UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 
  FORM 10-K
  x
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 For the fiscal year ended December 31, 2010
 
  ̈
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 For the transition period from ______________to ______________
 
 Commission File Number 000-53806
 
 CULLEN AGRICULTURAL HOLDING
 CORP.
 (Exact Name of Issuer as Specified in Its Charter)
 
 Delaware

(State of Incorporation)
27-0863248

(Issuer I.R.S. Employer I.D. Number)1431 N. Jones Plantation Road

Millen, Georgia

(Address of principal executive offices)
30442

(zip code)
 
 (706) 621-6737
 (Issuer’s Telephone Number, Including Area Code)
 
 Securities registered pursuant to Section 12(b) of the Act:
 
 None
 
 Securities registered pursuant to Section 12(g) of the Act:
 
 Common Stock, $.0001 par value per share
 Warrants to purchase shares of Common Stock
 
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ̈   No x
 
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes  ̈   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 Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days.  Y es x   No  ̈
 
 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ̈   No  ̈
 
 Indicate by check mark if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of the 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. x
 
 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 “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one).
 Large accelerated filer  ̈

Accelerated filer  ̈Non-accelerated filer  ̈

Smaller reporting company x(Do not check if a smaller reporting company)
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ̈   No x
 
 As of June 30, 2010 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the common stock held by non-affiliates of the registrant was approximately $8,623,915.
 
 As of March 24, 2011, there were 19,630,714 shares of Common Stock, $.0001 par value per share, outstanding.
 
 Documents incorporated by reference: None.
  
  CULLEN AGRICULTURAL HOLDING CORP.
 FORM 10-K
 TABLE OF CONTENTS
 
 PART IITEM 1.
BUSINESS
1ITEM 1A.
RISK FACTORS
8ITEM 1B.
UNRESOLVED STAFF COMMENTS
14ITEM 2.
PROPERTIES
14ITEM 3.
LEGAL PROCEEDINGS
14ITEM 4.
[REMOVED AND RESERVED]PART IIITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
15ITEM 6.
SELECTED FINANCIAL DATA
16ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
16ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
19ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
19ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
19ITEM 9A.
CONTROLS AND PROCEDURES
19ITEM 9B.
OTHER INFORMATION
20PART IIIITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
20ITEM 11.
EXECUTIVE COMPENSATION
25ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
29ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
31ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
33PART IVITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
33
  i
  PART I
 
 ITEM 1.
BUSINESS.
 
 Introduction
 
 Cullen Agricultural Holding Corp. (the “Company”) was incorporated in Delaware on August 27, 2009. References herein to “we,” “us” or “our” refer to the Company.
 
 We are a development stage company. We conduct our operations through our wholly-owned subsidiary, Cullen Agricultural Technologies Inc. (“Cullen Agritech”). Cullen Agritech conducts its operations primarily through its wholly-owned subsidiary, Natural Dairy Inc. (“Natural Dairy”). To date, we have not generated any revenue and will not do so until we have sufficient funds to implement our business plan described below. Since October 22, 2009, our activities have been primarily focused on raising capital to fund our business plan and the sale of land to meet our working capital requirements and repay our outstanding debt.
 
 Corporate History
 
 We were formed as a wholly-owned subsidiary of Triplecrown Acquisition Corp. (“Triplecrown”), a blank check company. CAT Merger Sub, Inc. (“Merger Sub”), a Georgia corporation, was incorporated as our wholly-owned subsidiary on August 31, 2009. We were formed in order to allow Triplecrown to complete a business combination (the “Merger”) with Cullen Agritech, as contemplated by the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of September 4, 2009, as amended, among us, Triplecrown, Merger Sub, Cullen Agritech and Cullen Inc. Holdings Ltd. (“Cullen Holdings”). Cullen Agritech was formed on June 3, 2009. Cullen Agritech’s primary operations are conducted through Natural Dairy. Cullen Holdings is an affiliated entity controlled by Eric J. Watson, our Chief Executive Officer, Secretary, Chairman of the Board and Treasurer and, prior to the Merger, was the holder of all of the outstanding common stock of Cullen Agritech.
 
 Pursuant to the Merger, (i) Triplecrown merged with and into the Company with the Company surviving as the new publicly-traded corporation and (ii) Merger Sub merged with and into Cullen Agritech with Cullen Agritech surviving as a wholly owned subsidiary of the Company. As a result of the Merger, the former security holders of Triplecrown and Cullen Agritech became the security holders of the Company. Thus, the Company became a holding company, operating through its wholly-owned subsidiary, Cullen Agritech. The Merger was consummated on October 22, 2009.
 
 As of the closing of the Merger (the “Closing”), the former shareholders of Triplecrown had an approximate 18% voting interest in the Company and Cullen Holdings had an approximate 82% voting interest in the Company. The Merger has been accounted for as a reverse merger accompanied by a recapitalization of the Company. Under this accounting method, Cullen Agritech is considered the acquirer for accounting purposes because it has obtained effective control of the Company as a result of the Merger. This determination was primarily based on the following facts: Cullen Holdings’ retention of a majority voting interest in the Company; and Cullen Holdings’ senior management serving as the senior management of the Company. Under this method of accounting, the recognition and measurement provisions of ASC 805, “Business Combinations” (“ASC 805”), do not apply and therefore, the Company will not recognize any goodwill or other intangible assets based upon fair value or related amortization expense associated with amortizable intangible assets. Instead, the share exchange transaction utilizes the capital structure of the Company with Cullen Agritech surviving as a subsidiary and the assets and liabilities of Cullen Agritech are recorded at historical cost.
 
 Our principal focus is to use our intellectual property in forage and animal sciences to improve agricultural yields. The Company was formed to develop, adapt and implement grazing-based farming systems in regions of the world where the geophysical and climatic conditions are suitable for a pasture-based model. While the potential for the pasture or grazing model is significant in many of the world’s developed and developing economies, the systems are highly specific and require significant adaptation and modification to be successful. We have identified the global dairy industry as a primary opportunity in which our systems can be applied to improve yields on land and drive cost-base efficiencies. We believe that cost savings of up to 40-50% are achievable in the long term. Further, we believe the high cost structure, which is employed by over 95% of milk producers in the U.S. and supported by government subsidies, will help to maintain a floor to milk prices in the U.S. and provide us with long term margin protection. By having direct access to a domestic market, we believe our business plan provides a unique opportunity to invest directly into food production while limiting earnings volatility linked to foreign exchange exposure, typically associated with returns from commodity production in exporting countries, such as New Zealand. In addition, we believe the potential opportunity to vertically integrate, while maintaining control of the supply chain, provides a further opportunity to reduce volatility and maximize profitability.
 1
 We have been in the process of attempting to obtain land development financing backed by the property we own and operate to support our working capital needs and implement our business plan. However, due to the recent performance of similar types of farming operations in the region, as well as the general economic downturn, financial institutions have been unwilling to provide such financing. As a result, we have been unable to obtain the necessary funding to support the implementation of our business plan at this time. Accordingly, we are in the process of exploring all financing and strategic alternatives available to us, including the possibility of disposing of or leasing portions of our land in order to continue to support our working capital needs and retire certain of our outstanding debt to reduce our interest obligations. During 2010, we entered into contracts with unrelated third parties for the sale of approximately 2,000 acres or approximately 56% of the land we originally purchased. A third party is also obligated to purchase approximately 500 acres by September 1, 2011.
 
 We continue to explore the disposition of the remaining 1,150 acres we own and not under contract to sell. We are currently in various stages of negotiations with potential buyers for some or all of our remaining land, although we have not finalized any agreements and have not accepted any offers that we have received at this time.  Accordingly, there is no assurance that we will be successful in disposing of any of our remaining land. Additionally, we have reduced salaries paid to our employees and curtailed operations in order to reduce operating expenses.  We will also look to explore alternative opportunities available to us unrelated to forage and animal sciences and farming systems which makes up our current business plan in an effort to maximize shareholder value.  To this end, we have had preliminary discussions with potential merger candidates wishing to become publicly traded.  However, such discussions are only preliminary and no formal terms have been discussed or agreed to.  There is no assurance that we will be successful in such efforts. If we are unable to secure additional financing or find another alternative, we will not have sufficient capital to implement our business plan and may be forced to suspend all operations until such time as capital or another alternative is available to us.
 
 Until such time where we can dispose of the remaining land we currently own or raise adequate financing to deploy our pasture based dairy and beef business plan, we have leased and performed various farming activities on the land. We are also considering utilizing a portion of the land for the production of pasture-finished beef products. Grass-fed beef has been proven to be better for your health, better for the environment and promotes improved animal ethics. As a result, there is a rapidly growing market for grass-fed beef products in the U.S., which at the retail levels can sell for a 50-100% premium over grain-fed beef. We believe the existing supply-chain infrastructure would provide us with immediate access to sell into the grass-fed market.
 
 Business Plan Upon Funding
 
 Natural Dairy intends to utilize the farmland to produce Class I raw milk for the liquid market in the Eastern Seaboard and it will strive to produce milk that is of the highest quality in conformation with food safety standards. Natural Dairy intends to use a majority of crossbred cows that have a higher milk solid content (butter fat, protein and lactose) than U.S. Holsteins which we believe will consistently produce milk which will exceed the 3.5% butter fat standard for Class I milk. Natural Dairy will not use the Bovine Growth Hormone to produce its milk. Natural Dairy milk should receive Class I (fluid) milk grading and pricing with its high butter fat content, low somatic cell and bacteria counts. As a result of its milk production operations, Natural Dairy will also be generating revenue from the sale of livestock. This could take various forms, including, but not limited to the sale of surplus livestock as well as the sale of livestock that will be strategically culled as part of a herd management program. The Company is also considering utilizing a portion of the land for the production of pasture-finished beef products.
 
 In addition to the planned operation of our farmland, we intend to offer a range of farm management and technology services such as forage techniques and genetics and feed management strategies that are designed to help improve the productivity and profitability of food animal production. While we specialize in grazing systems and pasture technologies, products and services can be provided for the traditional confinement-based dairy farm operator to integrate one or more grazing technologies into their operations or refine their feed and animal management strategies to improve profitability within a confinement system.
 
 We plan to work with producers, industry leaders and governments to improve the economic and environmental sustainability of food animal production. This includes whole farm management plans and feasibility studies, feed production, storage and feeding strategies, genetic improvement and rearing of replacement stock and engineering waste management solutions.
 
 The construction of a robust management framework is essential to deploy the systems effectively in regions of the world where unique sets of geophysical, climatic and social conditions exist. Specifically, Chile, China, Uruguay, the United States and parts of Eastern Europe fit this criteria.  We have identified the global dairy industry as a primary opportunity in which our systems can be applied to improve yields on land and drive cost-base efficiencies.
 2
 Intellectual Property
 
 Upon consummation of the Merger, we acquired the intellectual property that makes up our proprietary farming system. Our intellectual property includes all constituent components of the proprietary farming system (including forage growth and yields, animal genetics and milking systems) that has been developed by adapting established grazing science, processes, technology, and genetics to liquid milk production in the Southeastern United States.
 
 Although we may seek to register this intellectual property at a later date, none of the intellectual property is currently registered. In the absence of registration, protection of the intellectual property will be afforded by the scientifically advanced nature of the information subsisting in the proprietary system. This complexity means our system could not be readily imitated or adopted by current or future market participants. We will seek to protect our intellectual property by using a combination of trademark, patent and trade secrets laws, licensing and nondisclosure agreements.
 
 Key Components to Cullen Agritech’s Pasture-Based Farming System
 
 Our first proprietary farming system is applicable to the United States dairy industry and has the potential to significantly increase yields on land in the Southeastern United States. This system is based on a grazing-based farming model, whereby dairy cows are primarily fed a renewable pasture resource as opposed to a corn-based feed. We believe that with time, effort and resources the intellectual property can be adapted for implementation in markets beyond the Southeastern United States. Key components to the farming system are as follows:
 
 Farm Selection and Design: The pasture-based farming system requires land with specific characteristics. These characteristics include key soil properties and base fertility suitable for high quality forage crop production. It also requires contiguous blocks with shapes that minimize walking distances of grazing animals and a high proportion of clear irrigated crop acres that enable the system to achieve its optimum production efficiency. The farming system intellectual property includes paddock designs that provide a high level of control over the pasture feed resource – allowing many different varieties of pasture to be grown and various different rates throughout the year. Paddock area and layout is a fundamental tool that enables pasture to be accurately allocated to meet the nutritional demand of the livestock. Paddocks and lanes are also designed to minimize walking distances to and from the milk harvesting system and enable efficient irrigation of grazed acreage and cooling of livestock in the summer. Water reticulation and stock watering systems are also designed to ensure that milking cows receive adequate fresh water to each paddock. In addition, nutrient management plans are produced for each system so that they meet environmental regulations. The farming system intellectual property incorporates the knowledge and understanding of the above elements that are required to successfully identify and convert land into a successful pasture-based dairy.
 
 We have identified over 40,000 effective acres (farmable acres, typically 75-80% of the property) suitable for deployment of the pasture-based farming systems which may be acquired and developed as capital availability allows. These sites are primarily located in the State of Georgia and have access to an ample supply of high quality water. Engineers and other contractors have been identified to complete the conversion of land as well as manufacturing companies for the installation of sheds and milking systems. Livestock required to stock the potential farms is also being identified through multiple breeders. We currently own approximately 1,650 acres of farmland in the State of Georgia that we believe is suitable for the use of our proprietary farming system. We intend to begin utilizing this property once we have sufficient capital to acquire the necessary livestock and supplies for the farmland.  As additional capital becomes available to us, we will also begin to attempt to acquire more acreage and deploy our pasture-based farming system on such acreage.
 
 Pasture Sciences: The farming system incorporates a proprietary pasture production strategy that optimizes annual cow feed supply and milk production through an integrated mix of different pasture crop species and varieties, and management thereof. The system incorporates a matrix of summer and winter active species that provide a year-round supply of quality forage. The different pastures are designed to achieve the desired quantitative and qualitative traits, including provision of sufficient energy, protein, and trace elements to the livestock to ensure a targeted milk production is achieved. The intellectual property includes a detailed understanding of pasture inventory methodologies such as indirect pasture assessment technologies, feed budgeting and pasture wedge construction for the specific forage species used in the system. This allows efficient utilization of the pasture resource and can identify where supplemental feeds are required to address any quantitative or qualitative deficiency in the pasture. The intellectual property delivers the knowledge and understanding of the pasture production strategy including the management tools required to manage it on a day to day basis. Without this understanding, an efficient pasture-based production system cannot be achieved. In addition, pasture-specific fertilization and irrigation strategies are also a key component of the farming system intellectual property. Soil moisture sensors are planned to be installed to ensure that irrigation is used optimally to achieve maximum plant growth rates for the specific crop species. To complement this, the intellectual property delivers an understanding of fertilizer application strategies, which are used to ensure that soil fertility is not limiting forage growth.
 3
 Animal Genetics, Breeding & Health: The farming system intellectual property includes an understanding of animal management systems and genetic selection criteria to compliment the pasture-based grazing model. The farming system intellectual property incorporates an understanding of key selection criteria to optimize cow type for grazing. These traits include body size and conformation aspects that improved structural health, lower feed requirements for body maintenance, and improved tolerance to environmental extremes (heat and cold). Animals are selected for improved conception rates and maternal traits to increase calf numbers, reduce culling due to reproductive failure and ensure seasonal calving. The environment where the farming system is deployed has hot summers where production is affected if tolerance to heat is not included as a breeding objective. The intellectual property delivers an understanding of specific strategies for identifying heat tolerant animals and building this trait more quickly into the herd. These strategies include low pressure misting lines on center pivot irrigators to cool cows in the summer months as well as mister and sprinkler systems in the milking parlor to further lower body temperature in the summer. Specific milk harvesting strategies such as timing of the milking process have been developed to maximize milk production and cow comfort during milking.
 
 Genetic selection pressure is also driven towards animals that have greater efficiency in the conversion of cellulosic plant (forage-based) diets into milk. Genetic improvement programs are planned to be further enhanced with the use of automated animal management systems with radio frequency ID tags that individually track animal performance, feeding, and health status, and allow animals to be selected on these criteria. The understanding of these genetic-selection criteria, which is a key component of the intellectual property, will enable rapid development of livestock lines that are ideally adapted to pasture based production in the Southeast US environment.
 
 Farm Management: In addition to the pasture management strategies and breeding and culling programs, the pasture-based farming system is designed around significant labor, herd management and waste management efficiencies. The intellectual property includes an understanding of how to maximize the speed and efficiency of the milking systems, which, if used correctly, can allow two people to milk up to 500 cows per hour, greatly reducing labor requirements and waste production. Animal management systems such as fencing, lanes and yards allow animals to be quickly moved to various pasture crops on the farm and brought in for milking twice a day with little labor required. The fencing and stock water systems also allow the animals to be allocated variable amounts of pasture feed as needed by the movement of herds between pasture blocks as well as the use of temporary electric fencing. A key component of the farming system intellectual property is an understanding of how to execute this movement of the herds on a daily basis in order to maximize the pasture utilization. The herd management systems also allow the separate management of different herds in their contemporary groups by calving season, age structure, and production targets enabling differential feeding to individual groups as their status requires. The understanding and management of such systems is critical in order to achieve the expected operational efficiencies that a pasture-based system can deliver. Effluent management systems quickly and efficiently recycle waste water by reapplication back onto the pasture using a holding sump, pump and traveling irrigator system designed for grazing systems, eliminating the need for any storage of animal waste, as is necessary in confinement animal operations. The effluent applied over a relatively large land base becomes a valuable source of fertilizer rather than a costly waste product with a significant risk of environmental contamination.
 
 Systems & Training: Day to day management of the farms is critical to success. Therefore, highly trained farm managers who are skilled in grazing management, pasture crop production and animal sciences will need to be trained. As explained, the system includes various specific requirements including detailed management processes such as those associated with pasture production, culling strategies, herd management and effluent management systems. Therefore, an accurate understanding how to communicate and train the key day to day farm managers will be essential to efficiently run a large pasture-based dairy operation. A key part of the intellectual property includes the understanding of how to train and manage the farm management staff to ensure the key performance criteria are achieved.
 
 Testing of Cullen Agritech’s Farming System
 
 During 2008 through 2010, our intellectual property was tested on several research farms which are not owned by us or our subsidiaries. This testing was led by Dr. Richard Watson, the Company’s Chief Scientific Officer and director. None of the testing procedures or results have been independently verified by a third party.
 
