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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20-3893077
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(State
or other jurisdiction of
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(I.R.S.
Employer Identification No.)
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incorporation
or organization)
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2601
Ocean Park Blvd. Suite 320
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||
Santa
Monica, California
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90405
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(Address
of principal executive offices)
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(Zip
Code)
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·
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being
a development stage company with no operating
history;
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·
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dependence
on key personnel, some of whom may join us following an initial
transaction;
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·
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personnel
allocating their time to other businesses and potentially having
conflicts
of interest with our business;
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·
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potentially
being unable to obtain additional financing to complete an initial
transaction;
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·
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limited
pool of prospective target
businesses;
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·
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securities’
ownership being concentrated;
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·
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potential
change in control if we acquire one or more target businesses for
stock;
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·
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risk
associated with operating in the media, entertainment or
telecommunications industries;
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·
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delisting
of our securities from the American Stock Exchange or our inability
to
have our securities listed on the American Stock Exchange following
a
business combination;
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·
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financial
performance following an initial transaction;
or
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·
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those
other risks and uncertainties detailed in the Registrant’s filings with
the Securities and Exchange
Commission.
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PART I
— FINANCIAL INFORMATION
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Item 1.
Condensed Financial Statements
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4
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Condensed
Balance Sheet
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4
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Condensed
Statement of Operations
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5
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Condensed
Statement of Stockholders’ Equity
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6
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Condensed
Statement of Cash Flows
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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.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
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16
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Item 3.
Quantitative and Qualitative Disclosures about Market Risk
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21
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Item 4.
Controls and Procedures
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21
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PART II
— OTHER INFORMATION
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Item
1. Legal Proceedings
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22
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Item 1A.
Risk Factors
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22
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Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds
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22
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Item 3.
Defaults Upon Senior Securities
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22
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Item 4.
Submission of Matters to a Vote of the Security Holders
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22
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Item 5.
Other Information
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22
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Item 6.
Exhibits
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22
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SIGNATURES
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23 |
EXHIBITS
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June
30, 2007
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December 31, 2006
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||||||
(unaudited)
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|||||||
Assets
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|||||||
Current
assets:
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|||||||
Cash
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$
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344,091
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$
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1,228,722
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|||
Investments
Held in Trust
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147,004,394
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145,536,328
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|||||
Prepaid
Expenses
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40,966
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63,996
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|||||
Prepaid
income taxes
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75,531
|
—
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|||||
Total
Current Assets
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147,464,982
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146,829,046
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|||
Deferred
Tax Asset
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475,971
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256,314
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|||||
Deferred
aquisition costs
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1,577,411
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196,880
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|||||
Total
Assets
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$
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149,518,364
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$
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147,282,240
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|||
Liabilities
And Stockholders’ Equity
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|||||||
Current
Liabilities
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|||||||
Accrued
Costs
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$
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656,149
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$ |
76,978
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|||
Income
and Capital Taxes Payable
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—
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512,763
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||||
Accounts
Payable and Accrued Expenses
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28,521
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64,558
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|||||
Deferred
Interest
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910,898
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485,916
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|||||
Deferred
Underwriter Fees
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3,000,000
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3,000,000
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|||||
Total
Liabilities
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4,595,568
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4,140,215
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|||||
Common
Stock Subject to Possible Conversion, 3,748,125 Shares At Conversion
Value
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27,901,042
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27,901,042
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|||||
Commitments
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|||||||
Stockholders’
Equity
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|||||||
Preferred
