Item
1. Consolidated Financial Statements
STRATOS
RENEWABLES CORPORATION
BALANCE
SHEETS
See
notes to financial statements.
STRATOS
RENEWABLES CORPORATION
STATEMENTS
OF OPERATIONS (UNAUDITED)
THREE
MONTHS ENDED MARCH 31, 2022 AND 2021
See
notes to financial statements.
STRATOS
RENEWABLES CORPORATION
STATEMENTS
OF CASH FLOWS (UNAUDITED)
THREE
MONTHS ENDED MARCH 31, 2022 AND 2021
See
notes to financial statements.
STRATOS
RENEWABLES CORPORATION
STATEMENT
OF CHANGES IN STOCKHOLDERS’ DEFICIT (UNAUDITED)
THREE
MONTHS ENDED MARCH 31, 2022 AND 2021
See
notes to financial statements.
STRATOS
RENEWABLES CORPORATION
NOTES
TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH
31, 2022 AND 2021
NOTE
1- NATURE OF OPERATIONS
Nature
of Operations
Stratos
Renewables Corporation (the “Company”) was incorporated in the State of Nevada on September 29, 2004. The Company was a development
import/export business in products derived from hydrocarbons and bio-fuels. They ceased doing business and dissolved on May 27, 2014.
On June 15, 2021, the Company was revived and is exploring opportunities to identify targets for acquisition.
The
Company had a subsidiary Stratos del Peru S.A.C. in Peru. This entity is no longer active and there is no current ownership in this entity
and not included in the Company’s financial statements.
NOTE
2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
These
financial statements are presented as unaudited and in United States dollars and have been prepared in accordance with generally accepted
accounting principles in the United States of America. The Company believes that these financial statements present fairly, in all material
respects, the financial position of the Company and the results of its operations and cash flows for the periods presented.
NOTE
3-STOCKHOLDERS’ DEFICIT
There
were no common or preferred stock transactions since the Company was dissolved in 2014 until December 2021 when the Company issued 300,000
shares of Series B Preferred Stock as noted below.
The
Company on December 10, 2021 amended their articles of incorporation to include a certificate of designation for a Series B Preferred
Stock that is not convertible, but has voting rights of 10,000 votes per 1 share. These shares were issued to the officer of the Company
in December 2021.
On
July 1, 2021, the Company entered into an agreement with its officer to provide services to the Company. The officer was obligated to
pay $50,000 plus provide services valued at an additional $50,000 for the issuance of 300,000 shares of a newly formed series of preferred
stock (Series B). The only rights the Series B preferred Shares have are voting rights equivalent to 10,000 votes for each share. These
shares are not convertible into any other series of authorized stock of the Company and are not redeemable. The Series B Preferred Shares
were deemed issued as of the date of the agreement, however there were administrative delays in forming this new series and amending
the certificate of incorporation. The Company has reflected these shares as equity and noted that they are accrued. The Certificate of
Incorporation was amended on December 10, 2021 and the 300,000 shares were issued upon this amendment.
There
are no stock options or warrants outstanding as of March 31, 2022 and December 31, 2021.
NOTE
4 – GOING CONCERN
The
Company concluded that due to the change in management and revival of the entity, these conditions raise substantial doubt about the
Company’s ability to continue as a going concern for one year from the date the financial statements are issued.
Management
intends to identify potential merger candidates to provide operating revenues and profitability. Our ability to effectively identify,
develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including
without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies. Even though management
believes this plan will allow the Company to continue as a going concern, there are no guarantees to the successful execution of this
plan.
These
financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable
period of time.
Impact
of COVID-19
The
COVID-19 pandemic has not had a material impact on the Company, particularly due to our lack of operations.
NOTE
5 – RELATED PARTY TRANSACTION
On
July 1, 2021, the Company entered into an agreement with its officer to provide services to the Company. The officer was obligated to
pay $50,000 plus provide services valued at an additional $50,000 for the issuance of 300,000 shares of a newly formed series of preferred
stock (Series B). The only rights the Series B preferred Shares have are voting rights equivalent to 10,000 votes for each share. These
shares are not convertible into any other series of authorized stock of the Company and are not redeemable. The Series B Preferred Shares
were deemed issued as of the date of the agreement, however there were administrative delays in forming this new series and amending
the certificate of incorporation. The Company has reflected these shares as equity and noted that they are accrued. The Certificate of
Incorporation was amended on December 10, 2021 and the 300,000 shares were issued upon this amendment.
