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SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





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FORM 10-QSB





|x |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
|- |  | -------------------------------------------------

| |  | SECURITIES EXCHANGE ACT OF 1934
| |  | -------------------------------




For the quarter ended June 30, 2002





OR





| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|- |  | --------------------------------------------------------

| |  | SECURITIES EXCHANGE ACT OF 1934
| |  | -------------------------------




For the transition period from  to





Commission File Number: 1-12536





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STRATEGIC SOLUTIONS GROUP, INC.


(Exact name of Registrant as specified in its charter)





Delaware (State or other
jurisdiction of incorporation or organization)

11-2964894 (I.R.S.
Employer Identification No.)1598 Whitehall Road, Suite E Annapolis, Maryland (Address of principal executive offices)

21401 (Zip Code)





Registrants telephone number, including area
code:  (410) 757-2728





Not applicable


(Former name, former address and former fiscal year if changed since last report)





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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  ̈





8,559,196 Common Shares, $.0001 par
value were issued and outstanding at July 25, 2002.





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STRATEGIC SOLUTIONS GROUP, INC.





TABLE OF CONTENTS





Page No.Part IFinancial Information (unaudited)Consolidated Balance Sheets, June 30, 2002 and December 31, 2001

3Consolidated Statements of Operations for the three and six months ended June 30, 2002 and 2001

4Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and 2001

5Notes to Consolidated Financial Statements

6Managements Discussion and Analysis of Financial Condition and Results of Operations

9Part IIOther InformationItem 1.

Legal Proceedings

11Item 2.

Changes in Securities and Use of Proceeds

11Item 3.

Defaults Upon Senior Securities

11Item 4.

Submission of Matters to a Vote of Security Holders

11Item 5.

Other Information

11Item 6.

Exhibits and Reports on Form 8-K

11




2




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STRATEGIC SOLUTIONS GROUP, INC. AND SUBSIDIARY





CONSOLIDATED BALANCE SHEETS


(Unaudited)





June 30, 2002


December 31, 2001ASSETSCurrent assets:Cash and cash equivalents

$
133,501


$
105,430Accounts receivable, net of $25,000 allowance for doubtful accounts


46,181



121,435Costs and estimated earnings in excess of billings on uncompleted contracts


124,575



153,358Prepaid expenses and other current assets


30,143



25,923Total current assets


334,400



406,146Property and equipment, net


15,620



22,432Investments






19,139Other assets


8,233



8,233$
358,253


$
455,950LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilitiesAccounts payable and accrued liabilities

$
187,919


$
197,054Short-term debt


167,043



88,000Deferred revenue


1,113



5,893Total current liabilities


356,075



290,947Convertible subordinated debenturesrelated party


459,888



431,565Total liabilities


815,963



722,512Commitments and contingencies






Stockholders deficitCommon stock, $.0001 par value. Authorized 25,000,000 shares; issued and outstanding 8,592,529 and 8,792,528 shares as
of June 30, 2002 and December 31, 2001, respectively


859



879Additional paid-in capital


16,053,906



16,053,886Accumulated deficit


(16,512,475
)


(16,340,466
)Accumulated other comprehensive income






19,139Total stockholders deficit


(457,710
)


(266,562
)$
358,253


$
455,950





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




3




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STRATEGIC SOLUTIONS GROUP, INC. AND SUBSIDIARY





CONSOLIDATED STATEMENTS OF OPERATIONS


For the three and six months ended June 30, 2002 and 2001


(Unaudited)





Three months ended June
30,


Six months ended June
30,2002


2001


2002


2001RevenuesService

$
101,835


$
641,221


$
193,194


$
936,614Royalty


788



968



2,795



2,544Total revenue


102,623



642,189



195,989



939,158ExpensesCost of service


95,515



261,396



203,671



484,834Research and development














Selling, general and administrative


175,555



242,645



346,017



499,367Total operating expenses


271,070



504,041



549,688



984,201Income (loss) from operations


(168,447
)


