**SECURITIES
      AND EXCHANGE COMMISSION**




**Washington,
      D.C. 20549**





**FORM
      10-KSB**




**(Mark
      One)**




x
            **Annual
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**


**For
      the fiscal year ended December 31, 200** **7.**




**OR**




o
            **Transition
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**


**For
      the transition period from
            
to**




COMMISSION
        FILE NUMBER 333-124060







**STRATOS
      RENEWABLES CORPORATION**




(NAME
      OF SMALL BUSINESS ISSUER IN ITS CHARTER)




**Nevada**
            **20-1699126**State
                or other jurisdiction of incorporation or organization
            I.R.S.
                Employer Identification Number**9440
                Santa Monica Blvd., Suite 401****Beverly
                Hills, California**
            **90210**Address
                of principal executive offices
            Zip
                Code**(310)
                402-5901**Issuer’s
                telephone number




Securities
      registered pursuant to Section 12(b) of the Act: **None**




Securities
      registered pursuant to Section 12(g) of the Act: **None**









Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      Section 15(d) of the Exchange Act. x




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant’s knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB. x




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




The
        issuer generated no revenues for the fiscal year ended December 31,
        2007.
  The
          aggregate market value of the voting common stock held by non-affiliates
          of the
          registrant as of April 15, 2008 was approximately $71,092,825 (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.


The
      number of shares of common stock of the issuer outstanding as of April 15,
      2008
      was 59,972,936.




Transitional
      Small Business Disclosure Format (Check One): Yes o No
x





TABLE
      OF
      CONTENTS




**Page**PART I
            
            
            
            2Item
                1.
            Description
                of Business
            
            2Item
                2.
            Description
                of Property
            
            32Item
                3.
            Legal
                Proceedings
            
            32Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            32PART II
            
            
            
            33Item
                5.
            Market
                for Common Equity and Related Stockholder Matters and Small Business
                Issuer Purchases of Equity Securities
            
            33Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operation
            
            36Item
                7.
            Financial
                Statements
            
            43Item
                8.
            Changes
                In and Disagreements With Accountants on Accounting and Financial
                Disclosures
            
            43Item
                8A(T).
            Controls
                and Procedures
            
            43Item
                8B.
            Other
                Information
            
            45PART III
            
            
            
            45Item
                9.
            Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance with Section 16(a) of the Exchange Act
            
            45Item
                10.
            Executive
                Compensation
            
            50Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            52Item
                12.
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            57Item
                13.
            Exhibits
            
            58Item
                14.
            Principal
                Accountant Fees and Services
            
            59


-i-


**CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND
      INFORMATION**




This
        Annual Report on Form 10-KSB, the other reports, statements, and information
        that we have previously filed or that we may subsequently file with the
        Securities and Exchange Commission, or SEC, and public announcements that
        we
        have previously made or may subsequently make include, may include, incorporate
        by reference or may incorporate by reference certain statements that may
        be
        deemed to be “forward-looking statements” within the meaning of the Private
        Securities Litigation Reform Act of 1995 and are intended to enjoy the benefits
        of that act. Unless the context is otherwise, the forward-looking statements
        included or incorporated by reference in this Form 10-KSB and those reports,
        statements, information and announcements address activities, events or
        developments that Stratos Renewables Corporation (together with its subsidiary,
        Stratos del Peru S.A.C., hereinafter referred to as “we,” “us,” “our,” “our
        Company” or “Stratos”) expects or anticipates, will or may occur in the future.
        Any statements in this document about expectations, beliefs, plans, objectives,
        assumptions or future events or performance are not historical facts and
        are
        forward-looking statements. These statements are often, but not always, made
        through the use of words or phrases such as “may,” “should,” “could,” “predict,”
“potential,” “believe,” “will likely result,” “expect,” “will continue,”
“anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and
“outlook,” and similar expressions. Accordingly, these statements involve
        estimates, assumptions and uncertainties, which could cause actual results
        to
        differ materially from those expressed in them. Any forward-looking statements
        are qualified in their entirety by reference to the factors discussed throughout
        this document. All forward-looking statements concerning economic conditions,
        rates of growth, rates of income or values as may be included in this document
        are based on information available to us on the dates noted, and we assume
        no
        obligation to update any such forward-looking statements. It is important
        to
        note that our actual results may differ materially from those in such
        forward-looking statements due to fluctuations in interest rates, inflation,
        government regulations, economic conditions and competitive product and pricing
        pressures in the geographic and business areas in which we conduct operations,
        including our plans, objectives, expectations and intentions and other factors
        discussed elsewhere in this Report.


The
      risk
      factors referred to in this Report could materially and adversely affect our
      business, financial conditions and results of operations and cause actual
      results or outcomes to differ materially from those expressed in any
      forward-looking statements made by us, and you should not place undue reliance
      on any such forward-looking statements. Any forward-looking statement speaks
      only as of the date on which it is made and we do not undertake any obligation
      to update any forward-looking statement or statements to reflect events or
      circumstances after the date on which such statement is made or to reflect
      the
      occurrence of unanticipated events. The risks and uncertainties described below
      are not the only ones we face. New factors emerge from time to time, and it
      is
      not possible for us to predict which will arise. There may be additional risks
      not presently known to us or that we currently believe are immaterial to our
      business. In addition, we cannot assess the impact of each factor on our
      business or the extent to which any factor, or combination of factors, may
      cause
      actual results to differ materially from those contained in any forward-looking
      statements. *If
      any such risks occur, our business, operating results, liquidity and financial
      condition could be materially affected in an adverse manner. Under such
      circumstances, you may lose all or part of your investment.*




The
      industry and market data contained in this report are based either on our
      management’s own estimates or, where indicated, independent industry
      publications, reports by governmental agencies or market research firms or
      other
      published independent sources and, in each case, are believed by our management
      to be reasonable estimates. However, industry and market data is subject to
      change and cannot always be verified with complete certainty due to limits
      on
      the availability and reliability of raw data, the voluntary nature of the data
      gathering process and other limitations and uncertainties inherent in any
      statistical survey of market shares. We have not independently verified market
      and industry data from third-party sources. In addition, consumption patterns
      and customer preferences can and do change. As a result, you should be aware
      that market share, ranking and other similar data set forth herein, and
      estimates and beliefs based on such data, may not be verifiable or
      reliable.


1




**PART
        I**
  **Item
                  1.**
              Description
                  of Business
  **General**
  Stratos
        Renewables Corporation, or Stratos, is a development stage company. Through
        our
        wholly - owned subsidiary stratos del Peru S.A.C., or stratos Peru, we intend
        to
        engage we in the production, processing and distribution of sugarcane
        ethanol in Peru (as described in more detail below). Ethanol is a renewable
        energy source that provides significant economic and environmental benefits
        when
        mixed with gasoline and used as motor fuel. It can be blended with gasoline
        in
        varying quantities up to pure ethanol. As of January 2008, ethanol is blended
        into more than fifty percent (50%) of the gasoline sold in the U.S., typically
        as a blend of ten percent (10%) ethanol and ninety percent (90%) gasoline,
        as
        reported by the Renewables Fuels Association in their Ethanol Industry Outlook
        2008, or RFA 2008 Outlook. This blend, known as E10, is mandated in some
        states
        where auto emissions may reach harmful levels.
  **Corporate
        History and Overview**
  We
        were
        incorporated in the State of Nevada on September 29, 2004 as New Design
        Cabinets, Inc. or NDCI. Prior to the closing of the Share Exchange, as described
        below, we were an operating public company, attempting to establish a base
        of
        operations in the custom cabinetry and furniture industry as a builder of
        specialty, custom designed cabinets and wine racks. From inception to the
        closing of the Share Exchange, we had limited operations and generated a
        total
        of $61,900 in
        revenues from the sale of wine rack “kits” and the oversight of various
        construction activities.
  On
        November 14, 2007, pursuant to the Agreement Concerning the Exchange of
        Securities or the Share Exchange Agreement, by and among NDCI, or Stratos
        Peru, and the security holders of Stratos Peru, we acquired 999 or 99.9%
        of the
        issued and outstanding shares of common stock of  Stratos Peru, and issued
        45,000,000 shares of our common stock, par value $0.001, to the former common
        stock holders of Stratos Peru. This acquisition is herein referred to as
        the
“Share Exchange.”
  To
        date,
        Stratos has had limited operations. Upon consummation of the Share Exchange,
        we
        commenced our business plan to develop ethanol and sugar products in Peru
        through the cultivation, harvesting and processing of sugarcane in low cost
        growing locations.
  Stratos
        Peru was incorporated in Lima, Peru, on February 27, 2007, under the name
        Estratosfera del Peru S.A.C. or Estratosfera. On July 11, 2007, the shareholders
        of Estratosfera changed the name of the company from Estratosfera del Peru
        S.A.C. to Stratos del Peru S.A.C.
  Effective
        November 20, 2007, we amended our articles of incorporation to change our
        name
        to “Stratos Renewables Corporation.”
  **Closing
        of Financings**
  Since
        November 14, 2007, we have raised an aggregate of approximately $11.6 million
        in
        capital through various financings.
  We
        are
        conducting a $10 million private placement, or the March 2008 Financing,
        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. We have 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, pursuant to the March 2008 Financing.
  2
  In
        connection with the closing of the Share Exchange, we completed private
        placements of common stock, or the Private Placement, preferred stock, or
        the
        Series A Private Placement, and convertible promissory notes, or the Bridge
        Financing, aggregating approximately $10 million. Pursuant to the Private
        Placement, we issued an aggregate of 2,666,794 shares of common stock at
        a
        purchase price of $0.70 per share and warrants to purchase an aggregate of
        1,333,396 shares of common stock with an exercise price of $0.75 per share.
        Pursuant to the Series A Private Placement, we issued 7,142,857 shares of
        Series
        A preferred stock, at a purchase price of $0.70 per share and warrants to
        purchase 1,785,714 shares of common stock at an exercise price of $0.75 per
        share, to MA Green, LLC, a Delaware limited liability company, or MA Green.
        Our
        President and Chairman of the Board of Directors, Steven Magami, is the manager
        of MA Green. We issued an aggregate of approximately $3.0 million in convertible
        promissory notes and warrants to purchase an aggregate of 870,858 shares
        of
        common stock with an exercise price of $0.75 per share, pursuant to our Bridge
        Financing.
  **Business
        Plan**
  We
        aim to
        become the lowest cost and leading sugarcane ethanol producer in Peru. We
        plan
        to utilize low cost, locally grown sugarcane feedstock and service international
        markets, particularly the U.S. market through tariff-free exports under the
        newly signed Free Trade Agreement between the U.S. and Peru.
  We
        intend
        to produce over 90% of the sugarcane we process. We will purchase the remaining
        10% from local unaffiliated third party suppliers. We believe we can produce
        at
        least 145 tons of sugarcane per hectare per year, approximately twice the
        average production per hectare in Brazil, the world’s largest sugarcane ethanol
        producer. (One hectare is equivalent to approximately 2.47 acres.) According
        to
        the most current information available from the United Nations Food and
        Agricultural Organization, or FAO, Brazil produced an average 74 tons of
        sugarcane per hectare per year in 2006. Peru has unique climate and
        environmental conditions which make it consistently ranked as one of the
        world’s
        highest yield sugarcane producers. In 2006, according to the FAO, Peru’s
        sugarcane yields per hectare per year were the fifth highest in the world,
        while
        Brazil ranked 30 th .
        Further, we believe that Peru’s sugarcane producing potential is greatly
        untapped. As a result, plantable land in Peru can be secured at a significantly
        lower cost than in Brazil. We believe that our cost of securing land in Peru
        will be roughly one-half the cost of similar agricultural property in Brazil.
        By
        combining high sugarcane yielding, coastal property with a low cost acquisition
        of such land, we believe we can become one of the leading sugarcane ethanol
        producers in the world.
  **Our
        Strategy**
  We
        believe that we have the resources to become one of the lowest cost
        sugarcane ethanol producers in the world.
  ·
              Peru
                  has a comparative advantage in sugarcane production. According
                  to the FAO,
                  Peru’s average sugarcane yields per hectare per year were the fifth
                  highest in the world in 2006. Beforethemilitary
                  dictatorship that governed Peru in 1968-1980 nationalized the sugar
                  industry and turned it into cooperatives managed by its workers,
                  Peru’s
                  sugarcane yields were the world’s highest. In 1965, the FAO reports that
                  Peru yielded 155 tons of sugarcane per hectare per year. With the
                  use of
                  state-of-the-art technology and a world-class team of specialists,
                  we
                  anticipate being able to leverage Peru’s comparative advantage into a
                  competitive edge, reducing our cost of production
                  significantly.
  ·
              Peru’s
                  land prices are lower than in Brazil and are a fraction of land
                  prices in
                  developed countries producing fuel ethanol based on other
                  feedstocks.
  ·
              Transportation
                  costs will be low due to the coastal location of our proposed operations,
                  in addition to its proximity to the Pan-American
                  Highway.
  We
        have
        tariff free access to the U.S. market.
  ·
              We
                  intend to take advantage of the recently signed Trade Promotion
                  Agreement
                  between the United States and Peru, or the Free Trade Agreement.Pursuant
                  to the Free Trade Agreement, our fuel exports to the U.S., which
                  we expect
                  to be our main export market, will not be subject to the $0.54
                  per gallon
                  import tariff and 2.5% ad valorem tax imposed on Brazil fuel ethanol
                  exports to the U.S.
  We
        will
        utilize vertical integration and economies of scale, thereby lowering the
        cost
        of land.
  3
  ·
              In
                  order to take advantage of economies of scale, and avoid the hold-up
                  problem, due to the nature of assets in the sugarcane ethanol cluster
                  (relationship-specific assets), we will be a vertically integrated
                  producer.
  ·
              We
                  intend to have a high volume of production (estimated to be 180
                  million
                  gallons of fuel ethanol per year) by 2014, hence benefiting from
                  economies
                  of scale.
  We
        plan
        to exploit our first mover advantage by securing land in Peru’s nascent fuel
        ethanol industry, particularly land belonging to the extensive and under
        utilized peasant communities along the northern coast.
  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 ta x
        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.
  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 sugarcane per day to
        1,100 tons of sugarcane per day. We estimate that we will need a total of
        $9.6
        million including the value added tax, in investment and working
        capital to overhaul, expand and relocate the Sugar Mill, acquire the
        distillery and conduct operations at the Sugar Mill and distillery through
        the
        first quarter of 2009.
  We
        entered into an agreement with a member of our advisory board, effective
        December 4, 2007 to provide us with a plan for us 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. ****
  In
        addition, on February 27, 2008, we 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 is complete.
  On
        March
        12, 2008, we entered into an agreement, the CWE Agreement, with CWE Engineering
        & Supply S.A.C., or CWE.  The CWE Agreement relates to the relocation
        of the Sugar Mill to the Industrial Lot, as described below, that we have
        obtained the rights to in the Lambayeque region
        of
        Peru. 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.  Also on March 12, 2008, we rerained a consultant to provide
        us with architectural services relating to the Sugar Mill, including the
        technical specifications relating to the architecture of the Sugar Mill and
        any
        related property regulations.
  4
  In
        March
        2008 we began the dismantling of all of the equipment. As of March 29, 2008,
        approximately 25% of the equipment has been dismantled. We anticipate that
        the
        dismantling will be complete by the end of May 2008.
  After
        modifying and expanding the Estrella del Norte facilities, 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.
  *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.
  In
        furtherance of our seedling program, 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.  Biotecnologia is
        to install a laboratory in Piura with appropriate equipment and experienced
        personnel.  Biotecnologia will study various breeds of genetic
        material, and advise Stratos Peru which will be the most adequate to generate
        elite sugar cane plantlets to be used in our future seedling nursery.  The
        pilot laboratory has already begun generating sugarcane plantlets.
  *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 acquire and secure options to acquire
        the
        use of 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.
 Consistent
          with our view that access to land with adequate water is the main barrier
          to
          entry into Peru’s surging sugarcane ethanol industry, Stratos Peru has setup a
          multidisciplinary and experienced land sourcing, land assessment and
          hydrological studies’ team, comprised of 13 specialists. The land team is headed
          by Guillermo Freund, former Chief Advisor to the Head of Peru’s National
          Resources Institute, former Secretary General (3 rd officer
          in rank) and Chief Advisor at the Agriculture Ministry, where he was in
          charge
          of land acquisition, among other tasks. Dr. Freund team includes another
          four
          lawyers, four agronomists specialized in geographical information systems,
          two
          engineers specialized in soil and water sciences, in addition to two sustainable
          rural development professionals. One of Peru’s leading land assessment firms, We
          have also hired NeoAg Peru (a subsidiary of NeoAg Chile) to undergo soil
          and
          water studies. NeoAg has destined six executives to support our land sourcing
          process.
  *Field
        Installment*
  The
        fifth
        component, as part of our main objective to be the market leader in sustainably
        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 including
        grading, leveling, initial nutrient and organic material installation, and
        field
        layout. We estimate that the costs related to Field Installment for Phase
        I may
        be $1.5 million or higher.
  5
  *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 four 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 up to an additional $590
        million approximately in order to plant sugarcane on 48,000 hectares of raw
        land, and acquire and or build a total of four mills with attached ethanol
        distilleries, with expandable capacities and distribution port infastructure.
        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 mills and distilleries
        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.
  *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 $280 million, consisting
        of $120 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 $310 million, consisting of $120 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.
  **Ethanol**
  **Overview**
  Ethanol,
        or ethyl alcohol, is a clear, colorless and flammable organic chemical compound
        that can be used as a source of “clean” and renewable energy when blended with
        gasoline. Ethanol causes gasoline to burn more thoroughly, thereby improving
        combustion and reducing the amount of tailpipe carbon monoxide emissions.
        The
        amount of harmful exhaust emissions that are produced when gasoline is burned
        is
        inversely related to the amount of ethanol that is blended in the gasoline.
        Thus, as the proportional content of ethanol in a gasoline blend is increased,
        the relative amount of harmful exhaust emissions that is produced when the
        gasoline is burned decreases.
  6
  Ethanol
        blends can be used in almost all gasoline engines without costly modifications.
        Ethanol is dispensed in service stations worldwide (5% content ethanol blends
        in
        the European Union, or EU, and 10% ethanol content blends in the United States)
        with almost no reported incompatibility with vehicles that have unmodified
        conventional engines.
  The
        use
        of ethanol has been reported to have numerous significant long-term
        environmental benefits, including the following:
  ·
              ethanol
                  is a renewable fuel made from
                  plants;
  ·
              ethanol
                  is not a fossil-fuel, and therefore, burning it does not increase
                  the
                  greenhouse effect;
  ·
              ethanol
                  can be used to increase octane at low cost as an alternative to
                  harmful
                  fuel additives;
  ·
              as
                  an octane enhancer, ethanol is reported to reduce emissions of
                  cancer-causing benzene and
                  butadiene;
  ·
              ethanol
                  is biodegradable without harmful effects on the
                  environment;
  ·
              ethanol’s
                  high oxygen content reduces carbon monoxide levels more than any
                  other
                  oxygenate, by up to 25-30%, according to the U.S. Environmental
                  Protection
                  Agency;
  ·
              ethanol
                  is reported to reduce net carbon dioxide
                  emissions;
  ·
              ethanol
                  blends are reported to reduce emissions of hydrocarbons, a large
                  contributor to the depletion of the ozone
                  layer;
  ·
              high-level
                  ethanol blends are reported to reduce nitrogen oxide
                  emissions;
  ·
              high-level
                  ethanol blends are reported to reduce emissions of volatile organic
                  compounds, or VOCs, a major sources of ground-level ozone formation;
                  and
  ·
              sulphur
                  dioxide and particulate matter emissions decrease through the use
                  of
                  ethanol.
  Ethanol
        can be produced from a variety of raw materials, or feedstocks, and processes.
        There are two general types of ethanol:
  ·
              synthetic
                  ethanol, which is derived from crude oil or gas and coal;
                  and
  ·
              bioethanol,
                  which is distilled from grains, molasses, fruit, cellulose, sugarcane
                  juice and from numerous other natural sources.
  Regardless
        of the production process, synthetic ethanol and bioethanol are chemically
        identical.
  **Ethanol
        as a gasoline additive**
  Oxygen
        causes gasoline to burn more completely. Because ethanol contains 35% oxygen,
        when added to gasoline, it serves as an oxygenate that improves fuel combustion
        and reduces tailpipe emissions. Other fuel additives, such as MTBE (methyl
        tertiary-butyl ether), are not as effective as ethanol. It requires
        approximately twice the amount of the fuel additive MTBE (methyl tertiary-
        butyl
        ether) to obtain the same level of oxygenation in gasoline as ethanol. Thus,
        gasoline blended with ethanol produces fewer emissions than gasoline blended
        with MTBE. Additionally, since it was discovered that MTBE contributes to
        groundwater contamination, MTBE has been phased out in 17 states in the United
        States, thereby increasing the demand for alternative means of increasing
        octane
        levels. Blending high octane content ethanol with lower grade gasoline can
        increase the overall octane rating of gasoline, allowing it to be sold as
        a
        higher octane premium blend.
  Blending
        ethanol with gasoline also increases the volume of available fuel and may
        help
        to alleviate potential shortages of refined products. A new oil refinery
        has not
        been built in the United States in the past 30 years and with gasoline demand
        forecasted to increase by 1.5% per annum from the current volume of
        approximately 140 billion gallons per year, we believe that the United States
        will become increasingly dependent on not only crude oil imports, but also
        on
        imports of refined petroleum products (e.g., gasoline, to meet domestic
        consumption needs). The use of ethanol may help to reduce the need to import
        both crude oil and refined petroleum products.
  7
  **The
        Ethanol Production Process**
  Technologically,
        the process of producing ethanol from sugar is simpler than converting corn
        into
        ethanol. Converting corn into ethanol requires additional cooking and the
        application of enzymes, whereas the conversion of sugar primarily requires
        only
        a yeast fermentation process and the removal of water. The energy requirement
        for converting sugar into ethanol is about half that for corn.
  The
        sugarcane ethanol production process begins with cultivating and harvesting
        sugarcane at a cane field. The cane is then processed at a sugar mill, where
        the
        cane stalks are shredded and crushed to extract the cane juice. The byproducts
        of the juice extraction process are cane molasses and bagasse. Sugarcane
        molasses is used in the production of alcohol beverages, fuel alcohol and
        for
        direct human consumption. Bagasse can be used to produce steam and generate
        electricity within the plant. Excess electricity produced can be sold to
        utility
        grids.
  After
        sugarcane juice is extracted at the mill, it is then transformed into alcohol
        at
        a distillery through a fermentation process using yeasts as the catalyst.
        The
        fermentation process takes four to twelve hours and generates a significant
        amount of CO2 and heat. Fermentation can be conducted in batch or continuously,
        using open or closed fermentation tanks. Cooling is applied to maintain the
        resulting fermented mixture. Much of the CO2 that is generated during the
        fermentation process can be captured and converted into marketable products,
        such as dry ice, liquid CO2 for soft drinks, fire-fighting foams, filtration
        products and various industrial uses.
  After
        fermentation, the ethanol is distilled from other byproducts, resulting in
        a
        level of purity of approximately 95%. This mixture is often referred to as
        “hydrous ethanol” because it contains 5% water. Hydrous ethanol can be
        commercially used, but cannot be blended with gasoline. An additional reactant,
        such as cyclohexane, is needed in order to dehydrate the ethanol, by forming
        a
        tertiary azeotropic mixture with water and alcohol. Anhydrous ethanol is
        nearly
        100% pure and can be blended with gasoline.
  Sugarcane
        is bulky and relatively expensive to transport and must be processed as soon
        as
        possible to minimize sucrose deterioration. In order to save costs, ethanol
        is
        often produced near a sugarcane field at a sugarcane mill with an adjoining
        distillery plant.
  **The
        Ethanol Market**
  Demand
  World
        consumption of fuel ethanol reached approximately 17 billion gallons in 2007,
        as
        presented at the F.O. Licht 4 th Annual
        Conference “Sugar and Ethanol Brazil.”
  8
  **Graph
        1: Historical World Ethanol Consumption, 1998-2005**
  **(Billion
        liters)**
  
