SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549




FORM
10-Q





x
                        
                        Quarterly
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the quarterly period ended June 30, 2009oro
                        
                        Transition
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the transition period from_______ to
  ________.




Commission
File Number: 000-51510




InterAmerican
Acquisition Group Inc.


(Exact
name of registrant as specified in its charter)





Delaware
            
            20-2828369(State
      or Other Jurisdiction of
              Incorporation
      or Organization)
            
            (I.R.S.
      Employer
              Identification
      No.)




2918
Fifth Avenue South, Suite 209


San
Diego, California 92103


(Address
of Principal Executive Offices including zip code)




(619)
298-9883


(Registrant’s
Telephone Number, Including Area Code)




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 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.


Yes   
x
      No    o




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




Large
      accelerated filer   o
                Accelerated
      filer   oNon-accelerated
      filer       o  (do not
      check if a smaller reporting
      company)
                Smaller
      reporting company    x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes   
x
      No    o




There
were 7,000,000 shares of the Registrant’s Common Stock issued and outstanding on
August 18, 2009.









InterAmerican
Acquisition Group Inc.


(a
development stage enterprise)





CONTENTS




PagePart
      I: Financial information:Item
      I - Financial Statements:
                                          1Condensed
      Consolidated Balance Sheets as of June 30, 2009
(Unaudited)and
      December 31, 2008
                                          1Condensed
      Consolidated Statements of Operations for the three months and six
      monthsEnded
      June 30, 2009 and 2008, and for the period May 10, 2005 (inception)
      throughJune
      30, 2009 (Unaudited)
                                          2Condensed
      Consolidated Statement of Stockholders’ Equity/(Deficiency) for the
      periodMay
      10, 2005 (inception) to June 30, 2009 (Unaudited)
                                          3Condensed
      Consolidated Statements of Cash Flows for the six months
    endedJune
      30, 2009 and 2008, and for the period May 10, 2005 (inception)
      throughJune
      30, 2009 (Unaudited)
                                          4Notes
      to Unaudited Condensed Consolidated Financial Statements
                                          5Item
      2 -Management’s
      Discussion and Analysis of Financial Condition and Results
      of Operations
                                          16Item
      3 – Quantitative and Qualitative Disclosures about Market
    Risk
                                          20Item
      4 -Controls
      and Procedures
                                          20Part
      II: Other InformationItem
      1 – Legal Proceedings
                                          21Item
      1A – Risk Factors
                                          21Item
      2- Unregistered
      Sales of Equity Securities and Use of Proceeds
                                          21Item
      3 - Defaults on Senior Securities
                                          22Item
      4 – Submission of Matters to a Vote of Security Holders
                                          23Item
      5 – Other Information
                                          23Item
      6 - Exhibits
                                          23Signatures
                                          24Certifications




i


PART
I: FINANCIAL INFORMATION





ITEM
1: FINANCIAL STATEMENTS





InterAmerican
      Acquisition Group Inc.(a
      corporation in the development stage)Condensed
      Consolidated Balance
Sheets
  June 30, 2009
                            
                            
                            December 31, 2008(unaudited)ASSETSCurrent
      Assets:Cash
                            
                            $
                            539
                            
                            
                            $
                            20,773Investment
      and accrued interest - trust account
                            
                            
                            45,196,203
                            
                            
                            
                            45,204,605Prepaid
      expense
                            
                            
                            18,243
                            
                            
                            
                            19,552Total
      current assets
                            
                            
                            45,214,985
                            
                            
                            
                            45,244,930Deferred
      tax asset
                            
                            
                            195,000
                            
                            
                            
                            195,000Total
      Assets
                            
                            $
                            45,409,985
                            
                            
                            $
                            45,439,930LIABILITIES
      AND STOCKHOLDERS' EQUITY/(DEFICIENCY)Current
      LiabilitiesAccounts
      payable and accrued expenses  (including amounts payable to
      related parties of $83,327 and $51,844 for June 30, 2009 and December 31,
      2008 respectively)
                            
                            $
                            698,826
                            
                            
                            $
                            606,883Notes
      payable
                            
                            
                            -
                            
                            
                            
                            -Income
      and capital taxes payable
                            
                            
                            369,821
                            
                            
                            
                            284,380Deferred
      underwriting fees
                            
                            
                            2,070,000
                            
                            
                            
                            2,070,000Total
      Current Liabilities
                            
                            
                            3,138,647
                            
                            
                            
                            2,961,263COMMON
      STOCK SUBJECT TO POSSIBLE REDEMPTION(1,149,425
      shares at redemption value) (Note 1)
                            
                            
                            8,609,194
                            
                            
                            
                            8,609,194Stockholders'
      EquityPreferred
      stock, $0.0001 par valueAuthorized
      1,000,000 shares; none issuedCommon
      stock, $0.0001 par valueAuthorized
      90,000,000 sharesIssued
      and outstanding 7,000,000 shares at June 30, 2009 and December 31, 2008
      (which includes 1,149,425 shares subject to possible
      redemption)
                            
                            
                            700
                            
                            
                            
                            700Additional
      paid-in capital
                            
                            
                            35,106,999
                            
                            
                            
                            35,106,999Deficit
      accumulated during the development stage
                            
                            
                            (1,445,555
                            )
                            
                            
                            (1,238,226
                            )Total
      Stockholders' Equity
                            
                            
                            33,662,144
                            
                            
                            
                            33,869,473Total
      Liabilities and Stockholders Equity
                            
                            $
                            45,409,985
                            
                            
                            $
                            45,439,930
  See
      notes to unaudited condensed consolidated financial
    statements


1


InterAmerican
      Acquisition Group Inc.(a
      corporation in the development stage)Condensed
      Consolidated Statements of Operations(Unaudited)
  For
      the cumulativeThree
      months Ended
                                                
                                                
                                                Six
      Months Ended
                                                
                                                
                                                period
      fromJune
      30, 2009
                                                
                                                
                                                June
      30, 2008
                                                
                                                
                                                June
      30, 2009
                                                
                                                
                                                June
      30, 2008
                                                
                                                
                                                May
      10, 2005 (Inception) -
                                                  June
      30, 2009Interest
      income
                                                
                                                $
                                                35,589
                                                
                                                
                                                $
                                                200,496
                                                
                                                
                                                $
                                                103,099
                                                
                                                
                                                
                                                472,445
                                                
                                                
                                                $
                                                1,429,702ExpensesFormation
      costs
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                4,775General
      and administrative expenses
                                                
                                                
                                                78,500
                                                
                                                
                                                
                                                1,018,719
                                                
                                                
                                                
                                                298,507
                                                
                                                
                                                
                                                1,249,494
                                                
                                                
                                                
                                                2,634,564Interest
      expense
                                                
                                                
                                                154
                                                
                                                
                                                
                                                298
                                                
                                                
                                                
                                                230
                                                
                                                
                                                
                                                1,071
                                                
                                                
                                                
                                                17,305Total
      Expenses
                                                
                                                
                                                78,654
                                                
                                                
                                                
                                                1,019,017
                                                
                                                
                                                
                                                298,737
                                                
                                                
                                                
                                                1,250,565
                                                
                                                
                                                
                                                2,656,644Net
      loss before income tax provision
                                                
                                                
                                                (43,065
                                                )
                                                
                                                
                                                (818,521
                                                )
                                                
                                                
                                                (195,638
                                                )
                                                
                                                
                                                (778,120
                                                )
                                                
                                                
                                                (1,226,942
                                                )(Benefit)/provision
      for income taxes
                                                
                                                
                                                (513
                                                )
                                                
                                                
                                                (48,091
                                                )
                                                
                                                
                                                11,691
                                                
                                                
                                                
                                                (31,955
                                                )
                                                
                                                
                                                218,613Net
      loss
                                                
                                                $
                                                (42,552
                                                )
                                                
                                                $
                                                (770,430
                                                )
                                                
                                                $
                                                (207,329
                                                )
                                                
                                                $
                                                (746,165
                                                )
                                                
                                                $
                                                (1,445,555
                                                )Weighted
      average shares outstanding - basic and diluted
                                                
                                                
                                                7,000,000
                                                
                                                
                                                
                                                7,000,000
                                                
                                                
                                                
                                                7,000,000
                                                
                                                
                                                
                                                7,000,000
                                                
                                                
                                                
                                                3,758,014Net
      loss per share - basic and diluted
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.11
                                                )
                                                
                                                $
                                                (0.03
                                                )
                                                
                                                $
                                                (0.11
                                                )
                                                
                                                $
                                                (0.38
                                                )
  See
      notes to unaudited condensed consolidated financial
    statements
 2






InterAmerican
      Acquisition Group Inc.(a
      corporation in the development stage)Condensed
      ConsolidatedStatement of Stockholders'
  Equity/(Deficiency)For
      the period from May 10, 2005 (Inception)  through June 30,
      2009
  Income/(Deficit)AccumulatedCommon
      Stock
                                                      
                                                      
                                                      Additional
                                                      
                                                      
                                                      During
      the
                                                      
                                                      
                                                      Stockholders'Shares
                                                      
                                                      
                                                      Amount
                                                      
                                                      
                                                      paid-in
      capital
                                                      
                                                      
                                                      Development
      Stage
                                                      
                                                      
                                                      Equity/(Deficiency)Common
      shares issued May 26, 2005 at $0.01 per share
                                                      
                                                      
                                                      1,250,000
                                                      
                                                      
                                                      $
                                                      125
                                                      
                                                      
                                                      $
                                                      14,875
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      15,000Net
      Loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (11,148
                                                      )
                                                      