NOTE
6 – CONTINGENCY
The
Company entered into a Secured Note and Common Stock Purchase Agreement (the “Agreement”) with I2BF Biodiesel, Ltd. (“I2BF”)
and Blue Day SC Ventures, (“Blue Day”) (each, an “Investor” and collectively, the “Investors”). The
Company offered to the Investors: (a) a minimum of $3,000,000 in aggregate principal of Secured Promissory Notes (“Notes”)
issued for new cash investment in the Company as of the date of the Agreement (the “Initial Investment”), (b) $12,382,271
in aggregate principal amount of Notes issued concurrently with the Initial Investment in exchange for the surrender and cancellation
of existing indebtedness and equity securities of the Company outstanding in favor of the Investors, (c) up to an additional $1,725,000
principal amount of Notes issued to I2BF in a subsequent closing, and (d) as consideration for such new investment and the restructuring
of the existing indebtedness and equity securities, common stock representing an aggregate of forty-five percent (45%) of the fully diluted
equity of the Company and certain adjustment rights relating to such common stock as are set forth in the Agreement. The first Closing
on July 15, 2009 (the “Initial Closing”) was for the sale of Notes in the aggregate principal amount of $15,382,271 and an
aggregate of 55,586,157 shares of the Common Stock of the Company, evidencing not less than 39.895% of the outstanding the common stock
determined on a fully diluted basis, and was consummated simultaneously with the execution of the Agreement (the “Closing Date”).
I2BF
was required to make an additional investment in Notes with an aggregate principal amount of $1,725,000 and be issued 10,238,381 additional
shares of Common Stock, and an additional Closing shall be held with respect to such investment (the “Balance Closing”) if
and as soon as practicable following the closing of the credit facility currently under negotiation between the Company and Banco Internacional
del Perú S.A.A. (“Interbank”) and evidenced by that certain letter of intent dated May 29, 2009 (the “Interbank
Facility”), provided that the Interbank Facility shall provide credit to the Company and its subsidiaries of not less than $15,000,000.
The obligation (but not the right) of I2BF to participate in the Balance Closing shall cease in the event that the Interbank Facility
was not closed by October 15, 2009.
In
light of the age of this debt obligation, unless its terms have been amended to avoid the six year statute of limitations under NRS 11.190(1)(b)
for initiating collection actions for written debt obligations, it may no longer be a valid claim against us. To ascertain with certainty
whether that is the case, we filed on September 20, 2021 an Application by Custodia to Bar Unasserted Claims in the District Court of
the State of Nevada in and for Clark County. A motion to bar claims has been granted effective February 10, 2022.
Pursuant
to ASC 450-20-50-3, disclosure of the contingency shall be made if there is at least a reasonable possibility that a loss or an additional
loss may have been incurred and either of the following conditions exists: (a) an accrual is not made for a loss contingency because
(1) information available before the financial statements are issued or are available to be issued indicates that it is probable an asset
had been impaired or liability had been incurred at the date of the financial statements (it is implicit in this condition that it must
be probable that one or more future events will occur confirming the fact of the loss); and (2) the amount of the loss can be reasonably
estimated; or (b) an exposure to loss exists in excess of the amount accrued pursuant to the range of loss estimates pursuant to ASC
450-20-30-1.
Based
on the age of the debt obligation and the fact that a motion to bar claims has been granted, the Company does not consider this obligation
probable, nor can they reasonably estimate a range of loss.
As
a result, no accrual has been estimated and recorded as of the balance sheet dates.
NOTE
7: SUBSEQUENT EVENTS
In
accordance with ASC 855-10-50-1, the Company has evaluated subsequent events through May 13, 2022 which is the date that the financial
statements were available to be issued.
The
Company has evaluated subsequent events through the date the financial statements were available to be issued and has concluded that
no such events or transactions took place that would require disclosure.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The
following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial
statements and the notes to those financial statements appearing elsewhere in this Report.
Certain
statements in this Report constitute forward-looking statements. These forward-looking statements include statements, which involve risks
and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c)
anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They
are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,”
“estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,”
“expects,” “management believes,” “we believe,” “we intend,” or the negative of these
words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance
that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking
statements.
The
forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities
laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which
the statements are made or to reflect the occurrence of unanticipated events.
The
“Company,” “we,” “us,” or “our,” are references to the business of Stratos Renewables
Corporation, a Nevada corporation.
Corporation
Information
We
were incorporated in the State of Nevada on September 29, 2004 as New Design Cabinets, Inc. Prior to the closing of the Share Exchange,
as described below, we were an operating public company, attempting to establish a base of operations in the custom cabinetry and furniture
industry as a builder of specialty, custom designed cabinets and wine racks. From inception to the closing of the Share Exchange, we
had limited operations and generated a total of $61,900 in revenues from the sale of wine rack “kits” and the oversight of
various construction activities.
