**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**




ý
            Quarterly
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934


For
                the quarterly period ended March 31,
                2008


or





o
            Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934


For
                the transition period from
                                                 
                to




**Commission
      File Number: 001** **-33354**




**Alpha
      Security Group Corporation**


(Exact
      name of registrant as specified in its charter)





**Delaware**
            **03-0561397**(State
                or Other Jurisdiction of
              Incorporation
                or Organization)
            (I.R.S.
                Employer
              Identification
                No.)




**328
      West 77** **th** **Street**


**New
      York, New York 10024**


(Address
      of Principal Executive Offices) (Zip Code)




**212-877-1588**


(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 ý 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.




Large
      Accelerated Filer o Accelerated
      Filer o Non-accelerated
      Filer oSmaller reporting
      company ý




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




There
      were 7,580,000 shares of the Registrant’s common stock issued and outstanding as
      of May 19, 2008.















**TABLE
      OF CONTENTS**





**Page
                No.****Part
                I.**
            **Financial
                Information**
            2Item
                1.
            Financial
                StatementsCondensed
                Balance Sheets as of March 31, 2008 (unaudited) and December 31,
                2007
            2Condensed
                Statement of Income for the three months ended March 31, 2008 and
                March
                31, 2007, and for the period from April 20, 2005 (date of inception)
                to
                March 31, 2008 (unaudited)
            3Condensed
                Statement of Stockholders’ Equity for the period from April 20, 2005 (date
                of inception) to March 31, 2008
            4Condensed
                Statement of Cash Flows for the three months ended March 31, 2008
                and
                March 31, 2007, and from April 20, 2005 (date of inception) to March
                31,
                2008 (unaudited)
            5Notes
                to Condensed Financial Statements
            6Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            14Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            16Item
                4T.
            Controls
                and Procedures
            16**Part
                II.**
            **Other
                Information**
            17Item
                1.
            Legal
                Proceedings
            17Item
                1A.
            Risk
                Factors
            17Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            17Item
                3.
            Default
                Upon Senior Securities
            17Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            17Item
                5.
            Other
                Information
            17Item
                6.
            Exhibits
            17**Signatures**
            18









**PART
      I- FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**




ALPHA
      SECURITY GROUP CORPORATION


(A
      CORPORATION IN THE DEVELOPMENT STAGE)




CONDENSED
      BALANCE SHEET





March 31, 2008
            
            December 31, 2007(unaudited)**ASSETS**Current
                AssetsCash
            
            $
            16,351
            
            $
            8,726Investment
                in trust account
            
            
            60,933,914
            
            
            60,578,630Prepaid
                expenses & taxes
            
            
            700
            
            
            17,342Total
                current assets
            
            
            60,950,965
            
            
            60,604,698Deferred
                tax asset
            
            
            198,115
            
            
            150,220Property
                & equipment, net of depreciation
            
            
            7,679
            
            
            6,099Total
                assets
            
            $
            61,156,759
            
            $
            60,761,017**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                LiabilitiesAccrued
                expenses and taxes
            
            $
            111,984
            
            $
            75,235Income
                taxes payable
            
            
            166,575
            
            
            -Deferred
                underwriting fees
            
            
            1,800,000
            
            
            1,800,000Notes
                payable - stockholder
            
            
            250,000
            
            
            250,000Total
                liabilities
            
            
            2,328,559
            
            
            2,125,235Common
                stock, subject to possible redemption, 2,099,400 shares, at redemption
                value of $9.70 per share
            
            
            20,364,180
            
            
            20,364,180CommitmentsStockholders'
                equityPreferred
                stock, $.0001 par value, authorized 1,000,000 shares, none
                issuedCommon
                stock, $.0001 par value, authorized 30,000,000 shares; issued and
                outstanding 7,580,000 shares at March 31, 2008 and December 31, 2007
            
            
            758
            
            
            758Additional
                paid-in capital
            
            
            37,488,281
            
            
            37,488,281Earnings
                accumulated during the development stage
            
            
            974,981
            
            
            782,563Total
                stockholders' equity
            
            
            38,464,020
            
            
            38,271,602Total
                liabilities and stockholders' equity
            
            $
            61,156,759
            
            $
            60,761,017





See
      accompanying notes to financial statements.


