

Item 4.    Submission of Matters to a Vote of Security Holders...............16


PART II......................................................................16

Item 5.    Market for Common Equity and Related Shareholder Matters..........16

Item 6.    Management's Discussion and Analysis or Plan of Operations........16

Item 7.    Financial Statements..............................................17

Item 8.    Changes in and Disagreements with Accountants on Accounting
           and  Financial Disclosure.........................................20


PART III.....................................................................20

Item 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance With Section 16(a) of the Exchange Act.................20

Item 10.   Executive Compensation............................................25

Item 11.   Security Ownership of Certain Beneficial Owners and Management....26

Item 12.   Certain Relationships and Related Transactions....................27

Item 13.   Exhibits, List and Reports on Form 8-K............................28


                                       i


<PAGE>



                                     PART I

Item 1. Description of Business.

Business Development

     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.  During the last three  years the  Company  had no
revenues other than nominal  interest  income.  As of the date of filing of this
Form  10-KSB,  the  Company  has no  commercial  operations,  has  no  full-time
employees, and owns no real estate.

     The  Company's  current  business  plan is to seek,  investigate,  and,  if
warranted,  acquire one or more  properties or  businesses,  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.

     On January 18, 2000 the Company filed a  registration  statement Form 10-SB
in order to become a  Section  12(g)  registered  company  under the  Securities
Exchange Act of 1934, as amended (the "Exchange Act").

     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   (See   "Investigation   and   Selection   of  Business
Opportunities").   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,



                                       1
<PAGE>


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").

     Depending  upon the nature of the  transaction,  the current  officers  and
directors  of the Company  are likely to resign  management  positions  with the
Company in connection with the Company's  acquisition of a business opportunity.
See "Form of  Acquisition,"  below,  and "Risk  Factors - The  Company - Lack of
Continuity  in  Management."  In the event of such  resignations,  the Company's
current  management would not have any control over the conduct of the Company's
business following the Company's combination with a business opportunity.

     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.

     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.


                                       2
<PAGE>


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,  who are not  professional
business analysts.  See "Management."  Although there are no current plans to do
so,  Company  management  might  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 the Company agrees to pay would be paid
in stock and not in cash.  In  assessing  a potential  transaction,  the Company
anticipates that it will consider, among other things, the following factors:



                                       3
<PAGE>


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

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

     6. 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  listing on an  exchange  or NASDAQ,  so as to permit the
trading of such securities to be exempt from the requirements of Rule 15g-9. See
"Risk Factors - The Company - Regulation of Penny Stocks";

     7. 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;

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

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

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

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

     In regard to the  possibility  that the shares of the Company would qualify
for listing on NASDAQ,  the current  standards include the requirements that the
issuer of the  securities  that are  sought to be listed  have net  assets of at
least  $4,000,000.  Many, and perhaps most, of the business  opportunities  that
might be  potential  candidates  for a  combination  with the Company  would not
satisfy the NASDAQ listing criteria.

     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 the ten 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.



                                       4
<PAGE>


     The Company has no business proposals under consideration as of the date of
filing of this Form 10-KSB.

     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 within a reasonable  period of time not
to  exceed  60 days  following  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.

     It is  possible  that the range of  business  opportunities  that  might be
available  for  consideration  by the Company  could be limited by the impact of
Securities and Exchange  Commission  (the  "Commission")  regulations  regarding
purchase and sale of "penny stocks." The regulations would affect,  and possibly
impair,  any market that might  develop in the Company's  securities  until such
time as they  qualify for listing on NASDAQ or on another  exchange  which would
make them exempt from applicability of the "penny stock" regulations.  See "Risk
Factors - Regulation of Penny Stocks."

     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.

     There are no loan arrangements or arrangements for any financing whatsoever
relating to any business opportunities.



                                       5
<PAGE>



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.

     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.  (See "Description of Business -
Business Development").

     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



                                       6
<PAGE>


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.

Investment Company Act and Other Regulation

     The  Company  may  participate  in a business  opportunity  by  purchasing,
trading or selling  the  securities  of such  business.  The  Company  does not,
however,  intend to  engage  primarily  in such  activities.  Specifically,  the
Company intends to conduct its activities so as to avoid being  classified as an
"investment  company" under the Investment  Company Act of 1940 (the "Investment
Act"),  and  therefore  to  avoid  application  of the  costly  and  restrictive
registration  and other  provisions of the Investment  Act, and the  regulations
promulgated thereunder.

     Section  3(a)  of  the   Investment  Act  contains  the  definition  of  an
"investment  company," and it excludes any entity that does not engage primarily
in the business of investing, reinvesting or trading in securities, or that does
not engage in the business of investing,  owning, holding or trading "investment
securities"  (defined as "all  securities  other than  government  securities or
securities of  majority-owned  subsidiaries")  the value of which exceeds 40% of
the value of its total assets  (excluding  government  securities,  cash or cash
items).  The Company  intends to implement  its business  plan in a manner which
will  result  in the  availability  of this  exception  from the  definition  of
"investment company." Consequently, the Company's participation in a business or
opportunity  through the  purchase  and sale of  investment  securities  will be
limited.



                                       7
<PAGE>


     The  Company's  plan  of  business  may  involve  changes  in  its  capital
structure,  management,  control and business,  especially  if it  consummates a
reorganization  as  discussed  above.  Each of these areas is  regulated  by the
Investment  Company Act, in order to protect  purchasers of  investment  company
securities.  Since the  Company  will not  register  as an  investment  company,
stockholders will not be afforded these protections.

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  acquiree  being merged into a wholly
owned subsidiary, a shareholder will have no right of dissent under Nevada law.

Administrative Offices

     The Company currently  maintains it corporate records and a mailing address
at the office of its  President,  Richard S. Kaye,  50 East 42nd  Street,  Suite
1805, New York, NY 10017. Other than this mailing address,  the Company does not
currently maintain any other office facilities, and does not anticipate the need
for maintaining  office  facilities at any time in the foreseeable  future.  The
Company pays no rent or other fees for the use of this mailing address.

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.  Although there is no current
plan with  respect  to its  nature  or  amount,  remuneration  may be paid to or
accrued for the benefit of, the Company's  officers  prior to, or in conjunction
with, the completion of a business  acquisition for services actually  rendered.
See   "Executive   Compensation"   and   "Certain   Relationships   and  Related
Transactions."



                                       8
<PAGE>


Risk Factors

     1.  Officers  and  directors of  Strategic  may have  certain  conflicts of
interest  which are  adverse to the  Company  and may also be  afforded  certain
opportunities that are not extended to other Strategic shareholders.

     Certain  conflicts of interest may exist between Strategic and its officers
and  directors.  Such officers and directors  have other  business  interests to
which they  devote  their  attention,  and may be  expected to continue to do so
although  management  should  devote  time to the  business of  Strategic.  As a
result,  conflicts  of  interest  may arise that can be  resolved  only  through
exercise of such judgment as is consistent  with fiduciary  duties to Strategic.
See "Management," and "Conflicts of Interest."

