x
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QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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Delaware
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20-8523583
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(State
or other jurisdiction of
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(I.R.S.
Employer
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Incorporation
or organization)
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Identification
Number)
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590
MADISON AVENUE, 32nd
FLOOR
NEW
YORK, NY
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10022
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(Address
of principal executive offices)
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(Zip
Code)
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Page
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|||
PART
I
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|
||
FINANCIAL
INFORMATION
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|||
Item
1.
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Condensed
Financial Statements:
|
||
Condensed
Balance Sheets as of June 30, 2008 (unaudited) and December 31,
2007
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4
|
||
Condensed
Statements of Operations (unaudited) for the three months ended
June 30,
2008 and 2007, for the six months ended June 30, 2008 and for the
period
from February
14, 2007 (inception) through June 30, 2007 and for the period from
February 14,
2007 (inception) through June 30, 2008
|
5
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||
Condensed
Statements of Cash Flows (unaudited) for the six months ended June
30,
2008 and
2007, and for the period from February 14, 2007 (inception) through
June
30, 2008
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6
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||
Condensed
Statements of Stockholders’ Equity for the period February 14, 2007
(inception)
through December 31, 2007 and for the six months ended June 30,
2008
(unaudited)
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7
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||
Notes
to Condensed Financial Statements
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8
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||
Item
2.
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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17
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|
Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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19
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|
Item
4.
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Controls
and Procedures
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20
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PART
II
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|||
OTHER
INFORMATION
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|||
Item
1.
|
Legal
Proceedings
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20
|
|
Item
1A.
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Risk
Factors
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20
|
|
Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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21
|
|
Item
3.
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Defaults
Upon Senior Securities
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21
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|
Item
4.
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Submission
of Matters to a Vote of Security Holders
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21
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|
Item
5.
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Other
Information
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21
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|
Item
6.
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Exhibits