                                                      
                                                      (11,148
                                                      )Balance
      at December 31, 2005
                                                      
                                                      
                                                      1,250,000
                                                      
                                                      
                                                      
                                                      125
                                                      
                                                      
                                                      
                                                      14,875
                                                      
                                                      
                                                      
                                                      (11,148
                                                      )
                                                      
                                                      
                                                      3,852Net
      Loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (14,844
                                                      )
                                                      
                                                      
                                                      (14,844
                                                      )Balance
      at December 31, 2006
                                                      
                                                      
                                                      1,250,000
                                                      
                                                      
                                                      
                                                      125
                                                      
                                                      
                                                      
                                                      14,875
                                                      
                                                      
                                                      
                                                      (25,992
                                                      )
                                                      
                                                      
                                                      (10,992
                                                      )Proceeds
      of private placement September 10, 2007
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      1,500,000
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      1,500,000Units
      issued Sept. 10, 2007 @$8.00 per unit
                                                      
                                                      
                                                      5,375,000
                                                      
                                                      
                                                      
                                                      538
                                                      
                                                      
                                                      
                                                      42,999,462
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      43,000,000Units
      issued Sept. 11, 2007 @$8.00 per unit
                                                      
                                                      
                                                      375,000
                                                      
                                                      
                                                      
                                                      37
                                                      
                                                      
                                                      
                                                      2,999,963
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      3,000,000Expenses
      of the Offering
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (4,581,967
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (4,581,967
                                                      )Less
      shares subject to possible redemption
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (8,609,194
                                                      )
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (8,609,194
                                                      )Net
      Income
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      150,493
                                                      
                                                      
                                                      
                                                      150,493Balance
      at December 31, 2007
                                                      
                                                      
                                                      7,000,000
                                                      
                                                      
                                                      
                                                      700
                                                      
                                                      
                                                      
                                                      34,323,139
                                                      
                                                      
                                                      
                                                      124,501
                                                      
                                                      
                                                      
                                                      34,448,340Issuance
      of 185,000 warrants May 21, 2008
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      783,860
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      783,860Net
      Loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      (1,362,727
                                                      )
                                                      
                                                      
                                                      (1,362,727
                                                      )Balance
      at December 31, 2008
                                                      
                                                      
                                                      7,000,000
                                                      
                                                      
                                                      $
                                                      700
                                                      
                                                      
                                                      $
                                                      35,106,999
                                                      
                                                      
                                                      $
                                                      (1,238,226
                                                      )
                                                      
                                                      $
                                                      33,869,473Unaudited:Net
      loss
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      
                                                      $
                                                      (207,329
                                                      )
                                                      
                                                      
                                                      (207,329
                                                      )Balance
      at June 30, 2009
                                                      
                                                      
                                                      7,000,000
                                                      
                                                      
                                                      $
                                                      700
                                                      
                                                      
                                                      $
                                                      35,106,999
                                                      
                                                      
                                                      $
                                                      (1,445,555
                                                      )
                                                      
                                                      $
                                                      33,662,144
  See
      notes to unaudited condensed consolidated financial
    statements




3


InterAmerican
      Acquisition Group Inc.(a
      corporation in the development stage)Condensed
      Consolidated Statements of Cash Flows(Unaudited)
  For
      the cumulativeSix
      months ended
                                                          
                                                          
                                                          period
      fromJune
      30, 2009
                                                          
                                                          
                                                          June
      30, 2008
                                                          
                                                          
                                                          May
      10, 2005
                                                            (Inception) -
                                                            June
      30, 2009Cash
      flow from operating activitiesNet
      loss
                                                          
                                                          $
                                                          (207,329
                                                          )
                                                          
                                                          $
                                                          (746,165
                                                          )
                                                          
                                                          $
                                                          (1,445,555
                                                          )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Non-cash
      compensation related to the issuance of warrants
                                                          
                                                          
                                                          783,860Net
      interest income
                                                          
                                                          
                                                          (103,099
                                                          )
                                                          
                                                          
                                                          (472,447
                                                          )
                                                          
                                                          
                                                          (1,429,702
                                                          )(Increase)/decrease
      in prepaid expenses
                                                          
                                                          
                                                          1,309
                                                          
                                                          
                                                          
                                                          38,331
                                                          
                                                          
                                                          
                                                          (18,243
                                                          )Increase
      in deferred income tax asset
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (190,729
                                                          )
                                                          
                                                          
                                                          (195,000
                                                          )Increase/(decrease)
      in taxes payable
                                                          
                                                          
                                                          85,441
                                                          
                                                          
                                                          
                                                          (176,326
                                                          )
                                                          
                                                          
                                                          369,821Increase
      in accounts payable and accrued expenses
                                                          
                                                          
                                                          91,943
                                                          
                                                          
                                                          
                                                          197,246
                                                          
                                                          
                                                          
                                                          690,342Net
      cash used in operating activities
                                                          
                                                          
                                                          (131,735
                                                          )
                                                          
                                                          
                                                          (566,230
                                                          )
                                                          
                                                          
                                                          (1,244,477
                                                          )Cash
      flows from investment activitiesPayment
      to trust account
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (45,160,000
                                                          )Interest
      drawn from trust account
                                                          
                                                          
                                                          111,501
                                                          
                                                          
                                                          
                                                          760,353
                                                          
                                                          
                                                          
                                                          1,393,499Net
      cash provided by/(used in) investing activities
                                                          
                                                          
                                                          111,501
                                                          
                                                          
                                                          
                                                          760,353
                                                          
                                                          
                                                          
                                                          (43,766,501
                                                          )Cash
      flows from financing activitiesProceeds
      from notes and advances payable, InterAmerican Advisors,
    LLC
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          141,000Payments
      of notes and advances payable, InterAmerican Advisors, LLC
                                                          
                                                          
                                                          (141,000
                                                          )Proceeds
      from notes payable
                                                          
                                                          
                                                          16,716
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          86,366Payment
      of notes payable
                                                          
                                                          
                                                          (16,716
                                                          )
                                                          
                                                          
                                                          (46,734
                                                          )
                                                          
                                                          
                                                          (86,366
                                                          )Payment
      of costs of public offering
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (100,000
                                                          )
                                                          
                                                          
                                                          (2,503,483
                                                          )Proceeds
      from private placement warrant sale
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          1,500,000Proceeds
      from sale of shares of common stock
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          15,000Proceeds
      from initial public offering
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          46,000,000Net
      cash provided by (used in) financing activities
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (146,734
                                                          )
                                                          
                                                          
                                                          45,011,517Net
      (Decrease)/Increase in cash
                                                          
                                                          
                                                          (20,234
                                                          )
                                                          
                                                          
                                                          47,389
                                                          
                                                          
                                                          
                                                          539Cash
      at beginning of period
                                                          
                                                          
                                                          20,773
                                                          
                                                          
                                                          
                                                          15,533
                                                          
                                                          
                                                          
                                                          -Cash
      at end of period
                                                          
                                                          $
                                                          539
                                                          
                                                          
                                                          $
                                                          62,922
                                                          
                                                          
                                                          $
                                                          539Supplemental
      schedule of non-cash financing activities:Accrual
      of deferred offering costs
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          53,484
                                                          
                                                          
                                                          $
                                                          8,484Accrual
      of deferred underwriting fees
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          2,070,000Supplemental
      cash flow information:Cash
      paid for interest
                                                          
                                                          $
                                                          230
                                                          
                                                          
                                                          $
                                                          1,071
                                                          
                                                          
                                                          $
                                                          16,319Cash
      paid for income taxes
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          265,792
                                                          
                                                          
                                                          $
                                                          265,792
  See
      notes to unaudited condensed consolidatedfinancial
    statements


4


InterAmerican Acquisition Group
Inc.


(a
corporation in the development stage)





Notes
to Condensed Consolidated Financial Statements (Unaudited)


June
30, 2009





1.
            Basis
      of Presentation, Organization, Business Operations and Summary of
      Significant Accounting Policies





Basis
of Presentation





The
consolidated financial statements include the accounts of InterAmerican
Acquisition Group Inc. (the ‘‘Company’’) and its wholly-owned subsidiary, CNC
Development Ltd. All intercompany transactions have been
eliminated.  The consolidated financial statements at June 30, 2009
and for the three months and six months ended June 30, 2009 and 2008, and for
the period from May 10, 2005 (inception) to June 30, 2009 (cumulative), are
unaudited.  In the opinion of management, all adjustments (consisting of
normal adjustments) have been made that are necessary to present fairly the
consolidated financial position of the Company as of June 30, 2009 and the
results of its consolidated operations and cash flows for the three months and
six months ended June 30, 2009 and 2008 and for the period from May 10, 2005
(inception) to June 30, 2009 (cumulative).  Management of the Company
has reviewed subsequent events through the date of this filing, August 18,
2009.   Operating results for the interim periods presented are
not necessarily indicative of the results to be expected for the full fiscal
year.  The condensed consolidated balance sheet at December 31, 2008
and the condensed consolidated statement of stockholders’ equity for the period
ended December 31, 2005 and the years ended December 31, 2006, 2007 and 2008
have been derived from audited financial statements.  The statements
and related notes have been prepared pursuant to the rules and regulations of
the U.S. Securities and Exchange Commission.  Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles may be
omitted pursuant to such rules and regulations.  See the Company’s
Annual Report on Form 10-K for the year ended December 31, 2008 for additional
disclosures relating to the Company’s financial statements and accounting
principles.





