UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC 20549





FORM
10-K




x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





OR


o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




Commission
file number: 000-53977




57th Street
General Acquisition Corp.


Delaware
              
              
              27-1215274(State
      or other jurisdiction of
                incorporation
      or organization)
              
              
              (I.R.S.
      Employer
                Identification
      Number)





590
Madison Avenue, 35th Floor


New
York, New York 10022


(212)
409-2434


(Address,
including zip code, and telephone number, including


area
code, of registrant’s principal executive offices)





None


Securities
registered pursuant to Section 12(b) of the Act




N/A


Name of
each exchange on which registered




Common
Stock, $.0001 par value per share


Warrants
to purchase shares of Common Stock


Units,
each comprising of one share of Common Stock and one Warrant


Securities
registered pursuant to Section 12(g) of the Act:




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.    Yes  o    No  x.




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange
Act.    Yes  o    No  x.




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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  x    No  o.




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes  o    No  o.




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer  o
            
            Accelerated
      filer  oNon-accelerated
      filer  o
            
            Smaller
      reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes  x    No  o.




The
aggregate market value of the outstanding common stock, other than shares held
by persons who may be deemed affiliates of the registrant, computed by reference
to the closing sales price for the Registrant’s Common Stock on February 7,
2011, as reported on the OTC Bulletin Board, was approximately $55,108,630. As
of February 7, 2011, there were 6,030,026shares of
common stock, par value $.0001 per share, of the registrant
outstanding.










TABLE OF
CONTENTS




PART
      IItem
      1.
                
                Business
                2Item
      1A.
                
                Risk
      Factors
                12Item
      2.
                
                Properties
                26Item
      3.
                
                Legal
      Proceedings
                26Item
      4.
                
                Removed
      and Reversed
                27PART
      IIItem
      5.
                
                Market
      For Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                27Item
      6.
                
                Selected
      Financial Data
                29Item
      7.
                
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                29Item
      7A.
                
                Quantitative
      and Qualitative Disclosures About Market RiskItem
      8.
                
                Financial
      Statements and Supplementary Data
                33Item
      9.
                
                Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                34Item
      9A(T).
                
                Controls
      and Procedures
                34Item
      9B.
                
                Other
      Information
                34PART
      IIIItem
      10.
                
                Directors,
      Executive Officers and Corporate Governance
                35Item
      11.
                
                Executive
      Compensation
                38Item
      12.
                
                Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                39Item
      13.
                
                Certain
      Relationships and Related Transactions, and Director
      Independence
                41Item
      14.
                
                Principal
      Accountant Fees and Services
                42PART
      IVItem
      15.
                
                Exhibits
      and Financial Statement Schedules
                45





CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS




This
Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements can be
identified by the use of forward-looking terminology, including the words
“believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,”
“will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in
each case, their negative or other variations or comparable terminology. Such
statements include, but are not limited to, any statements relating to our
ability to consummate any acquisition or other business combination and any
other statements that are not statements of current or historical facts. These
statements are based on management’s current expectations, but actual results
may differ materially due to various factors, including, but not limited to,
our:




·
              our status as a development stage
      company;
 
 ·
              the reduction of the proceeds
      held in the trust account due to third party
  claims;
 
 ·
              our selection of a prospective
      target business or asset;
 
 ·
              our issuance of our capital
      shares or incurrence of debt to complete a business
      transaction;
 
 ·
              our ability to consummate an
      attractive business transaction due to our limited resources and the
      significant competition for business transaction
      opportunities;
 
 ·
              conflicts of interest of our
      officers and directors;
 
 ·
              potential current or future
      affiliations of our officers and directors with competing
      businesses;
 
 ·
              our ability to obtain additional
      financing if necessary;
 
 ·
              our sponsor’s ability to control
      or influence the outcome of matters requiring stockholder approval due to
      its substantial interest in
us;
 
 ·
              the adverse effect the
      outstanding warrants may have on the market price of our common
      stock;
 
 ·
              the adverse effect on the market
      price our common stock due to the existence of registration rights with
      respect to the securities owned by our
  sponsor;
 
 ·
              the lack of a market for our
      securities;
 
 ·
              our dependence on our key
      personnel;
 
 ·
              business and market
      outlook;
 
 ·
              costs of complying with
      applicable laws; and
 
 ·
              those other risks and
      uncertainties detailed in the Registrant’s filings with the Securities and
      Exchange Commission.




These
risks and others described under “Risk Factors” may not be
exhaustive.




By
their nature, forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may not occur in
the future. We caution you that forward-looking statements are not guarantees of
future performance and that our actual results of operations, financial
condition and liquidity, and developments in the industry in which we operate
may differ materially from those made in or suggested by the forward-looking
statements contained in this Annual Report on Form 10-K. In addition, even if
our results or operations, financial condition and liquidity, and developments
in the industry in which we operate are consistent with the forward-looking
statements contained in this Annual Report on Form 10-K, those results or
developments may not be indicative of results or developments in subsequent
periods.







These
forward-looking statements are subject to numerous risks, uncertainties and
assumptions about us described in our filings with the Securities and Exchange
Commission (the “Commission”). The forward-looking events we discuss in this
Annual Report on Form 10-K speak only as of the date of such statement and might
not occur in light of these risks, uncertainties and assumptions. Except as
required by applicable law, we undertake no obligation and disclaim any
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.  For any
risks associated with the Transaction (as described below), see the Company’s
Form 8-K as filed with the Commission on January 10, 2011 (the “Form
8-K”).




Unless
otherwise provided in this Annual Report on Form 10-K, references to “the
Company,” “57th
Street”, “the Registrant,” “we,” “us” and “our” refer to 57th Street
General Acquisition Corp..




PART
I




Item
1.  Business




Introduction




57th Street
General Acquisition Corp. (the “Company”, “57th
Street”, “we”, or “us”) formed on October 29, 2009, is a blank check company
organized under the laws of the State of Delaware. We were formed to acquire,
through a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization, exchangeable share transaction or other similar business
transaction, one or more operating businesses or assets.  Pursuant to
our second amended and restated certificate of incorporation, we will have until
August 19, 2011 to consummate our business transaction or we will (1) cease all
operations except for the purposes of winding up, (ii) redeem 100% of our public
shares of Common Stock for cash equal to their pro rata share of the aggregate
amount then on deposit in the trust account (approximately $9.98 per share)
including interest, less taxes, which redemption will completely extinguish
public stockholders’ rights as stockholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and
subject to the requirement that any refund of income taxes that were paid from
the trust account which is received after the redemption shall be distributed to
the former public stockholders, and (iii) as promptly as possible following such
redemption, dissolve and liquidate the balance of our net assets to our
remaining stockholders, as part of our plan of dissolution and liquidation to be
adopted in accordance with Section 281(b) of the Delaware General Corporation
Law.  Prior to January 9, 2011, our efforts have been limited to
organizational activities, our initial public offering (the “Offering”) and the
search for a suitable business transaction.  On January 9, 2011,
57th
Street, 57th Street
Merger Sub LLC, a newly formed Delaware limited liability company and
wholly-owned subsidiary of 57th Street,
Crumbs Holdings LLC, a Delaware limited liability company (“Crumbs”), all the
members of Crumbs (individually a “Member” or collectively the “Members”), and
the representatives of Crumbs and the Members, entered into a Business
Combination Agreement (the “Agreement”) pursuant to which 57th Street
will acquire Crumbs (the “Transaction”).  Pursuant to the terms of the
Agreement, among other things, Merger Sub will merge with and into Crumbs with
Crumbs surviving (the “Merger”) as a non-wholly owned subsidiary (the “Surviving
Company”) of 57th Street
in exchange for consideration in the form of cash, newly issued preferred stock
of 57th Street,
and newly issued exchangeable units of the Surviving Company, as further
described in the Company’s Form 8-K, filed on January 10,
2011.  Concurrently with the Merger, 57th Street
will (a) provide its stockholders with the opportunity to redeem their shares of
57th
Street Common Stock for cash equal to their pro rata share of the aggregate
amount then on deposit in the Trust Account, less taxes, upon the consummation
of the Merger (the “Tender Offer”) and (b) provide holders of its Warrants with
the opportunity to redeem their Warrants for cash upon consummation of the
Merger (the “Warrant Tender Offer” and together with the Tender Offer, the
“Tender Offers”).  The Merger and Tender Offers are collectively
referred to as the “Transaction”.  The description of the Agreement is
qualified in its entirety by reference to the full text of the Agreement which
was filed with the Commission on the Company’s Form 8-K.  You are
urged to read the entire Agreement and the other exhibits attached
thereto.  57th
Street’s board of directors has approved the Agreement and authorized 57th Street
to conduct the Tender Offers as set forth in the Agreement.




Additional
information about the proposed Transaction, Tender Offers, the business of
Crumbs and the Schedule TO are available (or will be available), without charge,
at the SEC’s website (http://www.sec.gov). Other than specific references to the
Transaction, the discussion in this Annual Report is as of December 31,
2010.


Our executive offices are located at
590 Madison Avenue, 35th Floor New York, New York 10022 and our telephone number at that
location is (212) 409-2434.




Significant
Activities Since Inception





A registration statement for the
Offering was declared effective May 19, 2010. On May 25, 2010, the Company sold
5,000,000 units (“Units”) in our initial public offering at a price of $10.00
per Unit.  Each Unit consists of one share of the Company’s common
stock, $.0001 par value per share (“Common Stock”) and one common stock purchase
warrant (“Warrant”).  On May 28, 2010, the Company sold an additional
456,300 Units subject to the underwriters’ over allotment
option.  Each Warrant entitles the holder to purchase from the Company
one share of Common Stock at an exercise price of $11.50 commencing the later of
the 30 days following the completion of an initial business transaction or May
19, 2011 (one year from the effective date of the offering), and expiring five
years from the date of our initial business transaction, or earlier upon
redemption or liquidation.  The Company may redeem the Warrants at a
price of $0.01 per Warrant upon 30 days prior notice after the Warrants become
exercisable, only in the event that the last sale price of the common stock is
at least $17.50 per share for any 20 trading days within a 30 trading day period
ending on the third business day prior to the date on which notice of redemption
is given.  On May 25, 2010, the Company received net proceeds of
approximately $48,816,340, before deducting deferred underwriting compensation
of $550,000 and $100,000 for the purchase of 200,000 warrants by the
underwriter.  On May 28, 2010, the Company received additional net
proceeds of $4,423,286 before deducting deferred underwriting compensation of
$50,193.  Total gross proceeds to the Company from the 5,456,300 Units
sold in the Offering (including the 456,300 Units sold pursuant to the
over-allotment option) were $54,563,000.




2


On May
25, 2010, 57th Street
GAC LLC. (the “sponsor”) and the underwriters of the Offering purchased warrants
exercisable for up to 3,700,000 shares of common stock (“Insider Warrants”) from
the Company for $1,850,000. The Insider Warrants are identical to the warrants
sold in the Offering, except that if held by the original holders or their
permitted assigns, they (i) may be exercised for cash or on a cashless basis;
(ii) are not subject to being called for redemption; and (iii) with respect
to Insider Warrants held by the underwriters and beneficially owned by Mark
Klein as a result of being a member of the sponsor, will expire May 19, 2015, or
earlier upon redemption or liquidation.





Subsequent
to the Offering, an amount of $54,476,303 (including $600,193 of deferred
underwriters fee and $100,000 of deferred legal fees), of the net proceeds of
the Offering was deposited in an interest-bearing trust account (“Trust
Account”) and invested only in United States “government securities” within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a
maturity of 180 days or less until the earlier of (i) the consummation of a
business transaction or (ii) liquidation of the Company.





On May 20, 2010, our Units commenced
trading on the OTC Bulletin Board under the symbol “SQTCU”.  Holders
of our Units were able to separately trade the Common Stock and Warrants
included in such Units commencing on June 10, 2010 and the trading in the Units
has continued under the symbol SQTCU. The Common Stock and Warrants are quoted
on the OTC Bulletin Board under the symbols SQTC and SQTCW,
respectively.




Effecting
a Business Transaction




General




We are
not presently engaged in any substantive commercial business. We intend to
utilize cash derived from the proceeds of the Offering, our capital stock, debt
or a combination of these in effecting a business transaction. A business
transaction may involve the acquisition of, or merger with, a company that does
not need substantial additional capital but desires to establish a public
trading market for its shares, while avoiding what it may deem to be adverse
consequences of undertaking a public offering itself. These include time delays,
significant expense, loss of voting control and compliance with various federal
and state securities laws.  In the alternative, we may seek to
consummate a business transaction with a company that may be financially
unstable or in its early stages of development or growth. While we may seek to
effect business transactions with more than one target business, we will
probably have the ability, as a result of our limited resources, to initially
effect only a single business transaction.





We intend
to utilize cash derived from the proceeds of the Offering, our capital stock,
debt or a combination of these in effecting a business transaction. Although
substantially all of the net proceeds of the Offering are intended to be applied
generally toward effecting a business transaction, the proceeds are not
otherwise being designated for any more specific purposes.





We
anticipate structuring a business transaction to acquire 100% of the equity
interests or assets of the target business or businesses. We may, however,
structure a business transaction to acquire less than 100% of such interests or
assets of the target business but will not acquire less than a controlling
interest.  We will acquire a controlling interest either through the
acquisition of at least 50.1% of the voting equity interests in the target or
through the acquisition of a significant voting equity interest that enables us
to exercise a greater degree of control over the target than any other person or
group. In the event we acquire less than a majority of the voting equity
interests in the target, we may seek an even greater degree of control through
contractual arrangements with the target and/or other target equity holders, or
through special rights associated with the target equity security that we hold,
which arrangements or rights may grant us the ability, among other things, to
appoint certain members of the board (or equivalent governing body) or
management of the target or the ability to approve certain types of significant
transactions that the target may seek to enter into.




3


We will
provide our stockholders with the opportunity to redeem their shares of our
Common Stock for cash equal to their pro rata share of the aggregate amount then
on deposit in the Trust Account, less taxes, upon the consummation of our
initial business transaction, subject to the limitations described
herein.  The amount in the Trust Account as of the date of this Report
is approximately $9.98 per share, including interest, less taxes, including
$0.11 per share being held in the Trust Account attributable to the contingent
fees payable to Morgan Joseph & Co. Inc. (“Morgan Joseph”), the sole
book-running manager and the underwriters solely in the event of that our
business transaction is consummated.  Unlike other blank check
companies which hold stockholder votes and conduct proxy solicitations in
conjunction with their initial business transactions and related redemptions of
public shares for cash upon consummation of such initial business
transactions even when a vote is not required by law, we intend to consummate
our initial business transaction and conduct the redemptions without stockholder
vote pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act which
regulate issuer tender offers, and file tender offer documents with the SEC. The
tender offer documents will contain substantially the same financial and other
information about the initial business transaction and the redemption rights as
is required under Regulation 14A of the Exchange Act which regulates the
solicitation of proxies.  If, however, a stockholder vote is required
by law, or we decide to hold a stockholder vote for other business or legal
reasons, we will conduct the redemptions like other blank check companies in
conjunction with a proxy solicitation pursuant to the proxy rules and not
pursuant to the tender offer rules.  We will consummate our initial
business transaction only if holders of no more than 88% of our public shares
elect to redeem their shares and, solely if we seek stockholder approval, a
majority of the outstanding shares of common stock voted are voted in favor of
the business transaction.  Our sponsor and our officers and directors
have agreed not to redeem the shares held by them prior to the
Offering.




We may
seek to raise additional funds through a private offering of debt or equity
securities in connection with the consummation of the business transaction, and
we may effect an initial business transaction using the proceeds of such
offering rather than using the amounts held in the Trust Account. Subject to
compliance with applicable securities laws, we would only consummate such
financing simultaneously with the consummation of our business transaction. In
the case of an initial business transaction funded with assets other than the
Trust Account assets, our notice disclosing the business transaction would
disclose the terms of the financing and, only if required by law, regulation or
a rule of the OTC Bulletin Board, we would seek stockholder approval of such
financing. In the absence of a requirement by law, regulation or a rule of the
OTC Bulletin Board, we would not seek separate stockholder approval of such
financing inasmuch as the financing portion of any initial business transaction
would be disclosed in our notice materials. There are no prohibitions on our
ability to raise funds privately or through loans in connection with our initial
business transaction.




Sources
of target businesses




Target
business candidates have been brought to our attention from various unaffiliated
sources, including investment bankers, venture capital funds, private equity
funds, leveraged buyout funds, management buyout funds and other members of the
financial community, who present solicited or unsolicited proposals. Our
officers and directors as well as their affiliates have also brought to our
attention target business candidates.  In no event, however, will we
pay any of our existing officers, directors or stockholders or any entity with
which they are affiliated any finder’s fee or other compensation prior to or in
connection with the consummation of a business transaction.





Investment
Criteria




Any
evaluation relating to the merits of a particular business transaction will be
based, to the extent relevant, on the below factors as well as other
considerations deemed relevant by our management in effecting a business
transaction consistent with our business objective. In evaluating a prospective
target business, we will conduct an extensive due diligence review which will
encompass, among other things, meetings with incumbent management, inspection of
facilities and assets, as well as a review of all relevant financial and other
information which is made available to us. This due diligence review will be
conducted either by our management or by unaffiliated third parties we may
engage, although we have no current intention to engage any such third parties.
We will also seek to have all owners of any prospective target business execute
agreements with us waiving any right, title, interest or claim of any kind in or
to any monies held in the Trust Account. If any prospective business or owner
refused to execute such agreement, it is unlikely we would continue negotiations
with such business or owner, and in no event will we enter into a definitive
agreement for our initial business transaction without such a waiver
agreement.




In the
case of all possible acquisitions, we will seek to determine whether the
transaction is advisable and in the best interests of us and our stockholders.
We believe it is possible that our attractiveness as a potential buyer of
businesses may increase after the consummation of an initial transaction and
there may or may not be additional business transaction opportunities as we grow
and integrate our acquisitions. We may or may not make future acquisitions.
Fundamentally, however, we believe that, following an initial transaction, we
could learn of, identify and analyze acquisition targets in the same way after
an initial transaction as we will before an initial transaction. To the extent
we are able to identify multiple acquisition targets and options as to which
business or assets to acquire as part of an initial transaction, we intend to
seek to consummate the acquisition which is most attractive and provides the
greatest opportunity for creating stockholder value. The determination of which
entity is the most attractive would be based on our analysis of a variety of
factors, including whether such acquisition would be in the best interests of
our securityholders, the purchase price, the terms of the sale, the perceived
quality of the assets and the likelihood that the transaction will
close.




4


The time
and costs required to select and evaluate a target business and to structure and
complete the business transaction cannot presently be ascertained with any
degree of certainty. Any costs incurred with respect to the identification and
evaluation of a prospective target business with which a business transaction is
not ultimately completed will result in a loss to us and reduce the amount of
capital available to otherwise complete a business transaction.




Possible
lack of business diversification




We may
seek to effect business transactions with more than one target business, and
there is no required minimum valuation standard for any target at the time of
such acquisition, as discussed above. We expect to complete only a single
business transaction, although this process may entail the simultaneous
acquisitions of several operating businesses. Therefore, at least initially, the
prospects for our success may be entirely dependent upon the future performance
of a single business operation. Unlike other entities that may have the
resources to complete several business transactions of entities or assets
operating in multiple industries or multiple areas of a single industry, it is
probable that we will not have the resources to diversify our operations or
benefit from the possible spreading of risks or offsetting of losses. By
consummating a business transaction with only a single entity or asset, our lack
of diversification may:




·
            subject
      us to numerous economic, competitive and regulatory developments, any or
      all of which may have a substantial adverse impact upon the particular
      industry in which we may operate subsequent to a business transaction;
      and




·
            result
      in our dependency upon the development or market acceptance of a single or
      limited number of products, processes or
  services.




In the
event we ultimately determine to simultaneously acquire several businesses or
assets and such businesses or assets are owned by different sellers, we will
need for each of such sellers to agree that our purchase of its business or
assets is contingent on the simultaneous closings of the other acquisitions,
which may make it more difficult for us, and delay our ability, to complete the
business transaction. With multiple acquisitions, we could also face additional
risks, including additional burdens and costs with respect to possible multiple
negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the
businesses or assets into a single operating business.




Limited
ability to evaluate the management of the target business





Although
we intend to closely scrutinize the incumbent management of a prospective target
business when evaluating the desirability of effecting a business transaction,
we cannot assure you that our assessment will prove to be correct. In addition,
we cannot assure you that new members that join our management following a
business transaction will have the necessary skills, qualifications or abilities
to manage a public company. Furthermore, the future role of our officers and
directors, if any, in the target business following a business transaction
cannot presently be stated with any certainty. While our current officers and
directors may remain associated in senior management or advisory positions with
us following a business transaction, they may not devote their full time and
efforts to our affairs subsequent to a business transaction. Moreover, they
would only be able to remain with us after the consummation of a business
transaction if they are able to negotiate employment or consulting agreements in
connection with such business transaction. Such negotiations would take place
simultaneously with the negotiation of the business transaction and could
provide for such individuals to receive compensation in the form of cash
payments and/or our securities for services they would render to us after the
consummation of the business transaction. While the personal and financial
interests of such individuals may influence their motivation in identifying and
selecting a target business, the ability of such individuals to remain with us
after the consummation of a business transaction will not be the determining
factor in our decision as to whether or not we will proceed with any potential
business transaction. Additionally, we cannot assure you that our officers and
directors will have significant experience or knowledge relating to the
operations of the particular target business.




Following
a business transaction, we may seek to recruit additional managers to supplement
or replace the incumbent management of the target business. We cannot assure you
that we will have the ability to recruit such managers, or that any such
managers we do recruit will have the requisite skills, knowledge or experience
necessary to enhance the incumbent management.




5


Stockholders
may not have the ability to approve a business transaction





We intend
to conduct redemptions without a stockholder vote pursuant to the tender
offer rules of the SEC.  Therefore we do not intend to seek
stockholder approval before we effect our initial business transaction as
not all business transactions require stockholder approval under applicable
state law.   However, we may conduct a stockholder vote, if it is
required by law, or we decide to hold such vote for other business or legal
reasons.  Presented in the table below is a graphic explanation of the
types of initial business transactions we may consider and whether stockholder
approval would be required under Delaware law for each such
transaction.





Type of Transaction
                
                Whether Stockholder Approval is RequiredPurchase
      of Assets
                
                NoPurchase
      of Stock of target not involving a merger with the company
                
                NoMerger
      of target into a subsidiary of the company
                
                NoMerger
      of the company with a target
                
                Yes





Redemption
rights for public stockholders upon consummation of our initial business
transaction





We
will provide our stockholders with the opportunity to redeem their shares of our
common stock for cash equal to their pro rata share of the aggregate amount then
on deposit in the Trust Account, less taxes, upon the consummation of our
initial business transaction, subject to the limitations described
herein.  The amount in the Trust Account as of the date of this Report
is approximately $9.98 per share, including interest, less taxes, including
$0.11 per share being held in the Trust Account attributable to the contingent
fees payable to Morgan Joseph and the underwriters solely in the event of that
our business transaction is consummated.  Unlike other blank check
companies which hold stockholder votes and conduct proxy solicitations in
conjunction with their initial business transactions and related redemptions of
public shares for cash upon consummation of such initial business
transactions even if not required by law, we intend to consummate our initial
business transaction and conduct the redemptions without stockholder vote
pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act which regulate
issuer tender offers, and file tender offer documents with the SEC. The tender
offer documents will contain substantially the same financial and other
information about the initial business transaction and the redemption rights as
is required under Regulation 14A of the Exchange Act which regulates the
solicitation of proxies.  If, however, a stockholder vote is required
by law, or we decide to hold a stockholder vote for other business or legal
reasons, we will conduct the redemptions like other blank check companies in
conjunction with a proxy solicitation pursuant to the proxy rules and not
pursuant to the tender offer rules.  We will consummate our initial
business transaction only if holders of no more than 88% of our public shares
elect to redeem their shares and, solely if we seek stockholder approval, a
majority of the outstanding shares of common stock voted are voted in favor of
the business transaction.  Our sponsor and our officers and directors
have agreed not to redeem any shares held by them in connection with the
consummation of a business combination.





The 88%
redemption threshold is different from the redemption or conversion thresholds
used by most blank check companies.  Traditionally, blank check
companies would not be able to consummate a business transaction if the holders
of the company’s public shares voted against a proposed business transaction and
elected to redeem or convert more than a much smaller percentage of the shares
sold in such company’s initial public offering, which percentage threshold is
typically between 19.99% and 39.99%.  As a result, many blank check
companies have been unable to complete business transactions because the amount
of shares voted by their public stockholders electing conversion exceeded the
maximum conversion threshold pursuant to which such company could proceed with a
business transaction.





Conduct
of redemption pursuant to tender offer rules





When we
conduct the redemptions upon consummation of our initial business transaction in
compliance with the tender offer rules, the redemption offer will be made to all
of our stockholders, not just our public stockholders.  Our sponsor
and our officers and directors, however, have agreed not to redeem the initial
shares in connection with this redemption offer.  In addition, the
offer will be made for up to a maximum of 88% of our public shares, subject to
the condition that if more than 88% of our public shares elect to redeem their
shares, we will withdraw the offer and not consummate the initial business
transaction.