On
November 14, 2007, pursuant to the Agreement Concerning the Exchange of Securities or the Share Exchange Agreement (the “Share
Exchange”), by and among New Design Cabinets, Inc., Stratos Peru and the security holders of Stratos Peru, we acquired 999 or 99.9%
of the issued and outstanding shares of common stock of Stratos Peru, and issued 45,000,000 shares of our common stock, par value $0.001,
to the former common stockholders of Stratos Peru. Upon consummation of the Share Exchange, we commenced our business plan to develop
ethanol and sugar products in Peru through the cultivation, harvesting and processing of sugarcane in low cost growing locations.
Stratos
Peru was incorporated in Lima, Peru, on February 27, 2007, under the name Estratosfera del Peru S.A.C. or Estratosfera. On July 11, 2007,
the shareholders of Estratosfera changed the name of the company from Estratosfera del Peru S.A.C. to Stratos del Peru S.A.C.
Effective
November 20, 2007, we amended our articles of incorporation to change our name to “Stratos Renewables Corporation.”
Our
last financial report was a Form 10-Q filed November 17, 2009 for the quarter ended September 30, 2009.
On
March 26, 2010, we filed a Form 15 with the Securities Exchange Commission (the “SEC”) to voluntarily effect the deregistration
of our common stock. We were eligible to deregister by filing a Form 15 because we had fewer than 300 holders of record of our common
stock. Upon the filing of a Form 15, our obligation to file certain reports with the SEC, including Forms 10-K, 10-Q and 8-K, were immediately
suspended.
On
June 15, 2021, George Sharp was appointed as our custodian by Order Granting Motion to Appoint George Sharp as Custodian and For Temporary
Restraining Order on Order Shortening Time (Case No. A-21-835772-B, Dept. No.: 13) issued by the District Court of the State of Nevada
in and for Clark County (the “Court Order”). Under his authority as Custodian George Sharp appointed himself as the sole
member of the Board and President, Secretary and Treasurer of the Company by resolutions of the registrant’s Board of Directors
on June 15, 2021. On December 10, 2021, in recognition of the $50,000 cash invested and $50,000 in consulting fees accrued by George
Sharp for professional and regulatory fees to reinstate the registrant in the State of Nevada and to have the Company become current
in its filings under the SEC’s recently imposed requirements for public companies operating under SEC Rule 15c2-11 that mandated
the filing of current financial and corporate disclosures to be submitted to OTC Markets by June 30, 2021 and to have OTC Markets declare
the Company “current” by September 30, 2021, the Board issued 300,000 shares of the authorized “blank check”
preferred stock to George Sharp with 10,000 votes for each share of preferred stock to give voting control to Mr. Sharp. Mr. Sharp engaged
BF Borgers CPA PC as the Company’s auditor to audit the financial statements prepared under Mr. Sharp’s supervision to allow
for the necessary filings with the SEC to have the Company be subject to the reporting requirements of the SEC, including the filing
of annual and quarterly financial reports.
On
September 27, 2021 we filed a Motion to Require Written Proof of Claim on Order Shortening Time in the District Court of the State of
Nevada in and for Clark County under NRS 78.347, 78.675 and other applicable provisions of Nevada law seeking an order barring unasserted
claims against Stratos Renewables and likewise barring all creditors and claimants of Stratos Renewables from participating in the distribution
of the assets of the Corporation as set forth in NRS 78.675.
On
September 28, 2021 we filed a Form 10-12G/A which we withdrew on November 19, 2021 to allow us to clarify the rights, preferences and
privileges of our Series B preferred shares. We filed on December 10, 2021 a Certificate of Designation with the Nevada Secretary of
State to provide that the Company designated 300,000 shares of Series B preferred stock with the voting rights of 10,000 shares of our
common stock for each share of Series B preferred stock but with no rights of conversion into shares or our common stock.
On
October 1, 2021 the District Court of the State of Nevada in and for Clark County entered an Order Granting Motion to Require Written
Proof of Claim requiring that “any claimants and creditors of Stratos who fail to timely submit Proof of Claim as set forth in
this Order shall be barred from later presenting their claim to Stratos.” On February 10, 2022, the District Court of the State
of Nevada in and for Clark County entered an Order that “any and all claimants and creditors of Stratos are hereby barred from
presenting any claim to Stratos.”
Our
principal executive offices are located at 3535 Executive Terminal Drive, Henderson, NV 89052, and our telephone number is (702)-840-4433.
The
Company’s accounting year end is December 31.
Our
principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination
with a business rather than immediate, short-term earnings. We will not restrict its potential candidate target companies to any specific
business, industry or geographical location and, thus, may acquire any type of business or be acquired should such a reasonable opportunity
arise.
Critical
Accounting Policies
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts in the accompanying consolidated financial statements and related
notes. These estimates and assumptions have a significant impact on our financial statements. Actual results could differ materially
from those estimates.
