Note 2 – Summary of Significant Accounting Policies

Basis of presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted by the United States of America (“GAAP”) as found in the Accounting Standards Codification (“ASC”) and the Accounting Standards Codification (“ASC”) and the Financial Accounting Standards Board (“FASB”) under the rules and regulations to the United states Securities and Exchange Commission SEC and are expressed in U.S. dollars.

Principles of consolidation

As of December 31, 2025, the accounts include those of Strategic Acquisitions, Inc and its 100% owned subsidiary Exworth Union LLC. It’s wholly owned subsidiary STQN Sub, Inc. is dormant and has no reportable balances.

Restatement

The financial statements have been restated and reflects an increase in prepaid expenses of $653, and an increase in accounts payable of $345 and a corresponding decrease in expenses of $998. These matters resulted in revisions to amounts previously reported in the financial statements as of December 31, 2024.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Concentration and credit risk

The Company maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, from time to time, amounts may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Federal Deposit Insurance Corporation (“FDIC”) insures accounts up to $250,000 per Federally insured institution. As of December 31, 2025 and 2024, the Company had no uninsured balances on deposit at banks.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, loans receivable, digital assets held as collateral. The Company’s loan portfolio may be concentrated among a limited number of borrowers and is secured by digital asset collateral. The collateral is only Bitcoin which can be subject to market volatility. The Company additionally monitors the creditworthiness of borrowers and the value of collateral on an ongoing basis to mitigate credit risk. As of December 31, 2025, and 2024, the Company held no loan receivable balances neither collateral.

The Company utilizes third-party service providers for the custody of digital assets. Accordingly, the Company is exposed to risks associated with these custodians, including the risk of loss, theft, or misappropriation of digital assets, as well as potential service disruptions. The Company monitors the performance and reliability of its custodians on an ongoing basis.

The Company did not generate any revenue and had no customers during the year ended December 31, 2025. For the year ended December 31, 2024, the Company had one customer, which accounted for 100% of the Company’s total revenue.

The Company had no loans outstandings during the year ended December 31, 2025. For the year ended December 31, 2024, the Company had one lender, and this debt was paid in full by year end.

Prepaid Expenses

Prepaid Expenses are primarily governed by ASC 340-10-25 (Other Assets and Deferred Costs- Recognition.) In accordance with this standard, payments made by the Company in cash or other forms of consideration for goods or services not yet received are classified as prepaid expenses.

Digital Currencies – Bitcoin

The Company accounts for digital assets in accordance with the AICPA Practice Aid “Accounting for and Auditing of Digital Assets” (June 30, 2022) and SEC Staff Accounting Bulletin No. 121, which provide non-authoritative guidance under U.S. GAAP. There is currently no specific authoritative guidance on accounting for digital assets; therefore, digital assets that lack physical substance meet the definition of intangible assets and are accounted for under FASB ASC 350, Intangibles – Goodwill and Other.

Effective June 30, 2024, the Company early adopted FASB ASU 2023-08, “Accounting for and Disclosure of Crypto Assets.” This standard requires that qualifying crypto assets, including Bitcoin, be measured at fair value under ASC 820, with changes in fair value recognized in net income each reporting period, replacing the previous impairment model.

The Company held no digital assets as of December 31, 2025, and 2024.

Borrower Collateral and Digital Asset Custody

The Company requires borrowers to provide collateral at origination and to maintain specified collateral levels throughout the term of the loan. Pursuant to the loan agreements, borrowers transfer digital asset collateral, primarily consisting of Bitcoin, to third-party custody wallet addresses controlled by the Company.

The Company evaluates these transfers under ASC 860 and has determined that such transfers do not qualify as sales, as borrowers retain the right to reclaim the collateral upon full repayment of the loan, including any accrued interest and fees. Accordingly, these arrangements are accounted for as secured borrowings.

Digital assets held as collateral and under rehypothecation arrangements are accounted for in accordance with ASU 2023-08 and are measured at fair value, with changes in fair value recognized in earnings in the period in which such changes occur. The related receivables and liabilities are also measured at fair value.

When the Company receives collateral in connection with secured transactions and has the right to sell or repledge that collateral, the Company recognizes the collateral as an asset and records a corresponding liability reflecting the obligation to return the collateral to the counterparty.

The Company may rehypothecate digital asset collateral to third-party lenders. In such instances, the Company recognizes (i) a receivable representing its right to receive the collateral from the third-party lender and (ii) a corresponding liability representing its obligation to return the collateral to the borrower. These amounts are presented on a gross basis in the consolidated balance sheets.

The accounting for these arrangements requires significant judgment, including the evaluation of control over transferred assets, the determination of fair value, and the assessment of risks associated with third-party custodians and counterparties.

Collateralized Loans Receivable

Loans receivables represent written promissory obligations under which the Company has the contractual right to receive principal and, when applicable, interest from borrowers. Loans are recognized when the Company becomes a party to the contractual arrangement and are initially recorded at the principal amount advanced, adjusted for any unamortized premium, discount, and deferred origination fees and costs, as applicable.