Organization, Business Operations and
Significant Accounting Policies





The
Company was incorporated in Delaware on May 10, 2005 as a blank check
company whose objective is to acquire an operating business, as further
described in Note 10 below. All activity through June 30, 2009 relates to the
Company’s formation, the public offering and its efforts to identify and
consummate a business combination as described below. In connection with the
prospective acquisition of an operating business (as further described in Note
10) the Company formed its wholly-owned subsidiary, CNC Development Ltd., in the
British Virgin Islands on August 11, 2008. CNC Development Ltd. was formed for
the purpose of the business combination described in Note 10 and had no
operations as of June 30, 2009. The Company is considered to be in the
development stage and is subject to the risks associated with activities of
development stage companies.





5


The
registration statement for the Company’s initial public offering (the
“Offering”) was declared effective on September 4, 2007. The Company
completed the Offering, including the exercise of the underwriter’s
overallotment option, on September 10, 2007 and September 11, 2007, and received
net proceeds of approximately $41.4 million, which is net of $2,070,000 of
deferred underwriting discounts (as described in Note 2). The Company’s
executive officers and directors have broad discretion with respect to the
specific application of the net proceeds of the Offering of units, consisting of
one share of the Company’s common stock and one redeemable common stock purchase
warrant (the “Units”) and the private placement of 1,000,000 warrants that
occurred immediately prior to completion of the Offering (the “Private
Placement”), although substantially all of the net proceeds of the Offering and
Private Placement are intended to be generally applied toward consummating an
initial merger, acquisition, asset purchase or other such transaction (a
“Business Combination”) with (or acquisition of) one or more operating
businesses. Furthermore, there is no assurance that the Company will be able to
successfully consummate an initial Business Combination. An amount of
$45,160,000, which includes $1,500,000 relating to the sale of warrants in the
Private Placement and $2,070,000 deferred payment to the underwriters in the
Offering, of the net proceeds was deposited in a trust account (the
“Trust Account”), as further described in Note 2, until the earlier of
(i) the consummation of an initial Business Combination or (ii) the
distribution of the Trust Account as described below. The placing of funds in
the Trust Account may not protect those funds from third party claims against
the Company. Although the Company will seek to have all third parties the
Company engages for services rendered to it or products sold to it (which
includes, for example, lawyers, investment bankers, consultants and analysts),
prospective target businesses or other entities it engages, execute agreements
with the Company waiving any right, title, interest or claim of any kind in or
to any monies held in the Trust Account, there is no guarantee that they will
execute such agreements. The Company’s two executive officers, William Morro and
Dr. Richard Sinkin have severally (but not jointly) agreed that they will be
personally liable, severally (but not jointly), which means they will be
personally liable only for 60% and 40% respectively (as an example, if there is
a valid third party claim of $1,000,000, Mr. Morro will be responsible for
$600,000 of such claim and Dr. Sinkin will be responsible for $400,000 of such
claim), to pay claims of third parties that are owed money for services rendered
to the Company or products sold to the Company (which includes, for example,
accountants, lawyers, investment bankers, consultants and analysts) that would
reduce the amount of the Trust Account, provided that such third party has not
executed a valid and enforceable waiver to rights or claims against the Trust
Account and only to the extent necessary to ensure that such claims do not
reduce the amount in the Trust Account.  The  indemnification
provided by Messrs. Morro and Sinkin is limited as further described in Note 12
and would not cover tax claims, tort claims brought against the Company for some
unforeseen event, claims against the Company brought by a target business for
breach of contract or claims for breach of a confidentiality agreement with a
potential target.  The Company will bring an action against either of
its executive officers in the event that such individual asserts that he is not
able to cover any of the indemnified expenses that would deplete the trust
proceeds or that either is not liable pursuant to their indemnification
obligations as described above.The Company will bring an action against
either of its executive officers in the event that such individual asserts that
he is not able to cover any of the expenses that would deplete the trust
proceeds or that either is not liable pursuant to their indemnification
obligations as described above. Based on the information provided to the Company
in the director and officer questionnaires provided to the Company in connection
with the Offering as well as the representations as to their accredited investor
status (as such term is defined in Regulation D), the Company currently believes
that such persons are of substantial means and capable of funding their
indemnity obligations. However, because the amount of any such indemnification
obligations cannot be estimated, the Company has not asked Messrs. Morro or
Sinkin to reserve for such an eventuality and there can be no assurance that
they will satisfy their indemnification obligations if and when they arise.
Accordingly, the proceeds held in trust could be subject to claims which could
take priority over the claims of the Company’s public stockholders and the
per-share liquidation price could be less than approximately $7.85, plus
interest (net of taxes payable and net of interest earned on the trust account
up to a maximum amount of $950,000 released to the Company to fund its working
capital) due to claims of such creditors, including claims related to amounts
authorized to be expended in accordance with the resolution described in Note
12. The remaining net proceeds (not held in the Trust Account) and interest
income earned on the funds in the Trust Account of up to $950,000, after tax, is
permitted to be and has been released to the Company to pay for business, legal
and accounting due diligence on prospective acquisitions and continuing general
and administrative expenses.  The Company has signed a definitive
agreement for the acquisition of a target business (Note 10) and will submit
such transaction for stockholder approval. In the event that stockholders owning
20% or more of the shares sold in the Offering vote against the Business
Combination and exercise their redemption rights described below, the Business
Combination will not be consummated. All of the Company’s stockholders prior to
the Offering, including all of the officers, directors and special advisors of
the Company (‘‘Initial Stockholders’’), have agreed to vote their 1,250,000
founding shares of common stock (as well as any shares included in units
purchased in the Offering or in the aftermarket) in accordance with the vote of
the majority in interest of all other stockholders of the Company (‘‘Public
Stockholders’’) with respect to any Business Combination. After consummation of
a Business Combination, these voting safeguards will no longer be
applicable.





6


With
respect to a Business Combination which is approved and consummated, any Public
Stockholder who voted against the Business Combination may demand that the
Company redeem his or her shares. The per share redemption price will equal the
amount in the Trust Account (inclusive of the funds held in the trust account
for the benefit of the underwriters and the proceeds from management’s warrant
purchase but net of taxes payable and net of interest earned up to a maximum
amount of $950,000 that was permitted to be released from the trust account to
meet working capital needs), calculated as of two business days prior to the
consummation of the proposed Business Combination, divided by the number of
shares of common stock sold in our initial public offering. Accordingly, Public
Stockholders holding 19.99% of the aggregate number of shares owned by all
Public Stockholders may seek redemption of their shares in the event of a
Business Combination. Therefore, a portion of the net proceeds from the Offering
(19.99% of the amount placed in the Trust Account) has been classified as common
stock subject to possible redemption.





The
Company’s amended and restated certificate of incorporation provides for the
liquidation of the Trust Account as part of any plan of dissolution and
distribution of the Company, in the event that the Company does not consummate a
Business Combination within 18 months from the date of the consummation of the
Offering, or 24 months from the consummation of the Offering if certain
extension criteria have been satisfied. There is no assurance that the Company
will be able to complete the Business Combination described in Note 10 within
that period. This factor, along with the liquidity factors described in Note 11,
raise substantial doubt about the Company’s ability to continue as a going
concern. The accompanying financial statements are prepared assuming the Company
will continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. These
liquidation provisions, which are also contained in the agreement governing the
Trust Account, cannot be amended without the affirmative vote of 100% of the
Public Stockholders, nor can the certificate of incorporation be amended without
the affirmative vote of 95% of the shares sold in the Offering. In the event of
liquidation, it is likely that the per share value of the residual assets
remaining available for distribution (including Trust Account assets) will be
less than the initial public offering price per share in the Offering (assuming
no value is attributed to the Warrants, as defined below, contained in the Units
issued in the Offering discussed in Note 2).





Income
Taxes





Deferred
income taxes are provided for the differences between the bases 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.





Net
Loss Per Common Share





Net loss
per share is computed by dividing net loss by the weighted-average number of
shares of common stock outstanding during the period after giving effect to
stock splits and reverse stock splits. The effect of the 5,750,000 outstanding
warrants issued in connection with the Offering and the 1,000,000 outstanding
warrants issued in connection with the Private Placement has not been considered
in diluted loss per share calculations for the six months ended June 30,
2009 since such warrants are contingently exercisable. The effect of the 185,000
outstanding warrants issued on May 21, 2008 as described in Note 7 has not been
considered in diluted loss per share calculations for the six months
ended June 30, 2009 since the effect would have been
antidilutive.





Use
of Estimates





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





Cash
and Cash Equivalents





The
Company maintains cash in bank deposit accounts which, at times, exceed
federally insured (FDIC) limits. The Company has not experienced any losses on
these accounts. For financial statement purposes, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.





