**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**Form
      10-Q**




x
            Quarterly
                report pursuant Section 13 or 15(d) of the Securities Exchange Act
                of
                1934 For the quarterly period ended March
              31,
              2008




o
            Transition
                report pursuant Section 13 or 15(d) of the Securities Exchange Act
                of
                1934 For the transition period from _______
              to
              _______.




**Commission
      file number 000-1321517**




STRATOS
      RENEWABLES CORPORATION




**(Exact
      name of small business issuer as specified in its charter)**




**Nevada**
              **(State
                or other jurisdiction of incorporation or**
              **organization)**
            
            **20-1699126**
              **(I.R.S.
                Employer Identification
                No.)**




**9440
                Little Santa Monica Blvd., Suite 401**
              **Beverly
                Hills, California**
              **(Address
                of principal executive offices)**
            
            **90210**
              **(Zip
                Code)**




**(310)
      402-5901**


**(Registrant’s
      telephone number, including area code)**




**N/A**


**(Former
      name, former address and former fiscal year, if changed since last
      report)**




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
o No
x




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o
            
            Accelerated filer oNon-accelerated filer o
            
            Smaller reporting company x(Do not check if a smaller
              reporting company)




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
o No
x





As
      of May
      12, 2008, the Company had 59,972,936 outstanding shares of common
      stock.




The
      aggregate market value of the voting common stock held by non-affiliates of
      the
      registrant as of May 12, 2008 was approximately $34,892,016 (computed based
      on
      the closing sale price of the common stock at $1.60 per share as of such date).
      Shares of common stock held by each officer and director and each person owning
      more than ten percent of the outstanding common stock have been excluded in
      that
      such persons may be deemed to be affiliates. This determination of the affiliate
      status is not necessarily a conclusive determination for other
      purposes.




1




TABLE
      OF
      CONTENTS




Part
                  I - FINANCIAL INFORMATION
              
              
              3Item
                  1. Financial Statements
              
              
              3Item
                  2. Management’s Discussion and Analysis or Plan of
                  Operation
              
              
              18Item
                  3. Quantitative and Qualitative Disclosures About Market
                  Risk
              
              
              25Item
                  4. Controls and Procedures
              
              
              26PART
                  II - OTHER INFORMATION
              
              
              26Item
                  1. Legal Proceedings
              
              
              26Item
                  1A. Risk Factors
              
              
              26Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              
              
              26Item
                  3. Defaults Upon Senior Securities
              
              
              27Item
                  4. Submission of Matters to a Vote of Security Holders
              
              
              27Item
                  5. Other Information
              
              
              27Item
                  6. Exhibits
              
              
              27


2


**Part
      I - FINANCIAL INFORMATION**




**Item
      1. Financial Statements**




**Stratos
        Renewables Corporation**


(A
        Development Stage Company)
 **Consoldiated
          Balance Sheet**


**March
                  31,**
              
              **December
                  31,****2008**
              
              **2007****ASSETS**
              
              (unaudited)CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              2,452,166
              
              $
              3,357,417Debt
                  issue costs
              
              
              -
              
              
              56,948Prepaid
                  consulting
              
              
              288,018
              
              
              155,020TOTAL
                  CURRENT ASSETS
              
              
              2,740,184
              
              
              3,569,385PLANT
                  AND EQUIPMENT, net
              
              
              5,610,074
              
              
              4,600,923VAT
                  RECEIVABLE
              
              
              1,132,756
              
              
              899,567OTHER
                  ASSETS
              
              
              75,910
              
              
              21,711TOTAL
                  ASSETS
              
              $
              9,558,924
              
              $
              9,091,586**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**CURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              947,990
              
              $
              173,032Accrued
                  interest
              
              
              115,239
              
              
              39,248Other
                  payables
              
              
              196,121
              
              
              84,648Accrued
                  interest and redemption premium
              
              
              1,360,193
              
              
              670,150Convertible
                  promissory notes, net of debt discount of $0 and
                  $552,369
              
              
              3,048,000
              
              
              2,495,631Accrued
                  beneficial converstion liability
              
              
              257,115
              
              
              250,938Accrued
                  warrant liablity
              
              
              1,625,656
              
              
              1,164,501TOTAL
                  CURRENT LIABILITIES
              
              
              7,550,314
              
              
              4,878,148STOCKHOLDERS'
                  EQUITYPreferred
                  stock; $0.001 par value; 50,000,000 sharesauthorized;
                  7,142,857 shares issued and outstanding
              
              
              7,143
              
              
              7,143Common
                  stock; $0.001 par value; 250,000,000 sharesauthorized;
                  59,972,936 and 57,666,794 shares issued and outstanding
              
              
              59,973
              
              
              57,667Additional
                  paid-in capital
              
              
              7,322,808
              
              
              6,193,629Other
                  comprehensive income
              
              
              700,832
              
              
              14,021Deficit
                  accumulated during the development stage
              
              
              (6,082,146
              )
              
              (2,059,022
              )TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              2,008,610
              
              
              4,213,438TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              9,558,924
              
              $
              9,091,586





The
        accompanying notes are an integral part of these consolidated financial
        statements.




3




**Stratos
        Renewables Corporation**


(A
        Development Stage Company)


**Statement
        of Operations and Other Comprehensive Loss**
  **For
                  the period**
              
              **For
                  the period****from
                  inception**
              
              **from
                  inception****Three
                  Months Ended**
              
              **(February
                  27, 2007)**
              
              **(February
                  27, 2007)****March
                  31, 2008**
              
              **to
                  March 31, 2007**
              
              **to
                  March 31, 2008**(unaudited)
              
              (unaudited)
              
              (unaudited)REVENUE
              
              $
              -
              
              $
              -
              
              $
              -COST
                  OF REVENUE
              
              
              -
              
              
              -
              
              
              -GROSS
                  PROFIT
              
              
              -
              
              
              -
              
              
              -OPERATING
                  EXPENSESConsulting
                  fees
              
              
              745,470
              
              
              -
              
              
              890,254General
                  and administrative
              
              
              881,964
              
              
              -
              
              
              1,402,743Professional
                  fees
              
              
              671,943
              
              
              -
              
              
              772,554Wages
              
              
              431,376
              
              
              -
              
              
              642,304TOTAL
                  OPERATING EXPENSES
              
              
              2,730,753
              
              
              -
              
              
              3,707,855OTHER
                  INCOME (EXPENSES)Amortization
                  of debt discounts and debt issuance costs
              
              
              (609,317
              )
              
              -
              
              
              (1,218,634
              )Interest
                  and financing costs
              
              
              (722,401
              )
              
              -
              
              
              (1,443,863
              )Change
                  in value of beneficial conversion feature
              
              
              (6,177
              )
              
              -
              
              
              617,875Change
                  in value of warrant liability
              
              
              209,260
              
              
              -
              
              
              305,232Foreign
                  currency loss
              
              
              (162,936
              )
              
              -
              
              
              (162,936
              )Other
              
              
              -
              
              
              -
              
              
              600TOTAL
                  OTHER EXPENSES, net
              
              
              (1,291,571
              )
              
              -
              
              
              (1,901,726
              )LOSS
                  FROM OPERATIONS
              
              
              (4,022,324
              )
              
              -
              
              
              (5,609,581
              )INCOME
                  TAX PROVISION
              
              
              800
              
              
              -
              
              
              800NET
                  LOSS
              
              
              (4,023,124
              )
              
              -
              
              
              (5,610,381
              )PREFERRED
                  STOCK DIVIDEND
              
              
              -
              
              
              -
              
              
              471,765NET
                  LOSS ATTIRUBTED TO COMMON STOCKHOLDERS
              
              
              (4,023,124
              )
              
              -
              
              
              (6,082,146
              )OTHER
                  COMPREHENSIVE INCOMEForeign
                  currency translation gain
              
              
              686,811
              
              
              -
              
              
              700,832COMPREHENSIVE
                  INCOME
              
              $
              (3,336,313
              )
              $
              -
              
              $
              (5,381,314
              )LOSS
                  PER COMMON SHARE - BASIC AND DILUTED
              
              $
              (0.07
              )
              $
              -
              
              $
              (0.11
              )WEIGHTED
                  AVERAGE COMMON EQUIVALENTSHARES
                  OUTSTANDING - BASIC AND DILUTED
              
              
              58,290,604
              
              
              -
              
              
              49,527,933
  The
        accompanying notes are an integral part of these financial
        statements.




4


**Stratos
        Renewables Corporation**
 (A
          Development Stage Company)
 **Statement
            of Stockholders' Equity**


**Deficit****Accumulated****Additonal**
                
                **Other**
                
                **During
                    the**
                
                **Total****Preferred
                    Stock**
                
                **Common
                    Stock**
                
                **Paid-in**
                
                **Comprehensive**
                
                **Development**
                
                **Stockholders'****Shares**
                
                **Amount**
                
                **Shares**
                
                **Amount**
                
                **Capital**
                
                **Gain
                    (loss)**
                
                **Stage**
                
                **Equity****Balance,
                    February 27, 2007**
                
                
                **-**
                
                **$**
                **-**
                
                
                **-**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **-**Purchase
                    of shares for cash
                
                
                
                
                
                
                
                
                45,000,000
                
                
                45,000
                
                
                (44,666
                )
                
                
                
                
                
                
                
                334Shares
                    issued in connection with reverse merger transaction
                
                
                
                
                
                
                
                
                10,000,000
                
                
                10,000
                
                
                (9,789
                )
                
                
                
                
                
                
                
                211Common
                    stock issued for cash
                
                
                
                
                
                
                
                
                2,666,794
                
                
                2,667
                
                
                1,442,065
                
                
                
                
                
                
                
                
                1,444,732Preferred
                    stock issued for cash
                
                
                7,142,857
                
                
                7,143
                
                
                
                
                
                
                
                
                4,334,254
                
                
                
                
                
                
                
                
                4,341,397Deemed
                    dividend on preferred shares issued
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                471,765
                
                
                
                
                
                (471,765
                )
                
                -Gain
                    on translation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                14,021
                
                
                
                
                
                14,021Net
                    loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,587,257
                )
                
                (1,587,257
                )**Balance,
                    December 31, 2007**
                
                
                **7,142,857**
                
                
                **7,143**
                
                
                **57,666,794**
                
                
                **57,667**
                
                
                **6,193,629**
                
                
                **14,021**
                
                
                **(2,059,022**
                **)**
                
                **4,213,438**Issuance
                    of common stock for cash
                
                
                
                
                
                
                
                
                2,267,782
                
                
                2,268
                
                
                1,129,217
                
                
                
                
                
                
                
                
                1,131,485Cashless
                    exercise of warrants (71,429 warrants exercisedfor
                    38,360 shares)
                
                
                
                
                
                
                
                
                38,360
                
                
                38
                
                
                (38
                )
                
                
                
                
                
                
                
                -Gain
                    on translation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                686,811
                
                
                
                
                
                686,811Net
                    loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (4,023,124
                )
                
                (4,023,124
                )**Balance,
                    March 31, 2008 (unaudited)**
                
                
                **7,142,857**
                
                **$**
                **7,143**
                
                
                **59,972,936**
                
                **$**
                **59,973**
                
                **$**
                **7,322,808**
                
                **$**
                **700,832**
                
                **$**
                **(6,082,146**
                **)**
                **$**
                **2,008,610**


The
        accompanying notes are an integral part of these financial
        statements.