Interest income is recognized over the contractual term of the loan using the effective interest method in accordance with ASC 835-30. If a loan does not bear interest at a market rate, the Company imputes interest based on an appropriate market rate at inception, unless the arrangement qualifies for a scope exception under applicable guidance.

Loans receivables are generally secured by collateral, including digital assets. The Company monitors collateral levels on an ongoing basis and may require additional collateral or liquidate collateral in the event of borrower default or significant market volatility.

Allowance for Credit Losses (Loans)

The Company accounts for expected credit losses on loans receivable in accordance with ASC 326. An allowance for credit losses is established upon initial recognition of a loan and is updated at each reporting date to reflect management’s estimate of expected credit losses over the contractual life of the loan.

The estimate of expected credit losses incorporates historical credit loss experience, current borrower-specific information, collateral value (including digital asset collateral, where applicable), payment history, and reasonable and supportable forecasts of future economic conditions.

Loans are evaluated individually when they do not share similar risk characteristics and collectively when similar risk characteristics exist.

When collectability of principal or interest is not probable, the loan is placed on nonaccrual status and interest income recognition is suspended. Interest income recognition resumes when collectability becomes reasonably assured.

Loans are written off when management determines that recovery of principal is not expected. Any subsequent recoveries are recorded as a reduction of credit loss expense in the period received.

Business segments

The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach, the Company determined that it has one operating segment.

Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3 Pricing inputs that are generally unobservable inputs and not corroborated by market data.

The company has no asset and liabilities that require measurement on fair value basis.

Note Payables

Note payables represent written debt instruments evidencing amounts owed to lenders. Note payables are recognized when the Company becomes obligated under a contractual borrowing arrangement and are recorded in accordance with ASC 470 at the principal amount received, net of any unamortized discount, premium, or debt issuance costs, as applicable.

Interest expense is recognized over the contractual term of the borrowing using the effective interest method in accordance with ASC 835-30. If a note does not bear interest at a stated market rate, the Company evaluates whether interest should be imputed at an appropriate market rate at inception.

Note payables are classified as current or noncurrent based on contractual maturity as of the balance sheet date. The Company evaluates modifications, extensions, or extinguishments of debt in accordance with ASC 470 and recognizes any resulting gain or loss in the period of settlement. Compliance with debt covenants is assessed at each reporting date, and amounts are reclassified as current if a covenant violation results in the obligation becoming callable and no waiver has been obtained.

Disaggregated Revenue Disclosure

The Company’s customers or sources of revenue generation were only from outside United States during the period ended December 31, 2025 and 2024. Below is a table of revenue by type:

 Schedule of Customers or Sources of Revenue Generation

For the year ended December 31, 2025, the Company did not recognize any revenue. In 2024, all revenue was derived from a single source, interest income.

Revenue Recognition

The Company offers U.S. dollar-denominated loans collateralized by digital assets and generates revenue from (i) interest income and loan-related fees and (ii) loan administration services. Interest income is presented as revenue in the statements of operations as it represents the Company’s principal business activity.

Interest Income and Loan Fees

The Company’s lending activities give rise to financial assets (loans receivable). Revenues is recognized in accordance with ASC 606, Revenue from Contracts with Customers and ASC 310 and ASC 835-30, as interest income is earned using the effective interest method over the contractual term of the loan. The applicable borrower fee rates for loans vary based on several factors including the originating loan-to-value ratio, loan duration and jurisdiction and are earned ratably over the life of the loan. Liquidation handling fees, late fees, stabilization fees, or conversion fees may apply in the case of a collateral sale and are recognized at the time the liquidation, late payment, stabilization, or conversion occurs.

Administrative Fees

The Company also provides loan administration services, acting as an intermediary between lenders and borrowers. These services include payment processing, collateral and account management, customer support, and preparation of periodic loan reports. The Company has determined that these activities are highly interrelated and represent a single combined performance obligation.

Revenue from loan administration services is recognized in accordance with ASC 606 as follows:

Loans are secured by digital assets pledged by borrowers. In the event of default, collateral may be liquidated to recover amounts owed, and related fees are recognized as described above.

Commitments and contingencies

The Company accounts for commitments and contingencies in accordance with ASC 450. Loss contingencies are accrued when it is probable that a liability has been incurred, and the amount of loss can be reasonably estimated. If a loss is reasonably possible but not probable, or if probable but not reasonably estimable, the Company discloses the nature of the contingency and, when practicable, an estimate of the possible loss or range of loss. No accrual or disclosure is made for contingencies considered remote unless otherwise required by U.S. GAAP.

From time to time, the Company may be subject to legal proceedings, claims, and settlement arrangements arising in the ordinary course of business. When a settlement agreement is executed, or a loss becomes both probable and reasonably estimable, the Company records a liability for its best estimate of the obligation in the period such determination is made.

