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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 (MARK ONE)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
  
 Coconut Palm Acquisition Corp.
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
(State or Other Jurisdiction of Incorporation or Organization)
    
    20-2763411
(I.R.S. Employer Identification No.)595 South Federal Highway, Suite 500
Boca Raton, Florida
(Address of Principal Executive Offices)
    
    33432
(Zip Code)
 Registrants telephone number, including area code (561) 955-7300
 x o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer x
 x o




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COCONUT PALM ACQUISITION CORP.
 INDEX
 PagePart IFinancial InformationItem 1. Financial StatementsCondensed Balance Sheets   As of June 30, 2006 (unaudited) and As of December 31, 2005
    
    
    3Condensed Statements of Operations (unaudited)  Three Months Ended June 30, 2006,
From April 29, 2005 (date of inception) to June 30, 2005, Six Months Ended June 30,
2006, and From April 29, 2005 (date of inception) to June 30, 2006
    
    
    4Condensed Statements of Stockholders Equity  From April 29, 2005 (date of
inception) to June 30, 2006 (unaudited)
    
    
    5Condensed Statements of Cash Flows (unaudited)  Six Months Ended June 30, 2006, From
April 29, 2005 (date of inception) to June 30, 2005, and From April 29, 2005 (date of
inception) to June 30, 2006
    
    
    6Notes to Condensed Unaudited Financial Statements
    
    
    7  12Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13  15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4. Controls and Procedures
    
    
    16Part IIOther InformationItem 1A. Risk Factors
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 5. Other Information
    
    
    17Item 6. Exhibits
    
    
    18Signatures
    
    
    18Exhibit Index
    
    
    19CertificationsEX-4.6 Warrant Clarification AgreementEX-10.16 First Amendment to Agreement & Plan of MergerEX-10.17 Engagement Letter, dated March 3, 2006EX-10.18 Supplement to Engagement LetterEX-10.19 Engagement Letter, dated June 5, 2006EX-10.20  Consulting AgreementEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
 2




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PART IFINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED BALANCE SHEETS
 June 30, 2006(Unaudited)
    
    
    December 31, 2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    504,552
    
    
    $
    934,086Prepaid expenses
    
    
    68,108
    
    
    
    14,999Total current assets
    
    
    572,660
    
    
    
    949,085Other assets:Investments held in Trust Fund
    
    
    64,094,073
    
    
    
    63,120,584Deferred acquisition costs
    
    
    1,200,242
    
    
    
    Total other assets
    
    
    65,294,315
    
    
    
    63,120,584Total assets
    
    $
    65,866,975
    
    
    $
    64,069,669LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    502,341
    
    
    $
    29,271Accrued expenses
    
    
    705,450
    
    
    
    46,306Accrued Delaware franchise fee
    
    
    14,386
    
    
    
    Income taxes payable
    
    
    50,749
    
    
    
    25,756Total current liabilities
    
    
    1,272,926
    
    
    
    101,333COMMITMENTS AND CONTINGENCIES (Note H)
    
    
    
    
    
    
    Common stock subject to possible conversion  2,298,850 shares
    
    
    12,517,738
    
    
    
    12,517,738Interest attributable to common stock, subject to possible conversion
    
    
    294,667
    
    
    
    100,067STOCKHOLDERS EQUITYPreferred stock    $.0001 par value; 1,000,000 shares
authorized; 0 issued and outstanding
    
    
    
    
    
    
    Common stock    $.0001 par value; 50,000,000 shares
authorized; 14,000,000 issued and outstanding
(which includes 2,298,850 shares subject to possible conversion)
    
    
    1,400
    
    
    
    1,400Additional paid-in-capital
    
    
    51,114,006
    
    
    
    51,114,006Retained earnings accumulated during the development stage
    
    
    666,238
    
    
    
    235,125Total stockholders equity
    
    
    51,781,644
    
    
    
    51,350,531Total liabilities and stockholders equity
    
    $
    65,866,975
    
    
    $
    64,069,669
  3




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COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 April 29, 2005
    