138,148



(353,699
)


(45,043
)Other income


12,897



13,911



25,708



13,922Interest expense and other, net


(31,657
)


(30,014
)


(63,422
)


(40,887
)Gain on sale of investments










30,842



Proceeds from settlement


188,562







188,562



Total operating expenses


169,802



(16,103
)


181,690



(26,965
)Net income (loss)

$
1,355


$
122,045


($
172,009
)

($
72,008
)Net income (loss) per common shareBasic

$



$
0.01


($
0.02
)

($
0.01
)Weighted average number of common shares outstandingbasic


8,642,345



8,806,273



8,691,791



8,535,762Net income (loss) per common sharediluted

$



$
0.01


($
0.02
)

($
0.01
)Weighted average number of common shares outstandingdiluted


8,642,345



9,993,287



8,691,791



8,535,762








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




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STRATEGIC SOLUTIONS GROUP, INC. AND SUBSIDIARY





CONSOLIDATED STATEMENTS OF CASH FLOWS


For the six months ended June 30, 2002 and 2001


(Unaudited)





Six Months Ended June
30,2002


2001Cash flows from operating activitiesNet income (loss)

($
172,009
)

($
72,008
)Adjustments to reconcile net loss to net cash used in operating activitiesDepreciation and amortization


8,032



14,944Amortization of deferred financing costs


18,722



9,791Amortization of beneficial conversion feature on convertible subordinated debentures


9,602



7,313Registration penalties waived


(25,134
)


13,911Gain on sale of investments


(30,842
)


Gain on disposal of assets


(200
)


Increase (decrease) in cash from changes in assets and liabilities:Accounts receivable


104,037



(360,977
)Prepaid expenses and other current assets


21,955



38,593Other assets






5,266Accounts payable and accrued liabilities


4,366



42,047Deferred revenue


(4,780
)


(64,673
)Net cash provided by (used in) operating activities


(66,251
)


(365,793
)Cash flows from investing activitiesProceeds from sale of investments


30,842



Proceeds from disposal of assets


200



Capital expenditures


(1,220
)


(8,723
)Net cash provided by (used in) investing activities


29,822



(8,723
)Cash flows from financing activitiesProceeds from issuance of convertible subordinated debenture






350,000Payments on financing costs






(14,886
)Borrowings on short-term debt


180,043



Repayments on short-term debt


(115,543
)


(53,333
)Net cash provided by (used in) financing activities


64,500



281,781Net increase (decrease) in cash and cash equivalents


28,071



(92,735
)Cash and cash equivalents, beginning of period


105,430



219,537Cash and cash equivalents, end of period

$
133,501


$
126,802Supplemental disclosures of cash paid:Interest

$
46,777


$
3,219Income taxes






Supplemental schedule of noncash investing and financing activities:Options issued as payment for accrued penalties

$



$
12,000Options exercised for the payment of directors fees






6,000Stock issued in connection with the sale of convertible debentures






76,580Beneficial conversion feature related to convertible debenture






77,000





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




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STRATEGIC SOLUTIONS GROUP, INC. AND SUBSIDIARY





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





1.    FINANCIAL STATEMENT PRESENTATION





Strategic Solutions Group, Inc. (the Company) has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. These
financial statements should be read together with the financial statements and notes in the Companys 2001 Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The accompanying condensed consolidated financial statements reflect all adjustments and disclosures which, in our
opinion, are necessary for fair presentation. All such adjustments are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of the entire year.





2.    INVESTMENTS





During the six months ended June 30, 2002, the Company disposed of the remaining 34,177 shares of High Speed Access stock it held for $30,842.





3.    LINE OF CREDIT





At June 30, 2002
the Company had a line of credit with a bank allowing for borrowings up to $150,000 for working capital. The line is secured by the assets of the Company, and bears interest on the outstanding principal balance at the Prime Rate (4.75% at June 30,
2002) plus 2%. Accrued interest is payable monthly with any outstanding principal and accrued interest due November 30, 2002. At June 30, 2002 the outstanding principal balance and accrued interest on the line of credit was $127,043.