  According
        to the FO Licht’s 2006 World Ethanol & Biofuels Report referenced below, by
        2030, the global consumption of fuel ethanol is projected to reach approximately
        72 billion gallons, resulting in the displacement of 10% of the forecasted
        demand of gasoline consumption.
  **Graph
        2: Estimated Consumption of Fuel Ethanol, 2006-2030**
  
  The
        interest in biofuels has increased primarily due to environmental, geo-political
        and economic factors, including initiatives by countries to develop new markets
        for agricultural products. The increase in demand for ethanol largely has
        been
        driven by tax incentives and blending mandates, which are regulatory directives
        requiring a minimum level of ethanol content in gasoline. Blending mandates
        allow governments to bring biofuels into the market without providing subsidies
        or tax credits for ethanol use.
  9
  On
        December 19, 2007, the United States expanded its Renewable Fuel Standard,
        or
        RFS, through the Energy
        Independence and Security Act of
        2007,
        or EISA. This legislation mandates the use of 36 billion gallons of renewable
        fuels per year by 2022. The following graphs depict the extent to which
        legislation had to catch up with the unprecedented surge in fuel ethanol
        consumption and production in the U.S.
  **Graph
        3: U.S. Renewables Standards and Energy Act of 2007**
  
  Source: F.O.
        Licht 4 th Annual
        Conference “Sugar and Ethanol Brazil” ,
        Dr.
        Christoph Berg’s, Director, F.O. Licht, Germany, “World Ethanol 2008: Ethanol in
        2008/09 - Light at the end of the tunnel?”
  10
  **Graph
        4: U.S. Renewables Standards and Energy Act of 2007**


Source:
        F.O. Licht 4 th Annual
        Conference “Sugar and Ethanol Brazil”, Dr. Christoph Berg’s, Director, F.O.
        Licht, Germany, “World Ethanol 2008: Ethanol in 2008/09 - Light at the end of
        the tunnel?”
  In
        the
        last few years, several other countries increased biofuel usage targets and
        mandates. Currently, biofuel blending mandates exist in at least fifteen
        countries at the national or regional and state level. Countries with mandates
        at the national level include Brazil, Colombia, Germany, France, Philippines,
        Thailand, and the United States (under the federal RFS). Countries with regional
        mandates include India (nine states plus four federal territories), China
        (nine
        provinces and certain cities), Canada (the provinces of Saskatchewan and
        Ontario) and the United States (Hawaii, Iowa, Louisiana, Minnesota, Missouri,
        Montana, and Washington). In Peru, all gasoline must contain 7.8% of fuel
        ethanol starting on January 1, 2010. Petroperu, the state-owned oil company,
        projects fuel ethanol demand of 22.6 million gallons per year in 2010 as
        reported at the F.O. Licht 4 th Annual
        Conference, “Sugar and Ethanol Brazil.”
  **Table
        1: Regulatory Mandates will Spur Ethanol Demand**
  Brazil
              All
                  gasoline must contain between 20 and 25% anhydrous ethanol. Currently,
                  the
                  mandate is 23%.Canada
              By
                  2010, 5% of all motor vehicle fuel must be ethanol or
                  biodiesel.France
              Set
                  target rates for incorporation of biofuels into fossil fuels (by
                  energy
                  content). Calls for 5.75% in 2008, increasing to 10% in
                  2010.Germany
              Mandates
                  8% energy content in motor fuels by 2015, 3.6% coming from
                  ethanol.Lithuania
              Gasoline
                  must contain 7-15% Ethyl Tertiary-Butyl Ether, or ETBE. The ETBE
                  must be
                  47% ethanol.Poland
              Mandatory
                  “National Biofuel Goal Indicators” calling for biofuels to represent a set
                  percentage of total transportation fuel use. 2008’s standard is 3.45%, on
                  an energy content basis.Argentina
              Requires
                  the use of 5% ethanol blends by 2010.Thailand
              Gasoline
                  in Bangkok must be blended with 10% ethanol.India
              Requires
                  5% ethanol in all gasoline.China
              Five
                  Chinese provinces require 10% ethanol blends - Heilongjian, Jilin,
                  Liaoning, Anhui, and Henan.The
                  Philippines
              Requires
                  5% ethanol blends in gasoline beginning in 2008. The requirement
                  expands
                  to 10% in 2010.Bolivia
              Expanding
                  ethanol blends to 25% over the next five years. Current blend levels
                  are
                  at 10%.Colombia
              Requires
                  10% ethanol blends in cities with populations over
                  500,000.Venezuela
              Phasing
                  in 10% ethanol blending
                  requirement.
  Source:
        Ethanol Industry Outlook 2008, Renewable Fuels Association.
  11
  In
        the
        short to mid-term future, we believe that worldwide fuel ethanol consumption
        will increase as a result of additional blending mandates prompted by the
        rapidly growing fleet of flexible fuel vehicles, which are vehicles that
        can
        efficiently use different sources of fuel. Projections of fuel ethanol use
        are
        summarized in Table 2 below (Table 2 includes two alternative scenarios for
        the
        United States, based upon estimated targets of, respectively, 14.6 and 59.9
        billion gallons, by 2030).
  **Table
        2: Targets/Estimates on Fuel Ethanol Consumption**
  **Country/**
                **Region**
              
              **Value/when**
              
              **Comment**U.S.
              
              36
                  billion gallons by 2022
              
              ESIA
                  mandate14.6
                  billion gallons by 2030
              
              Estimated
                  by U.S. DOE (EIA, 2006)59.9
                  billion gallons by 2030
              
              Possible
                  mandate by 2030EU
              
              2.5%
                  by 2010
              
              Estimate17.5%
                  by 2020
              
              EU
                  target defined in January 200720.0%
                  by 2030
              
              EstimateJapan
              
              10%12015 onwards
              
              EstimateChina
              
              0.66
                  billion gallons by 2010
              
              Production
                  targets on fuel ethanol3.3
                  billion gallons by 2020
              
              Production
                  targets on fuel ethanol10%1by
                  2020
              
              Target
                  defined by the Chinese governmentRest
                  of World
              
              1%2by
                  2010, 10%1by
                  2020
              
              Estimate
  Source:
        FO Licht’s, World Ethanol & Biofuels Report, 2006
 1 10%
        ethanol blending mandate
 2 1%
        ethanol blending mandate
  12
 Supply
  In
          2007,
          world production of fuel ethanol is estimated at nearly 13 billion gallons.
          The
          United States is now the world’s largest producer of fuel ethanol (6.5 billion
          gallons in 2007), surpassing Brazil (5.0 billion gallons in 2007), which
          historically has dominated fuel ethanol production, as reported by the
          RFA 2008
          Outlook.
  **Graph
        5: Historic Ethanol Production in Brazil, EU and the U.S.**
  *(1975-2006)*
  
  Source:
        F.O. Licht ’ s
        World
        Ethanol and Biofuels Report
  The
        primary feedstocks which are used for fuel ethanol production vary from country
        to country. According to a report entitled, The Emerging Biofuels Market:
        Trade
        and Development Implications from 2006, Brazil produces fuel ethanol primarily
        from sugarcane, the United States and China use corn as the primary feedstock,
        and India produces ethanol mainly from molasses (a co-product in the
        manufacturing sugar industry).
  **Graph
        6: Estimated Fuel Ethanol Production Capacity**
 ***(conventional
        technologies)***
  
  Source:
        F.O. Licht ’ s
        World
        Ethanol and Biofuels Report
  13
  According
        to the Food and Agricultural Policy Research Institute’s reports on World
        Biofuels from 2007 and 2008, world net trade in ethanol increased by 46.1%
        in
        2006 over 2005, followed by a decline in 2007 of 15.1%. As demand for ethanol
        increases in the future, world net trade is expected to increase 10.4% in
        2008,
        and is projected to increase by 235% by 2017. However, as there is a clear
        trend
        of countries becoming self sufficient in the ethanol markets, world export
        growth rates are expected to decrease even though supply and demand growth
        rates
        continue to increase.
  The
        main
        exporters of fuel ethanol in 2006 were Brazil (33.9%) and South Africa
        (10%).
  **Graph
        7: Ethanol Main Exporters -2006**
  
  Source:
        Food and Agriculture Policy Research Institute, 2007
  The
        main
        importers in 2006 were the EU (39.2%) and the United States (18.5%). We plan
        to
        supply the U.S. market and we believe that the Free Trade Agreement between
        Peru
        and the U.S. gives us a significant competitive advantage over Brazilian
        based
        ethanol producers.
  **Graph
        8: Ethanol Main Importers - 2006**
  
  Source:
        Food and Agriculture Policy Research Institute, 2007.
  14
  Market
        analysts forecast that world net imports will decrease by 2016 by approximately
        52% as a result of production capacity growing more rapidly than
        demand.
  **Ethanol
        Prices**
  Typically,
        ethanol is sold under six to twelve month contracts between ethanol producers
        and petroleum companies. Although many of these contracts are fixed price,
        some
        of the contracts are pegged to a gasoline benchmark. To a lesser extent,
        ethanol
        is also sold on the spot market, where prices fluctuate daily according to
        market conditions.
  Ethanol
        and unleaded gasoline’s retail prices in the U.S. increased steadily and were
        highly correlated between 2002 and 2006.
  **Graph
        9: Ethanol and Unleaded Gasoline Historical Retail Prices,
        1997-2006**
  ***(US$
        per Gallon)***
  
  Source:
        Food and Agriculture Policy Research Institute database
  15
  The
        futures market for ethanol seems to indicate a stabilization in ethanol
        prices over the coming months.
  **Graph
        10: Denatured Fuel Ethanol Futures Curve**
  
  Source:
        Chicago Board of Trade (CBOT)
  According
        to F.O. Licht, utilization rates, which declined steadily starting in 2004
        due
        to the capacity build-up, are projected to rise starting in 2008. In their
        view,
        while world ethanol production is estimated to continue rising in 2008, the
        slower capacity build-out will rebalance the market and may push ethanol
        prices
        higher in 2009.
  **Graph
        11: World’s Fuel Ethanol Production and Capacity Utilization Rates,
        2000-2010**
  
  Source:
        F.O. Licht, “World Ethanol 2008: Ethanol in 2008/09 - Light at the end of the
        tunnel?”
  16
  **The
        Ethanol Industry**
  Bioethanol
        is part of the “ modern
        biomass  based”
        sources of energy, which have a less severe impact on the environment than
        conventional gasoline or other petroleum derived additives. Moreover, sugarcane
        ethanol has an industrial positive net energy balance, which means that the
        energy contained in a ton of sugarcane ethanol is greater than the energy
        required to produce it. There are a number of factors that determine the
        economic viability of ethanol production, including the choice of raw material
        feedstock, land availability, socioeconomic frameworks, consumer trends and
        new
        technology.
  Feedstock
  We
        believe that our low cost feedstock business plan will give us a
        significant competitive advantage. Feedstock accounts for 70 to 80% of overall
        ethanol production costs. Feedstock costs are a function of land availability
        and field production costs, crop productivity, fermentable sugars/sucrose
        content (in case of sugar crops) and industrial conversion ratios.
  Currently,
        according to the SRI Consulting Ethanol Report from February 2008, approximately
        70% of the world’s ethanol supply is being produced from sugar crops, primarily
        from sugar beets, sugarcane and molasses, while the remainder is produced
        from
        grains, primarily maize or corn. Although there are several different metrics
        which can be used to analyze the choice of feedstock, we believe that the
        lowest
        gross feedstock costs, per gallon of fuel ethanol produced, are currently
        achieved by sugarcane grown in the central and southern regions of Brazil.
        While
        Peru does not yet have a developed ethanol industry due to the geography,
        climate and other conditions in Peru, we believe that Peru will be able to
        surpass the yields achieved in Brazil at lower gross feedstock
        costs.
  Profitable
        feedstock production is also dependent, in part, upon obtaining a reliable
        permanent source of raw material. Most of the profitable sugar based ethanol
        businesses worldwide are based on integrated plantation models that are able
        to
        provide feedstock at less than the market price demanded from third
        party growers.
  **Graph
        12: Ethanol Production Costs without Subsidies**
  
  Source:
        O. Henniges and J. Zeddies, in F.O. Licht ’ s
        World
        Ethanol and Biofuels Report, Vol. 3, No. II
  17
  Socioeconomic
        frameworks
  One
        of
        the key drivers of biofuel development throughout the world has been the
        increase in rural economic development opportunities that biofuel production
        facilitates. Compared to other sources of energy, the production of ethanol
        is
        more labor intensive, thus creating more jobs. It has been estimated that
        in
        Brazil 2,333 jobs are created for every one million tons of sugarcane harvested
        (which produces approximately 21 million gallons of ethanol). Further, sugar
        based ethanol production also provides an opportunity for countries that
        have
        existing sugar industries to produce a higher value-added product, ethanol,
        rather than relying exclusively on the volatile sugar commodity
        market.
  Consumer
        trends
  The
        International Energy Agency has estimated that recent policy initiatives,
        if
        fully implemented, could result in biofuels (mainly ethanol) displacing up
        to 5%
        of the worldwide motor gasoline use by 2010. In OECD (Organization for Economic
        Co-operation and Development) regions, most of this production would likely
        be
        from conventional ethanol produced from grain feedstocks, such as corn and
        wheat. While ethanol produced from grain feedstocks can provide important
        benefits, production costs of using corn and wheat are generally high and
        reductions in fossil energy use and CO2 emissions are modest. Ethanol production
        in the southern hemisphere (Brazil and Peru) primarily utilizes sugar crops,
        which are more efficient in reducing greenhouse gas emissions.
  **Graph
        13: Biofuel Cost per Ton GHG Reduction**
  
