SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

(Mark One)

þ     Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2007.

¨      Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from              to             .

Commission file number: 000-31390

PLANKTOS CORP.
(formerly "Diatom Corporation")

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

NEVADA
(State or other jurisdiction of incorporation or organization) 68-0423301
(IRS Employer Identification Number)

1151 Triton Drive, Suite C, Foster City, California 94404
(Address of Principal Executive Office)          (Zip Code)

(650) 638-1975
(Issuer’s telephone number)

Check whether the registrant: (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    þ          No    ¨

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

Yes    ¨          No    þ

The number of outstanding shares of the registrant’s common stock, $0.001 par value (the only class of voting stock), as of August 20, 2007 was 83,673,873.

TABLE OF CONTENTS

			Page
PART I.
	ITEM 1. FINANCIAL STATEMENTS			3
		Unaudited Balance Sheets as of June 30, 2007		4
		Unaudited  Statements of Income for the three and six months ended June 30, 2007 and 2006		5
		Unaudited Statements of Cash Flows for the six months ended June 30, 2007 and 2006		6
		Notes to the Unaudited Financial Statements		8
	ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS			17
	ITEM 3. CONTROLS AND PROCEDURES			25
PART II.
	ITEM 1. LEGAL PROCEEDINGS			26
	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES			26
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES			26
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS			27
	ITEM 5. OTHER INFORMATION			27
	ITEM 6. EXHIBITS			27
	SIGNATURES			28
INDEX TO EXHIBITS				29

2

PART I

ITEM 1. FINANCIAL STATEMENTS

As used herein, the term “Company,” refers to Planktos Corp. (formerly “Diatom Corporation”), a Nevada corporation and its predecessors, unless otherwise indicated. In the opinion of management, the accompanying unaudited financial statements included in this Form 10-QSB reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

3

PLANKTOS CORP
(formerly Diatom Corporation)
(A Development Stage Company)
BALANCE SHEETS
					June 30,		December 31,
					2007		2006
					(unaudited)
ASSETS
	CURRENT ASSETS
		Cash		$	14,469	$	67,121
		Advances receivable			797,194		5,824
			Total Current Assets		811,663		72,945
	OTHER ASSETS
		Vessels and other fixed assets, net of depreciation			796,727		-
			Total Other Assets		796,727		-
	TOTAL ASSETS			$	1,608,390	$	72,945
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
	CURRENT LIABILITIES
		Accounts payable		$	9,018	$	245
		Loan payable – related party			110,510		174,511
			Total Current Liabilities		119,528		174,756
	COMMITMENTS AND CONTINGENCIES				-		-
	STOCKHOLDERS' EQUITY (DEFICIT)
		Common stock, authorized 100,000,000 shares
		of $0.001 par value, issued and outstanding 83,673,838
		at June 30, 2007 and 77,438,838 at December 31, 2006			83,674		77,439
		Additional paid-in capital			5,185,898		3,393,148
		Deficit accumulated during development stage			(3,780,710)		(3,572,398)
			Total Stockholders' Equity (Deficit)		1,488,862		(101,811)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 1,608,390 $ 72,945

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

4

PLANKTOS CORP
(formerly Diatom Corporation)
(A Development Stage Company)
STATEMENTS OF OPERATIONS							From Inception
							(December 10,
			For the Three Months Ended June 30, (unaudited)		For the Six Months Ended June 30, (unaudited)		1998) to June 30, 2007 (unaudited)
			2007	2006	2007	2006
REVENUES			$ -	$ -	$ -	$ -	$ -
OPERATING EXPENSES
	General and administrative		39,181	-	208,312	12,815	3,527,851
		Total Operating Expenses	39,181	-	208,312	12,815	3,527,851
LOSS FROM OPERATIONS			(39,181)	-	(208,312)	(12,815)	(3,527,851)
OTHER INCOME (EXPENSE)
	Loss on sale of securities		-	-	-	-	(12,108)
	Gain on settlement of debt		-	-	-	-	9,249
	Write down of marketing rights		-	-	-	-	(250,000)
		Total Other Income (Expense)	-	-	-	-	(252,859)
NET LOSS BEFORE INCOME TAX			(39,181)	-	(208,312)	(12,815)	(3,780,710)
INCOME TAX EXPENSE			-	-	-	-	-
NET LOSS			$ (39,181)	$ -	$ (208,312)	$ (12,815)	$ (3,780,710)
NET LOSS PER SHARE			$ nil	$ nil	$ nil	$ nil

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING   83,273,838   77,438,838   82,947,588   77,438,838

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

5

PLANKTOS CORP
(formerly Diatom Corporation)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS								From Inception
								(December 10,
				For the Six Months Ended June 30, (unaudited)				1998) to June 30, 2007 (unaudited)
				2007		2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(208,312)	$	(12,815)	$	(3,780,710)
Adjustments to reconcile net loss to net cash
(Used) in operating activities:
	Depreciation			17,414		-		17,414
	Stock issued for services			43,000		-		1,524,000
	Warrant expense			-		-		500,347
	Loss on sale of securities			-		-		12,108
	Write down of marketing rights			-		-		250,000
	Gain on settlement of notes receivable			-		-		(9,249)
	(Increase) decrease in advances receivable			(791,370)		-		(797,194)
	Increase (decrease) in accounts payable			8,773		424		8,868
	Increase (decrease) in related accounts payable			-		-		179,936
		Net Cash (Used in) Operating Activities		(930,495)		(12,391)		(2,094,480)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Proceeds from sale of securities			-		-		492
	Purchase of marketing rights			-		-		(250,000)
	Purchase of vessel and other assets			(814,141)		-		(814,141)
	Payment on notes receivable			-		-		(3,351)
		Net Cash (Used in) Investing Activities		(814,141)		-		(1,067,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Capital contributions			-		-		1,500
	Issued common stock for cash			1,755,985		-		2,123,785
	Loan payable			(64,001)		-		10,969
	Proceeds from officer			-		-		201,839
	Proceeds from notes payable - related party			-		-		836,856
	Proceeds from subscription receivable			-		-		1,000
		Net Cash Provided by Financing Activities		1,691,984		-		3,175,949
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS				(52,652)		(12,391)		14,469
CASH AT BEGINNING OF PERIOD				67,121		34,768		-
CASH AT END OF PERIOD				$ 14,469		$ 22,377		$ 14,469
SUPPLIMENTAL CASH FLOW INFORMATION
	CASH PAID FOR:

Interest	$ -	$ -	$ -
Income taxes	$ -	$ -	$ -

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

6

PLANKTOS CORP.

(formerly Diatom Corporation)

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Continued)

NON-CASH FINANCING AND INVESTING TRANSACTIONS:

In January 2000, a marketable security valued at $12,600 was received in exchange for a notes receivable of $3,351. The market value of the securities at December 31, 2000 is $415.

In April 2001, the Company issued 4,500 shares of its common stock for services valued at $75,000.

In May 2001, the Company issued 75,000 shares of its common stock to an office of the Company for services valued at $50,000.

In May 2001, the Company issued 10,500 shares of its common stock for services valued at $175,000.

In July 2001, the Company issued 15,000 shares of its common stock for services valued at $200,000.

In December 2001, the Company issued 3,000,000 shares of its common stock to an office of the Company for services valued at $20,000.

In December 2001, debt in the amount of $41,685 was forgiven by officers of the Company.

During January 2002, the Company issued 750,000 shares of previously authorized but unissued common stock for services rendered value at $125,000.

During January 2002, the Company canceled 7,500 shares of common stock.

During September 2002, the Company issued 600,000 shares of previously authorized but unissued common stock for reduction of debt value at $80,000.

During September 2002, the Company authorized a ten for one (10:1) reverse split of its common stock.

In October 2002, the Company issued 32,700,000 shares of common stock at $0.02 per share for services revalued during the year at a total value of $436,000.

In January 2003, the Company issued 30,000,000 shares of its common stock to an officer of the Company for services valued at $400,000.

During 2005, the Company issued 78,711,311 shares of common stock to satisfy debt of $997,010.

During 2006, the Company converted $99,541 of accounts payable – related party to loan payable – related party.

In March 2007, the Company issued 50,000 shares of common stock to a director for services valued at $43,000.

7

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Diatom Corporation (“the Company”) was incorporated as eWorld Travel Corp on December 10, 1998 under the laws of the state of Nevada. On September 23, 2002, the Company changed its name to GYK Ventures, Inc. and on July 8, 2005, the Company changed its name again to Diatom Corporation. The Company originally was organized to provide internet-based travel services. The Company has not yet secured operations and is in the development stage according to Financial Accounting Standards Board Statement No. 7.

The Company is a development stage company as defined in Financial Accounting Standards Board Statement No. 7. It is concentrating substantially all of its efforts in raising capital and defining its business operation in order to generate significant revenues.

Pursuant to a marketing agreement, the Company has acquired the marketing rights to an “Iron-Fertilization” technology used for the sequestration of CO_2. The process is to remove carbon dioxide (CO₂) from the atmosphere, and place it into a stable storage medium in planktons in the ocean. The Company intends to assist with the prove-out of the technology and then market the environmental CO₂ reducer credits to companies required to assist in environmental improvement

On March 8, 2007, the Company effected a 1:1.5 forward split of its common stock and amended its articles of incorporation to reflect a name change from “Diatom Corporation” to “Planktos Corp.”

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited financials statements should be read in conjunction with the audited financials statements for the year ended December 31, 2006. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of results for the interim period presented. Operating results for the six month period ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ended December 31, 2007.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

This summary of significant accounting policies of Diatom Corporation is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

Accounting Method

The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents.

Derivative Instruments

The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (hereinafter “SFAS No. 133”), as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities – Deferral of the Effective Date of FASB No. 133”, and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities”, and SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. These statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

8

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

At June 30, 2007 and 2006, the Company has not engaged in any transactions that would be considered derivative instruments or hedging activities.

Earnings Per Share

The Company has adopted Statement of Financial Accounting Standards No. 128, which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Basic and diluted loss per share was the same, at the reporting dates, as there were no common stock equivalents outstanding.

Fair Value of Financial Instruments

The Company's financial instruments as defined by Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," include cash, trade accounts receivable, and accounts payable and accrued expenses. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2007 and December 31, 2006.

Going Concern

As shown in the accompanying financial statements at June 30, 2007 and December 31, 2006, the Company had negative working capital, no revenues and an accumulated deficit. The Company is currently putting technology in place which will, if successful, mitigate these factors which raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Management’s plans are to seek additional capital from new equity securities offerings that will provide funds needed to increase liquidity, fund internal growth and fully implement its business plan.

Long-lived Assets

In accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This standard establishes a single accounting model for long-lived assets to be disposed of by sale, including discontinued operations, and requires that these long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or discontinued operations. Accordingly, the Company reviews the carrying amount of long-lived assets for impairment where events or changes in circumstances indicate that the carrying amount may not be recoverable. The determination of any impairment would include a comparison of estimated future cash flows anticipated to be generated during the remaining life of the assets to the net carrying value of the assets. For the year ended December 31, 2006, the Company impaired the entire $250,000 paid for the perpetual marketing rights and intellectual property rights from Solar Energy Limited.

9

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

Provision for Taxes

Income taxes are provided based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes.” Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by SFAS No. 109 to allow recognition of such an asset.