Submission
of our initial business transaction to a stockholder vote





In the
event we seek stockholder approval of our business transaction, we will
distribute proxy materials and, in connection therewith, provide our public
stockholders with redemption rights upon consummation of the initial business
transaction.  Public stockholders voting in favor of the business
transaction and electing to exercise their redemption rights shall be entitled
to receive cash equal to their pro rata share of the aggregate amount then on
deposit in the Trust Account, including any amounts representing interest earned
on the Trust Account, less taxes, but public stockholders voting against the
business transaction and electing to exercise their redemption rights shall be
entitled to receive cash equal to their pro rata share of the aggregate amount
then on deposit in the Trust Account excluding any amounts representing interest
earned on the Trust Account, less taxes.





6


Additionally,
if we submit our business transaction to our stockholders for approval, and we
do not conduct redemptions in connection with our business transaction pursuant
to the tender offer rules, it is possible that our sponsor, officers, directors
and their respective affiliates may acquire securities from public stockholders
who have elected to redeem their shares in order to obtain the requisite level
of shares we are required to maintain so that we can proceed with the
consummation of our business transaction. Although our sponsor, officers,
directors and their respective affiliates have no intention of entering into
stock purchase arrangements with our public stockholders subsequent to the
Offering, they may do so in the future, both as an expression of confidence in
the value of our shares of common stock following our initial business
transaction and as a means of increasing the likelihood that we will be able to
proceed with our initial business transaction, as applicable. Such purchases,
should they occur at all, may be negotiated after the time when stockholders
elected to redeem their shares. Any shares purchased from stockholders by our
sponsor, officers, directors or their respective affiliates would be purchased
for cash or other consideration at a price to be negotiated between such
stockholders on the one hand and our sponsor, officers, directors or their
respective affiliates on the other hand. Such price would depend on a variety of
factors including, but not limited to, the size of the stockholder’s position in
our company and the method and timing of payment to such
stockholder.




Any
privately negotiated transaction to purchase shares from a stockholder who would
otherwise choose to redeem their shares, would include a contractual
acknowledgement that such stockholder, although still the record holder of our
shares is no longer the beneficial owner thereof and therefore agrees to refrain
from redeeming their common stock as directed by the purchaser of such
securities. All such privately negotiated transactions (should they occur at
all) would be isolated transactions conducted in compliance with all applicable
securities laws, each to be privately negotiated with one or a discrete group of
stockholders who have elected, or otherwise indicated their intention, to
exercise their redemption rights.




Investors
are cautioned that neither our sponsor, officers, directors, advisors and their
respective affiliates, nor any third parties, have agreed to purchase any such
shares, and their failure to so agree at the applicable time could adversely
impair our ability to consummate a business transaction. Moreover, even if our
sponsor, officers, directors, advisors and their respective affiliates were to
undertake such purchases, such purchases could be subject to limitations under
applicable securities laws and regulations, including Regulation M and
regulations regarding tender offers. The inability of such persons to effect
such purchases could adversely impair our ability to consummate the business
transaction.




Our
sponsor, officers, directors and/or their affiliates anticipate that they will
identify the stockholders with whom the sponsor, officers, directors or their
affiliates may pursue privately negotiated purchases by either the stockholders
contacting us directly or by our receipt of redemption requests submitted by
stockholders following our mailing of a notice in connection with our initial
business transaction.  To the extent that our sponsor, officers,
directors, advisors or their affiliates enter into a private purchase, they
would identify and contact only potential selling stockholders who have
expressed their election to redeem their shares for a pro rata share of the
Trust Account. Pursuant to the terms of such arrangements, any shares so
purchased by our sponsor, officers, advisors, directors and/or their affiliates
would then revoke their election to redeem such shares. The terms of such
purchases would operate to facilitate our ability to consummate a proposed
business transaction by potentially reducing the number of shares redeemed for
cash.




Limitation
on redemption rights upon consummation of a business transaction if we seek a
stockholder vote





Notwithstanding
the foregoing, and solely if we hold a stockholder vote to approve our initial
business transaction, and we do not conduct redemptions in connection with our
business transaction pursuant to the tender offer rules, our amended and
restated certificate of incorporation provides that a public stockholder,
together with any affiliate of his or any other person with whom he is acting in
concert or as a ‘‘group’’ (as defined under Section 13 of the Exchange Act),
will be restricted from seeking redemption rights with respect to more than an
aggregate of 10% of the shares sold in the Offering.  We believe this
restriction will discourage stockholders from accumulating large blocks of
shares, and subsequent attempts by such holders to use their ability to exercise
their redemption rights as a means to force us or our management to purchase
their shares at a significant premium to the then current market price or on
other undesirable terms.  Absent this provision, a public stockholder
holding more than an aggregate of 10% of the shares sold in the Offering could
threaten to seek exercise their redemption rights if such holder’s shares are
not purchased by us or our management at a premium to the then current market
price or on other undesirable terms.  By limiting our stockholders’
ability to redeem  no more than 10% of the shares sold in the
Offering, we believe we will limit the ability of a small group of stockholders
to unreasonably attempt to block our ability to consummate a business
transaction.  However, we would not be restricting our stockholders’
ability to vote all of their shares for or against a business
transaction.





7


Tendering
stock certificates in connection with a tender offer or redemption
rights





We may
require our public stockholders seeking to exercise their redemption rights,
whether they are record holders or hold their shares in “street name,” to either
tender their certificates to our transfer agent prior to the date set forth in
the tender offer documents or proxy materials mailed to such holders, or up to
two business days prior to the vote on the proposal to approve the business
transaction in the event we distribute proxy materials, or to deliver their
shares to the transfer agent electronically using Depository Trust Company’s
DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The
tender offer or proxy materials, as applicable, that we will furnish to holders
of our public shares in connection with our initial business transaction will
indicate whether we are requiring public stock holders to satisfy such delivery
requirements. Accordingly, a public stockholder would have from the time we send
out our tender offer materials until the close of the tender offer period, or up
to two days prior to the vote on the business transaction if we distribute proxy
materials, as applicable, to tender his shares if he wishes to seek to exercise
his redemption rights.  Given the relatively short exercise period, it
is advisable for stockholders to use electronic delivery of the public
shares.





There is
a nominal cost associated with the above-referenced tendering process and the
act of certificating the shares or delivering them through the DWAC System. The
transfer agent will typically charge the tendering broker $35.00 and it would be
up to the broker whether or not to pass this cost on to the redeeming holder.
However, this fee would be incurred regardless of whether or not we require
holders seeking to exercise redemption rights to tender their shares prior to
the meeting. The need to deliver shares is a requirement of exercising
redemption rights regardless of the timing of when such delivery must be
effectuated. However, in the event we require stockholders seeking to exercise
redemption rights prior to the consummation of the proposed business transaction
and the proposed business transactions is not consummated (and therefore we
would not be obligated to pay cash in connection with the tendered shares) this
may result in an increased cost to stockholders.




The
foregoing is different from the procedures used by many blank check
companies.  Traditionally, in order to perfect redemption rights in
connection with a blank check company’s business transaction, the company would
distribute proxy materials for the stockholders’ vote on an initial business
transaction, and a holder could simply vote against a proposed business
transaction and check a box on the proxy card indicating such holder was seeking
to exercise his redemption rights. After the business transaction was approved,
the company would contact such stockholder to arrange for him to deliver his
certificate to verify ownership. As a result, the stockholder then had an
“option window” after the consummation of the business transaction during which
he could monitor the price of the company’s stock in the market. If the price
rose above the redemption price, he could sell his shares in the open market
before actually delivering his shares to the company for cancellation. As a
result, the redemption rights, to which stockholders were aware they needed to
commit before the stockholder meeting, would become a “redemption” right
surviving past the consummation of the business transaction until the redeeming
holder delivered its certificate. The requirement for physical or electronic
delivery prior to the meeting ensures that a redeeming holder’s election to
redeem is irrevocable once the business transaction is approved.




Any
request to redeem such shares once made, may be withdrawn at any time up to the
date set forth in the tender offer materials or the date of the shareholder
meeting set forth in our proxy materials, as applicable. Furthermore, if a
holder of a public share of common stock delivered his certificate in connection
with an election of their redemption rights and subsequently decides prior to
the applicable date not to elect to exercise such rights, he may simply request
that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public
shares of common stock electing to redeem their shares will be distributed
promptly after the completion of a business transaction.




If the
initial business transaction is not approved or completed for any reason, then
our public stockholders who elected to exercise their redemption rights would
not be entitled to redeem their shares for the applicable pro rata share of the
Trust Account. In such case, we will promptly return any shares delivered by
public holders who elected to redeem their shares.




If our
initial proposed business transaction is not consummated, we may continue to try
to consummate a business transaction with a different target until 15 months
from the date of the prospectus.  If the initial business transaction
is not completed for any reason, then public stockholders who exercised their
redemption rights would not be entitled to redeem their shares for a pro rata
share of the aggregate amount then on deposit in the Trust Account. In such
case, if we have required public stockholders to tender their certificates, we
will promptly return such certificates to the tendering public stockholder.
Public stockholders would be entitled to receive their pro rata share of the
aggregate amount on deposit in the Trust Account only in the event that the
initial business transaction is consummated. If the proposed business
transaction is not consummated then a stockholder’s election to exercise its
redemption rights will not be honored, and such redemption will not be entitled
to a cash payment, even if such redemption right was properly
exercised.





8


Redemption
of common stock and liquidation if no initial business transaction




Our
sponsor, officers and directors have agreed that we will only have 15 months
from the date of the prospectus to consummate our initial business
transaction.  If we do not consummate a business transaction within
such 15 month period, we will (i) cease all operations except for the purposes
of winding up, (ii) redeem 100% of our public shares of common stock for cash
equal to their pro rata share of the aggregate amount then on deposit in the
trust account (approximately $9.98 per share, as of the date of this Report)
including interest, less taxes, which redemption will completely extinguish
public stockholders’ rights as stockholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and
subject to the requirement that any refund of income taxes that were paid from
the trust account which is received after the redemption shall be distributed to
the former public stockholders, and (iii) as promptly as possible following such
redemption, dissolve and liquidate the balance of our net assets to our
remaining stockholders, as part of our plan of dissolution and liquidation to be
adopted in accordance with Section 281(b) of the Delaware General Corporation
Law.   Pursuant to the terms of our certificate of incorporation,
our powers following the expiration of the permitted time period for
consummating a business transaction will automatically thereafter be limited to
acts and activities relating to dissolving and winding up our affairs, including
liquidation. In the event no business transaction is consummated within 15
months from the date of the prospectus and we are unable to redeem 100% of the
shares sold in the Offering, we intend to submit a plan of dissolution to our
public stockholders, requiring a majority of shares voted for approval, in which
(i) the proceeds held in our trust account, together with interest, less taxes,
would be distributed to only our public stockholders on a per share pro rata
basis and (ii) the remaining net assets of the company, if any, would be
distributed on a per share pro rata basis to our stockholders.




Our
sponsor has waived its right to participate in any redemption with respect to
its initial shares and the common stock underlying the Insider Warrants upon our
redemption of shares sold in the Offering if we fail to consummate a business
transaction within 15 months. However, if our sponsor or any of our officers,
directors, advisors or affiliates acquires shares of common stock in or after
the Offering, they will be entitled to a pro rata share of the trust account
upon our redemption in the event we do not consummate a business transaction
within the required time period. There will be no liquidating distribution with
respect to our warrants, which will expire worthless in the event we do not
consummate a business transaction. We expect that all costs associated with the
implementation and completion of our liquidation will be funded by any remaining
assets outside of the trust account although we cannot assure you that there
will be sufficient funds for such purpose. If such funds are insufficient, our
sponsor has agreed to advance us the funds necessary to complete such
liquidation (currently anticipated to be approximately $30,000).




If we
were to expend all of the net proceeds of the Offering, other than the proceeds
deposited in the trust account, and without taking into account interest, if
any, earned on the trust account, the initial aggregate of the (i) per share
redemption price or (ii) per share liquidation price would be approximately
$9.98, less taxes. The proceeds deposited in the trust account could, however,
become subject to the claims of our creditors which would have higher priority
than the claims of our public stockholders. We cannot assure you that the actual
aggregate of the (i) per share redemption price or (ii) per share liquidation
price will not be less than approximately $9.98, plus interest (net of any
taxes). Under Section 281(b) of the Delaware General Corporation Law, our plan
of distribution must provide for all claims against us to be paid in full or
make provision for payments to be made in full, as applicable, if there are
sufficient assets. These claims must be paid or provided for before we make any
distribution of our remaining assets to our stockholders. While we intend to pay
such amounts, if any, we cannot assure you that we will have funds sufficient to
pay or provide for all creditors’ claims.




Although
we will seek to have all vendors, service providers, prospective target
businesses or other entities we engage execute agreements with us waiving any
right, title, interest or claim of any kind in or to any monies held in the
trust account for the benefit of our public stockholders, there is no guarantee
that they will execute such agreements or even if they execute such agreements
that they would be prevented from bringing claims against the trust account
including but not limited to fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain an advantage with
respect to a claim against our assets, including the funds held in the trust
account. If any third party refused to execute an agreement waiving such claims
to the monies held in the trust account, our management would perform an
analysis of the alternatives available to it and would only enter into an
agreement with a third party that did not execute a waiver if management
believed that such third party’s engagement would be significantly more
beneficial to us than any alternative.  Examples of possible instances
where we may engage a third party that refused to execute a waiver include the
engagement of a third party consultant whose particular expertise or skills are
believed by management to be significantly superior to those of other
consultants that would agree to execute a waiver or in cases where management is
unable to find a provider of required services willing to provide the
waiver.  In addition, there is no guarantee that such entities will
agree to waive any claims they may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with us and will not seek
recourse against the trust account for any reason. In order to protect the
amounts held in the trust account, Mark D. Klein, our chairman, chief executive
officer and president, and Paul D. Lapping, our chief financial officer,
treasurer, secretary and director, have agreed that they will be liable to us if
and to the extent any claims by a vendor for services rendered or products sold
to us, or a prospective target business with which we have discussed entering
into a transaction agreement reduce the amounts in the trust account to below
$9.98 per share, except as to any claims by a third party who executed a waiver
of any and all rights to seek access to the trust account and except as to any
claims under our indemnity of the underwriters of the Offering against certain
liabilities, including liabilities under the Securities Act. In the event that
an executed waiver is deemed to be unenforceable against a third party, Messrs.
Klein and Lapping will not be responsible to the extent of any liability for
such third party claims.  We cannot assure you, however, that Messrs.
Klein and Lapping would be able to satisfy those obligations.





9


In the
event that the proceeds in the trust account are reduced below $9.98 per share
in the event we redeem 100% of our public shares of common stock for a per share
pro rata portion of the trust account, or  upon our liquation and
Messrs. Klein and Lapping assert that they are unable to satisfy their
obligations or that they have no indemnification obligations related to a
particular claim, our independent directors, if any, would determine whether to
take legal action against Messrs. Klein and Lapping to enforce their
indemnification obligations. While we currently expect that our independent
directors would take legal action on our behalf against Messrs. Klein and
Lapping to enforce their indemnification obligations to us, it is possible that
our independent directors in exercising their business judgment may choose not
to do so in any particular instance. Accordingly, we cannot assure you that due
to claims of creditors the actual value of the per share redemption price (or
per share liquidation distribution if we are unable to effect our redemption)
will not be less than $9.98 per share.




We will
seek to reduce the possibility that Messrs. Klein and Lapping will have to
indemnify the trust account due to claims of creditors by endeavoring to have
all vendors, service providers and prospective target businesses as well as
other entities execute agreements with us waiving any right, title, interest or
claim of any kind in or to monies held in the trust account. Messrs. Klein and
Lapping will also not be liable as to any claims under our indemnity of the
underwriters of the Offering against certain liabilities, including liabilities
under the Securities Act.  In the event that we liquidate and it is
subsequently determined that the reserve for claims and liabilities is
insufficient, stockholders who received a return of funds from the liquidation
of our trust account could be liable for claims made by creditors.




Under the
Delaware General Corporation Law, stockholders may be held liable for claims by
third parties against a corporation to the extent of distributions received by
them in a dissolution. The pro rata portion of our trust account distributed to
our public stockholders upon our redemption of 100% of our public shares of
common stock in the event we do not consummate our initial business transaction
within 15 months from the date of the prospectus may be considered a liquidation
distribution under Delaware law.  If the corporation complies with
certain procedures set forth in Section 280 of the Delaware General Corporation
Law intended to ensure that it makes reasonable provision for all claims against
it, including a 60-day notice period during which any third-party claims can be
brought against the corporation, a 90-day period during which the corporation
may reject any claims brought, and an additional 150-day waiting period before
any liquidating distributions are made to stockholders, any liability of
stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to
the stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. However, as stated above, if we do not
effect a business transaction by August 19, 2011, we shall (i) cease all
operations except for the purposes of winding up, (ii) redeem 100% of our public
shares of common stock for a per share pro rata portion of the trust account,
including the interest earned thereon, but net of any taxes and (iii) as
promptly as possible following such redemption, dissolve and liquidate the
balance of our net assets to our remaining stockholders, as part of our plan of
dissolution and liquidation. Accordingly, it is our intention to make
liquidating distributions to our stockholders as soon as reasonably possible
following our 15th month
and, therefore, we do not intend to comply with those procedures. As such, our
stockholders could potentially be liable for any claims to the extent of
distributions received by them (but no more) and any liability of our
stockholders may extend well beyond the third anniversary of such date. Because
we will not be complying with Section 280, Section 281(b) of the Delaware
General Corporation Law requires us to adopt a plan, based on facts known to us
at such time, that will provide for our payment of all existing and pending
claims or claims that may be potentially brought against us within the
subsequent 10 years. However, because we are a blank check company, rather than
an operating company, and our operations will be limited to searching for
prospective target businesses to acquire, the only likely claims to arise would
be from our vendors (such as accountants, lawyers, investment bankers, etc.) or
prospective target businesses. As described above, pursuant to the obligation
contained in our underwriting agreement, we will seek to have all vendors,
service providers and prospective target businesses execute agreements with us
waiving any right, title, interest or claim of any kind in or to any monies held
in the trust account. As a result of this obligation, the claims that could be
made against us are significantly limited and the likelihood that any claim that
would result in any liability extending to the trust account is remote. We have
an obligation to pursue indemnification from Messrs. Klein and Lapping pursuant
to the terms of their agreement with us. Further, Messrs. Klein and Lapping may
be liable only to the extent necessary to ensure that the amounts in the trust
account are not reduced below $9.98 per share less any per share amounts
distributed from our trust account to our public stockholders in the event we
are unable to consummate a business transaction within 15 months from the date
of the prospectus,  and will not be liable as to any claims under our
indemnity of the underwriters of the Offering against certain liabilities,
including liabilities under the Securities Act. In the event that an executed
waiver is deemed to be unenforceable against a third party, Messrs. Klein and
Lapping will not be responsible to the extent of any liability for such third
party claims.





10


If we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, the proceeds held in the trust account could
be subject to applicable bankruptcy law, and may be included in our bankruptcy
estate and subject to the claims of third parties with priority over the claims
of our stockholders. To the extent any bankruptcy claims deplete the trust
account, we cannot assure you we will be able to return to our public
stockholders an aggregate of at least $9.98 per share. Additionally, if we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our stockholders.
Furthermore, because we intend to distribute the proceeds held in the trust
account to our public stockholders promptly after the termination of our
corporate existence, this may be viewed or interpreted as giving preference to
our public stockholders over any potential creditors with respect to access to
or distributions from our assets. Furthermore, our board may be viewed as having
breached its fiduciary duty to our creditors and/or may have acted in bad faith,
and thereby exposing itself and our company to claims of punitive damages, by
paying public stockholders from the trust account prior to addressing the claims
of creditors. We cannot assure you that claims will not be brought against us
for these reasons.




Our
public stockholders will be entitled to receive funds from the trust account
only in the event of our redemption of 100% of our public shares upon our
liquidation or if they  redeem their respective shares for cash upon
the consummation of the initial business transaction. In no other circumstances
will a stockholder have any right or interest of any kind to or in the trust
account. In the event we seek stockholder approval in connection with our
initial business transaction, a stockholder’s voting in connection with the
business transaction alone will not result in a stockholder’s redeeming its
shares to us for an applicable pro rata share of the trust account. Such
stockholder must have also exercised its redemption rights described
above.




11


Employees




We
currently have two executive officers. These individuals are not obligated to
devote any specific number of hours to our matters and intend to devote only as
much time as they deem necessary to our affairs. The amount of time they will
devote in any time period will vary based on whether a target business has been
selected for the initial business transaction and the stage of the initial
business transaction process the company is in. Accordingly, once management
locates a suitable target business to acquire, they will spend more time
investigating such target business and negotiating and processing the initial
business transaction (and consequently spend more time on our affairs) than they
would prior to locating a suitable target business. We expect our executive
officers to devote a reasonable amount of time to our business.  We do
not intend to have any full time employees prior to the consummation of an
initial business transaction.





Competition




In
identifying, evaluating and selecting a target business for an initial business
transaction, we may encounter intense competition from other entities having a
business objective similar to ours including other blank check companies,
private equity groups and leveraged buyout funds, and operating businesses
seeking strategic acquisitions. Many of these entities are well established and
have extensive experience identifying and effecting business transactions
directly or through affiliates. Moreover, many of these competitors possess
greater financial, technical, human and other resources than us. Our ability to
acquire larger target businesses will be limited by our available financial
resources. This inherent limitation gives others an advantage in pursuing the
acquisition of a target business. Furthermore, our obligation to pay cash in
connection with 88% of our shares held by our public stockholders who exercise
their redemption rights may reduce the resources available to us for an initial
business transaction and our outstanding warrants, and the future dilution they
potentially represent, may not be viewed favorably by certain target businesses.
Either of these factors may place us at a competitive disadvantage in
successfully negotiating an initial business transaction.




Item
1A. Risk Factors




You
should carefully consider the following risk factors and all other information
contained in this Annual Report.  If any of the following risks occur,
our business, financial conditions or results of operations may be materially
and adversely affected. In that event, the trading price of our securities could
decline, and you could lose all or part of your investment.  This
Annual Report also contains forward-looking statements that involve risks and
uncertainties.  There can be no assurance that actual results will not
materially differ from expectations. Important factors could cause actual
results to differ materially from those indicated by such forward-looking
statements. With respect to the proposed Transaction, these factors include, but
are not limited to: the risk that more than 88% of 57th Street
stockholders will validly tender and won’t validly withdraw their shares of
common stock pursuant to and prior to the expiration of the tender offer; the
risk that governmental and regulatory review of the tender offer documents may
delay the transaction or result in the inability of the transaction to be
consummated by May 31, 2011 and the length of time necessary to consummate the
proposed transaction; changing legislation and regulatory environments; changing
interpretations of generally accepted accounting principles; continued
compliance with government regulations; the risk that a condition to closing of
the transaction may not be satisfied; the risk that the businesses will not be
integrated successfully; the risk that the anticipated benefits of the
transaction may not be fully realized or may take longer to realize than
expected; disruption from the transaction making it more difficult to maintain
relationships with customers, employees or suppliers; a reduction in industry
profit margin; the inability to continue the development of the Crumbs brand;
the ability to meet the NASDAQ Stock Market listing standards, including having
the requisite number of round lot holders or shareholders; a lower return on
investment; the inability to manage rapid growth; requirements or changes
affecting the business in which Crumbs is engaged; general economic conditions;
and the diversion of management time on transaction-related issues. These risks,
as well as other risks associated with the transaction, will be more fully
discussed in the Schedule TO that will be filed with the SEC in connection with
the proposed Transaction.




Risks
Associated With Our Business





We
are a development stage company with no operating history and, accordingly, you
will not have any basis on which to evaluate our ability to achieve our business
objective.




We are a
recently incorporated development stage company with no operating results to
date. Since we do not have any operations or an operating history, you will have
no basis upon which to evaluate our ability to achieve our business objective,
the focus of which is to acquire through a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization, exchangeable share transaction or
other similar business transaction, one or more operating businesses or assets
that we have not yet identified. We have no present revenue and will not
generate any revenues or income until, at the earliest, after the consummation
of a business transaction. We do not know when or if a business transaction will
occur. The report of our independent registered public accountants on our
financial statements includes an explanatory paragraph stating that our ability
to continue as a going concern is dependent on the consummation of the
Transaction. The financial statements do not include any adjustments that might
result from our inability to consummate the Transaction or our ability to
continue as a going concern.




12


If we are unable
to consummate a business transaction, our public stockholders will be forced to
wait until August 19, 2011, the full
15 months before receiving distributions from our trust
account.