2




ALPHA
        SECURITY GROUP CORPORATION
 (A
        CORPORATION IN THE DEVELOPMENT STAGE)


CONDENSED
      STATEMENT OF INCOME (UNAUDITED)





For
                the
            
            For
                the period fromThree months
              ended
              March 31, 2008
            
            Three months
              ended
              March 31, 2007
            
            April 20, 2005
              (inception) to
              March 31, 2008(unaudited)
            
            (unaudited)
            
            (unaudited)Interest
                and dividend income
            
            $
            540,574
            
            $
            37,660
            
            $
            2,635,104Formation
                and operating costs
            
            
            (158,351
            )
            
            (25,722
            )
            
            (697,654
            )Income
                before provision for income taxes
            
            
            382,223
            
            
            11,938
            
            
            1,937,450Provision
                for income taxes
            
            
            189,805
            
            
            -
            
            
            962,469Net
                income
            
            $
            192,418
            
            $
            11,938
            
            $
            974,981Weighted
                average shares outstanding
            
            
            7,580,000
            
            
            1,846,667
            
            
            3,650,678Net
                income per share
            
            $
            0.03
            
            $
            0.01
            
            $
            0.27





See
      accompanying notes to financial statements.


3





ALPHA
      SECURITY GROUP CORPORATION


(A
      CORPORATION IN THE DEVELOPMENT STAGE)




CONDENSED
      STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)





For
                the period from April 20, 2005 (inception) to March 31,
                2008Earnings
                (deficit)Common stock
            
            Additional paid-in
            
            accumulated during the
            
            Stockholders'Shares
            
            Amount
            
            capital
            
            development stage
            
            equity (deficiency)Common
                shares issued July 18, 2005 at $.0156
            
            
            1,600,000
            
            $
            160
            
            $
            24,840
            
            $
            -
            
            $
            25,000Net
                loss - 2005
            
            
            
            
            
            
            
            
            
            
            
            (11,140
            )
            
            (11,140
            )Balance
                - December 31, 2005
            
            
            1,600,000
            
            $
            160
            
            $
            24,840
            
            $
            (11,140
            )
            $
            13,860Net
                loss - 2006
            
            
            
            
            
            
            
            
            
            
            
            (23,905
            )
            
            (23,905
            )Redemption
                - September 15, 2006
            
            
            (20,000
            )
            
            (2
            )
            
            (310
            )
            
            
            
            
            (312
            )Balance
                - December 31, 2006
            
            
            1,580,000
            
            $
            158
            
            $
            24,530
            
            $
            (35,045
            )
            $
            (10,357
            )Proceeds
                of private placement - March 21, 2007
            
            
            
            
            
            
            
            
            3,200,000
            
            
            
            
            
            3,200,000Common
                shares issued March 28, 2007 at $10 per share
            
            
            6,000,000
            
            
            600
            
            
            59,999,400
            
            
            
            
            
            60,000,000Proceeds
                subject to possible redemption
            
            
            
            
            
            
            
            
            (20,364,180
            )
            
            
            
            
            (20,364,180
            )Expenses
                of the Offering
            
            
            
            
            
            
            
            
            (5,371,569
            )
            
            
            
            
            (5,371,569
            )Net
                income - 2007
            
            
            
            
            
            
            
            
            
            
            
            817,608
            
            
            817,608Proceeds
                of options sold
            
            
            
            
            
            
            
            
            100
            
            
            
            
            
            100Balance
                - December 31, 2007
            
            
            7,580,000
            
            $
            758
            
            $
            37,488,281
            
            $
            782,563
            
            $
            38,271,602(unaudited)Net
                income-January 1-March 31, 2008
            
            
            
            
            
            
            
            
            
            
            
            192,418
            
            
            192,418Balance
                March 31, 2008
            
            
            7,580,000
            
            
            758
            
            $
            37,488,281
            
            $
            974,981
            
            $
            38,464,020




See
      accompanying notes to financial statements.