5
  **Stratos
          Renewables Corporation**
 (A
          Development Stage Company)
 **Statement
          of Cash Flows**
  **For
                      the period**
                  
                  **For
                      the period****from
                      inception**
                  
                  **from
                      inception****Three
                      Months Ended**
                  
                  **(February
                      27, 2007)**
                  
                  **(February
                      27, 2007)****March
                      31, 2008**
                  
                  **to
                      March 31, 2007**
                  
                  **to
                      March 31, 2008**(unaudited)
                  
                  (unaudited)
                  
                  (unaudited)CASH
                      FLOW FROM OPERATING ACTIVITIES:Net
                      loss
                  
                  $
                  (4,023,124
                  )
                  $
                  -
                  
                  $
                  (5,610,381
                  )Adjustments
                      to net loss for non-cash activities:Amortization
                      of debt discounts and debt issuance costs
                  
                  
                  609,317
                  
                  
                  -
                  
                  
                  1,218,634Depreciation
                      and amortization
                  
                  
                  3,927
                  
                  
                  -
                  
                  
                  6,021Change
                      in value of beneficial conversion feature
                  
                  
                  6,177
                  
                  
                  -
                  
                  
                  (617,875
                  )Change
                      in value of warrant liability
                  
                  
                  (209,260
                  )
                  
                  -
                  
                  
                  (305,232
                  )Amortization
                      of prepaid consulting
                  
                  
                  83,107
                  
                  
                  -
                  
                  
                  134,779Adjustment
                      to reconcile net loss to net cashprovided
                      by operating activities:Other
                      assets
                  
                  
                  (49,922
                  )
                  
                  -
                  
                  
                  (70,790
                  )Accrued
                      interest and redemption premium
                  
                  
                  690,043
                  
                  
                  -
                  
                  
                  1,360,193Accounts
                      payable
                  
                  
                  764,450
                  
                  
                  -
                  
                  
                  935,069Interest
                      payable
                  
                  
                  75,991
                  
                  
                  -
                  
                  
                  115,239Other
                      payables
                  
                  
                  110,319
                  
                  
                  -
                  
                  
                  191,681Net
                      cash used in operating activities
                  
                  
                  (1,938,975
                  )
                  
                  -
                  
                  
                  (2,642,662
                  )CASH
                      FLOW FROM INVESTING ACTIVITIES:Purchases
                      of plant and equipment
                  
                  
                  (566,646
                  )
                  
                  -
                  
                  
                  (5,171,284
                  )VAT
                      receivable
                  
                  
                  (144,329
                  )
                  
                  -
                  
                  
                  (1,008,986
                  )Cash
                      acquired with acquisition
                  
                  
                  -
                  
                  
                  -
                  
                  
                  211Net
                      cash used in investing activities
                  
                  
                  (710,975
                  )
                  
                  -
                  
                  
                  (6,180,059
                  )CASH
                      FLOW FROM FINANCING ACTIVITIES:Proceeds
                      from sale of common stock
                  
                  
                  1,585,794
                  
                  
                  -
                  
                  
                  3,452,884Proceeds
                      from sale of preferred stock
                  
                  
                  -
                  
                  
                  -
                  
                  
                  5,000,000Payment
                      of offerings costs associated with common and preferred
                      stock
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (256,593
                  )Proceeds
                      from issuance of convertible debenture
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,048,000Payment
                      of offerings costs associated with convertible debenture
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (113,897
                  )Net
                      cash provided by financing activities
                  
                  
                  1,585,794
                  
                  
                  -
                  
                  
                  11,130,394Effect
                      of exchange rate changes on cash and cash equivalents
                  
                  
                  158,905
                  
                  
                  -
                  
                  
                  144,493NET
                      (DECREASE) INCREASE IN CASH ANDCASH
                      EQUIVALENTS
                  
                  
                  (905,251
                  )
                  
                  -
                  
                  
                  2,452,166CASH
                      AND CASH EQUIVALENTS, Beginning of period
                  
                  
                  3,357,417
                  
                  
                  -
                  
                  
                  -CASH
                      AND CASH EQUIVALENTS, End of period
                  
                  $
                  2,452,166
                  
                  $
                  -
                  
                  $
                  2,452,166SUPPLEMENTAL
                      DISCLOSURES OF CASH FLOWS INFORMATION:Interest
                      paid
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Income
                      taxes paid
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -SUPPLEMENTAL
                      NON-CASH INVESTING AND FINANCING ACTIVITIES:Costs
                      associated with acquisition:Beneficial
                      conversion feature associated with convertible debenture
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  874,990Issuance
                      of warrants in acquisition
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  229,748Acquisition
                      of shell company
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  211
  The
          accompanying notes are an integral part of these financial
          statements.
  6
  **Stratos
            Renewables Corporation**
 **(A
            Development Stage Company)**
 **Notes
            to Consolidated Financial Statements**
 **(Unaudited)**


**Note
      1 - Organization and Basis of Presentation**




The
      unaudited consolidated financial statements have been prepared by Stratos
      Renewables Corporation, formerly New Design Cabinets, Inc. (the “Company”),
      pursuant to the rules and regulations of the Securities Exchange Commission.
      The
      information furnished herein reflects all adjustments (consisting of normal
      recurring accruals and adjustments) which are, in the opinion of management,
      necessary to fairly present the operating results for the respective periods.
      Certain information and footnote disclosures normally present in annual
      consolidated financial statements prepared in accordance with accounting
      principles generally accepted in the United States of America have been omitted
      pursuant to such rules and regulations. These consolidated financial statements
      should be read in conjunction with the audited consolidated financial statements
      and footnotes included in the Company’s Annual Report on Form 10-KSB. The
      results for the three months ended March 31, 2008 are not necessarily indicative
      of the results to be expected for the full year ending December 31, 2008.




Organization
      and line of business




The
      Company was incorporated in the State of Nevada on September 29, 2004. Stratos
      del Peru S.A.C. was incorporated in Lima, Peru, on February 27, 2007 with the
      name of Estratosfera del Perú S.A.C. On July 11, 2007, the general meeting of
      shareholders agreed to change the Company’s name to its current one, Stratos del
      Peru S.A.C. (“Stratos del Peru”), which was officially registered with the Tax
      Administration on October 11, 2007.




On
      November 14, 2007, Stratos del Peru entered into a share exchange agreement
      (“Share Exchange”) with the Company. Pursuant to the agreement, the Company
      issued 45,000,000 shares of its common stock to the former security holders
      of
      Stratos del Peru in exchange for 999, or 99.9%, of the issued and outstanding
      shares of common stock of Stratos del Peru. Upon closing the Share Exchange,
      the
      Company had 55,000,000 shares of common stock issued and outstanding as a result
      of the issuance of 45,000,000 shares of common stock to the former security
      holders of Stratos del Peru. Effective November 20, 2007, the Company amended
      its articles of incorporation to change the name of the corporation from “New
      Design Cabinets, Inc.” to “Stratos Renewables Corporation.”




The
      Share
      Exchange is deemed to be a reverse acquisition under the purchase method of
      accounting. As the acquired entity, Stratos del Peru is regarded as the
      predecessor entity as of November 14, 2007. Accordingly, the merger of the
      Company and Stratos del Peru was recorded as a recapitalization of Stratos
      del
      Peru, with Stratos del Peru being treated as the continuing entity and the
      management and board of directors of Stratos del Peru were appointed as officers
      and directors of the Company. The accompanying consolidated statement of
      operations presents the amounts as if the acquisition occurred on February
      27,
      2007 (date of inception for Stratos del Peru).




Additionally,
      in connection with the reverse merger transaction, the Company conducted a
      private placement of common stock, preferred stock and convertible promissory
      notes totaling approximately $10 million.




The
      Company’s business objectives are the purchase, sale, production, distribution,
      marketing, transport, warehousing, mixture, exports and imports of all kinds
      of
      products derived from hydrocarbons and bio-fuels, being solids, liquids or
      gases. The Company is currently a development stage company under the provisions
      of Statement of Financial Accounting Standards (“SFAS”) No. 7 as it has not
      commenced generating revenue. The Company’s offices and administrative
      headquarters are located in Lima, Peru.




Basis
      of presentation




The
      accompanying consolidated financial statements are presented in US dollars
      and
      have been prepared in accordance with accounting principles generally accepted
      in the United States of America. The accompanying consolidated financial
      statements include the accounts of Stratos Renewables Corporation and its 99.99%
      owned subsidiary, Stratos del Peru. All intercompany accounts and transactions
      have been eliminated within the consolidation.




7




**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**




Minority
      interest




Minority
      interest has not been presented on the consolidated balance sheet due to
      accumulated losses which exceed the minority stockholders equity. In accordance
      with Accounting Principles Board Opinion No. 18, the minority interest has
      been
      written down to zero on the accompanying balance sheet.




Foreign
      currency translation




The
      reporting currency of the Company is the US dollar. The Company uses its local
      currency, Peruvian Nuevos Soles (PEN) as its functional currency. Such financial
      statements were translated into U.S. Dollars (USD) in accordance with Statement
      of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency
      Translation,” with the PEN as the functional currency. Assets and liabilities
      are translated using the exchange rates prevailing at the balance sheet date.
      Translation adjustments resulting from this process are included in accumulated
      other comprehensive income in the consolidated statement of stockholders’
equity. Transaction gains and losses that arise from exchange rate fluctuations
      on transactions denominated in a currency other than the functional currency
      are
      included in the results of operations as incurred.




Translation
      adjustments were $686,811 and $14,021 at March 31, 2008 and December 31, 2007,
      respectively. Asset and liability amounts at March 31, 2008 and December 31,
      2007 were translated at 2.746 and 2.997 PEN to $1.00 USD, respectively. Equity
      accounts were stated at their historical rate. The average translation rate
      applied to the statement of operations for the three months ended March 31,
      2008
      was 2.872 PEN to $1.00 USD. Cash flows are also translated at average
      translation rates for the period; therefore, amounts reported on the statement
      of cash flows will not necessarily agree with changes in the corresponding
      balances on the balance sheet.




**N** **ote
      2 - Summary of Significant Accounting Policies**




Use
      of
      estimates




The
      preparation of consolidated financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosures of contingent assets and liabilities
      at
      the date of the financial statements and the reported amounts of revenue and
      expenses during the reporting periods. Actual results could differ from these
      estimates.