7


Fair
value of Financial Instruments





The following methods and assumptions
are used to estimate the fair value of each class of financial instruments for
which it is practical to estimate:





The fair value of the Company’s assets
and liabilities that qualify as financial instruments under SFAS No. 107
“Disclosures about Fair Value of Financial Instrument,” approximate their
carrying amounts presented in the balance sheet at June 30, 2009 and December
31, 2008, based upon the short term nature of the account.





Recent
Accounting Pronouncements





In
December 2007, FASB issued Statement of Financial Accounting Standards No. 141R,
“Business Combinations” (“SFAS 141R”) that is effective for business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. The
pronouncement resulted from a joint project between the FASB and the
International Accounting Standards Board and continues the movement toward the
greater use of fair values in financial reporting. SFAS 141R is expected to
significantly change how future business acquisitions are accounted for and will
impact financial statements both on the acquisition date and in subsequent
periods.   SFAS 141R was adopted by the Company as of January 1,
2009 and will have an impact to the Company for any acquisitions on or after
January 1, 2009.





In
December 2007, FASB issued Statement of Financial Accounting Standards No. 160,
“Non-controlling Interests in Consolidated Financial Statements” (“SFAS 160”)
that is effective for annual periods beginning on or after December 15, 2008.
The pronouncement resulted from a joint project between the FASB and the
International Accounting Standards Board and continues the movement toward the
greater use of fair values in financial reporting. Adoption of SFAS 160 by the
Company as of January 1, 2009 did not result in the reclassification of any
non-controlling interests as a component of equity and will have an impact to
the Company for any acquisition on or after January 1, 2009.





In June
2008, the FASB ratified Emerging Issues Task Force (“EITF”) Issue No. 07-5,
“Determining Whether an Instrument (or Embedded Feature) is Indexed to an
Entity’s Own Stock” (“EITF 07-5”). EITF 07-5 mandates a two-step process for
evaluating whether an equity-linked financial instrument or embedded feature is
indexed to the entity’s own stock. It is effective for fiscal years beginning
after December 15, 2008 and interim periods within those fiscal years, which is
our first quarter of 2009. Any outstanding instrument at the date of adoption
required a retrospective application of the accounting through a cumulative
effect adjustment to retained earnings upon adoption. The adoption of EITF 07-5
as of January 1, 2009 did not have a material effect on the Company’s 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
accompanying financial statements.








2.
            Initial
      Public Offering





The
Company sold 5,750,000 Units at an offering price of $8.00 per Unit (750,000 of
which Units were sold in connection with the underwriters’ exercise of their
over-allotment option). Each “Unit” consists of one share of the Company’s
common stock and one Redeemable Common Stock Purchase Warrant (“Warrants”). Each
Warrant entitles the holder to purchase from the Company one share of common
stock at an exercise price of $5.00 commencing the later of the completion of a
Business Combination and one year from the effective date of the Offering and
expiring four years from the effective date of the Offering. The Company may
redeem the Warrants at a price of $0.01 per Warrant upon 30 days notice after
the Warrants become exercisable, only in the event that the last sale price of
the common stock is at least $10.00 per share for any 20 trading days within a
30-day period ending on the third day prior to the date on which notice of
redemption is given. The Company agreed to pay the underwriters in the Offering
an underwriting discount of 6% of the gross proceeds of the Offering and a
non-accountable expense allowance of 2% of the gross proceeds of the Offering
(excluding any over-allotment option proceeds). However, the underwriters have
agreed that, of this amount, 4.5% of the gross proceeds of the Offering will not
be paid unless and until the Company completes an initial Business Combination
and has waived its rights to receive such payment upon the Company’s liquidation
if the Company is unable to complete an initial Business
Combination.





8


The
Company has agreed with the representative of the underwriters to use its best
efforts to maintain the effectiveness of the registration statement applicable
to the Warrants until their expiration. If the Company is unable to maintain the
effectiveness of such registration statement until the expiration of the
Warrants, and therefore is unable to deliver registered shares, the Company will
not be required to net cash settle the Warrants and the Warrants may become
worthless.





3.
            Trust
      Account





Investments
held in trust at June 30, 2009 are invested in a money market fund meeting
conditions of the Investment Company Act of 1940. Continental Stock Transfer and
Trust Company is the trustee and the trust account is maintained by the trustee
at JP Morgan Chase New York Bank. The Company is permitted to draw up to
$950,000 of interest to meet its needs for operating expenses and working
capital and to incur additional unindemnified obligations as described in Note
12. The Company is also permitted to draw from interest earned on the Trust
Account without restriction to pay taxes. The reconciliation of investments held
in trust as of June 30, 2009 and December 31, 2008 is as follows:




June
      30, 2009
                                        
                                        
                                        December
      31, 2008Contribution
      to trust
                                        
                                        $
                                        45,160,000
                                        
                                        
                                        $
                                        45,160,000Interest
      income received
                                        
                                        
                                        1,420,260
                                        
                                        
                                        
                                        1,282,415Accrued
      interest income
                                        
                                        
                                        9,443
                                        
                                        
                                        
                                        44,190Withdrawals
      to pay taxes
                                        
                                        
                                        (443,500)
                                        
                                        
                                        
                                        (408,900)Withdrawals
      to fund operations (a)
                                        
                                        
                                        (950,000)
                                        
                                        
                                        
                                        (873,100)Investments
      and accrued interest held in trust
                                        
                                        $
                                        45,196,203
                                        
                                        
                                        $
                                        45,204,605(a)  Limited
      to $950,000


4.
            Accounts
      Payable and Accrued Expenses





Accounts
payable and accrued expenses consist of the following components as of June 30,
2009 and December 31, 2008:




June
      30, 2009
                        
                        
                        December
      31, 2008Amounts
      due for offering-related expenses
                        
                        $
                        8,484
                        
                        
                        $
                        8,484Other
                        
                        $
                        690,342
                        
                        
                        
                        598,399Total
                        
                        $
                        698,826
                        
                        
                        $
                        606,883




5.
            Notes
      Payable





The
Company issued a $75,000 unsecured promissory note to InterAmerican Advisors,
LLC (‘‘InterAmerican’’), an affiliate of certain of its Initial Stockholders, on
May 27, 2005, issued a $15,000 unsecured promissory note to InterAmerican on
July 6, 2006, issued an additional $15,000 unsecured promissory note to
InterAmerican on November 6, 2006, issued an additional $6,500 unsecured
promissory note to InterAmerican on March 1, 2007 and issued an additional
$29,000 unsecured promissory note to InterAmerican on June 25, 2007. In
accordance with their terms, the notes were repaid in full on September 10, 2007
together with interest at the rate of 6% per annum for the amount of $12,678
from the date of issue.





9


Effective
September 9, 2007, the Company entered into an unsecured financing agreement for
its D&O insurance premiums with an unaffiliated finance company in the
amount of $69,650 and an annualized interest rate of 7.07%. The first principal
payment of $22,916 was paid in November 2007 and the second principal payment of
$23,129 was paid in February 2008 and the final principal payment of $23,605 was
paid in May 2008.





Effective
March 4, 2009, the Company entered into an unsecured financing agreement for its
D&O insurance premiums with an unaffiliated finance company in the amount of
$16,716 and an annualized interest rate of 8.25%. The first principal payment of
$5,572 was paid in March 2009 and the second and third principal payments of
$5,572 were paid in May 2009 and June 2009 respectively.








6.  Fair Value of Financial
Instruments




Effective
January 1, 2008 the Company adopted Statement No. 157, Fair Value
Measurements.  Statement No. 157 applies to all assets and
liabilities that are being measured and reported on a fair value
basis.  Statement No. 157 requires new disclosure that establishes a
framework for measuring fair value in generally accepted accounting principles,
and expands disclosure about fair value measurements.  This statement
enables the reader of the financial statements to assess the inputs used to
develop those measurements by establishing a hierarchy for ranking the quality
and reliability of the information used to determine fair values.  The
statement requires that assets and liabilities carried at fair value will be
classified and disclosed in one of the following three categories:





Level
      1:
            Quoted
      market prices in active markets for identical assets or
      liabilities;


Level
      2:
              Observable
      market based inputs or unobservable inputs that are corroborated
      bymarket
      data;


Level
      3:
            Unobservable
      inputs that are not corroborated by market
data.




In
determining the appropriate levels, the Company performs a detailed analysis of
the assets and liabilities that are subject to Statement No. 157.  At
each reporting period, all assets and liabilities for which the fair value
measurement is based on significant unobservable inputs are classified as Level
3.




The table
below presents the balances of assets and liabilities measured at fair value on
a recurring basis by level within the hierarchy:





June
      30, 2009Total
                                        
                                        
                                        Level
      1
                                        
                                        
                                        Level
      2
                                        
                                        
                                        Level
      3Investments
      (including accrued interest) held in trust
                                        
                                        $
                                        45,196,203
                                        
                                        
                                        $
                                        45,196,203
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -Total
      assets
                                        
                                        $
                                        45,196,203
                                        
                                        
                                        $
                                        45,196,203
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -





The
Company’s restricted funds held in trust, including accrued interest, are
invested as described in Note 3 above and this investment is considered to be
highly liquid and easily tradable.




7.
            Commitments
      and Related Party Transactions





The
Company presently occupies office space provided by an affiliate of several of
the Initial Stockholders. Such affiliate has agreed that, until the Company
consummates a Business Combination, it will make such office space, as well as
certain office and secretarial services, available to the Company, as may be
required by the Company from time to time. The Company has agreed to pay such
affiliate $10,000 per month for such services for up to 12 months commencing on
the effective date of the Offering. The Statement of Operations for the six
months ended June 30, 2009 and 2008 and the period from May 10, 2005 (inception)
to June 30, 2009 includes $0, $60,000 and $120,000 respectively related to this
agreement.