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21
|
|
Signatures
|
22
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||
Exhibit
Index
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23
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||
Certifications
|
· |
ability
to complete our initial business
combination;
|
· |
success
in retaining or recruiting, or changes required in, our officers,
key
employees or directors following our initial business
combination;
|
· |
officers
and directors allocating their time to other businesses and potentially
having conflicts of interest with our business or in approving our
initial
business combination, as a result of which they would then receive
expense
reimbursements;
|
· |
potential
ability to obtain additional financing to complete a business
combination;
|
· |
ability
of our officers and directors to generate a number of potential investment
opportunities;
|
· |
potential
change in control if we acquire one or more target businesses for
stock;
|
· |
our
public securities’ potential liquidity and trading; listing or delisting
of our securities from the American Stock Exchange or the ability
to have
our securities listed on the American Stock Exchange following our
initial
business combination;
|
· |
use
of proceeds not held in the trust account or available to us from
interest
income on the trust account balance;
or
|
· |
financial
performance.
|
June
30,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
2,643,895
|
$
|
1,317,688
|
|||
Trust
account, interest available for working capital and taxes:
|
|||||||
Cash
and cash equivalents held in trust account, interest
available
for working capital and taxes
|
105,567
|
989,183
|
|||||
Accrued
interest receivable
|
157,214
|
469,705
|
|||||
Total
trust account, interest available for working capital and
taxes
|
262,781
|
1,458,888
|
|||||
Accounts
receivable other
|
—
|
26,323
|
|||||
Prepaid
expenses
|
103,507
|
108,024
|
|||||
Total
current assets
|
3,010,183
|
2,910,923
|
|||||
Deferred
tax assets - non current
|
—
|
125,406
|
|||||
Total
current assets
|
3,010,183
|
3,036,329
|
|||||
Non
current assets
|
|||||||
Trust
account, restricted
|
|||||||
Cash
and cash equivalents held in trust account
|
425,909,120
|
425,909,120
|
|||||
Accrued
interest receivable
|
370,117
|
—
|
|||||
Trust
account, restricted
|
426,279,237
|
425,909,120
|
|||||
Total
Assets
|
$
|
429,289,420
|
$
|
428,945,449
|
|||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$
|
10,669
|
$
|
449,194
|
|||
Note
payable to affiliate
|
—
|
250,000
|
|||||
Advances
payable to affiliate
|
1,504
|
26,818
|
|||||
Interest
payable to affiliate
|
—
|
9,435
|
|||||
Accrued
expenses
|
100,685
|
96,915
|
|||||
Taxes
payable
|
186,375
|
808,278
|
|||||
Other
payables - deferred underwriters’ fee
|
17,315,840
|
17,315,840
|
|||||
Total
Current Liabilities
|
17,615,073
|
18,956,480
|
|||||
Common
stock, subject to possible conversion, 12,986,879 shares at conversion
value:
|
127,772,726
|
127,772,726
|
|||||
Deferred
interest, attributable to common stock subject to possible
conversion
|
111,035
|
—
|
|||||
Commitments
and Contingencies:
|
—
|
—
|
|||||
Stockholders’
Equity:
|
|||||||
Preferred
stock, $.001 par value; 1,000,000 authorized, none issued
|
—
|
—
|
|||||
Common
stock, $.001 par value, 200,000,000 shares authorized; 41,125,121
shares
issued and outstanding (excluding 12,986,879 shares subject to possible
conversion)
|
41,125
|
41,125
|
|||||
Additional
paid-in capital
|
280,597,790
|
280,708,825
|
|||||
Retained
earnings accumulated during the development stage
|
3,151,671
|
1,466,293
|
|||||
Total
Stockholders’ Equity
|
283,790,586
|
282,216,243
|
|||||
Total
Liabilities and Stockholders’ Equity
|
$
|
429,289,420
|
$
|
428,945,449
|
For
the Three Months Ended
June
30, 2008
|
For
the Three Months Ended
June
30, 2007
|
For
the Six Months Ended
June
30, 2008
|
For
the Period from February 14, 2007 (inception) to June 30,
2007
|
For
the Period from February 14, 2007 (inception) to June 30,
2008
|
||||||||||||
Formation
and operating costs
|
$
|
301,765
|
$
|
132
|
$
|
499,229