    
    
    
    
    
    April 29, 2005(Date of
    
    
    
    
    
    
    (Date ofThree months
    
    
    Inception)
    
    
    Six months
    
    
    Inception)ended
    
    
    to June 30
    
    
    ended
    
    
    to June 30,June 30, 2006
    
    
    2005
    
    
    June 30, 2006
    
    
    2006Operating costs
    
    $
    (187,289
    )
    
    $
    (76
    )
    
    $
    (306,391
    )
    
    $
    (453,313
    )Other income:Bank interest
    
    
    4,711
    
    
    
    
    
    
    
    11,176
    
    
    
    18,462Interest on investments held in Trust
Fund
    
    
    526,907
    
    
    
    
    
    
    
    973,489
    
    
    
    1,474,073Total other income
    
    
    531,618
    
    
    
    
    
    
    
    984,665
    
    
    
    1,492,535Income (loss) before provision
for income taxes
    
    
    344,329
    
    
    
    (76
    )
    
    
    678,274
    
    
    
    1,039,222Provision for income taxes  current
    
    
    (29,338
    )
    
    
    
    
    
    
    (52,561
    )
    
    
    (78,317
    )Net income (loss)
    
    $
    314,991
    
    
    $
    (76
    )
    
    $
    625,713
    
    
    $
    960,905Interest income attributable to common stock
subject to possible conversion
    
    
    (105,328
    )
    
    
    
    
    
    
    (194,600
    )
    
    
    (294,667
    )Net income (loss) allocable to common stockholders not
subject to possible conversion
    
    $
    209,663
    
    
    $
    (76
    )
    
    $
    431,113
    
    
    $
    666,238Weighted average number of shares outstanding:Basic
    
    
    14,000,000
    
    
    
    2,500,000
    
    
    
    14,000,000Diluted
    
    
    15,959,138
    
    
    
    2,500,000
    
    
    
    15,909,966Net income (loss) per share:Basic
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    0.04Diluted
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    0.04Weighted average number of shares outstanding exclusive
of shares subject to possible conversion:Basic
    
    
    11,701,150
    
    
    
    2,500,000
    
    
    
    11,701,150Diluted
    
    
    13,660,288
    
    
    
    2,500,000
    
    
    
    13,611,116Net income (loss) per share not subject to possible conversion:Basic
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    0.04Diluted
    
    $
    0.02
    
    
    $
    (0.00
    )
    
    $
    0.03
  4




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COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED STATEMENT OF CHANGES IN COMMON STOCKHOLDERS DEFICIT
 Paid-in
    
    
    DeficitCommon Stock
    
    
    Capital
    
    
    AccumulatedIn
    
    
    During theExcess of
    
    
    DevelopmentShares
    
    
    Amount
    
    
    Par
    
    
    Stage
    
    
    TotalBalance    April 29,
2005 (date of inception)Initial capitalization from
founding stockholder
    
    
    2,500,000
    
    
    $
    250
    
    
    $
    24,750
    
    
    $
    
    
    
    $
    25,000Sale of 11,500,000 units
net of underwriters
discount and offering
expenses (includes
2,298,850 shares subject
to possible conversion)
    
    
    11,500,000
    
    
    
    1,150
    
    
    
    63,606,894
    
    
    
    
    
    
    
    63,608,044Proceeds subject to
possible conversion of
2,298,850 shares
    
    
    
    
    
    
    
    
    
    
    (12,517,738
    )
    
    
    
    
    
    
    (12,517,738
    )Accretion of trust fund
income relating to common
stock subject to possible
conversion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100,067
    )
    
    
    (100,067
    )Proceeds from issuance
of option
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100Net income for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    335,192
    
    
    
    335,192Balance at December 31, 2005
    
    
    14,000,000
    
    
    $
    1,400
    
    
    $
    51,114,006
    
    
    $
    235,125
    
    
    $
    51,350,531Accretion of trust fund
income relating to common
stock subject to possible
conversion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (194,600
    )
    