Vessels

Vessels and other fixed assets, net are stated at cost less accumulated depreciation. Vessels and other fixed assets are depreciated when the asset is ready for its intended use.

Depreciation is calculated, based on cost, less estimated residual value, using the straight-line method, over the remaining economic life of each asset. The costs of significant replacements, renewals and betterments are capitalized and depreciated over the shorter of the assets remaining estimated useful life or the estimated life of the renewal or betterment. Expenditures for routine maintenance and repairs are expensed as incurred.

Following are the estimated useful lives of vessels and other fixed assets:

i.   Vessels - on a straight line basis from date of acquisition over a period of 25 years.

ii.   Marine equipment on a straight line basis from date of acquisition over a period of five years.

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115” (hereinafter “SFAS No. 159”). This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings cause by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007, although earlier adoption is permitted. Management has not determined the effect that adopting this statement would have on the Company’s financial condition for results of operations.

Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation. This reclassification has resulted in no changes to the Company’s accumulated deficit or net losses presented.

Stock Options and Warrants Granted to Employees and Nonemployees

On January 1, 2006, the Company adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), “Share-Based Payment,” which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. In January 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107, which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R eliminates the ability to account for stock-based compensation transactions using the intrinsic value method under Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and instead requires that such transactions be accounted for using a fair-value-based method.

10

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

The Company uses the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of stock-based awards under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No. 123, “Accounting for Stock-Based Compensation.” The Company has elected the modified prospective transition method as permitted by SFAS No. 123R and accordingly prior periods have not been restated to reflect the impact of SFAS No. 123R. The modified prospective transition method requires that stock-based compensation expense be recorded for all new and unvested stock options, restricted stock, restricted stock units, and employee stock purchase plan shares that are ultimately expected to vest as the requisite service is rendered beginning on January 1, 2006.

Stock-based compensation expense for awards granted prior to January 1, 2006 is based on the grant date fair-value as determined under the pro-forma provisions of SFAS No. 123.

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.

NOTE 3 - VESSEL AND OTHER FIXED ASSETS

Vessel and other fixed assets consist of the following at June 30, 2007 and December 31, 2006:

June 30, December 31,

2007 2006

Research Vessel “Weatherbird II” $ 800,000 $ -

Marine Equipment 14,141 -

814,141 -

Accumulated Depreciation 17,414 -

Net Vessel & Equipment $ 796,727 $ -

NOTE 4 – RELATED PARTY TRANSACTIONS

During 2005, the Company incurred payables to a shareholder for unsecured, non-interest bearing advances in the amount of $99,541. In December 2006, this debt was assigned to related party.

On March 13, 2007, the Company issued 50,000 common shares to a director for services valued at $43,000.

During 2005, the Company received loan advances of $74,970 from a third party. These loans bear no interest and are unsecured. During December 2006, this related party purchased the debt of $99,541, as described above.

During the six months ended June 30, 2007, the Company received an additional $98,000 from this related party. The Company additionally paid back $162,000 during the six months ended June 30, 2007. As of June 30, 2007 the Company owes this related party $110,510.

11

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

NOTE 5– CAPITAL STOCK

Common Stock

The Company is authorized to issue 100,000,000 shares of common stock. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.

In its initial capitalization on December 10, 1998, the Company issued 300 shares of common stock for a total of $20,000 cash.

In June 2005, the Company issued 78,711,311 shares of its common stock to a related party for settlement of debt valued at $997,010.

During August 2005, officers of the Company canceled 70,500,000 shares of common stock. Also in 2005, the Company issued 1,500,000 shares of its common stock to a related party for cash of $250,000 and issued 600,000 shares of common stock to a non-related party for cash of $80,000.

During 2006, there were no issuances of common stock.

In January 2007 the Company completed a private placement for 4,327,500 units at $0.27 per unit for cash proceeds of $1,154,000. Each unit consists of one common share and one share purchase warrant exercisable into one common share at $0.27 for a period of two years.

In February 2007 the Company completed a private placement for 1,257,500 units at $0.40 per unit for cash proceeds of $502,000. Each unit consists of one common share and one share purchase warrant exercisable into one common share at $0.50 for a period of two years.

On March 8, 2007, the Company effected a 1:1.5 forward split of its common stock. All references in the financial statements to shares, share prices, per share amounts and stock plans have been adjusted retroactively for the 1:1.5 forward stock split.

On March 13, 2007, the Company issued 50,000 common shares for services valued at $43,000.

On June 26, 2007, the Company issued 600,000 common shares on the exercise of 600,000 purchase warrants at $0.1667 share for cash proceeds of $100,000.

12

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

Warrants

A summary of the Company’s warrants at June 30, 2007 and December 31, 2006 and the changes for 2007 are as follows:

		Weighted	Weighted
		Average	Average
	Warrants	Exercise	Remaining
	Outstanding	Price	Life
Balance, December 31, 2006	600,000	$     0.16	-
Issued	5,525,000	0.32	1.55
Exercised / Cancelled / Expired	(600,000)	0.16
Balance June 30, 2007	5,525,000	$ 0.32	1.55 years

NOTE 6 – MARKETING RIGHTS AND COMMITMENTS

On August 17, 2005, the Company entered an agreement with Planktos to buy perpetual marketing rights and intellectual property rights from Solar Energy, LTD, in exchange for developmental funding and a royalty agreement. The purchase price was $250,000 cash, on closing, plus additional funding commitments.

Pursuant to the marketing agreement, the Company committed to provide 25% of the cost of the prove-out phase of the development. This commitment is estimated to be $322,500.

The $250,000 already paid by the Company is part of this commitment, leaving $72,500 remaining to fund the prove-out. Solar Energy and its subsidiary, Planktos, Inc., are contractually delegated to fund the remaining 75% of the prove-out phase estimated at $967,750.

In accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” the Company impaired, at December 31, 2006, the entire $250,000 paid for the perpetual marketing rights and intellectual property rights from Solar Energy Ltd.

On January 12, 2007, the Company entered into a securities exchange agreement and plan of exchange with Solar Energy, Ltd. to acquire 100% ownership of Planktos, Inc. (a subsidiary of Solar) in exchange for an aggregate of 45,000,000 shares of common stock of Planktos Corp., and the fulfillment of certain conditions on or before closing. The conditions include: (a) making available working capital of no less than $1,000,000 to Planktos on or before the acquisition is completed, (b) cancellation of 45,000,000 shares of issued and outstanding common share capital on or before the acquisition is completed, and (c) obtaining shareholder approval of the transaction. The transaction obtained shareholder approval on May 31, 2007.

13

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

NOTE 7 – CONCENTRATIONS

Bank Accounts

The Company maintains its cash accounts in a single commercial bank. During the year, the Company may maintain balances in excess of the federally insured amounts in the accounts that are maintained in the United States.

NOTE 8 - SUBSEQUENT EVENTS

On July 30, 2007, the Company filed an amendment with the Secretary of State of the State of Nevada to increase the number of its authorized common shares to 250,000,000 par value $0.001.

On August 9, 2007, the Company acquired Planktos, Inc. as a wholly owned subsidiary, pursuant to the closing of a securities exchange agreement and plan of exchange. The agreement, entered into on January 12, 2007 with Solar Energy Limited and the Company, provided for the acquisition of 100% ownership of Planktos, Inc. in exchange for an aggregate of 45,000,000 shares (post forward split, dated March 8, 2007) of our common stock and the fulfillment of certain conditions on or before closing, including the retirement of $1,180,000 of Planktos, Inc. payables to Solar Energy Limited. The agreement was closed pursuant to the written consent of approximately 57% of the Company’s shareholders as of May 31, 2007.

In satisfaction for the purchase price, the Company assumed all outstanding liabilities of Planktos, Inc. The fair market value of the assets acquired and the liabilities assumed were as follows:

Prepaid expenses and deposits $ 5,000

___________

Total assets acquired 5,000

Accounts payable 16,000

Other current liabilities 23,000

Total liabilities acquired 39,000

Net liabilities acquired in excess of assets $ (34,000)

14

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

PLANKTOS CORP
JUNE 30, 2007
CONSOLIDATED STATEMENT OF OPERATIONS - PROFORMA
						PROFORMA
			Planktos Corp.	Planktos Inc.	Eliminations	CONSOLIDATED
			For the Three Months Ended
			June 30,	June 30,	June 30,	June 30,
			2007	2007	2007	2007
			(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
REVENUES			$ -	$ -		$ -
OPERATING EXPENSES
	General and administrative		39,181	356,158		395,339
	Marketing and selling		-	-		-
	Research and development			75,000		75,000
	Vessel operating costs		-	311,418		311,418
		Total Operating Expenses	39,181	742,576	-	781,757
LOSS FROM OPERATIONS			(39,181)	(742,576)	-	(781,757)
OTHER INCOME (EXPENSE)
	Other income		-	9,352		9,352
	Interest income		-	6		6
	Charitable contribution		-	(27,500)		(27,500)
	Interest expense		-	-		-
	Write down of marketing rights		-	-		-
		Total Other Income (Expense)	-	(18,142)	-	(18,142)
NET LOSS BEFORE INCOME TAX			(39,181)	(760,718)	-	(799,899)
INCOME TAX EXPENSE			-	-	-	-
NET LOSS			$ (39,181)	$ (760,718)	$ -	$ (799,899)

15

PLANKTOS CORP.

(formally Diatom Corporation)

CONDENSED NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2007

PLANKTOS CORP
JUNE 30, 2007
CONSOLIDATED STATEMENT OF OPERATIONS - PROFORMA
						PROFORMA
			Planktos Corp.	Planktos Inc.	Eliminations	CONSOLIDATED
			For the Six Months Ended
			June 30,	June 30,	June 30,	June 30,
			2007	2007	2007	2007
			(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
REVENUES			$ -	$ -	$ -	$ -
OPERATING EXPENSES
	General and administrative		208,312	652,729		861,041
	Marketing and selling		-	-		-
	Research and development		-	125,000		125,000
	Vessel operating costs		-	517,767		517,767
		Total Operating Expenses	208,312	1,295,496	-	1,503,808
LOSS FROM OPERATIONS			(208,312)	(1,295,496)	-	(1,503,808)
OTHER INCOME (EXPENSE)
	Other income		-	9,652		9,652
	Interest income		-	6		6
	Charitable contribution		-	(27,500)		(27,500)
	Interest expense		-	-		-
	Write down of marketing rights		-	-		-
		Total Other Income (Expense)	-	(17,842)	-	(17,842)
NET LOSS BEFORE INCOME TAX			(208,312)	(1,313,338)	-	(1,521,650)
INCOME TAX EXPENSE			-	-	-	-
NET LOSS			$ (208,312)	$ (1,313,338)	$ -	$ (1,521,650)

16

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

The following discussion and analysis of our financial condition and results of operation should be read in conjunction with the financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The Company’s fiscal year end is December 31.

General

The Company was incorporated as eWorld Travel Corp on December 10, 1998 to provide internet-based travel services. The Company changed it name to GYK Ventures, Inc. on September 23, 2002, and to Diatom Corporation on July 8, 2005. Subsequent to the year ended December 31, 2006, we changed our name to Planktos Corp.

