U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 30, 2002.
STRATEGIC PARTNERS, INC.
COMMISSION FILE NO. 333-95485
A Wyoming Corporation EIN: 77-0494696
3525 Sunset Lane
Oxnard, Calif. 93035
Telephone: 805-984-0821 Fax: 805-984-2764
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
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Yes No X
The number of common shares issued and outstanding as of
September 30, 2002 was 1,083,500.
This report form is not filed as a transitional format.
Total sequentially numbered pages in this document: 14
1
TABLE OF CONTENTS
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheets.......................................3
Statements of Operations.............................4
Statements of Stockholders' Equity (Deficit).........5
Statements of Cash Flows............................11
Notes to the Financial Statements...................12
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations.......14
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K...............14
Signatures.........................................14
2
ITEM 1 - Financial Information
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Balance Sheets
September 30, December 31,
2002 2001
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 396 $ 18,475
------ ------
Total Current Assets 396 18,475
------ ------
FIXED ASSETS, NET (Note 2) 5,207 6,416
------ -----
TOTAL ASSETS $ 5,603 $ 24,891
======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable-Related
Party (Note 4) $ 182,834 $ 136,121
------- -------
Total Current Liabilities 182,834 137,367
------- -------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par
value; 10,000,000 shares
authorized; 1,083,500 and
833,400 shares issued and
outstanding, respectively 1,084 833
Additional paid-in capital 1,209,200 1,112,650
Stock subscription
Deficit accumulated during
the development stage (1,387,515) (1,225,959)
-------- -------
Total Stockholders' Equity
(Deficit) (177,231) (112,476)
--------- ------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT) $ 5,603 $ 24,891
========= =======
3
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<table>
<c> <s> <s> <s> <s> <s>
From
Inception on
For the Nine For the Three September 25,
Months Ended Months Ended 1998 Through
September 30, September 30, September 30,
2002 2001 2002 2001 2002
REVENUES $ - $ - $ - $ - $ -
EXPENSES
General and
administrative 156,033 212,026 45,309 59,069 1,373,400
------- ------ ------- ------- ---------
(LOSS) FROM OPERATIONS (156,033) (212,026) (45,309) (59,069) (1,373,400)
------- -------- -------- ------- ---------
OTHER INCOME (EXPENSE)
Interest expense (5,537) (5,437) (1,862) (1,813) (16,300)
Miscellaneous income 14 1,317 - 304 2,185
------ ------ ------- ------- --------
Total Other Income
(Expense) (5,523) (4,120) (1,862) (1,509) (14,115)
------ -------- -------- -------- ----------
NET (LOSS) $ (161,556) $(216,146) $(47,171) $ (60,578) $(1,387,515)
======== ======== ======= ======= ==========
BASIC (LOSS)
PER SHARE $(0.18) $(0.30) $(0.05) $(0.07)
====== ====== ====== ======
</table>
4
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<table>
<c> <s> <s> <s> <s>
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
At Inception on
September 25, 1998 - $ - $ - $ -
Common stock issued
for services at $1.00 per
share, October 9, 1998 215,000 215 214,785 -
Common stock issued
for cash at $1.00 per
share, October 12, 1998 2,000 2 1,998 -
Common stock issued
for cash and services at
$1.00 per share,
October 13, 1998 4,000 4 3,996 -
Common stock issued
for services at $1.00 per
share, October 19, 1998 5,000 5 4,995 -
Common stock issued
for cash and services at
$1.00 per share,
October 30, 1998 10,000 10 9,990 -
Common stock issued
for cash at $1.00 per
share, November 17, 1998 6,000 6 5,994 -
Common stock issued
for cash at $1.00 per
share, November 24, 1998 3,000 3 2,997 -
Common stock issued for
cash, services and
expenses at $1.00 per
share, December 8, 1998 21,000 21 20,979 -
Less stock offering costs - - (534) -
Net (loss) for the period
ended December 31, 1998 - - - (264,556)
------ ------ ------ -------
Balance, Dec. 31, 1998 266,000 266 265,200 (264,556)
Common stock issued
for expenses at $1.00 per
share, January 5, 1999 300 - 300 -
Common stock issued for
cash and services at
$1.00 per share,
January 16, 1999 12,500 13 12,487 -
Common stock issued
for cash at $1.00 per
share, January 20, 1999 20,000 20 19,980 -
Common stock issued
for cash at $1.00 per
share, February 3, 1999 1,000 1 999 -
Common stock issued