If we do
not consummate a business transaction by August 19, 2011, we shall (i) cease all
operations except for the purposes of winding up, (ii) redeem 100% of our public
shares of common stock for a per share pro rata portion of the trust account
(including interest, but net of any taxes), subject to the requirements of
applicable law and (iii) as promptly as possible following such redemption,
dissolve and liquidate the balance of our net assets to our remaining
stockholders.  If we redeem such shares, such redemption must comply
with the applicable provisions of the Delaware General Corporation Law,
including Section 160 thereof, governing rights of redemption.  Upon
the termination of our corporate existence, the balance of our net assets will
be distributed to our remaining stockholders.  Accordingly, if our
plan to redeem 100% of our shares of common stock sold in the Offering is not
consummated for any reason, compliance with Delaware law may require that we
submit a plan of dissolution and liquidation to our then existing stockholders
for approval prior to the distribution of the proceeds held in our trust
account.  In that case, investors may be forced to wait beyond August
19, 2011, before the liquidation proceeds of our trust account become available
to them, and they receive the return of their pro rata portion of the proceeds
from our trust account.  Except for the above redemption, we have no
obligation to return funds to investors prior to the date of our liquidation
unless we consummate a business transaction prior thereto and only then in cases
where investors have sought to redeem their shares. Only upon our liquidation,
if no such redemption occurs, will public stockholders be entitled to
liquidation distributions if we are unable to complete a business
transaction.





We
may not be able to consummate a business transaction within the required
timeframe, in which case we will be forced to redeem our public stockholders and
liquidate.




Our
sponsor, officers and directors have agreed that we will only have until August
19, 2011, to consummate our initial business transaction.  If we do
not consummate a business transaction by August 19, 2011, we shall (i) cease all
operations except for the purposes of winding up, (ii) redeem 100% of our public
shares of common stock for a per share pro rata portion of the trust account
(including interest, but net of any taxes), subject to the requirements of
applicable law and (iii) as promptly as possible following such redemption,
dissolve and liquidate the balance of our net assets to our remaining
stockholders. We may not be able to find a suitable target business by August
19, 2011. In addition, our negotiating position and our ability to conduct
adequate due diligence on any prospective target may be reduced as we approach
the deadline for the consummation of a business transaction.




If
we are forced to redeem or liquidate before the completion of a business
transaction and distribute the trust account, our public stockholders may
receive less than $10.00 per share (the initial public offering price per unit)
and our warrants will expire worthless.




If we are
unable to complete a business transaction within the prescribed time frame and
are forced to cease operations and ultimately liquidate our assets, the amount
of either of the (i) per share redemption or (ii) per share liquidation
distribution may, since a portion of the over-allotment option was exercised, be
less than $10.00 because of the expenses of the Offering, our general and
administrative expenses and the anticipated costs of seeking a business
transaction. If we are unable to complete a business transaction and have
expended all of the net proceeds of the Offering, other than the proceeds
deposited in the trust account (net of any taxes), the initial (i) per-share
redemption or (ii) per-share liquidation amounts may be less than $10.00.
Furthermore, there will be no distribution with respect to our outstanding
warrants which will expire worthless if we liquidate before the completion of a
business transaction.




Public
stockholders may receive less than their pro rata share of the trust account
upon redemption due to claims of creditors.




Our
placing of funds in the trust account may not protect those funds from third
party claims against us. Although we will seek to have all vendors, service
providers (other than our independent accountants), prospective target
businesses or other entities we engage execute agreements with us waiving any
right, title, interest or claim of any kind in or to any monies held in the
trust account for the benefit of our public stockholders, such parties may not
execute such agreements, or even if they execute such agreements they may not be
prevented from bringing claims against the trust account, including, but not
limited to, fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver,
in each case in order to gain advantage with respect to a claim against our
assets, including the funds held in the trust account. If any third party
refused to execute an agreement waiving such claims to the monies held in the
trust account, we would perform an analysis of the alternatives available to us
if we chose not to engage such third party and evaluate if such engagement would
be in the best interest of our stockholders if such third party refused to waive
such claims.




13


Examples
of possible instances where we may engage a third party that refused to execute
a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to
those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a
waiver. In addition, such entities may not agree to waive any claims they may
have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with us and may seek recourse against the trust account
for any reason. Upon redemption of our public shares if we are unable to
complete a business transaction within the required timeframe or upon the
exercise of a redemption right in connection with a business transaction, we
will be required to provide for payment of claims of creditors which were not
waived that may be brought against us within the subsequent 10 years prior to
redemption.  Accordingly, the (i) per share redemption price or
(ii) per share liquidation price could be less than the $9.98 per share held in
the trust account, plus interest (net of any taxes), due to claims of such
creditors. In addition, Mark D. Klein, our chairman, chief executive officer and
president, and Paul D. Lapping, our chief financial officer, treasurer,
secretary and director, have agreed that they will be liable to us if and to the
extent any claims by a vendor for services rendered or products sold to us, or a
prospective target business with which we have discussed entering into a
transaction agreement reduce the amounts in the trust account to below $9.98 per
share, except as to any claims by a third party who executed a waiver of any and
all rights to seek access to the trust account and except as to any claims under
our indemnity of the underwriters of the Offering against certain liabilities,
including liabilities under the Securities Act. Moreover, in the event that an
executed wavier is deemed to be unenforceable against a third party, Messrs.
Klein and Lapping will not be responsible to the extent of any liability for
such third party claims.  We have not, however, asked Messrs. Klein
and Lapping to reserve for such indemnification obligations. Messrs. Klein and
Lapping may not be able to satisfy those obligations.





Additionally,
if we are forced to file a bankruptcy case or an involuntary bankruptcy case is
filed against us which is not dismissed, the funds held in our trust account
could be subject to applicable bankruptcy law, and may be included as an asset
in our bankruptcy estate and subject to the claims of third parties with
priority over the claims of our stockholders. To the extent any bankruptcy
claims deplete the trust account, we may not be able to return $9.98 per share
to our public stockholders.





Our
directors may decide not to enforce Messrs. Klein’s and Lapping’s
indemnification obligations, resulting in a reduction in the amount of funds in
the trust account available for distribution to our public
stockholders.




In the
event that the proceeds in the trust account are reduced below $9.98 per share
and Messrs. Klein and Lapping assert that they are unable to satisfy their
obligations or that they have no indemnification obligations related to a
particular claim, our independent directors, if any, would determine whether to
take legal action against Messrs. Klein and Lapping to enforce their
indemnification obligations. While we currently expect that our independent
directors would take legal action on our behalf against Messrs. Klein and
Lapping to enforce their indemnification obligations to us, it is possible that
our independent directors in exercising their business judgment may choose not
to do so in any particular instance. If our directors choose not to enforce
these indemnification obligations, the amount of funds in the trust account
available for distribution to our public stockholders may be reduced below $9.98
per share.




If
we seek stockholder approval of our business  transaction and holders
of more than 88% of our public shares indicate their intention to exercise their
redemption rights, our sponsor, directors, officers, advisors and their
affiliates could affect the outcome of the consummation of our business
transaction if they elect to purchase shares from stockholders who would
otherwise choose to exercise their redemption rights.




Solely in
the event we seek stockholder approval of our business transaction, and we do
not conduct redemptions in connection with our business transaction pursuant to
the tender offer rules, any privately negotiated transaction to purchase shares
from a stockholder who would otherwise redeem their shares for a per share
pro-rata portion of the trust account would include a contractual
acknowledgement that such stockholder, although still the record holder of our
shares is no longer the beneficial owner thereof and therefore agrees not to
exercise their redemption rights. In the event that our sponsor, officers,
directors, advisors or their respective affiliates purchase shares in privately
negotiated transactions from public stockholders who have already elected to
exercise their redemption rights, such selling stockholders would be required to
revoke their prior elections to redeem their shares. This will have the effect
of reducing the number of shares redeemed, making it more likely that the
required stockholder vote needed to approve the business transaction is
achieved, and therefore making it more likely that we would be able to
consummate our initial business transaction.




14


None of
our sponsor, officers, directors, advisors or their respective affiliates or any
third parties has agreed to purchase any such shares, and the failure to so
agree at the applicable time could adversely impair our ability to consummate a
business transaction. Moreover, even if our sponsor, officers, directors,
advisors and their respective affiliates were to undertake such purchases, such
purchases could be subject to limitations under applicable securities laws and
regulations, including Regulation M and regulations regarding tender offers. The
inability of such persons to effect such purchases could adversely impair our
ability to consummate a business transaction.




If we submit our business
transaction to our stockholders for approval, we may use funds in our trust
account to purchase, directly or indirectly, shares from holders thereof who
have indicated an intention to redeem their shares.




Solely if
we submit our business transaction to our stockholders for approval, and we do
not conduct redemptions in connection with our business transaction pursuant to
the tender offer rules, if holders of shares sold in the Offering indicate an
intention to seek to redeem their shares, we may privately negotiate
arrangements to provide for the purchase of such shares at the closing of the
business transaction using funds held in the trust account. The purpose of such
arrangements would be to (i) increase the likelihood of satisfaction of the
requirement that no more than 88% of our outstanding shares of common stock
demand to redeem their shares, (ii) increase the likehood of obtaining
stockholder approval of the business transaction or (iii) satisfy a minimum
valuation requirement, where it appears that such requirements would otherwise
not be met. This may result in the consummation of a business transaction that
may not otherwise have been possible. Additionally, as a consequence of such
purchases,




·
            the
      funds in our trust account that are so used will not be available to us
      after the business transaction; and·
            the
      public ‘‘float’’ of our common stock may be reduced and the number of
      beneficial holders of our securities may be reduced, which may make it
      difficult to obtain the quotation, listing or trading of our securities on
      a national securities exchange.




You
will not have any rights or interests in funds from the trust account, except
under certain limited circumstances.




Our
public stockholders will be entitled to receive funds from the trust account
only upon the earlier to occur of:  (i) our redemption of 100% of our
public shares of common stock for a per share pro rata portion of the trust
account (including interest but net of any taxes), subject to the requirements
of applicable law, (ii) our consummation of a business transaction, and then
only in connection with those shares of our common stock that such stockholder
properly elected to redeem, subject to the restrictions described in the
prospectus or (iii) our liquidation (if redemption does not occur). In no other
circumstances will a stockholder have any right or interest of any kind in the
trust account.




We
do not intend to establish an audit committee or a compensation committee until
the consummation of a business transaction.





Our board
of directors intends to establish an audit committee and a compensation
committee upon consummation of a business transaction. At that time our board of
directors intends to adopt charters for these committees. Prior to such time we
do not intend to establish either one. Accordingly, there will not be a separate
committee comprised of some members of our board of directors with specialized
accounting and financial knowledge to meet, analyze and discuss solely financial
matters concerning prospective target businesses nor will there be a separate
committee to review the reasonableness of expense reimbursement requests by
anyone other than our board of directors, which includes persons who may seek
such reimbursements.





You
will not be entitled to protections normally afforded to investors of blank
check companies.




Since the
net proceeds of the Offering were intended to be used to complete a business
transaction with an unidentified target business, we may be deemed to be a
“blank check” company under the United States securities laws. However, since
our securities are quoted on the OTC Bulletin Board, we have net tangible assets
in excess of $5,000,000 from proceeds of the Offering and have filed a Current
Report on Form 8-K with the Commission, including an audited balance sheet
demonstrating this fact, we are exempt from rules promulgated by the SEC to
protect investors of blank check companies, such as Rule 419 of the Securities
Act. Accordingly, investors will not be afforded the benefits or protections of
those rules, such as a requirement that we consummate a business transaction
with a target whose fair market value is equal to 80% of the proceeds in our
trust account.




15


If the net
proceeds of the Offering not being placed
in the trust account are insufficient to allow us to operate until August 19,
2011, we may not be able to complete an initial business
transaction.




From the
date of our consummation of the Offering, approximately $600,000 of the net
proceeds of the Offering not held in the trust account were available to us
through August 19, 2011, to cover expenses incurred in connection with a
business transaction or to cover expenses in connection with our liquidation if
we do not complete a business transaction during that time. These amounts may
prove to be insufficient especially if a portion of the available proceeds is
used to make a down payment or pay exclusivity or similar fees in connection
with a business transaction, or if we expend a significant portion of the
available proceeds in pursuit of a business transaction that is not
consummated.




We could
use a portion of the amount not held in trust to pay due diligence costs in
connection with a potential business transaction or to pay fees to consultants
to assist us with our search for a target business. We could also use a portion
of these funds as a down payment, “reverse break-up fee” (a provision in
designed to compensate the target for any breach by the buyer which results in a
failure to close the transaction), or to fund a “no-shop” provision (a provision
designed to keep target businesses from “shopping” around for transactions with
others on terms more favorable to such target businesses) with respect to a
particular proposed business transaction, although we do not have any current
intention to do so. If we entered into such an agreement with a prospective
target where we paid for the right to receive exclusivity from a target business
and were subsequently required to forfeit such funds (whether as a result of our
breach or otherwise) or if we agree to a reverse break-up fee and subsequently
were required to pay such fee as a result of our breach of a merger or other
agreement or if our costs are otherwise higher than expected, we might not have
sufficient funds to continue searching for, or conduct due diligence with
respect to, any other potential target businesses. If we do not have sufficient
proceeds available to fund our expenses, we may be forced to obtain additional
financing, either from our management or the sponsor or from third parties, to
continue operating. We may not be able to obtain additional financing and our
sponsor and management are not obligated to provide any additional financing. If
we do not have sufficient proceeds and cannot find additional financing, we may
be forced to dissolve and liquidate prior to consummating a business
transaction.




If
we are deemed to be an investment company under the Investment Company Act, we
may be required to institute burdensome compliance requirements and our
activities may be restricted, which may make it difficult for us to complete a
business transaction.





If we are
deemed to be an investment company under the Investment Company Act of 1940, as
amended, our activities may be restricted, including:




·
            restrictions on the nature of our
      investments; and





·
            restrictions on the issuance of
      securities, each of which may make it difficult for us to complete a
      business transaction.





In
addition, we may have imposed upon us burdensome requirements,
including:




·
                registration as an investment
      company;
 ·
              adoption of a specific form of
      corporate structure; and
  ·
              reporting, record keeping,
      voting, proxy and disclosure requirements and other rules and
      regulations.


In order
not to be regulated as an investment company under the Investment Company Act,
unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading of
securities and that our activities do not include investing, reinvesting,
owning, holding or trading "investment securities" constituting more than 40% of
our assets (exclusive of U.S. government securities and cash items) on an
unconsolidated basis. Our business will be to identify and consummate a business
transaction and thereafter to operate the acquired business or assets for the
long term. We do not plan to buy businesses or assets with a view to resale or
profit from their resale. We do not plan to buy unrelated businesses or assets
or to be a passive investor. We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the
proceeds held in the trust account may only be invested in United States
"government securities" within the meaning of Section 2(a)(16) of the Investment
Company Act having a maturity of 180 days or less or in money market funds
meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act. Pursuant to the trust agreement, the trustee is not permitted to
invest in other securities or assets. By restricting the investment of the
proceeds to these instruments, and by having a business plan targeted at
acquiring, growing and businesses for the long term (rather than on buying and
selling businesses in the manner of a merchant bank or private equity fund), we
intend to avoid being deemed an "investment company" within the meaning of the
Investment Company Act. The trust account is intended as a holding place for
funds pending the earlier to occur of either: (i) the consummation of our
primary business objective, which is a business transaction; or (ii) absent a
business transaction, our return of the funds held in the trust account to our
public stockholders as part of our redemption of public shares. If we do not
invest the proceeds as discussed above, we may be deemed to be subject to the
Investment Company Act. If we were deemed to be subject to the Investment
Company Act, compliance with these additional regulatory burdens would require
additional expense for which we have not accounted.




16


In
certain circumstances, our board of directors may be viewed as having breached
their fiduciary duties to our creditors, thereby exposing itself and us to
claims of punitive damages.




If we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our stockholders.
Furthermore, because we intend to redeem 100% of our public shares of common
stock for a per share pro rata portion of the trust account, in the event we do
not consummate a business transaction by August 19, 2011, this may be
viewed or interpreted as giving preference to our public stockholders over any
potential creditors with respect to access to or distributions from our assets.
Furthermore, our board of directors may be viewed as having breached its
fiduciary duty to our creditors and/or may have acted in bad faith, thereby
exposing itself and us to claims of punitive damages, by paying public
stockholders from the trust account prior to addressing the claims of
creditors.




Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them upon redemption of their
shares.




If we do
not consummate a business transaction by August 19, 2011, our sponsor, officers
and directors have agreed that we will (i) cease all operations except for the
purposes of winding up, (ii) redeem 100% of our public shares of common stock
for a per share pro rata portion of the trust account, plus a portion of the
interest earned on the trust account but net of any taxes, subject to the
requirements of Delaware General Corporation Law Section 160 and other
applicable law and (iii) as promptly as possible following such redemption,
dissolve and liquidate the balance of our net assets to our remaining
stockholders.  Under the Delaware General Corporation Law,
stockholders may be held liable for claims by third parties against a
corporation to the extent of distributions received by them pursuant to a
dissolution, and our redemption of 100% of the shares sold in the Offering may
be deemed a liquidating distribution.  If a corporation complies with
certain procedures set forth in Section 280 of the Delaware General Corporation
Law intended to ensure that it makes reasonable provision for all claims against
it, including a 60-day notice period during which any third-party claims can be
brought against the corporation, a 90-day period during which the corporation
may reject any claims brought, and an additional 150-day waiting period before
any liquidating distributions are made to stockholders, any liability of
stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to
the stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution.  Because we will not be
complying with certain procedures set forth in Section 280 of the Delaware
General Corporation Law, as set forth above, a stockholder who received
distributions in the redemption may be liable for the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the
stockholder until the third anniversary of the dissolution.





Although
we are required to use our best efforts to have an effective registration
statement covering the issuance of the shares of common stock underlying the
warrants at the time that our warrant holders exercise their warrants, a
registration statement may not be effective, in which case our warrant holders
may not be able to exercise their warrants and therefore the warrants could
expire worthless.




Holders
of our warrants will be able to exercise the warrants for cash only if we have
an effective registration statement covering the shares of common stock issuable
upon exercise of the warrants and a current prospectus relating to such common
stock and, even in the case of a cashless exercise which is permitted in certain
circumstances, such shares of common stock are qualified for sale or exempt
from qualification under the applicable securities laws of the states in which
the various holders of warrants reside. Although we have undertaken in the
warrant agreement, and therefore have a contractual obligation, to use our best
efforts to maintain an effective registration statement covering the shares of
common stock issuable upon exercise of the warrants following completion of the
business transaction, and we intend to comply with our undertaking, we may not
be able to do so. Factors such as an unexpected inability to remain current in
our SEC reporting obligations or other material developments concerning our
business could present difficulties in maintaining an effective registration
statement and a current prospectus. Holders of warrants will not be entitled to
a cash settlement for their warrants if we fail to have an effective
registration statement or a current prospectus available relating to the common
stock issuable upon exercise of the warrants. The expiration of warrants prior
to exercise would result in each unit holder paying the full unit purchase price
solely for the shares of common stock underlying the unit.




17


International
and political events could adversely affect our results of operations and
financial condition.





We may
enter into an initial business transaction with a non-U.S. entity and,
accordingly, a significant portion of our post business transaction revenue may
be derived from non-U.S. operations, which exposes us to risks inherent in doing
business in each of the countries in which we transact business. The occurrence
of any of the risks described below could have a material adverse effect on our
results of operations and financial condition.




Operations
in countries other than the U.S. are subject to various risks peculiar to each
country. With respect to any particular country, these risks may
include:





·
            expropriation and nationalization
      of our assets in that
country;


·
            political and economic
      instability;


·
            civil unrest, acts of terrorism,
      force majeure, war, or other armed
  conflict;


·
            natural disasters, including
      those related to earthquakes and
  flooding;


·
            inflation;


·
            currency fluctuations,
      devaluations, and conversion
  restrictions;


·
            confiscatory taxation or other
      adverse tax policies;


·
            governmental activities that
      limit or disrupt markets, restrict payments, or limit the movement of
      funds;


·
            governmental activities that may
      result in the deprivation of contract rights;
  and


·
            governmental activities that may
      result in the inability to obtain or retain licenses required for
      operation.





Due to
the unsettled political conditions in many countries in which we may operate,
our revenue and profits may be subject to the adverse consequences of war, the
effects of terrorism, civil unrest, strikes, currency controls, and governmental
actions. Our facilities and our employees could come under threat of attack in
some countries where we may operate. In addition, we may become subject to the
risk related to loss of life of our personnel and our subcontractors in these
areas. We are also subject to the risks that our employees, joint venture
partners, and agents outside of the U.S. may fail to comply with applicable
laws.




Unlike
most other blank check companies, we are not required to consider a target’s
valuation when entering into or consummating our business
transaction.  Management’s unrestricted flexibility in identifying and
selecting a prospective acquisition candidate, along with management’s financial
interest in consummating an initial business transaction, may lead management to
enter into an acquisition agreement that is not in the best interest of the our
stockholders




Most
blank check companies are required to consummate their initial business
combination with a target whose value is equal to at least 80% of the amount of
money deposited in the trust account of the blank check company at the time of
entry into a materially definitive agreement.  Because we do not have
the limitation that a target business have a minimum fair market enterprise
value of the net assets held in the trust account (net of taxes and exclusive of
any amounts subject to the exercise of redemption rights) at the time of our
signing a definitive agreement in connection with our initial business
transaction, we will have virtually unrestricted flexibility in identifying and
selecting a prospective acquisition candidate. Investors will be relying on our
management’s ability to identify business transactions, evaluate their merits,
conduct or monitor diligence and conduct negotiations.  Management’s
unrestricted flexibility in identifying and selecting a prospective acquisition
candidate, along with management’s financial interest in consummating an initial
business transaction, may lead management to enter into an acquisition agreement
that is not in the best interest of our stockholders.




We
may not obtain an opinion from an independent investment banking firm as to the
fair market enterprise value of the target business or that the price we are
paying for the business is fair to our stockholders.




Unless we
consummate a business transaction with an affiliated entity, we are not required
to obtain an opinion from an independent investment banking firm that either the
target business we select has a certain fair market enterprise value at the time
of our signing a definitive agreement in connection with our initial business
transaction or that the price we are paying is fair to our stockholders unless
our board of directors is not able to independently determine that a target
business or businesses have a sufficient fair market enterprise value or there
is a conflict of interest with respect to the transaction. The fair market
enterprise value of such business will be determined by our board of directors
based upon standards generally accepted by the financial community, such as
actual and potential sales, earnings and cash flow and book value, and the price
for which comparable businesses have recently been sold. If no opinion is
obtained, our stockholders will be relying on the judgment or our board of
directors.





18


Substantial
resources could be expended in researching initial business transactions that
are not consummated, which could materially adversely affect subsequent attempts
to locate and consummate an initial business transaction.




We
anticipate the investigation of each specific target business and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial costs for accountants, attorneys and other third party fees and
expenses. If we decide not to enter into an agreement with respect to a specific
proposed initial business transaction we have investigated, the costs incurred
up to that point for the proposed transaction likely would not be recoverable.
Furthermore, even if an agreement is reached relating to a specific target
business, we may fail to consummate the business transaction for any number of
reasons including those beyond our control. Any such event will result in a loss
to us of the related costs incurred which could materially adversely affect
subsequent attempts to locate and consummate a business
transaction.




Our
ability to successfully effect a business transaction and to be successful
thereafter will be dependent in large part upon the efforts of our key
personnel, including our officers and directors.




Our
ability to successfully effect a business transaction is dependent upon the
efforts of our key personnel. Our key personnel will also be officers,
directors, key personnel and/or members of other entities, to whom we anticipate
we will have access on an as needed basis, although such personnel may not be
able to devote sufficient time, effort or attention to us when we need it. None
of our key personnel, including our executive officers, have entered into
employment or consultant agreements with us.




Our
officers and directors may allocate their time to other businesses, thereby
causing conflicts of interest in their determination as to how much time to
devote to our affairs. These conflicts could impair our ability to consummate a
business transaction.




Our
officers and directors are not required to commit their full time to our
affairs, which may result in a conflict of interest in allocating their time
between our operations and other businesses. We do not intend to have any full
time employees prior to the consummation of a business transaction. Certain of
our executive officers are engaged in several other business endeavors and are
not obligated to contribute any specific number of hours per week to our
affairs. If our executive officers’ other business affairs require them to
devote more substantial amounts of time to such affairs, it could limit their
ability to devote time to our affairs and could impair our ability to consummate
a business transaction. These conflicts may not be resolved in our
favor.





Our
officers, directors and their affiliates currently are, and may in the future
become, affiliated with entities engaged in business activities that are similar
to those intended to be conducted by us and, accordingly, may have conflicts of
interest in determining to which entity a particular business opportunity should
be presented.




Certain
of our officers, directors, advisors or their affiliates have been principals
of, or affiliated or associated with, other blank check companies, and/or may in
the future become, affiliated with additional entities engaged in business
activities similar to those intended to be conducted by us. Due to these
existing affiliations, our officers and directors may have fiduciary obligations
to present potential business opportunities to those entities prior to
presenting them to us, which could cause additional conflicts of interest.
Accordingly, they may have conflicts of interest in determining to which entity
a particular business opportunity should be presented. These conflicts may not
be resolved in our favor.




Our
management may negotiate employment or consulting agreements with a target
business in connection with a particular business transaction. These agreements
may provide for them to receive compensation following a business transaction
and, as a result, may cause them to have conflicts of interest in determining
whether a particular business transaction is in the best interest of our public
stockholders.




