UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the Securities Exchange Act of 1934
(Amendment
No. 1)
STRATOS
RENEWABLES CORPORATION
Common
Shares
(Title of
Class of Securities)
863101101
Steven
Magami
9440
Little Santa Monica Boulevard, Suite 401
Beverly
Hills, California 90210
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
With
copies to:
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Valerie
Broadbent
9440
Little Santa Monica Boulevard, Suite 401
Beverly
Hills, California 90210
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July 15,
2009
(Date of
Event which Requires Filing of this Statement)
If the
filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box.
o
Note
: Schedules filed in paper
format shall include a signed original and five copies of the schedule,
including all exhibits. See §240.13d-7 for other parties to whom copies are to
be sent.
*The
remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP
NUMBER: 863101101
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1.
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Names
of Reporting Persons
SGM
Capital, LLC
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2.
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Check
the Appropriate Box if a Member of a Group (See
Instructions)
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(a)
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(b)
¨
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3.
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SEC
Use Only
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4.
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Source
of Funds (See Instructions)
OO
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5.
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Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
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¨
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6.
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Citizenship
or Place of Organization
California
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Number
of Shares
Beneficially
Owned
by
Each
Reporting
Person
With
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7.
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Sole
Voting Power
6,768,018
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8.
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Shared
Voting Power
0
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9.
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Sole
Dispositive Power
6,768,018
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10.
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Shared
Dispositive Power
0
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
6,768,018
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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¨
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13.
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Percent
of Class Represented by Amount in Row (11)
5.614%
(1)
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14.
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Type
of Reporting Person (See Instructions)
OO
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(1)
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Based
upon 120,562,347 shares of Issuer’s common stock outstanding as of July
15, 2009, reporting person may be deemed to have beneficial ownership of
approximately 5.614% of the outstanding shares of Issuer common
stock.
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CUSIP
NUMBER: 863101101
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1.
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Names
of Reporting Persons
MA
Green, LLC
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2.
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Check
the Appropriate Box if a Member of a Group (See
Instructions)
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(a)
¨
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(b)
¨
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3.
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SEC
Use Only
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4.
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Source
of Funds (See Instructions)
WC
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5.
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Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
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¨
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6.
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Citizenship
or Place of Organization
Delaware
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Number
of Shares
Beneficially
Owned
by
Each
Reporting
Person
With
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7.
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Sole
Voting Power
22,852,466
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8.
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Shared
Voting Power
0
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9.
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Sole
Dispositive Power
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10.
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Shared
Dispositive Power
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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¨
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13.
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Percent
of Class Represented by Amount in Row (11)
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14.
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Type
of Reporting Person (See Instructions)
IN
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(1)
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Based
upon 120,562,347 shares of Issuer’s common stock outstanding as of July
15, 2009, reporting person may be deemed to have beneficial ownership of
approximately 18.955% of the outstanding shares of Issuer common
stock.
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CUSIP NUMBER:
863101101
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1.
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Names
of Reporting Persons
Steven
Magami
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2.
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Check
the Appropriate Box if a Member of a Group (See
Instructions)
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(a)
¨
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(b)
¨
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3.
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SEC
Use Only
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4.
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Source
of Funds (See Instructions)
WC
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5.
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Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
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¨
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6.
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Citizenship
or Place of Organization
Delaware
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Number
of Shares
Beneficially
Owned
by
Each
Reporting
Person
With
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7.
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Sole
Voting Power
29,620,484
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8.
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Shared
Voting Power
0
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9.
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Sole
Dispositive Power
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10.
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Shared
Dispositive Power
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
29,620,484
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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¨
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13.
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Percent
of Class Represented by Amount in Row (11)
24.569%(1)
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14.
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Type
of Reporting Person (See Instructions)
WC
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(1)
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Based
upon 120,562,347 shares of Issuer’s common stock outstanding as of July
15, 2009, reporting person may be deemed to have beneficial ownership of
approximately 24.569% of the outstanding shares of Issuer common
stock.
