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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
 For the quarterly period ending March 31, 2006
 o
    
    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 0-51418
 
 Coconut Palm Acquisition Corp.
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    20-2763411(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 595 South Federal Highway, Suite 500Boca Raton, Florida
(Address of Principal Executive Offices)
    
    33432
(Zip Code)
 Registrants telephone number, including area code (561) 955-7300
 þ o
  o o þ
 o þ




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COCONUT PALM ACQUISITION CORP.
 INDEX
 PagePart IFinancial InformationItem 1. Financial StatementsCondensed Balance Sheets  As of March 31, 2006 (unaudited) and As
of December 31, 2005
    
    3Condensed Statements of Operations (unaudited)  Three Months Ended
March 31, 2006 and From April 29, 2005 (inception) to March 31,
2006
    
    4Condensed Statements of Stockholders Equity (unaudited)  From
April 29, 2005 (inception) to March 31, 2006
    
    5Condensed Statements of Cash Flows (unaudited)  Three Months Ended
March 31, 2006 and From April 29, 2005 (inception) to March 31,
2006
    
    6Notes to Condensed Unaudited Financial Statements
    
    711Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    13Item 4. Controls and Procedures
    
    13Part IIOther InformationItem 1A. Risk Factors
    
    14Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    14Item 6. Exhibits
    
    14Signatures
    
    1415Certifications
    
    16-19Section 302 CEO CertificationSection 302 CFO CertificationSection 906 CEO CertificationSection 906 CFO Certification
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PART IFINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED BALANCE SHEET
 March 31, 2006
    
    
    December 31, 2005(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    724,660
    
    
    $
    934,086Prepaid expenses
    
    
    94,122
    
    
    
    14,999Total current assets
    
    
    818,782
    
    
    
    949,085Investments held in trust fund
    
    
    63,567,165
    
    
    
    63,120,584Total assets
    
    $
    64,385,947
    
    
    $
    64,069,669LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    29,487
    
    
    $
    29,271Accrued expenses
    
    
    23,372
    
    
    
    46,306Intangible tax payable
    
    
    30,807
    
    
    
    Income taxes payable
    
    
    23,223
    
    
    
    25,756Total current liabilities
    
    
    106,889
    
    
    
    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
    
    
    189,339
    
    
    
    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
    
    
    
    51,114,006Income accumulated during the development stage
    
    
    456,575
    
    
    
    235,125Total stockholders equity
    
    
    51,571,981
    
    
    
    51,350,531Total liabilities and stockholders equity
    
    $
    64,385,947
    
    
    $
    64,069,669
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COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
 April 29, 2005Three months ended
    
    
    (Date of Inception)March 31, 2006
    
    
    to March 31, 2006Operating costs
    
    $
    (119,102
    )
    
    $
    (266,024
    )Other income:Bank interest
    
    
    6,465
    
    
    
    13,752Interest on investments held in Trust Fund
    
    
    446,582
    
    
    
    947,165Total other income
    
    
    453,047
    
    
    
    960,917Income before provision
for income taxes
    
    
    333,945
    
    
    
    694,893Provision
for income taxes  current
    
    
    (23,223
    )
    
    
    (48,979
    )Net income
    
    $
    310,722
    
    
    $
    645,914Interest income attributable to common stock
subject to possible conversion
    
    
    (89,272
    )
    
    
    (189,338
    )Net income allocable to common stockholders not
subject to possible conversion
    
    $
    221,450
    
    
    $
    456,576Weighted average number of shares outstanding:Basic
    
    
    14,000,000Diluted
    
    
    15,862,087Net income per share:Basic
    
    $
    0.02Diluted
    
    $
    0.02Weighted average number of shares outstanding exclusive
of shares subject to possible conversion:Basic
    
    
    11,701,150Diluted
    
    
    13,563,237Net income per share not subject to possible conversion:Basic
    
    $
    0.02Diluted
    
    $
    0.02
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COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED STATEMENT OF CHANGES IN COMMON STOCKHOLDERS DEFICIT
 DeficitCommon Stock
    