Our
management may not be able to remain with the company after the consummation of
a business transaction unless they are able to negotiate employment or
consulting agreements in connection with a business transaction. If, as a
condition to a potential initial business transaction, our existing officers
negotiate to be retained after the consummation of the business transaction,
such negotiations may result in a conflict of interest. Such negotiations would
take place simultaneously with the negotiation of the business transaction and
could provide for such individuals to receive compensation in the form of cash
payments and/or our securities for services they would render to us after the
consummation of the business transaction. While the personal and financial
interests of such individuals may influence their motivation in identifying and
selecting a target business, the ability of such individuals to remain with us
after the consummation of a business transaction will not be the determining
factor in our decision as to whether or not we will proceed with any potential
business transaction. In making the determination as to whether current
management should remain with us following the business transaction, we will
analyze the experience and skill set of the target business’s management and
negotiate as part of the business transaction that our existing officers and
directors remain if it is believed to be in the best interests of the combined
company after the consummation of the business transaction.




19


We
may engage in a business transaction with one or more target businesses that
have relationships or are affiliated with our sponsor, directors or officers,
which may raise potential conflicts.




We may
engage in a business transaction with one or more target businesses that have
relationships or are affiliated (as defined in Rule 405 of the Securities Act)
with our sponsor, directors or officers, which may raise potential conflicts.
Also, the completion of a business transaction between us and an entity owned by
a business in which one of our directors or officers may have an interest could
enhance their prospects for future business from such client. To minimize
potential conflicts of interest, we have agreed not to consummate, and our
amended and restated certificate of incorporation provides that we may not
consummate, a business transaction with a target business that is affiliated
with our sponsor, our directors, advisors or officers or any of our or their
affiliates unless we obtain an opinion from an independent investment banking
firm that is a member of FINRA that the business transaction is fair to our
stockholders from a financial point of view.




Since
our sponsor will lose its entire investment in us if a business transaction is
not consummated and may be required to pay costs associated with our liquidation
and our officers and directors have significant financial interests in us, a
conflict of interest may arise in determining whether a particular acquisition
target is appropriate for our initial business transaction.




Our
sponsor owns 606,256 shares of our common stock (which were purchased for
$25,000) that will be worthless if we do not consummate a business transaction.
In addition, our sponsor has purchased warrants exercisable for our common stock
(for $1,750,000), which will also be worthless if we do not consummate a
business transaction. In addition, in the event we are forced to liquidate, our
sponsor has agreed to advance us the entire amount of the funds necessary to
complete such liquidation (currently anticipated to be no more than
approximately $30,000) and has agreed not to seek repayment for such expenses.
The personal and financial interests of our officers, directors and advisory
board members may influence their motivation in identifying and selecting a
target business transaction and completing an initial business transaction.
Consequently, the discretion of our officers and directors, in identifying and
selecting a suitable target business transaction may result in a conflict of
interest when determining whether the terms, conditions and timing of a
particular initial business transaction are appropriate and in the best interest
of our public stockholders.





Since
our officers and directors will lose their entire investment if we are unable to
complete a business transaction, in the event we seek stockholder approval of
our business transaction, our intention to pay only holders of our common stock
voting in favor of such business transaction a pro rata portion of the interest
earned on our trust account may be viewed as a conflict of
interest.





Our
sponsor, which is wholly controlled by our officers, directors and members of
our advisory board, will lose its entire investment in us if we are unable to
consummate a business transaction by August 19, 2011.  The personal and
financial interests of our officers, directors and advisory board members may
influence their motivation in identifying and selecting a target business
transaction and completing an initial business transaction. As a result of this
potential conflict, our intention, solely in the event we seek stockholder
approval of our business transaction, to only pay holders of our common stock
who vote in favor of such transaction a pro rata portion of the interest earned
on the trust account may be viewed as a conflict of interest and may be
challenged as not enforceable.





The
requirement that we complete a business transaction by August 19, 2011 may
give potential target businesses leverage over us in negotiating a business
transaction.




If we
have not consummated a business transaction by August 19, 2011, we will redeem
100% of our public shares of common stock for a per share pro rata portion of
the trust account (approximately $9.98 per share), plus a portion of the
interest earned on the trust account but net of any taxes, and then adopt a plan
of dissolution pursuant to which we will liquidate and promptly distribute the
balance of our net assets to our remaining stockholders (subject to our
obligations under Delaware law for claims of creditors). Any potential target
business with which we enter into negotiations concerning a business transaction
will be aware of this requirement. Consequently, such target businesses may
obtain leverage over us in negotiating a business transaction, knowing that if
we do not complete a business transaction with that particular target business,
we may be unable to complete a business transaction with any target business.
This risk will increase as we get closer to the time limits referenced
above.




20


The
requirement that we complete a business transaction by August 19, 2011 may
motivate our officers and directors to approve a business transaction that is
not in the best interests of stockholders.




Each of
our officers and directors may receive reimbursement for out-of-pocket expenses
incurred by him in connection with activities on our behalf, such as identifying
potential target businesses and performing due diligence on suitable business
transactions. The funds for such reimbursement will be provided from the money
not held in trust. In the event that we do not effect a business transaction
by August 19, 2011, then any expenses incurred by such individuals in
excess of the money being held outside of the trust account will not be repaid
and we will liquidate. On the other hand, if we complete a business transaction
within such time period, those expenses will be repaid by the target
business.




Consequently,
our officers and directors may have an incentive to complete a business
transaction other than just what is in the best interest of our
stockholders.




Our
officers, directors, security holders and their respective affiliates may have
competitive pecuniary interests that conflict with our interests.




We have
not adopted a policy that expressly prohibits our directors, officers, security
holders or affiliates from having a direct or indirect pecuniary interest in any
investment to be acquired or disposed of by us or in any transaction to which we
are a party or have an interest. Nor do we have a policy that expressly
prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities
may have a conflict between their interests and ours.




Our
securities are quoted on the OTC Bulletin Board, which will limit the liquidity
and price of our securities more than if our securities were quoted or listed on
the Nasdaq Stock Market or another national exchange.




Our
units, common stock and warrants are traded in the over-the-counter market and
are quoted on the OTC Bulletin Board, a FINRA-sponsored and operated
inter-dealer automated quotation system for equity securities not included in
the Nasdaq Stock Market. Quotation of our securities on the OTC Bulletin Board
will limit the liquidity and price of our securities more than if our securities
were quoted or listed on the Nasdaq Stock Market or a national exchange. Lack of
liquidity will limit the price at which you may be able to sell our securities
or your ability to sell our securities at all.




An
active market for our securities may not develop, which would adversely affect
the liquidity and price of our securities.




The price
of our securities may vary significantly due to our reports of operating losses,
one or more potential business transactions, the filing of periodic reports with
the SEC, and general market and economic conditions.  An active
trading market on the OTC Bulletin Board for our securities may never develop
or, if developed, it may not be sustained. In addition, the price of the
securities can vary due to general economic conditions and forecasts, our
general business condition and the release of our financial
reports.  You may be unable to sell your securities unless a market
can be established or sustained.





We
may not be able to maintain control of a target business after our initial
business transaction.




We may
structure a business transaction to acquire less than 100% of the equity
interests or assets of a target business, but will not acquire less than a
controlling interest. We will acquire a controlling interest either through the
acquisition of at least 50.1% of the voting equity interests in the target or
through the acquisition of a significant voting equity interest that enables us
to exercise a greater degree of control over the target than any other person or
group. However, other minority stockholders may subsequently combine their
holdings resulting in a single person or group obtaining a larger share of the
company’s stock than we initially acquired. Accordingly, this may make it more
likely that we will not be able to maintain our control of the target
business.





Unlike
other blank check companies, we allow our public stockholders holding no more
than 88% of the shares sold in this the Offering to exercise their redemption
rights. This higher threshold will make it easier for us to consummate a
business transaction with which a substantial majority of our stockholders do
not agree.




We will
proceed with our initial business transaction unless holders of more than 88% of
our public shares redeem their shares.  The 88% redemption threshold
is different from the redemption or conversion thresholds used by most blank
check companies.  Traditionally, blank check companies would not be
able to consummate a business transaction if the holders of the company’s public
shares voted against a proposed business transaction and elected to redeem or
convert more than a much smaller percentage of the shares sold in such company’s
initial public offering, which percentage threshold is typically between 19.99%
and 39.99%.  As a result, many blank check companies have been unable
to complete business transactions because the amount of shares voted by their
public stockholders electing conversion exceeded the maximum conversion
threshold pursuant to which such company could proceed with a business
transaction.  As a result, we may be able to consummate a business
transaction even though a substantial majority of our public stockholders do not
agree with the transaction and have redeemed their shares or, solely if we hold
a stockholder vote to approve our initial business transaction, and do not
conduct redemptions in connection with our business transaction pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell
their shares to us or our sponsor, officers, directors, advisors or their
affiliates.




21


The
exercise price for the public warrants is higher than in similar blank check
company offerings in the past, and, accordingly, the warrants are more likely to
expire worthless.





The
exercise price of the warrants is higher than is typical in similar blank check
companies.  Historically, the exercise price of a warrant was
generally a fraction of the purchase price of the units in the
Offering.  The exercise price for our public warrants is $11.50 per
share.  As a result, the warrants are less likely to ever be in the
money and more likely to expire worthless.




The
ability of a larger number of our stockholders to exercise redemption rights may
not allow us to consummate the most desirable business transaction or optimize
our capital structure.




If our
business transaction requires us to use substantially all of our cash to pay the
purchase price, because we will not know how many stockholders may exercise such
redemption rights, we may either need to reserve part of the trust account for
possible payment upon such redemption, or we may need to arrange third party
financing to help fund our business transaction in case a larger percentage of
stockholders exercise their redemption rights than we expect. In the event that
the acquisition involves the issuance of our stock as consideration, we may be
required to issue a higher percentage of our stock to make up for a shortfall in
funds. Raising additional funds to cover any shortfall may involve dilutive
equity financing or incurring indebtedness at higher than desirable levels. This
may limit our ability to effectuate the most attractive business transaction
available to us.




In
order to effectuate a business combination, blank check companies have, in the
recent past, amended various provisions of their charters and modified governing
instruments.  We cannot assure you that we will not seek to amend our
certificate of incorporation or governing instruments in order to effectuate our
initial business transaction.





In order
to effectuate a business combination, blank check companies have, in the recent
past, amended various provisions of their charters and modified governing
instruments.  For example, blank check companies have amended the
definition of business combination, increased redemption thresholds and changed
industry focus.  We cannot assure you that we will not seek to amend
our certificate of incorporation or governing instruments in order to effectuate
our initial business transaction.





Unlike
most other blank check companies, the provisions of our amended and restated
certificate of incorporation may be amended with the approval of at least 65% of
our stockholders.





Most
blank check companies have a provision in their charter which prohibits the
amendment of certain of its provisions, including those which relate to a
company’s pre-business combination activity, without approval by a certain
percentage of the company’s stockholders.  Typically, amendment of
these provisions requires approval by between 90% and 100% of the company’s
public stockholders.  Our amended and restated certificate of
incorporation provides that any of its provisions, including those related to
pre-business transaction activity, may be amended if approved by at least 65% of
our stockholders.  As a result, we may be able to amend the provisions
of our amended and restated certificate of incorporation which govern our
pre-business transaction behavior more easily that other blank check companies,
and this may increase our ability to consummate a business transaction with
which you do not agree.




We
may issue notes or other debt securities, or otherwise incur substantial debt,
to complete a business transaction, which may adversely affect our leverage and
financial condition.




Although
we have no commitments as of the date of the prospectus to issue any notes or
other debt securities, or to otherwise incur outstanding debt, we may choose to
incur substantial debt to complete a business transaction. The incurrence of
debt could result in:




22




·
            default and foreclosure on our
      assets if our operating cash flow after a business transaction is
      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 contains covenants that require the
      maintenance of certain financial ratios or reserves and any such covenant
      is breached without a waiver or renegotiation of that
      covenant;





·
            our immediate payment of all
      principal and accrued interest, if any, if the debt security is payable on
      demand;





·
            covenants that limit our ability
      to acquire capital assets or make additional
      acquisitions;





·
            our inability to obtain
      additional financing, if necessary, if the debt security contains
      covenants restricting our ability to obtain additional financing while
      such security is
outstanding;





·
            our inability to pay dividends on
      our common stock;





·
            using a substantial portion of
      our cash flow to pay principal and interest on our debt, which will reduce
      the funds available for dividends on our common stock if declared,
      expenses, capital expenditures, acquisitions and other general corporate
      purposes;





·
            limitations on our flexibility in
      planning for and reacting to changes in our business and in the industry
      in which we operate;





·
            increased vulnerability to
      adverse changes in general economic, industry and competitive conditions
      and adverse changes in government regulation;
  and





·
            limitations on our ability to
      borrow additional amounts for expenses, capital expenditures,
      acquisitions, debt service requirements, execution of our strategy and
      other purposes and other disadvantages compared to our competitors who
      have less debt.





Our
sponsor controls a substantial interest in us and thus may influence certain
actions requiring a stockholder vote.




Our
sponsor owns 10% of our issued and outstanding common stock (assuming it does
not purchase units in the Offering or the aftermarket). This ownership interest,
together with any other acquisitions of our shares of common stock (or warrants
which are subsequently exercised), could allow our sponsor to influence the
outcome of matters requiring stockholder approval, including the election of
directors and approval of significant corporate transactions after completion of
our business transaction. Our board of directors is divided into two classes,
each of which will generally serve for a term of two years with only one class
of directors being elected in each year.  It is unlikely that
there will be an annual meeting of stockholders to re-elect existing directors
or elect new directors prior to the consummation of a business transaction, in
which case all of the current directors will continue in office until at least
the consummation of the business transaction. If there is an annual meeting, as
a consequence of our “staggered” board of directors, only a minority of the
board of directors will be considered for election and our sponsor, because of
its ownership position, will have considerable influence regarding the outcome
of an election of directors. The interests of our sponsor and your interests may
not always align and taking actions which require approval of a majority of our
stockholders, such as selling the company, may be more difficult to
accomplish.




We
may choose to redeem our outstanding warrants at a time that is disadvantageous
to our warrant holders.




We may
redeem the outstanding warrants (excluding any Insider Warrants held by our
sponsor or its permitted assigns or the underwriters) issued as a part of our
units at any time after the warrants become exercisable, in whole and not in
part, at a price of $0.01 per warrant, upon not less than 30 days prior written
notice of redemption, and if, and only if, the last sales price of our common
stock equals or exceeds $17.50 per share for any 20 trading days within a 30
trading day period ending three business days before we send the notice of
redemption. In addition, we may not redeem the warrants unless on the date we
give notice of redemption and during the entire period thereafter until the time
we redeem the warrants we have an effective registration statement covering the
shares of common stock issuable upon the exercise of the warrants and a current
prospectus relating to such common stock is available.




23


We will
likely redeem the warrants if the market price of our common stock reaches
$17.50 per share for the necessary trading period, since doing so would allow us
to decrease the dilutive effect of the warrants. Redemption of the warrants
could force the warrant holders to exercise the warrants, whether by paying the
exercise price in cash or through a cashless exercise at a time when it may be
disadvantageous for the holders to do so, to sell the warrants at the then
current market price when they might otherwise wish to hold the warrants, or to
accept the nominal redemption price which, at the time the warrants are called
for redemption, is likely to be substantially less than the market value of the
warrants. We expect most purchasers of our warrants will hold their securities
through one or more intermediaries and consequently you are unlikely to receive
notice directly from us that the warrants are being redeemed. If you fail to
receive notice of redemption from a third party and your warrants are redeemed
for nominal value, you will not have recourse to us.





Our
management’s ability to require holders of our warrants to exercise such
warrants on a cashless basis after we call the warrants for redemption or if
there is no effective registration statement covering the shares of common stock
issuable upon exercise of these warrants will cause holders to receive fewer
shares of common stock upon their exercise of the warrants than they would have
received had they been able to pay the exercise price of their warrants in
cash.




If we
call our warrants for redemption after the redemption criteria described
elsewhere in the prospectus have been satisfied, our management will have the
option to require any holder that wishes to exercise his warrant to do so on a
“cashless basis.”  “Cashless exercise” means the warrant holder pays
the exercise price by giving up some of the shares for which the warrant is
being exercised, with those shares valued at the then current market
price.  Accordingly, each holder would pay the exercise price by
surrendering the warrants for that number of shares of common stock equal to the
quotient obtained by dividing (x) the product of the number of shares of common
stock underlying the warrants, multiplied by the difference between the exercise
price of the warrants and the fair market value by (y) the fair market value.
The “fair market value” shall mean the average last sales price of our common
stock for the 10 trading days ending on the third trading day prior to the date
on which notice of redemption is sent to the holders of the
warrants.  For example, if the holder is exercising 875 public
warrants at $11.50 per share through a cashless exercise when the common stock
has a fair market value per share of $17.50 per share, then upon the cashless
exercise, the holder will receive 300 shares of common stock.  The
holder would have received 875 shares of common stock if the exercise price was
paid in cash.  In addition, in the event a registration statement covering
the common stock issuable upon exercise of the warrant is not effective within a
specified period following the consummation of our initial business transaction,
warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an
effective registration statement, exercise warrants on a cashless basis. 
For purposes of calculating the number of shares issuable upon such cashless
exercise, the “fair market value” of warrants shall be calculated using the
volume weighted average sale price of the common stock for the 10 trading days
ending on the trading day prior to the date on which notice of exercise is
received by the warrant agent.  If our management chooses to require
holders to exercise their warrants on a cashless basis or if holders elect to do
so when there is no effective registration statement, the number of shares of
common stock received by a holder upon exercise will be fewer than it would have
been had such holder exercised his warrant for cash. This will have the effect
of reducing the potential “upside” of the holder’s investment in our company
because the warrantholder will hold a smaller number of shares of common stock
upon a cashless exercise of the warrants they hold.




Our
outstanding warrants may have an adverse effect on the market price of common
stock and make it more difficult to effect a business transaction.




To the
extent we issue shares of common stock to effect a business transaction, the
potential for the issuance of a substantial number of additional shares of
common stock upon exercise of our public and Insider Warrants could make us a
less attractive acquisition vehicle to a target business. Such warrants, when
exercised, will increase the number of issued and outstanding shares of our
common stock and reduce the value of the shares of common stock issued to
complete the business transaction. Therefore, our warrants may make it more
difficult to effectuate a business transaction or increase the cost of acquiring
the target business.




An
investor will only be able to exercise a warrant if the issuance of common stock
upon such exercise has been registered or qualified or is deemed exempt under
the securities laws of the state of residence of the holder of the
warrants.




No
warrants will be exercisable and we will not be obligated to issue shares of
common stock unless the common stock issuable upon such exercise has been
registered or qualified or deemed to be exempt under the securities laws of the
state of residence of the holder of the warrants. Because the exemptions from
qualification in certain states for resales of warrants and for issuances of
common stock by the issuer upon exercise of a warrant may be different, a
warrant may be held by a holder in a state where an exemption is not available
for issuance of common stock upon an exercise and the holder will be precluded
from exercise of the warrant.  As a result, the warrants may be
deprived of any value, the market for the warrants may be limited and the
holders of warrants may not be able to exercise their warrants if the common
stock issuable upon such exercise is not qualified or exempt from qualification
in the jurisdictions in which the holders of the warrants reside.




24


We
may amend the terms of the warrants in a manner that may be adverse to holders
with the approval by the holders of two-thirds of the then outstanding public
warrants.




Our
warrants will be issued in registered form under a warrant agreement between
Continental Stock Transfer & Trust Company, as warrant agent, and
us.  The warrant agreement provides that the terms of the warrants may
be amended without the consent of any holder to cure any ambiguity or correct
any defective provision, but requires the approval by the holders of at least
two-thirds of the then outstanding public warrants in order to make any change
that adversely affects the interests of the registered
holders.   Accordingly, we may amend the terms of the warrants in
an adverse way to a holder if holders of at least two-thirds of the then
outstanding public warrants approve of such amendment.




Provisions
in our second amended and restated certificate of incorporation and bylaws and
Delaware law may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our common stock and could entrench
management.




Our
second amended and restated certificate of incorporation and bylaws contain
provisions that may discourage unsolicited takeover proposals that stockholders
may consider to be in their best interests. Our board of directors is divided
into two classes, each of which will generally serve for a term of two years
with only one class of directors being elected in each year. As a result, at a
given annual meeting only a minority of the board of directors may be considered
for election. Since our “staggered board” may prevent our stockholders from
replacing a majority of our board of directors at any given annual meeting, it
may entrench management and discourage unsolicited stockholder proposals that
may be in the best interests of stockholders. Moreover, our board of directors
has the ability to designate the terms of and issue new series of preferred
stock.




We are
also subject to anti-takeover provisions under Delaware law, which could delay
or prevent a change of control. Together these provisions may make more
difficult the removal of management and may discourage transactions that
otherwise could involve payment of a premium over prevailing market prices for
our securities.




Compliance
with the Sarbanes-Oxley Act of 2002 will require substantial financial and
management resources and may increase the time and costs of completing an
acquisition.




Section
404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and report on
our system of internal controls and requires that we have such system of
internal controls audited beginning with our Annual Report on Form 10-K for the
year ending December 31, 2011. If we fail to maintain the adequacy of our
internal controls, we could be subject to regulatory scrutiny, civil or criminal
penalties and/or stockholder litigation. Any inability to provide reliable
financial reports could harm our business. Recent revisions to section 1-202 and
2-202 of Regulation S-X and Item 308 of Regulations S-B and S-K require the
expression of a single opinion directly on the effectiveness of our internal
control over financial reporting from our independent registered public
accounting firm. Section 404 of the Sarbanes-Oxley Act also requires that our
independent registered public accounting firm report on management’s evaluation
of our system of internal controls. A target company may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of their
internal controls. The development of the internal controls of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and
costs necessary to complete any such acquisition. Furthermore, any failure to
implement required new or improved controls, or difficulties encountered in the
implementation of adequate controls over our financial processes and reporting
in the future, could harm our operating results or cause us to fail to meet our
reporting obligations. Inferior internal controls could also cause investors to
lose confidence in our reported financial information, which could have a
negative effect on the trading price of our securities.





We
do not currently intend to hold an annual meeting of stockholders until after
our consummation of a business transaction.




We do not
currently intend to hold an annual meeting of stockholders until after we
consummate a business transaction, and thus may not be in compliance with
Section 211(b) of the Delaware General Corporation Law, which requires an annual
meeting of stockholders be held for the purposes of electing directors in
accordance with a company’s bylaws unless such election is made by written
consent in lieu of such a meeting. Therefore, if our stockholders want us to
hold an annual meeting prior to our consummation of a business transaction, they
may attempt to force us to hold one by submitting an application to the Delaware
Court of Chancery in accordance with Section 211(c) of the Delaware General
Corporation Law.




25


The
grant of registration rights to our sponsor may make it more difficult to
complete our initial business transaction, and the future exercise of such
rights may adversely affect the market price of our common stock.




Our
sponsor, and the underwriters in the case of Insider Warrants purchased in the
private placement, and their permitted transferees can demand that we register
the initial shares and the Insider Warrants, and the shares of common stock
issuable upon exercise of the Insider Warrants. The registration rights will be
exercisable with respect to the initial shares and the Insider Warrants and the
shares of common stock issuable upon exercise of such Insider Warrants at any
time commencing upon the date that such shares are released from escrow. We will
bear the cost of registering these securities. If such persons exercise their
registration rights in full, there will be an additional 555,556 shares of
common stock (assuming no exercise of the underwriters’ over-allotment option)
and up to 3,700,000 shares of common stock issuable on exercise of the Insider
Warrants eligible for trading in the public market. The registration and
availability of such a significant number of securities for trading in the
public market may have an adverse effect on the market price of our common
stock. In addition, the existence of the registration rights may make our
initial business transaction more costly or difficult to conclude. This is
because the stockholders of the target business may increase the equity stake
they seek in the combined entity or ask for more cash consideration to offset
the negative impact on the market price of our common stock that is expected
when the securities owned by our sponsor are registered.




Because
we must furnish our stockholders with target business financial statements
prepared in accordance with U.S. generally accepted accounting principles, we
will not be able to complete a business transaction with prospective target
businesses unless their financial statements are prepared in accordance with
U.S. generally accepted accounting principles.




The
federal proxy rules require that a proxy statement with respect to a vote on a
business transaction meeting certain financial significance tests include
historical and/or pro forma financial statement disclosure in periodic reports.
We will include the same financial statement disclosure in connection with our
tender offer documents, whether or not they are required under the tender offer
rules.  These financial statements must be prepared in accordance
with, or be reconciled to, U.S. generally accepted accounting principles, or
GAAP, and the historical financial statements must be audited in accordance with
the standards of the Public Company Accounting Oversight Board (United States),
or PCAOB. These financial statement requirements may limit the pool of potential
target businesses we may acquire.




Because
of our limited resources and the significant competition for business
transaction opportunities, it may be more difficult for us to complete a
business transaction.




We expect
to encounter intense competition from other entities having a business objective
similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies and other entities,
domestic and international, competing for the type of businesses we intend to
acquire. Many of these individuals and entities are well established and have
extensive experience in identifying and effecting, directly or indirectly,
acquisitions of companies operating in or providing services to various
industries. Many of these competitors possess greater technical, human and other
resources, or more local industry knowledge, than we do and our financial
resources will be relatively limited when contrasted with those of many of these
competitors. While we believe there are numerous target businesses we could
potentially acquire with the net proceeds of the Offering, our ability to
compete with respect to the acquisition of certain target businesses that are
sizable will be limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of
certain target businesses. Furthermore, the obligation we have to seek
stockholder approval of a business transaction may delay the consummation of a
transaction. Also, our obligation to pay cash for the shares of common stock
redeemed in certain instances may reduce the resources available for a business
transaction. Any of these obligations may place us at a competitive disadvantage
in successfully negotiating a business transaction.




