UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended:
OR
For the transition period from __________ to __________
Commission File No.
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A |
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 past 12 months, and
(2) has been subject to such filing requirements for the past 90 days. Yes ☐
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of May 15, 2025, there were shares outstanding of the registrant’s common stock, par value $ per share, issued and outstanding.
TABLE OF CONTENTS
| Page | ||
| PART I – FINANCIAL INFORMATION | F-1 | |
| Item 1. | Condensed Consolidated Financial Statements | F-1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 4 |
| Item 4. | Controls and Procedures | 4 |
| PART II – OTHER INFORMATION | 5 | |
| Item 1. | Legal Proceedings | 5 |
| Item 1A. | Risk Factors | 5 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 5 |
| Item 3. | Defaults Upon Senior Securities | 5 |
| Item 4. | Mine Safety Disclosures | 5 |
| Item 5. | Other Information | 5 |
| Item 6. | Exhibits | 5 |
| Signatures | 6 | |
| -i- |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
AND OTHER INFORMATION CONTAINED IN THIS REPORT
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this Form 10-Q. In particular, these include statements relating to future actions; prospective products, applications, customers and technologies; future performance or results of anticipated products; anticipated expenses; and projected financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
| ● | our ability to continue as a going concern; | |
| ● | our operating expenses exceed our revenues and will likely continue to do so for the foreseeable future; | |
| ● | our ability to obtain additional capital, which may be difficult to raise as a result of our limited operating history or any number of other reasons; | |
| ● | competition; | |
| ● | general economic conditions and events and the impact they may have on us; and | |
| ● | other factors discussed in this Form 10-Q. |
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Form 10-Q that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or collaborations or strategic partnerships we may enter into.
You should read this Form 10-Q and the documents that we have filed as exhibits to this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Unless otherwise stated or the context otherwise requires, the terms “Stratos Renewables Corporation” “we,” “us,” “our” and the “Company” refer collectively to Stratos Renewables Corporation and its subsidiaries, if any.
| -ii- |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
STRATOS RENEWABLES CORPORATION
BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Total current assets | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Total current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Preferred stock, par value $; shares authorized; and shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | ||||||||
| Common stock, par value $; shares authorized, and shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | $ | ||||||
See notes to financial statements.
| F-1 |
STRATOS RENEWABLES CORPORATION
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
| 2025 | 2024 | |||||||
| REVENUES | $ | $ | ||||||
| COST OF REVENUES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES: | ||||||||
| Professional fees | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| LOSS FROM OPERATIONS BEFORE BENEFIT (PROVISION) FOR INCOME TAXES | ( | ) | ( | ) | ||||
| BENEFIT (PROVISION) FOR INCOME TAXES | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| NET LOSS PER SHARE | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| SHARES USED IN CALCULATION OF NET LOSS PER SHARE | ||||||||
| Basic and diluted | ||||||||
See notes to financial statements.
| F-2 |
STRATOS RENEWABLES CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2025 AND 2024
| Additional | ||||||||||||||||||||||||||||
| Preferred | Common | Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balances at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Exercise of warrants | - | - | ||||||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
See notes to financial statements.
| F-3 |
STRATOS RENEWABLES CORPORATION
STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2025 AND 2024
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash (used in) operating activities: | ||||||||
| Changes in assets and liabilities | ||||||||
| Accounts payable – related party | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Warrants exercised for cash | ||||||||
| Net cash provided by financing activities | ||||||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| Cash – beginning of period | ||||||||
| Cash – end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
See notes to financial statements.
| F-4 |
STRATOS RENEWABLES CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2025 AND 2024
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.
On September 16, 2022, the Board of Directors approved
a
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements are presented 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.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for permanent and temporary differences related to income taxes, liabilities to accrue, and determination of the fair value of stock awards. Actual results could differ from those estimates.
Cash
Cash consists of cash and demand deposits with an
original maturity of three months or less. The Company holds
Receivables and Concentration of Credit Risk
When the Company records an allowance for doubtful accounts it is based on management’s estimate of the overall collectability of accounts receivable, considering historical losses, credit insurance and economic conditions. Based on these same factors, individual accounts are charged off against the allowance when management determines those individual accounts are uncollectible. Credit extended to customers is generally uncollateralized. Past-due status is based on contractual terms. The Company recorded an allowance for their note receivable for the full amount as collection of this note is uncertain.
| F-5 |
Revenue Recognition
The Company will account for a contract with a customer that is within the scope of this Topic only when the five steps of revenue recognition under ASC 606 are met.
The five core principles will be evaluated for each service provided by the Company and is further supported by applicable guidance in ASC 606 to support the Company’s recognition of revenue.
The Company has not recognized any revenue to date.
Income Taxes
Income taxes are accounted under the asset and liability method. The current charge for income tax expense is calculated in accordance with the relevant tax regulations applicable to the entities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Differences between statutory tax rates and effective tax rates relate to permanent tax differences.
Uncertain Tax Positions
The Company follows ASC 740-10 Accounting for Uncertainty in Income Taxes. This requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. Management evaluates their tax positions on an annual basis.
The Company files income tax returns in the U.S. federal tax jurisdiction and various state tax jurisdictions. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed.
Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (“EPS”) include additional dilution from common stock equivalents, such as convertible notes, preferred stock, stock issuable pursuant to the exercise of stock options and warrants. The Company has and warrants as of March 31, 2025 and December 31, 2024 that are convertible into shares of common stock.
Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented, so only the basic weighted average number of common shares are used in the computations.
| F-6 |
Fair Value Measurements
ASC 820 Fair Value Measurements defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. ASC 820 classifies these inputs into the following hierarchy:
Level 1 inputs: Quoted prices for identical instruments in active markets.
Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 inputs: Instruments with primarily unobservable value drivers.
Financial instruments consist principally of cash, accounts payable and accrued liabilities, and amounts due to related parties. We measure our investments at cost less any impairment, and our notes receivable are at cost less any reserve for uncollectible amounts. The fair value of cash is determined based on Level 1 inputs. There were no transfers into or out of “Level 3” during the periods ended March 31, 2025 and 2024. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Stock-Based Compensation
The Company recognizes compensation costs under FASB ASC Topic 718, Compensation – Stock Compensation and ASU 2018-07. Companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
Segment Reporting
The Company follows the Financial Accounting Standards Board issued Accounting Standards Update 2023-07 (“ASU 2023-07”). ASU 2023-07 improves segment reporting disclosures for public companies. ASU 2023-07 requires more detailed information about reportable segments and expenses including the requirement to disclose qualitative information about factors used to identify reportable segments and quantitative information about profit and loss measures and significant expense categories. The Company has not yet begun generating revenue from its planned principal operations and operates as a single reportable segment. The chief operating decision maker is the Company’s chief executive officer who assesses performance based on total expenses, cash flows, and progress made in the Company’s ongoing acquisition efforts.
Recent Accounting Pronouncements
The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
| F-7 |
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 shares of Series B Preferred Stock as noted below.
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 $
As of March 31, 2025 and December 31, 2024, the Company has shares of common stock issued and outstanding, respectively.
There were shares issued during the periods ended March 31, 2025 and 2024, and there are stock options outstanding as of March 31, 2025 and December 31, 2024.
The Company issued
On January 21, 2025, the warrants that expire
NOTE 4 – GOING CONCERN
The Company concluded that due to the change in management and revival of the entity, and the fact that the Company has yet to conduct meaningful operations as they search for a merger candidate, 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.
NOTE 5 – RELATED PARTY TRANSACTIONS
On January 21, 2025, the warrants that expire
NOTE 6: SUBSEQUENT EVENTS
In accordance with ASC 855-10-50-1, the Company has evaluated subsequent events through May 15, 2025 which is the date that the financial statements were issued.
| F-8 |
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 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.
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 us and likewise barring all our creditors and claimants from participating in the distribution of our assets 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 designate 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.
| 1 |
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.”
On July 6, 2022 the District Court of Clark County, Nevada, at the request of George Sharp acting as our Court appointed Custodian, entered an Order Granting Motion to Cancel Shares of Stratos Stock on an Order Shortening Time on July 6, 2022. As a result of that Order, 219,673,603 shares of our common stock were cancelled that reduced the number of our issued and outstanding shares of common stock to 16,803,070.
On August 23, 2022 the District Court of Clark County, Nevada, at the request of George Sharp acting as our Court appointed Custodian, entered an Order Granting Motion to Terminate Custodianship on Order Shortening Time.
On August 23, 2023, the Company issued 2,000,000 shares and 4,000,000 warrants to a company for $400,000 pursuant to a Stock Purchase and Share Subscription Agreement.
Our principal executive offices are located at 3535 Executive Terminal Drive, Henderson, NV 89052, and our telephone number is (702)-840-4433.
Our 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 2 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.
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, 2024 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.
| 2 |
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, 2025 and 2024
In the three months ended March 31, 2025 and 2024, we incurred professional fees of $17,134 and $41,857 which mostly relate to the filing of the required Securities and Exchange reports.
The Company incurred nominal expenses related to general and administrative items.
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, 2025, we had an accumulated deficit of $3,969,005. Our independent registered public accounting firm has provided a going concern opinion on our most recent audited financial statements as of December 31, 2024.
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 in Operating Activities:
We used $15,300 and $19,707 in cash flows from operating activities for the three months ended March 31, 2025 and 2024, respectively. The majority of the cash used was due to the increase in accounts payable.
Cash Flows from Investing Activities:
We had no investing activities for the three months ended March 31, 2025 and 2024.
| 3 |
Cash Flows from Financing Activities:
We had no financing activities for the three months ended March 31, 2024. In the three months ended March 31, 2025, the Company raised $20,000 from the exercise of warrants.
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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 229.10(f)(1).
Item 4. Controls and Procedures Limitations on Effectiveness of Controls and Procedures
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact there are resource constraints and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated, as of the end of the period covered by this Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded our disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2025.
Changes in Internal Control Over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) has occurred during the three months ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Not applicable to a smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
There is no other information required to be disclosed under this item which was not previously disclosed.
Item 6. Exhibits.
| Exhibit No. | Description | |
| 31.1 | Certification by the Principal Executive Officer and Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). | |
| 32.1 | Certification by the Principal Executive Officer and Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101* | Inline XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.” |
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STRATOS RENEWABLES CORPORATION | ||
| Date: May 15, 2025 | By: | /s/ George Sharp |
| Name: | George Sharp | |
| Title: | President | |
| (Principal Executive and Financial and Accounting Officer) | ||
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