Stock, $.001 par value, 1,000,000 shares authorized; None issued
or
outstanding
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—
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—
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|||||
Common
Stock, $.001 par value, 60,000,000 shares authorized; 23,437,500
Shares
(which Includes 3,748,125
Subject
to Possible Conversion) and 4,687,500 Shares Issued and Outstanding,
respectively
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23,437
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23,437
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|||||
Additional
Paid in Capital
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113,190,621
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113,190,621
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|||||
Earnings
Accumulated during the Development Stage
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3,807,696
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2,026,925
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|||||
Total
Stockholders’ Equity
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117,021,754
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115,240,983
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|||||
Total
Liabilities and Stockholders’ Equity
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$
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149,518,364
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$
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147,282,240
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For
the period
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||||||||||||||||
From
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||||||||||||||||
Three
Months
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Three
Months
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Six
Months
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Six
Months
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December
6,
2005
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||||||||||||
Ended
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Ended
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Ended
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Ended
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(Inception)
to
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||||||||||||
June
30, 2007
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June
30, 2006
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June
30, 2007
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June
30, 2006
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June
30, 2007
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||||||||||||
Revenue
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$
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—
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$
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—
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$
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—
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$
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—
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$
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—
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||||||
Interest
Income
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1,609,633
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376,366
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3,134,601
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376,366
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6,727,513
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|||||||||||
Operating
Expenses
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||||||||||||||||
General &
Administrative
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73,544
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36,035
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173,781
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36,035
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393,319
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|||||||||||
Net
Income before Provision for Income Taxes
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$
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1,536,089
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$
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340,33140
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$
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2,960,820
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$
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340,331
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$
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6,334,194
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||||||
Provision
for Income Taxes
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612,510
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135,492
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1,180,049
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135,492
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2,526,498
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|||||||||||
Net
Income
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$
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923,579
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$ |
204,839
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$
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1,780,771
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$
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204,839
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$
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3,807,696
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||||||
Weighted
Average Number of Common Shares Outstanding —
Basic
and diluted
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23,437,500
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9,637,500
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23,437,500
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7,795,235
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17,625,000
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|||||||||||
Net
Income Per Share - Basic and diluted
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$
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0.04
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$
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0.02.03
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$
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0.08
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$
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0.03
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$
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0.22
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Earnings/(Deficit)
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||||||||||||||||
Accumulated
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||||||||||||||||
During
the
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||||||||||||||||
Common Stock
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Additional
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Development
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||||||||||||||
Shares
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Amount
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Paid-in-Capital
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Stage
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Total
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||||||||||||
Contributions
from founding stockholders - December
13,
2005 at $.005 per share
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4,687,500
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$
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4,687
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$
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20,313
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$
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—
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$
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25,000
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|||||||
Net
Loss
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—
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—
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—
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(2,013
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)
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(2,013
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)
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|||||||||
Balance
- December 31, 2005
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4,687,500
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$
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4,687
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$
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20,313
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$
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(2,013
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)