Cash
      and cash equivalents




For
      purposes of the statements of cash flows, the Company defines cash equivalents
      as all highly liquid debt instruments purchased with a maturity of three months
      or less.




Concentration
      of credit risk




Cash
      includes cash on hand and demand deposits in accounts maintained within Peru
      and
      the United States. Certain financial instruments, which subject the Company
      to
      concentration of credit risk, consist of cash. The Company maintains balances
      at
      financial institutions which, from time to time, may exceed Federal Deposit
      Insurance Corporation insured limits for the banks located in the Unites States.
      Balances at financial institutions within Peru are not covered by insurance.
      As
      of March 31, 2008 and December 31, 2007, the Company had deposits in excess
      of
      federally insured limits totaling $2,177,096 and $3,403,946, respectively.
      The
      Company has not experienced any losses in such accounts and believes it is
      not
      exposed to any significant risks on its cash in bank accounts.




The
      Company will extend credit based on an evaluation of the customer’s financial
      condition, generally without collateral. Exposure to losses on receivables
      is
      principally dependent on each customer’s financial condition. The Company will
      monitor its exposure for credit losses and will maintain allowances for
      anticipated losses, as required.




8


**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**




VAT
      receivable




At
      March
      31, 2008 and December 31, 2007, the Company recognized a VAT (value added tax)
      receivable of $1,132,756 and $899,567, respectively, in Peru. VAT is charged
      at
      a standard rate of 19% and the Company obtains income tax credits for VAT paid
      in connection with the purchase of capital equipment and other goods and
      services employed in its operations. The Company is entitled to use the credits
      against its Peruvian income tax liability or to receive a refund credit against
      VAT payable or sales. As the Company does not anticipate incurring either a
      Peruvian tax or a VAT liability during the next fiscal year, the receivable
      was
      classified as a long-term asset.




Plant
      and equipment




Plant
      and
      equipment are stated at historical cost and are depreciated using the
      straight-line method over their estimated useful lives ranging from 4 to 10
      years. The useful life and depreciation method are reviewed periodically to
      ensure that the depreciation method and period are consistent with the
      anticipated pattern of future economic benefits. Expenditures for maintenance
      and repairs are charged to operations as incurred while renewals and betterments
      are capitalized. Gains and losses on disposals are included in the results
      of
      operations.




Impairment
      of long-lived assets




The
      Company follows the guidance of Statement of Financial Accounting Standards
      No.
      144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS
      144”), which addresses financial accounting and reporting for the impairment or
      disposal of long-lived assets. The Company periodically evaluates the carrying
      value of long-lived assets to be held and used in accordance with SFAS 144.
      SFAS
      144 requires impairment losses to be recorded on long-lived assets used in
      operations when indicators of impairment are present and the undiscounted cash
      flows estimated to be generated by those assets are less than the assets’
carrying amounts. In that event, a loss is recognized based on the amount by
      which the carrying amount exceeds the fair market value of the long-lived
      assets. Loss on long-lived assets to be disposed of is determined in a similar
      manner, except that fair market values are reduced for the cost of disposal.
      Based on its review, the Company believes that, as of March 31, 2008, there
      were
      no significant impairments of its long-lived assets.




Income
      taxes




The
      Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
      for Income Taxes.” Deferred taxes are provided on the liability method whereby
      deferred tax assets are recognized for deductible temporary differences, and
      deferred tax liabilities are recognized for taxable temporary differences.
      Temporary differences are the differences between the reported amounts of assets
      and liabilities and their tax bases. Deferred tax assets are reduced by a
      valuation allowance when, in the opinion of management, it is more likely than
      not that some portion or all of the deferred tax assets will not be
      realized. Deferred tax assets and liabilities are adjusted for the effects
      of
      changes in tax laws and rates on the date of enactment. The income tax rate
      applicable to Peruvian companies is 30%. If the Company distributes its earnings
      fully or partially, it shall apply an additional rate of 4.1% on the distributed
      amount, which will be borne by the shareholders, as long as they are individuals
      or companies non-domiciled in Peru. The 4.1% rate tax will be borne by the
      Company and will apply on any amount or payment in kind subject to income tax
      that may represent an indirect disposition not subject to subsequent tax
      control, including amounts debited to expenses and undeclared revenues. As
      from
      January 1, 2007 the tax payer must liquidate and pay the 4.1% tax directly
      together with its monthly obligations without the requirement of a previous
      tax
      audit by the Tax Administration.




The
      Company adopted FASB Interpretation 48, “Accounting for Uncertainty in Income
      Taxes”, during 2007. A tax position is recognized as a benefit only if it is
“more likely than not” that the tax position would be sustained in a tax
      examination, with a tax examination being presumed to occur. The amount
      recognized is the largest amount of tax benefit that is greater than 50% likely
      of being realized on examination. For tax positions not meeting the “more likely
      than not” test, no tax benefit is recorded. The adoption had no affect on the
      Company’s financial statements.




9




**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**




Basic
      and Diluted Losses per share




The
      Company reports earnings per share in accordance with SFAS No. 128, “Earnings
      per Share.” Basic earnings per share is computed by dividing the net income by
      the weighted average number of common shares available. Diluted earnings per
      share is computed similar to basic earnings per share except that the
      denominator is increased to include the number of additional common shares
      that
      would have been outstanding if the potential common shares had been issued
      and
      if the additional common shares were dilutive. All preferred shares, warrants,
      and options were excluded from the diluted loss per share due to the
      anti-dilutive effect.




Accrued
      warrant liability and accrued beneficial conversion feature




Pursuant
      to EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and
      Potentially Settled in, a Company’s Own Stock”, the Company has recorded the
      fair value of all outstanding warrants as an accrued warrant liability since
      the
      Company’s convertible promissory notes are convertible into an undetermined
      number of shares of common stock. As a result, the Company may not have enough
      authorized shares to satisfy the exercise of its outstanding warrants. In
      addition, the fair value of the beneficial conversion feature associated with
      the convertible promissory notes is recorded as an accrued beneficial conversion
      liability




Fair
      value of financial instruments




On
      January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements.
      SFAS
      No. 157 defines fair value, establishes a three-level valuation hierarchy for
      disclosures of fair value measurement and enhances disclosures requirements
      for
      fair value measures. The carrying amounts reported in the balance sheets for
      receivables and current liabilities each qualify as financial instruments and
      are a reasonable estimate of fair value because of the short period of time
      between the origination of such instruments and their expected realization
      and
      their current market rate of interest. The three levels are defined as
      follow:




·
            Level
                1 inputs to the valuation methodology are quoted prices (unadjusted)
                for
                identical assets or liabilities in active
                markets.




·
            Level
                2 inputs to the valuation methodology include quoted prices for similar
                assets and liabilities in active markets, and inputs that are observable
                for the asset or liability, either directly or indirectly, for
                substantially the full term of the financial
                instrument.




·
            Level
                3 inputs to the valuation methodology are unobservable and significant
                to
                the fair value measurement.


The
        Company analyzes all financial instruments with features of both liabilities
        and
        equity under SFAS 150, “Accounting for Certain Financial Instruments with
        Characteristics of Both Liabilities and Equity,” SFAS No 133, “Accounting for
        Derivative Instruments and Hedging Activities” and EITF 00-19, “Accounting for
        Derivative Financial Instruments Indexed to, and Potentially Settled in,
        a
        Company’s Own Stock.”
  The
        Company’s beneficial conversion liability is carried at fair value totaling
        $257,115 and $250,938, as of March 31, 2008 and December 31, 2007; the Company
        carries its warrants at fair value totaling $1,625,656 and $1,164,501 as
        of
        March 31, 2008 and December 31, 2007. The Company used Level 2 inputs for
        its
        valuation methodology for the beneficial conversion liability, and warrant
        liability, and their fair values are determined by using the Black Scholes
        option pricing model based on various assumptions.
 10
 **Stratos
              Renewables Corporation**
 **(A
              Development Stage Company)**
 **Notes
              to Consolidated Financial Statements**
 **(Unaudited)**
 Fair
                    Value
                  As
                    of
                  March
                    31, 2008
                
                Fair
                    Value Measurements at March 31, 2008
                  Using
                    Fair Value HierarchyLiabilities
                
                
                
                Level
                    1
                Level
                    2
                Level
                    3Beneficial
                    conversion liability
                
                $257,115
                
                
                $257,115Warrant
                    liability
                
                $1,625,656
                
                
                $1,625,656
  The
          Company recognized $6,177 and $209,260 as loss and gain, respectively,
          on
          derivative instruments for the three months ended March 31, 2008.
  The
          Company did not identify any other non-recurring assets and liabilities
          that are
          required to be presented on the balance sheet at fair value in accordance
          with
          SFAS No. 157.
  Recently
          issued accounting pronouncements




In
      December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
      Combinations.” SFAS No. 141 (Revised 2007) changes how a reporting
      enterprise accounts for the acquisition of a business. SFAS No. 141
      (Revised 2007) requires an acquiring entity to recognize all the assets acquired
      and liabilities assumed in a transaction at the acquisition-date fair value,
      with limited exceptions, and applies to a wider range of transactions or events.
      SFAS No. 141 (Revised 2007) is effective for fiscal years beginning on or
      after December 15, 2008 and early adoption and retrospective application is
      prohibited.




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements”, which is an amendment of Accounting Research
      Bulletin (“ARB”) No. 51.  This statement clarifies that a
      noncontrolling interest in a subsidiary is an ownership interest in the
      consolidated entity that should be reported as equity in the consolidated
      financial statements.  This statement changes the way the consolidated
      income statement is presented, thus requiring consolidated net income to be
      reported at amounts that include the amounts attributable to both parent and
      the
      noncontrolling interest.  This statement is effective for the fiscal
      years, and interim periods within those fiscal years, beginning on or after
      December 15, 2008.  Based on current conditions, the Company does not
      expect the adoption of SFAS 160 to have a significant impact on its results
      of
      operations or financial position.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities”. This Statement permits entities to
      choose to measure many financial assets and financial liabilities at fair value.
      Unrealized gains and losses on items for which the fair value option has been
      elected are reported in earnings. SFAS No. 159 is effective as of the beginning
      of an entity’s first fiscal year that begins after November 15, 2007. The
      Company adopted SFAS No. 159 on January 1, 2008. The Company chose not to elect
      the option to measure the fair value of eligible financial assets and
      liabilities.




In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB
      Statements No. 87, 88, 106, and 132(R)”. This statement requires employers to
      recognize the overfunded or underfunded status of a defined benefit
      postretirement plan (other than a multiemployer plan) as an asset or liability
      in its statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a
      business entity or changes in unrestricted net assets of a not-for-profit
      organization. This statement also requires an employer to measure the funded
      status of a plan as of the date of its year-end statement of financial position,
      with limited exceptions. The provisions of SFAS No. 158 are effective for
      employers with publicly traded equity securities as of the end of the fiscal
      year ending after December 15, 2006. The adoption of this statement had no
      effect on the Company’s reported financial position or results of
      operations.