10


Pursuant
to letter agreements dated June 27, 2007 with the Company and the representative
for the underwriters, the Initial Stockholders have waived their right to
receive distributions with respect to their founding shares upon the Company’s
liquidation.





Immediately
prior to the consummation of the Offering on September 10, 2007, Sintrim Capital
Corp., an affiliate of InterAmerican Capital Partners II LLC, an entity
wholly-owned by certain of the Company’s executive officers, together with one
of the Company’s special advisors, purchased 1,000,000 warrants from the Company
at a purchase price of $1.50 per warrant, for an aggregate purchase price of
$1,500,000.  Each warrant entitles the holder to purchase one share of
the Company’s common stock at an exercise price of $5.00 per
share.  Sintrim Capital Corp and one of the Company’s special advisors
have further agreed that the warrants purchased by them pursuant to this
agreement will not be sold or transferred, except to one or more affiliates,
until after the Company has completed a Business Combination. The proceeds from
the sale of the warrants was deposited into the Trust Account and is part of the
amount payable to the Public Stockholders in the event of the liquidation of the
Trust Account as part of the Company’s plan of dissolution and distribution.
Similarly, the purchase price will become part of any redemption amount paid to
redeeming stockholders. The warrant purchase agreement also grants certain
registration rights to Sintrim Capital Corp., InterAmerican Capital Partners II
LLC and one of the Company’s special advisors with respect to the warrants
purchased and the shares of our common stock issuable upon exercise of the
warrants.





The
Initial Stockholders are entitled to registration rights with respect to their
founding shares pursuant to a registration rights agreement signed in connection
with the Offering. The holders of the majority of these shares are entitled to
make up to two demands that the Company register these shares at any time
commencing three months prior to the third anniversary of the effective date of
the Offering. In addition, the Initial Stockholders have certain ‘‘piggy-back’’
registration rights on registration statements filed subsequent to the third
anniversary of the effective date of the Offering.





We issued
to certain of our founding stockholders warrants to purchase an aggregate of
185,000 shares of our common stock, pursuant to agreements dated as of May 21,
2008. Subsequently, as required by an amendment to the stock purchase agreement,
with Sing Kung (as discussed in Note 10) the recipients have agreed to cancel
129,150 of those warrants upon consummation of the Business Combination with
Sing Kung described in Note 10.  As of June 30, 2009 all such warrants
remained outstanding and none were exercised. Under the terms of the May 21,
2008 warrant agreements, the warrants are immediately exercisable at an exercise
price of $.01 and expire on the earlier of (x) January 31, 2009 if a
Business Combination is consummated in 2008 or 90 days after the consummation of
a Business Combination if such Business Combination occurs in 2009 or (y)
September 4, 2009. The warrants are subject to the same restrictions as the
original shares held by the Company’s founding stockholders, including the
restriction from selling or transferring the warrants, or any common stock
underlying them, until September 4, 2009 (the “Restricted Period”). During the
Restricted Period, no sale or transfer or other disposition of the warrants, or
any common stock underlying them, can be made except for certain limited
exceptions as set forth in the warrant agreements. The issuance of the warrants
on May 21, 2008 was made pursuant to the exemption from the registration
provisions of the Securities Act of 1933, as amended (the “Securities Act”),
provided by Section 4(2) of the Securities Act and Regulation D promulgated
thereunder. The warrants and underlying common stock have not been registered
under the Securities Act and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
The value of the warrants was determined by our board of directors to be
$783,860 ($4.24 per warrant) based on an assessment of fair value provided by a
third-party appraiser who utilized a Black-Scholes model, although the
assumptions used as inputs in the Black-Scholes model (volatility, risk-free
rates and expected term) are not considered significant since variations of
these assumptions have little to no effect on the fair value, the resulting fair
value of the warrant being the differential between the fair value of the
underlying share and the exercise price of the warrant. The fair value of the
common share underlying the warrant was discounted for post-vesting
restrictions. As noted above, neither the warrants or the underlying common
shares can be sold or transferred, except for limited circumstances during the
Restricted Period and the common shares have no rights to the amounts in the
Trust Account upon liquidation. The discounts for the post-vesting restrictions
were estimated by applying a probability to our successful completion of a
Business Combination and discounting the resulting value for trading
restrictions and illiquidity following the prospective exercise of the options.
A tax deduction for such expense will be available to us at such time as the
options are exercised by the holders (if ever). If we successfully consummate a
Business Combination, we believe that the exercise of the options is highly
likely. However, because of uncertainty about the exercise of the options, we
have taken a reserve of 100% for deferred taxes associated with the option
expense.





11


8.
            Stockholders’
      Equity





Common
Stock





On
December 7, 2005, the Company effected a 2-for-5 reverse stock split of its
shares of common stock. On April 26, 2006, the Company effected a 1.25-for-1
stock split of its shares of common stock. On May 26, 2006, the Company effected
a 1.44-for-1 stock split of its shares of common stock. On June 27, 2007, the
Company effected a 1-for-2.16 reverse stock split of its shares of common stock.
All references in the accompanying financial statements to the number of shares
of common stock and income (loss) per share have been retroactively restated to
reflect these transactions.  At June 30, 2009, a total of 6,935,000
shares of common stock were reserved for issuance upon the exercise of
outstanding warrants.





Preferred
Stock





The
Company is authorized to issue 1,000,000 shares of preferred stock with such
designations, voting and other rights and preferences as may be determined from
time to time by the Board of Directors.





9.
            Income
      Taxes





The
provision for income taxes consists of the following:




Six
      Months Ended
                      June 30,
      2009
                    
                    
                    Six
      Months Ended
                      June
      30, 2008Current:Federal
                    
                    $
                    9,097
                    
                    
                    $
                    123,417State
                    
                    
                    2,594
                    
                    
                    
                    35,357Deferred:Federal
                    
                    
                    -
                    
                    
                    
                    (190,729
                    )State
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    $
                    11,691
                    
                    
                    $
                    (31,955
                    )


The
majority of the Company’s operating expenses are not currently deductible for
income tax purposes. These expenses will be deductible for income tax purposes
over a period of time when a trade or business, as defined in the Internal
Revenue Code, begins operations or in the event the Company liquidates. The
deferred tax asset relates to the future benefit the Company will receive when
it is able to deduct these costs for income tax purposes.





12


The
effect of the temporary differences that make up the deferred tax assets are as
follows:







June
      30, 2009
                      
                      
                      December
      31, 2008Effect
      of expenses deferred for purposes of calculating income
tax
                      
                      $
                      898,192
                      
                      
                      $
                      808,940Valuation
      allowance
                      
                      $
                      (703,192
                      )
                      
                      
                      (613,940
                      )Total
                      
                      $
                      195,000
                      
                      
                      $
                      195,000





The total
provision for income taxes differs from that amount which would be computed by
applying the U.S. Federal tax rate to income before provision for income taxes
as follows:





Six
      months ended
                        June 30,
      2009
                      
                      
                      Six months
      ended
                        June 30,
      2008Statutory
      federal income tax rate
                      
                      
                      (34.0
                      )%
                      
                      
                      (34.0
                      )%State
      and local income tax rate
                      
                      
                      (5.8
                      )%
                      
                      
                      (5.8
                      )%Effect
      of permanent differences
                      
                      
                      0.1
                      %
                      
                      
                      0.1
                      %Change
      in valuation allowance
                      
                      
                      45.6
                      %
                      
                      
                      43.9
                      %Effective
      income tax rate
                      
                      
                      (5.9
                      )%
                      
                      
                      4.1
                      %







Because
of limitations on loss carrybacks applicable to state income taxes, the Company
recorded a valuation reserve for all of its deferred state tax assets at June
30, 2009 and December 31, 2008. In recognition that it may not be able to
recover its federal deferred tax asset in excess of federal taxes previously
paid, the Company recorded a valuation allowance sufficient to meet this
condition for federal tax assets at June 30, 2009.





There
have been no audits of the Company’s tax returns since inception and all years
remain open to examination.




10.
            Proposed
      Acquisition





Effective
May 15, 2008, the Company entered into a definitive stock purchase agreement to
acquire 89.6% of the fully-diluted shares of Sing Kung, Limited, a
privately-held company based in the British Virgin Islands that provides city
planning, infrastructure development, urban land improvement, and older-city
redevelopment to municipalities in China (“Sing Kung”). The stock purchase
agreement was amended as of November 28, 2008 and July 17, 2009. Sing Kung was
formed in the British Virgin Islands in 2007 for the sole purposes of acquiring
a 100% interest in Century City Infrastructure Co. Ltd. (“Century City”).
Century City was also formed in 2007 and registered as a wholly-owned foreign
enterprise in China, for the purpose of acquiring a 100% interest in Shanghai
New Century City Development, Ltd. (“SNC”), which is the entity through which
Sing Kung conducts most of its business in China. The acquisition of SNC by
Century City was completed on December 8, 2008, but prior thereto (from December
27, 2007) Century City controlled and had a 100% economic interest in SNC as a
result of executed agreements between Century City and the SNC
stockholders.