4




ALPHA
        SECURITY GROUP CORPORATION
 (A
        CORPORATION IN THE DEVELOPMENT STAGE)
  CONDENSED
        STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
 For the period from
                  April 20, 2005
              
              For the three months ended(Inception) to
                March 31, 2008
              
              March 31, 2008
              
              March 31, 2007(unaudited)
              
              (unaudited)
              
              (unaudited)Cash
                  flows from operating activities:Net
                  income
              
              $
              974,981
              
              $
              192,418
              
              $
              24,501Adjustments
                  to reconcile net income tonet cash used in operating activities:Depreciation
              
              
              719
              
              
              420
              
              
              -Increase
                  in investment in Trust Account
              
              
              (2,627,409
              )
              
              (540,574
              )
              
              (33,303
              )Increase
                  in deferred tax asset
              
              
              (198,115
              )
              
              (47,895
              )
              
              -(Increase)
                  decrease in prepaid expenses/other receivables
              
              
              (700
              )
              
              16,642
              
              
              (9,224
              )Increase
                  in income taxes payable
              
              
              166,575
              
              
              166,575Increase
                  in accounts payable andaccrued expenses
              
              
              111,984
              
              
              36,749
              
              
              3,536Net
                  cash (used in) operating activities
              
              
              (1,571,965
              )
              
              (175,665
              )
              
              (14,490
              )Cash
                  flows from investing activitiesPayment
                  to trust account
              
              
              (60,002,831
              )
              
              -
              
              
              (60,002,831
              )Withdrawals
                  from trust account
              
              
              1,696,326
              
              
              185,290
              
              
              -Purchase
                  of equipment
              
              
              (8,398
              )
              
              (2,000
              )
              
              -Net
                  cash provided by (used in) investing activities
              
              
              (58,314,903
              )
              
              183,290
              
              
              (60,002,831
              )Cash
                  flows from financing activities:Payment
                  of expenses of offering
              
              
              (3,571,569
              )
              
              -
              
              
              (3,250,009
              )Proceeds
                  from sale of common stock
              
              
              25,000
              
              
              -
              
              
              -Proceeds
                  from notes payable - stockholder(s)
              
              
              250,000
              
              
              -
              
              
              250,000Proceeds
                  from initial public offering
              
              
              60,000,000
              
              
              -
              
              
              60,000,000Proceeds
                  from private placement
              
              
              3,200,000
              
              
              -
              
              
              3,200,000Proceeds
                  from sale of option
              
              
              100
              
              
              -
              
              
              -Repayment
                  of notes payable - stockholders
              
              
              -
              
              
              -
              
              
              (187,802
              )Payment
                  of deferred offering costs
              
              
              -
              
              
              -
              
              
              -Redemption
                  of stock
              
              
              (312
              )
              
              -
              
              
              -Net
                  cash provided by financingactivities
              
              
              59,903,219
              
              
              -
              
              
              60,012,189Net
                  increase (decrease) in cash
              
              
              16,351
              
              
              7,625
              
              
              (5,132
              )Cash
                  - beginning of period
              
              
              -
              
              
              8,726
              
              
              7,119Cash
                  - end of period
              
              $
              16,351
              
              $
              16,351
              
              $
              1,987Supplemental
                  disclosure of cash flow informationCash
                  paid for income taxes
              
              $
              993,634
              
              $
              70,596
              
              $
              -Supplemental
                  disclosure of non-cashfinancing
                  activities:Accrual
                  of deferred offering costs
              
              $
              1,800,000
              
              $
              -
              
              $
              1,890,000
  See
        accompanying notes to financial statements.
  5