In
      June
      2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for
      Nonrefundable Advance Payments for Goods or Services Received for use in Future
      Research and Development Activities” (“FSP EITF 07-3”), which addresses whether
      nonrefundable advance payments for goods or services that used or rendered
      for
      research and development activities should be expensed when the advance payment
      is made or when the research and development activity has been performed.
      Management is currently evaluating the effect of this pronouncement on financial
      statements.




**Note
      3 - Development Stage Company and Going Concern**




The
      Company is a new development stage company and is subject to risks and
      uncertainties that include: new product development, actions of competitors,
      reliance on the knowledge and skills of its employees to be able to service
      customers, and availability of sufficient capital and a limited operating
      history. Accordingly, the Company presents its consolidated financial statements
      in accordance with the accounting principles generally accepted in the United
      States of America that apply in establishing new operating enterprises. As
      a
      development stage enterprise, the Company discloses the deficit accumulated
      during the development stage and the consolidated accumulated statement of
      operations and cash flows from inception of the development stage to the date
      on
      the current balance sheet. Contingencies exist with respect to this matter,
      the
      ultimate resolution of which cannot presently be determined.




The
      accompanying consolidated financial statements have been prepared in conformity
      with generally accepted accounting principles in the United States of America,
      which contemplates continuation of the Company as a going concern. However,
      the
      Company has not generated any operating revenue and has working capital
      deficits, which raises substantial doubt about its ability to continue as a
      going concern.




11




**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**




In
      view
      of these matters, realization of certain of the assets in the accompanying
      balance sheet is dependent upon continued operations of the Company, which
      in
      turn is dependent upon the Company’s ability to meet its financial requirements,
      raise additional capital, and the success of its future operations.




Management
      recently raised approximately $10 million in debt and equity capital and is
      attempting to raise additional debt and equity capital. Management believes
      that
      this plan provides an opportunity for the Company to continue as a going
      concern.




**Note
      4 - Plant and Equipment**




Plant
      and
      equipment consist of the following:




**Description**
            
            March
                31, 2008
            
            December
                31, 2007Sugar
                plant
            
            $
            4,968,401
            
            $
            4,552,247Leasehold
                improvements
            
            
            57,163
            
            
            -Vehicles
            
            
            2,637
            
            
            2,416Computer
                equipment
            
            
            89,540
            
            
            48,439Construction
                in progress
            
            
            473,668
            
            
            -Other
            
            
            25,150
            
            
            -5,616,559
            
            
            4,603,102Accumulated
                depreciation
            
            
            (6,485
            )
            
            (2,179
            )Plant
                and equipment, net
            
            $
            5,610,074
            
            $
            4,600,923




Depreciation
      expense amounted to $3,927 for the three months ended March 31,
      2008.




For
      the
      period March 31, 2008 and for the period from February 27, 2007 (date of
      inception) to March 31, 2008, interest capitalized to construction in progress
      amounted to $32,319.




During
      2008, the Company had construction in progress related to the construction
      of
      the Company’s industrial lot and sugar mill and compost plant layout that will
      be completed during January 2009 and November 2008, respectively. Total
      estimated project completion costs for these projects amount to $7,000,000.


Due
        to
        significant modifications to the sugar plant, the plant is currently not in
        service and is not being depreciated.


**Note
      5 - Stockholders’ Equity**




*Common
      Stock Private Placement*




Immediately
      following the above mentioned Share Exchange under Note 1, the Company entered
      into a private placement (“Private Placement”) and issued an aggregate of
      2,666,794 shares of common stock and warrants to purchase an aggregate of
      1,333,396 shares of common stock. The issuance of 2,666,794 shares of common
      stock has been included as a component in the accompanying consolidated
      Statement of Stockholders’ Equity. The aggregate gross proceeds raised by the
      Company in connection with the Private Placement were $1,867,090. Each share
      of
      common stock was sold to investors at $0.70 per share. The fair value of the
      warrants amounted to $352,268. The fair value was computed using the
      Black-Scholes model under the following assumptions: (1) expected life of 1
      year; (2) volatility of 100%; and (3) risk free interest of 5.0%. The warrants
      expire after five (5) years from the date of issuance and are exercisable at
      $0.75 per share, subject to adjustment in certain circumstances.




*Series
      A Preferred Stock Private Placement*




Immediately
      following the above mentioned Share Exchange, the Company completed a Series
      A
      Private Placement (“Series A Private Placement”) and issued to MA Green
      7,142,857 shares of Series A Preferred Stock and warrants to purchase 1,785,714
      shares of common stock. The issuance of 7,142,857 shares of Preferred Stock
      has
      been included as a component in the accompanying Statement of Stockholders’
Equity. The gross proceeds raised by the Company in connection with the Series
      A
      Private Placement were $5,000,000. Each share of Series A Preferred Stock was
      sold at $0.70 per share. The warrants expire five (5) years from the date of
      issuance and are exercisable at $0.75 per share, subject to adjustment in
      certain circumstances. The Company’s Chairman of the Board of Directors, Steven
      Magami, is the manager of MA Green.




12


**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**




The
      fair
      value of the 1,785,714 warrants issued with the Series A Private Placement
      was
      $471,765. The fair value was computed using the Black-Scholes model under the
      following assumptions: (1) expected life of 1 year; (2) volatility of 100%,
      (3)
      risk free interest of 5.0% and (4) dividend rate of $0%. In addition, since
      this
      convertible preferred stock is convertible into shares of common stock at a
      one
      to one ratio an embedded beneficial conversion feature was recorded as a
      discount to additional paid in capital in accordance with Emerging Issues Task
      Force No. 00-27, “Application of Issue No. 98-5 to Certain Convertible
      Instruments.” The intrinsic value of the beneficial conversion feature has been
      recorded as a preferred stock dividend at the date of issuance. The Company
      recognized $471,765 of preferred dividends related to the beneficial conversion
      feature.




*Bridge
      Financing*




Immediately
      following the above mentioned Share Exchange, the Company entered into a Note
      and Warrant Purchase Agreement (“Bridge Financing”) with investors and issued an
      aggregate of $3,048,000 in convertible promissory notes and warrants to purchase
      an aggregate of 870,858 shares of common stock. The convertible promissory
      notes
      issued in connection with the Bridge Financing bear interest at 10% per annum.
      The bridge note holders received one (1) warrant to purchase one (1) share
      of
      common stock, at an exercise price of $0.75 per share, for every $3.50 invested
      in the Company in connection with the Bridge Financing. The aggregate gross
      proceeds raised by the Company in connection with the Bridge Financing were
      approximately $3.0 million. The warrants will expire three (3) years from the
      closing date of Bridge Financing. Total interest expense for the period ended
      March 31, 2008 amounted to $115,239.




Further,
      upon the earlier to occur of (i) three (3) months from the closing date of
      the
      Bridge Financing (the “Maturity Date”), and (ii) the consummation a PIPE
      financing with institutional investors for at least $25 million, net of offering
      expenses (the “PIPE”), the bridge note holders are entitled to repayment (in
      cash or in common stock) equal to 25% to 30% in excess of the principal and
      accrued interest then due and outstanding under the terms of the notes (the
      “Repayment Amount”). The bridge note holders entitled to a Repayment Amount of
      25% in excess of the principal and accrued interest due under the terms of
      the
      notes will receive a 5% origination fee as consideration for making loans to
      the
      Company. The bridge note holders entitled to a Repayment Amount of 30% in excess
      of the principal and accrued interest due under the terms of the notes will
      not
      be entitled to an origination fee. Upon the earlier to occur of the Maturity
      Date or the consummation of the PIPE, the bridge note holders will have the
      right to convert (in whole or in part) 110% of the Repayment Amount into shares
      of common stock of the Company at the fair market value of each share of common
      stock, or at the price per share of common stock sold to investors in the PIPE,
      as the case may be.




Per
      EITF
      00-19, paragraph 4, these convertible promissory notes do not meet the
      definition of a “conventional convertible debt instrument” since the debt is not
      convertible into a fixed number of shares.  The debt can be converted into
      common stock at a conversions price that is a percentage of the market price;
      therefore the number of shares that could be required to be delivered upon
      “net-share settlement” is essentially indeterminate.  Therefore, the
      convertible promissory notes are considered “non-conventional,” which means that
      the detachable warrants and the conversion feature must be bifurcated from
      the
      debt and shown as a separate derivative liability.




The
      $3,048,000 proceeds from the convertible promissory notes were allocated
      to the detachable warrants. The fair
      value of the 870,858 warrants issued in connection with this transaction was
      $229,748. The fair value was determined using the Black-Scholes option pricing
      model and the following assumptions:  term of 1 year, a risk free
      interest rate of 5.0%, a dividend yield of 0% and volatility of 100%.
      In addition the fair value of the beneficial conversion feature associated
      with
      the convertible promissory notes was $874,990. Both the value assigned to the
      warrants ($229,748) and the beneficial conversion feature ($874,990) is recorded
      as debt discounts and will be amortized over the terms of the convertible
      promissory notes. For the period ended March 31, 2008, the Company amortized
      $552,369 of the aforesaid debt discounts as other expense in the accompanying
      consolidated statements of operations.




13


**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**




A
      summary
      of the convertible promissory notes and related discounts is
      below:




March
                31, 2008
            
            December
                31, 2007Total
            
            TotalGross
                convertible promissory notes
            
            $
            3,048,000
            
            $
            3,048,000Debt
                discounts
            
            
            -
            
            
            (552,369
            )Convertible
                promissory notes, net
            
            $
            3,048,000
            
            $
            2,495,631




*Common
      Stock*




On
      March
      7, 2008 the Company closed on $1,587,447 of its $10 million private placement,
      and unless it receives the full $10 million earlier, the Company anticipates
      that it will continue to offer its securities on the same terms and conditions
      until at least May 31, 2008. Pursuant to this financing, the Company issued
      an
      aggregate of 2,267,782 shares of common stock at a purchase price of $0.70
      per
      share and warrants to purchase an aggregate of 1,133,888 shares of common stock
      with an exercise price of $0.75 per share. The fair value of the warrants
      amounted to $294,360. The fair value was computed using the Black-Scholes model
      under the following assumptions: (1) expected life of 1 year; (2) volatility
      of
      100%; and (3) risk free interest of 3.0%. The warrants expire after five (5)
      years from the date of issuance and are exercisable at $0.75 per share, subject
      to adjustment in certain circumstances.