Description of Business

On August 17, 2005, the Company entered into an Iron-Fertilization Prove-Out and Purchase Agreement with Planktos, Inc. (“Planktos”) and its parent company, Solar Energy Limited (“Solar”) to provide developmental funding for Planktos’ “iron-fertilization” prove out program of its carbon dioxide (“CO2”) sequestration process. The process is designed to capture CO2 from the earth’s marine environment using a proprietary “iron fertilization” process to generate commercial quantities of verifiable carbon credits to meet global demands for CO2 reduction made part of international agreements such as the Kyoto Protocol. We agreed to provide up to 25% of the program’s cost in exchange for exclusive marketing and intellectual property rights to Planktos the marine based sequestration process. We advanced $250,000 pursuant to this agreement and anticipate that Planktos will initiate the “iron-fertilization” prove out program this year.

On January 12, 2007, we entered into a Securities Exchange Agreement and Plan of Exchange with Solar to acquire 100% ownership of Planktos, in exchange for an aggregate of 45,000,000 shares of our common stock, and the fulfillment of certain conditions on or before closing. The conditions include that we (a) make available working capital of no less than $1,000,000 to Planktos on or before the acquisition is completed, (b) cancel 45,000,000 shares of our issued and outstanding common share capital on or before the acquisition is completed, and (c) obtain shareholder approval of the transaction. Shareholder approval of the acquisition was obtained on May 31, 2007.

On August 9, 2007, the Company concluded the terms of the Securities Exchange Agreement and Plan of Exchange dated January 12, 2007 pursuant to which we acquired Planktos as a wholly owned subsidiary from it former parent Solar in exchange for 45,000,000 shares or 53.78% of our outstanding common stock.

Planktos, Inc.

Planktos is a Foster City, California based business focused on reviving marine as well as land based ecosystem health and biodiversity with the intention to slow global climate change. Planktos has launched a two year pilot project series to restore hundreds of millions of tons of missing plankton plant life in the open seas that will sequester tens of millions of tons of CO2 in the deep ocean for centuries or more. On land, Planktos’ Hungarian affiliate KlimaFa (translated as “Climate Forest”) intends to plant thousands of hectares of new, permanently protected, native forests or “climate parks” in the national parks system of the European Union and elsewhere.

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Both ocean plankton and forest ecorestoration projects remove huge quantities of global warming CO2 from the atmosphere. Long term CO2 reductions can now be banked and traded like a commodity in international carbon markets. Consequently, Planktos’ business model will not only restore the planet’s most vital biological systems but will generate the largest volume of lowest cost greenhouse gas offsets or “carbon credits” available to commercial, governmental and green consumer clients.

Rarely in history has a globally recognized environmental crises and a remedial technology emerged with such auspicious synchronicity. Planktos is pioneering natural science intensive marine and terrestrial ecorestoration regimes that affordably offer unprecedented gains for the climate, the biosphere and the company’s commercial objectives. Simply, restoring ocean plankton plant life to 1980’s levels of health will remove 3-4 billion tons of global warming CO2 and generate tens of billions of dollars in tradable carbon credit value.

Years before global warming began claiming headlines around the world, Planktos researchers were building on a decade of ocean international science investigations with micronutrient revival of lifeless regions of the sea. Although this restoration science was once proposed as a potent technique to revive the collapsing marine food chain, it was neither funded nor developed as an effective technology. The advent of the Kyoto Protocol, the enormous carbon sequestration potential of this work, and the developing global trade in carbon credits, has become the focus of the Planktos business model.

The Kyoto Protocol enables companies and governments to offset regulated greenhouse emission restrictions by investing in CO2 reduction programs in exchange for Carbon Emission Reduction (“CER”) credits. European nations began trading CER credits as of January 2005. CER credits are traded much like commodities with an average value of between $6 and $16 per CER (which represents one ton of CO2 or equivalent) dependent on whether the carbon credit is certified or not and depending on the date and origin of the carbon credit. The Kyoto Protocol became law effective February 16, 2005, the result of which should be a rapidly expanding multi-billion-dollar market for CER credits.

Planktos has cultivated working partnerships with government labs and ocean science institutions to assist with measurement and verification procedures and to optimize project designs. Bankable, tradable investment grade CER credits for corporate buyers and fund managers will be verified and certified with satellite & aerial mapping, underwater analysis methods, and bloom measuring sensors on Planktos’ proprietary autonomous ocean rovers.

Russ George, the president of Planktos, has been involved with ocean restoration and CO2 sequestration since 1997 and was responsible for establishing the Planktos Foundation. Planktos’ management team is supported by an Advisory Group headed by Dr. Noel Brown (formerly the United Nations Environmental Program director) and Dr. Scott Chubb (US Naval Research Laboratory).

Forests of the Ocean

Plankton in our oceans is well documented in its utilization of photosynthesis to absorb CO2. Planktos’ near-term commercial objective is to produce CER credits at a cost of less than $1 per ton utilizing proprietary technology designed to stimulate plankton growth in the world's oceans as a means by which to sequester (isolate from the atmosphere) CO2.

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Specifically, Planktos expects to implement its program of sequestration by "iron fertilization" of the ocean, restoring this micronutrient that is vital for ocean plant growth and photosynthesis which is now scarce in marine waters. The iron is similar to that nature has delivered to sustain the oceans throughout history, but that has been on the decline for thirty years owing to changes in land use. The fertilization process is intended to trigger vast plankton blooms which will absorb the carbon in CO2, 30-40% of which sinks deep enough to be verified as sequestered

Planktos’ initial calculations have determined that the introduction of one ton of iron results in the biological fixation of up to 100,000 tons of CO2. Moreover, this process has three additional benefits that help to restore ecosystems of the open ocean:

§ Support and restore diminished fish populations (additional plankton means more food)

§ Adds to global O2 levels (more plankton results in more oxygen as some 60% of the earth’s O2 is produced by plankton)

§ Preserves coral reefs by reducing the acidity of the oceans.