Critical
accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about the
effect of matters that are inherently uncertain. Our significant accounting policies are disclosed in Note 1 to the Financial Statements
included in this Quarterly Report on Form 10-Q. However, we do not believe that there are any alternative methods of accounting for our
operations that would have a material effect on our financial statements.
CORONAVIRUS
AID, RELIEF AND ECONOMIC SECURITY ACT
The
COVID-19 pandemic has not had a material impact on the Company, particularly due to our lack of operations. The pandemic may, however,
have an impact on our ability to develop business. For example, our efforts will be threatened by government shutdowns, supply and labor
issues and resulting economic downturns which the pandemic has historically caused. While vaccinations
beginning in 2021 allowed for the partial reopening of the economy, the recent “Omicron” variant of the virus, as well as
reduced efficacy of vaccines over time and the possibility that a large number of people decline to get vaccinated or receive booster
shots, creates inherent uncertainty as to the future of our business, the industries in which we operate and plan to operate and the
economy in general in light of the pandemic.
Off
Balance Sheet Arrangements
As
of the date of this Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or
future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors.
Going
Concern
The
independent registered public accounting firm auditors’ report accompanying our December 31, 2021 financial statements contained
an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have
been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and
satisfy our liabilities and commitments in the ordinary course of business.
Results
of Operations
We
expect that our operating revenues, cost of revenues and operating expenses will greatly increase in the next fiscal year when we identify
a potential acquisition target. Currently we only have nominal operating expenses to run the company and report to the Securities and
Exchange Commission. We have identified ourselves as a shell company until such time a suitable business can be acquired, and we sustain
operations.
For
the Three Months Ended March 31, 2022 and 2021
In the three months ended March 31, 2022, we incurred
professional fees of $26,775 which mostly relate to the filing of the required Securities and Exchange reports as well as costs
to bring current the Company with required state regulatory filings.
We
had no operating expenses for the comparative period in 2021.
Liquidity
and Capital Resources
The
Company in June 2021 was recently revived by the State of Nevada. The Company had no operations for a period of 11 years prior to that
when they filed a Form 15.
On
June 15, 2021, George Sharp was appointed as our Custodian by Order Granting Motion to (1) Intervene, (2) Remove Custodian, (3) Appoint
George Sharp as Custodian, and (4) for Temporary Restraining Order and Preliminary Injunction on Order Shortening Time, Case No A-21-835772-B,
Dept. No. 13 issued by the District Court of the State of Nevada in and for Clark County (the “Court Order”). Under his authority
as Custodian, George Sharp appointed himself as the sole member of the Board and President, Secretary and Treasurer of the Company by
resolutions of the registrant’s Board of Directors on June 16, 2021.
Since
April 29, 2022, the Company has completed Securities and Exchange Commission filings to become a fully reporting company. They have brought
current state regulatory filings to be compliant in the State of Nevada. The Company has commenced the process to identify suitable acquisition
targets. The current operating expenses incurred have been to get to this point. Future operating expenses will be largely funded by
George Sharp until such time as the Company can raise the necessary funding to acquire a business and provide necessary working capital
to pay for the operating expenses of the Company.
As
of March 31, 2022, we had an accumulated deficit of $414,811 and a working capital deficit of $79,634. Our independent registered
public accounting firm has provided a going concern opinion on our most recent audited financial statements as of December 31, 2021.
In
the future, we will need to consummate one or more capital raising transactions, including potential debt or equity issuances, and/or
generate material revenue from an acquired business or businesses to fund our operations. We may also issue shares of common stock, stock
options or other securities to compensate our employees or independent contractors.
Net
Cash used by Operating Activities:
We reported no cash flow from operations as
our net loss from operations offset the increase in accounts payable. It is anticipated that we will continue to report negative
operating cash flow in future periods.
Cash
Flows from Investing Activities:
We
had no investing activities for the three months ended March 31, 2022 and 2021.
Cash
Flows from Financing Activities:
For
the three months ended March 31, 2022 and 2021, the only cash flows from financing activities related to the proceeds from the CEO related
to the purchase of preferred shares. There were no financing activities in the nine months ended March 31, 2021.
Based
upon our current operations, we will need additional working capital to fund our operations over the next 12 months. Further, if we are
able to close a reverse merger, asset purchase or similar transaction to acquire an operating business, it is likely we will need additional
capital, including potentially as a condition of closing the acquisition. Because of the inherent uncertainties of the Company at this
stage, we cannot be certain as to how much capital we need, if and how we can raise capital or the type or quantity of securities we
will be required to issue to do so. In connection with a business combination, we may issue a significant number our shares of our common
stock or securities convertible or exercisable into our common stock to the target’s shareholders which will be dilutive to our
shareholders.
We
anticipate that we will incur operating losses during the next 12 months. Our ability to develop and implement our business plan will
be subject to a number of risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such
risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of revenue sources; and the management
of growth.