     It is  anticipated  that each of  Strategic's  officers and  directors  may
actively  negotiate  or  otherwise  consent to the  purchase of a portion of his
common stock as a condition  to, or in  connection  with,  a proposed  merger or
acquisition  transaction.  In this  process,  our  officers  and  directors  may
consider their own personal  pecuniary benefit rather than the best interests of
other  Strategic  shareholders,  and the other  Strategic  shareholders  are not
expected to be afforded the  opportunity to approve or consent to any particular
stock buy-out transaction. See "Conflicts of Interest."

     2. Strategic may not have sufficient funds to finance any transaction or to
exploit opportunities in any business in which Strategic decides to invest.

     Strategic  has very  limited  funds,  and such funds may not be adequate to
take advantage of any available business opportunities.  Even if our funds prove
to be sufficient  to acquire an interest in, or complete a  transaction  with, a
business opportunity, we may not have enough capital to exploit the opportunity.
Our ultimate success may depend upon our ability to raise additional capital. We
have not investigated the  availability,  source, or terms that might govern the
acquisition  of additional  capital and will not do so until we determine a need
for additional financing. If additional capital is needed, there is no assurance
that funds will be available from any source or, if available,  that they can be
obtained on terms  acceptable to us. If not available,  our  operations  will be
limited to those that can be financed with our modest capital.

     3. Because the  Commission  considers our securities to be a "penny stock,"
there are a number of special  rules that govern the trading of our  securities.
In addition,  many penny stocks have been the subject of fraud and abuse,  which
may have a negative effect on the value of your investment in Strategic.

     Our securities are subject to a Commission  rule that imposes special sales
practice  requirements upon  broker-dealers  who sell such securities to persons
other than established  customers or accredited  investors.  For purposes of the
rule, the phrase  "accredited  investors" means, in general terms,  institutions
with assets in excess of $5,000,000, or individuals having a net worth in excess
of $1,000,000 or having an annual  income that exceeds  $200,000 (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker-dealer  must make a special  suitability  determination for
the purchaser and receive the purchaser's  written  agreement to the transaction
prior to the sale. Consequently, the



                                       9
<PAGE>


rule may affect the ability of our  shareholders to sell their securities in any
market that might develop.

     Shareholders should be aware that, according to the Commission,  the market
for penny stocks has suffered in recent years from  patterns of fraud and abuse.
Such patterns include (i) control of the market for the security by one or a few
broker-dealers   that  are  often  related  to  the  promoter  or  issuer;  (ii)
manipulation of prices through  prearranged  matching of purchases and sales and
false and misleading  press releases;  (iii) "boiler room"  practices  involving
high-pressure  sales tactics and unrealistic  price projections by inexperienced
sales persons;  (iv) excessive and undisclosed bid-ask differentials and markups
by selling broker-dealers;  and (v) the wholesale dumping of the same securities
by promoters and broker-dealers  after prices have been manipulated to a desired
level,  along with the  resulting  inevitable  collapse of those prices and with
consequent  investor  losses.  Our  management  is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to be
in a position to dictate the  behavior  of the market or of  broker-dealers  who
participate  in the  market,  management  will  strive  within the  confines  of
practical  limitations to prevent the described  patterns from being established
with respect to Strategic's securities.

     4. We may  never  find a  business  opportunity  and if we find a  business
opportunity, such opportunity may never make a profit.

     There  is  no  assurance   that  we  will  acquire  a  favorable   business
opportunity. Even if we should become involved in a business opportunity,  there
is no assurance  that it will generate  revenues or profits,  or that the market
price of our common stock will be increased thereby.

     5. We cannot accurately assess the risk of any future  transactions and you
may lose all or part of your investment in Strategic.

     We have not  identified  and have no commitments to enter into or acquire a
specific  business  opportunity and therefore can disclose the risks and hazards
of a business or  opportunity  that we may enter into in only a general  manner,
and  cannot  disclose  the  risks  and  hazards  of  any  specific  business  or
opportunity that we may enter into. An investor can expect a potential  business
opportunity to be quite risky. Our acquisition of or participation in a business
opportunity  will likely be highly  illiquid and could result in a total loss to
Strategic  and our  stockholders  if the  business or  opportunity  proves to be
unsuccessful.

     6. We may enter into a transaction  with a company that is seeking to avoid
the difficulties of effecting its own public offering.

     The  type of  business  to be  acquired  may be one that  desires  to avoid
effecting  its  own  public  offering  and  the  accompanying  expense,  delays,
uncertainties,  and  federal  and state  requirements  which  purport to protect
investors.  Because of our limited capital,  it is more likely than not that any
acquisition  by Strategic  will involve other parties whose primary  interest is
the acquisition of control of a publicly traded company.  Moreover, any business
opportunity  acquired may be currently  unprofitable  or present other  negative
factors.



                                       10
<PAGE>


     7.  We will  not be able to  perform  an  exhaustive  investigation  of any
potential strategic partners,  which increases the risk that you may lose all or
part of your investment in Strategic.

     Our limited funds and the lack of full-time  management will likely make it
impracticable to conduct a complete and exhaustive investigation and analysis of
a business  opportunity before we commit our capital or other resources thereto.
Management   decisions,   therefore,   will  likely  be  made  without  detailed
feasibility studies, independent analysis, market surveys and the like which, if
we had more funds  available to us, would be desirable.  We will be particularly
dependent in making decisions upon information provided by the promoter,  owner,
sponsor,  or  others  associated  with  the  business  opportunity  seeking  our
participation.  A significant portion of our available funds may be expended for
investigative  expenses and other  expenses  related to  preliminary  aspects of
completing an acquisition  transaction,  whether or not any business opportunity
investigated is eventually acquired.

     8. We will only be able to complete one  transaction  which  increases  the
risk that you may lose all or part of your investment in Strategic.

     Because of our limited financial resources,  it is unlikely that we will be
able to diversify our  acquisitions  or  operations.  Our probable  inability to
diversify  our  activities  into more than one area will  subject us to economic
fluctuations  within a  particular  business or industry  and increase the risks
associated with our operations.

     9. We may acquire a company that does not have audited financial statements
which may  increase  the risk  that such  information  is not  accurate  and may
preclude  Strategic's  securities  from being  listed on NASDAQ which may have a
negative affect on the value of your investment in Strategic.

     We generally will require audited financial  statements from companies that
we propose to acquire.  Given cases where audited  financials are not available,
we will have to rely upon unaudited  information received from target companies'
management that has not been verified by outside auditors.  The lack of the type
of independent  verification  which audited financial  statements would provide,
increases  the risk that we, in  evaluating  an  acquisition  with such a target
company,  will not have the benefit of full and accurate  information  about the
financial  condition and recent  operating  history of the target company.  This
risk increases the prospect that the  acquisition of such a company might have a
negative impact on the value of your investment in Strategic.