    
    (194,600
    )Net income for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    625,713
    
    
    
    625,713Balance at June 30, 2006
(Unaudited)
    
    
    14,000,000
    
    
    $
    1,400
    
    
    $
    51,114,006
    
    
    $
    666,238
    
    
    $
    51,781,644
  5




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COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 April 29, 2005
    
    
    April 29, 2005Date of
    
    
    Date ofSix months ended
    
    
    Inception)
    
    
    Inception)June 30, 2006
    
    
    to June 30, 2005
    
    
    to June 30, 2006Cash flows from operating activities:Net income (loss)
    
    $
    625,713
    
    
    $
    (76
    )
    
    $
    960,905Increase (decrease) in cash attributable to changes in:Prepaid expenses
    
    
    (53,109
    )
    
    
    
    
    
    
    (68,108
    )Accounts payable
    
    
    473,070
    
    
    
    
    
    
    
    502,341Accrued expenses
    
    
    659,144
    
    
    
    60,000
    
    
    
    705,450Accrued Delaware franchise fee
    
    
    14,386
    
    
    
    
    
    
    
    14,386Income tax payable
    
    
    24,993
    
    
    
    
    
    
    
    50,749Net cash provided by operating activities
    
    
    1,744,197
    
    
    
    59,924
    
    
    
    2,165,723Cash flows from investing activities:Principal deposited into Trust Fund
    
    
    
    
    
    
    
    
    
    
    (62,620,000
    )Increase in investments in Trust Fund
    
    
    (973,489
    )
    
    
    
    
    
    
    (1,474,073
    )Deferred acquisition costs
    
    
    (1,200,242
    )
    
    
    
    
    
    
    (1,200,242
    )Net cash used in investing activities
    
    
    (2,173,731
    )
    
    
    
    
    
    
    (65,294,315
    )Cash flows from financing activities:Proceeds from sale of common stock, net of offering costs
    
    
    
    
    
    
    
    
    
    
    63,633,044Proceeds from notes payable to founding stockholders
    
    
    
    
    
    
    
    
    
    
    75,000Repayment of notes payable to founding stockholders
    
    
    
    
    
    
    
    
    
    
    (75,000
    )Proceeds from issuance of underwriters purchase option
    
    
    
    
    
    
    
    
    
    
    100Net cash provided by financing activities
    
    
    
    
    
    
    
    
    
    
    63,633,144Net (decrease) increase in cash and cash equivalents
    
    
    (429,534
    )
    
    
    59,924
    
    
    
    504,552Cash and cash equivalents    beginning of period
    
    
    934,086
    
    
    
    
    
    
    
    Cash and cash equivalents    end of period
    
    $
    504,552
    
    
    $
    59,924
    
    
    $
    504,552Supplemental cash flow information:Income taxes paid
    
    $
    42,869
    
    
    $
    
    
    
    $
    42,869Supplemental non-cash activity:Accretion of Trust Fund income relating to common stock
subject to possible conversion
    
    $
    194,600
    
    
    $
    
    
    
    $
    294,667
  6




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COCONUT PALM ACQUISITION CORP.
 
 NOTES TO CONDENSED UNAUDTED FINANCIAL STATEMENTS
 Basis of Presentation
        7




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[1] Cash and cash equivalents:
 [2] Fair value of financial instruments:
 [3] Earnings per common share:
 8




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[4] Use of estimates:
 [5] Income taxes:
 [6] New Accounting Pronouncement:
    9




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Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2006Current tax provisionFederal
    
    $
    
    
    
    $
    State
    
    $
    ( 29,338
    )
    
    $
    ( 52,561
    )Total current tax provision
    
    $
    ( 29,338
    )
    
    $
    (52,561
    )Deferred income tax provision (benefit)Federal
    
    $
    
    
    
    $
    State
    
    $
    
    
    
    $
    Total deferred tax provision
    
    $
    
    
    