|
$
|
25,568
|
$
|
763,602
|
||||||
Loss
from operations
|
(301,765
|
)
|
(132
|
)
|
(499,229
|
)
|
(25,568
|
)
|
(763,602
|
)
|
||||||
Interest
income - Trust
|
1,700,797
|
—
|
4,341,829
|
—
|
7,286,222
|
|||||||||||
Interest
income - other
|
11,950
|
—
|
25,427
|
—
|
31,507
|
|||||||||||
Interest
expense
|
(3,021
|
)
|
(3,185
|
)
|
(6,146
|
)
|
(3,185
|
)
|
(15,581
|
)
|
||||||
Income
(loss) before tax
|
1,407,961
|
(3,317
|
)
|
3,861,881
|
(28,753
|
)
|
6,538,546
|
|||||||||
Provision
for income taxes
|
(698,507
|
)
|
—
|
(2,176,503
|
)
|
—
|
(3,386,875
|
)
|
||||||||
Net
income (loss)
|
709,454
|
(3,317
|
)
|
1,685,378
|
(28,753
|
)
|
3,151,671
|
|||||||||
Deferred
interest, attributable to common stock subject to possible
conversion
|
231,809
|
—
|
(111,035
|
)
|
—
|
(111,035
|
)
|
|||||||||
Net
income (loss) attributable to common stock
|
$
|
941,263
|
$
|
(3,317
|
)
|
$
|
1,574,343
|
$
|
(28,753
|
)
|
$
|
3,040,636
|
||||
Net
income (loss) attributable to common stock per common share, basic
and
diluted
|
$
|
0.02
|
$
|
(0.00
|
)
|
$
|
0.04
|
$
|
0.00
|
|||||||
Weighted
average number of common shares outstanding - excluding shares subject
to
possible conversion, basic and diluted
|
41,125,121
|
10,000,000
|
41,125,121
|
10,000,000
|
For
the Six Months ended June 30,
2008
|
For
the Period from February 14,
2007
(inception) to
June
30, 2007
|
For
the Period from February 14,
2007
(inception) to June 30, 2008
|
||||||||
(unaudited)
|
(unaudited)
|
|||||||||
Cash
flows from operating activities:
|
||||||||||
Net
Income (loss)
|
$
|
1,685,378
|
$
|
(28,753
|
)
|
$
|
3,151,671
|
|||
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
||||||||||
Deferred
tax asset and valuation allowance
|
125,406
|
—
|
—
|
|||||||
Changes
in asset and liability accounts:
|
||||||||||
Accrued
interest receivable
|
(57,626
|
)
|
—
|
(527,331
|
)
|
|||||
Other
receivable
|
26,323
|
—
|
—
|
|||||||
Prepaid
expenses
|
4,517
|
—
|
(103,507
|
)
|
||||||
Accounts
payable
|
(438,525
|
)
|
—
|
10,669
|
||||||
Advances
payable to affiliate
|
(25,314
|
)
|
26,818
|
1,504
|
||||||
Interest
payable to affiliate
|
(9,435
|
)
|
3,185
|
—
|
||||||
Accrued
expenses
|
3,770
|
(1,250
|
)
|
100,685
|
||||||
Income
taxes payable
|
(621,903
|
)
|
—
|
186,375
|
||||||
Net
cash generated in operating activities
|
692,591
|
—
|
2,820,066
|
|||||||
Cash
flows from investing activities:
|
||||||||||
Cash
and cash equivalents held in trust account,
interest available for working capital
and taxes
|
883,616
|
—
|
(105,567
|
)
|
||||||
Trust
account restricted
|
—
|
—
|
(425,909,120
|
)
|
||||||
Net
cash provided by (used in) investing activities
|
883,616
|
—
|
(426,014,687
|
)
|
||||||
Cash
flows from financing activities:
|
||||||||||
Proceeds
from issuance of founder’s units
|
—
|
25,000
|
25,000
|
|||||||
Proceeds
from issuance of additional founder’s warrants
|
—
|
—
|
7,000,000
|
|||||||
Proceeds
from note payable to affiliate
|
—
|
250,000
|
250,000
|
|||||||
Repayment
of note payable to affiliate
|
(250,000
|
)
|
—
|
(250,000
|
)
|
|||||
Proceeds
from initial public offering
|
—
|
—
|
432,896,000
|
|||||||
Payment
of offering costs
|
—
|
(76,915
|
)
|
(14,082,484
|
)
|
|||||
Net
cash provided by (used in) financing activities
|
(250,000
|
)
|
198,085
|
425,838,516
|
||||||
Net
increase in cash
|
1,326,207
|
198,085
|
2,643,895
|
|||||||
Cash
at the beginning of the period
|
1,317,688
|
—
|
—
|
|||||||
Cash
at the end of the period
|
$
|
2,643,895
|
$
|
198,085
|
$
|
2,643,895
|
||||
Supplemental
disclosure of non-cash financing activities:
|
||||||||||
Deferred
offering costs
|
$
|
—
|
$
|
372,456
|
$
|
—
|
||||
Accrual
of deferred underwriters’ discount
|
$
|
—
|
$
|
—
|
$
|
17,315,840
|
||||
Cash
payments for federal, state and local income taxes
|
$
|
2,673,000
|
$
|
—
|
$
|
3,200,500
|
Common
Stock
Shares
|
Common
Stock
Amount
|
Additional
Paid-in Capital
|
Retained
Earnings Accumulated During the Development Stage
|
Total
Stockholders’ Equity
|
||||||||||||
Proceeds
from founder’s units issued on March 22, 2007
|
11,500,000
|
$
|
11,500
|
$
|
13,500
|
$
|
-
|
$
|
25,000
|
|||||||