Item
2.    Properties




We do not
own any real estate or other physical properties materially important to our
operation.  Our executive office is located at 590 Madison Avenue,
35th Floor, New York, New York 10022. Our sponsor has agreed to provide us with
office space and general and administrative services free of charge until
consummation of the business transaction.  We consider our current
office space adequate for our current operations.




Item
3.    Legal Proceedings




To the
knowledge of our management, there is no litigation currently pending or
contemplated against us, any of our officers or directors in their capacity as
such or against any of our property.




26


Item
4.    (Removed and Reserved).




PART
II




Item
      5.
            Market for Registrant’s Common
      Equity, Related Stockholder Matters, and Issuer Purchases of Equity
      Securities




(a)
Market Information




Our
Common Stock, Warrants and Units are each traded on the OTC Bulletin Board under
the symbols SQTC, SQTCW and SQTCU, respectively.  Our units commenced
public trading on May 20, 2010, and our common stock and warrants commenced
public trading on June 10, 2010.




The table
below sets forth, for the calendar quarter indicated, the high and low bid
prices of our Units, Common Stock and Warrants as reported on the OTC Bulleting
Board.  The following table sets forth the high and low bid prices for
our Units for the period from May 20, 2010 through December 31, 2010 and our
Common Stock and Warrants for the period from June 10, 2010 through December 31,
2010.





Quarter Ended
                    
                    Units
                    
                    
                    Common Stock
                    
                    
                    WarrantsLow
                    
                    
                    High
                    
                    
                    Low
                    
                    
                    High
                    
                    
                    Low
                    
                    
                    HighJune
      30, 2010
                    
                    
                    10.00
                    
                    
                    
                    10.20
                    
                    
                    
                    9.61
                    
                    
                    
                    9.68
                    
                    
                    
                    0.40
                    
                    
                    
                    0.50September
      30, 2010
                    
                    
                    10.00
                    
                    
                    
                    10.10
                    
                    
                    
                    9.61
                    
                    
                    
                    9.80
                    
                    
                    
                    0.40
                    
                    
                    
                    0.55December
      30, 2010
                    
                    
                    10.01
                    
                    
                    
                    10.50
                    
                    
                    
                    9.61
                    
                    
                    
                    9.85
                    
                    
                    
                    0.38
                    
                    
                    
                    0.55





On
February 7, 2010, the closing prices of our Common Stock, Units and Warrants
were $10.10, $11.10 and $1.10, respectively.




(b) Holders





On
February 7, 2010, there were 2 holders of record of our Common Stock, 7holders of record of our
Warrants and 1 holder of record of our Units.





(c)
Dividends





We have
not paid any cash dividends on our common stock to date and do not intend to pay
cash dividends prior to the completion of a business transaction. The payment of
cash dividends in the future will be dependent upon our revenues and earnings,
if any, capital requirements and general financial condition subsequent to
completion of a business transaction. The payment of any dividends subsequent to
a business transaction will be within the discretion of our board of directors
at such time. It is the present intention of our board of directors to retain
all earnings, if any, for use in our business operations and, accordingly, our
board of directors does not anticipate declaring any dividends in the
foreseeable future. In addition, our board of directors is not currently
contemplating and does not anticipate declaring any stock dividends in the
foreseeable future. Further, if we incur any indebtedness, our ability to
declare dividends may be limited by restrictive covenants we may agree to in
connection therewith.





(d)
Securities Authorized for Issuance Under Equity Compensation Plans.





None.




Recent
Sales of Unregistered Securities





Prior to
the consummation of the Offering, we completed a private placement of an
aggregate of 3,700,000 Insider Warrants to our underwriters and our sponsor
(3,500,000 by our sponsor and 200,000 by the underwriters), generating gross
proceeds of $1,850,000.  Our sponsor   is indirectly
controlled and partially owned by certain of the Company’s officers and
directors. The Insider Warrants will be identical to the warrants sold in the
Offering except that if held by the original holders or their permitted assigns,
they (i) may be exercised for cash or on a cashless basis; (ii) are not subject
to being called for redemption so long as they are held by the initial
holders; and (iii) with respect to Insider Warrants held by the underwriters and
beneficially owned by Mark Klein as a result of being a member of our sponsor,
will expire five years from the effective date of the registration statement, or
earlier upon redemption or liquidation. In addition, the Insider Warrants will
be held in escrow until 30 days following the consummation of our initial
business transaction. The private placement of the warrants was made pursuant to
Section 4(2) or Regulation D of the Securities Act of 1933, as amended, or the
Securities Act.





27


On
November 6, 2009, the Company issued to the sponsor (i) 638,889 shares of
restricted Common Stock (of which 32,633 were forfeited on May 28, 2010, as a
result of the underwriters’ partial exercise of the over-allotment option), for
an aggregate amount of $25,000 in cash.  The purchase price for each
share of Common Stock (after giving effect to the forfeiture) was approximately
$0.041 per share.  The sponsor agreed that these shares of Common
Stock will not be sold or transferred until one year following consummation of a
business transaction, subject to certain limited exceptions.




Use
of Proceeds from our Initial Public Offering





The effective date of our registration
statement, which was filed on Form S-1 under the Securities Act of 1933 (File
No. 333-163134), and which related to the
initial public Offering of our units, was May 19, 2010. Each unit consisted of
one share of common stock, $.0001 par value per share, and one warrant to
purchase one share of common stock. A total of 5,750,000 (including the underwriters’ over
allotment) units were registered at a proposed maximum aggregate Offering price
of $57,500,000 (including the underwriters’ over allotment).





On May
25, 2010, the Company sold 5,000,000 Units in the Offering at a price of $10.00
per Unit.  Each Unit consists of one share of the Company’s Common
Stock and a Warrant exercisable for one share of Common Stock.  On May
28, 2010, the Company sold an additional 456,300 Units subject to the
underwriters’ over allotment option.  A total of 5,456,300 Units were
sold in the Offering for an aggregate Offering price of
$54,563,000.  The sole book running manager was Morgan Joseph &
Co. Inc.





In
addition, immediately prior to the Offering, our sponsor and the underwriters
purchased an aggregate of 3,700,000 Insider Warrants (3,500,000 by our sponsor
and 200,000 by the underwriters) from us at a price of $0.50 per warrant in a
private placement pursuant to Section 4(2) or Regulation D of the Securities Act
of 1933, as amended, or the Securities Act.





The net
offering proceeds to us from the sale of our Units and the private placement,
after deducting underwriting discounts and commissions of $1,636,890 (including
$600,193 placed in the Trust Account representing a deferred underwriters’
discount) and offering expenses of $1,495,900 (which includes $100,000 in
deferred legal fees payable upon consummation of the initial business
transaction), was $54,476,303.  $54,476,303 including proceeds from
the sale of our Insider Warrants, plus interest is currently being held in trust
and the remaining funds of approximately $397,000 are being held outside of the
trust. The Company, in the aggregate incurred $2,096,093 in expenses in
connection with the Offering.  The remaining proceeds are held for
working capital such as business, legal and accounting due diligence on
prospective acquisitions and continuing general and administrative expenses. We
will use substantially all of the net proceeds of the initial public Offering to
acquire a target business, including identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring,
negotiating and consummating the business combination. From the date of the
Offering through December 31, 2010, $291,988 of the Offering proceeds have been
used by us for working capital purposes.  To the extent that our
capital stock is used in whole or in part as consideration to effect a business
combination, the proceeds held in the trust fund as well as any other net
proceeds not expended will be used to finance the operations of the target
business. We believe we will have sufficient available funds outside of the
trust fund to operate through August 19, 2011, assuming that a business
transaction is not consummated during that time.  We do not believe we
will need to raise additional funds in order to meet the expenditures required
for operating our business. However, we may need to raise additional funds
through a private or public Offering of debt or equity securities if such funds
are required to consummate a business transaction that is presented to us. We
would only consummate such a financing simultaneously with the consummation of a
business transaction.





All
proceeds from the Offering held in our Trust Account will be and is being
invested in U.S. “government securities,” within the meaning of Section 2(a)(16)
of the Investment Company Act of 1940 (the “1940 Act”) with a maturity of 180
days or less, or in money market funds meeting certain conditions under Rule
2a-7 promulgated under the 1940 Act, until the earlier of (i) the consummation
of a business transaction or (ii) the distribution of the Trust
Account.





Other
than as set forth below, no expenses of the Offering were paid to any of our
officers and directors, to persons owning ten percent (10%) or more of Common
Stock or any of their respective affiliates. We did, however, repay our sponsor
and one of our executive officers for loans and advances made to us prior to the
consummation of the Offering. The aggregate amount of the loans and advances was
$15,051.





28


Mark
Klein, our chairman, chief executive officer and president, is an associated
person of Ladenburg Thalmann & Co., a member of FINRA, and a member of 57th
Street GAC Holdings LLC, our sponsor.  As a member of our sponsor,
Mark Klein is deemed a beneficial owner of 149,357 of the initial shares and
1,020,000 of the Insider Warrants purchased by our sponsor.





As a
result of Mark Klein’s relationship with Ladenburg Thalmann & Co., the
149,357 insider shares and the 1,020,000 Insider Warrants beneficially owned by
Mark Klein, together with the Insider Warrants purchased by the underwriters and
the common stock underlying all such Insider Warrants, have been deemed to be
underwriting compensation by FINRA and are therefore subject to a 360-day
lock-up pursuant to Rule 5110(g)(1) of the FINRA Conduct Rules.  Mark
Klein and the underwriters have agreed not to sell, transfer, assign, pledge or
hypothecate the insider shares, the Insider Warrants or the common stock
underlying the Insider Warrants beneficially owned by them, nor shall such
insider shares, Insider Warrants or common stock underlying such Insider
Warrants be the subject of any hedging, short sale, derivative, put or call
transaction that would result in the effective economic disposition of such
insider shares, Insider Warrants or the common stock underlying such Insider
Warrants to any person other than as permitted under Section 5110(g)(2) of the
FINRA Conduct Rules.





The
following table summarizes the compensation to our underwriters in connection
with the Offering:




Per Unit
                
                
                TotalWithout Over-
                  allotment
                
                
                With Over-
                  allotment
                
                
                Without
                  Over-
                  allotment
                
                
                With Over-
                  allotmentUnderwriting
      discounts and commissions paid by us (1)
                
                $
                0.19
                
                
                $
                0.19
                
                
                $
                950,000
                
                
                $
                1,092,500Contingent
      fees paid by us (2)
                
                
                0.11
                
                
                
                0.11
                
                
                
                550,000
                
                
                
                632,500





(1)
            Based on the underwriters’
      discount equal to 1.9% of the gross proceeds from the sale of units
      offered to the public.





(2)
            Based on a deferred fee payable
      to the underwriters equal to 1.1% of the gross proceeds from the sale of
      the units offered to the public that will become payable from the amounts
      held in the trust account solely in the event we consummate our initial
      business transaction.





Purchases
of Equity Securities by the Issuer and Affiliated Purchasers





None.




Item
6.   Selected Financial Data




We are a smaller reporting company as
defined in Regulation S-K; as such pursuant to Regulation S-K we are not
required to make disclosures under this Item.




Item
7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS





Forward-Looking
Statements





This
Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). The words “believe,” “expect,” “anticipate,”
“project,” “target,” “optimistic,” “intend,” “aim,” “will” or similar
expressions are intended to identify forward-looking statements. Such statements
include, among others, those concerning our expected financial performance and
strategic and operational plans, as well as all assumptions, expectations,
predictions, intentions or beliefs about future events. These statements are
based on the beliefs of our management as well as assumptions made by and
information currently available to us and reflect our current view concerning
future events. As such, they are subject to risks and uncertainties that could
cause our results to differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include, among many
others: our ability to consummate a successful business transaction; uncertainty
of capital resources; the speculative nature of our business; our ability to
successfully implement new strategies; present and possible future governmental
regulations; operating hazards; competition; the loss of key personnel; any of
the factors in the “Risk Factors” section of this Report; other risks identified
in this Report; additional risks and uncertainties that are discussed in the
Company’s reports filed and to be filed with the Commission and available at the
SEC’s website at www.sec.gov., and any statements of assumptions underlying any
of the foregoing. You should also carefully review other reports that we file
with the Securities and Exchange Commission. We assume no obligation and do not
intend to update these forward-looking statements, except as required by
law.





29


Overview





The
following discussion should be read in conjunction with our financial
statements, together with the notes to those statements, included elsewhere in
this Report. Our actual results may differ materially from those discussed in
these forward-looking statements because of the risks and uncertainties inherent
in future events.




We were
formed on October 29, 2009, for the purpose of acquiring, through a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization,
exchangeable share transaction or other similar business transaction, one or
more operating businesses or assets.  On January 9, 2011, we entered
into a Business Combination Agreement to effectuate a business transaction as is
more fully described in the Company’s Form 8-K, as filed with the Commission on
January 10, 2011.





We
presently have no revenue, have had losses since inception from incurring
administrative costs of government compliance for a public company, have no
operations other than the active solicitation of an acquisition target and have
relied upon the sale of our securities and loans from our officers and directors
to fund our operations.





We intend
to use cash from the proceeds of our Offering, our capital stock, incurred debt,
or a combination of cash, capital stock and debt, in effecting our initial
business transaction. The issuance of additional shares of our capital
stock:





·
            may
      significantly reduce the equity interest of investors in our initial
      public offering;


·
              may
      subordinate the rights of holders of common stock if preferred stock is
      issued with rights senior to those afforded to the holders of our common
      stock;


·
              may
      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 most likely will
      also result in the resignation or removal of our present officers and
      directors; and


·
            may
      adversely affect prevailing market prices for our common stock and/or
      warrants.





Similarly,
if we incur substantial debt, it could result in:





·
            default
      and foreclosure on our assets if our operating cash flow after a business
      transaction is 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 contains
      covenants that require the maintenance of certain financial ratios or
      reserves and any such covenant is breached without a waiver or
      renegotiation of that covenant;


·
            our
      immediate payment of all principal and accrued interest, if any, if the
      debt security is payable on
demand;


30





·
            covenants
      that limit our ability to acquire capital assets or make additional
      acquisitions;


·
              our
      inability to obtain additional financing, if necessary, if the debt
      security contains covenants restricting our ability to obtain additional
      financing while such security is outstanding;


·
            our
      inability to pay dividends on our common
stock;


·
              using
      a substantial portion of our cash flow to pay principal and interest on
      our debt, which will reduce the funds available for dividends on our
      common stock if declared, expenses, capital expenditures, acquisitions and
      other general corporate purposes;


·
            limitations
      on our flexibility in planning for and reacting to changes in our business
      and in the industry in which we
operate;


·
              increased
      vulnerability to adverse changes in general economic, industry and
      competitive conditions and adverse changes in government regulation;
      and


·
            limitations
      on our ability to borrow additional amounts for expenses, capital
      expenditures, acquisitions, debt service requirements, execution of our
      strategy and other purposes and other disadvantages compared to our
      competitors who have less debt.




Changes
in Financial Condition




Liquidity
and Capital Resources





On
November 6, 2009, the Company issued to the sponsor (i) 638,889 shares of
restricted Common Stock (up to 83,333 of which were subject to forfeiture if the
underwriters’ over-allotment option was not exercised in full), for an aggregate
amount of $25,000 in cash.  The purchase price for each share of
Common Stock was approximately $0.039 per share.  The sponsor agreed
that these shares of Common Stock will not be sold or transferred until one year
following consummation of a business transaction, subject to certain limited
exceptions. On May 28, 2010, the sponsor forfeited 32,633 of these shares in
connection with the underwriter’s partial exercise of their over-allotment
option.




Immediately
before consummation of the Offering, we entered into an agreement with our
sponsor and the underwriters for the sale of 3,700,000 warrants in a private
placement.  The warrants were sold at a price of $0.50 per warrant,
generating net proceeds of $1,850,000.  All of the proceeds received
from the sale of the Insider Warrants ($1,850,000) were placed in the Trust
Account.  Each warrant entitles the holder to purchase from us one
share of our common stock at a price of $11.50 subject to
adjustments.  The insider warrants will be identical to the warrants
sold in this offering except that if held by the original holders or their
permitted assigns, they (i) may be exercised for cash or on a cashless basis;
(ii) are not subject to being called for redemption so long as they are
held by the initial holders; and (iii) with respect to insider warrants held by
the underwriters and beneficially owned by Mark Klein as a result of being a
member of our sponsor, will expire five years from the effective date of the
registration statement, or earlier upon redemption or liquidation. In addition,
the insider warrants will be held in escrow until 30 days following the
consummation of our initial business transaction.




We
believe the purchase price of the Insider Warrants was greater than the fair
value of such warrants.  Therefore, we will not be required to incur a
compensation expense in connection with the purchase by our sponsors of the
Insider Warrants on the date of issuance.





On May
25, 2010, we consummated our initial public offering of 5,000,000 Units at a
price of $10.00 per Unit.  Each Unit consists of one share of the
Company’s Common Stock and one Warrant.  On May 28, 2010, the Company
sold an additional 456,300 Units subject to the underwriters’ over allotment
option.  Each Warrant entitles the holder to purchase from the Company
one share of Common Stock at an exercise price of $11.50 commencing the later of
the 30 days following the completion of an initial business transaction or May
19, 2011 (one year from the effective date of the offering), and expiring five
years from the date of our initial business transaction, or earlier upon
redemption or liquidation.





On May
25, 2010, the Company received net proceeds of approximately $48,816,340, before
deducting deferred underwriting compensation of $550,000 and $100,000 for the
purchase of 200,000 warrants by the underwriter.  On May 28, 2010, the
Company received additional net proceeds of $4,423,286 before deducting deferred
underwriting compensation of $50,193.  Total gross proceeds to the
Company from the 5,456,300 Units sold in the Offering (including the 456,300
Units sold pursuant to the over-allotment option) were
$54,563,000.




31


The net
proceeds we received from the private placement and the sale of our units and
warrants were $55,017,100 (not including deferred underwriting discounts and
commissions of $600,193 of deferred underwriters fee and $100,000 of deferred
legal fees).  Of this amount, $54,476,303 was placed in a Trust
Account at JP Morgan Chase Bank, N.A. maintained by Continental Stock Transfer
& Trust Company, as trustee.  The remaining funds of approximately
$600,692 were held outside of the trust. As of December 31, 2010, we had
approximately $415,360 (including $18,447 of interest we earned on funds in the
trust account, which we are entitled to in order to cover our operating expenses
and the costs associated with our plan of dissolution and liquidation if we do
not consummate a business combination) that we may use to cover our operating
expenses until August 19, 2011 and to cover the expenses incurred in connection
with a business transaction.





In order
to meet our working capital needs following the consummation of our Offering,
certain of our officers and directors may, but are not obligated to, loan us
funds, from time to time, or at any time, in whatever amount such officer or
director deems reasonable in his or her sole discretion, which may be
convertible into warrants of the post business transaction entity at a price of
$0.50 per warrant at the option of the lender.  The warrants would be
identical to the insider warrants.  The holders of a majority of such
warrants (or underlying shares) will be entitled to demand that we register
these securities pursuant to an agreement to be entered into at the time of the
loan.  The holders of a majority of these securities would have
certain “piggy-back” registration rights with respect to registration statements
filed subsequent to such date.  We will bear the expense incurred with
the filing of any such registration statements.  To date, no such
loans have been made to us.





We do not
believe we will need to raise additional funds until the consummation of our
initial business transaction to meet the expenditures required for operating our
business. However, we may need to raise additional funds through a private
offering of debt or equity securities if such funds are required to consummate a
business transaction that is presented to us. Subject to compliance with
applicable securities laws, we would only consummate such financing
simultaneously with the consummation of our initial business
transaction.




We have
evaluated the appropriate accounting treatment for the insider warrants and the
warrants attached to the public units. As we are not required to net-cash settle
such warrants under any circumstances, including when we are unable to maintain
sufficient registered shares to settle such warrants, the terms of the warrants
satisfy the applicable requirements of FASB ASC 815, which provides guidance on
identifying those contracts that should not be accounted for as derivative
instruments, in accordance with FASB ASC 815.Accordingly,
we intend to classify such instruments within permanent equity as additional
paid-in capital.




Out of
the proceeds of our Offering which remained available outside of the trust
account, we obtained Officers and Directors insurance covering a 15 month period
from May 19, 2010 through August 19, 2011 at a cost of $93,265 with a prepaid
balance at December 31, 2010 of $47,334.





For the
year ended December 31, 2010 we used cash of $145,116 in operating activities
(which was attributable to an increase in prepaid expenses of $47,334 together
with a net loss for the period of $401,955, accounts payable and accruals of
$159,903, increase in franchise taxes payable of $144,217 and $53 of
depreciation) resulting in a net increase in cash of $388,830. Adding the net
cash increase of $388,830 to the cash we started with at January 01, 2010 of
$8,083, we ended the period at December 31, 2010 with a cash balance of
$396,913.




The
$600,193 of the funds attributable to the deferred underwriting discounts and
commissions (1.1% of the gross proceeds from the sale of the units sold in the
Offering) and $100,000 of deferred legal fees, in connection with the Offering,
will be released to the underwriters and counsel, respectively, upon
consummation of the Transaction.





From
January 1 through June 30, 2010, an officer of the Company paid vendor bills on
behalf of the Company in the aggregate amount of $5,051, which was due on demand
without interest. The balance was repaid from the proceeds of the Offering in
May 2010.





If the
Transaction is consummated, the funds held in the Trust Account will be released
to pay (i) the $27 million cash consideration to the Members of Crumbs in
accordance with the Agreement and the liabilities and obligations of the Company
due and owing or incurred at or prior to the effective date of the Transaction
(i) to stockholders of the Company holding shares of Common Stock sold in
the Offering who shall have validly tendered and not withdrawn their shares of
Common Stock pursuant to the Company’s certificate of incorporation and to
holders of the outstanding warrants who shall have validly tendered and not
withdrawn their warrants in the Tender Offer, (ii) to the underwriter of the
Offering as to approximately $600,193 representing deferred underwriting
commissions and discounts payable upon consummation of the Transaction, (iii)
with respect to filings, applications and/ or other actions taken pursuant to
the Agreement required under any antitrust laws, and (iv) to third parties
(e.g., professionals, advisors, printers, etc.) who have rendered services to
the Company in connection with the Transaction.




32


If we are
unable to consummate the Transaction by August 19, 2011, we (i) cease all
operations except for the purposes of winding up, (ii) redeem 100% of our public
shares of common stock for a per share pro rata portion of the trust account,
including the interest earned thereon, but net of any taxes and (iii) as
promptly as possible following such redemption, dissolve and liquidate the
balance of our net assets to our remaining stockholders, as part of our plan of
dissolution and liquidation. If we are forced to liquidate, the per share
liquidation amount may be less than the initial per unit offering price because
of the underwriting commissions and expenses related to our Offering and because
of the value of the warrants in the per unit offering price. Additionally, if
third parties make claims against us, the Offering proceeds held in the Trust
Account could be subject to  those claims, resulting in a further
reduction to the per share liquidation price. Under Delaware law, our
stockholders who have received distributions from us may be held liable for
claims by third parties to the extent such claims have not been paid by us.
Furthermore, our warrants will expire worthless if we liquidate before the
consummation of the Transaction.




Results
of Operations





For the
year ended December 31, 2010, we had net (loss) of 401,955 consisting of
interest income of $18,447 less costs attributable to organization, formation
and general and administrative expenses of $420,402. For the period from October
29, 2009 (inception) through December 31, 2009, we had a net loss of $3,993,
attributable to organization, formation and general and administrative expenses
of $3,993.





On May
25, 2010, the Company received net proceeds of approximately $48,816,340, before
deducting deferred underwriting compensation of $550,000 and $100,000 for the
purchase of 200,000 warrants by the underwriter.  On May 28, 2010, the
Company received additional net proceeds of $4,423,286 before deducting deferred
underwriting compensation of $50,193.  Total gross proceeds to the
Company from the 5,456,300 Units sold in the Offering (including the 456,300
Units sold pursuant to the over-allotment option) were
$54,563,000.





We expect
to generate small amounts of non-operating income in the form of interest income
on cash and cash equivalents. Interest income is not expected to be significant
in view of current low interest rates on risk-free investments (treasury
securities).  We expect our expenses to increase substantially after this
annual period if we consummate the Transaction as a result of our acquiring an
operating company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence expenses.





Recent
Accounting Pronouncements




We do not
believe that the adoption of any recently issued accounting standards will have
a material impact on our financial position and results of
operations.




Off-Balance
Sheet Arrangements




None.




Item
8.   Financial Statements and Supplementary Data




Reference
is made to pages F-1 through F-16 comprising a portion of this Annual
Report on Form 10-K.


33




Item
      9.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure.




None.




Item
      9A.
            Controls
      and Procedures.