for cash at $1.00 per
share, February 15, 1999 2,200 2 2,198 -
-------- ------- ------- --------
Balance Forward 302,000 $ 302 $ 301,164 $ (264,556)
5
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
Balance Forward 302,000 $ 302 $ 301,164 $ (264,556)
Common stock issued
for cash at $1.00 per
share, February 22, 1999 2,000 2 1,998 -
Common stock issued
for cash at $1.00 per
share, March 12, 1999 6,400 6 6,394 -
Common stock issued
for cash and services
at $1.00 per share,
March 26, 1999 27,500 27 27,473 -
Common stock issued
for cash at $1.00 per
share, May 10, 1999 1,000 1 999 -
Common stock issued
for cash and services
at $1.00 per share,
May 19, 1999 6,000 6 5,994 -
Common stock issued
for services at $1.00
per share, July 12, 1999 2,000 2 1,998 -
Common stock issued
for services at $1.00
per share, July 27, 1999 1,600 2 1,598 -
Common stock issued
for cash and services
at $1.00 per share,
August 3, 1999 1,000 1 999 -
Common stock issued
for services at $1.00 per
share, August 10, 1999 1,500 2 1,498 -
Common stock issued
for cash at $1.00 per
share, September 17, 1999 12,500 12 12,488 -
Common stock issued
for cash and services
at $1.00 per share,
October 1, 1999 193,500 194 193,306 -
Common stock issued
for cash and services
at $1.00 per share,
October 26, 1999 11,000 11 10,989 -
Common stock issued
for services at $1.00 per
share, October 29, 1999 1,000 1 999 -
Less stock offering costs - - (8,600) -
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
Net (loss) for the year
ended December 31, 1999 - - - (364,608)
-------- ----- -------- --------
Balance,
December 31, 1999 569,000 $ 569 $ 559,297 $ (629,164)
--------- ------- ---------- ------------
Common stock issued for
cash at $ 2.00 per share
May 22, 2000 (unaudited) 29,000 29 57,971 -
Common stock issued for
cash at $ 2.00 per share
May 25, 2000 (unaudited) 5,000 5 9,995 -
Common stock issued for
cash at $ 2.00 per share
June 1, 2000 (unaudited) 2,000 2 3,998 -
Common stock issued for
cash at $ 1.00 per share
June 3, 2000 (unaudited) 5,000 5 4,995 -
Common stock issued for
cash at $ 2.00 per share
June 15, 2000 (unaudited) 1,000 1 1,999
-
Common stock issued for
cash at $ 2.00 per share
June 23, 2000 (unaudited) 1,000 1 1,999 -
Common stock issued for
debt at $1.00 per share
June 30, 2000 (unaudited) 7,500 8 7,492 -
Common stock issued for
debt at $1.00 per share
July 19, 2000 (unaudited) 2,500 2 2,498 -
Common stock issued for
services at $2.00 per share
July 19, 2000 (unaudited) 500 1 999 -
Common stock issued for
cash at $2.00 per share
July 24, 2000 (unaudited) 2,000 2 3,998 -
Common stock issued for
debt at $1.00 per share
July 31, 2000 (unaudited) 12,500 12 12,488 -
Common stock issued for
debt at $1.00 per share
August 2, 2000 (unaudited) 6,000 6 5,994 -
Common stock issued for
debt at $1.00 per share
August 3, 2000 (unaudited) 6,000 6 5,994 -
Common stock issued for
cash at $2.00 per share
August 30, 2000 (unaudited) 1,000 1 1,999 -
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
Common stock issued for
debt at $1.00 per share
Sept. 1, 2000 (unaudited) 13,200 13 13,187 -
Common stock issued for
debt at $1.00 per share
Sept. 16, 2000 (unaudited) 15,000 15 14,985 -
Common stock issued for
cash at $2.00 per share
Sept. 20, 2000 (unaudited) 5,000 5 9,995 -
Common stock issued for
cash at $2.00 per share
Sept.27, 2000 (unaudited) 3,000 3 5,997 -
Common stock issued for
services at $2.00 per share
Sept. 28, 2000 (unaudited) 500 1 999 -
Common stock issued for
debt at $1.00 per share
Sept. 29, 2000 (unaudited) 2,500 2 2,498 -
Common stock issued for
debt at $1.00 per share
Sept. 30, 2000 (unaudited) 1,000 1 999 -
Common stock issued for
debt at $ 1.00 per share
December 5, 2000 19,000 19 37,981 - -
Conversion of debt
to equity below market - - 71,200 - -
Common stock issued for
cash at $ 1.425 per share
December 7, 2000 58,800 59 83,731 (33,790) -
Issuance of common stock
below market - - 33,810 - -
Accrued interest payable
forgiven upon conversion
of debt to equity - - 3,514 - -
Net (loss) for the
year ended
December 31, 2000 - - - 328,483
--------- -------- -------- -------- --------
Balance,
December 31, 2000 768,000 $ 768 $ 960,611 $(33,790) (957,747)
Common stocks issued for
cash at $2.00 per share
March 14, 2001 20,000 20 40,000
Stocks subscription
received 33,790
Issuance of common stock
below market - - 24,102
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
Common stocks issued
For cash at $2.00 per
Share, April 16, 2001 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, April 30, 2001 6,000 6 11,994
