Corporate 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 25, 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 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.
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On April 29, 2022 our Form 10-12G/A was declared effective by the SEC.
On December 15, 2022, FINRA announced on the daily list a 5:1 forward split
under which existing holder of our shares of common stock were issued five
shares of our common stock for each share of common stock held by such
stockholders.
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 Annual Report
on Form 10-K. 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, 2022 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 Years Ended December 31, 2022 and 2021
In the year ended December 31, 2022, we incurred professional fees of $594,430
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, which includes $450,000 in common shares issued to
consultants. In addition, the Company recorded $1,500,000 in common shares
issued to the Chief Executive Officer of the Company for services rendered.
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In the year ended December 31, 2021, we incurred professional fees of $152,859
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, which includes $50,000 in preferred shares issued to the
Chief Executive Officer of the Company for services rendered.
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 December 31, 2022, we had an accumulated deficit of $2,482,466 and a
working capital deficit of $197,289. Our independent registered public
accounting firm has provided a going concern opinion on our most recent audited
financial statements as of December 31, 2022 and 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:
In 2022, we reported no cash flow from operations as our net loss from
operations offset the increase in accounts payable, and an adjustment for common
shares issued to consultants. It is anticipated that we will continue to report
negative operating cash flow in future periods. In 2021, we reported net cash
used in operations of $50,000, which resulted from our net loss from operations
offset by the increase on accounts payable and the value of the preferred shares
issued to the CEO.
Cash Flows from Investing Activities:
We had no investing activities for the years ended December 31, 2022 and 2021.
Cash Flows from Financing Activities:
For the years ended December 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 year
ended December 31, 2022.
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.
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