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ITEM
1. SECURITY AND
ISSUER.
This
Statement on Schedule 13D relates to the common stock (the “Common Stock”),
of Stratos Renewables Corporation (the “Company” or “Issuer” ), a Nevada
corporation. The principal executive offices of the Company are located at 9440
Santa Monica Blvd., Suite 401, Beverly Hills,
California 90210. The telephone number at that location is (310)
402-5901.
ITEM
2. IDENTITY AND
BACKGROUND.
(a). This
statement is being filed jointly by MA Green, LLC, a Delaware Limited Liability
Company, (“MA Green”), SGM Capital, LLC, a California Limited Liability Company
(“SGM”) and Steven Magami.
(b). The
business address for each of the Reporting Persons is: 9440 Santa Monica Blvd.,
Suite 401, Beverly Hills, California 90210.
(c). MA
Green and SGM are private investment companies. Steven Magami is the manager of
MA Green and of SGM. Steven Magami is a partner of Gulf Capital Partners, a
private equity firm located at 9440 Santa Monica Blvd., Suite 401, Beverly
Hills, California 90210.
During the last five years, none of
the reporting persons has been (i) convicted in any criminal proceeding
(excluding traffic violations and other similar misdemeanors) or (ii) has
been a party to any civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to any
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM
3. SOURCE AND
AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to an agreement (a copy of
which is attached as an Exhibit to Issuer's Current Report on Form 8-K filed on
July 21, 2009), dated as of July 15, 2009, by and between the Company, I2BF and
Blue Day SC Ventures, a joint venture of BlueDay Limited, a BVI company and MA
Green, LLC (collectively, the "Investors"), the Investors purchased Notes in the
aggregate principal amount of $15,382,271 and an aggregate of 55,586,158 shares
of the Common Stock of the Company. As a result MA Green, inclusive of tendering
all its Series A Preferred to the Issuer, beneficially acquired 22,023,385
shares of common stock in the transaction and currently owns an aggregate of
22,852,466 shares of Issuer common stock. With SGM Capital LLC, reporting person
beneficially owns a total of 29,620,484 shares of common stock. Mr. Magami is
the manager of MA Green and of SGM and exercises voting and investment control
over the shares registered in the name of each of those entities.
The total
amount of funds and other consideration required to purchase the Notes and the
Common Stock by Blue Day SC Ventures pursuant to the Agreement consisted of
securities, unsecured notes and $2,000,000 cash as more particularly described
within the Company’s current report on Form 8-K filed on July 21,
2009. No additional funds were required to acquire beneficial
ownership of the Common Stock reported on this Schedule 13D.
ITEM
4. PURPOSE OF
TRANSACTION.
The
information set forth and/or incorporated by reference in Items 2 and 3 is
hereby incorporated by reference into this Item 4.
The
acquisition by MA Green of beneficial ownership of Common Shares of the Company,
as described herein, was effected (a) because of MA Green’s belief that the
Company represents an attractive investment based on the Company’s business
prospects and strategy, (b) to help finance the Company’s Chepen Project
(as defined below) and (c) to satisfy and retire Company indebtedness
outstanding to Whitebox Capital Partners, L.P. (“Whitebox”). Effective as of the
closing of the financing, all of the Company’s obligations to Whitebox were
finally and effectively satisfied and extinguished, including warrants formerly
held by Whitebox.
Pursuant
to the Agreement, the Company offered to the Investors: (a) a minimum of
$3,000,000 in aggregate principal of Secured Promissory Notes (“Notes”) issued
for new cash investment in the Company as of the date of the Agreement (the
“Initial Investment”), (b) $12,382,271 in aggregate principal amount of
Notes issued concurrently with the Initial Investment in exchange for the
surrender and cancellation of existing indebtedness and equity securities of the
Company outstanding in favor of Investors as set forth opposite such Investors’
names on the Schedule of Investors attached to the Agreement (the “Tendered
Securities”), (c) up to an additional $1,725,000 principal amount of Notes
issued to I2BF in a subsequent closing, each in the allocations and amounts set
forth on the Schedule of Investors and (d) as consideration for such new
investment and the restructuring of the Tendered Securities, Common Stock
representing an aggregate of forty five percent (45%) of the fully diluted
equity of the Company and certain adjustment rights relating to such Common
Stock as are set forth in the Agreement.