Pursuant
to the stock purchase agreement, as amended, the Company formed a subsidiary,
CNC Development Ltd. (“CNC”) in the British Virgin Islands on August 11, 2008.
Upon the closing of the acquisition, subject to the approval of the Company’s
stockholders, the stock purchase agreement requires for the simultaneous
redomestication of the Company from the State of Delaware to the British Virgin
Islands, through a merger of the Company into CNC and the exchange of 0.1850734
shares of CNC common stock and 0.8857955 shares of CNC Class A Preferred stock
for each share of the Company’s common stock. The Sing Kung stockholders that
are parties to the stock purchase agreement will receive in the aggregate (i)
19,843,417shares of CNC common stock plus(ii) the right to receive up to an additional 10.3 million shares of CNC
common stock if the following net income targets are met in each of the years
shown below:





13


Year
      ending December 31,
                    
                    Net
      Income2009
                    
                    $15,000,0002010
                    
                    $19,500,0002011
                    
                    $25,350,0002012
                    
                    $32,955,0002013
                    
                    $42,841,500





CNC also
intends to make an exchange offer of 0.422200 shares of CNC common stock for
each of the remaining 2,548,718 shares of Sing Kung common stock and 1.842727
shares of CNC Class A Preferred stock for each of the 2,915,000 shares of Sing
Kung preferred stock that are held by Sing Kung stockholders who are not parties
to the stock purchase agreement. If all such stockholders who are not parties to
the stock purchase agreement participate in the exchange offer, they will
receive an aggregate of 1,076,070 shares of CNC common stock and 5,371,548
shares of CNC Class A Preferred stock respectively. The acquisition is expected
to be consummated in the third quarter of 2009, after the required approval by
the Company’s stockholders and the fulfillment of certain other closing
conditions.  Following the closing of the transaction, the
post-transaction public company will be renamed China New City Construction Co.
Ltd. In addition, the Company will seek to list its shares on The NASDAQ Stock
Market.





The
Company’s proxy statement/prospectus on Form S-4 related to the Sing Kung
transaction was declared effective by the Securities and Exchange Commission on
August 7, 2009 and a stockholder vote for stockholders of record as of August 5,
2009 has been scheduled for August 27, 2009.  Recent changes in market
conditions and the limited time remaining until the Company’s liquidation
deadline have increased the risk the acquisition of Sing Kung cannot be timely
completed on the terms set forth in the stock purchase agreement, as
amended.  For a more complete discussion of the Company’s proposed
Business Combination, see the Company’s final proxy statement/prospectus filed
with the Securities and Exchange Commission on August 10, 2009.





The
Company has incurred and expensed approximately $764,443 of costs related to the
proposed transaction with Sing Kung as of June 30, 2009.




11.
            Liquidity





In
addition to those initial proceeds not deposited in the trust fund, we are
permitted to withdraw from the trust account up to $950,000 of interest income
from the trust fund to fund our working capital requirements and the costs of
pursuing a Business Combination. Additional withdrawals from interest earned on
the trust fund are permitted to pay taxes. As of June 30, 2009 we had withdrawn
all of the $950,000 of the amount permitted for working capital
purposes.  As of June 30, 2009, we had liabilities, other than taxes
payable and deferred underwriting fees, net of cash, equal to $698,287. Despite
this working capital deficiency, based on the arrangements we have made with
certain of our vendors and advisors for payment following the consummation of
the Sing Kung stock purchase if it is consummated, the authorization to expend
limited additional corporate funds as further described in Note 12 and
assurances by Sing Kung that it will make limited non-recourse advances to us,
we believe we have sufficient resources to complete the transaction if it is
approved by our stockholders.





If the
Business Combination with Sing Kung is not consummated, we will not have
sufficient available funds (outside of the trust fund) to operate through
September 10, 2009, or to pursue an alternative transaction without needing to
raise additional funds from our officers, directors, stockholders or other
available sources. We have no commitments for such borrowings at this time
and there is no assurance that we will be able to raise additional funds needed
to meet the expenditures required for operating our business beyond the expected
date for consummation of the Sing Kung acquisition.





14


12.
            Subsequent
      Events





Effective July 17, 2009, the stock
purchase agreement with Sing Kung was amended.  The revised terms are
reflected in the description of the transaction incorporated in Note
10.





In connection with its approval of
Amendment No. 2 to the stock purchase agreement and its conclusion that
continued pursuit of the Sing Kung transaction would be in the best interest of
its stockholders, the independent members of the Company’s board of directors
approved the use of up to $200,000 of corporate funds, in addition to the
$950,000 previously authorized to be used in pursuit of a business combination
and for working capital purposes.  Expenditure of the additional funds
is authorized for the sole purpose of meeting incremental, non-contingent costs
incurred after July 20, 2009 to pursue the Transaction and would not be subject
to indemnification by the Company’s officers to repay claims of vendor creditors
that diminish the funds held in the trust account.





Sing Kung funded non-recourse advances
of $53,900 and $33,404 on July 22, 2009 and August 10, 2009,
respectively.





Our proxy statement/prospectus on Form
S-4 related to the Sing Kung transaction was declared effective on August 7,
2009 by the Securities and Exchange Commission and a final proxy
statement/prospectus was filed on August 10, 2009.  A special meeting
of stockholders was set for August 27, 2009 at which stockholders of record as
of August 5, 2009 will vote on the Sing Kung transaction and other matters
described in the meeting notice.







15


ITEM
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS





The
following discussion should be read in conjunction with our Condensed Financial
Statements and footnotes thereto contained in this report.




Forward
Looking Statements





All
statements other than statements of historical fact included in this Form l0-Q
including, without limitation,  statements under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
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-Q, 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.





Overview





The
Company was formed on May 10, 2005, to serve as a vehicle to effect a merger,
capital stock exchange, asset acquisition or other similar business combination
with an operating business. We intend to utilize cash derived from the proceeds
of our recently completed public offering, our capital stock, debt or a
combination of cash, capital stock and debt, in effecting a business
combina­tion.  Effective May 15, 2008, we entered into a
definitive stock purchase agreement with Sing Kung and that agreement was
subsequently amended as further described below.  There can be no
assurance that the Company will be able to complete a transaction with Sing
Kung, or any other target business.





Recent
Developments/Proposed Acquisition





Effective
May 15, 2008, the Company entered into a definitive stock purchase agreement to
acquire 89.6% of the fully-diluted shares of Sing Kung, Limited, a
privately-held company based in the British Virgin Islands that provides city
planning, infrastructure development, urban land improvement, and older-city
redevelopment to municipalities in China (“Sing Kung”). The stock purchase
agreement was amended as of November 28, 2008 and July 17, 2009. Sing Kung was
formed in the British Virgin Islands in 2007 for the sole purposes of acquiring
a 100% interest in Century City Infrastructure Co. Ltd. (“Century City”).
Century City was also formed in 2007 and registered as a wholly-owned foreign
enterprise in China, for the purpose of acquiring a 100% interest in Shanghai
New Century City Development, Ltd. (“SNC”), which is the entity through which
Sing Kung conducts most of its business in China. The acquisition of SNC by
Century City was completed on December 8, 2008, but prior thereto (from December
27, 2007) Century City controlled and had a 100% economic interest in SNC as a
result of executed agreements between Century City and the SNC
stockholders.





Year
      ending December 31,
                    
                    Net
      Income2009
                    
                    $15,000,0002010
                    
                    $19,500,0002011
                    
                    $25,350,0002012
                    
                    $32,955,0002013
                    
                    $42,841,500








16


CNC also
intends to make an exchange offer of 0.422200 shares of CNC common stock for
each of the remaining 2,548,718 shares of Sing Kung common stock and 1.842727
shares of CNC Class A Preferred stock for each of the 2,915,000 shares of Sing
Kung preferred stock that are held by Sing Kung stockholders who are not parties
to the stock purchase agreement. If all such stockholders who are not party to
the stock purchase agreement participate in the exchange offer, they will
receive an aggregate of 1,076,070 shares of CNC common stock and 5,371,548
shares of CNC Class A Preferred stock respectively. The acquisition is expected
to be consummated in the third quarter of 2009, after the required approval by
the Company’s stockholders and the fulfillment of certain other closing
conditions.  Following the closing of the transaction, the
post-transaction public company will be renamed China New City Construction Co.
Ltd. In addition, the Company will seek to list its shares on The NASDAQ Stock
Market.





Prior to
the closing of the acquisition, the amended stock purchase agreement requires us
to reduce the number of shares of the Company’s common stock outstanding
(including the management warrants issued on May 21, 2008 and described above)
to a total of 7,055,850. To satisfy this condition, our board of directors has
authorized, and the holders of the management warrants have agreed, to a
rescission of 129,150 of the management warrants prior to the closing of the
Sing Kung transaction.  The amended stock purchase agreement requires
the Company to reduce the number of the Company’s outstanding warrants issued in
its IPO and the private placement immediately prior thereto to 5,750,000 from
the 6,750,000 currently outstanding.  To meet this condition, the
purchasers of the 1,000,000 insider warrants issued in a private placement prior
to the Company’s IPO (described below in Item 2 of Part II) have agreed to
cancellation if their warrants if warrants issued in the IPO cannot be otherwise
acquired by the Company on acceptable terms.