Commitments represent contractual obligations that may require future cash outflows and include, among others, obligations under loan agreements, contractual commitments with third parties, arrangements related to joint ventures, and transactions with related parties. Borrowings are recognized and measured in accordance with ASC 470. Investments in and obligations related to joint ventures are evaluated under ASC 323, as applicable. Transactions and balances with related parties are disclosed in accordance with ASC 850. Guarantees and similar arrangements are evaluated under ASC 460.

The Company evaluates contingencies and related obligations through the date the financial statements are issued or available to be issued in accordance with ASC 855, subsequent Events through the date the financial statements are issued. Events occurring after the balance sheet date that provide additional evidence about conditions existing at the balance sheet date, such as the resolution of litigation, are recognized in the financial statements under ASC 450 Contingencies, while events arising solely after the balance sheet date are disclosed if material.

Related Party Disclosures

Under ASC 850 “Related Party Transactions” an entity or person is considered to be a “related party” if it has control, significant influence or is a key member of management personnel. A transaction is considered to be a related party transaction when there is a transfer of resources of obligations between related parties. The Company, in accordance with the standard ASC 850, presents disclosures about related party transactions and outstanding balances with related parties, see Note 11.

Earnings per Share

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted EPS on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants or stock options and the conversion of instruments convertible to common stock. Diluted EPS excludes all dilutive potential shares if their effect is antidilutive.

As of December 31, 2025, and December 31, 2024, there were outstanding warrants that could convert into 150,000 common shares. At the end of both periods, the potentially dilutive shares were excluded here because the effect would have been anti-dilutive.

Income taxes

The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as for net operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which such amounts are realized or settled. The effect of a change in tax rates is recognized in income in the period of enactment.

The Company evaluates the realizability of deferred tax assets and records a valuation allowance, as necessary, to reduce such assets to the amount that is more likely than not to be realized.

The Company accounts for uncertainty in income taxes in accordance with ASC 740, Income Taxes. Under this guidance, a tax benefit is recognized only if it is more likely than not that the position will be sustained upon examination by taxing authorities. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2025 and

2024, the Company had no accrued interest or penalties and has not identified any material uncertain tax positions.

The Company is subject to U.S. federal income taxation and taxation in the state of South Carolina. The Company has filed its income tax returns through the year ended December 31, 2024, and the 2025 return is on extension. Tax years generally remain subject to examination for three years from the date of filing. The Company is not currently subject to any income tax examinations.

Cash flows reporting

The Company prepares its statements of cashflows in accordance with ASC-230, Statements of Cash Flows, using the indirect method. Cash Equivalents include investments, with original maturities of three months or less. Non-cash investing and financing activities are disclosed separately in the supplemental section of the cash flow statement. Cash receipts from interest income are classified as operating cash inflows. Cash purchases of property and equipment are classified as investing activities, while proceeds from debt or equity financing are included in financing activities. Some transactions were part cash and part no-cash and disclosed accordingly.

Equity/Shares Capital

The Company accounts for equity transactions in accordance with ASC 505, Equity. Common stock is recorded as additional paid-in-capital. Equity issuance costs are charged directly to additional paid-in-capital. Shares issued for services received or non-cash consideration are measured at the fair market value of the equity instruments issued on the grant date or the fair value of the service received, whichever is more reliably measurable. The Company is authorized to issue 50,000,000 shares of common stock at $0.001 per share. As of December31, 2025, and December 31, 2024, 6,675,000 shares of common stock are issued and outstanding, respectively.

Warrants

The Company accounts for warrants issued in connection with equity or financing transactions in accordance with applicable U.S. GAAP, including ASC 480 and ASC 815. Warrants are evaluated at issuance to determine whether they should be classified as equity instruments or as liabilities based on the terms of the underlying agreements.

Warrants that meet the criteria for equity classification are recorded as a component of additional paid-in capital at the date of issuance and are not subsequently remeasured. Warrants that do not meet equity classification criteria are recorded as liabilities at fair value upon issuance and are subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings in accordance with ASC 820.

The Company uses appropriate valuation techniques, including option pricing models, to estimate the fair value of warrants when required. These models require the use of significant assumptions, including expected volatility, expected term, risk-free interest rate, and dividend yield.

As of December 31, 2025 and 2024, the Company had outstanding warrants with no changes in the number of warrants issued or outstanding during the periods presented. Accordingly, there were no warrant issuances, exercises, or expirations during the years presented.

Subsequent events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 55 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recent Accounting Pronouncements

In 2025, the FASB issued ASU 2025-05, Credit Losses (Topic 326), which introduces a practical expedient for estimating expected credit losses for certain financial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40) - Companies must break out major expense categories (e.g., labour, depreciation) in the notes to financial statements aimed at improving transparency. Effective for annual periods after Dec 15, 2026 (early adoption allowed). This is applicable to the Company but it’s not yet effective and the Company has not elected early adoption and currently evaluating the impact.

In December 2023, Income Tax Disclosure Improvements (ASU 2023-09) - Requires clearer details on income taxes paid (by federal, state, and foreign) and better breakdowns of rate reconciliations. Helps investors better understand a company’s tax situation. This standard applies to the Company but is not currently applicable to current period financials, as we have incurred losses and have no tax expense.