     We are subject to the reporting  provisions of the Exchange Act, and we are
required  to  furnish  certain   information  about  significant   acquisitions,
including  audited  financial  statements  for any  business  that  we  acquire.
Consequently,  acquisition  prospects that do not have, or are unable to provide
reasonable  assurances  that they will be able to obtain,  the required  audited
statements   would  not  be  considered  by  Strategic  to  be  appropriate  for
acquisition  so long  as the  reporting  requirements  of the  Exchange  Act are
applicable.  Should  we,  during  the time we remain  subject  to the  reporting
provisions of the Exchange Act,  complete an  acquisition of an entity for which
audited  financial  statements prove to be unobtainable,  we would be exposed to
enforcement  actions  by  the  Commission  and to  corresponding  administrative
sanctions,  including permanent  injunctions against us and our management.  The
legal and other costs of



                                       11
<PAGE>


defending  a  Commission   enforcement  action  would  have  material,   adverse
consequences for us and our business. The imposition of administrative sanctions
would subject us to further adverse consequences.

     In addition,  the lack of audited  financial  statements  would prevent our
securities  from  becoming  eligible  for listing on NASDAQ,  or on any existing
stock  exchange  and  would  cause  the  prohibition  of  brokers-dealers   from
continuing to quote our stock on the  over-the-counter  bulletin board, where it
is presently quoted.  Moreover,  the lack of such financial statements is likely
to  discourage  broker-dealers  from  becoming or  continuing to serve as market
makers in our securities.  Without audited financial statements, we would almost
certainly be unable to offer securities under a registration  statement pursuant
to the  Securities  Act of  1933,  and our  ability  to raise  capital  would be
significantly limited until such financial statements were to become available.

     10. We are highly  dependent on our officers and  directors.  Their lack of
full-time  attention to our business may  negatively  affect our ability to find
and complete a transaction,  which could reduce the value of your  investment in
Strategic.

     We currently  have only three  individuals  who are serving as our officers
and directors on a part-time basis. We are heavily  dependent upon their skills,
talents,  and  abilities to implement our business  plan,  and may, from time to
time,  find that the  inability of the  officers  and  directors to devote their
full-time  attention to the business of Strategic results in a delay in progress
toward implementing our business plan. See "Management." Because you will not be
able to evaluate the merits of possible business acquisitions by Strategic,  you
should critically assess the information concerning our officers and directors.

     11. Our business may be negatively impacted if our officers leave.

     We do not have employment  agreements  with our officers,  and as a result,
there is no assurance they will continue to manage  Strategic in the future.  In
connection with acquisition of a business opportunity,  it is likely the current
officers and  directors  of  Strategic  may resign  subject to  compliance  with
Section  14(f) of the Exchange  Act. A decision to resign will be based upon the
identity of the business  opportunity and the nature of the transaction,  and is
likely to occur without the vote or consent of the stockholders of Strategic.

     12. We may incur large expenses if we were required to indemnify an officer
or director and your investment in Strategic may be negatively impacted.

     Nevada statutes  provide for the  indemnification  of directors,  officers,
employees, and agents, under certain circumstances,  against attorney's fees and
other  expenses  incurred by them in any litigation to which they become a party
arising from their  association  with or activities on behalf of Strategic.  Our
By-Laws  further  provide that we will bear the expenses of such  litigation for
any of our directors, officers, employees, or agents, upon such person's promise
to repay us therefor if it is ultimately  determined  that any such person shall
not have been entitled to  indemnification.  This  indemnification  policy could
result in substantial expenditures by us which we may be unable to recoup.



                                       12
<PAGE>


     13. We may  engage  in a  leveraged  transaction  which  may  increase  our
exposure to larger losses,  make it more difficult to make a profit and possibly
result in the loss of all or part of your investment in strategic.

     There is a possibility  that any  acquisition of a business  opportunity by
Strategic may be leveraged, i.e., we may finance the acquisition of the business
opportunity  by borrowing  against the assets of the business  opportunity to be
acquired,  or against the projected  future  revenues or profits of the business
opportunity.  This could  increase  our  exposure to larger  losses.  A business
opportunity  acquired  through a leveraged  transaction is profitable only if it
generates  enough  revenues to cover the related debt and  expenses.  Failure to
make  payments on the debt incurred to purchase the business  opportunity  could
result  in the loss of a  portion  or all of the  assets  acquired.  There is no
assurance that any business opportunity acquired through a leveraged transaction
will generate sufficient revenues to cover the related debt and expenses.

     14. We may lose  valuable  business  opportunities  because we have limited
resources  and may not be able to  compete  with other  firms for such  business
opportunities.

     The search for potentially  profitable business  opportunities is intensely
competitive.  We expect to be at a  disadvantage  when competing with many firms
that  have  substantially   greater  financial  and  management   resources  and
capabilities  than  Strategic.  These  competitive  conditions will exist in any
industry in which Strategic may become interested.

     15. We do not plan on paying any  dividends  on our common  stock which may
make our common stock a less attractive investment to future potential investors
and have a negative impact on the value of your investment in Strategic.

     We have not paid  dividends  on our common  stock and we do not  anticipate
paying such dividends in the foreseeable future.

     16. We may sell  control of  Strategic  to an outside  investor and current
management of Strategic may be replaced. In addition,  your percentage ownership
of Strategic may be greatly reduced by such a transaction and you will have less
voting control over Strategic.

     We  may  consider  an  acquisition  in  which   Strategic  would  issue  as
consideration  for the  business  opportunity  to be  acquired  an amount of our
authorized but unissued  common stock that would,  upon issuance,  represent the
great  majority of  Strategic's  voting power and equity.  The result of such an
acquisition  would be that the acquired  company's  stockholders  and management
would control Strategic, and our management could be replaced by persons unknown
at this time.  Such a merger would  result in a greatly  reduced  percentage  of
ownership  of  Strategic by our current  shareholders.  In  addition,  our major
shareholders  could  sell  control  blocks  of stock at a  premium  price to the
acquired company's stockholders.

     17. Because certain shares of our common stock are "restricted  securities"
they are  subject  to  certain  trading  restrictions  which  may  cause  you to
experience delays and expenses in the sale of such securities.

     The  outstanding  shares of  common  stock  held by  present  officers  and
directors are "restricted  securities"  within the meaning of Rule 144 under the
Act. As restricted shares, these



                                       13
<PAGE>


shares may be resold only  pursuant to an  effective  registration  statement or
under  the  requirements  of  Rule  144  or  other  applicable  exemptions  from
registration  under the Act and as required under  applicable  state  securities
laws.  Rule  144  provides  in  essence  that a person  who has held  restricted
securities for one year may, under certain conditions,  sell every three months,
in brokerage  transactions,  a number of shares that does not exceed the greater
of 1.0% of a company's  outstanding  common stock or the average  weekly trading
volume  during the four calendar  weeks prior to the sale.  There is no limit on
the amount of restricted securities that may be sold by a nonaffiliate after the
restricted  securities  have been  held by the owner for a period of two  years.
Under Rule 144(k),  nonaffiliate  shareholders  who have held their shares for a
period of two years are eligible to have freely  tradable  shares.  A sale under
Rule 144 or under any other exemption from the Act, if available, or pursuant to
subsequent  registration  of  shares  of a  company's  common  stock of  present
stockholders, may have a depressive effect upon the price of the common stock in
any market that may develop.

     18. We will not be able to issue  shares  of  Strategic's  common  stock to
residents of any state upon exercise of the Warrants unless either the shares of
Strategic's  common  stock  issuable  upon  the  exercise  of the  Warrants  are
registered in that state or an exemption from registration is available.