  New
        technologies
  The
        increasing use and demand for ethanol is also an incentive to promote advances
        in biotechnology, particularly in the biomass-to-ethanol sector. New
        technologies in sugarcane production, such as precision agriculture, energy
        efficient irrigation systems, genetically modified seeds and integrated
        harvesting and transport systems, could be adopted to lower sugarcane and
        sugar
        beet production costs. In addition, advanced processing technologies, such
        as
        increased use of industrial automation, new separation processes, higher
        sucrose
        recovery and higher fermentation productivity, could be adopted to lower
        the
        processing costs of converting sugarcane into ethanol.
  18
  **Governmental
        Regulation**
  Our
        business is subject to extensive and frequently changing governmental laws
        and
        regulations. These laws may impact our existing and proposed business operations
        by imposing:
  ·
              restrictions
                  on our existing and proposed business operations and the need to
                  install
                  enhanced or additional controls;
  ·
              the
                  need to obtain and comply with permits and
                  authorizations;
  ·
              liability
                  for exceeding applicable permit limits or legal requirements;
                  and
  ·
              specifications
                  for the ethanol we market and
                  produce.
  Some
        of
        the governmental regulations that affect us are helpful to our ethanol
        production business. The ethanol fuel industry is greatly dependent upon
        tax
        policies and environmental regulations that favor the use of ethanol in motor
        fuel blends. At the end of 2007, fifteen countries had ethanol blending mandates
        at the federal or regional level, requiring that gasoline contain a minimum
        percentage of ethanol content. In the near future, blending mandates are
        expected to be implemented by additional countries and increased by those
        countries that currently impose blending mandates.
  **Environmental
        Compliance**
  The
        cost
        of compliance with environmental and safety regulations in Peru is relatively
        insignificant. We anticipate that our proposed facilities will not produce
        any effluents or have any smoke stacks. With regards to safety, all equipment
        must be fire proof and explosion proof. In addition, modern fire suppression
        systems must be installed in order to be eligible for insurance and to protect
        the safety of all employees.
  **Distribution**
  We
        currently have no distribution arrangements in effect. We anticipate seeking
        those as we get closer to the Sugar Mill going into production.
  **Customers**
  We
        currently have no customers. Once we are in production, we anticipate that
        our
        major customers will be Herco Combustibles S.A., Ocean Marine S.A.C. and
        PECSA
        (Peruana De Combustibles S.A.).
  **Research
        and Development**
  Our
        research and development expenditures will be focused primarily on the efficient
        production of sugarcane based fuel ethanol. During Phase I of our business
        plan,
        we expect to incur significant costs in implementing our seedling and compost
        programs and identifying and analyzing land sources for sugarcane production.
  **Intellectual
        Property**
  We
        have
        filed applications to register the trademarks “Stratos Renewables Corporation”
and “Stratos Renewables Corporation” and Design in the United States Trademark
        Office and in the Peru Trademark Office. The applications are pending and
        are in
        good standing. Aside from these trademarks, we do not have any other patents,
        trademarks, service marks, trade names, copyrights or other exclusive
        intellectual property rights. We do not believe that any segment of our business
        is dependent upon any single or group of intellectual property
        rights.
  **Competition**
  We
        face
        substantial competition, particularly in U.S. ethanol market, which we expect
        to
        be our main market. Many of our competitors have longer operating histories
        and
        significantly more resources than we do.
  19
  **Suppliers**
  During
        Phase I, we will purchase 100% of the sugarcane to be used at the Sugar Mill
        and
        distillery from third party growers. During Phase II, we expect to grow and
        cultivate 90% of the sugarcane needed for production.
  **Employees**
  As
        of
        March 29, 2008, we had a workforce of twenty-eight full time employees, of
        which
        four are executives. All of our employees are employed through Stratos Peru
        except for Steven Magami. None of our employees are currently represented
        by a
        union or covered by a collective bargaining agreement. Management believes
        its
        employee relations are satisfactory.
  **Marketing**
  We
        are
        not currently engaged in marketing efforts at this time.
  **Risks
        Relating to Our Business**
  **RISK
        FACTORS**
  ***In
        addition to other information in this Current Report, the following risk
        factors
        should be carefully considered in evaluating our business because such factors
        may have a significant impact on our business, operating results, liquidity
        and
        financial condition. As a result of the risk factors set forth below, actual
        results could differ materially from those projected in any forward looking
        statements. Additional risks and uncertainties not presently known to us,
        or
        that we currently consider to be immaterial, may also impact our business,
        operating results, liquidity and financial condition. If any such risks occur,
        our business, operating results, liquidity and financial condition could
        be
        materially affected in an adverse manner. Under such circumstances, you may
        lose
        all or part of your investment.***
  **Risks
        Related to our Business**
  ***Stratos
        has no operating history on which to base an evaluation of its
        business.***
  Stratos
        is a recently incorporated development stage company with no operating results
        to date. As Stratos has no operating history, it is difficult to evaluate
        its
        financial performance as of the date of this Current Report. Initially, we
        anticipate that we will incur increased operating costs without realizing
        any
        revenues until the expansion and modification of the Sugar Mill, including
        the
        addition of a distillery unit, is complete. In addition, in the near future,
        we
        will start our seedling production program, compost production program and
        land
        sourcing program. We anticipate that a total of $33 million will be required
        during Phase I, which is expected to be completed by the first quarter of
        2009.
        There can be no assurance that we will be able to complete the expansion
        or
        modification of the Sugar Mill or any of the programs of Phase I by the first
        quarter of 2009, if ever. The failure to timely complete the components of
        Phase
        I would materially and adversely affect our ability to achieve any
        revenues.
  20
  Additionally,
        we will need up to an additional $590 million in order to complete Phase
        II of
        our operations, which is expected to begin in the first quarter of 2009 and
        continue through 2014. There can be no assurance that we will be able to
        raise
        the additional funds we need to complete Phase II or that we will be able
        to
        begin any of the component programs of Phase II on a timely basis, if ever.
        The
        failure to raise these additional funds or to timely commence and complete
        Phase
        II would materially adversely affect our business, results of operations
        and
        financial condition.
  ***The
        fact that Stratos has not earned any revenues since the Share Exchange raises
        substantial doubt about our ability to continue as a going
        concern.***
  Stratos
        generated nominal revenues in its prior iteration as New Design Cabinets,
        Inc.
        Since the Share Exchange, Stratos has generated no revenues, and we will
        continue to incur operating expenses without generating revenues until the
        expansion and modification of the Sugar Mill is completed. As a
        result, we may need to obtain additional financing in order to develop and
        continue operations. There can be no assurance that we will be able to obtain
        the financing we require, or obtain such financing on terms that are
        commercially viable for us. These circumstances raise substantial doubt about
        our ability to continue as a going concern.
  Additionally,
        we may incur significant losses for the foreseeable future. We recognize
        that if
        we are unable to generate significant revenues from the Sugar Mill, we will
        not
        be able to earn profits or continue operations. As we are a development stage
        company, we expect to face the risks, uncertainties, expenses and difficulties
        frequently encountered by companies at the start up stage of their business
        development. There is no assurance that we will be successful in addressing
        these risks and uncertainties. Our failure to do so could have a materially
        adverse effect on our financial condition. There is no history upon which
        to
        base any assumption as to the likelihood that we will prove successful and
        we
        can provide investors with no assurance that we will generate any operating
        revenues or ever achieve profitable operations.
  ***Our
        business plan may not be realized.***
  Our
        operations are subject to all of the risks inherent in the establishment
        of a
        new business enterprise, including inadequate working capital and a limited
        operating history.  The likelihood of our success must be considered in
        light of the problems, expenses, complications and delays frequently encountered
        in connection with the development of a new business.  Unanticipated events
        may occur that could affect the actual results achieved during forecast
        periods.  Consequently, the actual results of operations during the
        forecast periods will vary from the forecasts and such variations may be
        material.  In addition, the degree of uncertainty increases with each
        successive year presented.  There can be no assurance that we will succeed
        in the anticipated operation of our business plan.  If our business plan
        proves to be unsuccessful, our business may fail.
  ***We
        will require a significant amount of additional funding to execute our business
        plan. Additional funding may not be**avai*** **l****able,
        or if available, it may not be offered to us on agreeable
        terms.**
  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 up to approximately $33.0 **** million.
        Furthermore, we estimate that we will need up to an additional $590 million
        to
        fund our expansion during the course of Phase II of our operations, which
        are
        set to commence during the first quarter of 2009 and continue for five years
        thereafter.
  Financing
        may not be available on terms acceptable to us or our investors, and may
        be
        available only on terms that would negatively affect the existing stockholders.
        If adequate funds are not available, we likely will not be successful in
        executing our business plan as anticipated and, as a result, we may be forced
        to
        cease operations and liquidate, in which case investors may not be able to
        receive any return on their invested capital.
  We
        cannot
        be certain that additional financing will not be needed beyond our current
        and
        projected needs or will be available when required and, if available, that
        it
        will be on terms satisfactory to us. Future financings may be dilutive to
        existing stockholders. If we are unable to generate sufficient cash flow
        and are
        otherwise unable to obtain funds necessary to meet our funding requirements,
        this would adversely affect our anticipated results of operations and financial
        condition.
  21
  ***Our
        future growth is dependent upon developing successful relationships with
        existing sugarcane growers and establishing our own sugarcane supplies, which
        requires us to obtain the use of significant amounts of land. If we are unable
        to develop and maintain such relationships or develop our own supplies, our
        future business prospects could be significantly
        limited.***
  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, which requires us to
        obtain the use of significant amounts of land. 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.  No
        assurance can be given that we will be able to establish seedling our seedling,
        compost and land sourcing programs, because we may not be able to obtain
        the necessary amounts of land to be used for such programs.  There is
        significant competition for land that can be used for growing crops in
        those areas of Peru that are proximately located to our
        business.  We can provide no assurances that we will be successful in
        obtaining the required land necessary to fulfill our business
        plan.  If we are unsuccessful in our attempt to obtain the necessary
        land for use in growing sugarcane and/or we fail to either
        establish or develop supply relationships for sugarcane with local growers
        or to
        establish successful seedling, compost and land sourcing programs our business
        could be materially and adversely affected.
  ***Our
        failure to accurately forecast market and customer demand for ethanol could
        adversely affect our business and financial results.***
  The
        ethanol industry faces difficulties in accurately forecasting market and
        customer demand for its products. If our forecasts exceed actual market demand,
        or if market demand decreases significantly from our forecasts, then we could
        experience periods of product oversupply and price decreases, which could
        impact
        our financial performance. If our forecasts do not meet actual market demand,
        of
        if market demand increases significantly beyond our forecasts or beyond our
        ability to add manufacturing capacity, then we may not be able to satisfy
        customer product needs, which could result in a loss of market share if our
        competitors are able to meet customer demands.
  ***Significant
        exchange rate variations between the Nuevo Sol and the U.S. dollar may adversely
        affect our financial condition and results of
        operations.***
  An
        appreciation of the Nuevo Sol as compared to the U.S. dollar would result
        in a
        decrease in our operating margin, given that our revenues are denominated
        in
        U.S. dollars, and a portion of our cost of services rendered (the depreciation
        of machinery) and administrative expenses are denominated in Nuevos
        Soles.
  ***Inflation
        could adversely affect our financial condition and results of operations
        and the
        value of our securities.***
  Although
        Peruvian inflation has moderated in recent years, Peru experienced high levels
        of inflation in the past. Over the five-year period ended on December 31,
        2006, the Peruvian economy experienced annual inflation averaging approximately
        2.3% per year as measured by the Peruvian Consumer Price Index. This index
        is
        calculated by the Instituto Nacional de Estadística e Informática and measures
        variations in prices of a selected group of goods and services typically
        consumed by Peruvian families. Inflation for the six months ended June 30,
        2007
        was 2.25%. There can be no assurance, however, that inflation will remain
        at
        these levels.
  If
        Peru
        experiences substantial inflation in the future, our costs may increase,
        which
        may adversely affect our ability to fulfill our obligations under the Notes.
        Inflationary pressures may also curtail our ability to access foreign financial
        markets and may lead to further government intervention in the economy,
        including the introduction of government policies that may adversely affect
        the
        overall performance of the Peruvian economy. Our operating results and the
        value
        of our securities, including the Notes, may be adversely affected by higher
        inflation.
  22
  ***Economic
        and political developments in Peru could affect our business, financial
        condition and results of operations.***
  All
        of
        our operations are conducted in Peru and are dependent upon the performance
        of
        the Peruvian economy. As a result, our business, financial position and results
        of operations may be affected by the general conditions of the Peruvian economy,
        price instability, inflation, interest rates, regulation, taxation, social
        instability, political unrest and other developments in or affecting Peru,
        over
        which we have no control.
  Our
        financial condition and results of operations may also be affected by changes
        in
        Peru’s political climate to the extent that such changes affect the nation’s
        economic policies, growth, stability or regulatory environment. On July 28,
        2006, former president Alan García Pérez, leader of the American Popular
        Revolutionary Alliance, took office for the second time. His previous term
        in
        office was from 1985 to 1990. In 1985, García had come to power in the middle of
        a severe economic crisis, with the economy in recession and the public sector
        staggering under a massive external debt burden. García responded with a failed
        policy agenda that involved significant state intervention in the economy,
        including an external debt moratorium and an attempt to nationalize the banking
        system.
  García
        has now pledged to follow conservative economic policies and has indicated
        a
        desire to avoid the mistakes of his past government. Garcia named the
        conservative banker Luis Carranza as minister of economy and finance. Carranza
        held a senior position at Banco Bilbao Vizcaya Argentaria, or BBVA, in Spain
        and
        was a key adviser to Pedro Pablo Kuczynski, the prime minister (and former
        finance minister) of former president Alejandro Toledo, who held office from
        2001 to 2006. García has announced that, in general terms, his administration
        would follow economic policies similar to those of the Toledo administration,
        which included achieving sustained economic growth, increasing exports of
        Peruvian goods, reducing unemployment, underemployment and poverty, reforming
        the tax system, fostering private investment and increasing public investment
        in
        education, public health, and other social programs, while reducing overall
        public spending.
  It
        is
        uncertain whether the Peruvian government, including the administration of
        President García, will continue to pursue business-friendly and open-market
        economic policies or policies that stimulate economic growth and social
        stability. Any changes in the Peruvian economy or the Peruvian government’s
        economic policies may have a negative impact on our business, financial
        condition and results of operations.
  ***In
        the past, Peru experienced significant levels of domestic terrorist activity.
        It
        is possible that a resurgence of terrorism in Peru may occur in the future,
        which may have a material adverse effect on the Peruvian economy and,
        ultimately, our business.***
  In
        the
        past, Peru experienced significant levels of terrorist activity that reached
        its
        peak in the late 1980s and early 1990s. Although local terrorist groups are
        no
        longer as powerful as they were during the 1980s and early 1990s, their members
        still operate in remote mountainous and jungle areas in central and southern
        Peru, where military patrols have decreased due to military spending cutbacks.
        We cannot assure you that a resurgence of terrorism in Peru will not occur
        or
        that, if there is a resurgence, it will not have a material adverse impact
        upon
        the economy and prospects of Peru and, ultimately, our business.
  ***We
        are exposed to certain risks due to the international nature of our
        operations.*** ****
  We
        are
        exposed to risks associated with international operations. These include: 
import and export licensing requirements, trade restrictions, changes in
        tariff
        rates, overlapping tax structures, transportation delays, currency
        fluctuations, potentially adverse tax consequences, and compliance with a
        variety of foreign laws and regulations.  Any of the foregoing factors
        could have a material adverse effect on our ability to expand our
        international operations.  Increased exposure to international markets
        creates new areas with which we may not be familiar and could place us in
        competition with new vendors.  We cannot assure you that we will be
        successful in our efforts to compete in these international markets.
  23
  We
        currently have a competitive advantage due to the recently signed Free Trade
        Agreement between the U.S. and Peru. Pursuant to the Free Trade Agreement,
        our
        fuel exports to the U.S., which we expect to be our main export market, will
        not
        be subject to the $0.54 per gallon import tariff and 2.5% ad valorem tax
        imposed
        on Brazil fuel ethanol exports to the U.S. There have been a number of proposals
        by various lobbying groups to change the landscape and eliminate tariffs
        on the
        import of ethanol into the U.S. We can not provide any assurances that the
        U.S.
        will not eliminate such tariffs, thereby reducing our future competitive
        advantage.
  In
        addition, certain foreign countries in which we plan to operate may not protect
        intellectual property rights to the same extent as the laws of the U.S. 
The failure to protect our proprietary information and any successful
        intellectual property challenges or infringement proceedings against us could
        have a material adverse affect on our business, financial condition or results
        of operations.
  ***We
        depend on key service providers for assistance and expertise and any failure
        or
        loss of these relationships could delay our operations, increase our expenses
        and hinder our success.***
  We
        must
        establish and maintain relationships with several key providers for contracting,
        consulting and other services. Initially, we will need to secure contracts
        for
        labor and materials in relation to the expansion and modification of the
        Estrella del Norte facilities. Upon completion of the expansion and modification
        of the Estrella del Norte facilities, we will need to secure transportation
        and
        utility services, ensure that we are in environmental compliance, obtain
        required permits, contract for sugarcane supplies and, eventually, market
        our
        bioethanol. If we should fail to maintain our relationship with any of these
        key
        providers, or if any of these providers should fail to perform, we would
        be
        forced to locate and retain alternative providers. As a consequence, due
        to the
        critical nature of these services, the commencement, and continuation, of
        our
        operations could be delayed, our start-up expenses could be significantly
        increased and our business could be greatly harmed, even to the point of
        failure
        of our Company.
  **There
        are several agreeme****n****ts
        and relationships that remain to be negotiated, executed and implemented
        which
        will have a critical impact on our operations, expenses and
        profitability.**
  There
        are
        several agreements, documents and relationships that remain to be negotiated,
        executed and implemented before we can commence operations. In some cases,
        the
        parties with whom we would need to establish a relationship have yet to be
        identified. Examples include agreements for equity financing, distribution
        agreements and agreements with numerous consultants. Our expectations regarding
        the likely terms of these agreements and relationships could vary greatly
        from
        the terms of any agreement or relationship that may eventually be executed
        or
        established. If we are unable to enter into these agreements or relationships
        on
        satisfactory terms, or if revisions or amendments to existing terms become
        necessary, the consummation of the expansion and modification of the Estrella
        del Norte facilities and the commencement of our operations could be delayed.
        As
        a result, our expenses could increase, our profitability could be adversely
        affected and the value of your investment could decline.
  ***The
        cost of the expansion and modification of the Estrella del Norte facilities
        could increase and, if an increase occurs, we may not have the resources
        to
        complete the expansion and modification of the
        facilities.***
  Our
        preliminary budget contemplates that the expansion and modification of the
        Estrella del Norte facilities will cost approximately $9.6 million. Our
        financial plan is based on this estimated cost, plus the cost of other site
        improvements, capital expenditures, start-up and development costs and reserves
        estimated to be approximately $23.6 million, resulting in total estimated
        remaining capital requirements during Phase I of $33.2 million. If the cost
        to
        expand and modify the Estrella del Norte facilities or other costs increase
        due
        to economic factors, design modifications, construction delays or cost overruns,
        the total cost of our project and the capital required could increase, perhaps
        significantly. In such an event, our results of operations and ultimately
        the
        financial condition of our Company will be adversely affected.
  24
  ***Delays
        due to weather, labor or material shortages, permitting or zoning delays,
        or
        opposition from local groups, may hinder our ability to timely commence
        operations.***
  Our
        construction timetable, which we believe to be reasonable, assumes the startup
        of operations in the first quarter of 2009. Our schedule depends upon several
        assumptions, many of which are beyond our control. We could incur delays
        in the
        acquisition and installation of the distillery unit due to permitting, adverse
        weather conditions, labor or material shortages, defects in materials or
        workmanship or other causes. In addition, the availability of financing,
        changes
        in interest rates or the credit environment or changes in political
        administrations at the federal, provincial or municipal level that result
        in
        policy changes towards biofuel or our facilities could result in delays in
        our
        timetable for construction and commencement of operations. Any such delays
        will
        adversely affect our ability to commence operations and generate
        revenue.
  ***Unpredictable
        natural and man-made catastrophic events could cause unanticipated losses
        and
        have a material adverse effect*** ***on
        the Peruvian economy and, ultimately, our business.***
  Catastrophes
        can be caused by various events, including natural events such as floods,
        earthquakes, hailstorms, severe winter weather and fires, and unnatural events
        such as acts of war, terrorist attacks, explosions and riots. The incidence
        and
        severity of catastrophes are inherently unpredictable. The extent of losses
        from
        a catastrophe is a function of both the total amount of insured exposure
        in the
        area affected by the event and the severity of the event. Peru is a region
        prone
        to earthquakes and floods, both which may produce significant damage to our
        infrastructure and operations. It is possible that a catastrophic event or
        multiple catastrophic events could have a material adverse effect upon our
        results of operations and financial condition.
  ***Defects
        in the construction or performance of our ethanol production facilities could
        result in a reduction in our revenues and profitability and in the value
        of your
        investment in our Company.***
  We
        anticipate that the distillery unit will come with warranties with respect
        to
        materials and workmanship and assurances that the facilities will operate
        at
        design capacity. However, defects in the construction or performance of the
        facilities could occur and there is no assurance that we will be able to
        correct
        any problems that do in fact occur. If our facilities do not perform at or
        above
        design specifications, we may not be able compete in a competitive marketplace.
        If defects delay the construction or hinder the operations of the facilities,
        our operations, revenues, profitability and the value of your investment
        in our
        Company could be materially adversely affected. If defects require a lengthy
        or
        permanent discontinuance of production, your investment could be reduced
        to very
        little or no value.
  ***Our
        business is subject to comprehensive government regulation and any change
        in
        such regulation may have a material adverse effect on our
        Company.***
  There
        is
        no assurance that the laws, regulations, policies or current administrative
        practices of any government body, organization or regulatory agency in Peru
        or
        any other jurisdiction, will not be changed, applied or interpreted in a
        manner
        which will fundamentally alter the ability of our Company to carry on our
        business. The actions, policies or regulations, or changes thereto, of any
        government body or regulatory agency, or other special interest groups, may
        have
        a detrimental effect on our Company. Any or all of these situations may have
        a
        negative impact on our operations.
  ***We
        may be subject to governmental regulations or restrictions in connection
        with
        the construction and operation of our Sugar Mill in Peru, as well as on the
        sale
        of ethanol outside of Peru.***
  Our
        proposed business is subject to regulation by governmental agencies in Peru,
        where we intend to produce and initially sell ethanol. We cannot predict
        in what
        manner or to what extent or cost we will need to comply with such governmental
        regulations, or to what extent such regulations will harm our business or
        the
        ethanol production and marketing industry in general.
  We
        intend
        to sell ethanol into the worldwide market, including the United States. The
        sale
        of ethanol is subject to regulation by agencies of the United States federal
        government, including, but not limited to, the Environmental Protection Agency
        as well as other agencies in each jurisdiction in which ethanol is produced,
        sold, stored or transported.
  25
  Environmental
        laws and regulations that are expected to affect our planned operations are
        extensive. Applicable laws and regulations are subject to change and there
        is a
        risk that such laws and regulations could be applied retroactively. Violations
        of environmental laws and regulations or permit conditions can result in
        substantial penalties, injunctive orders compelling installation of additional
        controls, civil and criminal sanctions, permit revocations and/or facility
        shutdowns. If significant unforeseen liabilities arise for corrective action
        or
        other compliance, our sales and profitability could be materially and adversely
        affected.
  It
        is
        also likely that operations at the Sugar Mill will be governed by other
        government regulations. Compliance with regulations may be time-consuming
        and
        expensive and may delay or even prevent sales of ethanol in Peru or in other
        jurisdictions.
  **Risks
        Related to our Company**
  ***We
        plan to grow very rapidly, which will place strains on our management team
        and
        other company resources.***
  We
        plan
        to grow and expand our operations at a rapid pace. This growth will place
        a
        significant strain on our management systems and resources. We will not be
        able
        to implement our business strategy in a rapidly evolving market without
        effective planning and management processes. We have a short operating history
        and have not implemented sophisticated managerial, operational and financial
        systems and controls. We will be required to manage multiple relationships
        with
        various strategic partners, including suppliers, distributors, and other
        third
        parties. In order to manage the expected growth of our operations and personnel,
        we will be required to significantly improve or replace existing managerial,
        financial and operational systems, procedures and controls, and to expand,
        train
        and manage our growing employee base. We will be required to expand our finance,
        administrative and operations staff. We may be unable to complete, in a timely
        manner, the improvements to our systems, procedures and controls necessary
        to
        support our future operations, management may be unable to hire, train, retain,
        motivate and manage required personnel and our management may be unable to