 Forage Systems
 
 The research farm conducted forage variety and species testing on both a ‘small plot’ and whole farm scale to determine key forage characteristics such as dry matter (yield) growth profiles by month, nutrient content (energy and crude protein), persistence under grazing and compatibility with other forage species. Species evaluated include C4 perennials such as Bermuda Grass (cynodon dactylon), several C4 annual species such as Millet and Sudangrass, C3 annual and perennial temperate grasses and legumes, as well as perennial herbs such as chicory. Monthly samples were collected from the replicated small plots to analyze dry matter growth (pounds of dry matter per acre per day), metabolizable energy, and crude protein. The ‘small plot’ trials are in a ‘replicated complete block design’ according to strict scientific rigor that is embedded within larger pastures on the research farm. These plot trials allow the simultaneous evaluation of many species and forage varieties in a common environment, across a range of key parameters. The larger whole paddock and farm systems trials were a phase 2 follow-on from the small plot work where the most promising candidates can be assessed on a larger scale.
 4
 The results of these trials provided us with a nutritional and growth profile database of many forage crop species and varieties. This database has been used to create a forage species matrix that provides a best fit solution to the nutritional (qualitative) and dry matter (quantitative) requirements of the dairy herd. Such research and development strategies will continue to be used to develop and evaluate new forage species as they become available through commercial breeding programs and from within our own breeding collaborations.
 
 Animal Genetics and Type Evaluations
 
 The research farm acquired livestock across a range of breed types and calving seasons. Detailed records have been kept on productivity (milk yield), reproductive performance (conception rate to artificial insemination and natural mating), health, body condition and heat tolerance. Analysis of these records has resulted in the development of a livestock strategy that will complement the forage strategy and produce the desired performance both on a production and cost basis. The key findings indicated that USA Holsteins are less suitable for the pasture-based farming systems than Holstein / Jersey crosses and purebred Jersey breeds. The ideal calving season to make most effective use of grown forage and minimize environmental stress on the cow is to have herd calving seasons in the spring and autumn and in particular avoid trying to calve and mate in the summer when heat adversely affects both production and reproductive performance in the cow. Specific mating systems and seasonal calving strategies are a key differentiator of a pasture-based system when compared to a traditional, confinement dairy system. The results of such testing allowed us to develop strategies which are instrumental to the intellectual property including those surrounding species selection, culling programs and reproduction management strategies.
 
 Supplemental Feed Inputs
 
 The prevalence of United States genetics in the herd required that supplemental feed input analysis be undertaken to assess what feed levels and feed formulations were necessary to complement a pasture-based diet. This analysis is required in order to achieve the targeted stocking rates while maintaining a feed plan that will deliver sufficient energy to the livestock. The use of supplementary feeds is contrary to a New Zealand-based system where it would not be unusual for there to not be any supplemental feeding strategy utilized. Led by Dr. Watson, we undertook a close examination of energy and trace element intake, which is required to ensure that a complete diet is fed to the livestock to meet the nutritional requirements for body maintenance and milk production.
 
 Results of this work have indicated that a pasture only diet is not possible with a 100% United States genetic base. The research has resulted in the development of a specific supplemental feeding strategy which incorporates between 25% and 30% concentrated corn-based feed. An understanding of how to manage this supplemental feeding strategy on a day to day basis, in response to monitoring forage development and key performance indicators such as production per cow, is also core to the intellectual property that has been developed through this research. Such a strategy must be included in the overall system to balance energy and mineral requirements of the milking animal. From this data, a genetic improvement program has been developed that will look to increase the proportion of Jersey and Jersey crosses and incorporate smaller framed New Zealand Holstein genetics into the herd to improve reproductive performance and feed efficiency on a pasture-based system.
 
 Nutrient Management
 
 The research farm has undertaken studies to evaluate the environmental impact of the pasture based system and associated effluent management processes. Serial soil analyses have been used to track the profile of key nutrients and organic matter in the soil including nitrates, phosphate and potassium and carbon sequestration. Results to date indicate that the system developed on the research farms delivers no nutrient loading, an improvement in nitrogen fertilizer use efficiency over row crop production and an improvement in soil physical properties (organic matter, and structure). It is anticipated that these trials will identify key areas where pasture based animal production has significant environmental advantages.
 
 Research has been undertaken to quantify the impact of animal waste production and management in the grazing system. We have worked closely with Land Grant Universities and State Departments of Agriculture to quantify waste management parameters and implement policy changes that reflect the improvements of the grazing system over the confinement feeding systems.
 5
 Competitive Strengths
 
 Key Cullen Agritech personnel have extensive experience in improving yields through applying pasture based farming techniques
 
 Significant time and resources have been invested by our key personnel, including Dr. Richard Watson, a member of our board of directors and the Chief Scientific Officer of Natural Dairy, in developing the necessary capabilities to deploy our pasture-based technologies. Dr. Watson has an extensive background in pastoral science and technology, from the laboratory to commercialization and industry application of technologies.
 
 We have also assembled an experienced group of pastoral scientists and dairy science industry participants to serve on our advisory board to further enhance our position as an innovative technology company with the ability to bring efficient pasture-based production systems to the agricultural community in the United States. The members of our advisory board have access to embryo, semen and genetic screening technologies (SNP-chip) that may accelerate genetic improvement and deployment of these lines in the United States dairy industry.
 
 Tested model through research farms developed by key Cullen Agritech personnel to provide cost advantages
 
 Our proprietary farming system was developed and tested on research farms in Girard, Georgia. These farms were established to develop and test the proprietary grazing system that Natural Dairy plans to roll-out in the Southeastern United States. Although we do not own these research farms, we own all the intellectual property associated with the farming system developed on these farms. The first research farm began producing milk in March 2008. During 2008, it was used to refine and develop the farming system. This research was focused on the development of a pasture crop system that maximized the production and utilization of grown pastures. Breeding and calving season trials have been conducted to optimize the relationship between feed grown on farm and the feed demand of the herd. During 2009 and 2010, the farming system was refined and has achieved favorable production cost results, proving the efficiency of the system.
 
 Forage based system provides lower cost per hundred pounds (“cwt”) of dairy production:
 
 The cost of producing milk will vary greatly depending on the region, the exact management practices and quality of farmers. For a majority of dairy farmers, the high dependence on the use of corn-based concentrate as a feedstock results in a high cost base. The use of pasture as a replacement for corn-based concentrate in our model reduces this expense, creating a much more economically-sustainable cost structure. Our model will also be less labor intensive and is more likely to have reduced animal health costs due to healthier and less confined conditions.
 
 The chart below depicts the cost structures of various dairy farm operating models. The New Zealand pasture-based grazing model has generally operated at $8.00-$10.00 per cwt cost levels. Given the research and development completed to date, Natural Dairy’s management believes that a cost structure as low as $10.00 per cwt is achievable in the long term. In comparison, the traditional United States confinement based model operated at an average of $17.61 per cwt during 2008 and 2009 ($18.51 per cwt for the US Southern Seaboard region).
 
 
 
 Chart 7 Cost Comparison of Different Farming Models
 Source: United States Department of Agriculture (“USDA”), Cullen Agritech Management
 
 Natural Dairy is strategically located in a region of high demand coupled with a shortage in supply
 
 Natural Dairy’s roll-out will be focused in the Southeastern United States where there is currently a shortage in the supply of fresh liquid milk. In addition, the United States represents the third largest liquid milk market in the world, a large proportion of which is represented by the Eastern Seaboard. Natural Dairy will be strategically positioned to help fill that supply gap and produce milk for this market, which is currently undersupplied.
 6
 Efficient production per cow
 
 We intend to utilize pasture production systems that optimize seasonal qualitative attributes of the pasture to best match the energy demands of its herds. Under these systems, the cow is provided sufficient nutrients to meet her needs for body maintenance and milk production. We intend to employ energy balances (the difference between the energy gained from feed intake and the energy expenditure associated with different physiological functions such as maintenance, milk production, pregnancy, and growth) to ensure that the cows are fed enough pasture to achieve the highest possible production targets in the most cost effective manner. Management believes this level of feed management sets us apart from other grazing operations in the U.S.
 
 Cullen Agritech’s system will result in healthier livestock and increased longevity
 
 The common United States dairy industry cow is the US Holstein. Our model is suited to smaller framed livestock such as Jersey/Holstein cross-breeds or a Friesian Holstein. These breeds of livestock generally have longer productive lives than a typical US Holstein, which is further lengthened by the healthier conditions associated with our pasture-based farming system which we own. This longevity is expected to result in reduced livestock culling rates and additional revenue from surplus livestock sales. Livestock managed under the system are also likely to have fewer health issues due to increased exercise and exposure to cleaner, less confined living conditions. As a result animals are healthier and the speed at which infection can spread throughout a herd is reduced. This, in turn, results in increased longevity as well as reduced health-related operating expenses on the farms.
 
 Reduced labor costs
 
 We intend to utilize milking systems which are custom made to maximize efficiency and minimize labor costs. This technology, combined with a unique and efficient farm design and management strategy, results in reduced labor costs, further reducing the cost of production under the system that we intend to utilize.
 
 Potential to achieve higher pricing in the future
 
 Management believes the demand for naturally produced food animal products is increasing as the population’s concern with how their food is produced increases. General awareness of the animal ethics and human health benefits of the grazing-based production system have also grown. For instance, a USDA survey showed that 48% of United States consumers now recognize “Grass-fed” as a brand.
 
 Products from animals fed on a pasture dominant diet have been found to contain higher levels of a number of naturally occurring metabolites that have proven human health benefits. The fermentation of the pasture diet in grazing animals by rumen bacteria create higher levels of conjugated linoleic acid (CLA), omega-3 and 6 fatty acids and vitamins A and E in the milk. Production of these qualities in milk produced by confinement cows is reduced by the heavy-starch grain diet, which reduces the formation of these beneficial fermentation products.
 
 Currently, there is a small but rapidly growing market for grass-fed or pasture-fed beef products. However, grass-fed milk products are limited due to dominance of the confinement model and the lack of producers who have the technical knowledge to produce milk on pasture year round.
 
 Natural Dairy has the ability to produce grass-fed milk year round in selected markets. Further, expected milk production levels may in the future result in availability of separate processing, with Natural Dairy’s grass-fed milk being processed separately from other milk. However, Natural Dairy milk will be initially sold as standard milk along with milk from confinement production. This means it will not initially receive premium pricing for its milk products on the basis of its “grass-fed” product. The Company is also exploring the ability to produce grass-fed beef products, which also could be sold for a premium in the marketplace.
 
 Strategic agreements and relationships allow for efficient large scale rollout of pasture based system
 
 As described in more detail below, Cullen Agritech entered into a strategic cooperation agreement with New Zealand Agritech, Inc. (“NZ Agritech”), New Zealand’s national representative body for agricultural technology companies operating in New Zealand, to promote the interests of NZ Agritech and its members. Cullen Agritech will assist members of NZ Agritech to mitigate barriers of market entry and provide the opportunity to realize potential growth in various markets. This alliance reflects an important connection to participants of New Zealand’s agricultural technology industry and enables us to offer its customers the benefit of our advanced technologies.
 7
 We believe that this and other potential strategic relationships will help to build our business and operations.
 
 Joint Venture Opportunities
 
 Our business encompasses a broad exposure to third parties operating within the agricultural science industry, including those which have developed or that otherwise promote products and/or technologies that compliment our business objectives. A number of these third parties are seeking to expand into markets in which we will undertake business activities. Management believes that we are positioned to partner with such third parties to assist with market entry and that joint venture opportunities exist in respect to product and technology adaptation services, in addition to potential marketing arrangements.
 
 On August 11, 2009, Cullen Agritech entered into a strategic cooperation agreement with NZ Agritech. Pursuant to the agreement, Cullen Agritech will assist members of NZ Agritech to mitigate barriers of market entry and provide the opportunity to realize the potential growth in various markets. NZ Agritech in turn will actively promote to its members its alliance with Cullen Agritech. Accordingly, this relationship with NZ Agritech presents Cullen Agritech with the opportunity to enter joint ventures and strategic alliances with New Zealand companies offering innovative products and technologies which promote efficient farming systems, including those seeking assistance with adaptation to the Southeastern, United States. The agreement is perpetual in nature but may be terminated by either party upon three months’ notice. Cullen Agritech is obligated to pay a fee to NZ Agritech annually, in arrears, based on its dealings with NZ Agritech’s members. No such dealings have taken place to date and therefore no fee is currently owed. The fee is to be negotiated on a year by year basis.
 
 Within the United States, we believe the know-how residing in its pasture-based farming system will present the opportunity for joint ventures with federal and state departments and businesses including dairy cooperatives, universities, training institutions and farmers.
 
 Customers/Sales and Marketing
 
 We intend to partner with and provide services to some of the world’s largest agricultural companies, including producer cooperatives, corporate farmers, investment funds and agricultural technology providers. Our expertise can be applied across a range of global regions and production systems that utilize pasture systems and technologies for food animal production and can assist industry and government organizations in adapting these technologies to their regions and production requirements. Natural Dairy’s customer base will be predominately milk cooperatives that supply processing facilities.
 
 Competition
 
 Potential competitors are large agricultural technology and service providers that might develop a globally focused consultancy capacity that is focused on the grazing model and technologies. To our knowledge, there is currently no other entity operating in the global grazing technology industry, provided, however companies could potentially develop this capability. These potential competitors include PGG Wrightson (NZ), Livestock Improvement Corporation (NZ), New Zealand Farming System Uruguay (NZ), Grasslands Consultancy LLC (Mo, USA), Manuka Farming (Chile) and Fonterra. To management’s knowledge, none of these companies currently provide agricultural consultancy services of significance outside their country of incorporation and may have limited capacity to move to other regions as a technology provider.
 
 Although Natural Dairy will face competition from other liquid milk producers across the United States, the effect of such competition is not expected to be adverse given the supply gap that exists in the liquid milk market in the Southeastern United States.
 
 Employees
 
 Currently, we have one executive officer and one employee. We have never experienced a strike or similar work stoppage.
 
 ITEM 1A.
RISK FACTORS
 
 Risks Related to Cullen Agritech’s Business
 
 Cullen Agritech has a limited operating history and may not be able to successfully operate its business or generate sufficient revenue to make or sustain distributions to its stockholders.
 
 We were incorporated in August 2009 in order to consummate the Merger and acquire Cullen Agritech. Cullen Agritech was incorporated in June 2009, is a development stage company and has only a limited operating history. We cannot assure you that we will be able to operate our business successfully or implement our policies and strategies as described in this annual report.
 8
 We do not have sufficient funds to implement our business plan.
 
 The implementation of our business plan relies on our ability to purchase land, livestock and other material assets. In connection the Merger, we purchased a piece of land and intended to purchase additional land thereafter in order to implement our business plan.  However, we do not currently have sufficient funds available to implement our business plan as originally anticipated. We have been in the process of attempting to obtain land development financing secured by the property we own and operate to support our working capital needs and implement our business plan.  However, due to the recent performance of farming operations in the region, as well as the general economic downturn, financial institutions have been unwilling to provide such financing.  Accordingly, we have sold portions of our unused land, reduced salaries paid to our employees and curtailed operations in order to raise capital and reduce operating expenses.  Additionally, we are in the process of exploring all financing and strategic alternatives available to us, including the possibility of disposing of or leasing additional portions of our land in order to continue to support our working capital needs or alternatively to retire certain of our outstanding debt to reduce our interest obligations.  We will also look to explore alternative opportunities available to us unrelated to forage and animal sciences and farming systems which makes up our current business plan in an effort to maximize shareholder value.  There is no assurance, however, that we will be successful in such efforts.  If we are unable to secure additional financing or find another strategic alternative, we will not have sufficient capital to implement our business plan and may be forced to suspend all operations until such time as capital or another strategic alternative is available to us.
 
 The land we currently own is subject to a mortgage.
 
 We own approximately 1,650 acres of farmland in the State of Georgia. Such land is the subject of a mortgage granted to Cullen Holdings securing our obligations owed to it pursuant to a promissory note that is due on January 20, 2012. If we fail to repay this promissory note when due, Cullen Holdings may foreclose on the land and take possession of it. We cannot assure you that we will have sufficient capital to repay the note or our other obligations when they come due. If we are unable to pay our obligations as they come due, it could have a material adverse effect on our operations.
 
 Certain of our directors are subject to litigation that may have a negative effect on our financial condition and business operations.
 
 On December 9, 2009, a second amended class action complaint, styled Goodman v. Watson, et al., was filed in the Court of Chancery of the State of Delaware against the former directors of Triplecrown (several of whom are current directors of our company).  The complaint alleges that the defendants breached their fiduciary duties and their duty of disclosure in connection with the Merger.  The plaintiff seeks, as alternative remedies, damages in the amount of approximately $9.74 per share, to have Triplecrown’s trust account restored and distributed pro rata to members of the putative class, a quasi-appraisal remedy for members of the putative class, and an opportunity for members of the putative class to exercise conversion rights in connection with the Merger. The defendants filed an answer on December 23, 2009. On January 18, 2011, we and the former directors entered into a stipulation of settlement with the plaintiff.  Pursuant to the stipulation, the class action will be resolved, and all claims will be dropped, in exchange for an aggregate payment to the class of up to $1.4 million, of which $550,000 will be paid by us and the balance will be paid by our insurance carrier.  The stipulation is subject to review and approval by the Court of Chancery, and is subject to potential objections by permissible claimants.  If the stipulation is not approved or an acceptable settlement cannot be reached, the defendants intend to defend this action vigorously.  If the court finds in favor of the plaintiff (who represents a purported class of stockholders that held approximately 490,000 shares of Triplecrown’s common stock) and the defendants are required to pay damages to the plaintiff (which could be approximately $5 million), we will have an obligation to indemnify the defendants for such damages.  In such event, we will seek to recover such payments from our D&O insurance carrier as we believe such claims are covered by our insurance policies.  However, there is no assurance that the carrier will agree in this analysis and not deny coverage of such claims.  If this occurred, our financial condition and business operations could be materially adversely affected.
 9
 The recent disruptions in the overall economy and the financial markets may adversely impact our business and results of operations.
 
 The agricultural industry is sensitive to changes in general economic conditions, both nationally and locally. Recent disruptions in global financial markets and banking systems have made it more difficult for companies to access credit and capital markets. The economic crisis may adversely affect our business in a variety of ways. Access to lines of credit or the capital markets may be severely restricted, which may preclude us from raising funds required for operations and to fund continued expansion. It may be more difficult for us to complete strategic transactions with third parties. Continuing volatility in the credit and capital markets could potentially impair our customers’ ability to access these markets and increase associated costs, and we may be materially affected by these financial market disruptions as economic events and circumstances continue to evolve. The financial and credit market turmoil could also negatively impact our potential suppliers and customers, which could decrease our ability to source, produce and distribute our products and could decrease demand for its products.
 
 If economic conditions continue to worsen, it is possible these factors could significantly impact our financial condition and ability to implement our strategic growth plan.
 
 Any negative public perception regarding our products or industry, or any ill effects of product liability claims, could harm our reputation, damage its brand, result in costly and damaging recalls and expose us to government investigations and sanctions, which would materially and adversely affect its results of operations.
 
 We intend to sell products for human consumption, which involves a number of risks. Product contamination, spoilage or other adulteration could result in the inability to sell our products. We also may be subject to liability if our products or operations violate applicable laws or regulations or in the event its products cause injury, illness or death. A significant product liability or other legal judgment against us or a widespread product recall may negatively impact our profitability. Even if a product liability or consumer fraud claim is unsuccessful or is not merited, the negative publicity surrounding such assertions regarding our products or processes could materially and adversely affect our reputation, brand image and results of operations. Finally, serious product quality concerns could result in governmental action against us, which, among other things, could result in the suspension of production or distribution of our products, or other governmental penalties, including possible criminal liability.
 