     Although  certain  exemptions in the Blue Sky laws of certain  states might
permit the Warrants to be  transferred  even though the Units were not initially
registered  for sale therein,  we will be prevented  from issuing  shares of our
common  stock to residents  of any state upon  exercise of the  Warrants  unless
either the shares of our common stock issuable upon the exercise of the Warrants
are registered in that state or an exemption from registration is available.  We
may  decide  not to  seek or may not be  able  to  obtain  registration  for the
issuance  of our  shares  of  common  stock in all of the  states  in which  the
ultimate  holders of the Warrants reside during the period when the Warrants are
exercisable. In this case, if there is no exemption from registration available,
the  Warrants,  as the case may be, held by  purchasers  will expire and have no
value.  Holders of the Warrants may  determine if shares of  Strategic's  common
stock  to be  issued  upon  exercise  of  the  Warrants  are  registered  in any
particular state by contacting us. (See "Description of Securities - Warrants")

     19. In the event a current  prospectus  is not  available,  you will not be
able to exercise your Warrants.

     During the  exercise  period of the  Warrants,  we must  maintain  and make
available  a current  prospectus.  Therefore,  management  will  likely  have to
provide a new and current prospectus to all Warrant holders upon the exercise of
the Warrants.  The sums received upon the exercise of the Warrants, if any, will
be  reduced  by the  costs  we  will  incur  in  preparing  and  printing  a new
prospectus,  including accounting and legal fees. Nevertheless,  there can be no
assurance  that we will not be prevented  by  financial or other  considerations
from maintaining a current prospectus.  In the event a current prospectus is not
available,  the Warrants will not be exercisable.  At present,  there is no such
prospectus available.


                                       14
<PAGE>


     20. We may redeem your  Warrants at any time on thirty days' prior  written
notice.

     We may redeem the Warrants at any time after on thirty days' prior  written
notice  if there  is then a  prospectus  available  to  permit  the sale of such
shares.  Although Warrant holders will have the right to exercise their Warrants
through the date of  redemption,  they may be unable to do so because  they lack
sufficient  funds at the time of  redemption,  or they  may  simply  not wish to
invest  any more  money in our  shares of common  stock at that  time.  Should a
Warrant  holder fail to  exercise  such  Warrants on or prior to the  redemption
date,  such  Warrants  will  have no  value  except  for the  $.01  per  Warrant
redemption  price after the close of  business  on the date set for  redemption.
(See "Description of Securities - Warrants")

     21.  There may be  restrictions  on your  ability to resell  your shares of
Strategic due to restrictions under state Blue Sky laws.

     Because our securities  have not been  registered for resale under the blue
sky laws of any state,  the  holders of such  shares and  persons  who desire to
purchase them in any trading market that might develop in the future,  should be
aware that there may be  significant  state blue-sky law  restrictions  upon the
ability of investors to sell the  securities  and of  purchasers to purchase the
securities. Some jurisdictions may not under any circumstances allow the trading
or resale of  blind-pool or  "Blank-Check"  securities.  Accordingly,  investors
should consider the secondary market for our securities to be a limited one.

     22. You may be prevented from selling your shares of Strategic.

     Many states have enacted  statutes or rules which  restrict or prohibit the
sale of  securities  of "Blank  Check"  companies  to  residents so long as they
remain without specific  business plans. To the extent any current  shareholders
or subsequent purchaser from a shareholder may reside in a state which restricts
or  prohibits  resale of shares in a "Blank  Check"  company,  warning is hereby
given that the shares may be "restricted"  from resale as long as we are a shell
company.

     As of the date of filing  of this  Form  10-KSB,  we have no  intention  of
offering further shares in a private offering to anyone.  Further, the policy of
the Board of Directors  is that any future  offering of shares will only be made
after an  acquisition  has been made and can be  disclosed  in  appropriate  8-K
filings.

     In the event of a violation of state laws regarding resale of "Blank Check"
shares we could be liable  for civil and  criminal  penalties  which  would be a
substantial impairment to us.

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 office of its President,  Richard S. Kaye, 50 East 42nd Street,  Suite 1805,
New York 10017.  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.



                                       15
<PAGE>


Item 3. Legal Proceedings.

     The Company is not a party to any pending  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.

     The  Company's   shares  of  common  stock  are  currently  traded  on  the
Over-the-Counter Bulletin Board.

                          CLOSING QUARTERLY BID PRICES

                          Q1             Q2            Q3              Q4
                          --             --            --              --
          1998           1/32           1/32          1/32            1/32
          1999           1/16           1/32           1/8            1/8

     The  quotations  reflect  inter-dealer  prices,   without  retail  mark-up,
mark-down or commission, and may not represent actual transactions.

     At December 23, 1999,  there were 218  beneficial and record holders of the
Company's common stock.

     The Board of Directors  has never paid  dividends  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.

Item 6. Management's Discussion and Analysis or Plan of Operations.

Plan of Operation

     The  Company  remains  in the  development  stage and has  limited  capital
resources  and  stockholder's  equity.  At December  31,  1999,  the Company has
current  assets  in the form of cash and cash  equivalents  of  $138,182,  total
assets of $138,182  and no  liabilities.  The cash  assets may not satisfy  cash
requirements  for the  company  within  the next  twelve  months.  In the  event
additional  cash  is  required  the  Company  may  have  to  borrow  funds  from
shareholders or other sources,  or seek funds from a private placement among new
investors,  none of which can be  assured.  The Company  cannot  predict to what
extent its limited capital  resources will impair the consummation of a business
combination  or whether it will  incur  further  operating  losses  through  any
business entity which the Company may eventually acquire.



                                       16
<PAGE>


     During  each of the last two fiscal  years,  the  Company has engaged in no
significant operations other than organizational  activities and preparation for
registration of its securities under the Exchange Act. No revenues were received
by the Company  during this period other than interest  income of  approximately
$5,700 in fiscal year 1998 and approximately  $5,200 in fiscal year 1999. During
the last fiscal year, the Company incurred  operating  expenses of $10,236.  The
Company's accumulated deficit at December 31, 1999 was $47,121. Such losses will
continue unless  revenues and business can be acquired by the Company.  There is
no  assurance  that  revenues  or  profitability  will ever be  achieved  by the
Company.

     For the current fiscal year, the Company anticipates  incurring a loss as a
result of legal and accounting  expenses,  expenses associated with registration
under the Exchange Act, and expenses  associated  with  locating and  evaluating
acquisition   candidates.   The  Company   anticipates  that  until  a  business
combination  is completed with an  acquisition  candidate,  it will not generate
revenues other than interest income, and may continue to operate at a loss after
completing  a  business  combination,  depending  upon  the  performance  of the
acquired business.

Year 2000 Issues

     Year 2000  problems  result  primarily  from the inability of some computer
software to properly store,  recall,  or use data after December 31, 1999. These
problems may affect many  computers  and other  devices  that  contain  embedded
computer chips. The Company's  operations,  however,  do not rely on information
technology  (IT) systems.  Accordingly,  the Company does not believe it will be
materially affected by Year 2000 problems.