The
principal amount of the Notes described in subsection (b) of the paragraph above
is in substitution for and wholly replaces earlier notes issued to I2BF and MA
Green LLC and, accordingly, the terms of the Notes supersede all of the
Company’s prior indebtedness to those Investors.
The first
Closing on July 15, 2009 (the “Initial Closing”) was for the sale of Notes in
the aggregate principal amount of $15,382,271 and an aggregate of 55,586,158
shares of the Common Stock of the Company, evidencing not less than 39.895% of
the outstanding the Common Stock determined on a fully diluted basis, and was
consummated simultaneously with the execution of the Agreement (the “Closing
Date”).
I2BF is
required to make an additional investment in Notes with an aggregate principal
amount of $1,725,000 and shall be issued 10,238,381 additional shares of Common
Stock, and an additional Closing shall be held with respect to such investment
(the “Balance Closing”) if and as soon as practicable following the closing of
the credit facility currently under negotiation between the Company and Banco
Internacional del Perú S.A.A. (“Interbank”) and evidenced by that certain letter
of intent dated May 29, 2009 (the “Interbank Facility”),
provided
that the
Interbank Facility shall provide credit to the Company and its subsidiaries of
not less than $15,000,000 and shall otherwise be upon terms and conditions as
set forth in that certain letter of intent referenced above or upon terms and
conditions substantially similar to such terms and conditions, subject to the
reasonable approval of Investors, it being agreed and acknowledged that the
“Interbank Facility” may be consummated with another lender substituted for
Interbank, subject to such requirements regarding the substantive terms and
conditions. The obligation (but not the right) of I2BF to participate
in the Balance Closing shall cease in the event that the Interbank Facility is
not closed by October 15, 2009. An additional Note shall be
issued to I2BF and certificate(s) evidencing the additional shares of Common
Stock issuable to I2BF and Blue Day SC Ventures shall be issued with respect to
the Securities purchased and issued at the Balance Closing. The
respective ownership of I2BF and Blue Day SC Ventures following the Balance
Closing shall be 25% and 20% respectively, each in the fully diluted ownership
of the Company (exclusive in the case of reporting person of securities
transactions that were effected outside of the Agreement).
The
Agreement contains certain other covenants and agreements including requirements
concerning use of proceeds in part with respect to construction and development
of business activities for the Company’s industrial plot and sugarcane crushing
assets in Chepen, Peru (the “Chepen Project”). The entity directly
owning and operating the Chepen Project is referred to as the “Chepen Operating
Company.”
The
Agreement also provides that for a period of five (5) years from and after the
date that all Obligations (as defined in the Notes) with respect to the Notes
are satisfied (the “Cash Flow Payment Term”), Blue Day SC Ventures or its
designee shall be entitled to receive payments (the “Participation Payments”)
from the Chepen Operating Company equal to fifteen percent (15%) of the Excess
Cash Flow (as defined in the Agreement) of the Chepen Operating
Company. Such payments from Excess Cash Flow shall be made quarterly
in arrears no later than ten (10) days after the end of each
quarter. In the event that there has not been a Change of Control (as
defined in the Agreement) of the Company or the Chepen Operating Company during
the Cash Flow Payment Term, then Blue Day SC Ventures’ right to receive
Participation Payments automatically shall be extended for one additional
year. In the event that there is a Change of Control of the Company
or the Chepen Operating Company during the initial Cash Flow Payment Term, Blue
Day SC Ventures will be entitled to receive a one time payment in the amount
equal to fifteen percent (15%) of eighty percent (80%) of the projected Excess
Cash Flow from the Chepen Project for the remaining portion of the Cash Flow
Payment Term.