Disclosure
Controls and Procedures





Our
management with the participation of our Chief Executive Officer and Chief
Financial Officer (the “Certifying Officers”) evaluated the effectiveness of the
Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, the “Exchange
Act”) as of the end of the period covered by this Annual Report on Form
10-K.  Based on this evaluation, our Certifying Officers have
concluded that, as of the end of such period, our disclosure controls and
procedures were adequate and effective.





Internal
Control over Financial Reporting




This
Annual Report does not include a report of management’s assessment regarding
internal control over financial reporting or an attestation report of the
Company’s registered public accounting firm due to a transition period
established by the rules of the Commission for newly public
companies.




Item
9B.  Other Information




None.


34




PART
III




Item
10.  Directors, Executive Officers and Corporate
Governance




Directors
and Executive Officers




Our
directors and executive officers as of the date of this Report are as
follows:




Name
                  
                  Age
                  
                  PositionMark
      D. Klein
                  
                  49
                  
                  Chairman,
      Chief Executive Officer, President and DirectorPaul
      D. Lapping
                  
                  48
                  
                  Chief
      Financial Officer, Treasurer, Secretary and DirectorFrederick
      G. Kraegel
                  
                  62
                  
                  DirectorLeonard
      A. Potter
                  
                  49
                  
                  DirectorAndrew
      A. Fink
                  
                  41
                  
                  Director








Mark D. Klein has been Chief
Executive Officer, President and a Director since inception, and our Chairman of
the Board since April 2010. Also in April 2010, Mr. Klein became a Managing
Member and Majority Partner of M. Klein & Company, LLC, which owns the Klein
Group, LLC, a registered broker dealer. Mr. Klein also maintains registration
with the Klein Group, LLC as a registered representative and Principal. Between
March 2007 and July 2009, Mr. Klein was the Chief Executive Officer, President
and a Director of Alternative Asset Management Corporation ("AAMAC"), a special
purpose acquisition company he helped form in 2007 and which completed a merger
with Great American Group LLC in July 2009. Mr. Klein is also a registered
representative at Ladenburg Thalmann & Co. Inc., a Managing Member of the
LTAM Titan Fund, a fund of funds hedge fund and was one of the Principals of
Aldebaran Investments, LLC, a private fund which invested in special purpose
acquisition companies. From April 2007 until August 2008, Mr. Klein was the
Chief Executive Officer of Hanover Group US LLC, an indirect US subsidiary of
the Hanover Group. Prior to joining Hanover in 2007, Mr. Klein was Chairman of
Ladenburg Thalmann & Co. Inc., a leading underwriter of blank check
companies, which is engaged in retail and institutional securities brokerage,
investment banking and asset management services. From March 2005 to September
2006, he was Chief Executive Officer and President of Ladenburg Thalmann
Financial Services, Inc., the parent of Ladenburg Thalmann & Co. Inc., and
Chief Executive Officer of Ladenburg Thalmann Asset Management Inc., a
subsidiary of Ladenburg Financial Services, Inc. Prior to joining Ladenburg
Thalmann, from June 2000 to March 2005, Mr. Klein served as the Chief Executive
Officer and President of NBGI Asset Management, Inc. and NBGI Securities, which
were the US subsidiaries of the National Bank of Greece, the largest financial
institution in Greece. Prior to joining NBGI, Mr. Klein was President and
Founder of Newbrook Capital Management, Founder and Managing Member of
Independence Holdings Partners, LLC, a private equity fund of funds company, and
Founder and General Partner of Intrinsic Edge Partners, a long/short equity
hedge fund. Prior to the formation of Newbrook Capital Management and
Independence Holdings Partners, LLC, Mr. Klein was a Senior Portfolio Manager
for PaineWebber and Smith Barney Shearson. Mr. Klein also serves as a member of
the board of directors of Great American Group, Inc. Mr. Klein is a graduate of
J.L. Kellogg Graduate School of Management at Northwestern University, with a
Masters of Management Degree and also received a Bachelors of Business
Administration Degree with high distinction from Emory University.





Paul D. Lapping has been Chief
Financial Officer, Treasurer, Secretary and Director since inception. From
January 2011 and through the present, Mr. Lapping has served as the Chief
Operations Officers of Next BDC Capital Corp., a private
company.   Between March 2007 and July 2009, Mr. Lapping was the
Chief Financial Officer, Treasurer and Secretary of AAMAC, a special purpose
acquisition company which recently completed a merger with Great American Group
LLC.  From August 2003 to June 2006, Mr. Lapping served as the
president of Lapping Investments, LLC, a personal investment fund targeting
lower middle market leveraged buyouts. From April 2007 until August 2008, Mr.
Lapping served as a Managing Director of Hanover Group US LLC. From April 2000
to November 2003, Mr. Lapping was a general partner of Minotaur Partners II,
L.P., a private investment partnership Mr. Lapping formed to invest equity in
small and middle-market marketing driven companies with an emphasis on emerging
technologies. From December 1995 to January 2002, Mr. Lapping was a general
partner of Merchant Partners, LP, a private investment partnership focused on
direct marketing, business and consumer services companies. Prior to joining
Merchant Partners, Mr. Lapping served in various corporate development roles
with Montgomery Ward Holding Corp., a retail, catalog, direct marketing and home
shopping company, and Farley Industries, Inc., a management company providing
services to Farley Inc., a private investment fund holding company, and its
related entities including Fruit of the Loom, Inc., Farley Metals, Inc., Acme
Boot Company and West Point-Pepperell, Inc. Mr. Lapping also served in various
positions with Golder, Thoma and Cressey, a private equity firm, and with the
merger and acquisition group of Salomon Brothers Inc. Mr. Lapping received a
Bachelor of Science from the University of Illinois and a Masters of Management
Degree from the Kellogg School of Business at Northwestern
University.




35


Frederick G. Kraegel has been
a Director since inception. Mr. Kraegel has extensive experience in evaluating
businesses and in working with companies with complex financial issues. He has
been with Bridge Associates LLC since February 2003, currently is a Senior
Director and in such capacity has served in a number of roles including as
financial advisor to the Chapter 7 Trustee of Refco, LLC. Mr. Kraegel was an
independent consultant from July 2002 to February 2003. From July 2001 to July
2002 Mr. Kraegel was Executive Vice President, Chief Administrative Officer and
Director of AMF Bowling Worldwide, Inc. where he was hired to provide direction
for the Chapter 11 process and financial, information technology and real estate
functions. Mr. Kraegel was President and Director of Acme Markets of Virginia,
Inc. from 2000 to 2001 and led the effort in which the retail operations of the
32-store chain were sold. In 1998, he was hired as Senior Vice President and
Chief Financial Officer of Factory Card Outlet Corp., a public company, to
direct the financial restructuring of the company including the filing a Chapter
11 proceeding in 1999; Mr. Kraegel left the company in 2000 prior to its
emergence from bankruptcy in 2002. Mr. Kraegel was a partner at Peat, Marwick
Mitchell & Co. (now KPMG LLP) and is a CPA. Mr. Kraegel graduated from
Valparaiso University in 1970 with a Bachelor of Science Degree in Business
Administration with a concentration in Accounting. Mr. Kraegel serves on the
boards of Concordia Plan Services, Inc., Thrivent Financial for Lutherans and
Valparaiso University.





Leonard A. Potterhas
been a Director since inception. Since January 1, 2010, Mr. Potter has been the
Chief Investment Officer for Salt Creek Hospitality LLC, an acquirer of hotel
and lodging related assets.  From December 2002 through July 2009, Mr.
Potter was a Managing Director of Private Equity at Soros Fund Management LLC
where, from May 2005 through July 2009, Mr. Potter served as co-head of the
Private Equity group and a member of the Private Equity Investment Committee.
From September 1998 until joining Soros Fund Management LLC in 2002, Mr. Potter
was a Managing Director of Alpine Consolidated LLC, a private merchant bank, and
from April 1996 through September 1998, Mr. Potter founded and served as a
Managing Director of Capstone Partners LLC, a private merchant bank. Prior to
founding Capstone Partners, Mr. Potter was an attorney specializing in mergers,
acquisitions and corporate finance at Morgan, Lewis & Bockius and Willkie
Farr & Gallagher.   Mr. Potter is a currently a director of Solar
Capital Ltd., a public business development company, Auto Europe, a private car
rental company, Stonegate Production Company, a private oil and gas exploration
and production company, Hilton Hotel Corp., a private hotel management and
ownership company and Next BDC Capital Corp, a private company.  Mr.
Potter is also a director of Solar Senior Capital, Ltd., an investment company
and has previously served as a director of several other public companies. Mr.
Potter also currently serves as a director of a number of private
companies. Mr. Potter has a Bachelors of Arts Degree from Brandeis University
and a Juris Doctor Degree from the Fordham University School of
Law.





Andrew A. Finkhas been a
Director since January, 2010.  Andrew A. Fink is a Managing Director
of Trevi Health Ventures LP, which he co-founded in March 2005.  From
2003 to 2005, Mr. Fink was the principal of Groton Partners LLC, a New
York-based merchant banking firm where he was responsible for principal
investments and advisory assignments in molecular diagnostics, medical devices,
biopharmaceuticals and healthcare services   From 2000 to 2003,
Mr. Fink was a member of the Healthcare and Life Sciences Group at Dresdner
Kleinwort Wasserstein, Inc., the investment banking arm of Germany's Dresdner
Bank AG, where Mr. Fink led the firm’s medical technology effort, advising
corporate clients on mergers & acquisitions and capital markets
transactions.   Mr. Fink began his career as a corporate lawyer at
Paul, Weiss, Rifkind, Wharton & Garrison in New York in 1996.  Mr.
Fink has a Bachelors of Arts Degree, magna cum laude, from Columbia College
(where he was elected to Phi Beta Kappa) and a Juris Doctor from Columbia School
of Law.  Mr. Fink is currently a member of the Board of Directors of
Ikonisys, Inc., Flynn Pharma Ltd., Small Bone Innovations, Inc., MedAvante, Inc.
and Manhattan Physicians Laboratories LLC.  Mr. Fink is also a member
of the Board of Directors of the Alumni Association of Columbia College and the
StreetSquash Organization.





Advisory
Board




In
addition to our board of directors, we have established an advisory
board.  As of the date of this Annual Report, the members of our
Advisory Board are:





Name
                  
                  Age
                  
                  PositionMichael
      J. Levitt
                  
                  51
                  
                  MemberJonathan
      I. Berger
                  
                  40
                  
                  MemberMichael
      S. Gross
                  
                  49
                  
                  Member




36


Our
Advisory Board is comprised of individuals who have the background and
experience to assist us in evaluating our business strategies and
development.  Our special advisors will not participate in managing
our operations. We have no formal arrangement or agreement with these
individuals to provide services to us and accordingly, they have no contractual
or fiduciary obligations to present business opportunities to us. We expect that
members of the Advisory Board will provide advice, insights, contacts and other
assistance to us based on their extensive industry experience and involvement in
areas of activity that are strategic to us. In addition to individual meetings
or phone conferences with members of the Advisory Board, we have conducted
bi-annual meetings with the Advisory Board to discuss our strategy and industry
trends.




Prior to
becoming members of our advisory board, Mr. Levitt was the chairman of our board
of directors, and Mr. Berger was a member of our board of
directors.  While we anticipate that each of Messrs. Levitt and Berger
will continue to devote as much time as needed to our business and our efforts
to consummate a business transaction, they elected to step down from our board
of directors and become members of our advisory board to avoid the appearance
that their position with us would restrict their other professional or business
endeavors.




The
following is a brief summary of the background of each member of our Advisory
Board. There are no family relationships among any of the advisors, executive
officers or directors.





Michael J. Levitt has been a
member of our Advisory Board since April 2010. Mr. Levitt was the Chairman of
our Board of Directors from October, 2009 through April, 2010.  In
2001, Mr. Levitt founded Stone Tower Capital LLC (“STC”), an alternative
investment firm focused on credit and credit-related assets, and is responsible
for the overall strategic direction of STC and the development of the firm’s
investment philosophies. Previously, Mr. Levitt was a partner in the New
York office of Hicks, Muse, Tate & Furst Incorporated, where he was involved
in many of the firm's investments and managed the firm’s relationships with
banking firms.  Prior thereto, Mr. Levitt served as the Co-Head of the
Investment Banking Division of Smith Barney Inc. with responsibility for the
advisory, private equity sponsor and leveraged finance activities of the
firm.  Mr. Levitt began his investment banking career at, and
ultimately served as a Managing Director of, Morgan Stanley & Co.,
Inc.  Mr. Levitt oversaw the firm’s corporate finance and advisory
businesses related to private equity firms and non-investment grade
companies.  Mr. Levitt also serves as a member of the board of
directors of Great American Group, Inc. Mr. Levitt has a Bachelors of Business
Administration degree from the University of Michigan and a Juris Doctor Degree
from the University of Michigan Law School.  Mr. Levitt serves on the
University of Michigan investment advisory board.





Jonathan I. Berger has been a
member of our Advisory Board since April 2010. Mr. Berger was one of our
Directors from October, 2009 through April, 2010. Mr. Berger is currently
President and Chief Investment Officer of Stone Tower Capital LLC (“STC”), where
he oversees all investment and non-investment operations.  Mr. Berger
is in charge of day-to-day management of STC with oversight of all investment
and non-investment operations. In addition, he is responsible for overseeing
STC’s investment activities and portfolios in corporate credit funds, and chairs
all of STC’s investment committees. Previously, he was a Co-Founder and Partner
of Pegasus Capital Advisors L.P (“Pegasus”). Prior to Pegasus, Mr. Berger was a
Vice President in the High Yield and Distressed Securities Group at UBS
Securities LLC. Prior thereto, he was a Principal at Rosecliff, Inc., a
middle-market private equity fund. Prior thereto, Mr. Berger was an Associate in
the Leveraged Finance Group at Salomon Brothers Inc. Mr. Berger holds a B.S. in
Economics with a concentration in Finance from the Wharton School of the
University of Pennsylvania.





Michael S. Grosshas been a
member of our Advisory Board since April 2010.  Mr. Gross was the
managing member, the chairman of the board of directors and the chief executive
officer of Solar Capital LLC since its inception in February 2007, and has been
the chairman of the board of directors since December 2007, and chief executive
officer and president since November 2007, of Solar Capital Ltd. Mr. Gross
also currently serves as the managing member of Solar Capital’s investment
adviser, Solar Capital Partners. From July 2006 through approximately the first
quarter of 2009, Mr. Gross was a partner in Magnetar Capital Partners, LP.
Between February 2004 and February 2006, Mr. Gross was the president and
chief executive officer of Apollo Investment Corporation, a publicly traded
business development company that he founded and on whose board of
directors and investment committee he served as chairman from February 2004 to
July 2006, and was the managing partner of Apollo Investment Management, L.P.,
the investment adviser to Apollo Investment Corporation. Apollo Investment
Corporation invests primarily in middle-market companies in the form of senior
secured and mezzanine loans as well as by making direct equity investments in
such companies. Under his management, Apollo Investment Corporation raised
approximately $930 million in gross proceeds in an initial public Offering in
April 2004 and invested approximately $2.3 billion in over 65 companies in
conjunction with 50 different private equity sponsors. From 1990 to February
2006, Mr. Gross was a senior partner at Apollo Management, L.P., a leading
private equity firm which he founded in 1990 with five other persons. Since its
inception, Apollo Management, L.P. has invested more than $13 billion in over
150 companies in the United States and Western Europe. During his tenure at
Apollo Management, L.P., Mr. Gross was a member of an investment committee
that was responsible for overseeing such investments. In addition, from 2003 to
February 2006, Mr. Gross was the managing partner of Apollo Distressed
Investment Fund, an investment fund he founded to invest principally in
non-control oriented distressed debt and other investment securities of
leveraged companies. Prior to his time at Apollo Management, L.P., Mr. Gross was
employed by Drexel Burnham Lambert Incorporated. From June 2006 to August 2008,
Mr. Gross served as the chief executive officer, chairman of the board of
directors and secretary of Marathon Acquisition Corp., a publicly traded special
purpose acquisition company. Mr. Gross currently serves on the boards of
directors of Saks, Inc., Global Ship Lease Inc. and Jarden Corporation, and in
the past has served on the boards of directors, including in certain cases, in
the capacity as a lead director, of more than 20 public and private companies.
He is a founding member, and serves on the executive committee, of the Youth
Renewal Fund, is the chairman of the board of Mt. Sinai Children’s Center
Foundation, and serves on the Board of Trustees of The Trinity School and the
Board of Directors of New York Road Runners. Mr. Gross holds a B.B.A. in
accounting from the University of Michigan and an M.M. from the J.L. Kellogg
Graduate School of Management at Northwestern University.




37





Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our officers,
directors and persons who beneficially own more than ten percent of our common
stock to file reports of ownership and changes in ownership with the SEC. These
reporting persons are also required to furnish us with copies of all Section
16(a) forms they file.  Based solely upon a review of such Forms,
management believes that all of these reports were filed in a timely
manner.




Audit
Committee and Audit Committee Financial Expert




Our board
of directors intends to establish an audit committee upon consummation of a
business transaction. At that time our board of directors intends to adopt a
charter for the audit committee. Accordingly, we do not have an audit committee
financial expert at this time and will not have such an expert until we
consummate our initial business transaction.




Code
of Ethics




We have
adopted a code of conduct and ethics applicable to our directors, officers and
employees in accordance with applicable federal securities laws.




Item
11. Executive Compensation




Compensation
Discussion and Analysis





No
compensation of any kind, including finders and consulting fees, has or will be
paid to any of our officers and directors, or any of their respective
affiliates, prior to, or for any services they render in order to effectuate,
the consummation of a business transaction.  However, our officers and
directors may be reimbursed for any out-of-pocket expenses incurred in
connection with activities on our behalf such as identifying potential target
businesses and performing due diligence on suitable business
combinations.  There is no limit on the amount of these out-of-pocket
expenses and there will be no review of the reasonableness of the expenses by
anyone other than our board of directors, which includes persons who may seek
reimbursement, or a court of competent jurisdiction if such reimbursement is
challenged (except that reimbursement may not be made using funds in the trust
account unless and until a business transaction is consummated). If all of our
directors are not deemed “independent,” we will not have the benefit of
independent directors examining the propriety of expenses incurred on our behalf
and subject to reimbursement.  Since our formation, we have not
granted any plan or non plan compensation to any of our officers or directors,
including any equity awards, stock options or stock appreciation rights or any
awards under any compensation plans.




After our
business transaction, our executive officers and directors who remain with us
may be paid consulting, management or other fees from the combined company with
any and all amounts being fully disclosed to stockholders, to the extent then
known, in the notice furnished to our stockholders. It is unlikely, however,
that the amount of such compensation will be known at the time of a stockholder
meeting held to consider a business transaction, as it will be up to the
directors of the post-combination business to determine executive officer and
director compensation. Any compensation to be paid to our chief executive
officer and other officers will be determined, or recommended to the board of
directors for determination, either by a compensation committee constituted
solely by independent directors or by a majority of the independent directors on
our board of directors, in accordance with the rules of the OTC Bulletin
Board.




38


Compensation
Committee Interlocks and Insider Participation and Compensation Committee
Report




We do not currently have a compensation
committee and intend to establish such a committee following consummation of a
business transaction.  We do not feel a compensation committee is
necessary prior to a business transaction as there will be no salary, fees or
other compensation being paid to our officers or directors prior to a business
transaction other than as disclosed in this Annual Report.  All
members of our board of directors reviewed the Compensation Discussion and
Analysis and agreed that it should be included in this Annual
Report.




Item 12. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder
Matters




The
following table sets forth information regarding the beneficial ownership based
on 6,062,556 shares of our common stock outstanding as of February 7, 2011,
based on information obtained from the persons named below, with respect to the
beneficial ownership of shares of our common stock by:





•
            each
      person known by us to be the beneficial owner of more than 5% of our
      outstanding shares of
      common stock;


•
            each of our officers and
      directors; and


•
            all our officers and directors as
      a group.




Unless
otherwise indicated, we believe that all persons named in the table have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them.





Name and Address of Beneficial Owners(1)
                    
                    Amount
                      and
                      nature of
                      beneficial
                      ownership
                    
                    
                    Percentage
                      of
                      outstanding
                      common
                      stock57th
      Street GAC Holdings LLC(2)
                    
                    
                    606,256
                    
                    
                    
                    10
                    %Mark
      D. Klein (2)(3)
                    
                    
                    162,988
                    
                    
                    
                    2.69
                    %Paul
      D. Lapping (2)(4)
                    
                    
                    606,256
                    
                    
                    
                    10
                    %Frederick
      G. Kraegel (2)(5)
                    
                    
                    6,063
                    
                    
                    
                    *
                    %Leonard
      A. Potter (2)(6)
                    
                    
                    79,896
                    
                    
                    
                    1.32
                    %Andrew
      A. Fink(2)(7)
                    
                    
                    39,948
                    
                    
                    
                    *
                    %Michael
      J. Levitt (2)(8)
                    
                    
                    156,596
                    
                    
                    
                    2.58
                    %Jonathan
      I. Berger (2)(8)
                    
                    
                    156,596
                    
                    
                    
                    2.58
                    %Michael
      Gross (2)(9)
                    
                    
                    79,896
                    
                    
                    
                    1.32
                    %Brian
      Taylor (10)
                    
                    
                    495,000
                    
                    
                    
                    8.2
                    %Bulldog
      Investors, Special Opportunities Fund Inc.(11)
                    
                    
                    425,000
                    
                    
                    
                    7
                    %Canton
      Holdings, L.L.C. (12)
                    
                    
                    490,000
                    
                    
                    
                    8.1
                    %All
      directors and officers as a group (5 persons)
                    
                    
                    606,256
                    
                    
                    
                    10
                    %


* Less
than 1 percent.




(1)  Unless
otherwise indicated, the business address of each of the stockholders is 590
Madison Avenue, 35th Floor, New York, New York 10022.




(2) The
sole managing member of 57th Street
GAC Holdings LLC, our sponsor, is Paul D. Lapping who has sole voting and
dispositive power over our sponsor and, as a result, Mr. Lapping may be
considered the beneficial owner of any shares owned by the
sponsor.  The members of the sponsor are Mark D. Klein, Jakal
Investments LLC, an entity controlled by Mr. Lapping, Frederick G. Kraegel,
Leonard A. Potter, Andrew A. Fink and Michael Gross and 57th Street
Partners LLC, whose sole managing members are Mr. Levitt and Mr.
Berger.




(3)
This amount includes shares of common stock beneficially owned by Mr. Klein
through his ownership interest in the sponsor. Does not include 1,020,000
Insider Warrants beneficially owned by Mr. Klein through his ownership interest
in the sponsor.  Mr. Klein disclaims beneficial ownership of any
shares in which he does not have a pecuniary interest.




(4)  Mr.
Lapping is sole managing member of Jakal Investments, LLC, a family trust of Mr.
Lapping. Mr. Lapping is the sole managing member of our sponsor and has sole
voting and dispositive power over the sponsor and as a result he may be deemed
to be the beneficial owner of any shares owned by the sponsor.  Jakal
Investments LLC, through its ownership interest in the sponsor may be deemed the
beneficial owner of 80,870 shares of common stock.  Does not include
250,000 Insider Warrants beneficially owned by Jakal Investments LLC through its
beneficial ownership in the sponsor.  Mr. Lapping disclaims beneficial
ownership of any shares in which he does not have a pecuniary
interest.




39


(5) This
amount includes shares of common stock beneficially owned by Mr. Kraegel through
his ownership interest in the sponsor.  Mr. Kraegel disclaims
beneficial ownership of any shares in which he does not have a pecuniary
interest.




(6) This
amount includes shares of common stock beneficially owned by Mr. Potter through
his ownership interest in the sponsor.  Does not include 500,000
Insider Warrants beneficially owned by Mr. Potter through his ownership in the
sponsor.  Mr. Potter disclaims beneficial ownership of any shares in
which he does not have a pecuniary interest.




(7) This
amount includes shares of common stock beneficially owned by Mr. Fink through
his ownership interest in the sponsor.  Does not include 250,000
Insider Warrants beneficially owned by Mr. Fink through his ownership in the
sponsor.  Mr. Fink disclaims beneficial ownership of any shares in
which he does not have a pecuniary interest.




(8) Mr.
Levitt and Mr. Berger are the sole managing members of 57th Street Partners LLC
and have sole voting and dispositive power over 57th Street Partners
LLC.  This amount includes shares of common stock beneficially owned
by 57th Street Partners LLC through its ownership of the
sponsor.  Does not include 980,000 Insider Warrants beneficially owned
by 57th Street Partners LLC through its ownership of the
sponsor.  Messrs. Levitt and Berger disclaim beneficial ownership of
any shares in which they do not have a pecuniary interest.  The
address of Messrs. Levitt and Berger are c/o Stone Tower Capital, 152 West
57th
Street, 35th Floor,
New York, NY 10019.




(9)  This
amount includes shares of common stock beneficially owned by Mr. Gross through
his ownership interest in the sponsor.  Does not include 500,000
Insider Warrants beneficially owned by Mr. Gross through his ownership of the
sponsor.  Mr. Gross disclaims beneficial ownership of any shares in
which he does not have a pecuniary interest.  Mr. Gross’ address is
500 Park Avenue, New York, NY 10022.