Sing Kung
is a privately-held company based in the British Virgin Islands that provides
city planning, infrastructure development, urban land improvement, and
older-city redevelopment to municipalities in China.  Sing Kung was
formed in the British Virgin Islands in 2007 for the sole purpose of acquiring a
100% interest in Century City.  Century City was also formed in 2007
and registered as a wholly-owned foreign enterprise in China, for the purpose of
acquiring a 100% interest in SNC, which was consummated in December
2008.





Results
of Operations





For the
three months and six months ended June 30, 2009, we had a net loss of $42,552
and $207,329 respectively.  We had a net loss for the three and six
months ended June 30, 2008 of $770,430 and of $746,165
respectively.   The reduction in losses for the three- and
six-month periods ended June 30, 2009 and 2008 of $727,878 and $538,836
respectively were due primarily to reductions in net interest income that were
partially mitigated by reductions in total expenditures and the absence in the
first six months of 2009 of warrant issuance costs.





Interest
earned in our trust account for the three and six months ended June 30, 2009 was
$35,589 and $103,099 as compared with $200,496 and $472,445 during the three and
six months ended June 30, 2008.  The declines of $164,907 (82%) and
$369,346 (78%) for the three- and six-month periods respectively were due
entirely to reductions in market interest rates for investment securities of the
types that we are permitted to own in our trust account.  Until we
enter into a business combination, we will not have revenues other than interest
earned on the funds held in trust and we may incur additional losses due to
managements’ expenses relating to locating a target business to
acquire.





Expenses
during the three months ended June 30, 2009 totaled $78,654, a reduction of
$156,503 (67%) as compared with total expenses of $235,157 during the three
months ended June 30, 2008 before giving effect to warrant issuance costs
incurred in May 2008 of $783,860 that were not incurred in the second quarter of
2009.  The reduction in expenses was partially the result of lower
administrative costs associated with lower contractual payments to InterAmerican
Advisors LLC ($30,000) and lower costs of maintaining our public filings,
corporate standing and stockholder and trust administrative and insurance
matters ($48,817) due to cost containment efforts. In addition, we curtailed
costs related to pursuing the business combination with Sing Kung (including
related investor relations expenses) pending restatement of the Sing Kung
financial statements, which reduced such expenses by $78,605 during the second
quarter.  Lower interest and miscellaneous expenses in the second
quarter of 2009 ($1,656) were offset by an increase in the franchise tax accrual
of $2,575.





17


Total
expenses during the quarter ended June 30, 2009 were comprised of: costs
associated with maintaining our public filings, corporate standing and
stockholder administrative matters, including legal and accounting fees
($14,579); administrative expense related to the trust ($3,211); D&O
insurance ($16,716); franchise taxes ($36,875); costs associated with pursuing a
business combination ($2,448); investor relations and communications expense
($4,000); interest ($154); other miscellaneous expenses ($671).  In
addition, our provision for income taxes amounted to a benefit of
$513.





Expenses
during the quarter ended June 30, 2008 totaled $1,019,017 and were comprised of:
costs associated with maintaining our public filings, corporate standing and
stockholder administrative matters, including legal and accounting fees
($65,015); administrative expense related to the trust ($2,705); D&O
insurance ($16,522); franchise taxes ($34,300); the InterAmerican Advisors LLC
administrative fee ($30,000); costs associated with pursuing a business
combination ($83,853); interest expense ($298); other miscellaneous expenses
($2,464); and $783,860 was incurred during the quarter as a result of the
issuance of warrants to our management, directors and a special advisor (as
described below in Part II Item 2:  Unregistered sales of equity
securities and use of proceeds).  Our provision for income taxes
amounted to a benefit of $48,091.





Expenses
during the six months ended June 30, 2009 totaled $298,737, a reduction of
$167,968 (36%) as compared with total expenses of $466,705 during the six months
ended June 30, 2008 before giving effect to warrant issuance costs incurred in
May 2008 of $783,860 that were not incurred in the first half of
2009.  The reduction in expenses was partially the result of lower
administrative costs associated with lower contractual payments to InterAmerican
Advisors LLC ($60,000) and lower costs of maintaining our public filings,
corporate standing and stockholder and trust administrative and insurance
matters ($81,468) due to cost containment efforts. In addition, we curtailed
costs related to pursuing the business combination with Sing Kung (including
related investor relations expenses) pending restatement of the Sing Kung
financial statements, which reduced such expenses by $24,769 during the second
quarter. Lower interest ($841) and miscellaneous expenses ($840) together with a
reduced franchise tax accrual ($50) in the first six months of 2009, as compared
with 2008, made up the balance of the difference.





Total
expenses during the six months ended June 30, 2009 were comprised of: costs
associated with maintaining our public filings, corporate standing and
stockholder administrative matters, including legal and accounting fees
($47,897); administrative expense related to the trust ($6,833); D&O
insurance ($33,366); franchise taxes ($73,750); costs associated with pursuing a
business combination ($126,562); investor relations and communications expense
($7,459); interest ($230); other miscellaneous expenses ($2,640). We also
recorded a provision for income taxes of $11,691.





Expenses
during the six months ended June 30, 2008 totaled ($1,250,565) and were
comprised of: costs associated with maintaining our public filings, corporate
standing and stockholder administrative matters, including legal and accounting
fees ($131,233); administrative expense related to the trust ($5,285); D&O
insurance ($33,046); franchise taxes ($73,800); the InterAmerican Advisors LLC
administrative fee ($60,000); costs associated with pursuing a business
combination, including related investor-relations costs ($158,790); interest
expense ($1,071); other miscellaneous expenses ($3,480);and. $783,860 incurred
during the quarter as a result of the issuance of options to our management,
directors and a special advisor (as described below in Part II Item
2:  Unregistered sales of equity securities and use of
proceeds).  Our provision for income taxes amounted to a benefit of
$31,955.





Financial
Condition and Liquidity





The
registration statement for our initial public offering (the “Offering”) was
declared effective on September 4, 2007. We completed the Offering,
including the exercise of the underwriter’s overallotment option, on September
10, 2007 and September 11, 2007, and received net proceeds of approximately
$41.4 million, which is net of $2,070,000 of deferred underwriting discounts (as
described in Note 2 to the financial statements). Our executive officers and
directors have broad discretion with respect to the specific application of the
net proceeds of this offering of Units and the private placement of 1,000,000
warrants that occurred immediately prior to completion of the Offering (the
“Private Placement”), although substantially all of the net proceeds of the
Offering and Private Placement are intended to be generally applied toward
consummating an initial Business Combination with (or acquisition of) one or
more operating businesses. See Note 10 to the financial statements for more
information with respect to the Company’s proposed acquisition of Sing
Kung.  Furthermore, there is no assurance that we will be able to
successfully consummate an initial Business Combination. An amount of
$45,160,000, which includes $1,500,000 relating to the sale of warrants in the
Private Placement and $2,070,000 deferred payment to the underwriters in the
Offering, of the net proceeds was placed in a Trust Account, and invested in
money market funds meeting conditions of the Investment Company Act of 1940 or
securities principally issued or guaranteed by the U.S. government until the
earlier of (i) the consummation of its initial Business Combination or
(ii) the distribution of the Trust Account as described below. The placing
of funds in the Trust Account may not protect those funds from third party
claims against us.  Although we will seek to have vendors, providers
of financing, if any, prospective target businesses and other entities it
engages, execute agreements with us waiving any right, title, interest or claim
of any kind in or to any monies held in the Trust Account, there is no guarantee
that they will execute such agreements.





18


In
addition to those initial proceeds not deposited in the trust fund, we are
permitted to withdraw up to $950,000 of interest income from the trust fund to
fund our working capital requirements and the costs of pursuing a business
combination.  Additional withdrawals from interest earned on the trust
fund are permitted to pay taxes.  As of June 30, 2009 we had withdrawn
all $950,000 of the amount permitted for working capital purposes.  As
of June 30, 2009 we had liabilities, other than taxes payable and deferred
underwriting fees, net of cash, equal to $698,287.





Because we have exhausted the funds we
are permitted to withdraw for working capital, we have had to enter into
contingent payment arrangements with various vendors and taken other steps in
order to meet the requirements necessary to consummate a business combination
with Sing Kung. Pursuant to the contingent arrangements with participating
vendors, such vendors will be paid upon consummation of a business combination.
We have also solicited financial assistance from Sing Kung to help us meet our
liquidity shortfall.  Without making any specific commitment with
respect to amount, Sing Kung has agreed to make limited non-recourse advances as
it deems minimally necessary to allow us to continue to pursue the
transaction.  Sing Kung made non-recourse advances for this purpose of
$53,900 and $33,404 on July 22, 2009 and August 10, 2009,
respectively.  In addition, the independent members of
the Company’s board of directors approved the use of up to $200,000 of corporate
funds, in addition to the $950,000 previously authorized, to be used in pursuit
of a business combination and for working capital
purposes.  Expenditure of the additional funds is authorized for the
sole purpose of meeting incremental, non-contingent costs incurred after July
20, 2009 to pursue the Sing Kung transaction and would not be subject to
indemnification by the Company’s officers to repay claims of vendor creditors
that diminish the funds held in the trust account.Utilizing
these mechanisms we believe that we will have sufficient funds to complete the
Sing Kung transaction if it is approved by our stockholders, however, there can
be no assurance that the resources available to us will be sufficient for this
purpose. If not, we will be forced to raise additional capital or be forced to
liquidate. We have not identified any sources of additional capital and there is
no assurance that we would be able to obtain such additional capital if
required.