ALPHA
        SECURITY GROUP CORPORATION
 (a
        corporation in the development stage)


NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008




**1.
      Organization, Proposed Business Operations and Summary of Significant Accounting
      Policies**




Basis
      of
      Presentation




The
      condensed financial statements at March 31, 2008 and for the periods ended
      March 31, 2008 and 2007 are unaudited and have been prepared by the Company
      in accordance with accounting principles generally accepted in the United States
      of America for interim financial information and with the instructions to Form
      10-Q. Accordingly, they do not include all of the information and footnotes
      required by accounting principles generally accepted in the United States of
      America for complete financial statements. In the opinion of management, all
      adjustments (consisting of normal adjustments) have been made that are necessary
      to fair presentation have been included. Operating results for the interim
      period presented are not necessarily indicative of the results to be expected
      for a full year.





These
      unaudited condensed interim financial statements should be read in conjunction
      with the audited financial statements and notes thereto for the period ended
      December 31, 2007 included in the Company’s Annual Report on Form 10-K
      filed with the U.S. Securities and Exchange Commission on April 15, 2008. The
      December 31, 2007 balance sheet and the statement of stockholders’ equity
      for the period ended December 31, 2007 have been derived from these audited
      financial statements. The accounting policies used in preparing these unaudited
      financial statements are consistent with those described in the
      December 31, 2007 audited financial statements.




Nature
      of
      Operations




Alpha
      Security Group Corporation (the “Company”) was incorporated in the State of
      Delaware on April 20, 2005 as a blank check company formed to acquire, through
      a
      merger, capital stock exchange, asset acquisition or other similar business
      combination, one or more businesses in the U.S. homeland security or defense
      industries or a combination thereof.





At
      March
      31, 2008, the Company had not yet commenced any operations. All activity through
      March 31, 2008 relates to the Company’s formation, a private placement and the
      public offering described below. The Company has selected December 31 as its
      fiscal year-end.





The
      registration statement for the Company’s initial public offering (the “Public
      Offering”) was declared effective on March 23, 2007. On March 21, 2007, the
      Company completed a private placement (the “Private Placement”) and received net
      proceeds of $3,200,000. The Company consummated the Public Offering on March
      28,
      2007 and received net proceeds of $54,628,431. The Company’s management has
      broad discretion with respect to the specific application of the net proceeds
      of
      the Private Placement and the Public Offering (collectively the “Offerings”) (as
      described in Note 2), although substantially all of the net proceeds of the
      Offerings (exclusive of working capital) are intended to be generally applied
      toward consummating a business combination with a target company. As used
      herein, a “target business” shall include an operating business in the U.S.
      homeland security or defense industries, or a combination thereof, and a
“business combination” shall mean the acquisition by the Company of such a
      target business. There is no assurance that the Company will be able to effect
      a
      business combination successfully.





At
      March
      31, 2008, $60,933,914 is being held in a trust account (“Trust Account”) at JP
      MorganChase, New York, New York, maintained by American Stock Transfer &
Trust Company, the Company’s transfer agent. This amount includes the net
      proceeds of the Public Offering and the Private Placement (including interest
      thereon), interest earned since the public offering was declared effective
      which
      has not yet been withdrawn for working capital needs and $1,800,000 of deferred
      underwriting compensation fees (the “Discount”) which will be paid to Maxim
      Group LLC if, and only if, a business combination is consummated, but which
      will
      be forfeited in part if public stockholders elect to have
      their shares redeemed for cash and in full if a business combination is not
      consummated.


6




ALPHA
      SECURITY GROUP CORPORATION


(a
      corporation in the development stage)





NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008




**1.
      Organization, Proposed Business Operations and Summary of Significant Accounting
      Policies (continued)**





The
      funds
      in the Trust Account will be invested until the earlier of (i) the consummation
      of the Company’s first business combination or (ii) the liquidation of the Trust
      Account as part of a plan of dissolution and liquidation approved by our
      stockholders. Up to $1,825,000 of interest income on the Trust Account may
      be
      used to fund the Company’s working capital including payments for business,
      legal and accounting, due diligence on prospective acquisitions and continuing
      general and administrative expenses.