        successfully identify, manage and exploit existing and potential market
        opportunities. As a result, our business and financial condition may be
        adversely affected.
  ***Our
        ability to hire and retain key personnel will be an important factor in the
        success of our business and a failure to hire and retain key personnel may
        result in our inability to manage and implement our business
        plan.***
  We
        are
        highly dependent upon our management personnel because of their experience
        in
        the alternative energy industry and specifically with bioethanol and related
        products. The loss of the services of one or more of these individuals may
        impair management’s ability to operate our Company. We do not anticipate
        purchasing key man insurance for any of our management or employees, which
        insurance would provide us with insurance proceeds in the event of their
        death.
        Without key man insurance, we may not have the financial resources to develop
        or
        maintain our business until we could replace the individual or to replace
        any
        business lost by the death of that person. The competition for qualified
        personnel in the markets in which we operate is intense. In addition, in
        order
        to manage growth effectively, we must implement management systems and recruit
        and train new employees. We may not be able to attract and retain the necessary
        qualified personnel. If we are unable to retain or to hire qualified personnel
        as required, we may not be able to adequately manage and implement our
        business.
  ***The
        past activities of NDCI prior to the Share Exchange, may lead to future
        liability for the combined companies.***
  Prior
        to
        the Share Exchange, we were engaged in businesses and were managed by parties
        unrelated to that of our current operations. Any liabilities relating to
        such
        prior business, including any liabilities arising out of our limited residential
        construction operations, may have a material adverse effect on us.
  ***Most
        of our assets, directors and officers are located outside the United States,
        with the result being that it may be difficult for investors to enforce within
        the United States any judgments obtained against us or any of our directors
        or
        officers.***
  Although
        we are organized under the laws of the State of Nevada, our principal business
        is located in Peru. Outside the United States, it may be difficult for investors
        to enforce judgments against us that are obtained in the United States in
        any
        action, including actions predicated upon civil liability provisions of federal
        securities laws. In addition, all of our directors and officers, except for
        Steven Magami and Valerie Broadbent, reside outside the United States, and
        nearly all of the assets of these persons and our assets are located outside
        of
        the United States. As a result, it may not be possible for investors to effect
        service of process within the United States upon such persons or to enforce
        against us or such persons judgments predicated upon the liability provisions
        of
        United States securities laws. There is substantial doubt as to the
        enforceability against us or any of our directors and officers located outside
        the United States in original actions or in actions of enforcement of judgments
        of United States courts or liabilities predicated on the civil liability
        provisions of United States federal securities laws. In addition, as the
        majority of our assets are located outside of the United States, it may be
        difficult to enforce United States bankruptcy proceedings against us. Under
        bankruptcy laws in the United States, courts typically have jurisdiction
        over a
        debtor’s property, wherever it is located, including property situated in other
        countries. Courts outside of the United States may not recognize the United
        States bankruptcy court’s jurisdiction. Accordingly, you may have trouble
        administering a United States bankruptcy case involving a Nevada company
        as
        debtor with most of its property located outside the United States. Any orders
        or judgments of a bankruptcy court obtained by you in the United States may
        not
        be enforceable.
  26
  ***If
        we suffer a loss to our facilities that is not adequately insured, our
        operations could be seriously harmed.***
  Our
        facilities are subject to catastrophic loss due to fire, flood, terrorism
        or
        other natural or man-made disasters. In particular, our facilities could
        be
        subject to a catastrophic loss caused by earthquake due to their location
        in
        Peru, which has recently experienced high levels of seismic activity. Although
        we carry insurance for property damage and business interruption, it may
        not be
        adequate to cover potential catastrophic losses. If any of our facilities
        were
        to experience a catastrophic loss that is not adequately insured, it could
        disrupt our operations, delay production, result in large expenses to repair
        or
        replace the facility or cause us to discontinue operations
        indefinitely.
  ***If
        we fail to maintain an effective system of our internal controls, we may
        not be
        able to accurately report our financial results or prevent
        fraud.***
  We
        are
        subject to reporting obligations under the U.S. securities laws. The SEC,
        as
        required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules
        requiring every public company to include a management report of such company’s
        internal controls over financial reporting in its annual report, which contains
        management’s assessment of the effectiveness of the company’s internal controls
        over financial reporting. This requirement applies to us beginning with our
        annual report on Form 10-KSB for the year ended December 31, 2007. In addition,
        in the future, an independent registered public accounting firm will be required
        to attest to and report on management’s assessment of the effectiveness of the
        company’s internal controls over financial reporting. Our management may
        conclude that our internal controls over our financial reporting are not
        effective. Moreover, even if our management concludes that our internal controls
        over financial reporting are effective, our independent registered public
        accounting firm may still decline to attest to our management’s assessment or
        may issue a report that is qualified if it is not satisfied with our controls
        or
        the level at which our controls are documented, designed, operated, or reviewed,
        or if it interprets the relevant requirements differently from us. Our reporting
        obligations as a public company will place a significant strain on our
        management, operational, and financial resources and systems for the foreseeable
        future. Effective internal controls, particularly those related to revenue
        recognition, are necessary for us to produce reliable financial reports and
        are
        important to help prevent fraud. As a result, our failure to achieve and
        maintain effective internal controls over financial reporting could result
        in
        the loss of investor confidence in the reliability of our financial statements,
        which in turn could harm our business and negatively impact the trading price
        of
        our stock. Furthermore, we anticipate that we will incur considerable costs
        and
        use significant management time and other resources in an effort to comply
        with
        Section 404 and other requirements of the Sarbanes-Oxley Act.
  **Risks
        Related to the Biofuel Industry**
  ***Our
        business could be significantly and adversely impacted by changes in government
        regulations over energy policy.***
  Our
        operations and properties may become subject to a wide variety of federal,
        provincial and municipal laws and regulations, including those governing
        the
        use, storage, handling, generation, treatment, emission release, discharge
        and
        disposal of certain materials, substances and wastes, the remediation of
        contaminated soil and groundwater, and the health and safety of employees.
        As
        such, the nature of our operations may expose us to the risk of claims with
        respect to such matters and there can be no assurance that material costs
        or
        liabilities will not be incurred in connection with such claims. Environmental
        legislation may also provide for standards, restrictions and prohibitions
        on the
        handling of certain types of waste and for releases, spills, emissions into
        the
        environment of substances that are being handled by our Company. Any breach
        by
        us of such legislation may result in the suspension or revocation of necessary
        licenses, permits or authorizations, civil liability and the imposition of
        fines
        and penalties which would adversely affect our financial condition.
  27
  ***Our
        business is not diversified because we are primarily dependent upon one product.
        As a consequence, we may not be able to adapt to changing market conditions or
        endure any decline in the biofuel industry.***
  Our
        business consists primarily of bioethanol and sugar production and sales.
        We do
        not have any other lines of business or other sources of revenue to rely
        upon if
        we are unable to produce and sell bioethanol and sugar, or if the market
        for
        such products declines. Although our Sugar Mill will have the ability to
        process
        sugar cane, the distillery unit will not have the ability to produce any
        other
        products. Our lack of diversification means that we may not be able to adapt
        to
        changing market conditions or to withstand any significant decline in the
        bioethanol industry.
  An
        increase in the price for sugarcane supplies and/or a decrease in market
        prices
        for biofuel could result in a significant reduction in our revenues and
        profitability.
  Our
        financial results will greatly depend on prices for our sugarcane supplies
        and
        market prices for the bioethanol that we produce. ****** Sugarcane supplies, which will comprise a major portion of our operating
        expenses, do not have a direct price relationship to the price of bioethanol
        in
        the marketplace. For an operating bioethanol plant, falling bioethanol prices,
        coupled with a rise in sugarcane prices, can result in significant reductions
        in
        cash flow and reduced profitability. These prices will change based on available
        supplies, the supply and market prices for alternative products and other
        market
        factors. For instance, increased supplies of bioethanol or alternative fuels
        may
        lead to lower prices for bioethanol, regardless of the price of sugarcane.
        In
        addition, increased production of bioethanol could result in increased demand
        for sugarcane, resulting in higher operating costs and lower profitability.
        There can be no assurance as to the price of these commodities in the future,
        and any increase in sugarcane prices or decrease in the price of bioethanol
        would adversely affect our financial condition.
  ***Our
        projected operating costs could be significantly higher than we expect due
        to
        the nature of our industry and our limited operating history, resulting in
        a
        reduction of our income and any distributions we may
        make.***
  In
        addition to general economic conditions, market fluctuations and commodity
        prices, significant increases in operating costs could adversely affect us
        due
        to numerous factors, many of which are beyond our control. These increases
        could
        arise for several reasons, such as:
  ·
              higher
                  prices for sugarcane;
  ·
              increased
                  costs for natural gas, electricity, water and other
                  utilities;
  ·
              higher
                  transportation costs for sugarcane supplies and for our bioethanol
                  products due to rising fuel costs and greater demands on truck
                  and rail
                  transportation services; and
  ·
              rising
                  labor costs, particularly if any labor shortage should
                  occur.
  Our
        operations also subject us to ongoing compliance with applicable governmental
        regulations, such as those governing pollution control, occupational safety
        and
        other matters. We may have difficulty complying with these regulations and
        our
        compliance costs could increase significantly. Increases in operating costs
        would have a negative impact on our operating income, and could result in
        substantially decreased earnings or a loss from our operations, adversely
        affecting our financial condition.
  28
  ***The
        market price of bioethanol has followed the price of petroleum and decreases
        in
        the price of petroleum-based fuels would very likely decrease the price of
        bioethanol, resulting in reductions in our revenues.***
  Historically,
        bioethanol prices have generally paralleled movements in petroleum prices.
        Petroleum prices in the international market have been difficult to forecast
        due
        to the impact of wars and other political factors, economic uncertainties,
        exchange rates and natural disasters. Just as a small reduction in the real
        or
        anticipated supply of crude oil can have a significant upward impact on the
        price of petroleum-based fuels, a perceived reduction of such threats can
        result
        in a significant reduction in petroleum fuel prices. A reduction in
        petroleum-based fuel prices could have a significantly adverse effect on
        our
        revenues and profits.
  ***The
        bioethanol and biofuel industry is becoming more competitive and as a result,
        we
        may not be able to achieve profitability.***
  Competition
        in the bioethanol and biofuel industry is growing more intense as more
        production facilities are built and the industry expands. Our business will
        face
        competitive challenges from larger facilities that can produce a wider range
        and
        larger quantity of products than we can, and from other plants similar to
        our
        proposed bioethanol production facilities. Many of these bioethanol and other
        biofuel producers will compete with us for sugarcane and/or customers in
        our
        regional market. We expect that additional bioethanol and other biofuel
        producers will enter the market if the regulatory environment remains favorable
        and the demand for bioethanol and other biofuels continues to
        increase.
  ***As
        more bioethanol and other biofuel facilities are built, bioethanol and other
        biofuel production will increase and, if demand does not sufficiently increase,
        this could result in lower prices for bioethanol and other biofuels, which
        will
        decrease the amount of revenue we generate.***
  A
        significant number of bioethanol and other biofuel plants are currently being
        planned and built in Peru and around the world. As a consequence, bioethanol
        and
        other biofuel production is expected to increase rapidly in the next two
        to
        three years. The demand for bioethanol and other biofuels is dependent upon
        numerous factors such as governmental regulations and incentives and the
        development of other technologies or products that may compete with bioethanol.
        If the demand for bioethanol and other biofuels does not sufficiently increase,
        then increased bioethanol and other biofuels production may lead to lower
        bioethanol prices. Decreases in the market price of bioethanol will result
        in
        lower revenues, decreased profitability, and adversely affect our financial
        condition.
  ***Technological
        advances and changes in production methods in the bioethanol and biofuel
        industry could render our production facilities obsolete and adversely affect
        our ability to compete and the value of your
        investment.***
  Technological
        advances could significantly decrease the cost of producing bioethanol and
        other
        biofuels. If we are unable to adopt or incorporate technological advances
        into
        our operations, our proposed production facilities could become uncompetitive
        or
        obsolete. We expect that technological advances in bioethanol and biofuel
        production methods will continue to occur. If improved technologies become
        available to our competitors, they may be able to produce bioethanol at a
        lower
        cost than us. In such an event, we may be required to acquire new technology
        and
        retrofit our production facilities so that we remain competitive. There is
        no
        assurance that third-party licenses for any new technologies would be available
        on commercially reasonable terms or that any new technologies could be
        incorporated into our proposed production facilities. The costs of upgrading
        our
        technology and production facilities could be substantial. If we are unable
        to
        obtain, implement or finance new technologies, our production facilities
        could
        be uncompetitive and our operating income would be reduced.
  ***The
        development of alternative fuels and energy sources may reduce the demand
        for
        bioethanol, resulting in a reduction in our
        profitability.***
  Alternative
        fuels are continually under development. Petroleum based fuels, other biofuels
        and other energy sources that can compete with bioethanol in the marketplace
        are
        already in use and more acceptable alternatives may be developed in the future,
        which may decrease the demand for bioethanol or the type of bioethanol that
        we
        expect to produce. Technological advances in engine and exhaust system design
        and performance could also reduce the use of biofuels, which would reduce
        the
        demand for bioethanol. Further advances in power generation technologies,
        based
        on cleaner hydrocarbon based fuels, fuel cells and hydrogen are actively
        being
        researched and developed. If these technological advances and alternatives
        prove
        to be economically feasible, environmentally superior and accepted in the
        marketplace, the market for bioethanol could be significantly diminished
        or
        replaced, which would adversely affect our financial condition.
  29
  ***Competition
        for qualified personnel in the bioethanol industry is intense and we may
        not be
        able to hire and retain qualified managers, engineers and operators to operate
        our plant efficiently.***
  When
        the
        expansion and modification of the Estrella del Norte facilities nears
        completion, we will need a significant number of employees to operate the
        facilities. Our success depends in part on our ability to attract and retain
        competent personnel. We must hire or otherwise engage qualified managers,
        engineers and accounting, human resources, operations and other personnel.
        Competition for employees in the bioethanol industry is intense. If we are
        unable to hire, train and retain qualified and productive personnel, we may
        not
        be able to operate the plant efficiently and the amount of bioethanol we
        produce
        and market may decrease.
  ***Compliance
        with new and existing environmental laws and regulations could significantly
        increase our construction and start-up costs, and force us to delay or halt
        construction or operation.***
  To
        expand, modify and operate the Estrella del Norte facilities, we may need
        to
        obtain and comply with a number of permitting requirements. We may have
        difficulties obtaining the permits we need. As a condition of granting necessary
        permits, regulators could make additional demands that increase our costs
        of
        construction and operations, in which case we could be forced to obtain
        additional capital. We cannot assure you that we will be able to obtain and
        comply with all necessary permits to construct and operate our proposed
        production facilities as planned.
  **Risks
        Related to our Capital Stock**
  ***There
        has been a limited public trading market for our securities, and the market
        for
        our securities may continue to be limited and be sporadic and highly
        volatile.***
  There
        is
        currently a limited public market for our common stock. Our common stock
        has
        only been listed for trading on the National Association of Securities Dealers,
        Inc. Over-the-Counter Bulletin Board, or the OTCBB, since December 8, 2005,
        and
        is now listed under the symbol “SRNW.” We cannot assure you that an active
        market for our shares will be established or maintained in the future. The
        OTCBB
        is not a national securities exchange, and many companies have experienced
        limited liquidity when traded through this quotation system. Holders of our
        common stock may, therefore, have difficulty selling their shares, should
        they
        decide to do so. In addition, there can be no assurances that such markets
        will
        continue or that any shares, which may be purchased, may be sold without
        incurring a loss. The market price of our shares, from time to time, may
        not
        necessarily bear any relationship to our book value, assets, past operating
        results, financial condition or any other established criteria of value,
        and may
        not be indicative of the market price for the shares in the future.
  In
        addition, the market price of our common stock may be volatile, which could
        cause the value of our common stock to decline. Securities markets experience
        significant price and volume fluctuations. This market volatility, as well
        as
        general economic conditions, could cause the market price of our common stock
        to
        fluctuate substantially. Many factors that are beyond our control may
        significantly affect the market price of our shares. These factors
        include:
  ·
              price
                  and volume fluctuations in the stock
                  markets,
  ·
              changes
                  in our earnings or variations in operating
                  results,
  ·
              any
                  shortfall in revenue or increase in losses from levels expected
                  by
                  securities analysts,
  ·
              changes
                  in regulatory policies or law,
  30
  ·
              operating
                  performance of companies comparable to us,
                  and
  ·
              general
                  economic trends and other external
                  factors.
  Even
        if
        an active market for our common stock is established, stockholders may have
        to
        sell their shares at prices substantially lower than the price they paid
        for the
        shares or might otherwise receive than if an active public market
        existed.
  ***If
        we issue additional shares in the future, it will result in dilution to our
        existing stockholders.***
  Our
        Board
        of Directors may choose to issue additional shares of our capital stock in
        the
        future to acquire one or more businesses or to provide additional financing.
        In
        addition, the holders of our convertible promissory notes, Series A preferred
        stock and warrants have the right to convert their securities into shares
        of our
        common stock. The issuance of additional securities will result in a reduction
        of the book value and market price of the outstanding shares of our common
        stock. If we issue any such additional shares, such issuance will cause a
        reduction in the proportionate ownership and voting power of all current
        stockholders. Further, such issuance may result in a change of control of
        our
        corporation.
  ***Our
        Series A Preferred contains rights, preferences and privileges that are senior
        to our common stock, which could negatively impact our common
        stockholders.***
  We
        have
        an aggregate of 7,142,857 shares of Series A preferred stock issued and
        outstanding and may issue additional shares of Series A preferred stock in
        the
        future. Our Series A preferred stock contains certain rights that are senior
        to
        the rights of our common stock, including, but not limited to, liquidation,
        anti-dilution, conversion, voting and registration rights. Furthermore, the
        holders of our Series A preferred stock could delay, defer or prevent us
        from
        effecting a change in control in the future, which in turn, could have a
        depressive effect on the prevailing market price of our common stock.
  ***Our
        common stock is subject to “penny stock” regulations that may affect the
        liquidity of our common stock.***
  Our
        common stock is subject to the rules adopted by the SEC that regulate
        broker-dealer practices in connection with transactions in “penny stocks.” Penny
        stocks are generally equity securities with a price of less than $5.00 (other
        than securities registered on certain national securities exchanges or quoted
        on
        the NASDAQ Stock Market, for which current price and volume information with
        respect to transactions in such securities is provided by the exchange or
        system).
  The
        penny
        stock rules require that a broker-dealer, prior to a transaction in a penny
        stock not otherwise exempt from those rules, deliver a standardized risk
        disclosure document prepared by the SEC, which contains the following:
  ·
              a
                  description of the nature and level of risk in the market for penny
                  stocks
                  in both public offerings and secondary
                  trading,
  ·
              a
                  description of the broker’s or dealer’s duties to the customer and of the
                  rights and remedies available to the customer with respect to violation
                  of
                  such duties or other requirements of securities
                  laws,
  ·
              a
                  brief, clear, narrative description of a dealer market, including
“bid”
                  and “ask” prices for penny stocks and significance of the spread between
                  the “bid” and “ask” price,
  ·
              a
                  toll-free telephone number for inquiries on disciplinary actions,
                  definitions of significant terms in the disclosure document or
                  in the
                  conduct of trading in penny stocks,
                  and
  ·
              such
                  other information and in such form (including language, type, size
                  and
                  format), as the SEC shall require by rule or
                  regulation.
  31
  Prior
        to
        effecting any transaction in penny stock, the broker-dealer also must provide
        the customer the following:
  ·
              the
                  bid and offer quotations for the penny
                  stock,
  ·
              the
                  compensation of the broker-dealer and its salesperson in the
                  transaction,
  ·
              the
                  number of shares to which such bid and ask prices apply, or other
                  comparable information relating to the depth and liquidity of the
                  market
                  for such stock,
  ·
              the
                  liquidity of the market for such stock,
                  and
  ·
              monthly
                  account statements showing the market value of each penny stock
                  held in
                  the customer’s account.
  In
        addition, the penny stock rules require that prior to a transaction in a
        penny
        stock not otherwise exempt from those rules, the broker-dealer must make
        a
        special written determination that the penny stock is a suitable investment
        for
        the purchaser and receive the purchaser’s written acknowledgment of the receipt
        of a risk disclosure statement, a written agreement to transactions involving
        penny stocks, and a signed and dated copy of a written suitability statement.
        These disclosure requirements may have the effect of reducing the trading
        activity in the secondary market for a stock such as our common stock if
        it is
        subject to the penny stock rules.
  **Additional
        Information**
  We
        are a
        public company and file annual, quarterly and special reports and other
        information with the SEC. We are not required to, and do not intend to, deliver
        an annual report to security holders. You may read and copy any document
        we file
        at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C.
        20549. You can request copies of these documents by writing to the SEC and
        paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330
        for
        more information about the operation of the public reference room. Our filings
        are also available, at no charge, to the public at **http://www.sec.gov** .
  **Item
                  2.**
              Description
                  of Property
  Our
        principal executive offices are located at 9440 Santa Monica Blvd., Suite
        401,
        Beverly Hills, California 90210. **** ARC
        Investment Partners, an affiliate of Steven Magami, our President, currently
        provides this space to us free of charge. This space may not be available
        to us
        free of charge in the future. We also lease offices in Lima, Peru for
        approximately $296,000 per year. The lease is a four year lease, which commenced
        in January 2008.
  On
        December 28, 2007, we engaged an unaffiliated third party, on an exclusive
        basis, to assist us in locating and acquiring land in the Tumbes, Piura,
        Lambayeque, La Libertad and Arequipa regions of Peru for the operation of
        the
        Sugar Mill.  Our engagement with them terminates on December 28,
        2009.  We agreed to compensate this unaffiliated third party for such
        services at a fixed amount per hectare of land obtained on our behalf.
        Since the date of the agreement, they have obtained control over 40 hectares
        of
        land from various owners or possessors in the Lambayeque region and have
        agreed
        to transfer control over the land, or Industrial Lot, to us as soon as the
        lot
        has been consolidated. We are still in the process of locating additional
        land
        in Peru.
  **Item
                  3.**
              Legal
                  Proceedings
  We
        are
        not a party to any material legal proceedings nor are we aware of any
        circumstance that may reasonably lead any third party to initiate material
        legal
        proceedings against us.
  **Item
                  4.**
              Submission
                  of Matters to a Vote of Security
                  Holders
  During
        the fourth quarter of the year ended December 31, 2007 there were two written
        consents entered into by the security holders of our Company.
  32
  On
        November 14, 2007 the majority shareholder of NDCI entered into a written
        consent authorizing and approving: (1) the cancellation of 89,900,000
        shares of the Company's common stock by Kenneth Laurent; (2) the Agreement
        Concerning the Exchange of Securities By and Among NDCI,
        Stratos Peru and the security holders of Stratos del Peru S.A.C.(or
        the Exchange Agreement); (3) the Amended and Restated Articles of
        Incorporation of NDCI; (4) the Amended and Restated Bylaws of NDCI; (5) setting
        the number of directors to be five; (6) the appointment of the following
        directors effective as of the date of the closing of the Exchange
        Agreement: Luis Francisco de las Casas, Steven Magami (Chairman), Gustavo
        Goyzueta, Carlos Antonio Salas, and Luis Goyzueta; and (7) the appointment
        of
        the following officers effective as of the date of the closing of the Exchange
        Agreement: Carlos Antonio Salas (Chief Executive Officer), Luis Goyzueta
        (President), Jorge Eduardo Aza (Chief Operating Officer), Julio Cesar Alonso
        (Chief Financial Officer and Treasurer) and Gustavo Goyzueta
        (Secretary).
  On
        November 15, 2007 the common and Series A preferred shareholders of NDCI
        entered
        into a written consent to amend the Amended and Restated Articles of
        Incorporation to change our name from New Design Cabinets, Inc. to Stratos
        Renewables Corporation.
  **PART
        II**
  **Item
                  5.**
              Market
                  for Common Equity and Related Stockholder Matters and Small Business
                  Issuer Purchases of Equity
                  Securities
  **MARKET
        FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**
  **Trading
        History**
  Our
        common stock is quoted on the Over-The-Counter
        Bulletin Board under the symbol “ SRNW .” Trading
        in our common stock has not been extensive and such trades cannot be
        characterized as constituting an active trading market. The following is
        a
        summary of the high and low closing prices of our common stock on the OTC
        Bulletin Board during the periods presented, as reported on the website of
        the
        NASDAQ Stock Market. Such prices represent inter-dealer prices, without retail
        mark-up, mark down or commissions, and may not necessarily represent actual
        transactions:
  **Closing
                  Sale Price****High**
              