 We may not realize anticipated benefits from our strategic growth plan.
 
 If we can obtain the necessary financing, we intend to implement a strategic growth plan, which includes a number of initiatives, that we believe are necessary in order to position our business for future success and growth. Over the next several years, these initiatives will require investments in people, systems, tools and facilities. Our success and earnings growth depends in part on our ability to maintain budgeted costs and efficiencies. If we are unable to successfully implement these initiatives, or fail to implement them as timely as anticipated, our results of operations could be adversely impacted.
 
 Our business is subject to various environmental laws, which may increase our compliance costs.
 
 Our business operations are subject to various environmental and governmental regulations. These laws and regulations cover the discharge of pollutants, wastewater, and hazardous materials into the environment. In addition, various laws and regulations addressing climate change are being considered or implemented at the federal and state levels. New legislation, as well as current federal and other state regulatory initiatives, relating to these environmental matters could require us to replace equipment, install additional pollution controls, purchase various emission allowances or curtail operations. These costs could adversely affect our results of operations and financial condition.
 
 Our operations are subject to numerous laws and regulations, exposing us to potential claims and compliance costs that could adversely affect its business.
 
 We are subject to federal, state and local laws and regulations relating to the manufacturing, labeling, packaging, health and safety, sanitation, quality control, fair trade practices, and other aspects of its business. In addition, zoning, construction and operating permits are required from governmental agencies which focus on issues such as land use, environmental protection, waste management, and the movement of animals across state lines. These laws and regulations may, in certain instances, affect its ability to develop and market new products and to utilize technological innovations in our business. In addition, changes in these rules might increase the cost of operating our facilities or conducting our business which would adversely affect our finances.
 
 Our dairy business will be affected by federal price support programs and federal and state pooling and pricing programs to support the prices of certain products we sell. Federal and certain state regulations help ensure that the supply of raw milk flows in priority to fluid milk and soft cream producers before producers of hard products such as cheese and butter. If any of these programs was no longer available to us, the prices it pays for milk could increase and reduce its profitability.
 
 Several states also have laws that restrict the ability of corporations to engage in farming activities. These regulations may require us to alter or restrict its operations or cause it to incur additional costs in order to comply with the regulations.
 10
 Inability to protect our trademarks and other proprietary rights could damage our competitive position.
 
 Any infringement or misappropriation of our intellectual property could damage its value and could limit our ability to compete. We may have to engage in litigation to protect our rights to intellectual property, which could result in significant litigation costs and require a significant amount of management’s time.
 
 We believe that the know-how associated with our farming systems for the production of raw milk are trade secrets. In addition, we have amassed a large body of knowledge regarding animal nutrition and pasture-based farming which we believe to be proprietary. Because most of this proprietary information is not patented, it may be more difficult to protect. We rely on security procedures and confidentiality agreements to protect this proprietary information; however, such agreements and security procedures may be insufficient to keep others from acquiring this information. Any such dissemination or misappropriation of this information could deprive us of the value of its proprietary information and negatively affect its results.
 
 Our proprietary farming system could be replicated creating additional competition in the grass-fed dairy industry.
 
 Despite our first mover advantage and the substantial amount of research and development that we believe would be required to replicate our farming system, over time and with significant capital, it is possible that other producers could replicate our model with a certain degree of success. This could put our market share and competitive advantages at risk.
 
 The efficiencies of our farming system may not be scalable.
 
 Our farming system has only been tested on a farm which is smaller than those farms we are expecting to roll-out in the future. If its system is not as efficient on a larger scale, this could impair our ability to implement our strategic plan and negatively affect our operating results.
 
 Key assets such as land, livestock and infrastructure could increase in price, reducing the ability to roll-out farms under the current budgeted capital requirements.
 
 An increase in the cost of our key capital items such as land, livestock and infrastructure could reduce our ability to roll-out farms. Key assets may increase substantially in price and additional capital may not be available to us on acceptable terms when needed.
 
 The price of land could decrease, reducing the underlying asset value of the business.
 
 Our current business plan involves buying land assets. If these assets were to be acquired and then the value of these assets decreased, this could reduce the strength of our balance sheet in the future and affect its ability to obtain additional capital and implement its business plan.
 
 We may establish and maintain relationships with only a small number of co-operatives for the collection and processing of our raw milk.
 
 The dairy processing industry is made up of a number of co-operatives that collect and process all raw milk produced at farms. Our business plan anticipates that it will establish and maintain relationships with co-operatives for the collection and processing of its raw milk. It is anticipated that it will not initially, if at all, establish contracts with a large number of different co-operatives, which could expose us to a customer concentration risk.
 
 Milk and corn price volatility could reduce revenues and negatively affect our results of operations.
 
 If the price of milk decreased to that which is substantially lower than expected, this could result in a material reduction in our revenues and negatively affect our results of operations.
 
 Our feeding strategy will utilize a certain proportion of other feedstocks, some of which are corn-based, the price of which fluctuates according to the price of corn. If corn prices were to rise significantly, we could experience a material reduction in our operating margins.
 
 Raw milk production is influenced by a number of factors that are beyond our control, such factors may have a material adverse effect on our business.
 
 Raw milk production is influenced by a number of factors that are beyond our control, including, but not limited to, the following:
 11
 •
Seasonal Factors: dairy cows generally produce more milk in temperate weather than in cold or hot weather and extended unseasonably cold or hot weather could lead to lower than expected production;
 
 •
Environmental Factors: the volume and quality of milk produced by dairy cows is closely linked to the quality of the nourishment provided by the environment around them, and, therefore, if environmental factors cause the quality of nourishment to decline, our milk production could decline; and
 
 •
Governmental Agricultural and Environmental Policy: declines in government grants, subsidies, provision of land, technical assistance and other changes in agricultural and environmental policies may have a negative effect on the viability of our farms, and the numbers of dairy cows and quantities of milk they are able to produce.
 
 Such factors could have a material adverse effect on our business.
 
 The milk production business is highly competitive and, therefore, we face substantial competition in connection with the sale of our products.
 
 We face competition from other milk producers across the U.S. Most of our competitors are well established, have greater financial, marketing, personnel and other resources, have been in business for longer periods of time than we have, and have products that have gained wide customer acceptance in the marketplace. We may be unable to compete successfully or our competitors may develop products which have superior qualities or gain wider market acceptance than ours.
 
 Large-scale disease could harm a significant portion of our livestock, reducing its ability to produce revenue.
 
 The productivity and profitability of Natural Dairy’s businesses depend on animal and crop health and on disease control. Natural Dairy will face the risk of outbreaks of bovine spongiform encephalopathy (“BSE”) which could lead to decreased milk and livestock sales and increased costs to produce its products. There have been three confirmed cases as having BSE in the United States in Washington, Alabama and Texas. Various countries have halted the import of U.S. fed beef in response to the discovery of BSE in the U.S. marketplace. In response to the discovery of BSE in the U.S. marketplace, the USDA has increased testing requirements for cows and is exploring additional inspection requirements which could increase the cost of production of dairy products. The discovery of additional cases of BSE could lead to widespread destruction of dairy cows, could cause consumer demand for dairy products to decrease and could result in increased inspection costs and procedures as well as reduce revenues from the sale of livestock. If this occurs, Natural Dairy could have decreased production and sales of its dairy products due to decreased consumer demand or decreased milk supply and decreased operating margins as a result of increased dairy production costs.
 
 Natural Dairy will face the risk of outbreaks of foot-and-mouth disease, which could lead to a significant destruction of cloven-hoofed animals such as dairy cattle, beef cattle, swine, sheep and goats and significantly reduce the demand for meat products. Because foot-and-mouth disease is highly contagious and destructive to susceptible livestock, any outbreak of foot-and-mouth disease could result in the widespread destruction of all potentially infected livestock. If this happens, Natural Dairy could also have difficulty procuring the livestock it needs for its dairy operations and incur increased cost to produce its dairy products, which could reduce its production, sales and operating margins.
 
 Our ability to produce revenue will be dependent on the continual survival and health of Natural Dairy’s livestock. If a significant number of Natural Dairy’s livestock died or were infected with a disease, Natural Dairy’s ability to produce revenue form the sale of milk would be reduced.
 
 Our results of operations will fluctuate by season and will be affected by weather conditions.
 
 Any adverse or major deviations from the typical weather conditions expected in a region could negatively impact our ability to produce revenue under our current strategy. In addition, severe weather conditions and natural disasters, such as floods, droughts, frosts or earthquakes, or adverse growing conditions, diseases and insect-infestation problems may reduce the quantity and quality of its milk production. For example, dairy cows produce less milk when subjected to extreme weather conditions, including hot and cold temperatures. A significant reduction in the quantity or quality of milk produced due to adverse weather conditions, disease, insect problems or other factors could result in increased processing costs and decreased production, with adverse financial consequences to us.
 12
 A change in the water availability may negatively impact the efficiency of the business model.
 
 The success of our farming system is dependent on the availability of water to successfully grow forage. If there was a reduction in water availability on a farm subsequent to acquiring and converting that property, due to drought, contamination or otherwise, our ability to produce milk on that farm could be negatively affected.
 
 We depend upon our key personnel and our ability to retain and recruit additional qualified personnel to implement our business strategy. The loss of such key personnel or the inability to retain or recruit qualified personnel in the future could have a material adverse impact on the implementation of the business strategy.
 
 Our success depends largely on our ability to attract, develop, motivate and retain highly skilled professionals. The loss or unavailability of any of our key personnel or the inability to train and retain additional qualified personnel and advisory board members for any significant period of time or at all would have a material adverse effect on the business, prospects, financial condition and results of operations.
 
 We may be unable to develop and implement a marketing strategy for our advisory and consulting services, which may have a material adverse effect on our business.
 
 We do not have any long-term agreements with clients for the provision of advisory and consulting services we intend to offer. Although we have not included consulting revenues in our forecasts, the success of our business will depend in part on our ability to secure advisory clients. If we are unable to secure advisory clients due to ineffective marketing, because of an economic downturn decreasing the demand for outsourced professional services or otherwise, our business is likely to be materially adversely affected.
 
 Inability to obtain required import permits could reduce our ability to achieve certain long term operating efficiencies.
 
 Our business plan includes the potential future requirement for importation of certain farm products, technologies or animal products into the US as well as movement of these products or technologies between States within the US. The importation of Agritech products from New Zealand into the US is subject to various regulatory and licensing restrictions including but not limited to those imposed by the U.S. Customs Service; the United States International Trade Commission; the United States Department of Agriculture; the Food and Drug Administration; the Animal & Plant Health Inspection Service; the Farm Service Agency; the Environmental Protection Agency and the Occupational Health & Safety Administration. We might also be exposed to certain quota limitations. Specifically, for animal products including semen and embryos, the U.S. Federal Law requires that the USDA Animal and Plant Health Inspection Service (APHIS) issue a permit. The current regulatory environment in the U.S. in regards to importation of Agritech products from New Zealand could change sometime in the future. As such, it is possible that we might be unable to obtain such permits or our activities will be limited by an inability to comply with the required regulatory and licensing restrictions. This could limit the ability for us to achieve our financial forecasts.
 
 A forage-based strategy could result in reduced production in the winter months.
 
 Due to the reliance on forage as a primary feed source, the colder winter months could reduce forage growth and therefore reduce feed availability for the farm’s livestock. This could result in either the requirement to increase the use of supplemental feed or reduced milk production. This could negatively impact our ability to produce milk or maintain expected operating margins.
 
 Our warrants may be exercised in the future, which would increase the number of shares eligible for future resale in the public market.
 
 We have outstanding warrants to purchase an aggregate of 74,000,000 shares of common stock. To the extent such warrants are exercised, additional shares of our common stock will be issued, which would dilute the ownership of existing stockholders.
 
 Eric J. Watson effectively controls us.
 
 Eric Watson beneficially owns 15,881,148 shares of our common stock and effectively controls us through such ownership. Because of this ownership, he will be able to have considerable influence over our corporate actions in the future.
 
 Our stock price could fluctuate and could cause you to lose a significant part of your investment.
 
 The market price of our securities may be influenced by many factors, some of which are beyond our control, including those described above and the following:
 13
 •
changes in financial estimates by analysts;
 
 •
fluctuations in its quarterly financial results or the quarterly financial results of companies perceived to be similar to it;
 
 •
general economic conditions;
 
 •
changes in market valuations of similar companies;
 
 •
terrorist acts;
 
 •
changes in its capital structure, such as future issuances of securities or the incurrence of additional debt;
 
 •
future sales of common stock;
 
 •
regulatory developments in the United States, foreign countries or both;
 
 •
litigation involving us, our subsidiaries or our general industry; and
 
 •
additions or departures of key personnel.
 
 ITEM 1B.
UNRESOLVED STAFF COMMENTS.
 
 None.
 
 ITEM 2.
PROPERTIES.
 
 We maintain our executive offices at 1431 N. Jones Plantation Road, Millen, Georgia 30442.  This land is included in the approximately 1,650 acres of farmland we own in the State of Georgia (including approximately 500 acres of land under contract to be sold to a third party that will take place on or before September 1, 2011). Cullen Holdings loaned us part of the purchase price for the land and the land is subject to a mortgage securing this loan.  The loan is evidenced by a promissory note that accrues interest at the rate of 8% per annum. As of March 24, 2011, the principal balance outstanding on the promissory note was $593,629.
 
 ITEM 3.
LEGAL PROCEEDINGS.
 
 See Note 10 to our consolidated financial statements included in Part II, Item 8 of this annual report.
  14
  PART II
 
 ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
 
 Market Information
 
 Our common stock and warrants are listed on the OTC Bulletin Board under the symbols, CAGZ and CAGZW, respectively. The following table sets forth the range of high and low sales prices for the common stock and warrants for the periods indicated since the common stock and warrants commenced public trading on October 23, 2009.
 
 Common Stock


WarrantsHigh


Low


High


LowFiscal 2010:Fourth Quarter

$
0.40


$
0.14


$
0.01


$
0.0028Third Quarter

$
2.50


$
0.40


$
0.02


$
0.0075Second Quarter

$
2.50


$
1.50


$
0.04


$
0.01First Quarter

$
3.95


$
1.75


$
0.05


$
0.02Fiscal 2009:Fourth Quarter

$
6.20


$
3.60


$
0.12


$
0.03
 
 Holders
 
 As of March 24, 2011, there were 19 holders of record of our common stock and 14 holders of record of our warrants.
 
 Dividends
 
 We have not paid any cash dividends on our common stock to date. The payment of cash dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of our board of directors. 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 does not anticipate declaring any dividends in the foreseeable future.
 
 Recent Sales of Unregistered Securities and Use of Proceeds
 
 On October 1, 2010, we issued 300,000 shares of common stock to Moonlight Investments Ltd. in a private placement pursuant to the exemption from registration contained in Section 4(2) of the Securities Act.  The shares of common stock were sold for $2.00 per share (or $600,000).
 
 On November 16, 2010, we issued 75,000 shares of common stock to Luton Verwaltungs GMBH in a private placement pursuant to the exemption from registration contained in Section 4(2) of the Securities Act. The shares of common stock were sold for $2.00 per share (or $150,000).
 15
 ITEM 6.
SELECTED FINANCIAL DATA.
 
 The selected financial data set forth below is derived from our audited financial statements. This selected financial data should be read in conjunction with the section under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K:
 
 For the period June 3,For the year ended


2009 (inception) throughDecember 31, 2010


December 31, 2009Total revenues

$
—


$
—Loss from operations


(1,592,262
)


(524,924
)Net loss


(4,134,527
)


(612,526
)Loss per share basic and diluted


(0.21
)


(0.03
)Weighted average shares outstanding


19,340,230



19,247,311Working capital deficiency


(245,604
)


2,199,282Total assets


3,486,214



11,855,329Stockholders’ equity


2,116,792



5,451,319
 
 ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
 The following discussion should be read in conjunction with our Consolidated Financial Statements and footnotes thereto contained in this report.
  Forward Looking Statements
  All statements other than statements of historical fact included in this Form 10-K including, without limitation, statements under “Management’s Discussion and Analysis or Plan of Operation” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Form 10-K, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward looking statements as a result of certain factors detailed in our filings with the Securities and Exchange Commission. All subsequent written or oral forward looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
  In assessing forward-looking statements contained herein, readers are urged to carefully read those statements. Among the factors that could cause actual results to differ materially are: inability to protect our intellectual property; inability to obtain necessary financing; competition; loss of key personnel; increases of costs of operations; continued compliance with government regulations; and general economic conditions.
  A description of key factors that have a direct bearing on our results of operations is provided under “Risk Factors” included on Item 1A of this form 10-K.
 
 Overview
 
 We are a development stage company. Since October 22, 2009, our activities have been primarily focused on raising capital to fund our business plan and the sale of land to meet our working capital requirements and repay our outstanding debt. Our principal focus is to use our intellectual property in forage and animal sciences to improve agricultural yields. The Company was formed to develop, adapt and implement grazing-based farming systems in regions of the world where the geophysical and climatic conditions are suitable for a pasture-based model. While the potential for the pasture or grazing model is significant in many of the world’s developed and developing economies, the systems are highly specific and require significant adaptation and modification to be successful. To date, we have not generated any revenue and will not do so until we have sufficient funds to implement our business plan described below.
 16
 We have been in the process of attempting to obtain land development financing secured by the property we own and operates to support our working capital needs and implement our business plan. However, due to the recent performance of farming operations in the Southeastern United States, as well as the general economic downturn, financial institutions have been unwilling to provide such financing. As a result, we have been unable to obtain the necessary funding to support the implementation of our business plan at this time. Accordingly, we are in the process of exploring all financing and strategic alternatives available to us, including the possibility of disposing of or leasing additional portions of our land in order to continue to support our working capital needs and retire certain of our outstanding debt to reduce our interest obligations. During 2010, we entered into contracts with unrelated third parties for the sale of approximately 2,000 acres or approximately 56% of the land we originally purchased. A third party is also obligated to purchase approximately 500 acres by September 1, 2011. We continue to explore the disposition of the remaining 1,150 acres it owns which is not under contract. We are currently in various stages of negotiations with potential buyers for some or all of our remaining land, although we have not finalized any agreements and have not accepted any offers that we have received at this time. There is no assurance that we will be successful in disposing of any of our remaining land.
 
 Results of Operations
 
 For the year ended December 31, 2010, we had a net loss of $4,134,527. We did not generate any revenues during this period and we are a development stage company. Our expenses of $1,592,262 for the year ended December 31, 2010 consisted primarily of legal, accounting and consulting fees, payroll and employee related expenses, and other general corporate and administrative expenses of $347,777, $233,703, $682,166 and $328,616, respectively.
 