Planktos is committed to the implementation of the iron-fertilization prove out program during 2007

The process of stimulating plankton growth and the overall mission of Planktos can be viewed on its website: www.planktosinc.com .

Forests of the Land

A tree is composed of about 50% carbon which is produced by removing CO2 from the air through photosynthesis. KlimaFa is dedicated to afforestation and reforestation projects in Europe and the Americas. Studies are now underway to develop an ecologically sound indigenous species mix and planting model of flora to maximize wildlife habitat and biodiversity in the respective regions. KlimaFa is currently involved in several government-assisted carbon forest projects in Hungary that intend to restore native mixed growth forests in national parks and then afforest vast tracts of retired agricultural lands.

The Kyoto Protocol recognizes a variety of mechanisms to reduce atmospheric CO2 and other greenhouse gases, and has approved carbon sequestration from new forests. The development of forests ultimately produces valuable carbon credits. KlimaFa estimates that carbon credits produced in this manner will cost approximately $4.00 per ton. KlimaFa’s target is to plant up to 100,000 hectares over the next 24 months.

The science and news surrounding eco-restoration can be viewed on KilmaFa’s website: www.klimafa.com

Plan of Operation

During the six months ended June 30, 2007, the Company was involved in monitoring Solar’s efforts to implement the sea trials contemplated in the Iron-Fertilization Prove-Out and Purchase Agreement to confirm the effectiveness of the Planktos CO2 sequestration process, conducting a private placement of common stock with warrants attached and purchasing the research vehicle Weatherbird II. We have now closed the acquisition of Planktos and are intent on the development of its business plan.

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Planktos, Inc.

Planktos is currently working with US and European marine research teams to plan and launch significant ocean iron fertilization projects during 2007. Initial efforts will be modest in scope and research-intensive, but are still designed to verifiably sequester carbon between hundreds of thousands and millions of tonnage per voyage.

Planktos expects to launch in 2007 the first of a series of up to 6 commercial scale ocean plankton blooms over 24 months designed to verifiably sequester a total of between 24 and 30 million tons of CO2. Post 2008 follow on projects include new ships, and larger blooms with a target of 250 million tons of verified CO2 sequestration by 2010.

Planktos, through its affiliate Klimifa, intends to initiate the planting of thousands of hectares of new, permanently protected, native forests or “climate parks” in Europe this year.

Planktos is approaching this work with an array of qualifications:

• Years of experience in the basic science of the field;

• Collaborative arrangements and working relationships with internationally recognized marine science project partners required for certification;

• Sustainable resource maximization plan designs;

• Expertise in resource value computation and certification procedures;

• Market access for resource monetization and trade; and

• Experience in structuring all preceding factors into viable binding business plans.

Our plan of operation for Planktos will require $1,500,000 in funding over the next 12 months. We are confident that the funds required to complete the “iron fertilization” prove out phase of the Planktos business model will be made available from additional debt or equity financings tied our common stock.

Results of Operations

The Company has been funded since inception from public or private debt or equity placements or by major shareholders in the form of loans. Virtually all of the capital raised to date has been allocated for general and administrative costs, financial obligations tied to the Iron-Fertilization Prove-Out and Purchase Agreement, the Securities Exchange Agreement and Plan of Exchange and the purchase of the research vessel Weatherbird II.

Net Losses

For the period from inception until June 30, 2007, the Company incurred a net loss of $3,780,710. Net losses for the three month period ended June 30, 2007 were $39,181 as compared to $0 for the three months ended June 30, 2006. Net losses for the six month period ended June 30, 2007 were $208,312 as compared to $12,815 for the six months ended June 30, 2006. The Company’s net losses are attributable to general and administrative expenses. General and administrative expenses include financing costs, accounting costs, consulting fees, leases, employment costs, professional fees and costs associated with the preparation of disclosure documentation. We did not generate any revenues during this period.

The Company expects to continue to incur losses through the year ended 2007

20

Income Tax Expense (Benefit)

The Company has a prospective income tax benefit resulting from a net operating loss carryforward and start up costs that may offset any future operating profit.

Impact of Inflation

The Company believes that inflation has had a negligible effect on operations over the past three years.

Capital Expenditures

The Company expended no significant amounts on capital expenditures for the period from inception to December 31, 2006.

Liquidity and Capital Resources

As of June 30, 2007, the Company had current assets totaling $811,663 and a working capital surplus of $692,135. These assets consist of cash on hand of $14,469 and advances receivable of $797,194. Net stockholders' equity in the Company was $1,488,862 at June 30, 2007. The Company is in the development stage and, since inception, has experienced significant changes in liquidity, capital resources and shareholders’ equity.

Cash flow used in operating activities was $2,094,480 for the period from inception to June 30, 2007. Cash flow used in operating activities for the six month period ended June 30, 2007 was $930,495 as compared to $12,391 for the six months ended June 30, 2006. The increase in cash flow used in operating activities in the current six month period was due primarily to an increase in net losses and an increase in advances receivable.

Cash flow provided by financing activities was $3,175,949 for the period from inception to June 30, 2007. Cash flow provided by financing activities for the six month period ended June 30, 2007 was $1,691,984 as compared to $0 for the six months ended June 30, 2006. Cash flow provided by financing activities in the current six month period can be attributed to the sale of common stock on a private placement basis.

Cash flows used for investing activities was $1,067,000 for the period from inception to June 30, 2007. Cash flow used for investing activities for the six month period ended June 30, 2007 was $814,141 as compared to $0 for the six months ended June 30, 2006. Cash flow used for investing activities can be attributed to the purchase of the research vehicle Weatherbird II in the current six month period.