Common stocks issued
For cash at $2.00 per
Share, May 15, 2001 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, June 1, 2001 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, June 21, 2001 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, July 31, 2001 9,000 9 17,991
Common stocks issued
For cash at $2.00 per
Share, August 31, 2001 8,000 8 15,992
Common stocks issued
For cash at $2.00 per
Share, September 30, 2001 7,000 7 13,993
Common stocks issued
For cash at $2.00 per
share, October 16, 2001 7,000 7 13,993
Common stocks issued
For cash at $2.00 per
share, November 26, 2001 1,000 1 1,999
Common stocks issued
for cash at $2.00 per
share, December 3, 2001 1,000 1 1,999
Net (loss) for year ended (268,212)
December 31, 2001
Prior year adjustment 1,400 1
-------- ----- ---------- ----- -----------
Balance
December 31, 2001 833,400 $ 833 $1,112,651 $ - $(1,225,959)
Common stocks issued
For cash at $2.00 per
Share, February 27, 2002 4,000 4 7,996
Common stocks issued
For cash at $1.00 per
Share, February 27, 2002 600 1 599
Common stocks issued
For cash at $2.00 per
Share, March 1, 2002 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, March 13, 2002 1,000 1 1,999
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
Common stocks issued
For cash at $2.00 per
Share, March 18, 2002 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, March 19, 2002 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, March 23, 2002 3,500 4 7,996
Common stocks issued
For cash at $2.00 per
Share, March 28, 2002 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, April 2, 2002 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, April 9, 2002 4,000 4 7,996
Common stocks issued
For cash at $2.00 per
Share, April 16, 2002 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, April 30, 2002 5,000 5 9,995
Common stocks issued
For cash at $2.00 per
Share, May 7, 2002 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, June 10,2002 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, June 10,2002 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, July 2,2002 2,000 2 3,998
Common stocks issued
For cash at $2.00 per
Share, July 3, 2002 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, July 5,2002 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, July 9, 2002 1,000 1 1,999
Common stocks issued
For cash at $2.00 per
Share, July 15, 2002 3,000 3 2,997
Common stocks issued
For cash at $2.00 per
Share, August13, 2002 10,000 10 19,990
Common stocks issued
For cash at $2.00 per
Share, August 20, 2002 1,000 1 1,999
Shares issued for
services 200,000 200
Net loss for
September 30, 2002 (161,556)
---------- ----- ---------- ----------
Balance at
September 30, 2002 1,083,500 $1,084 $1,209,200 $(1,387,515)
========== ===== ========== ==========
</table>
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<table>
<c> <s> <s> <s>
From
Inception
Sept. 25,1998
For the Three Months Through
Ended September 30 September 30
2002 2001 2002
----------- ---------- ------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (47,171) $ (60,578) $(1,387,515)
Adjustments to
reconcile net
loss to net cash (used)
by operating activities:
Depreciation 403 209 2,857
Common stock issued
for services 200 - 438,500
Changes in operating
assets and liabilities:
Increase (decrease)in
accounts payable 11,614 8,000 182,834
------ ------ -------
Net Cash (Used) by
Operating Activities (34,954) (52,369) (763,324)
------- ------- ---------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of Fixed Assets - - (8,064)
------- ------- --------
Net Cash (Used) by
Investing Activities - - (8,064)
------- ------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common
stock for cash 35,000 48,000 771,784
------- -------- -------
Net Cash Provided by
Financing Activities 35,000 48,000 771,784
------- ------- -------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 46 ( 4,369) 396
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 350 53,880 -
-------- ------- -------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 396 $49,511 $ 396
======= ======== =======
Cash Paid For:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
NON-CASH FINANCING
ACTIVITIES
Common Stock Issued
for services $ 200 $ - $ 438,500
</table>
11
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2002
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Strategic Partners, Inc. (a development stage company) (the Company) was
organized under the laws of the State of Wyoming on September 25, 1998.