 For the period from June 3, 2009 (inception) through December 31, 2009, we had a net loss of $612,526. We did not generate any revenues during this period as it was formed as a wholly-owned subsidiary of Triplecrown for the purpose of effecting the Merger consummated on October 22, 2009, and is a development stage company. Our expenses of $524,924 for the period from June 3, 2009 (inception) through December 31, 2009 consisted primarily of legal, accounting and consulting fees of $314,558 as well as payroll and employee related expenses of $150,481 and other general corporate and administrative expenses of $59,885. Prior to October 22, 2009 we and our wholly-owned subsidiary were “shell companies” and conducted no business operations and did not own or lease any real estate or other property.
 
 Additionally, upon the Merger, we issued to Cullen Holdings a promissory note in the amount of $6,853,918, representing part of the purchase price of a certain piece of land to be used by us following the Closing (see Note 4 to the condensed consolidated financial statements). This amount was to be repaid to Cullen Holdings at Closing but sufficient funds were not available. The parties amended the terms of the promissory note to extend the maturity date to January 20, 2012.  The promissory note accrues interest at the rate of 8% per annum.  As of December 31, 2010, we had repaid Cullen Holdings $6,650,000 of the note, consisting of $6,436,998 of principal and $213,002 of interest, and $593,629 of the principal remained outstanding. For the year ended December 31, 2010 and for the period from June 3, 2009 (inception) through December 31, 2009, we incurred interest expense of $313,282 and $111,359 respectively, related to this note.
 
 For the year ended December 31, 2010, we had other expenses, net of $2,227,693 related to lease income, note payable interest expense related to tractor, legal settlement charge, calf deaths, loss from beef grazing operations, the sale of timber, corn and hay, loss from the sale of land and impairment loss on property, plant and equipment and a $1,290 provision for income tax. For the period from June 3, 2009 (inception) through December 31, 2009, we had other income related to rental of the property of $24,077 and a $320 provision for income tax.
 
 Financial Condition and Liquidity
 
 We were formed as a wholly owned subsidiary of Triplecrown. From our inception in June 3, 2009 until the completion of the Merger on October 22, 2009, our activities were limited to its organization, the preparation and filing with the SEC of a Registration Statement on Form S-4 and other matters related to the Merger. Since October 22, 2009, our activities have been primarily focused on raising capital to fund its business plan. As of December 31, 2010, we had $154,028 of available cash and during the period from June 3, 2009 (inception) through December 31, 2010, did not have any sources of revenue. We had a net loss of $4,747,053 for the period from June 3, 2009 (inception) through December 31, 2010. As of December 31, 2010, we had working capital deficiency of $245,604.
 
 Upon the consummation of the Merger, we issued to Cullen Holdings a promissory note in the amount of $6,853,918, representing part of the purchase price of the land to be used by us following the Closing. The note was to be repaid as soon as practicable but no later than January 20, 2010 (90 days from the date of issuance). This amount was to be repaid to Cullen Holdings at Closing of the Merger but sufficient funds were not available
 17
 The parties further amended the terms of the promissory note to extend the maturity date to January 20, 2012.  The promissory note accrues interest at the rate of 8% per annum.  As of December 31, 2010, we had repaid Cullen Holdings $6,650,000 of the note, consisting of $6,436,998 of principal and $213,002 of interest, and $593,629 of the principal remained outstanding. In consideration of this extension, we granted to Cullen Holdings a mortgage on the land that is the subject of the promissory note. The note continues to accrue interest at the rate of 8% per annum.
 
 In January 2010, we entered into an agreement with Canoochee River Plantation, LLC, pursuant to which we sold 340 of non irrigated land for $613,170. We estimate the original purchase price for this land to be $594,794 and have recorded a gain from the sale of this property of $6,321 as other income, net during the year ended December 31, 2010.
 
 In June 2010, we entered into a second agreement with Canoochee River Plantation, LLC, pursuant to which we sold 240 acres of land for $776,688. We estimate the original purchase price for this land to be $807,239 and have recorded a loss from the sale of this property of $53,489 as other expense during the year ended December 31, 2010.
 
 In September 2010, we entered into an agreement with Mossy Creek Plantation, LLC, pursuant to which we sold 95 acres of land for $170,244. We estimate the original purchase price for this land to be $165,192 and have recorded a loss from the sale of this property of $3,641 which is included in other income, net during the year ended December 31, 2010.
 
 On September 28, 2010, we entered into a Sales Contract (“Mims Agreement”) with Benny Mims pursuant to which we sold approximately 500 acres of land for approximately $1.6 million. We estimate the original purchase price for this land to be $1,926,567 and have recorded a loss from the sale of this property of $385,739, which is included in other income, net during the year ended December 31, 2010.
 
 On October 15, 2010, we entered into a new Sales Contract with Landee Acres, LLC (“Landee”) pursuant to which we sold to Landee approximately 700 acres of land for an aggregate of $1.45 million. We estimate the original purchase price for this land to be $1,645,392 and have recorded a loss from the sale of this property of $252,148, which is included in other income, net during the year ended December 31, 2010. This sale of 700 acres closed on October 26, 2010. The Sales Contract also requires Landee to purchase an additional approximate 500 acres of land for approximately $1.49 million on or before September 1, 2011; provided however that if the sale is consummated on or before March 31, 2011, the purchase price for this land will be reduced by $50,000.
 
 On October 22, 2010, we entered into a sales contract with Don and Alisa Burke pursuant to which we sold approximately 154 acres of land for approximately $289,000.  We estimate the original purchase price for this land to be $312,988 and have recorded a loss from the sale of this property of $36,214, which is included in other income, net during the year ended December 31, 2010.
 
 Cullen Holdings held a mortgage on the acres of land sold during 2010 and released us from such mortgage in order for us to consummate the sales. We used approximately $5.7 million of the proceeds from the sales of the land to repay remaining amounts outstanding under the existing promissory note held by Cullen Holdings.
 
 For the year ended December 31, 2010, we recognized a gain on sale of equipment totaling $2,701 which is included in loss on sale of land and equipment during the year ended December 31, 2010.
 
 We have been in the process of attempting to obtain land development financing secured by the property we own and operates to support our working capital needs and implement our business plan. However, due to the recent performance of farming operations in the Southeastern United States, as well as the general economic downturn, financial institutions have been unwilling to provide such financing. As a result, we have been unable to obtain the necessary funding to support the implementation of our business plan at this time. Accordingly, we are in the process of exploring all financing and strategic alternatives available to us, including the possibility of disposing of or leasing additional portions of our land in order to continue to support our working capital needs and retire certain of our outstanding debt to reduce our interest obligations.  During 2010, we entered into contracts with unrelated third parties for the sale of approximately 2,000 acres or approximately 56% of the land we originally purchased. A third party is also obligated to purchase approximately 500 acres by September 1, 2011. We continue to explore the disposition of the remaining 1,150 acres it owns which is not under contract. There is no assurance that we will be successful in disposing of any of our remaining land. We have also reduced salaries paid to our employees and curtailed operations in order to raise capital and reduce operating expenses. Additionally, we are in the process of exploring all financing and strategic alternatives available to us, including alternative opportunities available to us unrelated to forage and animal sciences and farming systems which makes up our current business plan in an effort to maximize shareholder value. To this end, we have had preliminary discussions with potential merger candidates wishing to become publicly traded. However, such discussions are only preliminary and no formal terms have been discussed or agreed to. There is no assurance, however, that we will be successful in any of such efforts. If we are unable to attain further debt or equity financing on terms acceptable to us, our funds may not be sufficient to execute our business plan. These factors raise substantial doubt about our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern.
 18


Off-Balance Sheet Financing Arrangements





We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.





We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or acquired any non-financial assets.





Critical Accounting Policies





Our significant accounting policies are more fully described in Note 1 to the condensed consolidated financial statements. However certain accounting policies are particularly important to the portrayal of financial position and results of operations and require the application of significant judgments by management. In applying those policies, management used its judgment to determine the appropriate assumptions to be used in determination of certain estimates. Our accounting policy will be to use estimates based on terms of existing contracts, observance of trends in the industry and information available from outside sources, as appropriate.





See Recently Issued and Adopted Accounting Pronouncements in Note 1 to the audited consolidated financial statements in Item 1.





ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





None.





ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





This information appears following Item 15 of this Report and is included herein by reference.





ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.





None.





ITEM 9A.
CONTROLS AND PROCEDURES.





Evaluation of Disclosure Controls and Procedures





We have established disclosure controls and procedures to ensure that material information relating to us is made known to the officers who certify our financial reports and to other members of senior management and the board of directors.





Based on his evaluation as of December 31, 2010, our principal executive and principal financial and accounting officer has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective.





Management's Report on Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.





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An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.





Our management, under the supervision of and with the participation of our Chief Executive Officer and Treasurer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2010 based on criteria for effective control over financial reporting described in Internal Control — Integrated Framework (1992) created by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2010.





This annual report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting as such report is not required for non-accelerated filers.





Changes in Internal Control Over Financial Reporting





For the fiscal quarter ended December 31, 2010, we conducted the remediation activity in connection with the lack of internal control for measuring impairment of our long-lived assets.  We engaged an outside valuation expert to assist in determining whether the acquired plant, property and equipment are subject to impairment charges.  Management compared the carrying value of long-lived assets and the expert’s valuation to determine whether impairment charge is warranted.





Except as described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting





Limitations on the Effectiveness of Controls





A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Our principal executive and principal financial and accounting officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.





ITEM 9B.
OTHER INFORMATION.





None.





PART III





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.





Directors and Executive Officers





Our current directors and executive officers are as follows:





Name

Age

PositionEric J. Watson

51

Chief Executive Officer, Secretary, Treasurer and DirectorRichard Watson

38

Director and Chief Scientific Officer of Natural DairyRobert B. Hersov

50

DirectorKerry Kennedy

51

DirectorRichard Y. Roberts

59

DirectorEdward Hanson

35

Director





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Eric J. Watson has been our chief executive officer, secretary and treasurer and a member of our board of directors since our inception in August 2009. Mr. Watson was also the chairman and treasurer of Triplecrown from its inception in June 2007 until the Merger in October 2009. He has also been the chief executive officer of Cullen Agritech since its inception in June 2009. He has been instrumental in our early development and his business experience includes numerous acquisitions which make him well-suited to act as our chief executive officer and a member of our board as we seek to expand our business.





Since January 1995, Mr. Watson has been the executive chairman of, and interests associated with him own, Cullen Investments Limited, an international private investment company which has its origins in a start up founded by Mr. Watson through which he has actively invested his own capital in a range of successful mergers and acquisitions. Mr. Watson and his associated interests have a substantial portfolio comprising interests in the fashion retail, financial services, real estate, sports and entertainment sectors. Cullen Investments interests include ownership of Bendon, a global lingerie company whose prestige brands include the licensed Elle Macpherson Intimates and Stella McCartney labels.





From July 2005 until December 2007, Mr. Watson served as the chairman of the board and treasurer of Endeavor Acquisition Corp., an NYSE Amex listed blank check company formed to acquire an operating business. Endeavor Acquisition Corp. consummated its business combination with American Apparel, Inc. on December 12, 2007. From January 2007 to April 2009, Mr. Watson was the chairman of the board and treasurer of Victory Acquisition Corp., a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business in any industry other than the franchising, financial services or healthcare industries. Victory Acquisition Corp. did not consummate a business combination and liquidated as a result.





Prior to founding Cullen Investments, Mr. Watson was the founding chairman and largest stockholder of Blue Star Group, a retail and distribution group he founded in January 1992. In 1996, Blue Star Group was sold to U.S. Office Products, a diversified supplier of a broad range of office products and business services to corporate customers. Until August 1999, Mr. Watson continued as executive chairman of Blue Star Group, a wholly-owned subsidiary of U.S. Office Products after the acquisition. Following the acquisition of Blue Star Group by U.S. Office Products, Mr. Watson served as a director of McCollam Printers from July 1997 to June 1998. Prior to serving with U.S. Office Products, Mr. Watson held several positions with Xerox Corporation, an office products company, including president of operations for Australasia.





Mr. Watson received a Diploma of General Management from Auckland University in 1989. Mr. Watson is the half-brother of Dr. Richard Watson, a member of our board of directors.





Richard Watson has served as the chief scientific officer of Natural Dairy since September 2009 and has served as a member of our board of directors since October 2009. Dr. Watson was one of the key individuals that helped create and refine the intellectual property utilized in our business and we therefore believe he is well suited to serve as a member of our board. From June 2008 until September 2009, Dr. Watson was employed by Cullen Investments. From October 2006 to June 2008, Dr. Watson served as a senior scientist in the Forage Improvement Group at AgResearch (NZ), New Zealand’s largest Crown Research Institute with expertise in biological science. While there, he led the development of the proprietary farming system and completed all the testing and research related to the forage, livestock and farm management strategies that is utilized by Cullen Agritech. From January 2004 to August 2006, Dr. Watson was affiliated with the Department of Plant and Soil Sciences at Mississippi State University where he served as the State Extension Forage Specialist and Assistant Research Professor (the first non-United States person to hold this position and the first New Zealander to hold a State Forage Extension appointment in the United States). From April 2000 to December 2002, Dr. Watson served in a post-doctoral faculty position with the Department of Crop and Soil Science at the University of Georgia. Dr. Watson received a Bachelor of Agricultural Science, Master of Applied Science (with honors) and Doctor of Philosophy degrees from Massey University. Dr. Watson is the half-brother of Eric J. Watson.





Robert Hersov has been a member of our board of directors since October 2009.  We believe Mr. Hersov’s contacts and past business experience make him well suited to serve as a member of our board.   Since January 2004, Mr. Hersov has been the vice chairman of NetJets Europe Ltd., a subsidiary of NetJets, Inc., a private aviation and fractional jet ownership company which was acquired by Berkshire Hathaway Inc. in 1998. Mr. Hersov founded and, from December 2002 to April 2004, served as the chief executive officer of Marquis Jet Europe, a private aviation company which was acquired by NetJets, Inc. in 2004. Since September 2007, Mr. Hersov has served as a non-executive director of Australian privately-owned company Global Aviation Leasing Group. Mr. Hersov is also chairman of Sapinda Limited, a UK private company, which is the main shareholder of Vatas GmbH, a private German investment company. Mr. Hersov also founded and, from October 1998 to December 2002, served as the chairman of Sportal Ltd., a company that operates an Internet site that offers sports-related games and videos. From October 1996 to September 1998, he served as the executive director of Enic plc, a holding company listed on the London Stock Exchange that invests primarily in the sports and media sectors. From September 1995 to September 1997, Mr. Hersov was the chief executive officer of Telepiu PayTV in Milan, Italy, a pay TV and digital satellite company. From March 1993 to August 1995, Mr. Hersov served as an executive director of Richemont, a tobacco, luxury and media conglomerate listed on the SWX Swiss Exchange. We believe Mr. Hersov’s investment background will assist us in sourcing new avenues of financing needed to expand our business. Since June 2005, Mr. Hersov has been a member of the board of directors of Shine Media Acquisition Corp., a blank check company that was formed to acquire a direct or indirect interest in an operating business in the media and advertising industry in the People’s Republic of China. He was a director of Endeavor Acquisition Corp. from July 2005 to December 2007, a director of Victory Acquisition Corp. from January 2007 to April 2009 and a director of Triplecrown from June 2007 to October 2009. Mr. Hersov received a B.B.S. from the University of Cape Town in 1982 and a M.B.A. from the Harvard Business School in 1989.





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Kerry Kennedy has been a member of our board of directors since October 2009. We believe Ms. Kennedy’s contacts and philanthropic work make her well suited to serve as a member of our board.   She is an American human rights activist and writer. In April 1988, she established the Robert F. Kennedy Memorial Center for Human Rights and acted as its executive director until January 1995 working on diverse human rights issues. Ms. Kennedy has been the Chair of the Amnesty International Leadership Council since January 1996. She was a director of Endeavor Acquisition Corp. from July 2005 to December 2007, a director of Victory Acquisition Corp. from January 2007 to April 2009 and a director of Triplecrown from June 2007 to October 2009. She also serves on the board of directors of the International Center for Ethics and Justice and Public Life at Brandeis University. Ms. Kennedy received a B.A. from Brown University in 1982 and an LLM from Boston College Law School in 1987.





Richard Y. Roberts has been a member of our board of directors since October 2009. We believe Mr. Roberts’ contacts and past business experience, including at the Securities and Exchange Commission, make him well suited to serve as a member of our board.   In March 2006, Mr. Roberts co-founded a regulatory/legislative consulting firm, Roberts, Raheb & Gradler LLC. He was a partner with Thelen Reid & Priest LLP, a national law firm, from January 1997 to March 2006. From August 1995 to January 1997, Mr. Roberts was a consultant at Princeton Venture Research, Inc., a private consulting firm. From 1990 to 1995, Mr. Roberts was a commissioner of the Securities and Exchange Commission, and, in this capacity, was actively involved in, has written about or has testified on, a wide range of subjects affecting the capital markets. We believe his experience at the Commission will provide us with necessary insight into the requirements and needs of an emerging public company like ours. Since leaving the Commission, Mr. Roberts has been a frequent media commentator and writer on various securities public policy issues and has assisted the Governments of Romania and Ukraine in the development of a securities market. He was a director of Nyfix, Inc. from September 2005 to December 2009, Endeavor Acquisition Corp. from July 2005 to December 2007, a director of Victory Acquisition Corp. from January 2007 to April 2009 and a director of Triplecrown from June 2007 to October 2009. From 1987 to 1990, he was the chief of staff for Senator Richard Shelby. He is a member of the Alabama Bar and the District of Columbia Bar. Mr. Roberts is a member of the Advisory Board of Securities Regulation & Law Reports, of the Advisory Board of the International Journal of Disclosure and Governance, and of the Editorial Board of the Municipal Finance Journal. Mr. Roberts also previously served as a member of the District 10 Regional Consultative Committee of the Financial Industry Regulatory Authority, the Market Regulation Advisory Board of the FINRA, and the Legal Advisory Board of the FINRA. Mr. Roberts received a B.E.E. from Auburn University in 1973, a J.D. from the University of Alabama School of Law in 1976, and a Master of Laws from the George Washington University Law Center in 1981.





Edward Hanson has been a member of our board of directors since October 2009.  We believe Mr. Hanson’s business experience and contacts and relationships make him well suited to serve as a member of our board.  Mr. Hanson has served as a principal of Global Partners Fund, a private equity fund investing in asset backed businesses, since 2009. Prior to this, he was a director of Babcock & Brown (UK) Ltd. Babcock & Brown was a principal investment firm headquartered in Sydney and Mr. Hanson worked in the London office from 1997 to 2009. He focused on Private Equity and Real Estate. Mr Hanson received a Bachelor of Commerce from the University of Auckland in New Zealand.





Advisory Board





We will seek guidance and advice from members of our advisory board. These individuals are not required to commit any particular amount of time to our business and will simply provide advice, introductions to potential customers, and assistance to us, at our request, only if they are able to do so. Nevertheless, we believe with their business background and extensive contacts, they will be helpful to our business.