              **Low****Year
                  Ending****December
                  31, 2008**First
                  Quarter
              
              $
              1.90
              
              $
              1.50**Year
                  Ended****December
                  31, 2007**First
                  Quarter
              
              $
              0.0033
              
              $
              0.0033Second
                  Quarter
              
              
              0.0033
              
              
              0.0033Third
                  Quarter
              
              
              0.0033
              
              
              0.0033Fourth
                  Quarter
              
              
              1.75
              
              
              0.0033**Year
                  Ended****December
                  31, 200****6**First
                  Quarter
              
              $
              0.0033
              
              $
              0.0033Second
                  Quarter
              
              
              0.0033
              
              
              0.0033Third
                  Quarter
              
              
              0.0033
              
              
              0.0033Fourth
                  Quarter
              
              
              0.0033
              
              
              0.0033
  On
        April
        7, 2008, the closing sales price for our common stock was $1.60, as reported
        on
        the website of the OTCBB. As of April 7, 2008, there were approximately 90
        stockholders of record of the common stock (not including the number of persons
        or entities holding stock in nominee or street name through various brokerage
        firms) and 59,972,936 outstanding shares of common stock.
  33
  **Dividends**
  We
        have
        never declared or paid any cash dividends on our common stock. For the
        foreseeable future, we intend to retain any earnings to finance the development
        and expansion of our business, and we do not anticipate paying any cash
        dividends on our common stock. Any future determination to pay dividends
        will be
        at the discretion of the Board of Directors and will be dependent upon then
        existing conditions, including our financial condition and results of
        operations, capital requirements, contractual restrictions, business prospects
        and other factors that the Board of Directors considers relevant. Each holder
        of
        our Series A preferred stock is entitled to a 10% per annum cumulative
        dividend.
  There
        are
        no restrictions in our articles of incorporation or bylaws that prevent us
        from
        declaring dividends. The Nevada Revised Statutes, however, prohibit us from
        declaring dividends where, after giving effect to the distribution of the
        dividend:
  ·
              we
                  would not be able to pay our debts as they become due in the usual
                  course
                  of business; or
  ·
              our
                  total assets would be less than the sum of our total liabilities
                  plus the
                  amount that would be needed to satisfy the rights of stockholders
                  who have
                  preferential rights superior to those receiving the distribution,
                  unless
                  otherwise permitted under our articles of
                  incorporation.
   **Securities
        Authorized for Issuance Under Equity Compensation Plans**
  Neither
        NDCI nor Stratos had any equity compensation plans in place as of
        December 31, 2007.
  **Transfer
        Agent and Registrar**
  The
        transfer agent and registrar for our common stock is Holladay Stock
        Transfer ,
        2939 N.
        67th Place, Suite C, Scottsdale, Arizona 85251. The phone number of the transfer
        agent is (480) 481-3940.
  **RECENT
        SALES OF UNREGISTERED SECURITIES**
  The
        following represents our sales of unregistered securities in the last three
        years:
  **2008**
  On
        March
        7, 2008 we closed on $1,587,447 of our $10 million March 2008 Financing,
        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 the March 2008 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.
  **2007**
  On
        November 14, 2007, pursuant to the acquisition of Stratos Peru, we issued
        45,000,000 shares of our common stock to the security holders of Stratos
        Peru in
        exchange for 999, or 99.9%, of the issued and outstanding shares of Stratos
        Peru. Such securities 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
        security holders, which included, in pertinent part, that such security holders
        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 security holders understood that the securities may not be sold
        or
        otherwise disposed of without registration under the Securities Act or an
        applicable exemption therefrom.
  34
  On
        November 14, 2007, pursuant to the Private Placement, 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. Each share of common stock was sold to
        investors at $0.70 per share, for an aggregate of gross proceeds of
        approximately $1.9 million. The warrants expire five years from the date
        of
        issuance and are exercisable at $0.75 per share, subject to adjustment in
        certain circumstances. The common stock and warrants issued under connection
        with the Private Placement were not registered under the Securities Act 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 that 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
        November 14, 2007, we entered into a Series A preferred stock and warrant
        Purchase Agreement with MA Green, to sell an aggregate of 7,142,857 shares
        of
        Series A preferred stock, $0.001 par value and a warrant to purchase an
        aggregate of 1,785,714 shares of common stock, or the Series A Private
        Placement. Each share of Series A preferred stock was sold at $0.70 per share
        for an aggregate of approximately $5 million in gross proceeds. The warrant
        expires five years from the date of issuance and is exercisable at $0.75
        per
        share, subject to adjustment under certain circumstances. Our Chairman of
        the
        Board of Directors, Steven Magami, is the manager of MA Green. **** The
        Series A preferred stock and warrants issued in connection with the Series
        A
        Private Placement were not registered under the Securities Act and were issued
        in reliance upon the exemption set forth in Section 4(2) and Regulation D
        of the
        Securities Act. We made this determination based on the representations of
        the
        investor, which included, in pertinent part, that such investor was an
“accredited investor” within the meaning of Rule 501 of Regulation D promulgated
        under the Securities Act, and that the investor understood that the securities
        may not be sold or otherwise disposed of without registration under the
        Securities Act or an applicable exemption therefrom.
  On
        November 14, 2007, we entered into Note and Warrant Purchase Agreements with
        investors to issue an aggregate of approximately $3 million in convertible
        promissory notes, or the Notes, and warrants to purchase an aggregate of
        870,858
        shares of common stock to investors, or the Bridge Financing. The Notes issued
        in connection with the Bridge Financing bear interest at 10% per annum. The
        Note
        holders received one warrant to purchase one share of common stock, at an
        exercise price of $0.75 per share, subject to adjustment under certain
        circumstances for every $3.50 invested in the Company in connection with
        the
        Bridge Financing, or the Bridge Warrants. The Bridge Warrants are exercisable
        for three years from the closing date of the Bridge Financing.
  Upon
        the
        earlier to occur of: (i) April 30, 2008, the Maturity Date of the Notes,
        (ii)
        the consummation of a private investment in public equity financing, or PIPE,
        with institutional investors for at least $25 million, net of offering expenses,
        or (iii) when, upon the occurrence of an event of default as described in
        the
        Notes, such amounts are declared due and payable, the Note holders are entitled
        to repayment equal to 30% in excess of the principal and accrued interest
        then
        due and outstanding under the terms of the Notes, or the Repayment Amount.
        Upon
        the earlier to occur of the Maturity Date or the consummation of the PIPE,
        the
        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.
  The
        Notes
        issued in connection with the Bridge 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. We made this
        determination 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 that 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.
  35
  **2005**
  In
        January 2005, we completed an offering of our common stock to a group of
        private
        investors.  We issued 260,000 shares of common stock at $0.10 per share to
        23 stockholders for an aggregate offering price of $26,000. This transaction
        (a)
        involved no general solicitation, (b) involved less than thirty-five
        non-accredited purchasers, and (c) relied on a detailed disclosure document
        to
        communicate to the investors all material facts about NDCI, including an
        audited
        balance sheet and reviewed statements of income, changes in stockholders’ equity
        and cash flows.  Thus, we believe that the offering was exempt from
        registration under Regulation D, Rule 505 of the Securities Act.
  **Item
                  6.**
              Management’s
                  Discussion and Analysis or Plan of
                  Operation
  **MANAGEMENT’S
        DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS**
  **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 appearing elsewhere in this annual
        report.  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
        are
        engaged 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.
  On
        November 14, 2007, we completed a share exchange agreement with Stratos.
        As a
        result of the Share Exchange, we abandoned our previous cabinetry and furniture
        business and commenced the business of producing, processing and distributing
        sugarcane ethanol. Because we are the successor business to Stratos and because
        the operations and assets of Stratos represents our entire business and
        operations from the closing date of the Share Exchange, our management's
        discussion and analysis and plan of operations are based on Stratos’ intended
        operations.
  Neither
        Stratos nor Stratos Peru has generated
        any revenue since the commencement of our operations on February 27,
        2007.
  **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.
  36
  *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 December 31, 2007 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.
  37
  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 Mr. Luis Rivas, 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. As of March 29, 2008,
        approximately 25% of the equipment has been dismantled. We anticipate that
        the
        dismantling will be complete by the end of May 2008.
  After
        modifying and expanding the Estrella del Norte facilities, 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 4.9 million
        gallons of ethanol a year.
  *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.  Biotecnologia is to install a laboratory
          in Piura with appropriate equipment and experienced personnel.  They will
          study various breeds of genetic material, and advise Stratos Peru which
          will be
          the most adequate to generate elite sugar cane plantlets to be used in
          our
          future seedling nursery.  The Pilot Laboratory has already begun generating
          sugarcane plantlets, and we anticipate that we will receive a report on
          their
          advancements by the end of the April 2008.
  *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 acquire and secure options to acquire
        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.
  38
  *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 four 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 up to an additional $590 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.
  *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 $280 million, consisting
        of $120 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 $310 million, consisting of $120 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.
  39
  *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 up to an additional $590 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, along with the land we have acquired
        and propose to acquire 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.
  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.
  40
  Private
        Placement
  We completed a
        private placement for our securities on November 14, 2007, 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.
  Series
        A Preferred Stock Private Placement
  We
        completed a Series A private placement on November 14, 2007, 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.
  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.
  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.
  The
        following table summarizes the above transactions
  Description
              
              Gross
                  ProceedsPrivate
                  Placement - Common Stock
              
              $
              1,867,090Private
                  Placement - Preferred Stock
              
              
              5,000,000Bridge
                  Financing
              
              
              3,048,000$
              9,915,090
 
 41
 
 Recent
        Sale of Common Stock
 
 On
        March
        7, 2008 we closed on $1,587,447 of our $10 million private placement. 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.
  *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.
  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, we do not expect the
        adoption of SFAS 160 to have a significant impact on our results of operations
        or financial position.
  42
  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 for fiscal years
        beginning after November 15, 2007. We are currently assessing the impact
        of SFAS
        No. 159 on our financial position and results of operations.
  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 our reported
        financial position or results of operations.
  In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” The
        objective of SFAS No. 157 is to increase consistency and comparability in
        fair
        value measurements and to expand disclosures about fair value measurements.
        SFAS
        No. 157 defines fair value, establishes a framework for measuring fair value
        in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. SFAS No. 157 applies under other accounting pronouncements
        that require or permit fair value measurements and does not require any new
        fair
        value measurements. The provisions of SFAS No. 157 are effective for fair
        value
        measurements made in fiscal years beginning after November 15, 2007. The
        adoption of this statement is not expected to have a material effect on our
        future 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. 
We are currently evaluating the effect of this pronouncement on financial
        statements.
  **Item
                  7.**
              Financial
                  Statements
  See
        Index
        to Consolidated Financial Statements on Page F-1.
  **Item
                  8.**
              Changes
                  In and Disagreements With Accountants on Accounting and Financial
                  Disclosures
  As
          of
          December 4, 2007, Stratos replaced Bagell, Josephs, Levine & Company,
          L.L.C., or BJLC as its independent registered public accounting firm, and
          engaged Moore Stephens Wurth Frazer and Torbet, LLP, or MSWFT as its new
          independent registered public accounting firm.
 
 The
          reports of BJLC on the Company’s financial statements for the fiscal years ended
          December 31, 2006 and 2005 did not contain an adverse opinion or disclaimer
          of
          opinion, except that the reports stated that they were prepared assuming
          that
          the Company will continue as a going concern, as to which the Company’s
          recurring operating losses raised substantial doubt. During the Company’s fiscal
          years ended December 31, 2006 and 2005 and the subsequent interim period
          preceding the termination, there were no disagreements with BJLC on any
          matter
          of accounting principles or practices, financial statement disclosure,
          or
          auditing scope or procedure, which disagreements, if not resolved to the
          satisfaction of BJLC, would have caused BJLC to make reference to the subject
          matter of the disagreements in connection with its report on the financial
          statements for such years or subsequent interim periods.
 
 The
          Company’s Board of Directors was advised by BJLC that during their performance
          of audit procedures for the Company’s fiscal years ended December 31, 2006 and
          2005, BJLC identified a material weakness as defined in Public Company
          Accounting Oversight Board Standard No. 2 in the Company’s internal control over
          financial reporting. This deficiency consisted primarily of inadequate
          staffing
          and supervision that could lead to the untimely identification and resolution
          of
          accounting and disclosure matters and failure to perform timely and effective
          reviews.
 
 During
          the two most recent fiscal years and the interim period preceding the engagement
          of MSWFT, the Company has not consulted with MSWFT regarding either: (i)
          the
          application of accounting principles to a specified transaction, either
          completed or proposed, or the type of audit opinion that might be rendered
          on
          the Company’s financial statements; or (ii) any matter that was either the
          subject of a disagreement or event identified in paragraph (a)(1)(iv) of
          Item
          304 of Regulation S-B.
  **Item
                8A(T).**
              Controls
                  and Procedures
  **Controls
        and Procedures**
  As
        of
        December 31, 2007, we carried out an evaluation, under the supervision and
        with
        the participation of our management, including our chief executive officer
        and
        chief financial officer, of the effectiveness of the design and operation
        of our
“disclosure controls and procedures,” as such term is defined under Exchange Act
        Rules 13a-15(e) and 15d-15(e).
  43
  Based
        on
        this evaluation, our chief executive officer and chief financial officer
        concluded that, as of December 31, 2007, such disclosure controls and procedures
        were effective to ensure that information required to be disclosed by us
        in the
        reports we file or submit under the Exchange Act is recorded, processed,
        summarized and reported within the time periods specified in the rules and
        forms
        of the Securities and Exchange Commission, and accumulated and communicated
        to
        our management, including our chief executive officer and chief financial
        officer, as appropriate to allow timely decisions regarding required
        disclosure.
  In
        designing and evaluating the disclosure controls and procedures, our management
        recognized that any controls and procedures, no matter how well designed
        and
        operated, can provide only reasonable assurance of achieving the desired
        control
        objectives and in reaching a reasonable level of assurance our management
        necessarily was required to apply its judgment in evaluating the cost-benefit
        relationship of possible controls and procedures.
  **Management’s
        Report on Internal Control over Financial Reporting**
  Our
        management is responsible for establishing and maintaining an adequate system
        of
        internal control over financial reporting.  Our system of internal control
        over financial reporting is designed to provide reasonable assurance regarding
        the reliability of financial reporting and the preparation of financial
        statements for external purposes in accordance with accounting principles
        generally accepted in the United States of America.
  Our
        internal control over financial reporting includes those policies and procedures
        that:
  ·
              pertain
                  to the maintenance of records that, in reasonable detail, accurately
                  and
                  fairly reflect our transactions and dispositions of our
                  assets;
  ·
              provide
                  reasonable assurance that our transactions are recorded as necessary
                  to
                  permit preparation of our financial statements in accordance with
                  accounting principles generally accepted in the United States of
                  America,
                  and that our receipts and expenditures are being made only in accordance
                  with authorizations of our management and our directors;
                  and
  ·
              provide
                  reasonable assurance regarding prevention or timely detection of
                  unauthorized acquisition, use, or disposition of our assets that
                  could
                  have a material effect on the financial
                  statements.
  Because
        of its inherent limitations, a system of internal control over financial
        reporting can provide only reasonable assurance and may not prevent or detect
        misstatements. Further, because of changes in conditions, effectiveness of
        internal controls over financial reporting may vary over time. Our system
        contains self monitoring mechanisms, and actions are taken to correct
        deficiencies as they are identified.
  Due
        to
        our current size and our being in the development or start-up stage we are
        still
        in the process of retaining personnel qualified in applying U.S. generally
        accepted accounting principles or US GAAP and U.S. standards of financial
        reporting.  We are in the process of preparing to be in compliance with the
        internal control requirements under Section 404 of the Sarbanes Oxley Act,
        for
        our fiscal year ending December 31, 2008, and only recently became aware
        of the
        need to comply with such rules for our fiscal year ended December 31,
        3007.  During most of 2007 our internal accounting staff was primarily
        engaged in ensuring compliance with Peruvian accounting and reporting
        requirements for our operating subsidiaries and was not required to meet
        or
        apply US GAAP requirements.  Our current accounting department
        responsible for financial reporting of the Company on a consolidated basis
        is
        relatively new to U.S. GAAP and the related internal control procedures
        required of U.S. public companies.  As a result, we have engaged an
        outside U.S. CPA firm to help us prepare our US GAAP financial statements.
  We
        are also in the process of forming our internal audit function to help monitor
        our control procedures.  We intend to put an Audit Committee of the Board
        of Directors in place which will also contribute to the oversight of our
        accounting and audit functions.
  44
  Our
        management conducted an evaluation of the effectiveness of the system of
        internal control over financial reporting based on the framework in *Internal
        Control—Integrated Framework* issued
        by the Committee of Sponsoring Organizations of the Treadway Commission. 
From this evaluation, our management concluded that our system of internal
        control over financial reporting was effective as of December 31,
        2007.
  This
        annual report does not include an attestation report of our registered
        public accounting firm regarding internal control over financial
        reporting.  Management’s report was not subject to attestation by our 
registered public accounting firm pursuant to temporary rules of the SEC
        to
        provide only management’s report in this annual report.
  **Changes
        in Internal Control Over Financial Reporting**
  There
        were no changes in our internal controls over financial reporting during
        the
        quarter ended December 31, 2007 that materially affected, or are reasonably
        likely to materially affect, our internal controls over financial
        reporting.
  **Item
        8B(T).**  Other
        Information
  Not
        applicable.
  **PART
        III**
  **Item
                  9.**
              Directors,
                  Executive Officers, Promoters, Control Persons and Corporate Governance;
                  Compliance with Section 16(a) of the Exchange
                  Act
  **MANAGEMENT**
  **Directors
        and Officers**
  Our
        directors are elected annually and serve until the next annual meeting of
        the
        stockholders or until their successors are elected and qualify, subject to
        their
        prior death, resignation or removal. Officers serve at the discretion of
        our
        Board of Directors. There are no family relationships among any of our directors
        and executive officers. Our board members are encouraged to attend meetings
        of
        the Board of Directors and the annual meeting of stockholders. The Board
        of
        Directors held no meetings and adopted ten unanimous written consents in
        lieu of
        meetings in 2007.
  The
        following table sets forth certain biographical information with respect
        to our
        directors and executive officers:
  **Name**
              
              **Age**
              
              **Position**Carlos
                  Antonio Salas
              
              40
              
              Chief
                  Executive Officer and DirectorSteven
                  Magami
              
              31
              
              President
                  and Chairman of the Board of DirectorsJorge
                  Eduardo Aza
              
              34
              
              Chief
                  Operating OfficerJulio
                  Cesar Alonso
              
              28
              
              Chief
                  Financial Officer and TreasurerLuis
                  Francisco de las Casas
              
              46
              
              DirectorValerie
                  Broadbent
              
              69
              
              Secretary
 
 *Carlos
        Antonio Salas,*  *Chief
        Executive Officer and Director,* has
        served as a senior executive in the fields of agribusiness and agricultural
        development, and is the former Director General of the National Institute
        for
        Agricultural Research (equivalent to the United States’ Undersecretary of
        Agriculture), appointed by the President of Peru and the Ministry of
        Agriculture. Mr. Salas has been instrumental in directing technical, commercial,
        and financial evaluations of more than 100 medium and large size companies
        in
        the food and agribusiness sector worldwide. Mr. Salas has served on more
        than
        ten national and international committees and boards related to agricultural
        research and development. He has gathered expertise in fifteen countries,
        throughout the Americas, Africa and the EU. In the last two years, Mr. Salas
        has
        led mining and agriculture and reengineering processes in the Peruvian
        agribusiness sector. Mr. Salas holds an MSC and a PhD in Crop Science from
        North
        Carolina State University and a joint MBA in Food and Agribusiness Management
        from the Krannet School at Purdue University and Wageningen Universiteit
        in the
        Netherlands.
  45