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$
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22,987
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||||||
Sale
of Founding Director
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||||||||||||||||
Warrants
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—
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—
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2,250,000
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—
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2,250,000
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|||||||||||
Sale
of 18,750,000 Units Net of Underwriter’s Discount
and
Offering expenses (Includes 3,748,125 Shares
Subject
to Possible Conversion)
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18,750,000
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18,750
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138,821,250
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—
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138,840,000
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|||||||||||
Proceeds
Subject to Possible Conversion of 3,748,125 Shares
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—
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—
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(27,901,042
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)
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—
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(27,901,042
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)
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|||||||||
Sale
of Underwriter Option
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—
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—
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100
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—
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100
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|||||||||||
Net
Income
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—
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—
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—
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2,028,938
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2,038,938
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|||||||||||
Balance
- December 31, 2006
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23,437,500
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$
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23,437
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$
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113,190,621
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$
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2,026,925
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$
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115,240,983
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|||||||
Unaudited:
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||||||||||||||||
Net
Income
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—
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—
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—
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1,780,771
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1,780,771
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|||||||||||
Balance
- June 30, 2007
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23,437,500
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$ |
23,437
|
$ |
113,190,621
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$ |
3,807,696
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$ |
117,021,754
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Six
Months
Ended
June
30, 2007
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Six
Months
Ended
June
30, 2006
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For
the period from
December
6, 2005
(inception)
to
June 30, 2007
(cumulative)
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|
|||||||
Cash
Flows From Operating Activities:
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||||||||||
Net
Income
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$
|
1,780,771
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$
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204,839
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$
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3,807,696
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||||
Adjustments
to reconcile net income to net cash used in
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||||||||||
operating
activities:
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||||||||||
Increase
in Value of Investments Held in Trust
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(3,543,283
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)
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(423,977
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)
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(7,594,612
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)
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||||
Increase
in Deferred Income Tax Benefit
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(219,657
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)
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(28,086
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)
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(475,971
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)
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||||
Increase
in Deferred Interest
|
424,982
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50,852
|
910,898
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|||||||
Changes
in Operating Assets and Liabilities:
|
||||||||||
Increase/Decrease
in Accounts Payable and Accrued
|
||||||||||
Expenses
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(36,037
|
)
|
21,799
|
28,521
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||||||
Increase/Decrease
in Income and Capital Taxes Payable
|
(588,294
|
)
|
163,578
|
(75,531
|
)
|
|||||
Increase/Decrease
in Prepaid Expenses
|
23,030
|
(110,571
|
)
|
(40,966
|
)
|
|||||
Net
Cash Used in Operating Activities
|
(2,158,488
|
)
|
(121,566
|
)
|
(3,439,965
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)
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Cash
Flow from Investing Activities
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||||||||||
Increase/
Decrease in Other Assets
|
(801,360
|
)
|
—
|
(921,261
|
)
|
|||||
Investments
Placed in Trust
|
—
|
(142,575,000
|
)
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(142,575,000
|
)
|
|||||
Tax
Payments from Trust
|
2,075,217
|
—
|
3,165,217
|
|||||||
Net
Cash Provided by (Used in) Investing Activities
|
1,273,857
|
(142,575,000
|
)
|
(140,331,044
|
)
|
|||||
Cash
Flow from Financing Activities:
|
||||||||||
Proceeds
from Public Offering
|
—
|
150,000,000
|
150,000,000
|
|||||||
Proceeds
from Founding Director Warrant Purchase
|
—
|
2,250,000
|
2,250,000
|
|||||||
Proceeds
from Issuance of Underwriter Option
|
—
|
100
|
100
|
|||||||
Proceeds
from Sale of Common Stock
|
—
|
—
|
25,000
|
|||||||
Proceeds
from Notes Payable, Stockholders
|
—
|
—
|
225,000
|
|||||||
Payment
of Notes Payable, Stockholders
|
—
|
(225,000
|
)
|
(225,000
|
)
|
|||||
Payment
of Offering Costs
|
—
|
(8,018,464
|
)
|
(8,160,000
|
)
|
|||||
Net
Cash Provided by (Used in) Financing Activities
|
—
|
144,006,636
|
144,115,100
|
|||||||
Net
Increase/(Decrease) in Cash
|
(884,631
|
)
|
1,310,070
|
344,091
|
||||||
154,239
|
||||||||||
Cash
at Beginning of Period
|
1,228,722
|
—
|
—
|
|||||||
Cash
at end of period
|
$
|
344,091
|
$
|
1,464,309
|
$
|
344,091
|
||||
Supplemental
schedule of non-cash financing activities:
|
||||||||||
Accrual
of Deferred Underwriting Fees
|
$
|
—
|
$
|
3,000,000
|
$
|
3,000,000
|
||||
Accrual
of Other Assets
|
$
|
615,773
|
$
|
—
|
$
|
656,149
|
||||
Accrual
of Public Offering Costs
|
—
|
$
|
45,775
|
$
|
—
|
(i)
|
an
aggregate of 1,256,447 shares of the Registrant’s common
stock;
|
Number
|
Description
|
|
10.1
|
Asset
Purchase Agreement, dated May 30, 2007, by and between Registrant
and the
National Hot Rod Association (incorporated by reference to
Exhibit 10.1 to Current Report on Form 8-K dated June 5, 2007
(Commission File No. 1-32890))
|
|
10.2
|
Key
Definitions Agreement, dated May 30, 2007, by and between Registrant
and
the National Hot Rod Association (incorporated by reference to Annex
B to
Schedule 14A Proxy Statement filed July 17, 2007 (Commission File
No. 1-32890))
|
|
31.1*
|
Certification
by Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2*
|
Certification
by Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
32.1*
|
Certification
by Principal Financial 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
by Principal Executive officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
HD
PARTNERS ACQUISITION CORPORATION
|
||
|
|
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Date:
August 9, 2007
|
By: |
/s/
Eddy W. Hartenstein
|
Eddy
W. Hartenstein
|
||
Chairman,
President and Chief Executive Office
(Principal
Executive Officer)
|
|
|
|
|
By: |
/s/
Robert L. Meyers
|
Robert
L. Meyers
|
||
Chief
Financial Officer and Treasurer
(Principal
Financial and Accounting
Officer)
|