Dr. Hugh Blair, Ph.D. , has been a professor and head of the animal science department at Massey University since 1995. He was also appointed the deputy head of the Institute of Veterinary, Animal and Biomedical Sciences in 1998 and served as its acting head in 2009. Dr. Blair has held lectureships in the United States, Scotland, Denmark, Canada and Ireland and has authored over 170 peer-review articles.





22


Dr. Joe Bouton, Ph.D. , has been a senior vice president and forage improvement division director at the Samuel Roberts Nobel Foundation, a nonprofit organization conducting agricultural, forage improvement and plant biology research, providing grants to non-profit charitable, educational and health organizations, and assisting farmers and ranchers through educational and consultative agricultural programs, since May 2004. Previously, Dr. Bouton was a professor at the University of Georgia. He has 17 commercialized cultivars released for use in the United States.
  Bill Te Brake has served as a business development manager for the Institute of Veterinary, Animal and Biomedical Sciences at Massey University since June 2003. Mr. Brake has also hosted lectures in agricultural business and finance at Massey University.


Dr. Todd White, Ph.D. , was an employee of Cullen Agritech from January 2010 to August 2010. From 2003 to 2010, Dr. White was a scientist with the Agricultural Systems Group of AgResearch and was appointed a senior scientist in 2008. At AgResearch, Dr. White lead research and development programs aimed at developing pasture-based animal production models. Prior to joining AgResearch, Dr. White spent three years in a post-doctoral forage research position at Iowa State University.





Dr. Brian McBride has been a professor at the Centre for Nutrition Modeling at the University of Guelph in Canada since September 1999. Prior to this, Dr. McBride served on the Board of Agriculture and Natural Resources for the United States National Academy of Sciences. Dr. McBride has also been a long-time member of the Committee on Animal Nutrition at the United States National Research Counsel (“NRC”), which coordinated the publication of the NRC’s Nutrient Requirement series on nutrient requirements of domestic animals. Dr. McBride has authored over 275 scientific publications in his career.





Mike Culpepper has been a private investor/consultant since June 2009. Previously, Mr. Culpepper served with the Georgia Department of Agriculture from June 1999 to June 2009 where his responsibilities included guidance for compliance of animal production systems.





Dr. Nick Hill, Ph.D. , has served as a professor of plant sciences in the Department of Crop and Soil Sciences at the University of Georgia since January 1986. Dr. Hill leads research programs aimed at exploring the application of new forage species and the environmental impacts of grazing dairies in Georgia. Dr. Hill has also been a founding partner and president of Agrinostics Ltd., a diagnostic production company that tests corps for pathogens and toxins, since September 1997.





Section 16(a) Beneficial Ownership Reporting Compliance





Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and ten percent stockholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on copies of such forms received or written representations from certain reporting persons that no Form 5s were required for those persons, we believe that, during the fiscal year ended December 31, 2010, all filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with.





Code of Ethics





In October 2009, our board of directors adopted a code of ethics that applies to our directors, officers and employees as well any subsidiaries we may have in the future. Requests for copies of our code of ethics should be sent in writing to Cullen Agricultural Holding Corp., 1431 N. Jones Plantation Road, Millen, Georgia 30442.





Corporate Governance





Nominating Committee





Our nominating committee of the board of directors consists of Kerry Kennedy, who is an independent director under the NYSE Amex’s listing standards. The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, stockholders and others.





The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:




23




·
should have demonstrated notable or significant achievements in business, education or public service;





·
should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and





·
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.





The nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time. The nominating committee does not distinguish among nominees recommended by stockholders and other persons.





There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.





Audit Committee





Our audit committee of the board of directors consists of Edward Hanson, Robert Hersov and Richard Y. Roberts, each of whom has been determined to be “independent” as defined in Rule 10A-3 of the Exchange Act and the rules of the NYSE Amex. The audit committee’s duties, which are specified in our audit committee charter, include, but are not limited to:





·
reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K;





·
discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;





·
discussing with management major risk assessment and risk management policies;





·
monitoring the independence of the independent auditor;





·
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;





·
inquiring and discussing with management our compliance with applicable laws and regulations;





·
pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;





·
appointing or replacing the independent auditor;





·
determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;





·
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and





·
reviewing and approving any related party transactions we may enter into. The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction.





Financial Experts on Audit Committee





The audit committee will at all times be composed exclusively of “independent directors” who are “financially literate” as defined under the NYSE Amex listing standards. The definition of “financially literate” generally means being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.





24




In addition, our board of directors has determined that Edward Hanson qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.





Compensation Committee





Our compensation committee consists of Robert B. Hersov and Richard Y. Roberts, each of whom is an independent director. The principal functions of the compensation committee are:





•
evaluate the performance of our officers,





•
review any compensation payable to our directors and officers,





•
prepare compensation committee reports, and





•
administer the issuance of any common stock or other equity awards issued to our officers and directors.





ITEM 11.
EXECUTIVE COMPENSATION.





Our policies with respect to the compensation of our executive officers will be administered by our board in consultation with the compensation committee. Our compensation policies will be intended to provide for compensation that is sufficient to attract, motivate and retain executives of outstanding ability and potential and to establish an appropriate relationship between executive compensation and the creation of shareholder value. To meet these goals, the compensation committee will be charged with recommending executive compensation packages to our board of directors.





It is anticipated that performance-based and equity-based compensation will be an important foundation in executive compensation packages as we believe it is important to maintain a strong link between executive incentives and the creation of shareholder value. We believe that performance and equity-based compensation can be an important component of the total executive compensation package for maximizing shareholder value while, at the same time, attracting, motivating and retaining high-quality executives. The adoption of the proposed incentive compensation plan and the management incentive compensation plan reflect and will reflect what we believe is a focus on performance- and equity-based compensation.





Executive Compensation





The following table sets forth compensation for our principal executive and financial officer and our only other executive officer (together, our “Named Executive Officers”) for the fiscal year ended December 31, 2010 and for the period June 3, 2009 through December 31, 2009:





Name and Principal Position

Year

Salary

($)


Bonus

($)


Total

($)Eric J. Watson

2010


-



-



-Chief Executive Officer,

Secretary and Treasurer

2009


-



-



-Richard Watson

2010

$
83,208



0


$
83,208Chief Scientific Officer of

Natural Dairy, Inc.

2009


28,962



0



28,962





Eric Watson has agreed that he will not receive any salary or bonus from us until we have positive earnings before interest, taxes, depreciation and amortization. At that time, Mr. Watson will be paid a salary and bonus as approved by our board of directors.





Richard Watson is employed by Natural Dairy as its Chief Scientific Officer.  On August 31, 2009, Dr. Watson and Natural Dairy entered into a three-year employment agreement governing this relationship, which agreement was subsequently amended in 2010. Pursuant to the agreement, Dr. Watson was to receive a base salary of $35,000 and be issued $65,000 worth of our common stock on August 1st of each year that the employment agreement was still in effect.  The stock to be issued to Dr. Watson was to be valued at the average trading price of our common stock for the 60-day period prior to the date of issuance.  Dr. Watson was also entitled to receive a bonus of up to 50% of the base salary subject to the sole discretion of Natural Dairy’s board of directors. In March 2011, Natural Dairy and Dr. Watson further amended the employment agreement to eliminate any stock based compensation for 2010 and going forward. The employment term was also changed to a month-to-month basis.





25




Director Compensation





Our directors received no compensation in the fiscal year ended December 31, 2010. We currently do not have a definitive compensation plan for our directors.





2009 Long-Term Incentive Equity Plan





Our 2009 Long-Term Incentive Equity Plan is designed to enable us to offer our employees, officers, directors and consultants whose past, present and/or potential contributions to us have been, are or will be important to our success, an opportunity to acquire a proprietary interest in us. The various types of incentive awards that may be provided under the plan are intended to enable us to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity of its business. The plan reserves 2,405,914 shares of common stock for issuance in accordance with the plan’s terms.





All of our officers, directors and employees, as well as those of our subsidiaries, are eligible to be granted awards under the plan. An incentive stock option may be granted under the plan only to a person who, at the time of the grant, is an employee of ours or our subsidiaries. No awards have been granted under the plan as of the date of this prospectus. All awards will be subject to the recommendations of the compensation committee and approval by the board of directors or the compensation committee.





Administration





The plan is administered by our board of directors or our compensation committee. Subject to the provisions of the plan, the committee determines, among other things, the persons to whom from time to time awards may be granted, the specific type of awards to be granted, the number of shares subject to each award, share prices, any restrictions or limitations on the awards, and any vesting, exchange, deferral, surrender, cancellation, acceleration, termination, exercise or forfeiture provisions related to the awards.





Stock Subject to the Plan





Shares of stock subject to other awards that are forfeited or terminated will be available for future award grants under the plan. If a holder pays the exercise price of a stock option by surrendering any previously owned shares of common stock or arranges to have the appropriate number of shares otherwise issuable upon exercise withheld to cover the withholding tax liability associated with the stock option exercise, then, in the board’s or committee’s discretion, the number of shares available under the plan may be increased by the lesser of the number of such surrendered shares and shares used to pay taxes and the number of shares purchased under the stock option.





Under the plan, on a change in the number of shares of common stock as a result of a dividend on shares of common stock payable in shares of common stock, common stock forward split or reverse split or other extraordinary or unusual event that results in a change in the shares of common stock as a whole, the terms of the outstanding award will be proportionately adjusted.





Eligibility





Awards may be granted under the plan to employees, officers, directors and consultants who are deemed to have rendered, or to be able to render, significant services to us and who are deemed to have contributed, or to have the potential to contribute, to our success.





Types of Awards





Options . The plan provides both for “incentive” stock options as defined in Section 422 of the Internal Revenue Code of 1986, as amended (“Code”), and for options not qualifying as incentive options, both of which may be granted with any other stock based award under the plan. The board or committee determines the exercise price per share of common stock purchasable under an incentive or non-qualified stock option, which may not be less than 100% of the fair market value on the day of the grant or, if greater, the par value of a share of common stock. However, the exercise price of an incentive stock option granted to a person possessing more than 10% of the total combined voting power of all classes of stock may not be less than 110% of the fair market value on the date of grant. The aggregate fair market value of all shares of common stock with respect to which incentive stock options are exercisable by a participant for the first time during any calendar year (under all of our plans), measured at the date of the grant, may not exceed $100,000 or such other amount as may be subsequently specified under the Code or the regulations thereunder.





26




An incentive stock option may only be granted within a ten-year period commencing on October 22, 2009 and may only be exercised within ten years from the date of the grant, or within five years in the case of an incentive stock option granted to a person who, at the time of the grant, owns common stock possessing more than 10% of the total combined voting power of all classes of our stock. Subject to any limitations or conditions the board or committee may impose, stock options may be exercised, in whole or in part, at any time during the term of the stock option by giving written notice of exercise to us specifying the number of shares of common stock to be purchased. The notice must be accompanied by payment in full of the purchase price, either in cash or, if provided in the agreement, in our securities or in combination of the two.





Generally, stock options granted under the plan may not be transferred other than by will or by the laws of descent and distribution and all stock options are exercisable during the holder’s lifetime, or in the event of legal incapacity or incompetency, the holder’s guardian or legal representative. However, a holder, with the approval of the board or committee, may transfer a non-qualified stock option by gift to a family member of the holder, by domestic relations order to a family member of the holder or by transfer to an entity in which more than 50% of the voting interests are owned by family members of the holder or the holder, in exchange for an interest in that entity.





Generally, if the holder is an employee, no stock options granted under the plan may be exercised by the holder unless he or she is employed by us or a subsidiary of ours at the time of the exercise and has been so employed continuously from the time the stock options were granted. However, in the event the holder’s employment is terminated due to disability, the holder may still exercise his or her vested stock options for a period of 12 months or such other greater or lesser period as the board or committee may determine, from the date of termination or until the expiration of the stated term of the stock option, whichever period is shorter. Similarly, should a holder die while employed by us or a subsidiary of ours, his or her legal representative or legatee under his or her will may exercise the decedent holder’s vested stock options for a period of 12 months from the date of his or her death, or such other greater or lesser period as the board or committee may determine or until the expiration of the stated term of the stock option, whichever period is shorter. If the holder’s employment is terminated due to normal retirement, the holder may still exercise his or her vested stock options for a period of 12 months from the date of termination or until the expiration of the stated term of the stock option, whichever period is shorter. If the holder’s employment is terminated for any reason other than death, disability or normal retirement, the stock option will automatically terminate, except that if the holder’s employment is terminated without cause, then the portion of any stock option that is vested on the date of termination may be exercised for the lesser of three months after termination of employment, or such other greater or lesser period as the board or committee may determine but not beyond the balance of the stock option’s term.





Stock Appreciation Rights .  Under the plan, stock appreciation rights may be granted to participants who have been, or are being, granted stock options under the plan as a means of allowing the participants to exercise their stock options without the need to pay the exercise price in cash. In conjunction with non-qualified stock options, stock appreciation rights may be granted either at or after the time of the grant of the non-qualified stock options. In conjunction with incentive stock options, stock appreciation rights may be granted only at the time of the grant of the incentive stock options. A stock appreciation right entitles the holder to receive a number of shares of common stock having a fair market value equal to the excess fair market value of one share of common stock over the exercise price of the related stock option, multiplied by the number of shares subject to the stock appreciation rights. The granting of a stock appreciation right will not affect the number of shares of common stock available for awards under the plan. The number of shares available for awards under the plan will, however, be reduced by the number of shares of common stock acquirable upon exercise of the stock option to which the stock appreciation right relates.





Restricted Stock .  Under the plan, shares of restricted stock may be awarded either alone or in addition to other awards granted under the plan. The board or committee determines the persons to whom grants of restricted stock are made, the number of shares to be awarded, the price if any to be paid for the restricted stock by the person receiving the stock from us, the time or times within which awards of restricted stock may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the restricted stock awards.





27




Restricted stock awarded under the plan may not be sold, exchanged, assigned, transferred, pledged, encumbered or otherwise disposed of, other than to us, during the applicable restriction period. In order to enforce these restrictions, the plan requires that all shares of restricted stock awarded to the holder remain in our physical custody until the restrictions have terminated and all vesting requirements with respect to the restricted stock have been fulfilled. Other than regular cash dividends and other cash equivalent distributions as we may designate, pay or distribute, we will retain custody of all distributions made or declared with respect to the restricted stock during the restriction period. A breach of any restriction regarding the restricted stock will cause a forfeiture of the restricted stock and any retained distributions. Except for the foregoing restrictions, the holder will, even during the restriction period, have all of the rights of a stockholder, including the right to receive and retain all regular cash dividends and other cash equivalent distributions as we may designate, pay or distribute on the restricted stock and the right to vote the shares.





Other Stock-Based Awards .  Under the plan, other stock-based awards may be granted, subject to limitations under applicable law, that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of common stock, as deemed consistent with the purposes of the plan. These other stock-based awards may be in the form of purchase rights, shares of common stock awarded that are not subject to any restrictions or conditions, convertible or exchangeable debentures or other rights convertible into shares of common stock and awards valued by reference to the value of securities of, or the performance of, one of our subsidiaries. These other stock-based awards may include performance shares or options, whose award is tied to specific performance criteria. These other stock-based awards may be awarded either alone, in addition to, or in tandem with any other awards under the plan or any of our other plans.





Accelerated Vesting and Exercisability .  If any one person, or more than one person acting as a group, acquires the ownership of stock of the company that, together with the stock held by such person or group, constitutes more than 50% of the total fair market value or combined voting power of the our stock, and our board of directors does not authorize or otherwise approve such acquisition, then the vesting periods of any and all stock options and other awards granted and outstanding under the plan shall be accelerated and all such stock options and awards will immediately and entirely vest, and the respective holders thereof will have the immediate right to purchase and/or receive any and all common stock subject to such stock options and awards on the terms set forth in the plan and the respective agreements respecting such stock options and awards. An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which we acquire our stock in exchange for property is not treated as an acquisition of stock.





The committee may, in the event of an acquisition by any one person, or more than one person acting as a group, together with acquisitions during the 12-month period ending on the date of the most recent acquisition by such person or persons, of assets from the company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of our assets immediately before such acquisition or acquisitions, or if any one person, or more than one person acting as a group, acquires the ownership of our stock that, together with the stock held by such person or group, constitutes more than 50% of the total fair market value or combined voting power of our stock, which has been approved by our board of directors, (i) accelerate the vesting of any and all stock options and other awards granted and outstanding under the plan, or (ii) require a holder of any award granted under the plan to relinquish such award to us upon the tender by us to the holder of cash in an amount equal to the repurchase value of such award. For this purpose, gross fair market value means the value of the assets of the company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.





Notwithstanding any provisions of the plan or any award granted thereunder to the contrary, no acceleration shall occur with respect to any award to the extent such acceleration would cause the plan or an award granted thereunder to fail to comply with Section 409A of the Code.





Repurchases.   Unless otherwise provided in the grant of an award, the board or committee may, in the event of a corporate transaction that has been approved by our board of directors, require a holder of any award granted under the plan to relinquish the award to us upon payment by us to the holder of cash in an amount equal to the fair market value of the award.





Award Limitation.   No participant may be granted awards for more than 100,000 shares in any calendar year.





Other Limitations.   The board or committee may not modify or amend any outstanding option or stock appreciation right to reduce the exercise price of such option or stock appreciation right, as applicable, below the exercise price as of the date of grant of such option or stock appreciation right. In addition, no option or stock appreciation right may be granted in exchange for, or in connection with, the cancellation or surrender of an option or stock appreciation right or other award having a higher exercise price.





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ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.





The following table sets forth information regarding the beneficial ownership of our common stock as of March 24, 2011 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 of 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 Owner(1)

Amount of

Beneficial Ownership


Approximate

Percentage of

Outstanding

Common StockEric J. Watson(2)


18,381,148
(3)


84.5
%Kerry Kennedy(4)


60,000
(5)


*Robert B. Hersov(6)


60,000
(5)


*Richard Y. Roberts(7)


60,000
(5)


*Edward Hanson(8)


60,000
(5)


*Richard Watson


0



*Pine River Capital Management L.P.(9)


11,169,895
(10)


36.7
%Jonathan J. Ledecky(11)


4,500,000
(123)


20.7
%Magnetar Financial LLC


3,734,289
(13)


16.0
%President and Fellows of Harvard College(14)


2,961,400
(15)


13.3
%Citigroup Inc. (16)


200,000
(17)


1.0
%The Goldman Sachs group, Inc.(18)


1,067,929
(19)


5.2
%All directors and executive officers as a group (6 individuals)


18,621,148
(20)


85.3
%










*
Less than one percent.





(1)
Unless otherwise indicated, the business address of each of the individuals is 1431 N. Jones Plantation Road Millen, Georgia 30442.





(2)
Mr. Watson’s business address is Level 9, 68 Shortland Street, P.O. Box 91269, Auckland, New Zealand.





(3)
Includes (i) 15,881,148 shares of common stock held by Cullen Holdings and (ii) 2,500,000 shares of common stock issuable upon exercise of warrants held by Mr. Watson.  Does not include 6,630,000 warrants held by Summit Trust that are not exercisable and may not become exercisable within 60 days.