*Warrants*




The
      following is a summary of the warrant activity:




Outstanding
                as of December 31, 2007
            
            
            4,739,968Granted
            
            
            1,633,888Forfeited
            
            
            -Exercised
            
            
            (71,429
            )Outstanding
                as of March 31, 2008
            
            
            6,302,427




Following
      is a summary of the status of warrants outstanding at March 31,
      2008:




Outstanding Warrants
            
            Exercisable WarrantsExercise
              Price
            
            Number
            
            Average
              Remaining
              ContractualLife
            
            Average
              Exercise
              Price
            
            Number
            
            Average
              Remaining
              Contractual Life$0.70
            
            
            750,000
            
            
            4.64
            
            $
            0.70
            
            
            208,333
            
            
            4.65$0.75
            
            
            5,552,427
            
            
            4.23
            
            $
            0.75
            
            
            5,052,427
            
            
            4.16Total
            
            
            6,302,427
            
            
            
            
            
            
            
            
            5,260,760




**Note
      6 - Convertible Promissory Note**




On
      November 14, 2007, the Company entered into a Note and Warrant Purchase
      Agreement (“Bridge
      Financing”) with investors and issued an aggregate of $3,048,000 in convertible
      promissory notes and warrants to purchase an aggregate of 870,858 shares of
      common stock. The convertible promissory notes issued in connection with the
      Bridge Financing bear interest at 10% per annum. The bridge note holders
      received one (1) warrant to purchase one (1) share of common stock, at an
      exercise price of $0.75 per share, for every $3.50 invested in the Company
      in
      connection with the Bridge Financing. The aggregate gross proceeds raised by
      the
      Company in connection with the Bridge Financing were approximately $3.0 million.
      On March 26, 2008, the Company entered into an Amendment to Convertible
      Promissory Note (“Amendment”) with investors related to the $3,048,000
      Convertible Promissory Notes. Pursuant to the Amendment, the maturity dates
      of
      the Convertible Promissory Notes were extended from February 14, 2008 to April
      30, 2008. These notes are currently in default.




14




**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **(Unaudited)**




**Note
      7 - Intercompany Promissory Note**




In
      connection with the Share Exchange, the Company agreed to lend Stratos del
      Peru
      $5.5 million pursuant to the terms of a Promissory Note, dated as of November
      14, 2007 (the “Promissory Note”). The Promissory Note is unsecured, bears
      interest at a rate of 4.39% compounded annually and must be repaid in full
      on or
      before November 14, 2014. As of March 31, 2008 and December 31, 2007 there
      is
      $91,288 and $30,181 of accrued interest, respectively. These amounts have been
      eliminated in consolidation in the March 31, 2008 and December 31, 2007
      financial statements.




**Note
      8 - Income taxes**




Deferred
      income taxes reflect the net tax effects of temporary differences between the
      carrying amounts of assets and liabilities for financial statement purposes
      and
      the amounts used for income tax purposes. The Company has incurred net operating
      losses in Peru and the United States for income tax purposes for the year ended
      December 31, 2007. The net operating loss carry forwards amounted to $1,881,698
      and $3,728,683 for Peru and the United States, respectively which may be
      available to reduce future years’ taxable income. These carry forwards will
      expire, if not utilized through 2011 and 2027 for Peru and the United States,
      respectively. Management believes that the realization of the benefits from
      these losses appears uncertain due to the Company’s limited operating history
      and continuing losses for United States income tax purposes. Accordingly, the
      Company has provided a 100% valuation allowance on the deferred tax asset
      benefit to reduce the asset to zero. The net change in the valuation allowance
      for the period ended March 31, 2008 was an increase of $1,075,334. Management
      will review this valuation allowance periodically and make adjustments as
      warranted.




Significant
      components of the Company’s deferred tax assets and liabilities at March 31,
      2008 are as follows:




Peru
            
            U.S.
            
            TotalDeferred
                tax assets (liabilities):Net
                operating loss carryforwards
            
            $
            1,881,698
            
            $
            3,728,683
            
            $
            5,610,381Deferred
                tax assets, net
            
            
            711,677
            
            
            1,118,453
            
            
            1,830,130Valuation
                allowance
            
            
            (711,677
            )
            
            (1,118,453
            )
            
            (1,830,130
            )Net
                deferred tax assets
            
            $
            -
            
            $
            -
            
            $
            -




A
      reconciliation of the statutory income tax rate and the effective income tax
      rate for the period from inception (February 27, 2007) to March 31, 2008 is
      as
      follows:




Peru
            
            U.S.Statutory
                income tax rate
            
            30%
            
            43%Valuation
                allowance
            
            (30%)
            
            (43%)Effective
                income tax rate
            
            0%
            
            0%




15


**Stratos
          Renewables Corporation**
 **(A
          Development Stage Company)**
 **Notes
          to Consolidated Financial Statements**
 **(Unaudited)**




**Note
      9 - Commitments and contingencies**




The
      Company entered into a four year lease agreement for office space in Lima,
      Peru
      for monthly payments of $6,179. The lease began in January, 2008.




The
      aggregate minimum annual lease commitments for the operating leases extending
      beyond one year are as follows:




Period
                Ending March 31,
            
            Amount2008
            
            $
            74,1482009
            
            
            74,1482010
            
            
            74,1482011
            
            
            55,611$
            278,055




16


**Stratos
          Renewables Corporation**
 **(A
          Development Stage Company)**
 **Notes
          to Consolidated Financial Statements**
 **(Unaudited)**


**Note** **** **10
      - Related party transactions**




On
      March
      10, 2008, Stratos Peru entered into a services agreement with Iberocons S.A.
      or
      Iberocons, pursuant to which Iberocons has agreed to conduct a feasibility
      analysis of using desalinated sea water as part of the irrigation process for
      our greenfields. The agreement terminates on April 29, 2008. The consideration
      for services rendered will be $33,000. Iberocons owns 5% of ACM, and Mr. Salas
      is a 10% owner of Iberocons.




On
      January 7, 2008, Stratos Peru entered into a Services Agreement with
      Agribusiness Consulting & Management Peru SAC, or ACM, pursuant to which ACM
      agreed to provide consulting services to Stratos Peru for 45 days, including
      updating the use of funds for Phase I and structuring a financial model for
      the
      simulation of various scenarios regarding Stratos’ ethanol production. Pursuant
      to the agreement, ACM is to receive compensation in the amount of approximately
      $99,000 for the services provided. Antonio Salas, the Chief Executive Officer
      of
      our Company and of Stratos Peru owns 95% of ACM, and the Chief Executive Officer
      of ACM is Gissela Camminati, who is the wife of Mr. Salas. Mr. Salas was also
      a
      former member of the Board of Directors of ACM. As
      of
      March 31, 2008 the Company incurred total consulting expenses of approximately
      $338,000 from this related party. Total payables owed to this related party
      were
      approximately $239,000 as of March 31, 2008.




As
      discussed in Note 5, the Company completed a Series A Private Placement and
      issued to MA Green 7,142,857 shares of Series A preferred stock and warrants
      to
      purchase 1,785,714 shares of common stock. The gross proceeds raised by the
      Company in connection with the Series A Private Placement were $5,000,000.
      The
      Company’s Chairman of the Board of Directors, Steven Magami, is the manager of
      MA Green.




**Note
      11 - Subsequent Events**




On
      April
      18, 2008, the Company completed a private placement of the Company’s securities
      (the “Grey K Private Placement”) to three accredited investors, Grey K LP, a
      Delaware limited partnership, Grey K Offshore Fund, Ltd., a Cayman Island exempt
      company, and Grey K Offshore Leveraged Fund, Ltd., a Cayman Island exempt
      company (collectively, “Grey K”), consisting of the sale of an aggregate of
      1,428,572 shares of Series A preferred stock at a purchase price of $0.70 per
      share, which are convertible into shares of the Company’s common stock. Grey K
      also received warrants to purchase up to an aggregate of 357,143 shares of
      common stock. The warrants have a five-year term and an exercise price of $0.75
      per share. The purchasers were also granted certain demand and piggyback rights
      with respect to the shares of common stock underlying the Series A preferred
      stock and the warrants. In connection with the Grey K Private Placement, the
      Company received gross proceeds of $1,000,000, less a funding fee paid to Grey
      K
      equal to 2% of the purchase price paid and other expenses.




On
      April 29, 2008, the Company made principal
      re-payments in the total amount of $1,524,000 towards the $3,048,000 convertible
      promissory notes issued on November 14, 2007. These notes are currently in
      default.




17





**Item
      2. Management’s Discussion and Analysis or Plan of
      Operation**




*Certain
      statements in this Quarterly Report on Form 10-Q, or the Report, are
“forward-looking statements.” These forward-looking statements include, but are
      not limited to, statements about the plans, objectives, expectations and
      intentions of Stratos Renewables Corporation, a Nevada corporation (referred
      to
      in this Report as “we,” “us,” “our” or “registrant”) and other statements
      contained in this Report that are not historical facts. Forward-looking
      statements in this Report or hereafter included in other publicly available
      documents filed with the Securities and Exchange Commission, or the Commission,
      reports to our stockholders and other publicly available statements issued
      or
      released by us involve known and unknown risks, uncertainties and other factors
      which could cause our actual results, performance (financial or operating)
      or
      achievements to differ from the future results, performance (financial or
      operating) or achievements expressed or implied by such forward-looking
      statements. Such future results are based upon management’s best estimates based
      upon current conditions and the most recent results of operations. When used
      in
      this Report, the words “expect,” “anticipate,” “intend,” “plan,” “believe,”
“seek,” “estimate” and similar expressions are generally intended to identify
      forward-looking statements, because these forward-looking statements involve
      risks and uncertainties. There are important factors that could cause actual
      results to differ materially from those expressed or implied by these
      forward-looking statements, including our plans, objectives, expectations and
      intentions and other factors that are discussed under the section entitled
“Risk
      Factors,” in this Report and in our Annual Report on Form 10-KSB for the year
      ended December 31, 2007.*




*The
      following discussion and analysis summarizes our plan of operation for the
      next
      twelve months, our results of operations for the three months ended March 31,
      2008 and changes in our financial condition from our year ended December 31,
      2007. The following discussion should be read in conjunction with the
      Management’s Discussion and Analysis or Plan of Operation included in our Annual
      Report on Form 10-KSB for the year ended December 31, 2007.*




**Overview**




The
      following discussion and analysis of our financial condition and results of
      operations should be read in conjunction with our consolidated financial
      statements and related notes included in our annual report on Form 10-KSB for
      the year ended December 31, 2007 filed with the Securities and Exchange
      Commission on April 15, 2008.  This discussion and analysis contains
      forward-looking statements that involve risks, uncertainties, and
      assumptions.  The actual results may differ materially from those
      anticipated in these forward-looking statements as a result of certain factors,
      including but not limited to the risks discussed in this report.




We
      intend
      to engage in the business of producing, processing and distributing sugarcane
      ethanol in Peru. Ethanol is a renewable energy source that provides significant
      economic and environmental benefits when mixed with gasoline and used as motor
      fuel.