The Company’s current assets are insufficient to conduct its plan of operation over the next twelve (12) months and it will have to seek debt or equity financing to fund operations. The Company has no current commitments or arrangements with respect to, or immediate sources of funding. Further, no assurances can be given that funding will be available or available to the Company on acceptable terms. In addition, any equity financing would result in dilution to the Company shareholders and any debt financing could involve restrictive covenants with respect to future capital raising activities or other financial or operational matters.

The Company’s shareholders will be the most likely source of new funding in the form of loans or equity placements though none have made any commitment for future investment and we have no agreement formal or otherwise. The Company’s inability to obtain adequate funds will adversely affect our operations and the ability to implement is plan of operation.

21

The Company has no current plans for the purchase or sale of any plant or equipment except those operational purchases required to equip the Weatherbird II for anticipated sea voyages.

The Company has no current plans to make any changes in the number of employees.

Off Balance Sheet Arrangements

As of June 30, 2007, the Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to stockholders.

Forward Looking Statements and Factors That May Affect Future Results and Financial Condition

The statements contained in the section titled Management’s Plan of Operations, with the exception of historical facts, are forward looking statements within the meaning of Section 27A of the Securities Act. A safe-harbor provision may not be applicable to the forward looking statements made in this prospectus because of certain exclusions under Section 27A (b). Forward looking statements reflect our current expectations and beliefs regarding our future results of operations, performance, and achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not materialize. These statements include, but are not limited to, statements concerning:

• our anticipated financial performance and business plan;

• the sufficiency of existing capital resources;

• our ability to raise additional capital to fund cash requirements for future operations;

• uncertainties related to the Company’s future business prospects;

• the ability of the Company to generate revenues to fund future operations;

• the volatility of the stock market and;

• general economic conditions.

We wish to caution readers that the Company’s operating results are subject to various risks and uncertainties that could cause our actual results to differ materially from those discussed or anticipated including the factors set forth in the section entitled “Risk Factors” included elsewhere in this report. We also wish to advise readers not to place any undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward looking statements to reflect new events or circumstances or any changes in our beliefs or expectations, other than is required by law.

Critical Accounting Policies

In the notes to the audited consolidated financial statements for the year ended December 31, 2006 included in the Company’s Form 10-KSB, we discuss those accounting policies that are considered to be significant in determining the results of operations and our financial position. The Company believes that the accounting principles utilized by us conform to accounting principles generally accepted in the United States of America.

22

The preparation of financial statements requires management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, the Company evaluates our estimates, including those related to bad debts, inventories, intangible assets, warranty obligations, product liability, revenue, and income taxes. We base our estimates on historical experience and other facts and circumstances that are believed to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions.

Stock-Based Compensation

On January 1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. In January 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107, which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R eliminates the ability to account for stock-based compensation transactions using the intrinsic value method under Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and instead generally requires that such transactions be accounted for using a fair-value-based method. We use the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of stock-based awards under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No. 123, Accounting for Stock-Based Compensation. We have elected the modified prospective transition method as permitted by SFAS No. 123R and accordingly prior periods have not been restated to reflect the impact of SFAS No. 123R. The modified prospective transition method requires that stock-based compensation expense be recorded for all new and unvested stock options, restricted stock, restricted stock units, and employee stock purchase plan shares that are ultimately expected to vest as the requisite service is rendered beginning on January 1, 2006, the first day of our fiscal year 2006. Stock-based compensation expense for awards granted prior to January 1, 2006 is based on the grant date fair-value as determined under the pro forma provisions of SFAS No. 123.

Prior to the adoption of SFAS No. 123R, we measured compensation expense for our employee stock-based compensation plans using the intrinsic value method prescribed by APB Opinion No. 25. We applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, as if the fair-value-based method had been applied in measuring compensation expense. Under APB Opinion No. 25, when the exercise price of the Company’s employee stock options was equal to the market price of the underlying stock on the date of the grant, no compensation expense was recognized.

We account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18.

23

Risks Related to Our Business

Our future operating results are highly uncertain. Before deciding to invest in us or to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this quarterly report. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment.

We have a history of significant operating losses and such losses may continue in the future.

Since our inception in 1998, our operations have resulted in a continuation of losses and an accumulated deficit which reached $3,572,398 at December 31, 2006 that had increased to $3,780,710 at June 30, 2007 During fiscal 2006, we recorded a net loss of $169,131 The Company has never realized revenue from operations. Our only expectation of future profitability is dependent upon the successful implementation of the company’s business model. Therefore, we may never be able to achieve profitability.

Planktos will not likely be profitable in the next twelve months and may never be profitable.

Planktos is in the process of implementing its iron-fertilization prove-out program and is not expected to be profitable within the next twelve months. While the prove out program can hypothetically produce profits, we cannot be assured that iron-fertilization will live up to our expectations or that revenue will ever be produced as a result of our attempts to sequester carbon credits.

We will need additional financing to fund Planktos.

We will need additional capital to fund Planktos to completion of its iron-fertilization prove-out program. In our efforts to raise capital or obtain additional financing, we may be obligated to issue additional shares of common stock or warrants or other rights to acquire common stock on terms that will result in dilution to existing shareholders or place restrictions on operations. If adequate funds are not available our ability to fund Planktos will be significantly limited.

The market for our stock is limited and our stock price may be volatile.

The market for our common stock has been limited due to low trading volume and the small number of brokerage firms acting as market makers. Because of the limitations of our market and volatility of the market price of our stock, investors may face difficulties in selling shares at attractive prices when they want to. The average daily trading volume for our stock has varied significantly from week to week and from month to month, and the trading volume often varies widely from day to day.