(4)
Ms. Kennedy’s business address is c/o Robert F. Kennedy Center, 1367 Connecticut Avenue N.W., Suite 200, Washington, D.C. 20036.





(5)
Does not include 60,000 shares of common stock issuable upon exercise of warrants that are not exercisable and may not become exercisable within 60 days.





(6)
Mr. Hersov’s business address is NetJets Europe, Ltd., Grundstrasse 12, 6343 Rotkreuz, Switzerland.




(7)
Mr. Roberts’ business address is Roberts, Raheb & Gradler, 805 15th Street, NW, Suite 1101, Washington, DC 20005.





(8)
Mr. Hanson’s business address is c/o Edward Hanson, 22 Bruton Street, Third Floor, London W1J 6QE, UK.





(9)
The business address of Pine River Capital Management L.P. is 601 Carlson Parkway, Suite 330, Minnetonka, MN 55305.





(10)
Includes (i) 9,256,483 shares of common stock issuable upon the exercise of warrants beneficially owned by Nisswa Acquisition Master Fund Ltd. and (ii) 1,830,705 shares of common stock issuable upon the exercise of warrants beneficially owned by Nisswa Fixed Income Master Fund Ltd.  Pine River Capital Management L.P., as the investment manager of each of the foregoing funds, and Brian Taylor, as the general partner of Pine River Capital Management L.P., may be deemed to beneficially own all such shares.  Each of Mr. Taylor and the foregoing entities has shared power to vote and dispose of the shares beneficially owned by them.  The foregoing information was derived from a Schedule 13D filed on November 3, 2009.




29




(11)
Mr. Ledecky’s business address is 970 West Broadway, PMB 402, Jackson, WY 83001.





(12)
Includes (i) 600,000 shares of common stock held by Hat Tricks LLC, an affiliate of Mr. Ledecky, and (ii) 2,500,000 shares of common stock issuable upon exercise of warrants held by Mr. Ledecky.  Does not include 600,000 warrants held by Hat Tricks LLC and 6,630,000 warrants held by Mr. Ledecky that are not exercisable and may not become exercisable within 60 days.





(13)
Magnetar Financial LLC, Magnetar Capial Partners LP, Supernova Management LLC, and Alec N. Litowitz may be deemed the beneficial owner of the shares, of which 3,295,510 are obtainable upon the exercise of warranst held for the account of Magnetar Capital Master Fund and 438,779 are obtainable upon the exercise of warrants held for the account of Hipparchus Master Fund, Ltd.  Magnetar Financial LLC’s business address is 1603 Orrington Avenue, 13thFloor, Evanston, Illinois 60201.  The foregoing information was derived from a Schedule 13G filed on February 10, 2011.





(14)
The business address of the President and Fellows of Harvard College is c/o Harvard Management Company, Inc., 600 Atlantic Avenue, Boston, MA 02210.





(15)
Includes 2,961,400 shares of common stock issuable upon the exercise of warrants.   The President and Fellows of Harvard College have sole power to vote and dispose of such shares.  The foregoing information was derived from a Schedule 13G filed on November 10, 2009.





(16)
The business address of the Fortress Investment Group LLC is 1345 Avenue of the Americas, 46thFloor, New York, NY 10105, Attention: Michael Cohn.




(17)
Citigroup Inc.’s business address is 399 Park Avenue, New York, New York 10043.





(18)
This information was derived from a Schedule 13G filed on February 8, 2010.





(19)
The business address of Goldman, Sachs & Co. is 85 Broad Street, New York, New York 10004.





(20)
Represents shares beneficially owned by certain operating units of The Goldman Sachs Group,  Inc. and its subsidiaries and affiliates.  The foregoing information was derived from a Schedule 13G filed on February 10, 2011.





(21)
Includes 2,500,000 shares of common stock issuable upon exercise of warrants that became exercisable upon consummation of the Merger. Does not include 6,810,000 shares of common stock issuable upon exercise of warrants that are not exercisable and may not become exercisable within 60 days.




Prior to Triplecrown’s initial public offering (“IPO”), Triplecrown’s officers, directors and stockholders prior to such IPO (“Triplecrown Founders”) acquired 13,800,000 units of Triplecrown, representing 13,800,000 shares of common stock of Triplecrown and 13,800,000 warrants to purchase shares of common stock of Triplecrown.  All of these securities were placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent.  The securities were to be released from escrow one year from the consummation of a business combination, except that they were to be released earlier than this date if (i) Triplecrown’s common stock had a last sales price equal to or exceeding $13.75 per unit for any 20 trading days within any 30-trading day period or (ii) Triplecrown consummated a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property.  In connection with the Merger, the Triplecrown Founders had cancelled an aggregate of 11,260,000 shares of our common stock that they received in exchange for 11,260,000 of their shares upon consummation of the Merger. The remaining 2,540,000 shares that they received, as well as all of the warrants that they received in exchange for their warrants, continue to be held in escrow pursuant to the original terms of the escrow agreement.  The shares and warrants were released on October 22, 2010 in accordance with the terms of the escrow agreement.




Equity Compensation Plan Information
 
 The following table gives the information about common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of December 31, 2010.




30




Plan Category

Number of securities to

be issued upon exercise

of outstanding options,

warrants and rights

(a)


Weighted-average

exercise price of

outstanding

options, warrants

and rights

(b)


Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

column (a))

(c)Equity compensation plans approved by security holders


2,405,914



–



2,405,914Equity compensation plans not approved by security holders


–



–



–Total


2,405,914



–



2,405,914





ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.





Prior to Triplecrown’s IPO, the Triplecrown Founders acquired 13,800,000 units of Triplecrown, representing 13,800,000 shares of common stock of Triplecrown and 13,800,000 warrants to purchase shares of common stock of Triplecrown for an aggregate purchase price of $25,000. All of these securities were placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent. The securities were to be released from escrow one year from the consummation of a business combination, except that they were to be released earlier than this date if (i) Triplecrown’s common stock had a last sales price equal to or exceeding $13.75 per unit for any 20 trading days within any 30-trading day period or (ii) Triplecrown consummated a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property. In connection with the Merger, the Triplecrown Founders had cancelled an aggregate of 11,380,000 shares of our common stock that they acquired when their 11,380,000 shares of Triplecrown common stock were converted into shares of our common stock upon consummation of the Merger. The remaining 2,420,000 shares that they acquired (the founders’ shares), as well as all of the warrants that they received in exchange for their warrants (the founders’ warrants), continue to be held in escrow pursuant to the original terms of the escrow agreement. The shares and warrants were released on October 22, 2010 in accordance with the terms of the escrow agreement.





In connection with the closing of the IPO, Triplecrown sold 2,500,000 warrants (the sponsors’ warrants) to each of Eric J. Watson and Jonathan J. Ledecky, Triplecrown’s president and secretary, at a purchase price of $1.00 per warrant. These purchases took place on a private placement basis simultaneously with the consummation of the IPO. If we call our warrants for redemption, the sponsors’ warrants are not redeemable so long as such warrants are held by Messrs. Watson, Ledecky or their affiliates, including any permitted transferees.





The holders of the majority of the founders’ shares and founders’ warrants (or underlying shares) and the holders of the majority the sponsors’ warrants (or underlying shares) each will be entitled to make up to two demands that we register such shares or warrants (or underlying shares) pursuant to a registration rights agreement entered into with Triplecrown in connection with the IPO. The holders of the majority of the founders’ shares and founders’ warrants can elect to exercise these registration rights at any time. The holders of a majority of the sponsors’ warrants (or underlying shares) can elect to exercise these registration rights at any time. In addition, these holders have certain “piggy-back” registration rights on registration statements filed subsequent to such date. We will bear the expenses incurred in connection with the filing of any such registration statements.





On August 30, 2009, Cullen Holdings, the former holder of all of the common stock of Cullen Agritech which is beneficially owned and controlled by Eric J. Watson, contributed 100 shares of Natural Dairy to Cullen Agritech. As a result of the contribution, Natural Dairy became a wholly-owned subsidiary of Cullen Agritech.





Effective September 1, 2009, Dr. Richard Watson became an employee of Natural Dairy pursuant to an employment agreement entered on August 31, 2009, which was amended in 2010 and 2011. Dr. Watson is the half-brother of Eric Watson.





On September 3, 2009, Cullen Agritech entered into an agreement with Cullen Investments Limited, Hart, Natural Dairy and Dr. Watson whereby the parties assigned the rights to certain intellectual property, including the proprietary farming system, to Cullen Agritech upon consummation of the Merger.





31


Upon completion of the Merger, Cullen Holdings was issued 15,881,148 shares of our common stock (valued at $155 million, or $9.76 per share) for its interest in Cullen Agritech.
 
 In connection with the Merger, Natural Dairy and Triplecrown entered into a land purchase contract with Grimsley LLC on June 27, 2009, as amended, to purchase 3,618 acres of farmland in the State of Georgia. A deposit in the aggregate amount of approximately $1.7 million was made and the parties intended to close on the purchase contract on September 30, 2009. From September 30, 2009 to October 16, 2009, Natural Dairy was waiting for the seller of the land to satisfy its closing conditions which were satisfied and the closing on the sale of the property occurred on October 16, 2009.


Upon the closing of the Merger, we issued to Cullen Holdings a promissory note in the amount of $6,853,918, representing part of the purchase price of the land. The note was to be repaid as soon as practicable but no later than January 20, 2010 (90 days from the date of issuance). This amount was to be repaid to Cullen Holdings at closing of the Merger but sufficient funds were not available. On March 30, 2010, the parties amended the terms of the promissory note to extend the maturity date to January 20, 2011. On March 2, 2011, the parties further amended the terms of the promissory note to extend the maturity date to January 20, 2012.The promissory note accrues interest at the rate of 8% per annum.  As of December 31, 2010, the Company had repaid Cullen Holdings $6,650,000 of the note, consisting of $6,436,998 of principal and $213,002 of interest, and $593,629 of the principal remained outstanding.





On June 1, 2010, we entered into an agreement with Hart, an affiliate of Richard Watson, for the lease 120 acres of our property, from June 1, 2010 through December 31, 2010. This area of land consists of 100 irrigated acres and 20 non-irrigated acres. The agreement calls for Hart to pay, in advance, $175 per acre of irrigated land and $50 per acre of non-irrigated land. We received $18,500 for the lease of this land as of December 31, 2010.





Related party policy





Our Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interest, except under guidelines approved by the board of directors (or the audit committee). Related-party transactions are defined as transactions in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (ii) we or any of our subsidiaries is a participant and (iii) any (a) executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of our common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.





Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. No director may participate in the approval of any transaction in which he is a related party, but that director is required to provide the audit committee with all material information concerning the transaction. Additionally, we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions. These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, or officer.





Independence of Directors





We adhere to the rules of the NYSE Amex in determining whether a director is independent. As a result, our board of directors consults with its counsel to ensure that the board’s determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. The NYSE Amex requires that a majority of the board must be composed of “independent directors,” which is defined generally as a person other than an officer of a company, who does not have a relationship with the company that would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Consistent with these considerations, our board of directors has affirmatively determined that each of Robert B. Hersov, Kerry Kennedy, Richard Y. Roberts and Edward Hanson will be our independent directors.





32




PART IV





ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.





The firm of Marcum LLP acts as our independent registered public accounting firm.  The following is a summary of fees paid to Marcum LLP for services rendered.





Audit Fees





During the fiscal year ended December 31, 2010 and 2009, audit fees for our independent registered public accounting firm were $117,500 and $75,000, respectively.





Audit-Related Fees





We did not receive audit-related services that are not reported as audit fees for the fiscal year ended December 31, 2010 and 2009.





Tax Fees





During the fiscal year ended December 31, 2010 and 2009, we were billed $4,600 and $2,000, respectively for tax services by our independent registered public accounting firm.





All Other Fees





During the fiscal year ended December 31, 2010 and 2009, there were no fees billed for services provided by our independent registered public accounting firm other than those set forth above.





Audit Committee Approval





Our audit committee pre-approved all the foregoing services.  In accordance with Section 10A(i) of the Securities Exchange Act of 1934, before we engage our independent accountant to render audit or non-audit services on a going-forward basis, the engagement will be approved by our audit committee.





ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.





(a)
The following Exhibits are filed as part of this report.




Exhibit

No.

Description2.1.

Agreement and Plan of Reorganization, dated as of September 4, 2009, by and among Triplecrown Acquisition Corp., Cullen Agricultural Holding Corp., Cullen Agricultural Technologies Inc., Triplecrown Merger Sub and Cullen Inc. Holdings Ltd.(1)3.1

Amended and Restated Certificate of Incorporation of Cullen Agricultural Holding Corp.(1)3.2

Bylaws of Cullen Agricultural Holding Corp.(1)4.1

Form of Warrant Agreement between Continental Stock Transfer & Trust Company and Triplecrown Acquisition Corp.(2)4.2

Specimen Common Stock Certificate of Cullen Agricultural Holding Corp.(3)4.3

Specimen Warrant Certificate of Cullen Agricultural Holding Corp.(3)4.4

Amendment No. 1 to Warrant Agreement between Continental Stock Transfer & Trust Company, Triplecrown Acquisition Corp. and Cullen Agricultural Holding Corp.(1)10.1

Form of Securities Escrow Agreement between Triplecrown Acquisition Corp., Continental Stock Transfer & Trust Company and the Triplecrown Founders.(2)10.2

Form of Lockup.(1)




33




10.3

Employment Agreement between Natural Dairy, Inc. and Dr. Richard Watson.(1)10.4

Deed of Acknowledgement relating to Intellectual Property.(3)10.5

Strategic Cooperation Agreement between Cullen Agricultural Technologies, Inc. and New Zealand Agritech, Inc.(3)10.6

Form of Registration Rights Agreement among Triplecrown Acquisition Corp. and the Triplecrown Founders.(2)10.7

Contract for Sale and Purchase of Grimsley Farm.(4).10.8

Closing Date Extension Agreement for Contract for Sale and Purchase of Grimsley Farm.(4)10.9

Second Closing Date Extension Agreement for Contract for Sale and Purchase of Grimsley Farm.(4)10.10

Escrow Agreement by and among Cullen Agricultural Holding Corp., Cullen Inc. Holdings Ltd. and Continental Stock Transfer & Trust Company.(1)10.11

Form of Promissory Note issued to Cullen Inc. Holdings Ltd.(5)10.12

Sales Contract with Landee Acres, LLC(6)10.13

Sales Contract with Benny Mims(6)10.14

Sales Contract with Don and Alisa Burke(6)14.1

Form of Code of Ethics of Cullen Agricultural Holding Corp.(3)21.1

Subsidiaries of Cullen Agricultural Holding Corp.31

Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232

Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 200299.3

Audit Committee Charter.(5)99.4

Nominating Committee Charter.(5)











(1)
Incorporated by reference to the Cullen Agricultural Holding Corp.’s Registration Statement on Form S-4 (File No. 333-161773) filed on September 8, 2009.





(2)
Incorporated by reference to Amendment No. 2 to Triplecrown’s Registration Statement on Form S-1 (File Nos. 333-144523 and 333-146850) filed on September 24, 2007.





(3)
Incorporated by reference to Amendment No. 1 to Cullen Agricultural Holding Corp.’s Registration Statement on Form S-4 (File No. 333-161773) filed on September 10, 2009.





(4)
Incorporated by reference to Amendment No. 3 to Cullen Agricultural Holding Corp.’s Registration Statement on Form S-4 (File No. 333-161773) filed on September 10, 2009.





(5)
Incorporated by reference to Cullen Agricultural Holding Corp.’s Current Report on Form 8-K, filed October 22, 2009.





(6)
Incorporated by reference to Cullen Agricultural Holding Corp.’s Registration Statement on Form S-1, filed October 27, 2010.





34




SIGNATURES





Pursuant to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 24th day of March 2011.





CULLEN AGRICULTURAL HOLDING  CORP.By:
/s/ Eric WatsonEric WatsonChairman of the Board, Chief Executive Officer, Secretary,

and Treasurer (Principal Executive Officer and

Principal Financial and Accounting Officer)





In accordance with 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

Title

Date/s/ Eric J. Watson

Chairman of the Board, Chief Executive Officer,

March 24, 2011Eric J. Watson

Secretary, and Treasurer (PrincipalExecutive Officer and Principal Financial and Accounting Officer)/s/ Richard Watson

Director

March 24, 2011Richard WatsonDirectorRobert B. HersovDirectorKerry Kennedy/s/ Richard Y. Roberts

Director

March 24, 2011Richard Y. Roberts/s/ Edward Hanson

Director

March 24, 2011Edward Hanson




35





Cullen Agricultural Holding Corp. and Subsidiaries


(a development stage corporation)





CONTENTS











PageFINANCIAL STATEMENTS
F-1Report of independent registered public accounting firm
F-2Consolidated Financial Statements:
F-3Balance Sheets as of December 31, 2010 and as of December 31, 2009
F-3Statement of Operations for the year ended December 31, 2010, for the period June 3, 2009 (inception) through December 31, 2009 and for the period from June 3, 2009 (inception) through December 31, 2010
F-4Statement of Changes in Stockholders’ Equity for the period from June 3, 2009 (inception) through December 31, 2010
F-5Statement of Cash Flows for the year ended December 31, 2010, for the period June 3, 2009 (inception) through December 31, 2009 and for the period from June 3, 2009 (inception) through December 31, 2010
F-6NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-7 – F-17





F-1




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Audit Committee of the


Board of Directors and Stockholders


of Cullen Agricultural Holding Corp. and Subsidiaries





We have audited the accompanying consolidated balance sheet of Cullen Agricultural Holding Corp. and Subsidiaries (a development stage company) (the “Company”) as of December 31, 2010 and 2009  and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2010 and for the periods from June 3, 2009 (inception) through December 31, 2010 and 2009 .  These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 audit to obtain reasonable assurance about whether the consolidated 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.





In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Cullen Agricultural Holding Corp. and Subsidiaries (a development stage 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 for the periods from June 3, 2009 (inception) through December 31, 2010 and 2009  in conformity with accounting principles generally accepted in the United States of America.