*Steven
          S. Magami, President and Chairman of the Board of Directors,* has led
          a career as a private equity investor, investment banker and C-level executive,
          with a focus on the clean energy sector for several years. Mr. Magami is a
          partner of ARC Investment Partners, a private equity firm focused on renewable
          energy. Mr. Magami has extensive experience in the biofuels industries
          were he
          has financed and built companies from business plans through the evolution
          of
          their business strategy and concluding institutional equity financing.
          He has
          served as President and a Director of Pure Biofuels Corporation, a leading
          Latin American biodiesel producer, since 2007. Previously, Mr. Magami was
          a
          principal investor with Lovell Minnick Partners managing and investing
          capital for institutions including Goldman Sachs and GE. Mr. Magami was
          instrumental in building a successful portfolio of companies through LBOs,
          growth capital and venture investments. Mr. Magami started his career as
          an
          investment banker advising large buyout firms on industry roll-up strategies.
          He
          has served on the boards of numerous public and private companies guiding
          business strategy, leading corporate development initiatives and driving
          acquisition strategies.
 *Luis
        de las Casas, Director,* was
        formerly Peru’s Vice-Minister of Construction and has broad experience in public
        policy, strategic expansion projects and territorial planning. He has been
        involved in several land acquisition and expansion programs and has actively
        designed, directed, and managed social and rural development projects related
        to
        peasant communities and farmer coops. He participates currently in
        multidisciplinary Consultative Boards and is the President of FINCA, the
        Foundation for the Innovation and Competitiveness of Agriculture. He has
        an MS
        in regional and rural planning.
  *Jorge
        Eduardo Aza, Chief Operating Officer* ,
        has
        over a decade of experience in the supply chain management industry. Mr.
        Aza has
        developed logistic projects in the mining industry, has experience in freight
        forwarding operations, and has held financial positions with different global
        logistics companies such as Eagle Global Logistic and UTI Worldwide Inc.
        Mr. Aza
        holds a BSc degree in Business Administration and Finance from UPC, a member
        of
        Laureate Universities in Peru.
  *Julio
        Cesar Alonso, Chief Financial Officer and Treasurer,* previously served as a senior financial auditor of PricewaterhouseCoopers,
        leading teams for planning and execution of financial audits for local companies
        such as Nextel del Perú, Grupo Backus, Grupo Graña y Montero, Grupo Quimica
        Suiza, IBM del Peru, Kraft Foods del Perú, Eckerd Peru and Talma Menzies, and
        international companies such as Rentokil US Pest Control and Teleflex Corp.
        Mr.
        Alonso has participated as a team member of the Transaction Services Group
        in
        charge of all due diligence projects for PricewaterhouseCoopers. He also
        has
        experience working for cargo transportation and integrated logistics companies.
        Mr. Alsonso holds a BSc in Business Administration and Finance from the UPC,
        a
        member of Laureate Universities in Peru.
  *Valerie
        Broadbent, Secretary,* is
        the
        managing member of Berkeley Consulting Group, LLC and Chief Administrative
        Officer of MBA Holdings, LLC, which consults and advises companies on
        organization, corporate administration, business strategies, restructuring,
        overseeing capital formation and mergers and acquisitions. Ms. Broadbent
        has
        more than 30 years of experience working in corporate administration for
        both
        public companies and in the private sector. She has served as Corporate
        Secretary for three public companies and numerous private companies.
  To
        the
        best of our knowledge, none of our directors, executive officers, promoters
        or
        control persons, or any nominated directors, has been involved in any of
        the
        following events during the past five years:
  ·
              any
                  bankruptcy petition filed by or against any business of which such
                  person
                  was a general partner or executive officer either at the time of
                  the
                  bankruptcy or within two years prior to that
                  time;
  ·
              any
                  conviction in a criminal proceeding or being subject to a pending
                  criminal
                  proceeding, excluding traffic violations and other minor
                  offences;
  46
  ·
              being
                  subject to any order, judgment or decree, not subsequently reversed,
                  suspended or vacated, of any court of competent jurisdiction, permanently
                  or temporarily enjoining, barring, suspending or otherwise limiting
                  his
                  involvement in any type of business, securities or banking activities;
                  or
  ·
              being
                  found by a court of competent jurisdiction in a civil action, the
                  SEC or
                  the Commodity Futures Trading Commission to have violated a federal
                  or
                  state securities or commodities law, and the judgment has not been
                  reversed, suspended, or vacated.
  **Board
        of Directors**
  Our
        Board
        of Directors is currently composed of three members, Carlos Antonio Salas,
        Steven Magami, and Luis de las Casas. Steven Magami is our Chairman of the
        Board
        of Directors. In this capacity, he is responsible for presiding at meetings
        of
        the Board of Directors and exercising and performing such other powers and
        duties as may be from time to time assigned by the Board of Directors or
        prescribed by our Amended and Restated Bylaws.
  None
        of
        our directors are deemed independent. All the members of our Audit Committee,
        Compensation Committee and Nominating and Corporate Governance Committees
        are
        required to be independent pursuant to their charters. We are in the process
        of
        recruiting independent directors, and as soon as we have retained them, we
        will
        appoint members to these board committees.
  **Director
        Qualifications**
  We
        believe that our directors should have the highest professional and personal
        ethics and values, consistent with our longstanding values and standards.
        They
        should have broad experience at the policy-making level in business or banking.
        They should be committed to enhancing stockholder value and should have
        sufficient time to carry out their duties and to provide insight and practical
        wisdom based on experience. Their service on other boards of public companies
        should be limited to a number that permits them, given their individual
        circumstances, to perform responsibly all director duties for us. Each director
        must represent the interests of all stockholders. When considering potential
        director candidates, the Board of Directors also considers the candidate’s
        character, judgment, diversity, age and skills, including financial literacy
        and
        experience in the context of our needs and the needs of the Board of
        Directors.
  **Board
        Committees**
  *Audit
        Committee.*
  We
        have
        adopted an Audit Committee Charter, although at this time, we do not yet
        have a
        separately designated standing audit committee. Pursuant to Section 3(a)(58)(B)
        of the Exchange Act, the entire Board of Directors acts as an audit committee
        for the purpose of overseeing the accounting and financial reporting processes,
        and audits of our financial statements. The SEC recently adopted new regulations
        relating to audit committee composition and functions, including disclosure
        requirements relating to the presence of an “audit committee financial expert”
serving on its audit committee. We have only recently begun increasing our
        operations, and we are now seeking to acquire an independent director who
        qualifies as an “audit committee financial expert” as soon as reasonably
        practicable. Our current directors, by virtue of their education and past
        employment experience, have considerable knowledge of financial statements,
        finance, and accounting, and have significant employment experience involving
        financial oversight responsibilities. Accordingly, we believe that our current
        directors capably fulfill the duties and responsibilities of an audit committee
        in the absence of such a designated expert at this time.
  Our
        Audit
        Committee will oversee our accounting and financial reporting processes,
        internal systems of accounting and financial controls, relationships with
        independent auditors and audits of financial statements. Specific
        responsibilities include the following:
  ·
              selecting,
                  hiring and terminating our independent
                  auditors;
  ·
              evaluating
                  the qualifications, independence and performance of our independent
                  auditors;
  ·
              approving
                  the audit and non-audit services to be performed by our independent
                  auditors;
  47
  ·
              reviewing
                  the design, implementation, adequacy and effectiveness of our internal
                  controls and critical accounting
                  policies;
  ·
              overseeing
                  and monitoring the integrity of our financial statements and our
                  compliance with legal and regulatory requirements as they relate
                  to
                  financial statements or accounting
                  matters;
  ·
                reviewing
                    with management and our independent auditors any earnings announcements
                    and other public announcements regarding our results of operations;
                    and
  ·
              preparing
                  the audit committee report that the Commission requires in our
                  annual
                  proxy statement.
  *Compensation
        Committee and Nominating and Corporate Governance Committee.*
  We
        have
        adopted a Compensation Committee charter and a Nominating and Governance
        Committee charter, although we have not yet designated a Compensation Committee
        or a Nominating committee, due to our lack of independent directors. We intend
        to retain independent directors to serve on these committees, as soon as
        reasonably practicable.
  Our
        Compensation Committee will assist our Board of Directors in determining
        the
        development plans and compensation of our executive officers and employees.
        Specific responsibilities include the following:
  ·
              approving
                  the compensation and benefits of our executive
                  officers;
  ·
              reviewing
                  the performance objectives and actual performance of our executive
                  officers; and
  ·
              administering
                  our stock option and other equity compensation
                  plans.
  Our
        Nominating and Governance Committee will assist the Board of Directors by
        identifying and recommending individuals qualified to become members of our
        Board of Directors, reviewing correspondence from our stockholders,
        establishing, evaluating and overseeing our corporate governance guidelines,
        and
        recommending compensation plans for our directors. Specific responsibilities
        include the following:
  ·
              evaluating
                  the composition, size and governance of our Board of Directors
                  and its
                  committees and making recommendations regarding future planning
                  and the
                  appointment of directors to our
                  committees;
  ·
              establishing
                  a policy for considering stockholder nominees for election to our
                  Board of
                  Directors;
  ·
              evaluating
                  and recommending candidates for election to our Board of Directors;
                  and
  ·
              recommending
                  and determining the compensation of our
                  directors.
  **Board
        Meetings**
  The
        Board
        of Directors of our Company held no meetings of directors and took ten actions
        by written consent during the fiscal year ended December 31, 2007. Other
        than
        that paid to Steven Magami, no compensation has been paid to the directors
        for
        the year ended December 31, 2007.
  **Code
        of Ethics**
  Our
        Chief
        Executive Officer and all senior financial officers, including the Chief
        Financial Officer, are bound by a Code of Ethics that complies with Item
        406 of
        Regulation S-B of the Exchange Act.
  A
        Code of
        Ethics relates to written standards that are reasonably designed to deter
        wrongdoing and to promote:
  ·
              honest
                  and ethical conduct, including the ethical handling of actual or
                  apparent
                  conflicts of interest between personal and professional
                  relationships;
  ·
              full,
                  fair, accurate, timely and understandable disclosure in reports
                  and
                  documents that are filed with, or submitted to, the SEC and in
                  other
                  public communications made by an
                  issuer;
  48
  ·
              compliance
                  with applicable governmental laws, rules and
                  regulations;
  ·
              the
                  prompt internal reporting of violations of the code to an appropriate
                  person or persons identified in the code;
                  and
  ·
              accountability
                  for adherence to the code.
  **Insider
        Trading Policy**
  In
        order
        to take an active role in the prevention of insider trading violations by
        our
        officers, directors, employees and other related individuals, we have
        adopted an Insider Trading Policy and Whistleblower Policy and
        Procedures.
  **Foreign
        Corrupt Practices Act**
  We
        have
        adopted policies and procedures relating to the U.S. Foreign Corrupt
        Practices Act, or the FCPA.  The FCPA makes it illegal to give or
        offer to give money or anything of value to a foreign official, a foreign
        political party, a party official or a candidate for political office in
        order
        to influence official acts or decisions of that person or entity, to obtain
        or
        retain business, or to secure any improper advantage.  It is our policy
        that Stratos, our directors, officers, employees and agents strictly comply
        with
        the FCPA in the U.S. and in every jurisdiction in which we operate.
  **Stockholder
        Relations**
  We
        do not
        have any restrictions on stockholder nominations under our Amended and Restated
        Articles of Incorporation or Amended and Restated Bylaws. The only restrictions
        are those applicable generally under Nevada law. Currently, the entire Board
        of
        Directors decides on nominees, on the recommendation of one or more members
        of
        the Board of Directors. The Board of Directors will consider suggestions
        from
        individual stockholders, subject to evaluation of the person’s merits.
        Stockholders may communicate nominee suggestions directly to any of the board
        members, accompanied by biographical details and a statement of support for
        the
        nominees. The suggested nominee should also provide a statement of consent
        to
        being considered for nomination. Although there are no formal criteria for
        nominees, our Board of Directors believes that persons should be actively
        engaged in business endeavors, have a financial background, and be familiar
        with
        acquisition strategies and money management.
  The
        Board
        of Directors has not adopted a formal methodology for communications from
        stockholders but plans to adopt one as soon as reasonably
        practicable.
  We
        do not
        have a policy regarding the attendance of board members at the annual meeting
        of
        stockholders.
  49
  **Item
                  10.**
              **Executive
                  Compensation**
  **EXECUTIVE
        COMPENSATION**
  **Summary
        Compensation Table**
  The
        following table sets forth all compensation received during the two years
        ended
        December 31, 2007 by our current President and each of the other most highly
        compensated executive officers. None of our officers received total compensation
        which exceeded $100,000 during either of the two fiscal years ended December
        31,
        2006 or December 31, 2007.
  **Name
                  and**
              
              **Year**
              
              **Salary**
              
              **Bonus**
              
              **Stock**
              
              **Option**
              
              **Non-Equity**
              
              **Non-**
              
              **All
                  Other**
              
              **Total****Principal**
              
              
              
              **($)**
              
              **($)**
              
              **Awards**
              
              **Awards**
              
              **Incentive**
              
              **qualified**
              
              **Compensation**
              
              **($)****Position**
              
              
              
              
              
              
              
              
              
              
              
              **Plan**
              
              **Deferred**
              
              **($)****Compensation**
              
              **Compensation****Earnings**Luis
                  Goyzueta,
                *President*****(1)**
              
              
              2007
              
              $
              33,774Carlos
                  AntonioSalas,
                *Chief
                  Executive**Officer,*
                *Director**and
                  General**Manager***(2)**
              
              
              2007
              
              $
              27,600Kenneth
                  P.Laurent,
                *President
                  and**Chief
                  Executive**Officer***(3)**
              
              
              2007
                2006Julio
                  CesarAlonso,
                *Chief
                  Financial**Officer
                  and**Treasurer***(4)**
              
              
              2007Todd
                  Laurent,
                *Secretary
                  and**Treasurer***(5)**
              
              
              2007
                2006
 ____________________________________________
  (1)
              Luis
                  Goyzueta served as President and a Director of Stratos from November
                  14,
                  2007 until March 10, 2008, when he resigned from both positions.
                  Mr.
                  Goyzueta did not receive any compensation for his services rendered
                  to
                  Stratos. Mr. Goyzueta also served as a manager of Stratos Peru
                  since
                  November 5, 2007, pursuant to an employment agreement with Stratos
                  Peru.
                  As a manager of Stratus Peru, Mr. Goyzueta received a salary of
                  $12,700
                  per month. Mr. Goyzueta resigned from his position as a manager
                  of Stratos
                  Peru on March 10, 2008.
  50
  (2)
              Carlos
                  Antonio Salas has served as Chief Executive Officer and a Director
                  of
                  Stratos Peru since November 5, 2007, and as Chief Executive Officer
                  and
                  Director of Stratos since November 14, 2007. Beginning on November
                  5,
                  2007, Mr. Salas received salary of $13,800 per month pursuant to
                  his
                  employment agreement with Stratos Peru.Mr. Salas is not compensated in either of his executive roles with
                  Stratos.(3)
              Kenneth
                  Laurent served as the President and Chief Executive Officer of
                  NDCI Mr.
                  Laurent did not receive any direct cash or non-cash compensation
                  during
                  the fiscal years ended December 31, 2006 or December 31, 2007.
                  Mr. Laurent
                  resigned from both positions on November 14, 2007.(4)
              Julio
                  Cesar Alonso served as the Chief Financial Officer for Stratos
                  Peru since
                  November 5, 2007 and as Chief Financial Officer effective November
                  14,
                  2007. Beginning on November 5, 2007 Mr. Alonso received salary
                  of $5,700
                  per month pursuant to his employment agreement with Stratos
                  Peru.(5)
              Todd
                  Laurent served as the Secretary and Treasurer of NDCI Mr. Laurent
                  did not
                  receive any direct cash or non-cash compensation during the fiscal
                  years
                  ended December 31, 2006 or December 31, 2007. Mr. Laurent resigned
                  on
                  November 14, 2007.
  **Outstanding
        Equity Awards At Fiscal Year-End**
  No
        option
        awards, unexercised options, unvested stock awards or equity incentive plan
        awards were granted to our named executive officers during fiscal year ended
        at
        December 31, 2007.
  **Director
        Compensation**
  The
        following table summarizes the compensation paid to Stratos’ directors for the
        fiscal year ended December 31, 2007:
  **Name**
              
              **Fees**
              
              **Stock**
              
              **Option**
              
              **Non-Equity**
              
              **All
                  Other**
              
              **Total****Earned
                  or**
              
              **Awards**
              
              **Awards**
              
              **Incentive
                  Plan**
              
              **Compensation**
              
              **($)****Paid
                  in**
              
              **($)**
              
              **($)**
              
              **Compensation**
              
              **($)****Cash**
              
              
              
              
              
              **($)**Kenneth
                  P. Laurent**(1)**Steven
                  Magami**(2)**
              
              $
              20,000
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              20,000Carlos
                  Antonio SalasLuis
                  HumbertoGoyzueta**(3)**Luis
                  Francisco de las Casas
  **Notes:**
  (1)
              Kenneth
                  P. Laurent did not receive any direct cash or non-cash compensation
                  during
                  the fiscal years ended December 31, 2006 or December 31, 2007.
                  Mr. Laurent
                  resigned on November 14, 2007.(2)
              Steven
                  Magami has served as our Chairman of the Board of Directors since
                  November
                  14, 2007, pursuant to which he received $10,000 per month in
                  compensation.(3)
              Luis
                  HumbertoGoyzueta
                  resigned as a Director of Stratos on March 10,
                  2008.
  **Compensation
        Arrangements**
  Prior
        to
        November 14, 2007, we had only one director, Kenneth P. Laurent. 
Mr. Laurent did not receive any direct compensation for his services. In
        connection with the acquisition of Stratos Peru, Kenneth P. Laurent resigned
        from his position as our sole director.  Concurrent therewith, we appointed
        four new directors to our Board of Directors: Carlos Antonio Salas, Luis
        Humberto Goyzueta, Steven Magami and Luis Francisco de las Casas. Mr. Goyzueta
        resigned as a director on March 10, 2008. Steven Magami received $10,000
        per
        month in his capacity as Chairman of the Board of Directors. None of the
        other
        directors have received any direct compensation for their services.
  51
  **Employment
        Agreements**
  Other
        than as described below, we are not party to any employment contracts with
        our
        officers and directors.
  *Steven
        Magami.* Steven
        Magami has served as our Chairman of the Board of Directors since November
        14,
        2007. He continued to serve solely as our Chairman of the Board through March
        14, 2008, when he was also appointed President of Stratos. Mr. Magami receives
        $10,000 per month for his services as Chairman of the Board and as President
        of
        Stratos. He currently does not have an employment agreement with the
        Company.
  *Carlos
        Antonio Salas.* Our
        wholly owned subsidiary, Stratos Peru, entered into an employment agreement
        with
        Mr. Salas for his services as Chief Executive Officer effective November
        5,
        2007. The term of the agreement is for one year, ending on November 4, 2008.
        Pursuant to the terms of the agreement, we have agreed to pay Mr. Salas an
        annual salary of $165,600 per year. In addition to his annual salary, Mr.
        Salas
        will be granted one additional month of salary in July and again in December
        under Peruvian Labor laws.
  *Eduardo
        Aza.* Our
        wholly owned subsidiary, Stratos Peru, entered into an employment agreement
        with
        Mr. Aza for his services as Chief Operating Officer effective November 22,
        2007.
        The term of the agreement is for one year, ending on November 4, 2008. Pursuant
        to the terms of the agreement, we have agreed to pay Mr. Aza an annual salary
        of
        $96,000 per year. In addition to his annual salary, Mr. Aza will be granted
        one
        additional month of salary in July and again in December under Peruvian Labor
        laws.
  *Julio
        Cesar Alonso.* Our
        wholly owned subsidiary, Stratos Peru, entered into an employment agreement
        with
        Mr. Alonso for his services as Chief Financial Officer effective November
        5,
        2007. The term of the agreement is for one year, ending on November 4, 2008.
        Pursuant to the terms of the agreement, we have agreed to pay Mr. Alonso
        an
        annual salary of $68,400 per year. In addition to his annual salary, Mr.
        Alonso
        will be granted one additional month of salary in July and again in December
        under Peruvian Labor laws.
  **Consulting
        and Advisory Agreements**
  As
        of
        April 7, 2008 we have entered into four agreements with unaffiliated third
        party
        consultants for the purpose of providing us with advisory services in connection
        with our business, strategy, operations and financings. Pursuant to these
        agreements, we have issued an aggregate of 1,250,000 warrants, all of which
        will
        have vested by March 7, 2009, and are exercisable at a weighted average price
        of
        $0.72 per share. One of these agreements expired on February 15, 2008, but
        the
        remaining agreements have a one year term. All the warrants have a five year
        term. The consultants also receive stipends ranging between $5,000 and $10,000
        per month.
  **Stock
        Option Plans**
  None.
  **Item
                  11.**
              **Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters**
  The
        following table sets forth certain information concerning the number of shares
        of our common stock owned beneficially as of April 15, 2008 by: (i) each
        person
        (including any group) known to use to own more than 5% of any class of our
        voting securities, (ii) each of our directors and each of our named executive
        officers, and (iii) officers and directors as a group. Unless otherwise
        indicated, the stockholders listed possess sole voting and investment power
        with
        respect to the shares shown and the officers, directors and stockholders
        can be
        reached at our principal offices at 9440 Santa Monica Boulevard, Suite 401,
        Beverly Hills, California 90210.
  52
  As
        of
        April 7, 2008, we had 59,972,936 shares of common stock and 7,142,857 shares
        of
        Series A preferred stock issued and outstanding.
  Name
                  of Beneficial Owner and
              