The purpose of the Company is to engage in the business of investment
banking. The Company has had no active operations from inception.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year end.
b. Advertising
Advertising costs are expense as incurred. Advertising expense
totaled $26,895 for the year 2001.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
e. Revenue Recognition Policy
The Company currently has no source of revenues.
f. Basic Loss Per Share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 "Earnings Per Share". Basic loss per share
reflects the amount of losses for the period available to each
share of common stock outstanding during the reporting period, while
giving effect to all dilutive potential common shares that were outstanding
during the period, such as stock options and convertible securities. As
of September 30, 2002, the Company had no issuable shares qualified as dilutive
The following is an illustration of the reconciliation of the numerators
and denominators of the basic loss per share calculation:
For the
three months
September 30,
2002 2001
Net loss (numerator) $ (46,971) $(60,578)
Weighted average shares
outstanding (denominator) 883,500 799,000
Basic loss per share $ (0.05) $ (0.07)
======== ========
12
STRATEGIC PARTNERS, INC.
(A Development Stage Company)
Notes to the Financial Statements (continued)
September 30, 2002
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
g. Fixed Assets
Fixed assets are recorded at cost. Major additions and improvements are
capitalized. Minor replacements, maintenance and repairs that do not
extend the useful life of the assets are expensed as incurred. Depreciation
of property and equipment is determined using the straight line method over
the useful lives, primarily from 5 to 7 years. Property and equipment
consisted of the following at:
June 30, June 30,
2002 2001
Office equipment $ 8,064 $ 8,064
Accumulated depreciation (2,857) (2,051)
------ ------
$ 5,207 $ 6,013
======= ======
Depreciation expense for the three months ended September 30, 2002 and 2001
was $403 and $403, respectively.
h. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for
a fair presentation. Such adjustments are of a normal recurring nature.
NOTE 3 - RELATED PARTY TRANSACTIONS
Office Space
The Company pays rent of $ 1,100 per month on a month-to-month basis
for office space in the personal residence of a related party. Rent
expense for the three months ended September 30, 2002 and 2001 was
$3,300 and $3,300, respectively.
Accounts Payable
Accounts payable consist of unpaid consulting expenses for Chief
Executive Officer in the amount of $182,834 at September 30, 2002.
Employment Agreements
During October 1999, the Company signed an employment contract with
its Chief Executive Officer, whereby, the Company agreed to pay him
$150,000 per year for five years. Compensation expense associated with this
contract amounted to $150,000 for the year ended December 31, 2001.
The Company agreed to pay its Secretary $2,500 per month as compensation.
Compensation expense associated with this agreement amounted to $7,500
for the three months ended September 30, 2002.
NOTE 4 INCOME TAXES
The Company has a net operating loss carryover at December 31, 2001 of
approximately $1,225,959 which begin to expire in 2020. The potential
tax benefit of the loss carryover has been offset by a valuation
allowance of the same amount.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable
to a going concern which contemplates the realization of assets
and liquidation of liabilities in the normal course of business.
The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. It is
the intent of the Company to earn revenues from investment banking
services. Until sufficient revenues are earned to operate profitably,
management intends to issue additional shares of its common stock for
the Company.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
We are a development stage company without significant assets or clients.
We were formed to engage in the business of providing consulting services
to companies with respect to finance, mergers, acquisitions, raising capital
in the public markets and marketing on the internet. We registered an initial
public offering consisting of 300 units at $ 2,000 per unit. This registration
statement was renewed in October, 2000 and continues through November, 2002.
A copy of the prospectus may be obtained on our web site under "stock offer".
Our website address is www.strategic-partners-inc.com.
Pending conclusion of this offering we have limited liquidity and capital
resources. We have not yet begun operations Besides continuing our public
offering we are investigating potential investments and
seeking new clients.
The primary goal is to have sufficient cash to employ support staff that
will compliment the sales efforts of our officers and directors. With
quality employees we will be able to carry out business in a profitable
manner. The first milestone we hope to achieve with this offering is the
raising of at least $300,000. If the maximum units are sold we will lease
offices and purchase adequate equipment to facilitate full scale operations.
The budget is set forth in the use of proceeds section of the
prospectus.
The second milestone is to generate income from fees of not less than $300,000
for the first year following the conclusion of the offering. This level of
income will allow us to continue in business and expand on this client base.
We have identified potential clients that will generate fee income allowing
us to achieve our financial objectives.
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(b) There were no reports filed by us on Form 8-K
for the quarter ended September 30, 2002.
SIGNATURES
In accordance with the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
STRATEGIC PARTNERS, INC.
Dated: 11/19/2002
-------
By: /s/ Frank J. Weinstock
---------------------------------
Frank J. Weinstock, President,
Director, Chief Executive Officer
By: /s/ Richard D. Spencer
---------------------------------
Richard D. Spencer,
Director, Chief Financial Officer
14