The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company is in the development stage, has incurred a net loss of $4,747,053 for the period from June 3, 2009 (inception) through December 31, 2010 and to date has not generated any revenues. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ Marcum LLP


Melville, New York


March 24, 2011





F-2




Item 1 – Financial Statements
 Cullen Agricultural Holding Corp. and Subsidiaries
 (a development stage company)
 Consolidated Balance Sheets
 
 December 31, 2010


December 31, 2009ASSETSCURRENT ASSETSCash


154,028



1,292,204Rent receivable


—



7,461Cattle held for sale


286,588



—Inventory


25,002



—Prepaid expenses and other current assets


34,056



86,083Federal tax receivable


—



1,349,969Total Current Assets


499,674



2,735,717PROPERTY, PLANT AND EQUIPMENT, Net


2,986,540



9,119,612TOTAL ASSETS

$
3,486,214


$
11,855,329LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESAccrued expenses


174,895



508,380Accrued settlement fee


550,000



—Due to affiliates


10,778



28,055Current portion of note payable


9,605



—Total Current Liabilities


745,278



536,435Mortgage payable, related party


593,629



5,867,575Non current portion of note payable


30,515



—TOTAL LIABILITIES


1,369,422



6,404,010STOCKHOLDERS' EQUITYPreferred stock - $0.0001 par value; authorized 1,000,000 shares; no shares issued and outstanding


—



—Common stock, par value $0.0001; 200,000,000 shares authorized; 19,630,714 and 19,247,311 shares issued and outstanding, respectively


1,964



1,925Additional paid in capital


6,861,881



6,061,920Deficit accumulated during the development stage


(4,747,053
)


(612,526
)TOTAL STOCKHOLDERS' EQUITY


2,116,792



5,451,319TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$
3,486,214


$
11,855,329
 
 The accompanying notes are an integral part of these consolidated financial statements.
  F-3
  Cullen Agricultural Holding Corp. and Subsidiaries
 (a development stage company)
 Consolidated Statement of Operations
 
 For the period from


For the period fromJune 3, 2009


June 3, 2009For the year ended


(inception) through


(inception) throughDecember 31, 2010


December 31, 2009


December 31, 2010Revenues

$
—


$
—


$
—General and administrative expenses


1,592,262



524,924



2,117,186LOSS FROM OPERATIONS


(1,592,262
)


(524,924
)


(2,117,186
)OTHER INCOME (EXPENSE)Interest expense - related party


(313,282
)


(111,359
)


(424,641
)Interest expense - note payable


(733
)


—



(733
)Legal settlement


(550,000
)


—



(550,000
)Impairment loss on property, plant and equipment


(963,172
)


—



(963,172
)Loss on sale of land and equipment


(722,209
)


—



(722,209
)Other income, net


8,421



24,077



32,498TOTAL OTHER EXPENSE


(2,540,975
)


(87,282
)


(2,628,257
)LOSS BEFORE INCOME TAXES


(4,133,237
)


(612,206
)


(4,745,443
)INCOME TAXES


1,290



320



1,610NET LOSS

$
(4,134,527
)

$
(612,526
)

$
(4,747,053
)Weighted average number of common shares outstanding – basic and diluted


19,340,230



19,247,311Basic and diluted net loss per share

$
(0.21
)

$
(0.03
)
 
 The accompanying notes are an integral part of these consolidated financial statements.
  F-4
 
 Cullen Agricultural Holding Corp. and Subsidiaries
 (a development stage company)
 Consolidated Statement of Changes in Stockholders’ Equity
 
 For the Period From June 3, 2009 (inception) through December 31, 2010
 
 Deficit accumulatedCommon Stock


Additional


during theShares


Amount


Paid-in Capital


development stage


TotalBALANCE - Beginning June 3, 2009 (inception)


—


$
—


$
—


$
—


$
—Issuance of stock to initial stockholder – 100 shares at$0.0001 per share


100



—



100



—



100Issuance of stock due to Merger – 19,247,211 shares at $0.0001 per share on October 22, 2009


19,247,211



1,925



6,061,820



—



6,063,745Net loss for the period from June 3, 2009 (inception) through December 31, 2009


—



—



—



(612,526
)


(612,526
)BALANCE - December 31, 2009


19,247,311



1,925



6,061,920



(612,526
)


5,451,319Issuance of stock at $5.95 per share


8,403



1



49,999



—



50,000Issuance of stock at $2.00 per share


375,000



38



749,962



—



750,000Net loss for the year ended December 31, 2010


—



—



—



(4,134,527
)


(4,134,527
)BALANCE - December 31, 2010


19,630,714


$
1,964


$
6,861,881


$
(4,747,053
)

$
2,116,792
 
 The accompanying notes are an integral part of these consolidated financial statements.
  F-5
 
 Cullen Agricultural Holding Corp. and Subsidiaries
 
 (a development stage company)
 
 Consolidated Statements of Cash Flows
 
 For the period from


For the period fromJune 3, 2009


June 3, 2009For the year ended


(inception) through


(inception) throughDecember 31, 2010


December 31, 2009


December 31, 2010Cash Flows from Operating ActivitiesNet loss


(4,134,527
)


(612,526
)


(4,747,053
)Adjustments to reconcile net loss to net cash used in operating activities:Loss on sale of property and equipment


722,209



-



722,209Depreciation and amortization


37,018



2,639



39,657Impairment loss on property, plant and equipment


963,172



-



963,172Changes in operating assets and liabilities:Rent receivable


7,461



(7,461
)


-Cattle held for sale


(286,588
)


-



(286,588
)Inventory


(25,002
)


-



(25,002
)Prepaid expenses and other current assets


52,027



(86,083
)


(34,056
)Federal tax receivable


1,349,969



-



1,349,969Accrued expenses


(106,776
)


466,558



359,782Accrued settlement fee


550,000



-



550,000TOTAL ADJUSTMENTS


3,263,490



375,653



3,639,143NET CASH USED IN OPERATING ACTIVITIES


(871,037
)


(236,873
)


(1,107,910
)Cash Flows from Investing ActivitiesPurchases of property and equipment


(280,080
)


(561,769
)


(841,849
)Proceeds from sale of property and equipment


4,730,873



-



4,730,873NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES


4,450,793



(561,769
)


3,889,024Cash Flows from Financing ActivitiesRepayment of mortgage payable to related party


(5,450,655
)


(986,343
)


(6,436,998
)Repayment to affiliates


(227,314
)


19,434



(207,880
)Advances from affiliates


210,037



-



210,037Cash acquired in reverse merger


-



3,057,755



3,057,755Proceeds from issuance of common stock


750,000



-



750,000NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES


(4,717,932
)


2,090,846



(2,627,086
)NET (DECREASE) INCREASE IN CASH


(1,138,176
)


1,292,204



154,028CASH - Beginning


1,292,204



-



-CASH - Ending


154,028



1,292,204



154,028SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for:Interest

$
376,054


$
13,657


$
389,711Taxes


-



-



-Non-cash investing and financing activities:Acquisition of property, plant and equipment through issuance of debt

$
40,120



-


$
40,120Acquisition of land through issurance of debt


-



-



-Issuance of common stock to settle accrued expenses

$
50,000



-


$
50,000Conversion of interest payable into mortgage payable to related party

$
176,709



-


$
176,709On October 22, 2009, the Company completed its reverse merger and recapitalization by acquiring certain assets and assuming certain liabilities:Tax refund receivable


-


$
1,349,969


$
1,349,969Land and land improvements


-


$
8,560,482


$
8,560,482Loan payable


-


$
(6,853,918
)

$
(6,853,918
)Accrued expenses


-


$
(41,822
)

$
(41,822
)Due to affiliates


-


$
(8,621
)

$
(8,621
)Issuance of stocks


-


$
(1,925
)

$
(1,925
)Net non-cash recapitalization


-


$
3,004,165


$
3,004,165
 
 The accompanying notes are an integral part of these consolidatedfinancial statements.
  F-6
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 Note 1.   Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration
 
 Organization and Nature of Operations
 
 Cullen Agricultural Holding Corp. (the “Company”, “we”, “us” or “our”) was incorporated in Delaware on August 27, 2009.  We are a development stage company.  Our principal focus is to use our intellectual property in forage and animal sciences to improve agricultural yields.  To date, we have not generated any revenue and will not do so until we have sufficient funds to implement our business plan.
 
 We were formed as a wholly-owned subsidiary of Triplecrown Acquisition Corp. (“Triplecrown”), a blank check company.  CAT Merger Sub, Inc. (“Merger Sub”), a Georgia corporation, was incorporated as our wholly-owned subsidiary on August 31, 2009.  We were formed in order to allow Triplecrown to complete a business combination (the “Merger”) with Cullen Agricultural Technologies, Inc. (“Cullen Agritech”), as contemplated by the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of September 4, 2009, as amended, among Triplecrown, the Company, Merger Sub, Cullen Agritech and Cullen Inc. Holdings Ltd. (“Cullen Holdings”).  Cullen Agritech was formed on June 3, 2009.  Cullen Agritech’s primary operations are conducted through Natural Dairy Inc., a wholly owned subsidiary of Cullen Agritech.  Cullen Holdings is an entity controlled by Eric J. Watson, our Chief Executive Officer, Secretary, Chairman of the Board and Treasurer and, prior to the Merger, was the holder of all of the outstanding common stock of Cullen Agritech.
 
 Pursuant to the Merger, (i) Triplecrown merged with and into the Company with the Company surviving as the new publicly-traded corporation and (ii) Merger Sub merged with and into Cullen Agritech with Cullen Agritech surviving as a wholly owned subsidiary of the Company.  As a result of the Merger, the former security holders of Triplecrown and Cullen Agritech became the security holders of the Company.  Thus, the Company became a holding company, operating through its wholly-owned subsidiary, Cullen Agritech.  The Merger was consummated on October 22, 2009.
 
 On October 22, 2009, $538,810,161 was held in Triplecrown’s trust account. Upon consummation of the Merger, the funds were disbursed as follows: $149,007,989 to stockholders who voted against the Merger and elected to convert their shares into a pro rata portion of the Triplecrown trust account (approximately $9.76 per share); $384,950,260  to the third parties who entered into stock purchase agreements with Triplecrown pursuant to which Triplecrown agreed to purchase such parties’ Triplecrown shares in connection with the Merger; $1,154,157 in fees paid to Victory Park Capital Advisors, LLC for the aggregation of shares from such third parties; the remaining $3,697,755 from Triplecrown’s trust account was received by the Company upon consummation of the Merger. Of this amount, $640,000 was used to pay expenses and fees associated with the transaction, resulting in net proceeds to the Company of $3,057,755. The net proceeds received by the Company were to be used for general working capital purposes.
 
 The Company has been in the process of attempting to obtain land development financing backed by the property it owns and operates to support its working capital needs and implement its business plan. However, due to the recent performance of similar types of farming operations in the region, as well as the general economic downturn, financial institutions have been unwilling to provide such financing. As a result, the Company has been unable to obtain the necessary funding to support the implementation of its business plan at this time. Accordingly, the Company is in the process of exploring all financing and strategic alternatives available to it, including the possibility of disposing of or leasing additional portions of its land in order to continue to support its working capital needs or alternatively to retire certain of its outstanding debt to reduce its interest obligations.
  F-7
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 Note 1.   Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration, continued
 
 Principles of Consolidation
 
 The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Cullen Agritech, including its wholly owned subsidiary, Natural Dairy Inc. All intercompany accounts and transactions have been eliminated in consolidation.
 
 Going Concern Consideration
 
 The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, the Company is a development stage company and has incurred a net loss of $4,747,053 for the period from June 3, 2009 (inception) through December 31, 2010, and has $154,028 of cash as of December 31, 2010. Additionally, upon the consummation of the Merger, the Company issued to Cullen Holdings a promissory note in the amount of $6,853,918, representing part of the purchase price of a certain piece of land to be used by the Company following the Closing (see Note 4 to the Company’s consolidated financial statements). This amount was to be repaid to Cullen Holdings at the consummation of the Merger but sufficient funds were not available.   The parties amended the terms of the promissory note to extend the maturity date to January 20, 2012.  The promissory note accrues interest at the rate of 8% per annum.  As of December 31, 2010, the Company had repaid Cullen Holdings $6,650,000 of the note, consisting of $6,436,998 of principal and $213,002 of interest, and $593,629 of the principal remained outstanding.
 
 To date, we have not generated any revenue and will not do so until we have sufficient funds to implement our business plan. We have been in the process of attempting to obtain land development financing backed by the property we own and operate to support our working capital needs and implement our business plan.  However, due to the recent performance of similar types of farming operations in the SE United States, as well as the general economic downturn, financial institutions have been unwilling to provide such financing.  As a result, the Company has been unable to obtain the necessary funding to support the implementation of its business plan at this time. In order to continue to support its working capital needs and retire certain of its outstanding debt, during 2010, the Company entered into contracts with unrelated third parties for the sale of approximately 2,000 acres or approximately 56% of the land the Company originally purchased.. A third party is also obligated to purchase approximately 500 acres by September 1, 2011. The Company continues to explore the disposition of the remaining 1,146 acres it owns which is not under contract. However, there is no assurance that the Company will be successful in such efforts.
 
 Additionally, the Company is in the process of exploring all financing and strategic alternatives available to it, including those unrelated to forage and animal sciences and farming systems which make up its current business plan in an effort to maximize shareholder value.  To this end, the Company has had preliminary discussions with potential merger candidates wishing to become publicly traded.  However, such discussions are only preliminary and no formal terms have been discussed or agreed to.  There is no assurance that the Company will be successful in any of such efforts.  If the Company is unable to secure additional financing or find another alternative, the Company will not have sufficient capital to implement its business plan and may be forced to suspend all operations until such time as capital or another alternative is available to it.  Until such time where the Company can dispose of the remaining land it currently owns or raise adequate financing to deploy its pasture based dairy and beef business plan, it has begun to utilize its pasture and general farming expertise to conduct various farming activities on the property. These activities include, but are not limited to, the growing of pasture to raise calves and the growing of corn for use as feed and sale to third parties.  The Company has sold portions of its unused land (as indicated above), reduced salaries paid to its employees and curtailed operations in order to raise capital and reduce operating expenses.
  F-8
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 Note 1.  Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration, continued
 
 Going Concern Consideration, continued
 
 These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern.
 
 Use of Estimates
 
 The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America ("GAAP”) 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 consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
 
 Cash
 
 The Company deems all highly liquid financial instruments purchased with an original maturity date of three months or less, to be cash equivalents.  At December 31, 2010 and December 31, 2009, there were no cash equivalents. Cash and cash equivalents are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each financial institution.  Cash balances maintained at financial institutions may, at times, exceed the FDIC limits.
 
 Inventory
 
 Inventory consists of feed inventory and investment in crops that are stated at lower of cost or market.  The Company capitalizes all direct and indirect costs until growing crops are harvested.  Harvested crops are reclassified to feed inventory until such crops are sold or used.  The related inventoried costs are recognized as cost of sale to provide an appropriate matching of expenses with the related revenue earned when the crops are sold.  Crops used to develop the Company’s animals are capitalized as part of the carrying value of such animal and are recognized as cost of sale when the animals are sold.  Feed inventory and investment in crops amounted to $7,677 and $17,325, respectively, as of December 31, 2010.
 
 Property, Plant and Equipment
 
 Property and equipment are stated at cost, net of accumulated depreciation. The Company charges repairs and maintenance items to expense, while major improvements and betterments are capitalized.
 
 Depreciation and amortization is provided on the straight-line method over the following estimated useful lives of the assets:
 
 Buildings

15 yearsMachinery and equipment

5 – 10 yearsTransportation equipment

5 yearsLand improvements

15 years
  F-9
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 
 Note 1.   Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration, continued
 
 Long-Lived Assets
 
 The Company accounts for its long-lived assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360 “Plant, Property and Equipment,” for purposes of determining and measuring impairment of its long-lived assets other than goodwill. The Company’s policy is to review the value assigned to its long lived assets to determine if they have been permanently impaired by adverse conditions which may affect the Company whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  If the Company identifies a permanent impairment such that the carrying amount of the Company’s long lived assets is not recoverable using the sum of an undiscounted cash flow projection, the impaired asset is adjusted to its estimated fair value, based on an estimate of future discounted cash flows which becomes the new cost basis for the impaired asset.  Considerable management judgment is necessary to estimate undiscounted future operating cash flows and fair values and, accordingly, actual results could vary significantly from such estimates.
 
 Loss Per Share
 
 The Company follows the provisions of FASB  ASC 260, “Earnings Per Share” (“ASC 260”). In accordance with ASC 260, earnings per common share amounts (“Basic EPS”) are computed by dividing earnings by the weighted average number of common shares outstanding for the period. Earnings per common share amounts, assuming dilution (“Diluted EPS”), gives effect to dilutive options, warrants, and other potential common stock outstanding during the period. ASC 260 requires the presentation of both Basic EPS and Diluted EPS on the face of the statements of operations. The effect of the Merger has been given retroactive application in the EPS calculation. At December 31, 2010 and 2009, there were 74,000,000 warrants outstanding that were not included in the calculation of diluted EPS because the effects of these securities would have been anti-dilutive.
 
 Basic earnings per share is calculated using the average number of common shares outstanding and diluted earnings per share is computed on the basis of the average number of common shares outstanding plus the effect of outstanding warrants using the “treasury stock method.”
 
 Income Taxes
 
 The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and establishes for all entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company's assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management's opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Company has identified its federal tax return and its state tax return in Georgia as "major" tax jurisdictions. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's consolidated financial statements. Since the Company was incorporated on June 3, 2009, the evaluation was performed for the 2009 and 2010 tax year. The Company believes that its income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position.
  F-10
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 Note 1.   Organization, Business Operations, Significant Accounting Policies and Going Concern Consideration, continued
 
 The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense.  There were no amounts accrued for penalties and interest as of or during the year ended December 31, 2010 or the period from June 3, 2009 (inception) through December 31, 2009.  The Company does not expect its uncertain tax position to change during the next twelve months.  Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.
 
 Recently Issued and Adopted Accounting Pronouncements
 
 In December 2009, FASB issued ASU 2009-17,Consolidations (Topic 810) Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities , which replaces the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. ASU 2009-17 also requires additional disclosures about an enterprise's involvement in variable interest entities. ASU 2009-17 is effective as of the beginning of each reporting entity's first annual reporting period that begins after November 15, 2009. The adoption of ASU 2009-17 did not have a material impact on its consolidated financial statements.
 
 Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the consolidated financial statements.
 
 Note 2 – Merger
 
 On September 4, 2009, the Company entered into the Merger Agreement. Parties to the Merger Agreement included the Company, Triplecrown, the Merger Sub, Cullen Agritech and Cullen Holdings (the “Parties”).  Pursuant to the Merger Agreement, the Parties (i) merged Triplecrown into the Company, with the Company being the surviving public entity and (ii) merged Merger Sub into Cullen Agritech, with Cullen Agritech being the surviving subsidiary of the Company.  The Merger was consummated on October 22, 2009.  As a result, the holders of common stock and warrants of Triplecrown received like securities of the Company, on a one-to-one basis, in exchange for their existing securities, except that 11,380,000 shares of the 13,800,000 shares of common stock owned by Triplecrown’s founding shareholders and directors were cancelled.  The shares of Cullen Agritech’s common stock were converted into 15,881,148 shares of the Company’s common stock as purchase consideration. Upon consummation of the Merger, the Company became the sole owner of Cullen Agritech’s common stock.
 
 In connection with the Merger, the stockholders of Triplecrown approved the amendment of certain terms of the Warrant Agreement, dated as of October 22, 2007. Specifically the holders of Triplecrown’s warrants agreed to increase the strike price of the warrants from $7.50 per share to $12.00 per share and to extend the expiration date to October 22, 2013. No compensation expense was recorded as a result of the modification to warrants.
 