(10)  Based
on information contained in Schedule 13G filed by the following persons on May
27, 2010, Brian Taylor is the principal of each of Pine River Capital Management
L.P., and Nisswa Acquisition Master Fund Ltd. Each of Mr. Taylor, Pine River
Capital Management L.P., and Nisswa Acquisition Master Fund Ltd. have shared
voting and dispositive power with respect to the shares.  The address
of these beneficial holders is Pine River Capital Management L.P., 601 Carlson
Parkway, Suite 330, Minnetonka, MN 55305.





(11)
Based on information contained in Schedule 13G filed by the following persons on
May 28, 2010, Phillip Goldstein and Andrew Dakos are principals of Bulldog
Investors.  Bulldog Investors has the sole voting and dispositive
power with respect to 425,000 shares of common stock.   The
address of Bulldog Investors Special Opportunities Fund Inc. is Park 80 West,
250 Pehle Ave. Suite 708, Saddle Brook, NJ 07663.





(12)
Based on information contained in Schedule 13G filed by the following persons on
May 28, 2010, Archer Capital Master Fund, L.P., a Cayman Islands exempted
limited partnership (“Archer Master Fund”), (ii) Archer Capital Management,
L.P., a Delaware limited partnership (“Archer”), is the investment manager to
Archer Master Fund and certain other private investment vehicles (collectively,
the “Funds”), (iii) Canton Holdings, L.L.C., a Delaware limited liability
company (“Canton”), as the general partner of Archer, (iv) Joshua A. Lobel,
an individual, as a principal of Canton, and (v) Eric J. Edidin, an
individual, as a principal of Canton.  All shares of Common Stock are
held by the Funds.  Archer Master Fund has the power to vote and
dispose of 372,537 shares of Common Stock. Canton, Archer, Mr. Lobel and
Mr. Edidin have the power to vote and dispose of the 490,000 shares of
Common Stock held collectively by the Funds.  The address of all such
reporting person is 570 Lexington Avenue, 40th Floor,
New York, NY 10022.




Changes in Control




Pursuant
to the Agreement, upon the consummation of the Transaction, all directors of
57th
Street shall resign and the Members of Crumbs shall appoint or elect five
directors to serve on the Company’s board of directors.  Also pursuant
to the terms of the Agreement, we will (subject to market conditions) conduct a
Tender Offer pursuant to Rule 13e-4 and Regulation 14E (each, as modified,
waived or otherwise agreed to with the SEC) of the Securities Exchange Act of
1934, as amended.  Through the Tender Offer, our stockholders will be
provided with the opportunity to redeem up to 88% of the shares of Common Stock
issued in the Offering.  Furthermore, in connection with the
Transaction, the Members of Crumbs, in accordance with the terms and conditions
of the Agreement, will receive equity securities in the Company and equity
securities that are convertible into Common Stock of the Company, as more fully
described in the Form 8-K.




40




Item
13. Certain Relationships and Related Transactions, and Director
Independence





Certain
Relationships and Related Transactions





On
November 6, 2009, the Company issued to the sponsor (i) 638,889 shares of
restricted Common Stock (up to 83,333 of which were subject to forfeiture if the
underwriters’ over-allotment option was not exercised in full), for an aggregate
amount of $25,000 in cash.  The purchase price for each share of
Common Stock was approximately $0.039 per share.  The sponsor agreed
that these shares of Common Stock will not be sold or transferred until one year
following consummation of a business transaction, subject to certain limited
exceptions. On May 28, 2010, the sponsor forfeited 32,633 of these shares in
connection with the underwriter’s partial exercise of their over-allotment
option.




On May
25, 2010, we issued the Insider Warrants to purchase up to 3,500,000 shares of
common stock from the Company for $1,750,000. The Insider Warrants are identical
to the warrants sold in the Offering, except that if held by the original
holders or their permitted assigns, they (i) may be exercised for cash or on a
cashless basis; (ii) are not subject to being called for redemption; and
(iii) with respect to Insider Warrants held by the underwriters and beneficially
owned by Mark Klein as a result of being a member of the sponsor, will expire
May 19, 2015, or earlier upon redemption or liquidation.




On May
19, 2010, our sponsor placed the initial shares and the insider warrants into an
escrow account maintained by Continental Stock Transfer & Trust Company,
acting as escrow agent.  The initial shares will not be released from
escrow until one year following our business transaction, unless we were to
consummate a transaction after the consummation of the initial business
transaction that results in all of our stockholders having the right to exchange
their public shares for cash, securities or other property.  The
Insider Warrants will not be released from escrow until 30 days following the
consummation of our initial business transaction.  Pursuant to the
Agreement with Crumbs, the sponsor will execute a letter agreement, whereby,
150,000 shares of common stock issued to the sponsor, shall remain in escrow
until certain Company milestones are satisfied.




The
Company issued a $10,000 unsecured promissory note to the sponsor on November
10, 2009. The note, which was paid from proceeds of the Offering in May 2010,
was non-interest bearing and was payable on the earlier of December 31, 2010 or
the consummation of the Offering.





From
January 1 through June 30, 2010, an officer of the Company paid vendor bills on
behalf of the Company in the aggregate amount of $5,051, which was due on demand
without interest. The balance was repaid from the proceeds of the Offering in
May 2010.





Mark
Klein, our chairman, chief executive officer and president, is an associated
person of Ladenburg Thalmann & Co., a member of FINRA and one of the
underwriters of our Offering, and a member of our sponsor.  As a
member of our sponsor, Mark Klein is deemed a beneficial owner of 149,357 of the
initial shares and 1,020,000 of the initial warrants purchased by our
sponsor.  As a result of Mark Klein’s relationship with Ladenburg
Thalmann & Co., the 149,357 insider shares and the 1,020,000 Insider
Warrants beneficially owned by Mark Klein, together with the Insider Warrants
purchased by the underwriters and the Common Stock underlying all such Insider
Warrants, have been deemed to be underwriting compensation by FINRA and are
therefore subject to a 360-day lock-up pursuant to Rule 5110(g)(1) of the FINRA
Conduct Rules.  Mark Klein and the underwriters have agreed not to
sell, transfer, assign, pledge or hypothecate the insider shares, the Insider
Warrants or the common stock underlying the Insider Warrants beneficially owned
by them, nor shall such insider shares, Insider Warrants or common stock
underlying such Insider Warrants be the subject of any hedging, short sale,
derivative, put or call transaction that would result in the effective economic
disposition of such insider shares, Insider Warrants or the common stock
underlying such Insider Warrants to any person other than as permitted under
Section 5110(g)(2) of the FINRA Conduct Rules.




In order
to protect the amounts held in the trust account, Mark D. Klein, our chairman,
chief executive officer and president, and Paul D. Lapping, our chief financial
officer, treasurer, secretary and director, have agreed to indemnify us for all
claims of creditors, to the extent that we fail to obtain waivers from vendors,
service providers and prospective target business to the extent necessary to
ensure that the amounts in the trust account available for distribution to our
stockholders below approximately $9.98 per share, except as to any claims by a
third party who executed a waiver of any and all rights to seek access to the
trust account and except as to any claims under our indemnity of the
underwriters of the Offering against certain liabilities, including liabilities
under the Securities Act. In the event that an executed waiver is deemed to be
unenforceable against a third party, Messrs. Klein and Lapping will not be
responsible to the extent of any liability for such third party
claims.





41


We will
reimburse our officers and directors for any reasonable out-of-pocket business
expenses incurred by them in connection with certain activities on our behalf
such as identifying and investigating possible target businesses and business
transactions. Reimbursable out-of-pocket expenses incurred by our officers and
directors will not be repaid out of proceeds held in the trust account until
these proceeds are released to us upon the completion of a business transaction,
provided there are sufficient funds available for reimbursement after such
consummation. The financial interest of such persons could influence their
motivation in selecting a target business and thus, there may be a conflict of
interest when determining whether a particular business transaction is in our
public stockholders’ best interest.




Other
than the reimbursable out-of-pocket expenses payable to our officers and
directors, no compensation, reimbursements, cash payments or fees of any kind,
including finders, consulting fees or other similar compensation, including the
issuance of any of our securities, will be paid to our sponsor, officers or
directors, or to any of our or their respective affiliates prior to or with
respect to a business transaction.




After the
consummation of a business transaction, if any, some of our officers and
directors may enter into employment agreements, the terms of which shall be
negotiated and which we expect to be comparable to employment agreements with
other similarly-situated companies. Further, after the consummation of a
business transaction, if any, to the extent our directors remain as directors of
the resulting business, we anticipate that they will receive compensation
comparable to directors at other similarly-situated companies.




Unless
stated otherwise, our board of directors reviews any related party transactions
to determine whether they are in the best interest of the Company and the
Company’s stockholders.




Director
Independence





Although
our securities are quoted on the Over-the-Counter Bulletin Board, we apply the
NYSE Amex standard in determining independent directors.  The NYSE
Amex requires that a majority of our board must be composed of “independent
directors,” which is defined generally as a person other than an officer or
employee of the company or its subsidiaries or any other individual having a
relationship, which, in the opinion of the company’s board of directors would
interfere with the director’s exercise of independent judgment in carrying out
the responsibilities of a director.




The
Company has determined that Frederick G. Kraegel, Leonard A. Potter and Andrew
A. Finkare
independent directors as defined under the NYSE Amex listing standards and
Rule 10A-3 promulgated under the Exchange Act, constituting a majority of
our board of directors.




Item
14.Principal
Accountant Fees and Services.





During
the fiscal year ended December 31, 2010, the firm of Rothstein, Kass &
Company, P.C., which we refer to as Rothstein Kass, was our principal
accountant. The following is a summary of fees paid or to be paid to Rothstein
for services rendered.




42


Audit Fees. Audit fees
consist of fees billed for professional services rendered for the audit of our
year-end financial statements and services that are normally provided by
Rothstein Kass in connection with regulatory filings.  We paid
Rothstein Kass $37,500 in connection with our audited financials for the
period ended March 31, 2010 and for the period from October 29, 2009 (inception)
through March 31, 2010 and $16,000 for reviews of interim financial statements
through September 30, 2010.  We expect to be billed approximately
$12,500 in connection with our December 31, 2010 fiscal year-end audit and
$6,000 in connection with the review of interim financial statements through
September 30, 2010.




Audit-Related
Fees.  Audit-related services consist of fees billed for
assurance and related services that are reasonably related to performance of the
audit or review of our financial statements and are not reported under “Audit
Fees.”  These services include attest services that are not required
by statute or regulation and consultations concerning financial accounting and
reporting standards.  There were no fees billed for audit-related
services rendered by Rothstein Kass during the last two fiscal
years.




Tax Fees. We expect to be
billed $28,000 by Rothstein Kass for tax planning and tax advice for the year
ended December 31, 2010.




All other fees.  We
paid Rothstein Kass $29,792 for consulting services for our due diligence review
in connection with the investigation of an acquisition
target.


43





PART
IV





Item
15. Exhibits and Financial Statement Schedules.


57th
Street General Acquisition Corp.
 (a
development stage company)
 Index
to Financial Statements
 December
31, 2010
 
 Report
      of Independednt Registered Public Accounting Firm - Rothstein, Kass &
      Company, P.C.
                  F-1Financial
      StatementsBalance
      Sheets
                  F-2Statements
      of Operations
                  F-3Statement
      of Changes in Stockholders' Equity
                  F-4Statements
      of Cash Flow
                  F-5
      to F-6Notes
      to Financial Statements
                  F-7
      to F-16
 
 44
  Report of
Independent Registered Public Accounting Firm
 
 To the
Board of Directors and Stockholders of
 57th Street
General Acquisition Corp.
 
 We have
audited the accompanying balance sheets of 57th Street
General Acquisition Corp. (a development stage company) (the “Company”) as of
December 31, 2010 and 2009, and the related statements of operations, changes in
stockholders’ equity, and cash flows for the year ended December 31, 2010 and
the periods from October 31, 2009 (date of inception) to December 31, 2009 and
October 29, 2009 (date of inception) to December 31, 2010.  These
financial statements are the responsibility of the Company’s
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.  An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note A to the financial
statements, the Company will face a mandatory liquidation if a business
combination is not consummated by August 19, 2011, which raises substantial
doubt about its ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31, 2010
and 2009, and the results of its operations and its cash flows for the year
ended December 31, 2010 and the periods from October 29, 2009 (date of
inception) to December 31, 2009 and October 29, 2009 (date of inception) to
December 31, 2010, in conformity with U.S. generally accepted accounting
principles.
 
 /s/
Rothstein, Kass & Company, P.C.
 
 Roseland,
New Jersey
 February
10, 2011




F-1




57th
Street General Acquisition Corp.


(a
development stage company)


BALANCE
SHEETS





December 31,2010
                
                
                2009ASSETSCurrent
      assetsCash
                
                $
                396,913
                
                
                $
                8,083Prepaid
      expenses
                
                
                47,334
                
                
                
                -444,247
                
                
                
                8,083Fixed
      assets, net of accumulated depreciation of $53
                
                
                3,113
                
                
                
                -Deferred
      offering costs
                
                
                -
                
                
                
                72,524Investments
      held in Trust Account
                
                
                54,494,749
                
                
                
                -Total
      assets
                
                $
                54,942,109
                
                
                $
                80,607LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable and accrued expenses
                
                $
                160,904
                
                
                $
                48,763Franchise
      taxes payable
                
                
                145,054
                
                
                
                837Total
      current liabilities
                
                
                305,958
                
                
                
                49,600Deferred
      underwriting compensation
                
                
                600,193
                
                
                
                -Deferred
      legal fees related to the offering
                
                
                100,000
                
                
                
                -Note
      payable, stockholder
                
                
                -
                
                
                
                10,000Total
      liabilities
                
                
                1,006,151
                
                
                
                59,600Commitments
      and contingencies (see Note E)Common
      stock subject to possible redemption, 4,801,544 shares (at redemption
      value)
                
                
                47,939,147
                
                
                
                -Stockholders'
      equityPreferred
      stock, $.0001 par value; 1,000,000 shares authorized; no shares issued and
      outstanding
                
                
                -
                
                
                
                -Common
      stock, $.0001 par value, 100,000,000 shares authorized; 6,062,556 shares
      issued and outstanding at December 31, 2010 (which includes 4,801,544
      shares subject to possible redemption) and; 638,889 shares issued and
      outstanding at December 31, 2009
                
                
                606
                
                
                
                64Additional
      paid-in capital
                
                
                6,402,153
                
                
                
                24,936Deficit
      accumulated during development stage
                
                
                (405,948
                )
                
                
                (3,993
                )Total
      stockholders' equity
                
                
                5,996,811
                
                
                
                21,007Total
      liabilities and stockholders' equity
                
                $
                54,942,109
                
                
                $
                80,607





The
accompanying notes are an integral part of the financial
statements


F-2





57th
Street General Acquisition Corp.


(a
development stage company)


STATEMENTS
OF OPERATIONS





October 29, 2009
                  
                  
                  October 29, 2009Year Ended
                  
                  
                  (date of inception) to
                  
                  
                  (date of inception) toDecember 31, 2010
                  
                  
                  December 31, 2009
                  
                  
                  December 31, 2010Revenue
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -General
      and administrative expenses
                  
                  
                  420,402
                  
                  
                  
                  3,993
                  
                  
                  
                  424,395Loss
      from operations
                  
                  
                  (420,402
                  )
                  
                  
                  (3,993
                  )
                  
                  
                  (424,395
                  )Other
      IncomeInterest
      income
                  
                  
                  18,447
                  
                  
                  
                  -
                  
                  
                  
                  18,447Net
      loss attributable to common shares not subject to possible
      redemption
                  
                  $
                  (401,955
                  )
                  
                  $
                  (3,993
                  )
                  
                  $
                  (405,948
                  )Weighted
      average number of common shares outstanding, basic and
    diluted
                  
                  
                  3,904,466
                  
                  
                  
                  559,028
                  
                  
                  
                  3,405,380Basic
      and diluted net loss per share attributable to common
      stockholders
                  
                  $
                  (0.10
                  )
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.12
                  )





The
accompanying notes are an integral part of the financial statements





F-3





57th Street General Acquisition Corp.


(a
development stage company)


STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY


For
the period from October 29, 2009 (date of inception) to


December
31, 2010


Common Stock
                                    
                                    
                                    
                                    
                                    
                                    Deficit
                                      accumulatedShares
                                    
                                    
                                    Amount
                                      $.0001
                                      par
                                    
                                    
                                    Additional
                                      paid-in
                                      capital
                                    
                                    
                                    during
                                      development
                                      stage
                                    
                                    
                                    Total
                                      stockholders'
                                      equitySale
      of common stock issued to initial stockholder on October 30, 2009 at $.039
      per share
                                    
                                    
                                    638,889
                                    
                                    
                                    $
                                    64
                                    
                                    
                                    $
                                    24,936
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    25,000Net
      loss attributable to common stockholder not subject to possible
      redemption
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (3,993
                                    )
                                    
                                    
                                    (3,993
                                    )Balance
      atDecember 31, 2009
                                    
                                    
                                    638,889
                                    
                                    
                                    
                                    64
                                    
                                    
                                    
                                    24,936
                                    
                                    
                                    
                                    (3,993
                                    )
                                    
                                    
                                    21,007Sale
      on May 25, 2010 of 5,000,000 units, net of underwriters' discount and
      offering expenses (including 4,400,000 shares subject to possible
      redemption)
                                    
                                    
                                    5,000,000
                                    
                                    
                                    
                                    500
                                    
                                    
                                    
                                    48,093,316
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    48,093,816Sale
      on May 28, 2010 of 456,300 units pursuant to underwriter's over allotment,
      net of underwriters’ discount and offering expenses (including 401,544
      shares subject to possible redemption)
                                    
                                    
                                    456,300
                                    
                                    
                                    
                                    45
                                    
                                    
                                    
                                    4,373,048
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    4,373,093Forfeiture
      of sponsor shares in connection with the underwriters election to not
      exercise their over-allotment option in full
                                    
                                    
                                    (32,633
                                    )
                                    
                                    
                                    (3
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (3
                                    )Net
      proceeds subject to possible redemption of 4,801,544 shares at redemption
      value
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (47,939,147
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    (47,939,147
                                    )Sale
      on May 25, 2010 of private placement warrants to the sponsor and the
      underwriters
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,850,000
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    1,850,000Net
      loss attributable to common shares not subject to possible
      redemption
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (401,955
                                    )
                                    
                                    
                                    (401,955
                                    )Balance
      atDecember 31, 2010
                                    
                                    
                                    6,062,556
                                    
                                    
                                    $
                                    606
                                    
                                    
                                    $
                                    6,402,153
                                    
                                    
                                    $
                                    (405,948
                                    )
                                    
                                    $
                                    5,996,811





The
accompanying notes are an integral part of the financial
statements


F-4


57th
Street General Acquisition Corp.
 (a
development stage company)
 STATEMENTS
OF CASH FLOW




October 29, 2009
                
                
                October 29, 2009(date of
                
                
                (date ofYear Ended
                
                
                inception) to
                
                
                inception) toDecember 31,
                
                
                December 31,
                
                
                December 31,2010
                
                
                2009
                
                
                2010Cash
      Flows from Operating ActivitiesNet
      loss
                
                $
                (401,955
                )
                
                $
                (3,993
                )
                
                $
                (405,948
                )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                
                
                53
                
                
                
                -
                
                
                
                53Changes
      in operating assets and liabilities:(Increase)
      in prepaid expenses
                
                
                (47,334
                )
                
                
                -
                
                
                
                (47,334
                )Increase
      in accounts payable and accrued expenses
                
                
                159,903
                
                
                
                1,000
                
                
                
                160,903Increase
      in franchise taxes payable
                
                
                144,217
                
                
                
                837
                
                
                
                145,054Net
      cash used in operating activities
                
                
                (145,116
                )
                
                
                (2,156
                )
                
                
                (147,272
                )Cash
      Flows from Investing Activities:Investments
      held in Trust Account
                
                
                (54,494,749
                )
                
                
                -
                
                
                
                (54,494,749
                )Acquisition
      of fixed assets
                
                
                (3,166
                )
                
                
                -
                
                
                
                (3,166
                )Net
      cash used in investing activities
                
                
                (54,497,915
                )
                
                
                -
                
                
                
                (54,497,915
                )Cash
      Flows from Financing Activities(Payment
      of) proceeds from note payable, stockholder
                
                
                (10,000
                )
                
                
                10,000
                
                
                
                -Proceeds
      from issuance of stock to initial stockholder
                
                
                -
                
                
                
                25,000
                
                
                
                25,000Proceeds
      from public offering
                
                
                54,563,000
                
                
                
                -
                
                
                
                54,563,000Proceeds
      from issuance of warrants
                
                
                1,850,000
                
                
                
                -
                
                
                
                1,850,000Payment
      of offering costs
                
                
                (1,371,139
                )
                
                
                (24,761
                )
                
                
                (1,395,900
                )Net
      cash provided by financing activities
                
                
                55,031,861
                
                
                
                10,239
                
                
                
                55,042,100Net
      increase in cash
                
                
                388,830
                
                
                
                8,083
                
                
                
                396,913Cash
      at beginning of the period
                
                
                8,083
                
                
                
                -
                
                
                
                -Cash
      at end of the period
                
                $
                396,913
                
                
                $
                8,083
                
                
                $
                396,913





The
accompanying notes are an integral part of the financial
statements


F-5





57th
Street General Acquisition Corp.


(a
development stage company)


STATEMENTS
OF CASH FLOW


(Continued)




October 29, 2009
              
              
              October 29, 2009(date of
              
              
              (date ofYear Ended
              
              
              inception) to
              
              
              inception) toDecember 31,
              
              
              December 31,
              
              
              December 31,2010
              
              
              2009
              
              
              2010Supplemental Disclosure of cash
      flow information:Cash
      paid for franchise taxes
              
              $
              837
              
              
              $
              -
              
              
              $
              837Supplemental
      Disclosure of Non-cash transactions:Accrual
      of offering costs
              
              $
              -
              
              
              $
              47,762
              
              
              $
              -Deferred
      underwriting compensation
              
              $
              600,193
              
              
              $
              -
              
              
              $
              600,193Deferred
      legal fees related to the offering
              
              $
              100,000
              
              
              $
              -
              
              
              $
              100,000




The
accompanying notes are an integral part of the financial
statements


F-6


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





NOTE
A—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS


57th
Street General Acquisition Corp. (a corporation in the development stage) (the
“Company”) was incorporated in Delaware on October 29, 2009. The Company was
formed for the purpose of acquiring, through a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization, exchangeable share
transaction or other similar business transaction, one or more operating
businesses or assets that the Company had not then identified (“Business
Transaction”). The Company has neither engaged in any operations nor generated
any income to date. The Company intends to focus on identifying a prospective
target business or asset with which to consummate a Business
Transaction.





The
Company is considered to be in the development stage as defined in FASB
Accounting Standard Codification, or ASC 915, “Development Stage Entities,” and
is subject to the risks associated with activities of development stage
companies.





As more
fully described in Note I – Subsequent Events, in January 2011, the Company
announced its Business Combination Agreement with 57th Street Merger Sub LLC, a
newly formed Delaware limited liability company and wholly-owned subsidiary of
the Company and Crumbs Holdings, LLC.





All
activity through December 31, 2010 relates to the Company’s formation,
initial public offering (“Offering”) and identifying and investigating
prospective target businesses with which to consummate a Business
Transaction.





The
registration statement for the Offering was declared effective May 19, 2010. The
Company consummated the Offering on May 25, 2010 and received net proceeds of
approximately $48,816,340, before deducting deferred underwriting compensation
of $550,000 and $100,000 for the purchase of 200,000 warrants by the lead
underwriter of the Offering.





On May
25, 2010, 57th Street
GAC LLC, (the “Sponsor”) and the underwriters of the Offering purchased
3,700,000 warrants to purchase 3,700,000 shares of common stock (“Sponsor
Warrants”) from the Company for an aggregate purchase price of $1,850,000. The
Sponsor Warrants are identical to the warrants sold in the Offering, except that
if held by the original holders or their permitted assigns, they (i) may be
exercised for cash or on a cashless basis; (ii) are not subject to being called
for redemption; and (iii) with respect to Sponsor Warrants held by the lead
underwriter of the Offering and beneficially owned by Mark Klein as a result of
being a member of the Sponsor, will expire May 19, 2015, or earlier upon
redemption or liquidation.





On May
28, 2010, the Company consummated the closing of an additional 456,300 units
pursuant to the exercise of the underwriters’ over-allotment option as part of
the Offering and received net proceeds of $4,423,286 before deducting deferred
underwriting compensation of $50,193.





Total
gross proceeds to the Company from the 5,456,300 units sold in the offering
(including the 456,300 Units sold pursuant to the over-allotment option) were
$54,563,000.


F-7


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





The
Company’s management has broad discretion with respect to the specific
application of the net proceeds of the Offering, although substantially all of
the net proceeds of the Offering are intended to be generally applied toward
consummating a Business Transaction. Furthermore, there is no assurance that the
Company will be able to successfully consummate a Business
Transaction.