4.    CONVERTIBLE SUBORDINATED DEBTRELATED PARTY





Convertible subordinated debentures consisted of the following at June 30, 2002:


Convertible subordinated debt(1)

$
350,000Convertible subordinated debt(2)


250,000Subtotal


600,000Less: unamortized debt discount


(140,112
)Convertible subordinated debt, net

$
459,888


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|(1) |  | On March 27, 2001, the Company executed Subscription Agreements with certain existing shareholders, directors and members of executive management for the sale
of fourteen units for a total of $350,000. Each unit consists of 50,000 shares of Company common stock and a $25,000 convertible subordinated debenture, bearing interest at 10%, due in 2005. The convertible subordinated debentures are convertible at
the holders option, at any time, into shares of the Companys common stock at a conversion price of $0.10 per share (the closing market price on March 27, 2001).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | These debentures bear interest at 10%, with principal and accrued interest due in March and April 2005, and are convertible, by the holder at any time, into
shares of the Companys common stock, with the number of shares determined by dividing the unpaid principal balance and all accrued interest by $0.10. The Company calculated the value of the 700,000 shares of common stock issued as part of
these units as $77,000 based on the closing market price on March 27, 2001 (the Commitment Date). The Company recorded the market value of the 700,000 shares
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  | of common stock issued as part of these units as a discount to the convertible debentures and as common stock and additional paid in capital. The Company also
calculated the value of the beneficial conversion feature associated with these debentures in accordance with EITF 98-5: Accounting for Convertible Securities and Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, of
approximately $77,000 at the Commitment Date. The total discount of $154,000 is being amortized over the holding period of the debentures.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Company has the right to redeem the debentures at redemption prices increasing from 125% of the principal amount of the debenture, if redeemed before the
first anniversary of the Issuance Date, to 175% of the principal amount of the debenture between the second and third anniversary dates of the Issuance Date. Within ten (10) days of receipt of notice of redemption, the holder of the debenture has
the right to convert the redemption proceeds into common stock at $0.10 per share.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | On February 24, 2000 (Issuance Date), the Company issued a convertible subordinated debenture for $250,000. This debenture bears interest at 10%,
matures February 24, 2004 and is convertible into common stock, beginning the earlier of 180 days after the Issuance Date or the effective date of the Registration Statement filed pursuant to a Registration Rights Agreement, at a conversion price of
$0.28 (the Conversion Price).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Company has the right to redeem this debenture at redemption prices increasing from 125% of the principal amount of the debenture, if redeemed before the
first anniversary of the Issuance Date, to 200% of the principal amount of the debenture after the third anniversary date of the Issuance Date. Upon notice of redemption, the holder of the debenture has the right to convert the redemption proceeds
into common stock at the above Conversion Price.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In connection with the issuance of this debenture, the Company issued a stock purchase warrant for the purchase of up to 250,000 shares of the Companys
common stock at $0.75 per share. This stock purchase warrant expires on February 24, 2004. Based on the relative fair value of the debenture and stock purchase warrant, the stock purchase warrant has been assigned a value of $22,500, which
represents a debenture discount and will be amortized to interest expense over the life of the debenture. This fair value of the warrants was calculated using the Black-Scholes option pricing model with the following assumptions: risk free rate of
return of 5.7%; expected warrant lives of four years; volatility of 125%; and a dividend yield of 0%.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | As part of the debenture, the Company also issued 250,000 shares of its common stock to the investor. The Company recorded the market value of these shares as
an additional debenture discount and as common stock and additional paid in capital.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In connection with these investments, the Company entered into a registration rights agreement with this investor that required the Company to file a
registration statement with the SEC registering the shares of common stock related to these investments or incur penalties.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The Company adopted Emerging Issues Task Force (EITF) Issue 00-27, Application of EITF 98-5, Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios to Certain Convertible Instruments during the fourth quarter of 2000. EITF 00-27 requires that a convertible instruments beneficial conversion feature be measured
using an effective conversion price. As a result, the value assigned to the original issue discount on the convertible debt securities issued by the Company in the private placement of the convertible subordinated debentures completed in February
2000 was increased by $57,789. In accordance with the consensus, this additional original discount was expensed in 2000 and recognized as the cumulative effect of a change in accounting principle.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