              Shares
                  of common stock
                Beneficially
                  Owned
              
              Shares of Series A preferred
                  stock
                Beneficially
                  OwnedAddress(1)
              
              Number(2)
              
              Percentage(2)
              
              Number(2)
              
              Percentage(2)Carlos
                  Antonio Salas
              
              
              5,000,000
              
              
              8.3
              
              
              -
              
              
              -Luis
                  Humberto Goyzueta(3)
              
              
              17,287,327
              
              
              28.6
              
              
              -
              
              
              -Jorge
                  Eduardo Aza
              
              
              3,018,018
              
              
              5.0
              
              
              -
              
              
              -Julio
                  Cesar Alonso
              
              
              540,541
              
              
              *
              
              
              -
              
              
              -Gustavo
                  Goyzueta(4)
              
              
              3,018,018
              
              
              5.0
              
              
              -
              
              
              -Steven
                  Magami(5)
              
              
              11,946,589
              
              
              17.3
              
              
              7,142,857
              
              
              100Luis
                  Francisco de las Casas
              
              
              540,541
              
              
              *
              
              
              -
              
              
              -MA
                  Green, LLC(6)
              
              
              8,928,571
              
              
              12.9
              
              
              7,142,857
              
              
              100SGM
                  Capital, LLC(7)
              
              
              3,018,018
              
              
              5.0
              
              
              -
              
              
              -Kenneth
                  P. Laurent(8)
              
              
              6,100,000
              
              
              10.2
              
              
              -
              
              
              -All
                  Executive Officers and Directors as a Group (5 persons)(9)
              
              
              21,045,689
              
              
              30.5
              
              
              7,142,857
              
              
              100
  *
              Less
                  than 1%(1)
              Unless
                  otherwise indicated, the address of the beneficial owner is 9440
                  Santa
                  Monica Blvd., Suite 401, Beverly Hills, CA 90210.(2)
              Beneficial
                  ownership is determined in accordance with the rules of the SEC.
                  Shares of
                  common stock subject to options or warrants currently exercisable
                  or
                  exercisable within 60 days of the date of this Annual Report, are
                  deemed
                  outstanding for computing the percentage ownership of the stockholder
                  holding the options or warrants, but are not deemed outstanding
                  for
                  computing the percentage ownership fo any other stockholder. Unless
                  otherwise indicated in the footnotes to this table, we believe
                  stockholders named in the table have sole voting and sole investment
                  power
                  with respect to the shares set forth opposite such stockholder’s name.
                  Percentage of ownership is based on 59,972,936 shares of common
                  stock
                  outstanding as of April 15, 2008.(3)
              Luis
                  Humberto Goyzueta’s address is Av. La Merced 810, Surco, Lima, Peru. Mr.
                  Luis Humberto Goyzueta’s holdings consist of 16,930,290 shares of common
                  stock and warrants to purchase 357,037 shares of common
                  stock.(4)
              Gustavo
                  Goyzueta’s address is Calle La Coruna 149, La Estancia, La Molina, Lima,
                  Peru.(5)
              Steven
                  Magami’s holdings consist of 3,018,018 shares of common stock, 7,142,857
                  shares of Series A preferred stock and a warrant to purchase 1,785,714
                  shares of common stock. 3,018,018 shares of common stock are held
                  by SGM
                  Capital, LLC. Mr. Magami is the manager of SGM Capital, LLC and
                  exercises
                  voting and investment control over the shares. 7,142,857 shares
                  of Series
                  A preferred stock and warrants to purchase 1,785,714 shares of common
                  stock are held by MA Green, LLC. Mr. Magami is the manager of MA
                  Green,
                  LLC and exercises voting and investment control over the
                  shares.
  53
  (9)
              MA
                  Greene, LLC’s holdings consist of 7,142,857 shares of Series A preferred
                  stock and a warrant to purchase 1,785,714 shares of common stock.
                  Steven
                  Magami is the manager of MA Green, LLC and exercises voting and
                  investment
                  control over the shares.(10)
              SGM
                  Capital, LLC’s holdings consist of 3,018,018 shares of common stock.
                  Steven Magami is the manager of SGM Capital, LLC and exercises
                  voting and
                  investment control over the shares.(11)
              Kenneth
                  Laurent’s address is 3313 N. 83rd Place, Scottsdale, AZ
                  85251.(12)
              Consists
                  of 21,045,689 shares of common stock, 7,142,857 shares of Series
                  A
                  preferred stock and warrants to purchase 1,785,714 shares of common
                  stock.
  **DESCRIPTION
        OF SECURITIES**
  We
        are presently authorized under our Amended and Restated Articles of
        Incorporation to issue 300,000,000 shares of capital stock, consisting of
        250,000,000 shares of common stock and 50,000,000 shares of preferred stock,
        $.001 par value. As of April 15, 2008, we had 59,972,936 shares of common
        stock,
        7,142,857 shares of Series A preferred stock and warrants to purchase an
        aggregate of 6,373,856 shares of common stock issued and
        outstanding.
  The
        following descriptions of our capital stock are only summaries and do not
        purport to be complete and are subject to and qualified by our Amended and
        Restated Articles of Incorporation, our Amended and Restated Bylaws, by the
        Amended and Restated Certificate of Designation of our Series A preferred
        stock
        and by the provisions of applicable corporate laws of the State of Nevada.
  **Common
        Stock**
  As
        of
        April 7, 2008, we had 59,972,936 shares of common stock issued and outstanding.
        Each share of common stock issued and outstanding entitles the holder thereof
        to
        one vote on all matters submitted to the vote of the stockholders. Our common
        stock may be issued for such consideration and for such corporate purposes
        as
        the Board of Directors may from time to time determine. Fully paid shares
        of
        common stock are not liable to any further call or assessment. Dividends
        may be
        declared and paid on our common stock only out of legally available funds.
        Upon
        the sale of substantially all of the stock or assets of the Company or
        dissolution, liquidation, or winding up of the Company, whether voluntary
        or
        involuntary, after all liquidation preferences payable to any series of
        preferred stock have been satisfied, the remaining net assets of the Company
        will be distributed to the holders of common stock and preferred stock in
        proportion to the number of shares of common stock then held by them and
        the
        number of shares of common Stock which the holders of preferred stock have
        the
        right to acquire upon conversion of the preferred stock held by them. To
        the
        extent that additional shares of common stock may be issued in the future,
        the
        relative interests of the then existing stockholders may be
        diluted.
  **Series
        A Preferred Stock**
  As
        of
        April 7, 2008 we have an aggregate of 7,142,857 issued and outstanding shares
        of
        Series A preferred stock. Upon the purchase of their Series A preferred stock,
        the holders of the Series A preferred stock received a funding fee equal
        to 2%
        of the purchase price paid. The holders of our Series A preferred stock are
        entitled to the following rights, preferences and privileges:
  ***Optional
        Conversion***
  The
        holders of our Series A preferred stock have the right to convert the Series
        A
        preferred stock at any time into shares of our common stock. The initial
        conversion ratio is 1:1 and is subject to anti-dilution adjustment as described
        below. In addition, the holder has the right to convert one and a half times
        the
        total number of shares of Series A Preferred held by the holder into shares
        of
        our common stock, upon the closing of a financing (whether debt or equity)
        or
        multiple financings led by one or more institutional investors whereby an
        aggregate amount of $25.0 million, net of offering expenses, is received
        by the
        Company. Accumulated dividends, if any, are payable on conversion.
  54
  ***Automatic
        Conversion***
  Each
        share of Series A preferred stock will automatically convert into shares
        of our
        common stock, at the then applicable conversion rate, if the common stock
        has
        been trading above $2.00 per share for a period of 120 consecutive days.
        In no
        event shall the Series A preferred stock automatically convert into shares
        of
        common stock until nine months from November 14, 2007. Accumulated dividends,
        if
        any, are payable on conversion .
  ***Anti-dilution***
  The
        conversion rate of the Series A preferred stock is subject to adjustment,
        on a
        full ratchet basis, to prevent dilution in the event that we issue additional
        shares at a purchase price per share less than the conversion price. There
        will
        be no adjustment to the conversion rate of the Series A preferred stock for
        issuances of (i) shares of common stock issued upon conversion of the Series
        A
        preferred stock, (ii) shares issued to employees, consultants or directors
        in
        accordance with plans approved by the Board of Directors, (iii) shares issued
        upon exercise of warrants existing on November 14, 2007, (iv) shares of common
        stock issued as a dividend or distribution on the Series A preferred stock,
        (v)
        shares issued or issuable pursuant to equipment lease and bank financing
        arrangements, (vi) shares of common stock issued or issuable pursuant to
        an
        acquisition of another company by us, or (vii) shares of common stock that
        are
        otherwise excluded by vote or written consent of the holder of the Series
        A
        preferred stock.
  ***Dividend***
  The
        holders of Series A preferred stock are entitled to a 10% per annum cumulative
        dividend.
  ***Liquidation***
  In
        the
        event of the liquidation, dissolution or winding up of our operation, the
        rights
        of the holders of Series A preferred stock are senior to the rights of the
        holders of common stock. Each share of Series A preferred stock entitles
        the
        holder to a liquidation amount of $1.05, subject to adjustment in certain
        circumstances. After payment of the liquidation amount to the holders of
        Series
        A preferred stock, the holders of common stock and Series A preferred stock
        are
        entitled to receive our remaining assets in proportion to the number of
        shares of common stock then held by them, with the shares of Series A preferred
        stock treated for this purpose as if they had been converted into shares
        of
        common stock at the then applicable conversion rate. A sale of all or
        substantially all of our assets or our merger or consolidation or into
        any other company is treated as a liquidation, dissolution or winding up
        of
        us.
  ***Voting
        Rights***
  The
        holders of Series A preferred stock are entitled to a number of votes equal
        to
        the number of shares of common stock issuable upon conversion of the holder’s
        Series A preferred stock. The holders of Series A preferred stock shall vote
        with holders of common stock on all matters except as otherwise required
        by
        law. Further,
        so long as there is a minimum of 1,000,000 shares of Series A preferred stock
        issued and outstanding, the holders of Series A preferred stock will have
        the
        exclusive right to elect one director to the Board of
        Directors.
  So
        long
        as any of the Series A preferred stock shall be issued and outstanding, we
        shall not, without first obtaining the approval of the holders of more than
        50%
        of the outstanding shares of the Series A preferred stock: (1) amend, alter
        or
        repeal any provision of the Amended and Restated Articles of Incorporation
        or
        the Amended and Restated Bylaws of the Company, if such action would adversely
        alter the rights, preferences, privileges or powers of, or restrictions provided
        for the benefit of the Series A preferred stock; (2) increase or decrease
        the
        authorized number of shares of Series A preferred stock; (3) authorize or
        create
        any new class or series of shares having rights, preferences or privileges
        with
        respect to dividends or payments upon liquidation senior to or on a parity
        with
        Series A preferred stock or having voting rights other than those granted
        to the
        Series A preferred stock generally; (4) enter into any transaction or series
        of
        related transactions deemed to be a liquidation, dissolution or winding up
        our
        Company; (5) authorize a merger, acquisition or sale of substantially all
        of our assets or any of the assets of our subsidiaries; (6)
        voluntarily liquidate or dissolve; or (7) except in the ordinary course of
        business, borrow any money, or otherwise incur any indebtedness, other than
        pursuant to the Bridge Financing.
  55
  ***Protective
        Provisions***
  So
        long
        as any of the Series A preferred stock shall be issued and outstanding, we
        shall not, without first obtaining the approval of the holders of more than
        50%
        of the outstanding shares of the Series A preferred stock: (1) amend, alter
        or
        repeal any provision of our Amended and Restated Articles of Incorporation
        or the Amended and Restated Bylaws, if such action would adversely alter
        the
        rights, preferences, privileges or powers of, or restrictions provided for
        the
        benefit of the Series A preferred stock; (2) increase or decrease the authorized
        number of shares of Series A preferred stock; (3) authorize or create any
        new
        class or series of shares having rights, preferences or privileges with respect
        to dividends or payments upon liquidation senior to or on a parity with Series
        A
        preferred stock or having voting rights other than those granted to the Series
        A
        preferred stock generally; (4) enter into any transaction or series of related
        transactions deemed to be a liquidation, dissolution or winding up of the
        Company; (5) authorize a merger, acquisition or sale of substantially all
        of the
        assets of the Company or any of its subsidiaries; (6) voluntarily liquidate
        or
        dissolve; or (7) except in the ordinary course of business, borrow any money,
        or
        otherwise incur any indebtedness, other than pursuant to the Bridge
        Financing.
  **Convertible
        Promissory Notes**
  The
        convertible promissory notes issued in connection with the Bridge Financing,
        or
        the Notes, bear interest at 10% per annum. Upon the earlier to occur of:
        (i)
        April 30, 2008, the Maturity Date of the Notes, (ii) the consummation of
        a
        private investment in public equity financing, or PIPE, with institutional
        investors for at least $25 million, net of offering expenses, or (iii) when,
        upon the occurrence of an event of default as described in the Notes, such
        amounts are declared due and payable, the Note holders are entitled to repayment
        equal to 30% in excess of the principal and accrued interest then due and
        outstanding under the terms of the Notes, or the Repayment Amount. Upon the
        earlier to occur of the Maturity Date or the consummation of the PIPE, the
        Note
        holders will have the right to convert (in whole or in part) 110% of the
        Repayment Amount into our 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.
  **Warrants**
  As
        of
        April 15, 2008, we had warrants to purchase 6,373,856 shares of common stock
        outstanding. 3,119,110 of these warrants were issued in connection with the
        Private Placement and Series A Private Placement, have a five year term and
        are
        exercisable at $0.75 per share. 870,858 of the warrants were issued in
        connection with the Bridge Financing, have a three year term and are also
        exercisable at $0.75 per share. 1,133,888 warrants were issued in connection
        with the March 2008 Financing, have a five year term and are exercisable
        at
        $0.75 per share. The remaining 1,250,000 warrants were issued pursuant various
        consulting and advisory agreements, have a five year term, and are exercisable
        at a weighted average price of approximately $0.72 per share.
  **Registration
        Rights**
  We
        have
        granted certain registration rights in connection with the Private Placement,
        Series A Private Placement and Bridge Financing. We are obligated to file
        with
        the SEC within 30 days after we close the PIPE, a registration statement
        covering the resale of:
  ·
              100%
                  of the common stock and common stock underlying the warrants issued
                  in
                  connection with the Private
                  Placement;
  ·
              100%
                  of the common stock underlying the Series A preferred stock and
                  common
                  stock underlying the warrant issued in connection with the Series
                  A
                  Private Placement; and
  ·
                100%
                    of the common stock underlying the promissory notes and common
                    stock
                    underlying the warrants issued in connection with the Bridge
                    Financing.
 56
  If
        the
        SEC limits the number of securities that may be registered on the registration
        statement, such number of securities will be cutback (in the following order)
        to
        comply with any such limitation imposed by the SEC: (i) shares of common
        stock
        underlying any and all warrants to be registered, (ii) common stock and (iii)
        shares of common stock underlying the Series A preferred stock. Any required
        cutbacks will be applied to investors pro-rata in accordance with the number
        of
        securities sought to be included in such registration statement. We are required
        to use best efforts to have the registration statement declared effective
        by the
        SEC within 150 days after the filing date.
  If
        the
        registration statement is not filed within 30 days after we close the PIPE,
        or
        is not declared effective by the SEC within 150 days after we close the PIPE,
        we
        will be required to pay to each investor an amount equal to 1.5% of the purchase
        price paid by such investor for its securities, for each 30 day period until
        the
        registration statement is filed or declared effective. The maximum amount
        we
        will be obligated to pay for the failure to file the registration statement
        or
        cause the registration statement to be declared effective is 10% of the purchase
        price of the securities paid by each investor. Similar payments will be required
        to be made by us to the investors if effectiveness of the registration statement
        is suspended for more than 30 consecutive days. In no event will we be liable
        for liquidated damages as to any shares of common stock, any shares of common
        stock underlying warrants, any shares of common stock underlying Series A
        preferred stock or any shares of common stock underlying convertible promissory
        notes which are not permitted by the SEC to be included in the registration
        statement solely due to comments received by us from the SEC.
  In
        addition, at any time after November 14, 2008, the holders of Series A preferred
        stock shall have the right to require that we file a registration statement
        with the SEC covering the shares of common stock underlying the Shares A
        preferred stock and the common stock underlying the warrants issued to the
        investor in the Series A Private Placement. We shall file the registration
        statement no later than thirty days after the Company’s receipt of the request.
        If in the good faith judgment of the Board of Directors of the Company, the
        filing of the registration statement would be materially detrimental to the
        Company, then the Company shall have the one time right to defer such filing
        for
        a period of not more than one hundred eighty days after receipt of the request.
        The registration statement filed pursuant to the request of the holder of
        Series
        A preferred stock may include other securities of the Company and may include
        securities of the Company being sold for the account of the Company. The
        penalty
        provisions set forth above are also applicable to the demand registration
        statement. These registration rights are also applicable to all holders of
        Series A preferred stock, whether purchased pursuant to the Series A Private
        Placement or at a later date.
  **Item
                  12.**
              **CERTAIN
                  RELATIONSHIPS AND RELATED
                  TRANSACTIONS**
  Other
        than as set forth in this Report, Stratos has not entered into any material
        transactions with any director, executive officer, and nominee for director,
        beneficial owner of five percent or more of its common stock, or family members
        of such persons.
  Kenneth
        P. Laurent, our former Chief Executive Officer, President and sole director
        was
        considered our promoter within the meaning of the federal securities laws,
        for
        serving as the incorporator of NDCI on September 21, 2004. Mr. Laurent purchased
        10,000,000 shares of our common stock for $10,000 on October 13, 2004. The
        purchase price for the shares was arbitrarily set by Mr. Laurent. Other than
        as
        set forth in this Current Report, Mr. Laurent did not receive anything of
        value
        from us for his services as our promoter.
  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.
  57
  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.
  **Anti-Takeover
        Provisions**
  Our
        Amended and Restated Articles of Incorporation and Amended and Restated Bylaws
        contain provisions that may make it more difficult for a third party to acquire
        or may discourage acquisition bids for the Company. Our Board of Directors
        is
        authorized, without the action of our stockholders, to issue authorized but
        unissued common stock and preferred stock. The existence of undesignated
        preferred stock and authorized but unissued common stock enables us to
        discourage or to make it more difficult to obtain control of us by means
        of a
        merger, tender offer, proxy contest or otherwise.
  **Item
                  13.**
              **Exhibits**
  Exhibit
                  Number
              
              Description2.1
              
              Agreement
                  Concerning the Exchange of Securities*3.1
              
              Amended
                  and Restated Articles of Incorporation*3.2
              
              Amended
                  and Restated Bylaws*3.3.
              