     The  Company  relies  on  non-IT  systems  that may  suffer  from Year 2000
problems,  including  telephone systems and facsimile and other office machines.
Moreover,  the Company  relies on third  parties  that may suffer from Year 2000
problems  that  could  affect  the  Company's  operations,  including  banks and
utilities.  In light of the Company's limited  operations,  the Company does not
believe that such non-IT systems or  third-party  Year 2000 problems will affect
the Company in a manner that is different or more substantial than such problems
affecting other similarly situated companies or industry generally.

Item 7. Financial Statements.



                                       17
<PAGE>


                                    PART F/S

                          STRATEGIC ACQUISITIONS, INC.
                          (A Development Stage Company)
                          Index to Financial Statements

                                    CONTENTS

COVER PAGE...................................................................F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS...........................F-2

BALANCE SHEETS, DECEMBER 31, 1999 AND 1998...................................F-3

STATEMENTS OF OPERATIONS FOR THE YEARS
ENDED DECEMBER 31, 1999 AND 1998.............................................F-4

STATEMENTS OF CASH FLOWS FOR THE YEARS
ENDED DECEMBER 31, 1999 AND 1998.............................................F-5

STATEMENTS OF STOCKHOLDER'S EQUITY,
DECEMBER 31, 1999 AND 1998...................................................F-6

NOTES TO FINANCIAL STATEMENTS................................................F-7



                                       18
<PAGE>








                           STRATEGIC ACQUISITIONS INC.

                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                           DECEMBER 31, 1999 AND 1998



                                      F-1
<PAGE>


                          MAYER RISPLER & COMPANY, P.C.

                          CERTIFIED PUBLIC ACCOUNTANTS

MAYER RISPLER, C.P.A.                                   18 HEYWARD STREET
MICHAEL FRIEDMAN, C.P.A.                                BROOKLYN, NEW YORK 11211
JOSEPH SCHWARTZ, C.P.A.                                 (718) 852-9200
                                                        FAX (718) 596-3968



                          INDEPENDENT AUDITORS' REPORT

To The Board of Directors:

Strategic Acquisitions Inc.

New York, New York

We have audited the accompanying  balance sheets of Strategic  Acquisitions Inc.
(a  Development  Stage Company) as of December 31, 1999 and 1998 and the related
statements of operations, stockholders' equity and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an opinion on these  statements
based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance about whether the statement is 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, 1999 and 1998,  and the results of its operations and cash flows
for the years then ended,  in  conformity  with  generally  accepted  accounting
principles.

/s/ Mayer Rispler & Company, P.C.
February 20, 2000
Brooklyn, New York


                                      F-2
<PAGE>


                           STRATEGIC ACQUISITIONS INC.

                          (A Development Stage Company)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS

                                                                                 December 31,
                                                                             1999            1998
                                                                           ---------       ---------
<S>                                                                        <C>             <C>
Cash and Equivalents                                                       $ 138,182       $ 143,213
               TOTAL ASSETS                                                $ 138,182       $ 143,213
                                                                           =========       =========



                      LIABILITIES AND STOCKHOLDERS' EQUITY

Stockholders' Equity

        Common Stock, par value $.001; authorized 50,000,000
        shares, 1,600,000 shares issued and outstanding at
        December 31, 1999 and 1998, respectively                           $   1,600       $   1,600
        Additional Paid-In Capital                                           183,703         183,703
        Accumulated Deficit                                                  (47,121)        (42,090)
           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                           $ 138,182       $ 143,213
                                                                           =========       =========
</TABLE>



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



                                      F-3
<PAGE>




                           STRATEGIC ACQUISITIONS INC.

                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

                               FOR THE YEARS ENDED

<TABLE>
<CAPTION>
                                                                         December 31,
                                                                 1999                 1998
                                                              -----------          -----------
<S>                                                           <C>                  <C>
Interest Income                                               $     5,205          $     5,788
                                                              -----------          -----------
Expenses:
        Transfer Agent Fees                                         2,400                2,400
        State of Nevada Filing Fees                                   100                   85
        Registered Agent Fee                                          108                  103
        Bank Confirmation Fee                                          25                  -0-
        Legal Fees                                                  3,603                  -0-
        Auditing Fees                                               4,000                  -0-
                                                              -----------          -----------
               Total Expenses                                      10,236                2,588
                                                              -----------          -----------
               NET INCOME (LOSS)                              $    (5,031)         $     3,200
                                                              ===========          ===========
Basic Earnings (Loss) Per Common Share                        $     (.003)         $      .002
                                                              ===========          ===========
Weighted Average Number of Shares Outstanding                   1,600,000            1,600,000
                                                              ===========          ===========
</TABLE>



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



                                      F-4
<PAGE>




                           STRATEGIC ACQUISITIONS INC.

                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS

                               FOR THE YEARS ENDED

                                                             December 31,
                                                       1999              1998
                                                     ---------         ---------
Cash Flows From Operating Activities:
        Net Income (Loss)                            $  (5,031)        $   3,200
        CASH - BEGINNING                               143,213           140,013
        CASH - ENDING                                $ 138,182         $ 143,213
                                                     =========         =========


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



                                      F-5
<PAGE>


                           STRATEGIC ACQUISITIONS INC.

                          (A Development Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                               Total
                                                      Common          Additional        Accumulated         Stockholders
                                                      Stock        Paid-In Capital        (Deficit)           Equity
                                                    ---------      ---------------      -----------         ------------
<S>                                                 <C>                <C>                <C>                <C>
Issuance of common stock on July 31,
1989 at par value ($.001 per share) for cash        $   1,360          $   4,640                             $   6,000
Public offering - 40,000 units (six
shares per unit) @ $6.00 per unit, net of costs           240            179,063                               179,303
Net Loss - Inception to December 31, 1997                                                   (45,290)           (45,290)
                                                    ---------          ---------          ---------          ---------

Balance - December 31, 1997                             1,600            183,703            (45,290)           140,013
Net Income                                                                                    3,200              3,200
                                                    ---------          ---------          ---------          ---------
Balance - December 31, 1998                             1,600            183,703            (42,090)           143,213
Net Loss                                                                                     (5,031)            (5,031)
                                                    ---------          ---------          ---------          ---------
Balance - December 31, 1999                         $   1,600          $ 183,703          $ (47,121)         $ 138,182
                                                    =========          =========          =========          =========
</TABLE>



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



                                      F-6
<PAGE>


                           STRATEGIC ACQUISITIONS INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1999 AND 1998



NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

     Background - Strategic  Acquisitions Inc. (the Company) was organized under
the laws of the State of Nevada on January 27, 1989. Its purpose is to provide a
vehicle to acquire or merge with another entity. Since the Company does not have
any operations, it is considered a development stage company.

     Cash and Equivalents - Cash and equivalents are stated at cost plus accrued
interest.  The Company  considers all highly liquid  investments with a maturity
date of three months or less to be cash equivalents.

     Concentration  of Credit Risk - At December 31, 1999 and 1998,  the Company
maintained all its cash in one commercial bank.