We may incur significant expenses as a result of being quoted on the Over the Counter Bulletin Board, which may negatively impact our financial performance.

We may incur significant legal, accounting and other expenses as a result of being listed on the Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, has required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in the future, which would negatively impact our financial performance and could have a material adverse effect on our results of operations and financial condition.

24

Our internal controls over financial reporting may not be considered effective, which could result in a loss of investor confidence in our financial reports and in turn have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, beginning with our annual report for the year ending December 31, 2008, we may be required to furnish a report by our management on our internal controls over financial reporting. Such report will contain, among other matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management. If we are unable to assert that our internal controls are effective as of December 31, 2008, investors could lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline.

Going Concern

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended December 31, 2006, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

The Company’s ability to continue as a going concern is subject to our ability to realize a profit and /or obtain funding from outside sources. Management’s plan to address our ability to continue as a going concern, include: (a) obtaining funding from private placement sources; (b) obtaining additional funding from the sale of the Company’s securities; and (c) obtaining loans and grants from various financial institutions, where possible. Although management believes that we will be able to obtain the necessary funding to allow us to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful.

ITEM 3. CONTROLS AND PROCEDURES

The Company’s president acts both as our chief executive officer and chief financial officer and is responsible for establishing and maintaining disclosure controls and procedures for the Company.

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”), as of June 30, 2007 Based on this evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our chief executive officer and chief financial officer, in a manner that allowed for timely decisions regarding required disclosure.

25

(b) Changes in Internal Controls

During the period ended June 30, 2007, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

On June 26, 2007, the Company authorized the issuance of 600,000 shares of common stock on the exercise of 600,000 purchase warrants attached valued at $0.1667 per share to Anitha Vasireddi, for cash consideration of $100,000 pursuant to the exemptions from registration provided by Regulation S and Section 4(2) of the Securities Act of 1933, as amended.

The Company complied with Section 4(2) based on the following factors: (1) the issuance was an isolated private transaction that did not involve a public offering; (2) there was one offeree who was issued the stock for cash consideration on the exercise of warrants; (3) the offeree stated an intention not to resell the stock; (4) there were no subsequent or contemporaneous public offerings of the stock; (5) the stock was not broken down into smaller denominations; and (6) the negotiations that lead to the issuance of the stock took place directly between the offeree and the Company.

Regulation S provides generally that any offer or sale that occurs outside of the United States is exempt from the registration requirements of the Securities Act, provided that certain conditions are met. Regulation S has two safe harbors. One safe harbor applies to offers and sales by issuers, securities professionals involved in the distribution process pursuant to contract, their respective affiliates, and persons acting on behalf of any of the foregoing (the “issuer safe harbor”), and the other applies to resales by persons other than the issuer, securities professionals involved in the distribution process pursuant to contract, their respective affiliates (except certain officers and directors), and persons acting on behalf of any of the forgoing (the “resale safe harbor”). An offer, sale or resale of securities that satisfied all conditions of the applicable safe harbor is deemed to be outside the United States as required by Regulation S. The distribution compliance period for shares sold in reliance on Regulation S is one year.

The Company complied with the requirements of Regulation S by having made no directed offering efforts in the United States, by offering only to an offeree who were outside the United States at the time the stock was issued, and ensuring that the offeree to whom the stock was issued was a non-U.S. offeree with an address in a foreign country. 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On May 31, 2007, the holders of a majority of the outstanding shares of our common stock entitled to vote executed a written consent in accordance with the provisions set forth in Title 7, Article 78, Section 390 of the Nevada Revised Statutes andArticle II, Section 10 of the Corporation's bylaws to approve the agreement to acquire Planktos and an increase in the number of our authorized common shares to 250,000,000. As of the record date, we had 83,073,873 shares of common stock issued and outstanding that was entitled to vote, with each share of common stock entitled to one vote. The holders of 47,392,238 shares of our outstanding common shares, representing approximately 57% of the votes entitled to be cast, approved both the acquisition of Planktos and the increase in the number of authorized common shares.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits required to be attached by Item 601 of Regulation SB are listed in the Index to Exhibits on page 29 of this Form 10-QSB and are incorporated herein by this reference.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, this 20^th day of August 2007.

PLANKTOS CORP.

/s/ Russ George

Russ George

Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer

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EXHIBITS

Exhibit Page

No. No. Description

3(i)(a) * Articles of Incorporation (incorporated by reference to the Corporation’s Form

10-SB filed with the Commission on January 31, 2000)

3(i)(b) *                     Amendment of the Corporation’s Articles of Incorporation (incorporated by reference to the Corporation’s Form 8-K filed with the Commission on September 24, 2002)

3(i)(c) * Amendment of the Corporation’s Articles of Incorporation (incorporated by reference to the Corporation’s Form 8-K filed with the Commission on August 10, 2007)

3(i)(d) * Amendment of the Corporation’s Articles of Incorporation (incorporated by reference to the Corporation’s Form 8-K filed with the Commission on August 10, 2007)

3(i)(e) * Amendment of the Corporation’s Articles of Incorporation (incorporated by reference to the Corporation’s Form 8-K filed with the Commission on August 10, 2007)

3(ii) *         By-laws (incorporated herein by reference to the Corporation’s Form 10-SB filed         with the Commission on January 31, 2000)

10(i) *        Iron-Fertilization Prove-Out and Purchase Agreement with Solar, dated August         17, 2005 (incorporated by reference to the Corporation’s Form 10-QSB/A filed         with the Commission on September 7, 2005)

10(ii) *         Securities Exchange Agreement and Plan of Exchange with Solar, dated January         12, 2007 (incorporated by reference to the Corporation’s Form 8-K filed with the  Commission on January 19, 2007)

31 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.