 On October 22, 2009, the Merger was consummated (the “Closing”).  In connection with the transactions, Triplecrown entered into “forward contracts” to purchase approximately 39.4 million of the shares of its common stock sold in its initial public offering in privately negotiated transactions from stockholders who would otherwise have voted against the Merger for an aggregate purchase price of approximately $385 million.  The closing of such purchases was effected on the closing out of the funds that were held in Triplecrown’s trust account and were released as a result of the Merger.  In connection with such purchases, Triplecrown paid a fee to Victory Park Capital Advisors, LLC of $1,154,157 for purchasing an aggregate of approximately 15.5 million shares from stockholders who would otherwise have voted against the Merger.
  F-11
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 
 Note 2.   Merger, continued
 
 Upon completion of the Merger, Cullen Holdings was issued 15,881,148 shares of the Company’s common stock for its interest in Cullen Agritech. Of this amount, 1,588,114 shares were deposited in escrow to secure the indemnification obligations owed to Triplecrown under the Merger Agreement. Additionally, two consultants to Triplecrown were issued an aggregate of 455,000 shares of common stock of the Company.
 
 After giving effect to the Merger and the issuances to Triplecrown’s two consultants, as of October 22, 2009, 19,247,311 shares of the Company’s common stock were outstanding and 74,000,000 warrants, each to purchase one share of the Company’s common stock.
 
 The number of shares of common stock of the Company issued and outstanding upon consummation of the Merger on October 22, 2009 is summarized as follows:
 
 Triplecrown Public Shares outstanding prior to the Merger


55,200,000Triplecrown Founder shares


13,800,000Total Triplecrown shares outstanding prior to the Merger


69,000,000Common shares forfeited by Triplecrown Founders


(11,260,000
)Common shares forfeited by Triplecrown non-continuing directors


(120,000
)Triplecrown shares converted to a pro rata share portion of Triplecrown’s trust account (1)


(15,267,212
)Triplecrown shares purchased pursuant to stock purchase agreements (2)


(39,441,625
)Total Triplecrown shares outstanding immediately prior to the effective date of the Merger


2,911,163Share exchange ratio (1 to 1)

1:1Common shares issued in connection with the Merger


2,911,163Common shares issued as purchase consideration to Cullen Holdings


15,881,148Common shares issued to consultants of Triplecrown


455,000Total common shares outstanding at closing, October 22, 2009


19,247,311
 
 (1) Reflects the 15,267,212 Triplecrown shares, representing 27.66% of the shares sold in Triplecrown’s initial public offering, that were converted into a pro rata portion of the funds in the Triplecrown trust account in connection with the consummation of the Merger.
 
 Note 3 – Property, Plant and Equipment
 
 At December 31, 2010 and December 31, 2009, property, plant and equipment consisted of the following:
 
 December 31, 2010


December 31, 2009Land

$
2,623,214


$
8,445,606Buildings


66,099



185,375Machinery and equipment


154,229



6,170Website


3,328



3,328Land improvements

$
176,626


$
481,7723,023,496



9,122,251Less: Accumulated depreciation and amortization


36,956



2,639Property, plant and equipment, net

$
2,986,540


$
9,119,612
 
 Depreciation and amortization expense for the period from June 3, 2009 (inception) through December 31, 2010 was $39,657. For the year ended December 31, 2010 and for the period June 3, 2009 (inception) through December 31, 2009, depreciation and amortization expense was $37,018 and $2,639, respectively.
 
 During 2010, the Company assessed the recoverability of the carrying value of its property, plant and equipment.  The assessment resulted in an impairment charge of $963,172. This charge reflects the amounts by which the carrying values of these assets exceed their estimated fair values.
  F-12
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 
 Note 4.   Mortgage Payable – Related Party
 
 In connection with the Merger, Triplecrown and Natural Dairy entered into a contract to purchase a certain piece of land to be used by us following consummation of the Merger. The total purchase price of the land was $8,662,500. Triplecrown paid an initial deposit of $866,250 on the land. On August 10, 2009, Triplecrown, Natural Dairy and the seller of the land extended the closing date for the land purchase and Triplecrown paid an additional deposit on the land of $833,750, interest of $48,070 and a leasing fee to use the land of $3,518 for a total additional deposit of $885,338.  Natural Dairy closed on this contract and purchased the land on October 16, 2009.  The balance of the purchase price for such land was paid by Natural Dairy, which funds were advanced to it by Cullen Holdings.  Upon the Closing, we issued to Cullen Holdings a promissory note in the amount of $6,853,918, representing the part of the purchase price that was advanced by Cullen Holdings. This amount was to be repaid to Cullen Holdings at the Closing but sufficient funds were not available.  On March 30, 2010, the Company issued a new note in replacement of the existing note which was past due. The new promissory note is in the amount of $5,066,985 and accrues interest at 8% per annum and is due on January 20, 2011. In consideration of this extension, the Company granted to Cullen Holdings a mortgage on the land that is the subject of the promissory note. On March 2, 2011, the parties further amended the terms of the promissory note to extend the maturity date to January 20, 2012.  The promissory note accrues interest at the rate of 8% per annum.  As of December 31, 2010, the Company had repaid Cullen Holdings $6,650,000 of the note, consisting of $6,436,998 of principal and $213,002 of interest. For the year ended December 31, 2010 and for the period from June 3, 2009 (inception) through December 31, 2009, we incurred interest expense of $313,282 and $111,359 respectively, related to this note. At December 31, 2010 and December 31, 2009 mortgage payable to a related party consisted of $593,629 and $5,867,575, respectively.
 
 Note 5.   Other Income (Expense)
 
 During January 2010, the Company signed an Agreement with Battle Lumber Co., Inc. for the sale and removal of merchantable timber located on part of our property. During the year ended December 31, 2010, Battle Lumber Co. removed a portion of the timber and the Company recorded income $79,961,which is included in other income.
 
 In January 2010, the Company entered into an agreement with Canoochee River Plantation, LLC, pursuant to which the Company sold 340 of non irrigated land for $613,170. The Company estimates the original purchase price for this land to be $594,794 and has recorded a gain from the sale of this property of $6,321 which is included in other income, net during the year ended December 31, 2010.
 
 In June 2010, the Company entered into second agreement with Canoochee River Plantation, LLC, pursuant to which the Company sold 240 acres of land for $776,688. The Company estimates the original purchase price for this land to be $807,239 and has recorded a loss from the sale of this property of $53,489 which is included in other income, net during the year ended December 31, 2010.
 
 In September 2010, the Company entered into an agreement with Mossy Creek Plantation, LLC, pursuant to which the Company sold 95 acres of land for $170,244. The Company estimates the original purchase price for this land to be $ 165,192 and has recorded a loss from the sale of this property of $3,641 which is included in other income, net during the year ended December 31, 2010.
 
 On September 28, 2010, the Company entered into a Sales Contract (“Mims Agreement”) with Benny Mims pursuant to which the Company sold approximately 500 acres of land for approximately $1.6 million.The Company estimates the original purchase price for this land to be $1,926,567 and have recorded a loss from the sale of this property of $385,739, which is included in other income, net during the year ended December 31, 2010.
  F-13
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 
 Note 5.   Other Income (Expense), continued
 
 On October 15, 2010, the Company entered into a new Sales Contract with Landee Acres, LLC (“Landee”) pursuant to which the Company sold to Landee approximately 700 acres of land for an aggregate of $1.45 million. The Company estimates the original purchase price for this land to be $1,645,392 and have recorded a loss from the sale of this property of $252,148, which is included in other income, net during the year ended December 31, 2010. This sale of 700 acres closed on October 26, 2010. Landee is also obligated to purchase an additional approximate 500 acres of land for approximately $1.49 million, which approximates the carry value of the land as of December 31, 2010, by September 1, 2011; provided however that if the sale is consummated on or before March 31, 2011, the purchase price for this land would be reduced by $50,000.
 
 On October 22, 2010, the Company entered into a sales contract with Don and Alisa Burke pursuant to which the Company sold approximately 154 acres of land for approximately $289,000.  The Company estimates the original purchase price for this land to be $312,988 and have recorded a loss from the sale of this property of $36,214, which is included in other income, net during the year ended December 31, 2010.
 
 For the year ended December 31, 2010, we recognized a gain on sale of equipment totaling $2,701 which is included in loss on sale of land and equipment during the year ended December 31, 2010.
 
 Cullen Holdings held a mortgage on the acres of land sold during 2010 and released the Company from such mortgage in order for the Company to consummate the sales. The Company used approximately $5.7 million of the proceeds from the sales of the land to repay remaining amounts outstanding under the existing promissory note held by Cullen Holdings.
 
 During the year ended December 31, 2010, the Company sold a large portion of the corn it produced to Hart Acquisitions, LLC (“Hart”), an affiliate of Dr. Richard Hart Watson, an employee of the Company, for approximately $143,473. The cost to produce that corn was approximately $114,778. The Company has recorded a gain from the sale of corn of $28,695, which is included in other income, net during the year ended December 31, 2010.
 
 On June 1, 2010, the Company entered into an agreement with an unrelated third party for the lease of 753 acres of the Company’s property, from June 1, 2010 through December 31, 2010. This area of land consists of 500 irrigated acres and 253 non irrigated acres. The agreement calls for the unrelated third party to pay, in advance, $175 per acre of irrigated land and $50 per acre of non irrigated land. The Company received $100,150 for the lease of this land during June 2010, which is included in other income, net during the year ended December 31, 2010.
 
 On June 1, 2010, the Company entered into an agreement with Hart for the lease of 120 acres of the Company’s property, from June 1, 2010 through December 31, 2010. This area of land consists of 100 irrigated acres and 20 non irrigated acres. The agreement calls for Hart to pay, in advance, $175 per acre of irrigated land and $50 per acre of non irrigated land. The Company has received $18,500 for the lease of this land during June 2010, which is included in other income, net during the year ended December 31, 2010.
 
 During 2010, the Company assessed the recoverability of the carrying value of its property, plant and equipment.  The assessment resulted in an impairment charge of $963,172, which is included in other income, net during the year ended December 31, 2010. This charge reflects the amounts by which the carrying values of these assets exceed their estimated fair values.
 
 On August 2, 2010, the Company entered into a Beef Grazing Agreement (“Grazing Agreement”) with FPL Foods LLC (“FPL”) pursuant to which the Company grazed FPL’s cattle on land leased and owned by the Company from August 1, 2010 through January 15, 2011.  During March 2011, the Company and FPL agreed that effective December 31, 2010, cattle would be returned to FPL and the Company and FPL would be released of their obligations. The Company recorded a loss related to the Grazing Agreement of $202,465, which is included in other income, net during the year ended December 31, 2010.
 
 The Company recognized interest income and hay income, totaling $9,313, which is included in other income, net during the year ended December 31, 2010. The Company also recognized a loss from legal settlement and calf deaths totaling $550,000, and $25,732 respectively, which is included in other income, net during the year ended December 31, 2010.
  F-14
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 
 Note 6.   Stock Transactions
 
 On January 25, 2010, the Company issued 8,403 shares of Common Stock valued at $50,000, at the time of issuance, to Ladenburg Thalmann & Co. Inc. as compensation for services performed related to the Merger.
 
 In October and November 2010, the Company issued a total of 375,000 shares of Common Stock for an aggregate purchase price of $750,000 (or $2.00 per share) to two investors in a private placement.
 
 Note 7 – 2009 Long-Term Incentive Equity Plan
 
 The Company’s 2009 Long-Term Incentive Equity Plan (the “Plan”) permits the granting of stock options, stock appreciation rights, restricted stock and other stock based awards to officers, employees, directors and consultants of the Company for up to 2,405,914 shares.  The Company believes that such awards better align the interest of its employees with those of its shareholders.  Option awards are granted with an exercise price equal to the market price on the date of grant and they generally vest over a three year period and expire between 5 and 10 years from the date of issuance.  Stock appreciation rights may be awarded in tandem with an option and shall no longer be exercisable upon termination or the exercise of the related option.  The term of the stock appreciation right is determined by the Plan’s committee.  Restricted stock and other stock based awarded at the discretion of the Plan’s committee.  As of December 31, 2010 and for the period from June 3, 2009 (inception) through December 31, 2009, there have been no awards granted under this Plan.
 Note 8 – Income Taxes
 
 The components of the income tax provision are as follows:
 
 For the year ended December 31, 2010


For the Period from June 3, 2009 (inception) through December 31, 2009


For the Period from June 3, 2009 (inception) through December 31, 2010Current:Federal

$
-


$
-


$
-State


1,290



320



1,610Deferred:Federal


(1,403,266
)


(207,255
)


(1,610,521
)State


(163,439
)


(24,139
)


(187,578
)(1,565,415
)


(231,074
)


(1,796,489
)Change in valuation allowance


1,566,705



231,394



1,798,099Income tax expense

$
1,290


$
320


$
1,610
 
 Deferred income taxes, if applicable, are provided for the differences between the basis of assets and liabilities for financial reporting and income tax purposes.  A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
 
 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
 
 For the year ended December 31, 2010


For the Period from June 3, 2009 (inception) through December 31, 2009Deferred tax assets:Legal settlement

$
208,780


$
-Impairment loss


365,620



-Loss on sale of fixed assets


18,802



-Net operating loss carry forwards


1,212,196



231,394Other


13,260



-Total deferred tax assets


1,818,658



231,394Deferred tax liabilities:Depreciation and amortization


(20,559
)


-Total deferred tax liability


(20,559
)


-Change in valuation allowance


(1,798,099
)


(231,394
)Net deferred tax asset

$
-


$
-
 
 
 As of December 31, 2010 and 2009, the Company has an estimated net operating loss carry forward of $3,193,351 and $609,572, respectively, which begin to expire starting in 2029.  If realized, it would have an estimated tax benefit of approximately $1,212,196.   The Company has determined that the deferred tax asset has no value at this time, as the Company does not believe it will utilize these losses in the future, and accordingly has recorded a valuation allowance of 100% of the deferred tax asset.
 
 A reconciliation of the provision for income taxes with the amounts computed by applying the statutory Federal income tax to income from continuing operations before provision for income taxes is as follows:
 
 For the year ended

December 31, 2010


For the Period from

June 3, 2009 (inception) through December 31, 2009Tax provision at statutory


34
%


34
%State and local taxes (net of federal benefit)


4
%


4
%Change in valuation allowance and non-deductible items


(38
%)


(38
%)Effective tax rate


0



0
 F-15
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 
 Note 9.   Related Parties
 
 During the year ended December 31, 2010, Hart incurred costs related to the operations of Cullen Agritech and Natural Dairy of a combined total of $136,805.  These costs consisted of property related expenses of $35,645, and employee related expenses of $101,159. During the year ended December 31, 2010, the Company, incurred costs related to the operations of Hart of $244,369.  These costs consisted of $225,869 of property related expenses and $18,500 of lease related expense. As of the December 31, 2010, $10,778 was due to Hart.
 
 From June 3, 2009 (inception) through December 31, 2009, Hart funded part of the operations of both Cullen Agritech and Natural Dairy and incurred costs of a combined total of $47,307.  These costs consisted of $5,114 of property related expenses and $42,193 of employee related expenses. As of December 31, 2009, $20,251 was repaid to Hart and the remainder of $27,055, was repaid during February 2010.
 
 From June 3, 2009 (inception) through December 31, 2009, Cullen Investments Limited, an entity controlled by Eric J. Watson, our Chief Executive Officer, Secretary, Chairman of the Board and Treasurer, funded part of the operations of both Cullen Agritech and Natural Dairy and incurred costs of a combined total of $114,937.  These costs consisted of $69,553 of legal expenses, $28,398 of corporate formational costs and $16,986 of travel costs. As of December 31, 2009, $113,937 was repaid to Cullen Investments Limited and $1,000 is payable and included in due to affiliate.
 
 On February 2, 2010, the Company signed an Escrow Agreement (“Escrow Agreement”) related to the procurement and purchase of 350 cows, for which the Company had paid a deposit. During June 2010, Hart assumed all rights and obligations related to this contract and in return repaid the Company for all deposits and costs, including interest, related to this contract.
 
 Note 10.   Commitments and Contingencies
 
 Litigation
 
 The Company is not party to any litigation.  However, on December 9, 2009, a second amended class action complaint, styled Goodman v. Watson, et al., was filed in the Court of Chancery of the State of Delaware against the former directors of Triplecrown.  The complaint alleges that the defendants breached their fiduciary duties and their duty of disclosure in connection with the Merger.  The plaintiff seeks, as alternative remedies, damages in the amount of approximately $9.74 per share, to have Triplecrown’s trust account restored and distributed pro rata to members of the putative class, a quasi-appraisal remedy for members of the putative class, and an opportunity for members of the putative class to exercise conversion rights in connection with the Merger.  The defendants filed an answer on December 23, 2009. On January 18, 2011, the Company and the former directors entered into a stipulation of settlement with the plaintiff.  Pursuant to the stipulation, the class action will be resolved, and all claims will be dropped, in exchange for an aggregate payment to the class of up to $1.4 million, of which $550,000 will be paid by the Company and the balance will be paid by our insurance carrier.  The stipulation is subject to review and approval by the Court of Chancery, and is subject to potential objections by permissible claimants.  If the stipulation is not approved or an acceptable settlement cannot be reached, the defendants intend to defend this action vigorously.  If the court finds in favor of the plaintiff (who represents a purported class of stockholders that held approximately 490,000 shares of Triplecrown’s common stock) and the defendants are required to pay damages to the plaintiff (which could be approximately $5 million), the Company will have an obligation to indemnify the defendants for such damages.  In such event, the Company will seek to recover such payments from its D&O insurance carrier as the Company believes such claims are covered by its insurance policies.  However, there is no assurance that the carrier will agree in this analysis and not deny coverage of such claims.  If this occurred, our financial condition and business operations could be materially adversely affected.Accordingly, the Company accrued $550,000 which represents management’s estimate of the Company’s exposure in connection with this litigation.
 
 Triplecrown is currently under an audit by the Internal Revenue Service for the tax year ended October 22, 2009.  The audit is in the early stages and the outcome is uncertain.  However, management believes that the tax positions taken on Triplecrown’s income tax return will be sustained on its technical merit. If Triplecrown is not successful, the Company will be forced to pay any liability, as Triplecrown no longer exists as a result of the Merger.
  F-16
  CULLEN AGRICULTURAL HOLDING CORP. AND SUBSIDIARIES
 (a development stage company)
 NOTES TO THE CONSOLIDATED  FINANCIAL STATEMENTS
 
 Note 11.   Subsequent Events
 
 On March 1, 2011, the Company entered into an agreement with Hart for the lease of 120 acres of the Company’s property, from January 1, 2011 through August 31, 2011. This area of land consists of 100 irrigated acres and 20 non irrigated acres. The agreement calls for Hart to pay, in advance, $117 per acre of irrigated land and $33 per acre of non irrigated land. The Company is due to receive $12,360 for the lease of this land.
 
 The Company evaluates events that occurred after the balance sheet date but before the consolidated financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non recognized subsequent events, except as noted above, that would have required adjustment or disclosure in the consolidated financial statements.
  F-17