     Earnings  Per  Share -- Basic  earnings  per  share is  computed  using the
weighted average number of shares outstanding during the reporting period.

NOTE 2 - STOCKHOLDERS' EQUITY

The Company is authorized to issue 50,000,000  common shares with a par value of
$.001. On July 31, 1989, the Company issued 1,360,000 shares of its common stock
to its officers for a total consideration 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 consists of six shares of Common Stock, $.001
par value,  thirty Class A Warrants,  thirty Class B Warrants and thirty Class C
Warrants. Each Class A Warrant entitles the holder thereof to purchase one share
of Common  Stock at $0.75 per share for an exercise  period of  eighteen  months
commencing from the effective date of this offering (the "Effective Date"). Each
Class B Warrant  entitles  the holder  thereof to  purchase  one share of Common
Stock at $0.875 per share for an exercise period of two years from the Effective
Date.  Each Class C Warrant  entitles the holder thereof to purchase on share of
common  Stock at $1.00 per share for and  exercise  period of two years from the
Effective  Date. The Company has the right to call the Warrants at any time upon
thirty days written  notice to the holders of record  thereof at a call price of
$.01 per  Warrant.  The  Company has  extended  the life of these  Warrants  and
currently  the Class A Warrants  expire on April 17,  2000,  and the Class B and
Class C Warrants expire October 16, 2000.



                                      F-7
<PAGE>



                           STRATEGIC ACQUISITIONS INC.

                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 1999 AND 1998

                                   (CONTINUED)

The Company granted the  underwriter of its initial public offering  warrants to
purchase an aggregate  of 4,000 units that are  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 Company has extended the life of these
warrants and currently they expire on April 17, 2000.

NOTE 3 - COMMITMENTS AND THE MATTERS

a) The  Company  currently  utilizes  the office of its  president  as a mailing
address. Pursuant to an oral agreement these facilities are rent free.

NOTE 4 - INCOME TAXES

At December 31, 1999 and 1998 the Company had  available  Federal net  operating
loss  carry-forwards  of $47,121  and  $42,090,  respectively.  The  Company has
established a valuation  allowance  equal to 100% of the deferred tax asset that
would be  created  upon  recording  the tax  effect  of the net  operating  loss
carry-forwards,  as the Company  could not conclude  that the deferred tax asset
would be realized.

NOTE 5 - REGISTRATION STATEMENT

     A  Registration  Statement on Form 10-SB was filed with the  Securities and
Exchange  Commission  January 18,  2000.  The  Company  has been  advised by the
Commission  that no review of such  statement  has been or will be made and that
the Registration  Statement will go effective  automatically on sixty days after
filing.



                                      F-8
<PAGE>



Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure.

     None.

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        With Section 16(a) of the Exchange Act.

     The directors and executive  officers  currently serving the Company are as
follows:

Name                             Positions Held                        Tenure
----                             --------------                        ------
Richard S. Kaye                  President and Director                Annual
Deborah A. Salerno               Vice President and Director           Annual
Victor E. Stewart                Secretary, Treasurer and Director     Annual

     There is no arrangement or understanding between the directors and officers
of the Company and any other  person  pursuant to which any  director or officer
was or is to be selected as a director or officer.

     All  of  the  Company's   directors  hold  office  until  the  next  annual
stockholders  meeting or until their death,  resignation,  retirement,  removal,
disqualification,  or until their  successors  have been elected and  qualified.
Vacancies in the existing  Board of Directors  are filled by a majority  vote of
the remaining directors.  Officers of the Company serve at the will of the Board
of Directors.

     The  directors  and  officers of the  Company  will devote such time to the
Company's affairs on an "as-needed"  basis, but less than 20 hours per month. As
a result,  the actual  amount of time which  they will  devote to the  Company's
affairs is unknown and is likely to vary substantially from month to month.

Section 16(a) Beneficial Ownership Reporting Compliance.

     Each of the Company's officers and directors filed his Form 3 late.

Biographical Information.

     Brief  biographies  of the  Company's  directors and officers are set forth
below.  Each of these persons may be deemed a "promoter" of the Company as those
terms are defined in the rules and regulations promulgated under the Act.



                                       20
<PAGE>


     RICHARD S. KAYE, age 67, has acted as the Company's  president and director
since  1989.  For more than the past five  years,  Mr.  Kaye has managed his own
investment portfolio for his own account.

     DEBORAH A. SALERNO, age 46, has acted as the Company's vice president and a
director  since 1989. Ms. Salerno has also acted as the president (and owner) of
DAS Consulting,  Inc., a private corporation located in New York City, providing
financial consulting services to corporations since 1988.

     Ms.  Salerno,  who attended  Pace  University,  has also been employed as a
trader  in the  over-the-counter  market  (Greentree  Securities,  October  1986
through March 1987); and as Vice President and Syndicate  Manager (Yves Hentic &
Company,  Inc.,  Jersey  City,  New Jersey,  1985  through  1986).  She was also
involved with the risk  arbitrage  market from 1978 through  1985,  and was vice
president of Bodkin  Securities  (1980 through  1985) and Assistant  Options P&S
Manager for Ivan F. Boesky, from 1978 through 1980.

     Ms. Salerno has had  significant  experience  with "shell" or "Blank Check"
companies,  which experience is detailed on pages following under Previous Blank
Check Offerings.

     VICTOR E. STEWART, age 49, has acted as the Company's secretary,  treasurer
and director  since 1989.  Since 1997 Mr.  Stewart has been a partner in the law
firm of Lovell & Stewart, LLP, which specializes in securities,  commodities and
antitrust  litigation.  From 1994 until 1996 Mr. Stewart served as a director of
Deutsche Morgan Grenfell.

     Mr.  Stewart  graduated  from Yale College in 1972 (B.A.  English) and from
Harvard Business School in 1975 (M.B.A.). Mr. Stewart received his J.D. from the
University of Virginia in 1979.

     Mr. Stewart has had  significant  experience  with "shell" or "blank check"
companies,  which  experience is detailed on the pages  following under Previous
Blank Check Offerings.

     None  of the  Company's  officers  and  directors  currently  receives  any
compensation for their respective services rendered to the Company. Compensation
of any  officer or  director  is not  expected  to occur  until the  Company has
generated   revenues  from  operations   after   consummation  of  a  merger  or
acquisition.  Currently, no retirement, pension, profit sharing, stock option or
insurance  programs or other  similar  programs have been adopted by the Company
for the benefit of its employees.

     It is possible that, after the Company successfully consummates a merger or
acquisition  with an  unaffiliated  entity,  that entity may desire to employ or
retain one or a number of members of the Company's  management  for the purposes
of  providing  services to the  surviving  entity,  or otherwise  provide  other
compensation to such persons.  However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be  a  consideration  in  the  Company's  decision  to  undertake  any  proposed
transaction.  Each member of management  has agreed to disclose to the Company's
Board of Directors any discussions  concerning possible  compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and  further,  to  abstain  from  voting on such  transaction.  Therefore,  as a
practical  matter,  if each  member of the  Company's  Board of  Directors  were
offered  compensation  in any form from any  prospective  merger or  acquisition
candidate, the proposed transaction would not be approved by the Company's Board
of



                                       21
<PAGE>


Directors  as a result of the  inability of the Board to  affirmatively  approve
such a transaction.