5.    STOCKHOLDERS EQUITY





On August 15, 2001, the Company entered into a stock repurchase agreement with a shareholder whereby the Company agreed to repurchase 750,000 shares (Repurchased Shares) of common stock
held by the shareholder for an aggregate purchase price of $180,000. Of such Repurchased Shares,




7




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250,000 shares were paid for in cash for $60,000 and the remaining 500,000 shares were paid for in the
form of a promissory note in the principal amount of $120,000. The promissory note calls for fifteen monthly payments of $8,000 plus interest, with each payment repurchasing 33,333 shares of common stock. The shareholder also agreed to waive,
prorata as the note is repaid, $94,250 of previously accrued penalties the Company has incurred in connection with not registering these shares for resale. The Company has recorded the unpaid portion, $40,000, of the promissory note as a reduction
of paid in capital. The Company has recorded as other income $12,567 of the accrued penalties waived for the three months ended June 30, 2002. The balance of the accrued penalties at June 30, 2002 is $20,944.





6.    EARNINGS (LOSS) PER SHARE





Basic earnings (loss) per share for each period presented is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted
earnings per share reflects the dilutive effect of additional shares of common stock that could be issued upon the exercise of outstanding stock options and the conversion of the convertible subordinated debenture.





The following shows the determination of income for the purpose of the earnings (loss) per share computions:





Three Months Ended June
30,

Six Months Ended June
30,2002

2001

2002


2001Income (loss) available for common stockholders, for basic earnings per share

$
1,355

$
122,045

$
(172,009
)

$
(72,008
)Plus interest on convertible subordinated debentures, net of income taxes





14,344






Income (loss) available for common stockholders, used for diluted earnings per share

$
1,355

$
136,389

$
(172,009
)

$
(72,008
)





The following shows the determination of the number of shares used
in the earnings per share computations:





Three Months Ended June
30,

Six Months Ended June
30,2002

2001

2002

2001Weighted average number of shares outstanding

8,642,345

8,806,273

8,691,791

8,535,762Net number of shares issued on the assumed exercise of stock options



592,508



Shares issued on the assumed conversion of convertible subordinated debenture



594,505



Number of shares used in the computation of diluted earnings per share

8,642,345

9,993,287

8,691,791

8,535,762





For the three and six months ended June 30, 2002, approximately
2,000,000 shares of common stock issuable upon the exercise of stock options and the conversion of convertible debentures and warrants were excluded from the calulation for the dilutive earnings per share as their effect would be anti-dilutive.





7.    PROCEEDS FROM CLAIMS





On June 28, 2002, the Company received $28,562 and $160,000 as settlement of claims against High Speed Access Corporation (HSAC) and the principal owners of
Digital Chainsaw, Inc., an entity acquired by HSAC, in which the Company previously held an ownership position. On July 1, 2002 the Company used $127,043 of the proceeds to pay-off the outstanding line of credit.




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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





Overview





The Companys revenues are comprised of service fees and royalties. Service fees are generated from the
development of custom multimedia software. Royalties are paid to the Company by customers who resell copies of software developed by the Company for such customers.





Results of Operations





Three and Six Months Ended June
30, 2002 Compared to Three and Six Months Ended June 30, 2001





Total revenues for the three months ended June
30, 2002 were $102,623 as compared to $642,189 for the same period of 2001, a decrease of approximately $540,000. Total revenue for the six months ended June 30, 2002 was $195,989 as compared to $939,158 for the same period of 2001, a decrease of
approximately $743,000. The decrease in revenue for these periods reflects the general downturn in our economy during the previous three quarters. We have experienced a shift in our business cycle so that contacts traditionally procured and
producing revenue during the first and second quarter are lagging behind. We are optimistic that the Companys strategy to increase revenues prospectively from custom multimedia software development services which includes targeting its sales
and marketing efforts of technology-based training solutions to the manufacturing and transportation industries will show recovery in the future.