Proceeds
from issuance of 40,000,000 units, net of underwriters’ commissions and
offering expenses of $29,030,049 on October 16, 2007
|
40,000,000
|
40,000
|
370,929,951
|
—
|
370,969,951
|
|||||||||||
Net
proceeds subject to possible conversion of 11,999,999
shares
|
(11,999,999
|
)
|
(12,000
|
)
|
(118,187,990
|
)
|
—
|
(118,199,990
|
)
|
|||||||
Proceeds
from issuance of 7,000,000 warrants on October 16, 2007
|
—
|
—
|
7,000,000
|
—
|
7,000,000
|
|||||||||||
Proceeds
from issuance of 3,289,600 units, net of underwriters’ commissions and
offering expenses of $2,368,275 on October 31, 2007
|
3,289,600
|
3,290
|
30,524,435
|
—
|
30,527,725
|
|||||||||||
Net
proceeds subject to possible conversion of 986,880 shares
|
(986,880
|
)
|
(987
|
)
|
(9,571,749
|
)
|
—
|
(9,572,736
|
)
|
|||||||
Common
stock forfeited by founders on October 31, 2007
|
(677,600
|
)
|
(678
|
)
|
678
|
—
|
—
|
|||||||||
Net
income
|
—
|
—
|
—
|
1,466,293
|
1,466,293
|
|||||||||||
Balances
at December 31, 2007
|
41,125,121
|
41,125
|
280,708,825
|
1,466,293
|
282,216,243
|
|||||||||||
Deferred
interest, attributable to common stock subject to possible
conversion
|
—
|
—
|
(111,035
|
)
|
—
|
(111,035
|
)
|
|||||||||
Net
income attributable to common stockholders (unaudited)
|
—
|
—
|
—
|
1,685,378
|
1,685,378
|
|||||||||||
Balances
at June 30, 2008 (unaudited)
|
41,125,121
|
$
|
41,125
|
$
|
280,597,790
|
$
|
3,151,671
|
$
|
283,790,586
|
5. |
Reclassification:
|
6. |
Concentration
of Credit Risk:
|
7. |
Fair
Value of Financial
Instruments:
|
8. |
Use
of Estimates:
|
9. |
Trust
Account-Restricted:
|
10. |
Income
tax:
|
11. |
Share-based
compensation:
|
12. |
Recent Accounting
Pronouncements:
|
June
30, 2008
|
|
December
31, 2007
|
|||||
Initial
Founder’s Warrants
|
10,822,400
|
10,822,400
|
|||||
Additional
Founder’s Warrants
|
7,000,000
|
7,000,000
|
|||||
Public
Warrants
|
43,289,600
|
43,289,600
|
|||||
Total
|
61,112,000
|
61,112,000
|
·
|
may
significantly reduce the equity interest of our
stockholders;
|
·
|
will
likely cause a change in control if a substantial number of our shares
of
common stock are issued, which may affect, among other things, our
ability
to use our net operating loss carry forwards, if any, and may also
result
in the resignation or removal of one or more of our current officers
and
directors; and
|
·
|
may
adversely affect prevailing market prices for our common
stock.
|
·
|
default
and foreclosure on our assets if our operating revenues after a business
combination were insufficient to pay our debt
obligations;
|
·
|
acceleration
of our obligations to repay the indebtedness even if we have made
all
principal and interest payments when due if the debt security contained
covenants that require the maintenance of certain financial ratios
or
reserves and any such covenant were breached without a waiver or
renegotiation of that covenant; and
|
·
|
our
immediate payment of all principal and accrued interest, if any,
if the
debt security were payable on demand; and our inability to obtain
additional financing, if necessary, if the debt security contained
covenants restricting our ability to do
so.
|
SP
Acquisition Holdings, Inc.
|
||
|
|
|
By: | /s/ Warren G. Lichtenstein | |
Warren
G. Lichtenstein
Chairman,
President and Chief
Executive Officer
(Principal
Executive Officer)
|
SP Acquisition Holdings, Inc. | ||
|
|
|
By: | /s/ Jack L. Howard | |
Jack
L. Howard
Chief
Operating Officer and Secretary
(Principal
Financial Officer and Principal Accounting
Officer)
|
||
Dated: August 14, 2008 |
Exhibit
Number
|
Description
|
|
31.1
|
Certification
of Principal Executive Officer, pursuant to Rule 13a -14 and 15d-14
of the
Securities Exchange Act of 1934.
|
|
31.2
|
Certification
of Principal Financial and Principal Accounting Officer, pursuant
to Rule
13a-14 and 15d-14 of the Securities Exchange Act of
1934
|
|
32.1
|
Certification
of Principal Executive Officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
32.2
|
Certification
Principal Financial and Principal Accounting Officer pursuant to
18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act
of 2002
|