     It is  possible  that  persons  associated  with  management  may  refer  a
prospective  merger or  acquisition  candidate to the Company.  In the event the
Company  consummates  a  transaction  with any entity  referred by associates of
management,  it is possible that such an associate will be compensated for their
referral in the form of a finder's fee. It is anticipated  that this fee will be
either in the form of  restricted  common stock issued by the Company as part of
the  terms  of the  proposed  transaction,  or  will  be in  the  form  of  cash
consideration.  However,  if such  compensation  is in the  form of  cash,  such
payment will be tendered by the  acquisition  or merger  candidate,  because the
Company has insufficient cash available.  The amount of such finder's fee cannot
be  determined  as of the date of filing  this  report,  but is  expected  to be
comparable to  consideration  normally paid in like  transactions.  No member of
management  of the Company  will receive any finder's  fee,  either  directly or
indirectly,  as a result of their respective  efforts to implement the Company's
business plan outlined herein.

     Management  has been  involved  in several  other  "Blind  Pool" and "Blank
Check" companies as described in the following section.

Previous "Blank Check" or "Blind Pool" Offerings.

     A "Blank Check"  company is a company  which is formed  without a specified
business as its purpose.

     A "Blind Pool" company is a company which has raised money through a public
or private  offering for use to acquire  unspecified,  undesignated  business or
company.

     Management of the Company has been involved in prior public "Blind Pool" or
"Blank Check"  offerings.  As set forth below,  management  has been part of the
formation  of many new  companies  which  made  offerings  of  shares  without a
designated business.

     DEBORAH A.  SALERNO has been an officer and  director of twelve  blind pool
corporations,  excluding the Company. Eleven of such corporations have conducted
public offerings (pursuant to effective registration statements on Form S-18, as
filed  with  the  Commission),  and of  those,  all  have  completed  merger  or
acquisition transactions.

     The blank check  companies  with which Ms.  Salerno has been  involved have
concentrated  primarily  on  companies  with  plans  for  expansion  and/or  the
introduction of new products or services; such new products or services were, in
some cases, the acquisition or merger candidate's primary business, and in other
cases, an addition to existing lines of business.

     Ms. Salerno's past and present blind pool affiliations are as follows:

     1.  Formerly  president  and a director of Amsterdam  Capital  Corporation,
until it acquired  Care  Concepts,  Inc. as of June 16, 1989.  The  registration
statement for Amsterdam Capital



                                       22
<PAGE>


Corporation  became  effective on January 17, 1989, for 40,000 Units @ $5.50 per
unit raising $220,000.

     2. Formerly  president of East End Investment,  Inc., until it acquired The
Theme Factory,  Inc. as of October, 16 1989. Ms. Salerno continued to serve as a
director of The Theme  Factory,  Inc.  until her  resignation  in July 1992. The
registration  statement  for East  End  Investment,  Inc.  became  effective  on
September 8, 1989, for 10,000 Units @ $6 per unit raising $60,000.

     3.  Formerly  president  and a director of West End  Ventures,  Inc.  until
January 26, 1990, when it acquired Future Medical Technologies. The registration
statement for West End Ventures,  Inc.  became  effective on January 2, 1990 for
12,000 Units @ $6.00 per unit raising $72,000.

     4. Formerly president and a director of Sharon Capital Corporation until it
acquired Process Engineers Inc., as of April 5, 1990. The registration statement
for Sharon Capital  Corporation became effective on February 14, 1990 for 36,000
Units @ $6.00 per unit raising $216,000.

     5. Formerly  president and a director of Fulton Ventures,  Inc., until June
16, 1990, which acquired Triad Warranty Corporation.  The registration statement
for Fulton Ventures,  Inc. became effective on April 10, 1990 for 12,000 Units @
$6.00 per unit raising $72,000.

     6. Formerly,  president and a director of Elmwood Capital Corporation whose
registration  statement was declared effective on June 27, 1990 for 12,000 Units
@ $6.00 per unit raising  $72,000.  Elmwood  Capital  Corporation  acquired U.S.
Environmental  Solutions,  Inc., as of March 5, 1991, at which time Ms.  Salerno
ceased acting as an officer or director.

     7. Formerly president and a director of Carnegie Capital Corporation, whose
registration  statement  became effective on February 1, 1991 for 18,000 Units @
$6.00  per  unit  raising  $108,000.  During  November  1991,  Carnegie  Capital
corporation acquired Nevada Construction supply, which later changed its name to
National  Building  Supply.   Ms.  Salerno  resigned  as  president,   upon  the
acquisition  but  continued in her position as a director  until  September  29,
1992.

     8. Formerly  president and a director of Avalon Enterprises Inc., which had
its  registration  statement  declared  effective on March 26, 1991,  for 16,000
Units @ $6.00  per  unit  raising  a total  of  $96,000.  It  acquired  Southern
Corrections  Services,  Inc. on June 15, 1992. The company's name was thereafter
changed to Avalon  Community  Services,  Inc.,  and then to Avalon  Correctional
Services,  Inc. a post-effective  amendment to its registration statement became
effective on November 16, 1991.

     9.  Formerly  president and a director of South End  Ventures,  Inc.  whose
registration statement became effective on November 15, 1991, for 12,000 Units @
$6.00 per unit raising $72,000.  South End Ventures  completed an acquisition of
Shore Group,  Inc., a private  company  located,  in  Philadelphia,  PA,  during
December 1992, at which time Ms. Salerno  resigned as officer and director.  The
name of the company has been changed to Shore Group Incorporated.



                                       23
<PAGE>


     10. Formerly  president and a director of Hard Funding,  Inc., which merged
with Marinex which subsequently merged with Texas Equipment Corp. A Registration
Statement  was  effective  for 8,500  Units @ $6.00 per unit  raising a total of
$51,000.

     11. Former president and director of Bishop Equities, Inc. which registered
with the  Commission  effective  March 8,  1999  which  raised  $60,000.  Bishop
completed an acquisition of Aethlon Medical, Inc. on March 3, 1993.

     Detailed  information  and financial data about the above  companies may be
obtained,  where  applicable,  by reviewing the registration  statements on file
with the Commission  together with other subsequent filings. No assurance can be
given that the Company's  management will investigate or eventually  engage in a
combination with, similar companies, focus on the same or similar industries, or
utilize similar criteria in the evaluation of business combination candidates.

     Ms. Salerno has also acted as president and director of OSK Capital I Corp.
(1999)  and  secretary  and  director  of Park Hill  Capital I Corp.  (1999) and
Franklyn Resources I, Inc. (1999),  all blank check companies,  without specific
business plans which have filed  registration  statements under section 12(g) of
the Exchange Act.