The
Agreement provides for the issuance of additional Shares in the event that third
party investors in the Additional Chepen Financing receive, individually or in
the aggregate and in one or a series of transactions, an equity position or
equity participation in the Chepen Operating Company of greater than twenty
(20%) on a fully diluted basis.
The
Agreement provides for certain Piggyback Registration Rights and Antidilution
protection.
The
Company simultaneously entered into a Security Agreement creating first priority
security interests in favor of Investors over all of the assets of the Company
and its Subsidiaries; provided, however that the Investors agreed to subordinate
their security interests to Interbank if and when the Interbank Facility
closes.
In
connection with the Agreement, the Company signed two Secured Promissory Notes
(the “Notes”):
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·
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to
Blue Day SC Ventures in the principal amount of Eight Million Six Hundred
Fifty Nine Thousand Seven Hundred Nineteen Dollars (US$8,659,719) (the
“Blue Day Note”); and
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·
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to
I2BF in the principal amount of Six Million Seven Hundred Twenty Two
Thousand Five Hundred Fifty One Dollars (US$6,722,551) (the “I2BF
Note”).
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The Notes
bear interest at fifteen percent (15%) per annum.
Of the
principal amount of the Notes, $12,382,271 was issued in substitution for and
wholly replacing earlier notes issued to I2BF and MA Green and, accordingly, the
terms of the Notes supersede all of the Company’s prior indebtedness to those
investors.
All
unpaid principal, together with any then unpaid and accrued interest and other
amounts payable under the Notes, are be due and payable on the earliest to occur
(the “Maturity Date”) of (i) December 31, 2012, (ii) a Change of Control
(iii) when, upon or after the occurrence of an Event of Default (as defined
in the Notes).
The Notes
may be prepaid by the Company, but, except with respect to prepayments described
in Section 4 of the Notes, prepayment may be made only with the consent of the
Holder. Any prepayment of amounts outstanding under the Notes shall
be made in connection with a prepayment with respect to all Notes issued
pursuant to the Agreement, allocated
pro rata
among such Notes
based on the principal and interest outstanding with respect
thereto.
Under
Section 4 of the Notes, from and after March 15, 2011, the Company shall direct
a percentage of the Excess Cash Flow from the operation of the Chepen Project to
the prepayment of the Notes in accordance with its terms. Prepayments
of the Notes from Excess Cash Flow shall be made in amounts and upon terms
described in the Agreement.
The Notes
provide for certain Events of Default including a failure to close the Interbank
Facility or failure to secure at least $8,000,000 in new outside financing for
the Chepen Project by the close of business on October 15, 2009, if such failure
shall continue for thirty (30) days after written notice by all holders of Notes
issued under the Agreement.
The Note
provides for various remedies upon the occurrence of an Event of Default,
including acceleration.
The Notes
provide that from and after March 15, 2011, the Company shall direct ninety
percent (90%) of the monthly Excess Cash Flow of the Chepen Operating Company to
the prepayment of the Notes pro rata in accordance with their
terms. Prepayments of the Notes from Excess Cash Flow shall be made
quarterly in arrears no later than ten (10) days after the end of each
quarter.
The
Agreement and the Notes and related documents and agreements are filed as
exhibits to the Company’s current report on Form 8-K filed on July 21, 2009, and
should be referred to in their entirety for a complete description
thereof.
Except as
set forth in this Statement, the Agreement, the Notes and the Security
Agreement, reporting person does not have any present plans or proposals which
relate to or would result in any of the actions specified in clauses (a), (c),
(d), (e), (f), (g) or (h) of Item 4 of Schedule 13D.
The
foregoing descriptions of the Agreement, the Notes and the Security Agreement
are only summaries, do not purport to be complete and are qualified in their
entirety by reference to the full text of the Agreement, the Blue Day Note, the
I2BF Note, and the Security Agreement, which are attached hereto as Exhibits to
the Form 8-K filed on July 21, 2009, and are incorporated herein by
reference.
Each
Reporting Person acquired its securities of the Company for investment
purposes.