On May
25, 2010, $50,000,000 from the Offering and Sponsor Warrants was placed in a
trust account (“Trust Account”) and invested in U.S. “government securities,”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940
(the “1940 Act”) with a maturity of 180 days or less, or in money market funds
meeting certain conditions under Rule 2a-7 promulgated under the 1940 Act, until
the earlier of (i) the consummation of a Business Transaction or (ii) the
distribution of the Trust Account as described below. On May 28, 2010, an
additional $4,476,303 representing Offering proceeds from the partial exercise
of the underwriter’s over-allotment option was deposited in the Trust Account.
On May 28, 2010, the Sponsor forfeited 32,633 shares of common stock back to the
Company. All shares and per share data in the financial statements have been
adjusted to give effect to the forfeiture. As of December 31, 2010 total of
$54,476,303 (including the proceeds from the sale of the Sponsor Warrants for
$1,850,000 to the Company’s sponsor and the lead underwriter of the Offering)
has been placed in trust.





The
Company, after signing a definitive agreement for the acquisition of one or more
target businesses or assets, is not required to submit the proposed
Business Transaction for stockholder approval. The Company will submit the
Business Transaction for stockholder approval if such approval is required by
law, or if the Company elects to do so for other business or legal
reasons.  If no stockholder approval is sought, the Company will
proceed with a Business Transaction if it is approved by its board of directors
and less than 88% of the public stockholders exercise their redemption rights
pursuant to a tender offer conducted by the Company.  Solely in the
event that the Company seeks stockholder approval in connection
with its initial Business Transaction, the Company will proceed
with a Business Transaction only if a majority of the outstanding shares of
common stock voted are voted in favor of the Business Transaction.
However, the Company's sponsor’s, officers’, directors’ or their
affiliates’ participation in privately-negotiated transactions (solely in the
event the Company seeks stockholder approval), if any, could result in the
approval of a Business Transaction even if a majority of the Company’s public
stockholders either vote against, or indicate their intention to vote against,
such Business Transaction. In connection with such a vote, if a Business
Transaction is approved and consummated, stockholders electing to redeem their
shares of common stock for a pro-rata portion of the Trust Account would be
treated as follows:  (i) public stockholders voting against the
Business Transaction and electing to redeem shares of common stock will be
entitled to receive a per share pro rata portion of the Trust Account (excluding
interest and net of taxes) and (ii) public stockholders voting in favor of the
Business Transaction and electing to redeem shares of common stock will be
entitled to receive a per share pro rata portion of the Trust Account (together
with interest thereon but net of taxes). These shares have been recorded at a
fair value and were classified as temporary equity upon the completion of the
proposed Business Transaction, in accordance with FASB ASC 480-10. The Sponsor
has agreed, in the event the Company seeks stockholder approval of its Business
Transaction, to vote its initial shares in favor of approving a Business
Transaction. The Sponsor and the Company’s officers and directors have also
agreed to vote shares of common stock acquired by them in the Offering or in the
aftermarket in favor of any Business Transaction submitted to the Company’s
stockholders for approval.


F-8


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





The
Company’s Sponsor, officers and directors have agreed that the Company will only
have until August 19, 2011 to consummate its initial Business
Transaction.  If the Company does not consummate its Business
Transaction by such date, it shall (i) cease all operations except for the
purposes of winding up; (ii) redeem 100% of the Company’s  public
shares of common stock for cash equal to their pro rata share of the aggregate
amount then on deposit in the Trust Account, less taxes, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the
right to receive further liquidation distributions, if any), subject to
applicable law, and subject to the requirement that any refund of income taxes
that were paid from the trust account which is received after the redemption be
distributed to the former public stockholders and (iii) as promptly as possible
following such redemption, dissolve and liquidate the balance of its net
assets to its remaining stockholders, as part of its plan of dissolution
and liquidation. The Sponsor has waived its right to participate in any
redemption with respect to its initial shares. However, if the Sponsor or any of
the Company’s officers, directors or affiliates acquire shares of common stock
in the Offering or in the aftermarket, they will be entitled to a pro rata share
of the Trust Account upon the Company’s dissolution and liquidation in the event
the Company does not consummate a Business Transaction within the required time
period. In the event of such distribution, it is possible that the per share
value of the residual assets remaining available for distribution (including
Trust Account assets) will be less than the initial public offering price per
unit in the Offering.




In the
event that the Company does not consummate a Business Combination by
August  19, 2011, the proceeds held in the Trust Account will be
distributed to the Company's stockholders, excluding the Founders. After
distributing the proceeds of the Trust Account, the Company will promptly
distribute the balance of its net assets to its remaining stockholders according
to the Company's plan of dissolution.  This mandatory liquidation and
subsequent dissolution raises substantial doubt about the Company's ability to
continue as a going concern.


NOTE
B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis
of presentation





The
accompanying financial statements are presented in U.S. dollars in conformity
with accounting principles generally accepted in the United States of America
and pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”). The Company selected December 31 as its fiscal year
end.





Development
Stage Company





The
Company complies with the reporting requirements of FASB ASC 915, “Development
Stage Entities.” At December 31, 2010, the Company had not commenced any
operations nor generated revenue to date, other than interest on the Trust
Account balance. All activity through December 31, 2010 relates to the Company’s
formation, the Offering and, investigating prospective target businesses with
which to consummate a Business Transaction.





Net
loss per common share





The
Company complies with accounting and disclosure requirements of FASB ASC 260,
“Earnings Per Share.” Net loss per common share is computed by dividing net loss
applicable to common stockholders by the weighted average number of common
shares outstanding for the period. At December 31, 2010, the Company did not
have any dilutive securities and other contracts that could, potentially, be
exercised or converted into common stock and then share in the earnings of the
Company. As a result, diluted loss per common share is the same as basic loss
per common share for the period.





F-9


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





Concentration
of credit risk





Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of cash accounts in a financial institution, which at times, may
exceed the Federal depository insurance coverage of $250,000. The Company has
not experienced losses on these accounts and management believes the Company is
not exposed to significant risks on such accounts.





Investments
held in the Trust Account




The
amounts held in the Trust Account represent substantially all of the proceeds of
the Offering and are classified as restricted assets since such amounts can only
be used by the Company in connection with the consummation of a Business
Combination. The funds held in the Trust Account are invested primarily in
United States Treasury Securities. The Company considers Treasury Bills with a
maturity of 3 months or less to be cash equivalents.





Fair
value of financial instruments





The fair
value of the Company’s assets and liabilities, which qualify as financial
instruments under FASB ASC 820, “Fair Value Measurements and Disclosures”,
approximates the carrying amounts represented in the balance sheet.





Depreciation
and Amortization





Depreciation
and amortization are provided by the straight-line and accelerated methods over
their estimated useful lives.





Use
of estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.





Deferred
offering costs





The
Company complies with the requirements of the ASC 340-10-S25-1,”Expenses of
Offering.”





Securities
held in Trust Account





Investment
securities consist of United States Treasury securities. The Company classifies
its securities as held-to-maturity in accordance with FASB ASC 320 “Investments
- Debt and Equity Securities.”  Held-to-maturity securities are those
securities which the Company has the ability and intent to hold until
maturity.  Held-to-maturity treasury securities are recorded at
amortized cost and adjusted for the amortization or accretion of premiums or
discounts.





A decline
in the market value of held-to-maturity securities below cost that is deemed to
be other than temporary, results in an impairment that reduces the carrying
costs to such securities' fair value.  The impairment is charged to
earnings and a new cost basis for the security is established.  To
determine whether an impairment is other than temporary, the Company considers
whether it has the ability and intent to hold the investment until a market
price recovery and considers whether evidence indicating the cost of the
investment is recoverable outweighs evidence to the
contrary.  Evidence considered in this assessment includes the reasons
for the impairment, the severity and the duration of the impairment, changes in
value subsequent to year-end, forecasted performance of the investee, and the
general market condition in the geographic area or industry the investee
operates in.


F-10


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





Premiums
and discounts are amortized or accreted over the life of the related
held-to-maturity security as an adjustment to yield using the effective-interest
method.  Such amortization and accretion is included in the “interest
income” line item in the statements of operations. Interest income is recognized
when earned.





Income
tax





The
Company complies with FASB ASC 740, “Income Taxes,” which requires an asset and
liability approach to financial accounting and reporting for income taxes.
Deferred income tax assets and liabilities are computed for differences between
the financial statement and tax bases of assets and liabilities that will result
in future taxable or deductible amounts, based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.





The
Company has the following deferred tax assets and liabilities at December 31,
2010 and 2009:





December
      31,2010
                            
                            
                            2009Noncurrent
      assets and liabilities:Net
      operating loss carryforwards
                            
                            $
                            64,000
                            
                            
                            $
                            400Amortizable
      start-up costs
                            
                            
                            50,000
                            
                            
                            
                            1,300114,000
                            
                            
                            
                            1,700Valuation
      allowance
                            
                            
                            (114,000
                            )
                            
                            
                            (1,700
                            )Net
      noncurrent deferred tax asset
                            
                            $
                            -
                            
                            
                            $
                            -





The
Company has net operating losses amounting to approximately $146,000 that expire
in from 2029 through 2030. The ultimate realization of the net operating losses
is dependent upon future taxable income, if any, of the Company and may be
limited in any one period by alternative minimum tax rules. Although management
believes that the Company will have sufficient future taxable income to absorb
the net operating loss carryovers before the expiration of the carryover period,
the current global economic crisis imposes additional profitability risks that
are beyond the Company’s control. Accordingly, management has determined that a
full valuation allowance of the deferred tax asset is appropriate at this
time.





Internal
Revenue Code Section 382 imposes limitations on the use of net operating loss
carryovers when the stock ownership of one or more 5% shareholders (shareholders
owning 5% or more of the Company’s outstanding capital stock) has increased by
more than 50 percentage points. Management cannot control the ownership changes
occurring as a result of public trading of the Company’s Common Stock.
Accordingly, there is a risk of an ownership change beyond the control of the
Company that could trigger a limitation of the use of the loss
carryover.





The
Company established a valuation allowance of $114,000 and $1,700 as of December
31, 2010 and 2009, respectively, which fully offset the deferred tax assets of
$103,000 and $1,600. The deferred tax asset results from applying an effective
combined federal and state tax rate of 44% to start-up costs of approximately
$113,000 (2010) and $3,000 (2009) and net operating losses of approximately
$146,000 (2010) and $1,000 (2009). Effective tax rates differ from statutory
rates due to timing differences in the deductibility of
expenses.


F-11





57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





The
statutory Federal income tax rate and the effective rate are reconciled as
follows:





Year Ended December 31,2010
                      
                      
                      2009Statutory
      Federal income tax rate
                      
                      
                      35
                      %
                      
                      
                      35
                      %State
      and local taxes, net of Federal tax benefit
                      
                      
                      9
                      %
                      
                      
                      9
                      %Valuation
      allowance
                      
                      
                      -44
                      %
                      
                      
                      -44
                      %0
                      %
                      
                      
                      0
                      %





Effective
October 29, 2009, the Company adopted the provisions of Financial Accounting
Standards BoardAccounting Standard
Codification or FASB ASC
740-10-25 which establishes recognition requirements for the accounting
for income taxes. There were no unrecognized tax benefits as of December 31,
2010 and December 31, 2009. The section prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement of
tax positions taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities. The Company is subject to income tax
examinations by major taxing authorities since inception. Any potential
examinations may include questioning the timing and amount of deductions, the
nexus of income among various tax jurisdictions and compliance with U.S.
federal, state and local and foreign tax laws.  The Company's
management does not expect that the total amount of unrecognized tax benefits
will materially change over the next twelve months. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income
tax expense. No amounts were accrued for the payment of interest and penalties
at December 31, 2010. The Company is currently not aware of any issues under
review that could result in significant payments, accruals or material deviation
from its position. The adoption of the provisions of FASB ASC 740-10-25 did not
have a material impact on the Company’s financial position and results of
operation and cash flows as of and for the periods ended December 31,
2010.





Recently
issued accounting standards





The
Company does not believe that the adoption of any recently issued, but not yet
effective, accounting standards will have a material impact on its financial
position and results of operations.


F-12


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





NOTE
C—INITIAL PUBLIC OFFERING





Between
May 25, 2010 and May 28, 2010, the Company sold to the public 5,456,300 units
(including the 456,300 units sold pursuant to the over-allotment option) at $10
per unit (“Units”). Each Unit consists of one share of the Company’s common
stock, $0.0001 par value, and one redeemable common stock purchase warrant
(“Warrant”). Each Warrant will entitle the holder to purchase from the Company
one share of common stock at an exercise price of $11.50 commencing on the later
of (a) May 19, 2011 or (b) the completion of a Business Transaction, and will
expire five (5) years from the date of the consummation of the Business
Transaction. The Warrants may be redeemed by the Company at a price of $0.01 per
Warrant upon 30 days prior notice after the Warrants become exercisable, only in
the event that the last sale price of the common stock is at least $17.50 per
share for any 20 trading days within a 30 trading day period ending on the third
business day prior to the date on which notice of redemption is
given.




NOTE
D—RELATED PARTY TRANSACTIONS





The
Company issued a $10,000 unsecured promissory note to the sponsor on November
10, 2009. The note, which was paid from proceeds of the Offering in May 2010,
was non-interest bearing and was payable on the earlier of December 31, 2010 or
the consummation of the Proposed Offering. Due to the short-term nature of the
note, the fair value as of December 31, 2009 of the note approximates its
carrying amount of $10,000.





On
November 6, 2009, the Company issued to the Sponsor (i) 638,889 shares of
restricted common stock (up to 83,333 of which were subject to forfeiture if the
underwriter’s over-allotment option was not exercised in full), for an aggregate
amount of $25,000 in cash.  The purchase price for each share of
common stock was approximately $0.039 per share.  The Sponsor agreed
that these shares of common stock will not be sold or transferred until one year
following consummation of a Business Transaction, subject to certain limited
exceptions. On May 28, 2010, the Sponsor forfeited 32,633 of these shares in
connection with the underwriters’ partial exercise of their over-allotment
option.





From
January 1 through June 30, 2010, an officer paid vendor bills on behalf of the
Company in the aggregate amount of $5,051, which was due on demand without
interest. The balance was repaid from the proceeds of the Offering in May
2010.





The
Sponsor and underwriters of the Offering agreed to purchase an aggregate of
3,700,000 Sponsor Warrants in a private placement, prior to the consummation of
the Offering at a price of $0.50 per warrant (an aggregate purchase price of
$1,850,000) from the Company. Based on the observable market prices, the Company
believes that the purchase price of $0.50 per warrant for such warrants exceeded
the fair value of such warrants on the date of the purchase. The valuation was
based on comparable initial public offerings. The holders have agreed that the
Sponsor Warrants will not be sold or transferred until 30 days following
consummation of a Business Transaction, subject to certain limited exceptions.
If the Company does not complete a Business Transaction, then the proceeds will
be part of the liquidating distribution to the public stockholders and the
Sponsor Warrants will expire worthless. The Company classified the Sponsor
Warrants within permanent equity as additional paid-in capital in accordance
with FASB ASC
815-40.





The
Sponsor and the underwriters will be entitled to registration rights pursuant to
a registration rights agreement. Such persons will be entitled to demand
registration rights and certain “piggy-back” registration rights with respect to
its shares of common stock, the Sponsor Warrants and the common stock underlying
the Sponsor Warrants, commencing on the date such common stock or Sponsor
Warrants are released from escrow. The Company will bear the expenses incurred
in connection with the filing of any such registration
statements.


F-13


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





NOTE
E—COMMITMENTS AND CONTINGENCIES





A
contingent fee payable to the underwriters of the Offering equal to 1.10% of the
gross proceeds from the sale of the Units sold in the Offering will become
payable from the amounts held in the Trust Account solely in the event the
Company consummates its initial Business Transaction.




The
Company was obligated to its legal counsel for certain fees and expenses related
to the Offering.  In connection therewith, the Company and its counsel have
agreed that payment of $100,000 of such legal fee will be deferred until, and
payable only in the event of, the Company’s consummation of its Business
Transaction.  Additionally, in consideration of such deferral and solely
upon the consummation of a Business Transaction, the Company agreed to issue its
legal counsel 35,000 warrants on the same terms as the Sponsor
Warrants.




NOTE
F—INVESTMENT IN TRUST ACCOUNT





Subsequent
to the Offering, an amount of $54,476,303 (including $600,193 of deferred
underwriters fee and $100,000 of deferred legal fees), of the net proceeds
of the Offering was deposited in the Trust Account and invested only in United
States “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940 having a maturity of 180 days or less until the
earlier of (i) the consummation of a Business Combination or (ii) liquidation of
the Company.




As of
December 31, 2010, investment securities in the Company’s Trust Account consist
of $54,494,090 Treasury Bills and another $659 held as cash in the account. The
Company classifies its United States Treasury and equivalent securities as
held-to-maturity in accordance with FASB ASC 320, "Investments - Debt and Equity
Securities”.Held-to-maturity
securities are those securities which the Company has the ability and intent to
hold until maturity. Held-to-maturity treasury securities are recorded at
amortized cost on the accompanying balance sheets and adjusted for the
amortization or accretion of premiums or discounts. The carrying amount,
excluding accrued interest income, gross unrealized holding gains and fair value
of held to maturity securities at December 31, 2010 are as
follows:


F-14





57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





Carrying
                    Amount
                  
                  
                  Gross
                    Unrealized
                    Holding
                    Gains
                  
                  
                  Fair ValueHeld-to-maturity:U.S.
      Treasury Securities
                  
                  $
                  54,494,090
                  
                  
                  $
                  365
                  
                  
                  $
                  54,494.455




NOTE
G—FAIR VALUE MEASUREMENTS





The
Company adopted ASC 820, “Fair Value Measurement” for its financial assets and
liabilities that are re-measured and reported at fair value at each reporting
period, and non-financial assets and liabilities that are re-measured and
reported at fair value at least annually. The adoption of ASC 820 did not have
an impact on the Company’s financial position or results of
operations.




The
following table presents information about the Company’s assets and liabilities
that are measured at fair value on a recurring basis as of December 31, 2010,
and indicates the fair value hierarchy of the valuation techniques the Company
utilized to determine such fair value. In general, fair values determined by
Level 1 inputs utilize quoted prices (unadjusted) in active markets for
identical assets or liabilities. Fair values determined by Level 2 inputs
utilize data points that are observable such as quoted prices, interest rates
and yield curves. Fair values determined by Level 3 inputs are unobservable data
points for the asset or liability, and includes situations where there is
little, if any, market activity for the asset or liability:





Description
                
                December 31, 2010
                
                
                Quoted
                  Prices in
                  Active Markets
                  (Level 1)
                
                
                Significant
                  Other
                  Observable
                  Inputs
                  (Level 2)
                
                
                Significant Other
                  Unobservable
                  Inputs
                  (Level 3)Assets:Restricted
      cash equivalents held in Trust Account
                
                $
                54,494,455
                
                
                $
                54,494,455
                
                
                
                —
                
                
                
                —





NOTE
H—PREFERRED STOCK





The
Company is authorized to issue 1,000,000 shares of preferred stock with such
designations, voting and other rights and preferences as may be determined from
time to time by the Board of Directors. As of December 31, 2010, the Company has
not issued any shares of preferred stock.


F-15


57th
Street General Acquisition Corp.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


For the period from October 29, 2009
(date of inception) toDecember 31, 2010





NOTE
I—SUBSEQUENT EVENTS





On
January 9, 2011, 57th The Company, 57th Street Merger Sub LLC, a newly formed
Delaware limited liability company and wholly-owned subsidiary of
57th  Street (“Merger Sub”), Crumbs Holdings LLC, a Delaware limited
liability company (“Crumbs”), all the members of Crumbs (individually a “Member”
or collectively the “Members”), and the representatives of Crumbs and the
Members, entered into a Business Combination Agreement (the “Agreement”)
pursuant to which the Company will acquire Crumbs.





Pursuant
to the terms of the Agreement, among other things, Merger Sub will merge with
and into Crumbs with Crumbs surviving (the “Merger”) as a non-wholly owned
subsidiary (the “Surviving Company”) of the Company in exchange for
consideration in the form of cash, newly issued preferred stock of the Company,
and newly issued exchangeable units of the Surviving
Company.  Concurrently with the Merger, the Company will (a) provide
its stockholders with the opportunity to redeem their shares of
57th  Street common stock (the “Common Stock”) for cash equal to their
pro rata share of the aggregate amount then on deposit in the trust account
(“Trust Account”) set up to hold the net proceeds of the Company’s initial
public offering (the “IPO”), less taxes, upon the consummation of the Merger
(the “Tender Offer”) and (b) provide holders of its warrants with the
opportunity to redeem their warrants for cash upon consummation of the Merger
(the “Warrant Tender Offer” and together with the Tender Offer, the “Tender
Offers”).  The Merger and Tender Offers are collectively referred to
herein as the “Transaction”.





The
Company’s board of directors has approved the Agreement and authorized
management to conduct the Tender Offers as set forth in the
Agreement.


F-16


Exhibits.





We hereby
file as part of this Annual Report on Form 10-K the Exhibits listed in the
attached Exhibit Index.  Exhibits which are incorporated herein by
reference can be inspected and copied at the public reference facilities
maintained by the SEC, 100 F Street, N.E., Room 1580, Washington D.C.
20549.  Copies of such material can also be obtained from the Public
Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at
prescribed rates or on the SEC website at www.sec.gov.





Exhibit No.
            
            Description1.1
            
            Underwriting
      Agreement. (1)2.1
            
            Business
      Combination Agreement, dated as of January 9, 2011 by and among 57th
      Street General Acquisition Corp., 57th
      Street Merger Sub LLC, Crumbs Holdings LLC, the members of Crumbs Holdings
      LLC, and the representatives of Crumbs Holdings LLC and its
      members.(6)3.1
            
            Certificate
      of Incorporation (2)3.2
            
            Second
      Amended and Restated Certificate of Incorporation. (1)3.3
            
            Bylaws.
      (3)4.1
            
            Specimen
      Unit Certificate.(3)4.2
            
            Specimen
      Common Stock Certificate.(3)4.3
            
            Specimen
      Warrant Certificate.(3)4.4
            
            Warrant
      Agreement between Continental Stock Transfer & Trust Company and the
      Registrant.(1)10.1
            
            Investment
      Management Trust Account Agreement between Continental Stock Transfer
      & Trust Company and the Registrant. (1)10.2
            
            Securities
      Escrow Agreement among the Registrant, Continental Stock Transfer &
      Trust Company and security holders. (1)10.3
            
            Registration
      Rights Agreement among the Registrant and security holders.
      (1)10.4
            
            Letter
      Agreement by and between the Registrant and each of the directors of the
      Registrant. (4)10.5
            
            Letter
      Agreement by and between the Registrant and Mark D. Klein.
    (4)10.6
            
            Letter
      Agreement by and between the Registrant and Paul D. Lapping.
      (4)10.7
            
            Letter
      Agreement by and between the Registrant and 57th Street GAC Holdings LLC.
      (4)10.8
            
            Securities
      Purchase Agreement dated October 30, 2009 between the Registrant and
      57th Street GAC Holdings LLC. (6)10.9
            
            Promissory
      Note, dated November 10, 2009 issued to 57th Street GAC Holdings LLC in
      the amount of $10,000. (6)10.10
            
            Amended
      and Restated Insider Warrants Subscription Agreement between the
      Registrant and Warrantholders. (5)14.1
            
            Code
      of Business and Ethics.(4)31
            
            Certification
      of Chief Executive Officer and Principal Financial Officer pursuant to
      Rule 13a-14 of the Securities Exchange Act of 1934, as
    amended32
            
            Certification
      of Chief Executive Officer and Principal Financial Officer pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
    1350


(1)
            Incorporated
      by reference to the Company’s Form 8-K, filed with the Commission on May
      25, 2010.


(2)
              Incorporated
      by reference to the Company’s Form 8-K, filed with the Commission on
      January 10, 2011(3)
              Incorporated
      by reference to the Company’s Form S-1, filed with the Commission on April
      28, 2010


(4)
            Incorporated
      by reference to the Company’s Form S-1, filed with the Commission on May
      6, 2010


(5)
            Incorporated
      by reference to the Company’s Form S-1, filed with the Commission on May
      14, 2010


(6)
            Incorporated
      by reference to the Company’s Form S-1, filed with the Commission on May
      19, 2010





45


SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




57TH
      STREET GENERAL ACQUISITION CORP.By:
            /s/  Mark
      D. KleinName:
      Mark D. Klein
              Title:
      Chief Executive Officer and President
              (Principal
      Executive Officer)





Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Name
                                
                                Position
                                
                                Date/s/
      Mark D. Klein
                                
                                Chief
      Executive Officer, President and Chairman
                                
                                February
      10, 2011Mark
      D. Klein
                                
                                (Principal
      Executive Officer)/s/
      Paul D. Lapping
                                
                                Chief
      Financial Officer
                                  (Principal
      Financial and Accounting
                                
                                February
      10, 2011Paul
      D. Lapping
                                
                                Officer)/s/
      Frederick G. Kraegel
                                
                                Director
                                
                                February
      10, 2011Frederick
      G. Kraegel/s/
      Leonard A. Potter
                                
                                Director
                                
                                February
      10, 2011Leonard
      A. Potter/s/
      Andrew A. Fink
                                
                                Director
                                
                                February
      10, 2011Andrew
      A. Fink


46