The Company has entered into agreements that allow certain customers to resell copies of the Companys software products in exchange for royalty payments. Royalties were $788 and $2,795 during the
three and six months ended June 30, 2002, as compared to $968 and $2,544 for the same periods of the prior year. The Company generally expects royalty revenue to remain constant with current levels due to the aging shelf life of products for which
the Company currently receives royalties. However, the Company continually explores additional marketing and development partners to increase revenues generated from royalty arrangements.





The net income and earnings per share were $1,355 and $0.00 per share, respectively, for the three months ended June 30, 2002, as compared to $122,045 and $0.01,
respectively, for the same period of the prior year. The decrease in net income of approximately $121,000 is primarily due to the significant reduction in new contracts. The net loss and loss per share were $172,009 and $0.02 per share,
respectively, for the six months ended June 30, 2002, as compared to $72,008 and $0.01, respectively, for the same period of the prior year. The increase in net loss of approximately $100,000 is primarily due to the significant reduction in new
contracts.





During the three and six months ended June 30, 2002, the cost of service fees for custom multimedia
software were $95,515 and $203,671, respectively, as compared to $261,396 and $484,834, respectively, for the same periods of the prior year, resulting in gross margins of approximately 6.2% and (5.2)%, respectively. This is primarily due to the
reduction of existing contract backlog, and inability to generate new contracts. With aggressive cost cutting measures, the Company was able to keep the cost of service fees at a minimum, but still experienced a minimal gross margin for the six
months ended June 30, 2002. Management believes that new contracts will be generated in the third and fourth quarters of 2002, and if enough contracts are secured, gross margins should return to around 50%.





During the three and six month periods ended June 30, 2002, total operating expenses were $271,070 and $549,688, respectively, as compared
to $504,041 and $984,201, respectively, for the same periods of the prior year, decreases of approximately $233,000 and $435,000, respectively. This decrease was primarily attributable to significant restructuring of the production process and cut
back on professional staff. There were no research and development expenses for the six months ended June 30, 2002 nor 2001.





During the three and six month periods ended June 30, 2002, selling, general and administrative expenses were $175,555 and $346,017, respectively, as compared to $242,645 and $499,367,




9




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respectively, in the same periods of the prior year, decreases of approximately $67,000 and $153,000,
respectively. The decrease is primarily the result of the adoption of significant cost cutting procedures.





During
the three and six months ended June 30, 2002, other income increased by approximately $188,000 and $231,000, respectively. The increase was primarily the result of a settlement of $188,562 received during the quarter ended June 30, 2002.





During the three and six months ended June 30, 2002, other expense increased by approximately $2,700 and $20,000,
respectively. The increase is the result of interest expense and amortization of discount and issue costs related to the Convertible Subordinated Debentures which were recorded during 2001.





Cash Flow, Liquidity and Capital Resources





For the six months ended June 30, 2002, the Company used net cash of $66,251 from operations. In addition to the net loss, the Company experienced a net increase in prepaid expenses and short-trm debt and a decrease in accounts
receivable, accounts payable and accrued liabilities and deferred revenue. The Company received net cash of $29,822 from investing activities. The Company received net cash of $28,071 from financing activities.





Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets, and the satisfaction
of liabilities in the normal course of business. Our auditors have included in their Report of Independent Certified Public Accountants, dated January 25, 2002, a fourth (explanatory ) paragraph drawing attention to factors that raise substantial
doubt about our ability to continue as a going concern. We have experienced net losses in the six months ended June 30, 2002 and during the year ended December 31, 2001 and currently have a working capital deficit. At July 31, 2002, we have $106,000
available to us under our $150,000 line of credit.