**Critical
      Accounting Policies and Estimates**




Our
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations section discusses our financial statements, which have been prepared
      in accordance with accounting principles generally accepted in the United States
      of America. The preparation of the financial statements 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. On an on-going basis,
      management evaluates its estimates and judgments, including those related to
      revenue recognition, recoverability of intangible assets, and contingencies
      and
      litigation. Management bases its estimates and judgments on historical
      experience and on various other factors that are believed to be reasonable
      under
      the circumstances, the results of which form the basis for making judgments
      about the carrying value of assets and liabilities that are not readily apparent
      from other sources. Actual results may differ from these estimates under
      different assumptions or conditions. The most significant accounting estimates
      inherent in the preparation of our financial statements include estimates as
      to
      the appropriate carrying value of certain assets and liabilities which are
      not
      readily apparent from other sources, primarily the valuation of our fixed assets
      and the recoverability of our VAT receivable. The methods, estimates and
      judgments we use in applying these most critical accounting policies have a
      significant impact on the results we report in our financial
      statements.




18




*Impairment
      of long-lived assets*




We
      follow
      the guidance of Statement of Financial Accounting Standards No. 144, “Accounting
      for the Impairment or Disposal of Long-Lived Assets,” or SFAS 144, which
      addresses financial accounting and reporting for the impairment or disposal
      of
      long-lived assets. We periodically evaluate the carrying value of long-lived
      assets to be held and used in accordance with SFAS 144. SFAS 144 requires
      impairment losses to be recorded on long-lived assets used in operations when
      indicators of impairment are present and the undiscounted cash flows estimated
      to be generated by those assets are less than the assets’ carrying amounts. In
      that event, a loss is recognized based on the amount by which the carrying
      amount exceeds the fair market value of the long-lived assets. Loss on
      long-lived assets to be disposed of is determined in a similar manner, except
      that fair market values are reduced for the cost of disposal. Based on our
      review, we believe that, as of March 31, 2008, there were no significant
      impairments of long-lived assets.




**Plan
      of Operations**




*Overview*




This
      current report contains forward-looking statements that involve significant
      risks and uncertainties. The following discussion, which focuses on our plan
      of
      operation through the commencement of operations of our plant, consists almost
      entirely of forward-looking information and statements. Actual events or results
      may differ materially from those indicated or anticipated, as discussed in
      the
      section entitled “Forward Looking Statements.” This may occur as a result of
      many factors, including those set forth in the section entitled “Risk
      Factors.”




Upon
      consummation of the Share Exchange, we commenced our business plan to develop
      ethanol and sugar products through the cultivation, harvesting and processing
      of
      sugarcane in low cost growing locations. From a strategic value perspective,
      our
      management believes a geographic focus in Peru will be a key component in
      achieving our goals.




Our
      business plan consists of two phases. Phase I will primarily be focused on
      establishing our initial ethanol production facilities and infrastructure.
      Phase
      II will primarily be focused on expanding our operations in strategic
      locations.




Phase
      I




Phase
      I
      of our business plan is comprised of six components:




·
            mill
                and distillery acquisition, expansion and
                modification;




·
            seedling
                production;




·
            compost
                production;




·
            land
                sourcing;




·
            field
                installment; and




·
            conducting
                feasibility studies and generating a business plan for Phase
                II.




*Mill
      and distillery acquisition, expansion and modification*




On
      October 18, 2007, Stratos Peru entered into an asset purchase agreement with
      Gabinete Tecnico de Cobranzas S.A.C., or Gabinete, pursuant to which it acquired
      certain assets and rights relating to the Estrella del Norte sugar mill located
      in the province of Chepen, Peru, or the Sugar Mill. Stratos Peru paid
      approximately $4.5 million plus a value added tax of 19% to acquire the Sugar
      Mill.  Of the purchase price, we held back $350,000, or the Holdback,
      representing approximately 7.74% of the purchase price, into an escrow
      contingencies account with Banco Continental in Lima, Peru.  The Holdback
      is to protect us in the event Gabinete fails to fulfill certain tax obligations
      relating to the equipment for the years 2002 through 2007, the equipment is
      lost
      or damaged while in transit from Gabinete, the equipment is not delivered to
      us,
      or certain representations made by Gabinete in the asset purchase agreement
      are
      discovered to be false.




19




We
      plan
      to relocate the Sugar Mill and to acquire and install a distillery unit to
      adjoin it for the production of ethanol. Additionally, we plan to upgrade the
      Sugar Mill’s capacity to crush sugarcane from 500 tons of including the value
      added tax sugarcane per day to 1,100 tons of sugarcane per day. We estimate
      that
      we will need a total of $9.6 million in investment and working capital to
      overhaul, expand and relocate the Sugar Mill, acquire the distillery and conduct
      operations at the mill and distillery through the first quarter of 2009.




On
      December 4, 2007 we entered into an agreement with a member of our advisory
      board, for his services in providing us with a plan for us to hire a contractor
      to dismantle, repair and overhaul the equipment from the Sugar Mill. He will
      also provide us with engineering studies in order to determine the maximum
      capacity of sugar cane processing of the Sugar Mill and to establish the process
      layout and technical specifications that will be required for new machinery
      and
      equipments.




On
      February 27, 2008, Stratos Peru entered into an agreement with Panka S.A.C.
      to
      provide us with a basic engineering plan and new layout of the Sugar Mill after
      the overhauling of the Sugar Mill.




On
      March
      12, 2008, Stratos Peru entered into an agreement, the CWE Agreement, with
      CWE.  The CWE Agreement relates to the relocation of the Sugar Mill to the
      Industrial Lot, that we have obtained the rights to in the Lambayeque
      region. Under the terms of the CWE Agreement, we engaged CWE to clean, remove
      and disassemble equipment located at the Sugar Mill.   We have agreed
      to pay CWE a service fee of approximately $150,000, payable in
      installments.  In connection with the payment of the service fee, we
      executed two promissory notes in favor of CWE, each in the amount of
      $8,330.  The Notes are both due and payable on May 22, 2008.  The CWE
      Agreement terminates on June 9, 2008.




In
      March
      2008 we began the dismantling of all of the equipment. We anticipate that the
      dismantling will be complete by the end of June 2008.




After
      modifying and expanding the Sugar Mill, we plan to use approximately 40% of
      its
      capacity to produce raw sugar to be sold in the local wholesale markets, and
      60%
      of its capacity to produce an estimated 4.8 million gallons of ethanol a year.




On
      May 3,
      2008, we entered into a lease with an unaffiliated third party in order to
      obtain the rights to use 24,000 hectares of undeveloped land in Peru, of which
      15,000 hectares are plantable land.




*Seedling
      Production*




The
      second component of Phase I will be to establish a high quality seedling
      production program to supply our planned intensive planting program scheduled
      to
      commence during Phase II of our business strategy. We intend to lease a plot
      of
      land in the Piura region, which we believe is an ideal location with respect
      to
      its climate and surrounding environment, to establish a sugarcane seedling
      nursery.




On
      February 6, 2008, Stratos Peru entered into a services agreement with
      Biotecnologia Del Peru S.A.C, or Biotecnologia, to establish a pilot seedling
      laboratory, or Pilot Laboratory.  Pursuant to the agreement, Biotecnologia
      installed a laboratory in Piura with appropriate equipment and experienced
      personnel.  They are in the process of studying various breeds of genetic
      material, in order to advise Stratos Peru which breed will generate the most
      elite sugar cane plantlets.




20




*Compost
      Production*




In
      addition to establishing a seedling production program in Phase I, we also
      intend to implement an organic fertilizer production program to support our
      planned intensive planting program scheduled to commence during Phase II. We
      anticipate that our compost production program will begin in the second quarter
      of 2008.




*Land
      Sourcing*




The
      fourth component of Phase I will be to secure land for sugarcane production
      from
      three potential sources: small and medium private land lots; peasant community
      land lots; and state owned land lots. The most important factors in locating
      land suitable for sugarcane production are water supply, soil composition,
      climate, distance from the Sugar Mill and access to roads and other services.




*Field
      Installment*




The
      fifth
      component, as part of our main objective to be the market leader in sustainable
      low-cost ethanol production, will be to take advantage of our “greenfield”
position to use only sophisticated crop management techniques to ensure maximum
      yield with high sucrose and inverted sugar content. The Peruvian coast is ideal
      for these modern farming techniques, as water and nutrient content can be
      managed due to the sandy soil and irrigation equipment to be installed.  To
      ensure the maximum benefit from the genetically cleaned sugar varieties that
      we
      intend to install on our comparatively low-cost land, significant investment
      will go into channeling water to the sites from national irrigation projects
      and
      on field irrigation installation with back-up water supply, and land preparation
      to ensure the longevity and productivity of the fields which includes
      grading, leveling, initial nutrient and organic material installation, and
      field
      layout.




*Conducting
      feasibility studies and generating a business plan for Phase
      II*




The
      final
      component of Phase I will initially involve hiring a consultant to conduct
      a
      feasibility study based on the information provided by our land sourcing
      efforts. The study will focus on generating cost estimates and designs based
      on
      analyzing the climactic, water, soil, topography and irrigation characteristics
      of the properties identified by our land sourcing team. Following the completion
      of the feasibility study, we will create a comprehensive business plan for
      Phase
      II consisting of an overview of the industry, a market analysis, competitive
      analysis, marketing plan, management plan and financial plan. We will also
      perform a port feasibility study, which if successful, will optimize our
      distribution of ethanol and reduce our operation costs for distribution to
      world
      markets.




Our
      goal
      is to have all of the components of Phase I completed by early 2009 so that
      we
      can begin executing Phase II.




Phase
      II




Phase
      II
      of our business plan will consist of our expansion in strategic locations along
      the northern Peruvian coast and the cultivation of our own sugarcane supplies
      to
      be used for production. In connection with Phase II, we anticipate raising
      and
      investing funds over an additional $600 million in order to plant sugarcane
      on 48,000 hectares of raw land, and acquire and operate a total of four mills
      with attached ethanol distilleries, with expandable capacities and distribution
      port infrastructure. By the fourth quarter of 2014, it is our goal to be able
      to
      process a total of 25,000 tons of sugarcane per day, and produce approximately
      180 million gallons of anhydrous ethanol annually.




We
      expect
      to initiate Phase II by the first quarter of 2009. The mill and distillers
      we
      plan to establish in Phase II will be located in regions that we have selected
      based on our extensive research of agro climatic conditions, hydrology, basic
      services, logistic supplies and social environment. We plan to establish the
      four locations in two stages.




21




*Stage
      One - Olmos and Morrope*




During
      the first stage, which will begin in the second quarter of 2009, we plan to
      start exercising the lease contract which we believe we will have with the
      Peasant Community of Olmos and Morrope for 24,000 hectares of land. We estimate
      that the total cost for Stage One will be approximately $295 million, consisting
      of $135 million in costs related to administration, field installation and
      the
      development of an infrastructure, and $160 million in costs related to the
      construction of production facilities and distribution port.