If we are unable to proceed with the
Sing Kung transaction, we will not have a sufficient amount of working capital
available outside of the trust account to conduct due diligence and pay other
expenses related to finding another suitable business combination without
securing additional financing. We cannot assure you that such financing would be
available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable if and when needed to consummate a particular
business combination, we would be compelled to liquidate.





Over the
time period from June 30, 2009 to September 10, 2009, we currently anticipate
incurring additional expenses for the following purposes:





•
            legal,
      accounting and other expenses attendant to consummating the Sing Kung
      transaction;


•
            legal
      and accounting fees relating to our SEC reporting obligations and general
      corporate matters; and


•
            working
      capital, director and officer liability insurance premiums and
      reserves.





19


If the
Sing Kung acquisition is approved by our stockholders, we expect to use all or
substantially all of the proceeds held in trust, other than the deferred portion
of the underwriter’s fee, to pay a dividend of $4.85 per share to our public
stockholders (who do not exercise their conversion rights with respect to the
Company shares) and to acquire Sing Kung, although there is no assurance that we
will be successful in doing so.





If we are
unable to consummate the Sing Kung transaction by September 10, 2009 (or such
earlier time as our working capital funds are exhausted), we will be forced to
liquidate. If we are forced to liquidate, the per share liquidation amount will
be less than the initial per unit price in the Offering because of the
underwriting commissions and expenses related thereto and because of the value
of the warrants in the per unit offering price. Additionally, if third parties
make claims against us, the funds held in the Trust Account could be subject to
those claims, resulting in a further reduction to the per share liquidation
price. Under Delaware law, our stockholders who have received distributions from
us may be held liable for claims by third parties to the extent such claims are
not been paid by us. Furthermore, our warrants will expire worthless if we
liquidate before the completion of a business combination.





As
indicated in the accompanying financial statements, we are assuming that we will
continue as a going concern.  As discussed elsewhere, however, we must
consummate the business combination with Sing Kung or another target by
September 10, 2009 or else we are required to liquidate and
dissolve.  The financial statements do not reflect this
contingency.





ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Market risk is the
sensitivity of income to changes in interest rates, foreign exchanges, commodity
prices, equity prices, and other market-driven rates or prices.  We
are not presently engaged in any substantive commercial
business.  Accordingly, we are not exposed to risks associated with
foreign exchange rates, commodity prices, equity prices or other market-driven
rates or prices.  The net proceeds of our initial public offering held
in the Trust Account are invested only in money-market funds meeting certain
conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940
or United States treasury bills.  Given the limited risk in our
exposure to money market funds and treasury bills, we do not view the interest
rate risk to be material.





ITEM
4. CONTROLS AND PROCEDURES.





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Exchange Act is accumulated and communicated to management,
including our chief executive officer, as appropriate to allow timely decisions
regarding required disclosure.





As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief executive
and financial officer carried out an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures as of June 30,
2009. Based upon his evaluation, he concluded that our disclosure controls and
procedures were effective.





Our
internal control over financial reporting is a process designed by, or under the
supervision of, our chief executive and chief financial officer and effected by
our board of directors, management and other personnel, 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 (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
(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.





20


During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected, or is
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 financial officer concluded that our
disclosure controls and procedures are effective at that reasonable assurance
level.








PART
II: OTHER INFORMATION





ITEM
1: LEGAL PROCEEDINGS





None





ITEM
1A. RISK FACTORS





In
addition to the other information set forth in this report, you should carefully
consider the factors discussed in the section titled “Risk Factors” in our final
prospectus on Form 424(b)(3), filed on September 5, 2007, which could materially
affect our business, financial condition or future results and in our Annual
Report on Form 10-K for the year ended December 31, 2008.  The risks
described in our Prospectus and Annual Report are not the only risks facing our
Company.  Additional risks and uncertainties not currently known to us
or that we currently deem to be immaterial also may materially adversely affect
our business, financial condition and/or operating results.  Other
than risks specifically associated with the Sing Kung stock purchase and our
limited liquidity as discussed above under the heading “Financial Condition and
Liquidity”, there have been no material changes from the risk factors previously
disclosed on Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2008. In addition, we have filed a proxy statement/prospectus on
Form S-4 that was declared effective on August 7, 2009 in connection with
seeking stockholder approval for the Sing Kung stock purchase and it provides
additional information on the risks particular to such business
combination.  A final joint proxy statement/prospectus was filed as of
August 10, 2009.





ITEM
2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





On
September 10 and 11, 2007, we closed our initial public offering of 5,750,000
units, including 750,000 units subject to the underwriters’ over-allotment
option, with each unit consisting of one share of our common stock and one
warrant, each to purchase one share of our common stock at an exercise price of
$5.00 per share. The units from the initial public offering (including the
over-allotment option) were sold at an offering price of $8.00 per unit,
generating total gross proceeds of $46,000,000. Chardan Capital Markets LLC
(“CCM”) acted as representative of the underwriters in the initial public
offering. The securities sold in the offering were registered under the
Securities Act of 1933 on registration statement Form S-1 (Nos. 333-125558). The
Securities and Exchange Commission declared the registration statement effective
on September 4, 2007.





We paid a
total of $690,000 in underwriting discounts and commissions (not including
$2,070,000 which was deferred by the underwriters until completion of a Business
Combination) and approximately $1,343,975 for other costs and expenses related
to the offering and the over-allotment option.





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We also
consummated the simultaneous private sale of 1,000,000 warrants at a price of
$1.50 per warrant, pursuant to the exemption from registration under Section
4(2) of the Securities Act, generating total proceeds of approximately
$1,500,000. The warrants were purchased by Sintrim Capital Corp. and one of our
special advisors. The insider warrants are identical to the warrants included in
the units sold in the initial public offering except that the insider warrants
(i) will be exercisable on a cashless basis, (ii) may be exercised whether or
not a registration statement relating to the common stock issuable upon exercise
of the warrants is effective and current and (iii) will not be redeemable by us
so long as they are still held by the purchasers or their affiliates. The
purchasers of the insider warrants have agreed that the insider warrants will
not be sold or transferred by them (except in certain cases) until the
consummation of our business combination.  To meet the requirements of
amended stock purchase agreement with Sing Kung, the purchasers of the insider
warrants have agreed to the cancellation of their warrants issued in our IPO if
such warrants cannot be acquired by us on acceptable terms.





After
deducting the underwriting discounts and commissions and the offering expenses,
our net proceeds from the Offering were approximately $41.4 million, and an
amount of $45,160,000, including $1,500,000 in connection with the warrant sale
and $2,070,000 of deferred underwriting discounts and commissions, was deposited
into the trust account and the remaining proceeds became available to be used to
provide for business, legal and accounting due diligence on prospective business
combinations and continuing general and administrative expenses.





For a
description of the use of the proceeds generated in our initial public offering,
see Part I, Item 2 of this Form 10-Q.





We issued
to certain of our founding stockholders warrants to purchase an aggregate of
185,000 shares of our common stock, pursuant to agreements dated as of May 21,
2008. A copy of the form of agreement with such founding stockholders was filed
on a Form 8-K on May 23, 2008.  As a result of the issuance of the
warrants, if such warrants are exercised, the founding stockholders would have a
twenty percent (20%) beneficial ownership interest in us before giving effect to
the exercise of the warrants included with the units issued in our initial
public offering and the private placement warrants purchased contemporaneously
by affiliates of our management and one of our special
advisors.   Under the terms of the May 21, 2008 warrant
agreements, the warrants are immediately exercisable at an exercise price of
$.01 and expire on the earlier of (x) January 31, 2009 if a
business combination is consummated in 2008 or 90 days after the consummation of
a business combination if such business combination occurs in 2009 or (y)
September 4, 2009.  The warrants are subject to the same restrictions
as the original shares held by the Company’s founding stockholders, including
the restriction from selling or transferring the warrants, or any common stock
underlying them, until September 4, 2009 (the “Restricted
Period”).  During the Restricted Period, no sale or transfer or other
disposition of the warrants, or any common stock underlying them, can be made
except for certain limited exceptions as set forth in the warrant
agreements.  The issuance of the warrants on May 21, 2008 was made
pursuant to the exemption from the registration provisions of the Securities Act
of 1933, as amended (the “Securities Act”), provided by Section 4(2) of the
Securities Act and Regulation D promulgated thereunder.  The warrants
and underlying common stock have not been registered under the Securities Act
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.  To satisfy a
condition in Amendment No. 1 to the stock purchase agreement with Sing Kung, our
board of directors has authorized, and the holders of the management warrants
have agreed, to a rescission of 129,150 of the management warrants prior to the
closing of the Sing Kung transaction, assuming that such closing
occurs.





ITEM
3: DEFAULTS UPON SENIOR SECURITIES





None





22




ITEM
4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None





ITEM
5:  OTHER INFORMATION




None




ITEM
6: EXHIBITS




(a)           Exhibits





31.1
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002.






23


SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.





INTERAMERICAN
      ACQUISITION GROUP INC.By:
                /s/ William C. MorroName:
      William C. Morro
                  Title:  
      Chief Executive Officer







Dated:  August
18, 2009








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