    
    Paid-in Capital
    
    
    Accumulatedin
    
    
    During theDevelopmentShares
    
    
    Amount
    
    
    Excess of 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
    
    
    $
    1,400.00
    
    
    $
    51,114,006
    
    
    
    235,125
    
    
    
    51,350,531Accretion of trust fund
income relating to common
stock subject to possible
conversion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (89,272
    )
    
    
    (89,272
    )Net income for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    310,722
    
    
    
    310,722Balance at March 31, 2006
(Unaudited)
    
    
    14,000,000
    
    
    $
    1,400.00
    
    
    $
    51,114,006
    
    
    
    456,575
    
    
    
    51,571,981
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COCONUT PALM ACQUISITION CORP.
(a development stage company)
 
 CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
 April 29, 2005Three months
    
    
    (Date ofended,
    
    
    Inception)March 31, 2006
    
    
    to March 31, 2006Cash flows from operating activities:Net income
    
    $
    310,722
    
    
    $
    645,914Increase (decrease) in cash attributable to changes in:Prepaid expenses
    
    
    (79,123
    )
    
    
    (94,122
    )Accounts payable
    
    
    216
    
    
    
    29,487Accrued expenses
    
    
    (22,934
    )
    
    
    23,372Intangible tax payable
    
    
    30,807
    
    
    
    30,807Income tax payable
    
    
    (2,533
    )
    
    
    23,223Net cash provided by operating activities
    
    
    237,155
    
    
    
    658,681Cash flows from investing activities:Principal deposited into Trust Fund
    
    
    
    
    
    
    (62,620,000
    )Increase in investments in a fund
    
    
    (446,581
    )
    
    
    (947,165
    )Net cash used in investing activities
    
    
    (446,581
    )
    
    
    (63,567,165
    )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
    
    
    (209,426
    )
    
    
    724,660Cash and cash equivalents    beginning of period
    
    
    934,086
    
    
    
    Cash and cash equivalents    end of period
    
    $
    724,660
    
    
    $
    724,660Supplemental cash flow information:Income taxes paid
    
    $
    42,500
    
    
    $
    42,500Supplemental non-cash activity:Accretion of Trust Fund income relating to common stock
subject to possible conversion
    
    $
    89,272
    
    
    $
    189,338
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COCONUT PALM ACQUISITION CORP.
 
 NOTES TO UNAUDTED CONDENSED FINANCIAL STATEMENTS
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[1] Cash and cash equivalents:
 [2] Fair value of financial instruments:
 [3] Earnings per common share:
 [4] Use of estimates:
 [5] Income taxes:
 [6] New Accounting Pronouncements:
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Three MonthsEnded March31, 2006Current tax provisionFederal
    
    $
    State
    
    $
    23,223Total Current Tax Provision
    
    $
    23,223Deferred income tax provision (benefit)Federal
    
    $
    State
    
    $
    Total Deferred Tax Provision
    
    $
    Total provision for taxes
    
    $
    23,223
  March 31,
    
    
    December 31,2006
    
    
    2005Total current deferred tax assets
    
    $
    
    
    
    $
    Net operating losses
    
    $
    19,825
    
    
    $
    11,305Startup Costs
    
    
    79,230
    
    
    
    43,471Total non-current deferred tax assets
    
    
    99,055
    
    
    
    54,776Valuation Allowance
    
    $
    (99,055
    )
    
    $
    (54,776
    )Net deferred tax assets
    
    $
    
    
    
    $
    
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    For the period from January 1, 2006 through March 31, 2006
    Risk Factors That May Affect Future Results
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 4. CONTROLS AND PROCEDURES
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PART IIOTHER INFORMATION
 
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
 ITEM 6. EXHIBITS
  31.1
    
    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: May 15, 2006
    By:
    /s/ Richard C. RochonChairman of the Board and Chief Executive Officer(principal executive officer)Date: May 15, 2006
    By:
    /s/ Robert C. FarenhemVice President and Secretary(principal financial and accounting officer) 14




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Exhibit Index
 31.1
    
    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
 
 15