The
      Company, after signing a definitive agreement for the acquisition of a target
      business, will submit such transaction for stockholder approval. In the event
      that public stockholders owning 35% or more of the outstanding stock excluding
      for this purpose, those persons who were stockholders prior to the Offerings
      vote against the business combination, the business combination will not be
      consummated. All of the Company’s stockholders prior to the Offerings, including
      all of the officers and directors of the Company (“Initial Stockholders”), have
      agreed to vote their 1,580,000 founding shares of common stock in accordance
      with the vote of the majority-in-interest of all other stockholders of the
      Company with respect to any business combination. After consummation of the
      Company’s first business combination, all of these voting safeguards will no
      longer be applicable.




With
      respect to the first 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 $10 per share plus the pro-rata share of any accrued interest earned
      on
      the Trust Account, net of: (i) taxes payable
      on interest income earned on the Trust Account, State of Delaware franchise
      taxes, repayment of $250,000 of an additional
      officer loan made prior to closing of the Public Offering by Steven M. Wasserman
      (such loan was to be repaid within
      90
      days of the closing of the Public Offering, but has not been repaid through
      March 31, 2008) and (ii) up to $1,825,000 of interest earned on the Trust
      Account released
      to the Company to fund its working capital. Accordingly, Public Stockholders
      holding 34.99% of the aggregate number
      of
      shares owned by all Public Stockholders may seek redemption of their shares
      in
      the event of a business combination.
      Such Public Stockholders are entitled to receive their per share interest in
      the
      Trust Account computed without
      regard to the shares held by Initial Stockholders. In the event that more than
      20% of the Public Stockholders exercise
      their redemption rights, a proportional percentage of the common stock held
      by
      the Company’s Initial Stockholders
      will automatically, and without any further action required by the Company
      or
      such stockholders, be forfeited and
      cancelled upon consummation of the business combination. The percentage of
      shares forfeited will be equal to the percentage
      of redemptions above 20% and will be pro rata among the Initial Stockholders
      on
      the 1,580,000 shares owned by them.




The
      Company’s Amended and Restated Certificate of Incorporation provides for
      mandatory liquidation of the Trust Account
      as part of a stockholder-approved plan of dissolution and liquidation 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 Public Offering if a letter of intent, agreement in
      principle or definitive agreement has been executed
      within 18 months after consummation of the Public Offering and the business
      combination has not yet been consummated within such 18 month period. In the
      event of such liquidation, the amount in the Trust Account will be distributed
      to the holders of the shares sold in the Public Offering. The Company’s initial
      business combination must be for assets or with a target business the fair
      market value of which is at least equal to 80% of the Company’s net assets at
      the time of such acquisition (exclusive
      of Maxim Group LLC’s deferred underwriting compensation, including interest
      thereon, held in the trustaccount).
      Steven M. Wasserman, Chief Executive Officer, President and Co-Chairman of
      the
      board of directors and Constantinos Tsakiris, a director of the Company,
      purchased warrants to purchase an aggregate of 3,200,000 shares ofcommon
      stock in the Private Placement for an aggregate purchase price of $3,200,000
      or
      $1.00 per warrant. The PrivatePlacement
      warrants are exercisable on the later of (i) the completion of a business
      combination or (ii) March 23, 2008.




7




ALPHA
      SECURITY GROUP CORPORATION


(a
      corporation in the development stage)





NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008




**1.
      Organization, Proposed Business Operations and Summary of Significant Accounting
      Policies (continued)**




*Cash
      and Cash Equivalents*




The
      Company considers all highly liquid instruments with original maturities of
      three months or less when purchased to be
      cash
      equivalents. Such cash and cash equivalents, may exceed federally insured
      limits. The Company maintains its accounts
      with financial institutions with high credit ratings.