Each
Reporting Person will continue to evaluate its ownership and voting position in
the Company and may consider the following future courses of action: (i)
continuing to hold the Common Stock for investment; (ii) disposing of all or a
position of the Common Stock in open market sales or in privately-negotiated
transactions; or (iii) acquiring additional shares of Common Stock in open
market or in privately-negotiated transactions. Each Reporting Person has not
yet determined which of the courses of action specified in this paragraph it may
ultimately take, although each Reporting Person has no present intent to dispose
of any of the acquired securities of the Company.
Each
Reporting Person reserves the right to determine in the future whether to change
the purpose or purposes described above or whether to adopt plans
or proposals of the type specified above.
ITEM
5. INTEREST IN
SECURITIES OF THE ISSUER.
The
information set forth and/or incorporated by reference in Items 2, 3 and 4 is
hereby incorporated by reference into this Item 5.
(a) MA
Green is the beneficial owner of an aggregate of 22,852,466, or 18.955%
(approximately 16.42% fully diluted), of the total outstanding shares of Common
Stock.
SGM
is the beneficial owner of an aggregate of 6,768,018, or 5.614% (approximately
4.86% fully diluted) of the total outstanding shares of Common
Stock.
Steven
Magami is the beneficial owner of an aggregate of 29,620,484, or 24.569%
(approximately 21.29% fully diluted) of the total outstanding shares of Common
Stock, by virtue of being (i) the manager of SGM and exercising voting and
investment control over the securities held by SGM and (ii) the manager of MA
Green and exercising voting and investment control over the securities held by
MA Green.
(b) MA
Green shares power to vote and direct the disposition of 22,852,466 shares of
Common Stock with Steven Magami. SGM shares power to vote and direct the
disposition of 6,768,018 shares of Common Stock with Steven Magami. Steven
Magami shares power to vote and direct the disposition of 29,620,484shares of
Common Stock with MA Green and SGM, as set forth above.
(c)
Except as described in this Schedule 13D, there have been no transactions
in the shares of common stock effected by any of the reporting persons during
the last 60 days.
(d) – (e)
Not applicable.
ITEM
6. CONTRACTS,
ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER.
The
information set forth, or incorporated by reference, in Items 3 through 5 of
this statement is hereby incorporated by reference to this Item 6. To
the knowledge of the Reporting Persons, except as otherwise described in this
Schedule 13D, there are no contracts, arrangements, understandings or
relationships among reporting persons and between any such persons and any other
person, with respect to any securities of the Company, including but not limited
to, transfer or voting of any of the securities of the Company, joint ventures,
loan or option arrangements, puts or calls, guarantees or profits, division of
profits or loss, or the giving or withholding of proxies, or a pledge or
contingency the occurrence of which would give another person voting power over
the securities of the Company.
ITEM
7. MATERIALS TO
BE FILED AS EXHIBITS.
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1
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Blue
Day Note*
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2
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I2BF
Note*
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3
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Secured
Note and Common Stock Purchase Agreement*
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4
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Security
Agreement*
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5
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Certificate
of Amendment of the Certificate of Designation, Powers, Preferences and
Rights of Series A Preferred Stock*
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*Incorporated
by reference to the Exhibits filed with the Company’s current report on Form 8-K
as filed on July 21, 2009.
Exhibit
A
Joint Filing Agreement (incorporated by
reference to Exhibit A of Schedule 13D filed by the Reporting Persons on
December 12, 2007).
SIGNATURES
After
reasonable inquiry and to the best of its knowledge and belief, the undersigned
certifies that the information set forth in this Statement is true, complete and
correct.
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MA
Green, LLC
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Dated:
July 30, 2009
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/s/ Steven Magami
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By:
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Steven
Magami
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Its:
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Manager
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SGM
Capital, LLC
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Dated:
July 30, 2009
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/s/ Steven Magami
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By:
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Steven
Magami
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Its:
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Manager
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Dated:
July 30, 2009
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/s/ Steven Magami
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Steven
Magami
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