*Stage
      Two - Chepen*




During
      the second stage, which will begin in the second quarter of 2011, we plan to
      plant the first 24,000 hectares of land around the Chepen valley, located along
      the northern Peruvian coast. We estimate that the total cost for this stage
      will
      be approximately $325 million, consisting of $135 million in costs related
      to
      administration, field installation, and the development of an infrastructure,
      and $190 million in costs relating to the construction of production facilities
      and distribution port.




**Trends
      and Uncertainties**




Our
      future growth will be dependent initially on our ability to establish reliable
      sources of sugarcane for the operation of the Sugar Mill, and going forward,
      on
      our ability to develop our own supplies of sugarcane. We must be successful
      in
      establishing sugarcane supply relationships with local growers and there is
      no
      assurance that we will be able to enter into such relationships for sufficient
      amounts of sugarcane. Additionally, we must be successful in establishing
      seedling, compost and land sourcing programs in order to allow us to develop
      a
      consistent, reliable and cost-effective long-term supply of sugarcane.




We
      will
      require a significant amount of additional capital in the future to sufficiently
      fund our operations. We may not be able to obtain additional capital on terms
      favorable to us or at all. We expect to increase our operating expenses over
      the
      coming years. We estimate that Phase I of our business plan, which is currently
      in effect, will cost a total of approximately $33 million. Furthermore, we
      estimate that will need over an additional $600 million to fund our
      expansion during the course of Phase II of our operations, which is set to
      commence during the first quarter of 2009 and continue for five years
      thereafter.




Most
      of
      our operations, including the Sugar Mill, the land we have obtained the rights
      to and the land we propose to obtain the rights to on which to grow our
      sugarcane supplies, are located in Peru. Although we believe that conducting
      operations in Peru will provide us with significant competitive advantages,
      we
      will also be subject to risks not typically associated with ownership of United
      States companies.




**Financing**




To
      date,
      we have had negative cash flows from operations and we have been dependent
      on
      sales of our equity securities and debt financing to meet our cash requirements.
      We expect this situation to continue for the foreseeable future. We anticipate
      that we will have negative cash flows from operations during our fiscal year
      ended December 31, 2008.




Given
      that we are a development stage company and have not generated any revenues
      to
      date, our cash flow projections are subject to numerous contingencies and risk
      factors beyond our control, including our ability to manage our expected growth,
      complete construction of our proposed plant and commence operations. We can
      offer no assurance that our company will generate cash flow sufficient to meet
      our cash flow projections or that our expenses will not exceed our projections.
      If our expenses exceed estimates, we will require additional monies during
      the
      next twelve months to execute our business plan.




There
      are
      no assurances that we will be able to obtain funds required for our continued
      operation. There can be no assurance that additional financing will be available
      to us when needed or, if available, that it can be obtained on commercially
      reasonable terms. If we are not able to obtain additional financing on a timely
      basis, we will not be able to meet our other obligations as they become due
      and
      we will be forced to scale down or perhaps even cease the operation of our
      business.




22




There
      is
      substantial doubt about our ability to continue as a going concern as the
      continuation of our business is dependent upon obtaining further long-term
      financing, completion of our proposed plant and successful and sufficient market
      acceptance of our products once developed and, finally, achieving a profitable
      level of operations. The issuance of additional equity securities by us could
      result in a significant dilution in the equity interests of our current
      stockholders. Obtaining commercial loans, assuming those loans would be
      available, will increase our liabilities and future cash
      commitments.




**Liquidity
      and Capital Resources**




*Cash
      Flows from Financing Activities*




There
      are
      no assurances that we will be able to obtain further funds required for our
      continued operations. We intend to pursue various financing alternatives to
      meet
      our immediate and long-term financial requirements. There can be no assurance
      that additional financing will be available to us when needed or, if available,
      that it can be obtained on commercially reasonable terms. If we are not able
      to
      obtain additional financing on a timely basis, we will be unable to conduct
      our
      operations as planned, and we will not be able to meet our other obligations
      as
      they become due. In such event, we will be forced to scale down or perhaps
      even
      cease our operations.




Historically,
      we have met our immediate and long-term financial requirements primarily through
      the sale of common stock and other convertible equity securities. In 2007 and
      the first quarter of 2008, we conducted the following private placements of
      our
      securities:




Private
      Placement of Common Stock




On
      November 14, 2007, we completed a private placement for our
      securities, or Private Placement, pursuant to which we issued an aggregate
      of
      2,666,794 shares of common stock and warrants to purchase an aggregate of
      1,333,396 shares of common stock. We raised $1,867,090 aggregate gross proceeds
      in connection with the Private Placement. We sold to investors each share of
      common stock at $0.70 per share. The fair value of the warrants amounted to
      $352,268. We computed the fair value using the Black-Scholes model under the
      following assumptions: (1) expected life of 1 year; (2) volatility of 100%;
      and
      (3) risk free interest of 5.0%. The warrants expire after five (5) years from
      the date of issuance and are exercisable at $0.75 per share, subject to
      adjustment in certain circumstances.




On
      March
      7, 2008 we closed on $1,587,447 of our $10 million private placement, and unless
      we receive the full $10 million earlier, we anticipate that we will continue
      to
      offer its securities on the same terms and conditions until at least May 31,
      2008. Pursuant to this financing, we issued an aggregate of 2,267,782 shares
      of
      common stock at a purchase price of $0.70 per share and warrants to purchase
      an
      aggregate of 1,133,888 shares of common stock with an exercise price of $0.75
      per share. The fair value of the warrants amounted to $294,360. We computed
      the
      fair value using the Black-Scholes model under the following assumptions: (1)
      expected life of 1 year; (2) volatility of 100%; and (3) risk free interest
      of
      3.0%. The warrants expire after five (5) years from the date of issuance and
      are
      exercisable at $0.75 per share, subject to adjustment in certain circumstances.




Series
      A Preferred Stock Private Placement




On
      November 14, 2007 we completed a Series A private placement, or Series A Private
      Placement, pursuant to which we issued to MA Green 7,142,857 shares of Series
      A
      Preferred Stock and warrants to purchase 1,785,714 shares of common stock.
      We
      raised $5,000,000 gross in connection with the Series A Private Placement.
      We
      sold each share of Series A Preferred Stock at $0.70 per share. The warrants
      expire five (5) years from the date of issuance and are exercisable at $0.75
      per
      share, subject to adjustment in certain circumstances. Our Chairman of the
      Board
      of Directors, Steven Magami, is the manager of MA Green.




23




The
      fair
      value of the 1,785,714 warrants issued with the Series A Private Placement
      was
      $471,765. The fair value was computed using the Black-Scholes model under the
      following assumptions: (1) expected life of 1 year; (2) volatility of 100%,
      (3)
      risk free interest of 5.0% and (4) dividend rate of 10%. In addition, since
      this
      convertible preferred stock is convertible into shares of common stock at a
      one-to-one ratio (unless the conversion occurs upon the consummation of a
      financing or financings in an aggregate amount of $25 million), an embedded
      beneficial conversion feature was recorded as a discount to additional paid
      in
      capital in accordance with Emerging Issues Task Force No. 00-27, “Application of
      Issue No. 98-5 to Certain Convertible Instruments.” The intrinsic value of the
      beneficial conversion feature has been recorded as a preferred stock dividend
      at
      the date of issuance. The Company recognized $471,765 of preferred dividends
      related to the beneficial conversion feature.




On
      April
      18, 2008, we issued an aggregate of 1,428,572 shares of Series A preferred
      stock
      at a purchase price of $0.70 per share, which are convertible into shares of
      the
      Company’s common stock. In connection with this sale, we also issued warrants to
      purchase an aggregate of 357,143 shares of common stock. The warrants have
      a
      five (5) year term and an exercise price of $0.75 per share.




Bridge
      Financing




We
      entered into a Note and Warrant Purchase Agreement on November 14, 2007, or
      Bridge Financing, with investors and issued an aggregate of $3,048,000 in
      convertible promissory notes and warrants to purchase an aggregate of 870,858
      shares of common stock. The convertible promissory notes issued in connection
      with the Bridge Financing bear interest at 10% per annum. The bridge note
      holders received one (1) warrant to purchase one (1) share of common stock,
      at
      an exercise price of $0.75 per share, for every $3.50 invested in the Company
      in
      connection with the Bridge Financing. We raised $3.0 million aggregate gross
      proceeds in connection with the Bridge Financing. The warrants will expire
      three
      (3) years from the closing date of Bridge Financing. Total interest expense
      at
      December 31, 2007 amounted to $56,125. On March 26, 2008, the Company entered
      into an Amendment to Convertible Promissory Note (“Amendment”) with investors
      related to the $3,048,000 Convertible Promissory Notes. Pursuant to the
      Amendment, the maturity dates of the Convertible Promissory Notes were extended
      from February 14, 2008 to April 30, 2008.




On
      April
      29, 2008, we made principal re-payments in the total amount of $1,524,000
      towards the $3,040,000 convertible promissory notes. These notes are currently
      in default.




*Cash
      Used for Investing Activities*




On
      October 18, 2007, we signed a purchase-sale contract with Gabinete Técnico de
      Cobranza S.A.C., and have acquired certain assets that are part of the
      Sugar Mill. This purchase price was $5,382,328:




·
            $5,032,328
                by bank draft issued to the order of Gabinete Técnico de Cobranza
                S.A.C.;




·
            $350,000
                to be deposited in a bank account in order to guarantee payment of
                any
                contingency that may arise from this
                transaction




We
      acquired certain assets from Gabinete Técnico de Cobranza S.A.C. as part of its
      overall business strategy to purchase, sale, produce, distribute, market,
      transport, warehouse, export and import of all kinds of products derives from
      hydrocarbons and bio-fuels.




The
      following table summarizes the fair values of the assets acquired and
      liabilities assumed at the date of acquisition:  The fair values are
      determined based on an appraisal:




Plant
                and equipment
            
            $
            4,522,965VAT
                receivable
            
            
            859,363Purchase
                price
            
            $
            5,382,328




We
      have determined that the discounted cash flows generated by the
      exploitation of the Sugar Mill will suffice to cover the carrying value of
      the
      assets acquired in this acquisition.




24




The
      Sugar
      Mill did not have any operations for the past several years.




**Off-Balance
      Sheet Arrangements**




Our
      company has no outstanding off-balance sheet guarantees, interest rate swap
      transactions or foreign currency contracts. Neither our company nor our
      operating subsidiary engages in trading activities involving non-exchange traded
      contracts.