*Income
      Taxes*




The
      Company recorded a deferred tax asset of $198,115 and $150,220 at March 31,
      2008
      and December 31, 2007, respectively,
      for the tax effect of temporary differences, aggregating $582,692 and $441,823
      In recognition of the uncertainty
      regarding the ultimate amount of income tax benefits to be derived, the Company recorded
      a valuation allowance of $ 56,348 and
      $43,658 at March 31, 2008 and December 31, 2007 respectively. The effective
      tax
      rate differs from the statutory rate of 34% due to the effect of state and
      local
      income taxes.




On
      January 1, 2007 the Company adopted FASB Interpretation No. 48, “Accounting for
      Uncertainty in Income Taxes
—
      an Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the
      accounting for uncertainty in tax positions
      recognized in a company’s financial statements in accordance with SFAS No. 109,
“Accounting for Income Taxes.”
      FIN 48 requires that the impact of a tax position be recognized in the financial
      statements if it is more likely than not
      that
      the tax position will be sustained on tax audit, based on the technical merits
      of the position. FIN 48 also provides guidance
      on derecognition of tax positions that do not meet the “more likely than not”
standard, classification of tax assets and liabilities, interest and penalties,
      accounting in interim periods, disclosure and transition .
      The
      adoption of FIN 48 had no effect on our financial condition or results of operations
      since the company has not identified any uncertain tax positions.




The
      Company recognizes interest and penalties related to uncertain tax positions
      in
      income tax expense. All tax years remain
      open to examination by the major taxing jurisdictions to which it is
      subject.




*Share-Based
      Payments*




The
      Company accounts for share-based payments in accordance with Statement of
      Financial Accounting Standards No.
      123R
      (“SFAS No. 123R”) as of the date of issuance of the warrants described in Note
      2.




*Recently
      Issued Accounting Pronouncements*




In
      December 2007, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards No. 141(R) “Business
      Combinations”. This statement establishes principles and requirements for how
      the acquirer of a business recognizes and measures in its financial statements
      the identifiable assets acquired, the liabilities assumed, and any
      noncontrolling interest in the acquiree. The Statement also provides guidance
      for recognizing and measuring the goodwill acquired in the business combination
      and determines what information to disclose to enable users of the financial
      statements to evaluate the nature and financial effects of the business
      combination. The guidance will become effective as of the beginning of a
      company’s fiscal year beginning after December 15, 2008.




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.


8


ALPHA
      SECURITY GROUP CORPORATION


(a
      corporation in the development stage)





NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008







**1.
      Organization, Proposed Business Operations and Summary of Significant Accounting
      Policies (continued)**




*Income Per
      Common Share*




Income per
      share is computed by dividing net income by the weighted-average number of
      shares of common stock outstanding
      during the period. Shares of common stock issuable upon the exercise of options
      and warrants at March
      31,
      2008 (9,410,000 shares) are excluded from the computation since such options
      and
      warrants are contingently exercisable.




*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.




**2.
      Public Offering and Private Placement**




On
      March
      28, 2007 the Company sold 6,000,000 units to the public at a price of $10.00
      per
      unit. Each unit consists of one
      share
      of the Company’s common stock, $.0001 par value, and one Redeemable Common Stock
      Purchase Warrant (“Warrant”).
      Each Warrant entitles the holder to purchase from the Company one share of
      common stock at an exercise price
      of
      $7.50 commencing the later of (i) the completion of a business combination
      with
      a target business or (ii)
      March 23, 2008, and expires March 23, 2011. The Warrants will be redeemable
      by
      the Company at a price of $0.01 per
      warrant upon 30 days notice after the Warrants become exercisable, only in
      the
      event that the closing price of the common
      stock is at least $14.25 per share for any 20 trading days within a 30 trading
      day period ending on the third day prior
      to
      the date on which notice of redemption is given.