In order for us to be successful, we need to increase both our
sales and our customer mix. We are currently dependent primarily on one long-term customer (with multiple plant locations and contracts), who provided 59% and 87% of our revenue during the six months ended June 30, 2002 and the year ended December
31, 2001, respectively. Our relationship with this customer is good. Our anticipated cash flow from operations is largely dependent upon our ability to achieve our sales and gross profit objectives. Our contract backlog at June 30, 2002 was
$1,125,881 which represents a $899,006 increase from our backlog at December 31, 2001. This includes $1,073,000 in anticipated revenue from our largest customer for which we have been performing services although formal contracts for these services
have not been executed. Payments for the services we are performing will be made upon execution of the formal contracts. The amount of these services, $97,592 as of June 30, 2002, is reflected on our balance sheet as Costs and estimated
earnings in excess of billings on uncompleted contracts. We are dependent upon execution of these contracts for continuation as a going concern. We are currently aggressively pursuing additional financing due to the financial condition of the
Company. In addition, we have retained a professional Mergers and Acquisitions firm to investigate alterative business structures for the Company. Now that this process has begun, we cannot provide any assurance that we will be able to
secure the needed funds or that should we be able to obtain these funds, that they will be on terms acceptable to us.





Although we are hopeful that operating results will improve, there can be no assurances that positive results will occur. We may experience adverse results of operation in the future, and if we do, we may not be able to satisfy our
current obligations in the normal course of business or obtain additional investment capital on terms acceptable to us, or at all.





For the six months ended June 30, 2001, the Company used cash of $365,793 from operations. In addition to the net income, the Company experienced a net increase in accounts receivable, prepaid expenses and accounts payable
and accrued liabilities and a decrease in deferred revenue. The Company used cash of $8,723 for investing activities. The Company received net cash of $281,781 from financing activities.




10




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Strategy to Achieve Profitable Operations





During 1998, management laid out its Strategy to Achieve Profitable Operations, which included intensified development of its
technology-based training software, greater penetration of the needs of existing, major customers, initial exploitation of the internet applications for Companys expertise and careful management. In 2000 the Company began to stabilize its
business. While it has been successful to date, there are no assurances that the Company will continue to achieve its strategy.





The Companys Profit Strategy For 2002 focuses on maintaining and increasing profitability. Achievement of this goal will be accomplished by procuring additional contracts and meeting production deadlines.





Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in
this document and other statements which are not historical facts are forward looking statements that involve risks and uncertainties, including, the success of newly implemented sales strategies; the continued existence of agreements with product
providers; market acceptance of the Companys products and services; the ability to obtain a larger number and size of contracts; the timing of contract awards; work performance and customer response; the impact of competitive products and
pricing; technological developments by the Companys competitors or difficulties in the Companys research and development efforts; and other risks as detailed in the Companys Securities and Exchange Commission filings.





PART IIOTHER INFORMATION





Item 1.Legal Proceedings:





The Company is not subject to any
other legal proceedings other than claims that arise in the ordinary course of its business.





Item
2.Changes in Securities and Use of Funds:





None





Item 3.Defaults Upon Senior Securities:





None





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





None





Item 5.Other Information:





None





Item 6.Exhibits and Reports on Form 8-K:





(a)  Exhibits





99.19

Certifications pursuant to 18 USC Section 1350  Sarbanes-Oxley Act of 2002





(b)  No reports on Form 8-K were required to be filed for
the three months ended June 30, 2002.





SIGNATURE





In accordance with the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





STRATEGIC SOLUTIONS GROUP, INC.
(Registrant)By:

/s/    ERNEST
WAGNERErnest Wagner President, Chief
Operating Officer





Dated:  August 14, 2002




11




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EXHIBIT INDEX





Exhibit No.

Description99.19

Certifications pursuant to 18 USC Section 1350Sarbanes-Oxley Act of 2002




12