**Recently
      Issued Accounting Pronouncements**




In
      December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
      Combinations.” SFAS No. 141 (Revised 2007) changes how a reporting
      enterprise accounts for the acquisition of a business. SFAS No. 141
      (Revised 2007) requires an acquiring entity to recognize all the assets acquired
      and liabilities assumed in a transaction at the acquisition-date fair value,
      with limited exceptions, and applies to a wider range of transactions or events.
      SFAS No. 141 (Revised 2007) is effective for fiscal years beginning on or
      after December 15, 2008 and early adoption and retrospective application is
      prohibited.




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements”, which is an amendment of Accounting Research
      Bulletin (“ARB”) No. 51.  This statement clarifies that a
      noncontrolling interest in a subsidiary is an ownership interest in the
      consolidated entity that should be reported as equity in the consolidated
      financial statements.  This statement changes the way the consolidated
      income statement is presented, thus requiring consolidated net income to be
      reported at amounts that include the amounts attributable to both parent and
      the
      noncontrolling interest.  This statement is effective for the fiscal
      years, and interim periods within those fiscal years, beginning on or after
      December 15, 2008.  Based on current conditions, the Company does not
      expect the adoption of SFAS 160 to have a significant impact on its results
      of
      operations or financial position.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities”. This Statement permits entities to
      choose to measure many financial assets and financial liabilities at fair value.
      Unrealized gains and losses on items for which the fair value option has been
      elected are reported in earnings. SFAS No. 159 is effective as of the beginning
      of an entity’s first fiscal year that begins after November 15, 2007. The
      Company adopted SFAS No. 159 on January 1, 2008. The Company chose not to elect
      the option to measure the fair value of eligible financial assets and
      liabilities.




In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB
      Statements No. 87, 88, 106, and 132(R)”. This statement requires employers to
      recognize the overfunded or underfunded status of a defined benefit
      postretirement plan (other than a multiemployer plan) as an asset or liability
      in its statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a
      business entity or changes in unrestricted net assets of a not-for-profit
      organization. This statement also requires an employer to measure the funded
      status of a plan as of the date of its year-end statement of financial position,
      with limited exceptions. The provisions of SFAS No. 158 are effective for
      employers with publicly traded equity securities as of the end of the fiscal
      year ending after December 15, 2006. The adoption of this statement had no
      effect on the Company’s reported financial position or results of
      operations.




In
      June
      2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for
      Nonrefundable Advance Payments for Goods or Services Received for use in Future
      Research and Development Activities” (“FSP EITF 07-3”), which addresses whether
      nonrefundable advance payments for goods or services that used or rendered
      for
      research and development activities should be expensed when the advance payment
      is made or when the research and development activity has been performed.
      Management is currently evaluating the effect of this pronouncement on financial
      statements.




**Item
      3. Quantitative and Qualitative Disclosures About Market
      Risk**




Not
      applicable.




25




**Item
      4. Controls and Procedures**




Evaluation
      of Disclosure Controls and Procedures




As
      of
      March 31, 2008, we carried out an evaluation of the effectiveness of the design
      and operation of our “disclosure controls and procedures” (as defined in the
      Exchange Act Rules 13a-15(e) and 15d-15(e)) under the supervision and with
      the
      participation of our management, including our Chief Executive Officer and
      our
      Chief Financial Officer.  Based upon that evaluation, we concluded that our
      disclosure controls and procedures are effective.




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in our reports filed or
      submitted under the Exchange Act are recorded, processed, summarized and
      reported, within the time periods specified in the Securities and Exchange
      Commission’s rules and forms.  Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed in our reports filed under the Exchange Act is
      accumulated and communicated to management to allow timely decisions regarding
      required disclosure.




During
      the quarter ended March 31, 2008, there were no changes in our internal control
      over financial reporting that have materially affected our internal control
      over
      financial reporting.




**PART
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings**




None




**Item
      1A. Risk Factors**




In
      addition to the other information set forth in this Report, you should carefully
      consider the factors discussed in the section entitled “Risk Factors” in our
      Annual Report on Form 10-KSB for the year ended December 31, 2007, which to
      our
      knowledge have not materially changed. Those risks, which could materially
      affect our business, financial condition or future results, are not the only
      risks we face. Additional risks and uncertainties not currently known to us
      or
      that we currently deem to be immaterial also may materially adversely affect
      our
      business, financial condition and/or operating results.




**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds**




On
      March
      7, 2008 we closed on $1,587,447 of a $10 million private placement, and unless
      we receive the full $10 million earlier, we anticipate that we will continue
      to
      offer our securities on the same terms and conditions until at least May 31,
      2008. Pursuant to the March 2008 Financing, we issued an aggregate of 2,267,782
      shares of common stock at a purchase price of $0.70 per share and warrants
      to
      purchase an aggregate of 1,133,888 shares of common stock with an exercise
      price
      of $0.75 per share. The warrants have a “cashless” exercise provision, expire
      five years from the date of issuance, and are exercisable at $0.75 per share,
      subject to adjustment under certain circumstances. The common stock and warrants
      issued in connection with this financing were not registered under the
      Securities Act and were issued in reliance upon exemptions set forth in Section
      4(2), Regulation D and/or Regulation S of the Securities Act. Our determination
      with regard to the applicable exemptions from registration was based on the
      representations of the investors, which included, in pertinent part, that such
      investors were either: (a) “accredited investors” within the meaning of Rule 501
      of Regulation D promulgated under the Securities Act, or (b) not a “U.S. person”
as such term is defined in Rule 902(k) of Regulation S under the Securities
      Act,
      and that the investors understood that the securities may not be sold or
      otherwise disposed of without registration under the Securities Act or an
      applicable exemption therefrom.




On
      April
      18, 2008, we completed a private placement of the Company’s securities to Grey
      K, consisting of the sale of an aggregate of 1,428,572 shares of Series A
      preferred stock at a purchase price of $0.70 per share, which are convertible
      into shares of the Company’s common stock. Grey K also received warrants to
      purchase up to an aggregate of 357,143 shares of common stock. The warrants
      have
      a five (5)year term and an exercise price of $0.75 per share. The purchasers
      were also granted certain demand and piggyback rights with respect to the shares
      of common stock underlying the Series A preferred stock and the warrants. In
      connection with this private placement, we received gross proceeds of
      $1,000,000, less a funding fee paid to Grey K equal to 2% of the purchase price
      paid and other expenses.




26




**Item
      3. Defaults Upon Senior Securities**




The
      Company is currently in default on its convertible promissory notes in the
      amount of $3,048,000.




**Item
      4. Submission of Matters to a Vote of Security Holders**




No
      matters were submitted to our stockholders, through the solicitation of proxies
      or otherwise, during the first quarter of the year ended March 31,
      2008.




**Item
      5. Other Information**




We
      entered into an employment agreement with Steven Magami for his services as
      our
      Chairman of the Board of Directors, effective May 15, 2008. The term of the
      agreement is for two years, ending on May 14, 2010, with automatic renewals
      of
      one year periods, subject to termination with 90 days notice by Mr. Magami
      or
      the Company. Pursuant to the terms of the agreement, we have agreed to pay
      Mr.
      Magami an annual salary of $250,000. In addition to his annual salary, Mr.
      Magami will be eligible for a bonus of 40% of his annual salary for each
      $50,000,000 of capital raised by the Company from November 14, 2007 through
      the
      term of his agreement.




**Item
      6. Exhibits**




Exhibit
                Number
            
            Description2.1
            
            Agreement
                Concerning the Exchange of Securities(1)3.1
            
            Amended
                and Restated Articles of Incorporation(1)3.2
            
            Amended
                and Restated Bylaws(1)3.3.
            
            Certificate
                of Designation(1)4.1
            
            Specimen
                Stock Certificate for Shares of common stock(1)4.2
            
            Specimen
                Stock Certificate for Shares of Series A preferred stock(1)4.3
            
            Form
                of warrant(1)4.4
            
            Form
                of Promissory Note(1)4.5
            
            Form
                of Promissory Note(1)4.6
            
            Form
                of Bridge warrant(1)4.7
            
            Form
                of warrant(1)10.1
            
            Equipment
                Purchase Agreement by and between Stratos del Peru S.A.C. and Gabinete
                Tecnico De Cobranzas S.A.C.(1)10.2
            
            Amendment
                to the Equipment Purchase Agreement by and between Stratos del Peru
                S.A.C.
                and Gabinete Tecnico De Cobranzas S.A.C.(1)10.3
            
            Escrow
                Agreement by and between Stratos del Peru S.A.C. and Blanca Fernandez
                Pasapera(1)10.4
            
            Amendment
                to the Escrow Agreement by and between Stratos del Peru S.A.C. and
                Blanca
                Fernandez Pasapera(1)10.5
            
            Form
                of Subscription Agreement(1)10.6
            
            Series
                A Stock and warrant Purchase Agreement(1)10.7
            
            Note
                and warrant Purchase Agreement(1)10.8
            
            Note
                and warrant Purchase Agreement(1)10.9
            
            Memorandum
                of Understanding by and between Stratos del Peru S.A.C. and Petrox
                S.A.C.(1)10.10
            
            Promissory
                Note(1)10.11
            
            Work
                Agreement by and between Stratos del Peru S.A.C. and CWE Engineering
&
                Supply S.A.C.(2)10.12
            
            Services
                Agreement by and between Stratos del Peru S.A.C. and Agribusiness
                Consulting & Management Peru S.A.C.(2)




27




10.13
            
            Services
                Agreement by and between Stratos del Peru S.A.C. and Iberocons
                S.A.(2)10.14
            
            Reserved10.15
            
            Reserved10.16
            
            Reserved10.17
            
            Services
                Agreement by and between Stratos del Peru S.A.C. and Biotecnologia
                del
                Peru S.A.C. dated February 6, 2008(2)10.18
            
            Services
                Agreement by and between Stratos del Peru S.A.C. and Panka S.A.C.
                dated
                February 27, 2008(2)10.19
            
            Employment
                Agreement by and between Stratos Renewables Corporation and Steven
                Magami,
                dated May 15, 2008(3)14.1
            
            Code
                of Ethics(2)21.1
            
            List
                of Subsidiaries(1)31.1
            
            Certifications
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002(3)31.2
            
            Certifications
                of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002(3)32.1
            
            Certifications
                of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002(3)32.2
            
            Certifications
                of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002(3)99.1
            
            Audit
                Committee Charter(2)99.2
            
            Compensation
                Committee Charter(2)99.3
            
            Nominations
                Committee Charter(2)99.4
            
            Foreign
                Corrupt Practices Act Policies and Procedures(2)




(1)
      Filed
      in the 8K dated November 20, 2007.




(2)
      Filed
      in Form 10-KSB dated April 15, 2007.




(3)
      Filed
      herewith




28




**SIGNATURES**




In
      accordance with 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 20,
                2008
            By:
            /s/
                Steven
                MagamiSteven
                Magami,PresidentDate:
                May 20,
                2008
            By:
            /s/
                Julio Cesar
                AlonsoJulio
                Cesar Alonso,Chief
                Financial Officer




29