              Certificate
                  of Designation*4.1
              
              Specimen
                  Stock Certificate for Shares of common stock*4.2
              
              Specimen
                  Stock Certificate for Shares of Series A preferred
                  stock*4.3
              
              Form
                  of warrant*4.4
              
              Form
                  of Promissory Note*4.5
              
              Form
                  of Promissory Note*4.6
              
              Form
                  of Bridge warrant*4.7
              
              Form
                  of warrant*10.1
              
              Equipment
                  Purchase Agreement by and between Stratos del Peru S.A.C. and Gabinete
                  Tecnico De Cobranzas S.A.C.*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.*10.3
              
              Escrow
                  Agreement by and between Stratos del Peru S.A.C. and Blanca Fernandez
                  Pasapera*10.4
              
              Amendment
                  to the Escrow Agreement by and between Stratos del Peru S.A.C.
                  and Blanca
                  Fernandez Pasapera*10.5
              
              Form
                  of Subscription Agreement*10.6
              
              Series
                  A Stock and warrant Purchase Agreement*10.7
              
              Note
                  and warrant Purchase Agreement*10.8
              
              Note
                  and warrant Purchase Agreement*10.9
              
              Memorandum
                  of Understanding by and between Stratos del Peru S.A.C. and Petrox
                  S.A.C.*10.10
              
              Promissory
                  Note*10.11
              
              Work
                  Agreement by and between Stratos del Peru S.A.C. and CWE Engineering
&
                  Supply S.A.C.**10.12
              
              Services
                  Agreement by and between Stratos del Peru S.A.C. and Agribusiness
                  Consulting & Management Peru S.A.C. **10.13
              
              Services
                  Agreement by and between Stratos del Peru S.A.C. and Iberocons
                  S.A.**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**10.18
              
              Services
                  Agreement by and between Stratos del Peru S.A.C. and Panka S.A.C.
                  dated
                  February 27, 2008**
  58
  14.1
              
              Code
                  of Ethics**21.1
              
              List
                  of Subsidiaries*99.1
              
              Audit
                  Committee Charter**99.2
              
              Compensation
                  Committee Charter**99.3
              
              Nominations
                  Committee Charter**99.4
              
              Foreign
                  Corrupt Practices Act Policies and
                  Procedures**
  *
        Filed
        in the 8K dated November 20, 2007.
  **
        Filed
        herewith.
 __________________________________
  **Item
                  14.**
              **Principal
                  Accountant Fees and
                  Services**
  On
        December 4, 2007 we appointed Moore Stephens Wurth Frazer and Torbet, LLP
        as our
        independent auditors for the fiscal year ended December 31, 2007.
  The
        following table shows the fees paid or accrued by us for the audit and other
        services provided by Bagell, Josephs, Levine & Company LLC and Moore
        Stephens Wurth Frazer and Torbet, LLP for fiscal 2007 and 2006.
  **2007**
              
              **2006**Audit
                  Fees
              
              $
              85,000
              
              $
              7,500Audit-Related
                  Fees
              
              
              -
              
              
              304Tax
                  Fees
              
              
              -
              
              
              275All
                  Other Fees
              
              
              -
              
              
              -Total
              
              **$**
              **85,000**
              
              $
              8,079
  As
        defined by the SEC, (i) “audit fees” are fees for professional services rendered
        by our principal accountant for the audit of our annual financial statements
        and
        review of financial statements included in our Form 10-Q, or for services
        that
        are normally provided by the accountant in connection with statutory and
        regulatory filings or engagements for those fiscal years; (ii) “audit-related
        fees” are fees for assurance and related services by our principal accountant
        that are reasonably related to the performance of the audit or review of
        our
        financial statements and are not reported under “audit fees;” (iii) “tax fees”
are fees for professional services rendered by our principal accountant for
        tax
        compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for
        products and services provided by our principal accountant, other than the
        services reported under “audit fees,” “audit-related fees,” and “tax
        fees.”
  Under
        applicable SEC rules, the Audit Committee is required to pre-approve the
        audit
        and non-audit services performed by the independent auditors in order to
        ensure
        that they do not impair the auditors’ independence. The SEC’s rules specify the
        types of non-audit services that an independent auditor may not provide to
        its
        audit client and establish the Audit Committee’s responsibility for
        administration of the engagement of the independent auditors. Until such
        time as
        we have an Audit Committee in place, the Board of Directors will pre-approve
        the
        audit and non-audit services performed by the independent auditors.
  Consistent
        with the SEC’s rules, the Audit Committee Charter requires that the Audit
        Committee review and pre-approve all audit services and permitted non-audit
        services provided by the independent auditors to us or any of our subsidiaries.
        The Audit Committee may delegate pre-approval authority to a member of the
        Audit
        Committee and if it does, the decisions of that member must be presented
        to the
        full Audit Committee at its next scheduled meeting.


59




**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the
      registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




Date:
                April
                15, 2008
            **STRATOS
                  RENEWABLES CORPORATION,****a
                Nevada corporation*****By:***
            ***/s/
                STEVEN MAGAMI*****Steven
                Magami, President****(Principal
                Executive Officer)**




In
      accordance with the Exchange Act, this Report has been signed below by the
      following persons on behalf of the Registrant and in the capacities and on
      the
      dates indicated.




**Signature**
              
              **Title**
              
              **Date*****/s/
                  STEVEN MAGAMI***
              
              President
                  and Chairman of the Board of Directors
              
              April
                  15, 2008Steven
                  Magami
              
              (Principal
                  Executive Officer)***/s/
                  CARLOS ANTONIO SALAS***
              
              Chief
                  Executive Officer and Director
              
              April
                  15, 2008Carlos
                  Antonio Salas***/s/
                  JULIO CESAR ALONSO***
              
              Chief
                  Financial Officer and Treasurer
              
              April
                  15, 2008Julio
                  Cesar Alonso
              
              (Principal
                  Accounting Officer)***/s/
                  LUIS FRANCISCO DE LAS CASAS***
              
              Director
              
              April
                  15, 2008Luis
                  Francisco de las Casas


60




**STRATOS
      RENEWABLES CORPORATION**


**(A
      Development Stage Company)**


**Consolidated
      Financial Statements**


**For
      the Period from Inception (February 27, 2007) to December 31,
      2007**




**Contents**


Page**Report
                  of Independent Registered Public Accounting Firm**
              F-1**Consolidated
                  Financial Statements:**Consolidated
                  Balance Sheet as of December 31, 2007
              F-2Consolidated
                  Statement of Operations for the period from inception(February
                  27, 2007) to December 31, 2007
              F-3Consolidated
                  Statement of Stockholders’ Deficit for the period from inception(February
                  27, 2007) to December 31, 2007
              F-4Consolidated
                  Statement of Cash Flows for the period from inception(February
                  27, 2007) to December 31, 2007
              F-5Notes
                  to Consolidated Financial Statements for the period from inception(February
                  27, 2007) to December 31, 2007
              F-6









**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





Board
      of
      Directors


Stratos
      Renewables Corporation





We
      have
      audited the accompanying consolidated balance sheet of Stratos Renewables
      Corporation (a development stage company) as of December 31, 2007, and the
      related consolidated statements of operations, stockholders’ deficit and cash
      flows for the period from inception (February 27, 2007) to December 31, 2007.
      These consolidated financial statements are the responsibility of the Company's
      management. Our responsibility is to express an opinion on these consolidated
      financial statements based on our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. An audit
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the consolidated financial statements. An audit also includes
      assessing the accounting principles used and significant estimates made by
      management, as well as evaluating the overall financial statement presentation.
      We believe that our audit provides a reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Stratos Renewables
      Corporation as of December 31, 2007, and the results of its operations and
      cash
      flows for the period from inception (February 27, 2007) to December 31, 2007,
      in
      conformity with accounting principles generally accepted in the United States
      of
      America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 2 to the
      consolidated financial statements, the Company’s working capital deficit raises
      substantial doubt about its ability to continue as a going concern. The
      consolidated financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.





/s/
      Moore
      Stephens Wurth Frazer and Torbet, LLP





Walnut,
      California


March
      28,
      2008




F-1




**Stratos
        Renewables Corporation**
 (A
        Development Stage Company)
 **Consoldiated
        Balance Sheet**
 
 **December
                  31,****2007****ASSETS**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              3,357,417Debt
                  issue costs, net
              
              
              56,948Prepaid
                  Consulting
              
              
              155,020TOTAL
                  CURRENT ASSETS
              
              
              3,569,385PLANT
                  AND EQUIPMENT, net
              
              
              4,600,923VAT
                  RECEIVABLE
              
              
              899,567OTHER
                  ASSETS
              
              
              21,711TOTAL
                  ASSETS
              
              $
              9,091,586**LIABILITIES
                  AND STOCKHOLDERS' EQUITY**CURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              173,032Accrued
                  interest
              
              
              39,248Other
                  payables
              
              
              84,648Accrued
                  interest and redemption premium
              
              
              670,150Convertible
                  promissory notes, net of debt discount of $552,369
              
              
              2,495,631Accrued
                  beneficial converstion liability
              
              
              250,938Accrued
                  warrant liablity
              
              
              1,164,501TOTAL
                  CURRENT LIABILITIES
              
              
              4,878,148STOCKHOLDERS'
                  EQUITYPreferred
                  stock; $0.001 par value; 50,000,000 shares authorized; 7,142,857
                  shares issued and outstanding
              
              
              7,143Common
                  stock; $0.001 par value; 250,000,000 shares authorized; 57,666,794
                  shares issued and outstanding
              
              
              57,667Additional
                  paid-in capital
              
              
              6,193,629Other
                  comprehensive income
              
              
              14,021Deficit
                  accumulated during the development stage
              
              
              (2,059,022
              )TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              4,213,438TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              9,091,586
 
 See
        report of independent registered public accounting firm.
 The
        accompanying notes are an integral part of these financial
        statements.
  F-2
 
 **Stratos
        Renewables Corporation**
 (A
        Development Stage Company)
 **Statement
        of Operations and Other Comprehensive Loss**
 
 **For the period****from inception****(February 27, 2007)****to December 31, 2007**(unaudited)REVENUE
              
              $
              -COST
                  OF REVENUE
              
              
              -GROSS
                  PROFIT
              
              
              -OPERATING
                  EXPENSESConsulting
                  fees
              
              
              144,784General
                  and administrative
              
              
              520,779Professional
                  fees
              
              
              100,611Wages
              
              
              210,928TOTAL
                  OPERATING EXPENSES
              
              
              977,102OTHER
                  INCOME (EXPENSES)Amortization
                  of debt discounts and debt issuance costs
              
              
              (609,317
              )Interest
                  and financing costs
              
              
              (721,462
              )Change
                  in value of beneficial conversion feature
              
              
              624,052Change
                  in value of warrant liability
              
              
              95,972Other
              
              
              600TOTAL
                  OTHER EXPENSES, net
              
              
              (610,155
              )LOSS
                  FROM OPERATIONS
              
              
              (1,587,257
              )INCOME
                  TAX BENEFIT
              
              
              -NET
                  LOSS
              
              $
              (1,587,257
              )PREFERRED
                  STOCK DIVIDEND
              
              
              471,765NET
                  LOSS ATTIRUBTED TO COMMON STOCKHOLDERS
              
              $
              (2,059,022
              )OTHER
                  COMPREHENSIVE INCOMEForeign
                  currency translation gain
              
              
              14,021COMPREHENSIVE
                  INCOME
              
              $
              (2,045,001
              )LOSS
                  PER COMMON SHARE - BASIC AND DILUTED
              
              $
              (0.04
              )WEIGHTED
                  AVERAGE COMMON EQUIVALENT SHARES
                  OUTSTANDING - BASIC AND DILUTED
              
              
              46,930,529
 
 See
        report of independent registered public accounting firm.
 The
        accompanying notes are an integral part of these financial
        statements.
  F-3
 
 **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**
 
 See
        report of independent registered public accounting firm.
 The
        accompanying notes are an integral part of these financial
        statements.
  F-4
 
 **Stratos
        Renewables Corporation**
 (A
        Development Stage Company)
 **Statement
        of Cash Flows**
 
 **For the period****from inception****(February 27, 2007)****to December 31, 2007**CASH
                  FLOW FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (1,587,257
              )Adjustments
                  to net income for non-cash activities:Amortization
                  of debt discounts and debt issuance costs
              
              
              609,317Depreciation
                  and amortization
              
              
              2,094Change
                  in value of beneficial conversion feature
              
              
              (624,052
              )Change
                  in value of warrant liability
              
              
              (95,972
              )Amortization
                  of prepaid consulting
              
              
              51,672Adjustment
                  to reconcile net loss to net cashprovided
                  by operating activities:Other
                  assets
              
              
              (20,868
              )Accrued
                  interest and redemption premium
              
              
              670,150Accounts
                  payable
              
              
              170,619Interest
                  payable
              
              
              39,248Other
                  payables
              
              
              81,362Net
                  cash used in operating activities
              
              
              (703,687
              )CASH
                  FLOW FROM INVESTING ACTIVITIES:Purchases
                  of plant and equipment
              
              
              (4,604,638
              )VAT
                  receivable
              
              
              (864,657
              )Cash
                  acquired with acquisition
              
              
              211Net
                  cash used in investing activities
              
              
              (5,469,084
              )CASH
                  FLOW FROM FINANCING ACTIVITIES:Proceeds
                  from sale of common stock
              
              
              1,867,090Proceeds
                  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
              
              
              9,544,600Effect
                  of exchange rate changes on cash and cash equivalents
              
              
              (14,412
              )NET
                  INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              3,357,417CASH
                  AND CASH EQUIVALENTS, Beginning of period
              
              
              -CASH
                  AND CASH EQUIVALENTS, End of period
              
              $
              3,357,417SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOWS INFORMATION:Interest
                  paid
              
              $
              -Income
                  taxes paid
              
              $
              -SUPPLEMENTAL
                  NON-CASH INVESTING AND FINANCING ACTIVITIES:Costs
                  associated with acqisition:Beneficial
                  conversion feature associated with convertible debenture
              
              $
              874,990Issuance
                  of warrants in acquisition
              
              $
              229,748Acquisition
                  of shell company
              
              $
              211
 
 See
        report of independent registered public accounting firm.
 The
        accompanying notes are an integral part of these financial
        statements.
  F-5


**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Period From Inception (February 27, 2007) to December 31,
        2007**


**Note
      1 - Organization and Significant Accounting Policies**





Organization
      and line of business





Stratos
      Renewables Corporation, formerly New Design Cabinet, Inc., (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 the 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). A consolidated statement of
      operations for the year ended December 31, 2006 is not presented as Stratos
      del
      Peru did not commence operations until February 27, 2007.





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 operations. The Company’s offices and administrative headquarters are
      located in Lima, Peru.


See
        report of independent registered public accounting firm.




F-6




**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Period From Inception (February 27, 2007) to December 31,
        2007**




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.





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
      adjustment was $14,021 at December 31, 2007. Asset and liability amounts at
      December 31, 2007 were translated at 2.997 PEN to $1.00 USD. Equity accounts
      were stated at their historical rate. The average translation rates applied
      to
      the statement of operations for the period from inception (February 27, 2007)
      to
      December 31, 2007 was 3.118. 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.





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.


See
          report of independent registered public accounting
          firm.




F-7




**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Period From Inception (February 27, 2007) to December 31,
        2007**




Fair
      value of financial instruments





For
      certain of the Company's financial instruments, including cash and cash
      equivalents, other receivables, accounts payable and accrued expenses, the
      carrying amounts approximate fair value due to their short maturities.





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 f inancial
      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 December 31, 2007, the Company
      had deposits in excess of federally insured limits totaling $3,403,946. 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.





VAT
      receivable





At
      December 31, 2007, the Company recognized a VAT (value added tax) receivable
      of
      $899,567 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.


See
          report of independent registered public accounting
          firm.




F-8




**Stratos
        Renewables Corporation**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Period From Inception (February 27, 2007) to December 31,
        2007**




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 December 31, 2007 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.





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-dilutes effect.




See
        report of independent registered public accounting firm.




F-9




**Stratos
      Renewables Corporation**


**(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Period From Inception (February 27, 2007) to December 31,
        2007**




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 is 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





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 for fiscal years
      beginning after November 15, 2007. The Company is currently assessing the impact
      of SFAS No. 159 on its financial position and results of
      operations.




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.




See
        report of independent registered public accounting firm.




F-10




**Stratos
      Renewables Corporation**


**(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Period From Inception (February 27, 2007) to December 31,
        2007**




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements“. The
      objective of SFAS No. 157 is to increase consistency and comparability in fair
      value measurements and to expand disclosures about fair value measurements.
      SFAS
      No. 157 defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS No. 157 applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any new
      fair
      value measurements. The provisions of SFAS No. 157 are effective for fair value
      measurements made in fiscal years beginning after November 15, 2007. The
      adoption of this statement is not expected to have a material effect on the
      Company‘s future 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
      2 – 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.




See
        report of independent registered public accounting firm.





F-11




**Stratos
      Renewables Corporation**


**(A
        Development Stage Company)**
 **Notes
        to Consolidated Financial Statements**
 **For
        the Period From Inception (February 27, 2007) to December 31,
        2007**




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
      3 - Plant and Equipment**





Plant
      and
      equipment at consisted of the following at December 31 2007:





Description
            
            AmountSugar
                plant
            
            $
            4,552,247Vehicles
            
            
            2,416Computer
                equipment
            
            
            48,4394,603,102Accumulated
                depreciation
            
            
            (2,179
            )Plant
                and equipment, net
            
            $
            4,600,923





Depreciation
      expense amounted to $2,094 for the period ended December 31, 2007.





**Note
      4 – Private Placement of Equity and Debt Securities**





*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.




See
        report of independent registered public accounting firm.





F-12






**Stratos
      Renewables Corporation**


**(A
      Development Stage Company)**


**Notes
      to Consolidated Financial Statements**


**For
      the Period From Inception (February 27, 2007) to December 31,
      2007**





*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.





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 at December 31, 2007
      amounted to $56,125.





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.





See
      report of independent registered public accounting firm.




F-13




**Stratos
      Renewables Corporation**


**(A
      Development Stage Company)**


**Notes
      to Consolidated Financial Statements**


**For
      the Period From Inception (February 27, 2007) to December 31,
      2007**





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 December 31, 2007, the Company amortized $552,369 of the aforesaid
      debt discounts as other expense in the accompanying consolidated statements
      of
      operations.





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





**Total**Gross
                convertible promissory notes
            
            $
            3,048,000Debt
                discounts
            
            
            (552,369
            )Convertible
                promissory notes, net
            
            $
            2,495,631





See
      report of independent registered public accounting firm.


F-14


**Stratos
      Renewables Corporation**


**(A
      Development Stage Company)**


**Notes
      to Consolidated Financial Statements**


**For
      the Period From Inception (February 27, 2007) to December 31,
      2007**





*Warrants*





The
      following is a summary of the warrant activity:





Outstanding
                at inception (February 27, 2007)
            
            -Granted
            
            
            4,739,968Forfeited
            
            
            -Exercised
            
            
            -Outstanding
                as of December 31, 2007
            
            
            4,739,968





Following
      is a summary of the status of warrants outstanding at December 31,
      2007:





Outstanding Warrants
            
            Exercisable WarrantsExercisePrice
            
            Number
            
            AverageRemainingContractualLife
            
            AverageExercisePrice
            
            Number
            
            AverageRemainingContractual Life$
            0.75
            
            
            3,989,968
            
            
            4.875
            
            $
            0.75
            
            
            3,989,968
            
            
            4.875$
            0.70
            
            
            750,000
            
            
            4.89
            
            $
            0.70
            
            
            166,667
            
            
            4.89Total
            
            
            4,739,968
            
            
            
            
            
            
            
            
            4,156,635




**Note
      5 – 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 December 31, 2007 there is $30,181 of accrued
      interest. These amounts have been eliminated in consolidation in the December
      31, 2007 financial statements.





**Note
      6 – Acquisition of assets**





On
      October 18, 2007, the Company signed a purchase-sale contract with Gabinete
      Técnico de Cobranza S.A.C., and have subsequently acquired certain assets that
      are part of a 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.





See
      report of independent registered public accounting firm.




F-15




**Stratos
      Renewables Corporation**


**(A
      Development Stage Company)**


**Notes
      to Consolidated Financial Statements**


**For
      the Period From Inception (February 27, 2007) to December 31,
      2007**





The
      Company 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





The
      Company has 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.





The
      sugar
      mill did not have any operations for the past several years.





**Note
      7 - 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 $490,009
      and $537,805 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 year ended
      December 31, 2007 was an increase of $377,399. Management will review this
      valuation allowance periodically and make adjustments as warranted.





Significant
      components of the Company's deferred tax assets and liabilities at December
      31,
      2007 are as follows:





**Peru**
            
            **U.S.**
            
            **Total**Deferred
                tax assets (liabilities):Net
                operating loss carryforwards
            
            $
            147,003
            
            $
            230,396
            
            $
            377,399Deferred
                tax assets, net
            
            
            147,003
            
            
            230,396
            
            
            377,399Valuation
                allowance
            
            
            (147,003
            )
            
            (230,396
            )
            
            (377,399
            )Net
                deferred tax assets
            
            $
            -
            
            $
            -
            
            $
            -




See
      report of independent registered public accounting firm.


F-16




**Stratos
      Renewables Corporation**


**(A
      Development Stage Company)**


**Notes
      to Consolidated Financial Statements**


**For
      the Period From Inception (February 27, 2007) to December 31,
      2007**





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




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





**Note
      8 – Commitments and contingencies**





On
      September 19, 2007, the Company entered into a five year agreement with Petrox
      S.A.C., a Peruvian fuel distributor, to sell
      10,000 gallons of ethanol per day at a fixed price of $2.00 per
      gallon.





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





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





Year Ending December 31,
            
            Amount2008
            
            $
            74,1482009
            
            
            74,1482010
            
            
            74,1482011
            
            
            74,148$
            296,592





**Note
      9 – Related party transactions**





The
      Company was charged fund raising fees by a member of the board of directors
      that
      amounted to $84,970. These fees have been recorded as an asset under debt
      issuance costs.





The
      Company also received consulting services from a member of its board of
      directors. Total consulting fees amounted to $17,750.





As
      discussed in Note 4, 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
      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.





See
      report of independent registered public accounting firm.




F-17


**Stratos
      Renewables Corporation**


**(A
      Development Stage Company)**


**Notes
      to Consolidated Financial Statements**


**For
      the Period From Inception (February 27, 2007) to December 31,
      2007**





**Note
      10 – Subsequent events**





On
      March
      7, 2008 the Company closed on $1,587,447 of its $10 million private placement
      (the “March 2008 Financing”), and the Company anticipates that it will continue
      to offer its securities on the same terms and conditions until at least July
      1,
      2008. Pursuant to the March 2008 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 1,133,891 shares of Common Stock with
      an
      exercise price of $0.75 per share.


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 as described in Note 4. Pursuant to the Amendment, the maturity dates
        of
        the Convertible Promissory Notes have been extended from February 14, 2008
        to
        April 30, 2008.
  See
        report of independent registered public accounting firm.


F-18