    $
    Total provision for taxes
    
    $
    (29,338
    )
    
    $
    (52,561
    )
  June 30,
    
    
    December 31,2006
    
    
    2005Total current deferred tax assets
    
    $
    
    
    
    $
    Net operating losses
    
    $
    28,872
    
    
    $
    11,305Startup costs
    
    
    142,468
    
    
    
    43,471Total non-current deferred tax assets
    
    
    171,340
    
    
    
    54,776Valuation allowance
    
    $
    (171,340
    )
    
    $
    (54,776
    )Net deferred tax assets
    
    $
    
    
    
    $
    
      10




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11




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12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     Developments in Finding Suitable Business Combination Partner
     13




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Results of Operations for the period from April 1, 2006 through June 30, 2006
  Results of Operations for the period from January 1, 2006 through June 30, 2006
  Liquidity and Capital Resources
      Off-Balance Sheet Arrangements
  14




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Risk Factors That May Affect Future Results
  15




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ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
   16




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PART IIOTHER INFORMATION
 
 ITEM 1A. RISK FACTORS
  
 ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
     
 ITEM 5. OTHER INFORMATION
  17




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ITEM 6. EXHIBITS
  4.6
    
    Warrant Clarification Agreement, dated August 17, 2006, between
Coconut Palm Acquisition Corp. and Continental Stock Transfer & Trust
Company10.16
    
    First Amendment to Agreement and Plan of Merger, dated May 5, 2006,
between Coconut Palm Acquisition Corp., Equity Broadcasting
Corporation and Major EBC Shareholders10.17
    
    Engagement Letter, dated March 3, 2006, between Morgan Joseph & Co. Inc. and Coconut Palm Acquisition Corp.10.18
    
    Supplement to the Engagement Letter, dated April 10, 2006, between
Morgan Joseph & Co. Inc. and Coconut Palm Acquisition Corp.10.19
    
    Engagement Letter, dated May 15, 2006, between Morgan Joseph & Co. Inc. and Coconut Palm Acquisition Corp.10.20
    
    Consulting Agreement, dated June 5, 2006, between Coconut Palm
Acquisition Corp. and Jones-Sagansky Broadcast Group, LLC31.1
    
    Certification of Chief Executive Officer Pursuant to Rule 15A-14(A)
or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to Rule 15A-14(A)
or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)
or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)
or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
 SIGNATURES
  COCONUT PALM ACQUISITION CORP.Date: August 18, 2006
    By:
    /s/ Richard C. RochonChairman of the Board and Chief Executive Officer(principal executive officer)Date: August 18, 2006
    By:
    /s/ Robert C. FarenhemVice President and Secretary(principal financial and accounting officer) 18




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Exhibit Index
 4.6
    
    Warrant Clarification Agreement, dated August 17, 2006, between
Coconut Palm Acquisition Corp. and Continental Stock Transfer & Trust
Company10.16
    
    First Amendment to Agreement and Plan of Merger, dated May 5, 2006,
between Coconut Palm Acquisition Corp., Equity Broadcasting
Corporation and Major EBC Shareholders10.17
    
    Engagement Letter, dated March 3, 2006, between Morgan Joseph & Co. Inc. and Coconut Palm Acquisition Corp.10.18
    
    Supplement to the Engagement Letter, dated April 10, 2006, between
Morgan Joseph & Co. Inc. and Coconut Palm Acquisition Corp.10.19
    
    Engagement Letter, dated May 15, 2006, between Morgan Joseph & Co. Inc. and Coconut Palm Acquisition Corp.10.20
    
    Consulting Agreement, dated June 5, 2006, between Coconut Palm
Acquisition Corp. and Jones-Sagansky Broadcast Group, LLC31.1
    
    Certification of Chief Executive Officer Pursuant to Rule 15A-14(A)
or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to Rule 15A-14(A)
or 15D-14(A) of the Securities Exchange Act of 1934, As Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)
or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)
or Rule 15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 19