     VICTOR E. STEWART has been  affiliated  with several  blank check  entities
including the following:  Asset Development  Corporation,  which merged with Joe
Franklin Productions in August 1987; The Acquisition Company, Inc., which merged
with Nightwing Group,  Inc. in October 1987;  Mergers Are Us, Inc., which merged
with North American Karate Conference, Inc. in September 1987; Asset Exploration
Company, Inc., which merged with K.F.O. Associates,  Inc. in September 1987; and
The Value Added Company,  Inc.,  which merged with Advanced Video Robotics Corp.
in November 1987.  During 1988, Mr.  Stewart served as  secretary-treasurer  and
director  of Big  Mergers,  Inc.,  which  merged with Self  Insurers  Services &
Underwriters,  Inc. in January 1988;  Bigger  Mergers,  Inc.,  which merged with
Modem Chemical  Technology,  Inc. in February 1988; Biggest Merger,  Inc., which
merged with Sportsplex Health and Fitness, Inc. in April 1988; Creative Mergers,
Inc.  which merged with  Accucomp  Equipment,  Inc. in July 1988;  Most Creative
Mergers,  Inc.  which merged with We Are Systems 21 Inc. and PN Computer  Gaming
Systems,  Inc. in July 1988; and More Creative  Mergers,  Inc. which merged with
ATS Money Systems, Inc. in September 1988. Most recently,  Mr. Stewart served as
secretary-treasurer  and  director  of Deals Are Us,  Inc.,  which  merged  with
Equestrian Centers of America, Inc. in April 1989 and Easy Mergers,  Inc., which
merged with Graystone Companies, Incorporated in July 1989.

Conflicts of Interest.

     The  officers  and  directors  of the  Company  will not devote more than a
portion of their time to the  affairs of the  Company.  There will be  occasions
when the time  requirements of the Company's  business conflict with the demands
of their other  business and investment  activities.  Such conflicts may require
that the Company attempt to employ additional  personnel.  There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.



                                       24
<PAGE>


     Certain of the  officers  and  directors  of the Company  may be  directors
and/or  principal  shareholders  of other companies and,  therefore,  could face
conflicts  of interest  with  respect to  potential  acquisitions.  In addition,
officers and directors of the Company may in the future  participate in business
ventures which could be deemed to compete directly with the Company.  Additional
conflicts of interest and non-arms'  length  transactions  may also arise in the
future in the event the  Company's  officers or  directors  are  involved in the
management of any firm with which the Company transacts business.  The Company's
Board of Directors  has adopted a policy that the Company will not seek a merger
with, or  acquisition  of, any entity in which  management  serve as officers or
directors,  or in which they or their family  members own or hold a  controlling
ownership  interest.  Although the Board of Directors could elect to change this
policy, the Board of Directors has no present intention to do so.

     The Company's  officers and  directors may actively  negotiate or otherwise
consent to the purchase of a portion of their common stock as a condition to, or
in  connection  with,  a  proposed  merger  or  acquisition  transaction.  It is
anticipated that a substantial  premium over the initial cost of such shares may
be paid by the purchaser in conjunction with any sale of shares by the Company's
officers and directors which is made as a condition to, or in connection with, a
proposed merger or acquisition transaction.  The fact that a substantial premium
may be paid to the  Company's  officers and  directors  to acquire  their shares
creates a potential  conflict of interest for them in satisfying their fiduciary
duties to the Company and its other shareholders.  Even though such a sale could
result in a substantial  profit to them, they would be legally  required to make
the  decision  based upon the best  interests  of the Company and the  Company's
other shareholders, rather than their own personal pecuniary benefit.

Item 10. Executive Compensation.

                    SUMMARY COMPENSATION TABLE OF EXECUTIVES

                           Annual Compensation Awards

<TABLE>
<CAPTION>
                                                                                Securities
   Name and                                       Other Annual    Restricted    Underlying
  Principal              Salary       Bonus       Compensation      Stock        Options/
   Position     Year       ($)         ($)             ($)         Award(s)      SARs (#)
  ---------     ----     ------       -----       -------------   ----------    ----------
<S>             <C>         <C>         <C>             <C>            <C>          <C>
Richard S.      1997        0           0               0              0            0
Kaye,           1998        0           0               0              0            0
President       1999        0           0               0              0            0
Deborah A.      1997        0           0               0              0            0
Salerno,        1998        0           0               0              0            0
Vice-President  1999        0           0               0              0            0
Victor E.       1997        0           0               0              0            0
Stewart,        1998        0           0               0              0            0
Secretary,      1999        0           0               0              0            0
Treasurer
</TABLE>


                                       25
<PAGE>

                             Directors' Compensation

                                                                    Number of
                                                                   Securities
                            Annual      Meeting    Consulting      Underlying
                         Retainer Fee     Fees     Fees/Other        Options
          Name               ($)          ($)       Fees ($)         SARs(#)
          ----           ------------   -------    ----------      ----------
A.    Richard S. Kaye         0            0            0               0
B.    Deborah A.              0            0            0               0
      Salerno
C.    Victor E.               0            0            0               0
      Stewart

Aggregated  Option/SAR  Grants in Last  Fiscal  Year and  Aggregated  Option/SAR
Exercises in Last Fiscal Year and FY-End Option/SAR values: None

Long Term Incentive Plans - Awards in Last Fiscal Year: None

     No officer or director has received any other  remuneration in the two-year
period  prior to the filing of this Form  10-KSB.  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.  See "Certain  Relationships and Related Transactions." 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. The Company's
officers do not have employment contracts with the Company.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

     The following table sets forth, as of the date hereof, 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.



                                       26
<PAGE>


MANAGEMENT AND 5% OR GREATER                                        OWNERSHIP
SHAREHOLDERS/BENEFICIAL OWNERS            NUMBER OF SHARES          PERCENTAGE
------------------------------            ----------------          ----------
Richard S. Kaye                                453,333                28.33%
50 East 42nd Street, Suite 1805
New York, NY  10017

Victor E. Stewart                              453,334                28.33%
269 South Irving Street
Ridgewood, NJ 07450

Deborah A. Salerno                             453,333                28.33%
355 South End Ave., 22B
New York, NY 10280

All directors and executive                   1,360,000               85.0%
Officers as a group (3 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.

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 a
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 50 East 42nd Street, Suite 1805,
New York, NY 10017, the office of its President,  Richard S. Kaye, but otherwise
does



                                       27
<PAGE>


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, List and Reports on Form 8-K.

3.1  Articles of Incorporation*

3.2  By-Laws*

4.2  Warrant Agreement between Strategic  Acquisitions,  Inc. and American Stock
     Transfer & Trust Company, dated October 16, 1989.*

27.1 Financial Data Schedule

----------
*Previously  filed with the Securities and Exchange  Commission as an exhibit to
its Form 10-SB.

                                       28

<PAGE>


                                   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: March 30, 2000

                                                STRATEGIC ACQUISITIONS, INC.

                                            By:/s/ Richard S. Kaye
                                               ---------------------------------
                                               Richard S. Kaye, President

     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
         ----                            -----                         ----
 /s/ Richard S. Kaye         Director, President                  March 28, 2000
 -------------------
   Richard S. Kaye

/s/ Victor E. Stewart        Director, Vice President             March 28, 2000
---------------------
  Victor E. Stewart

 /s/ Deborah Salerno         Director, Secretary and              March 28, 2000
 -------------------
   Deborah Salerno           Treasurer


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