On
      March
      21, 2007, Steven M. Wasserman, Chief Executive Officer, President and
      Co-Chairman of the board of directors
      and Constantinos Tsakiris, a director, acquired warrants to purchase an
      aggregate of 3,200,000 shares of common stock
      from the Company in a Private Placement. The total purchase price for the
      warrants was $3,200,000 or $1.00 per warrant.
      The Warrants included in the Private Placement have terms identical to the
      Warrants included in the Offering.




Under
      the
      terms of the Company’s warrant agreement, no public warrants will be exercisable
      unless at the time of exercise
      a registration statement relating to common stock issuable upon exercise of
      the
      warrants is effective and current, a prospectus
      is available for use by the public stockholders and those shares of common
      stock
      have been registered or been deemed
      to
      be exempt from registration under the securities laws of the state of residence
      of the holder of the warrants. The holders
      of the Warrants issued in the Private Placement will be able to exercise their
      Warrants even if, at the time of exercise,
      a prospectus relating to the common stock issuable upon exercise of such
      Warrants is not current. In
      addition, in no event will the registered holders of the Warrants issued in
      the
      Public Offering or the Private Placement
      be entitled to receive a net cash settlement of stock or other consideration
      in
      lieu of physical settlement in shares of
      the
      Company’s common stock. As such, the Company has determined that the public
      warrants should be classified in stockholders’
      equity in accordance with the guidance of EITF 00-19 (“EITF 00-19”), Accounting *for
      Derivative Financial* *Instruments
      Indexed to, and Potentially Settled in, a Company’s Own Stock.*





The
      Company will use its best efforts to cause a registration statement to become
      effective on or prior to the commencement of the warrant exercise period and
      to
      maintain the effectiveness of such registration statement until the expiration
      of the
      Warrants. If the Company is unable to maintain the effectiveness of such
      registration until the expiration of the Warrants and therefore is unable to
      deliver registered shares, the Warrants may become worthless.


9


ALPHA
      SECURITY GROUP CORPORATION


(a
      corporation in the development stage)





NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008




**3.**  **** **Note
      payable, stockholder**




The
      Company issued an unsecured promissory note to Steven Wasserman, a related
      party, totaling $250,000 on March
      28,
      2007. The Note does not bear interest and was to be repaid in full ninety days
      thereafter and such repayment has not been made. Due to the short-term nature of
      the
      promissory note, the fair value of the note approximates its carrying
      value.




**4.**  **Commitments**




The
      Company has agreed to pay to an affiliated third party, $7,500 a month for
      24
      months for office space and general and
      administrative expenses.




Upon
      completion of the Public Offering, the Company sold to the representative of
      the
      underwriters, for $100, an option
      to
      purchase up to a total of 105,000 units. The units issuable upon exercise of
      this option are identical to those offered in the Public Offering. This option
      is exercisable at $11.00 per unit commencing after 180 days from March 23, 2007
      and
      expiring March 23, 2012. The 105,000 units (the 105,000 shares of common stock
      and the 105,000 warrants underlying
      such units, and the 105,000 shares of common stock underlying such warrants)
      have been deemed compensation
      by the National Association of Securities Dealers (“NASD”) and are therefore
      subject to a 180-day lock-up pursuant to Rule 2710(g)(1) of the NASD Conduct
      Rules. Additionally, the option may not be sold, transferred, assigned, pledged
      or hypothecated for a 24-month period (including the foregoing 180-day period)
      following March 23, 2007 (the effective
      date of the prospectus pertaining to the Public Offering). However, the option
      may be transferred to any underwriter
      and selected dealer participating in the Public Offering and their bona fide
      officers or partners. This represents an
      amended agreement between the Company and the representative of the
      underwriters, revising their original agreement which provided for the issuance
      of an option to purchase 420,000 units with a lock-up period of one-year. The
      option may expire
      unexercised and the underlying warrants unredeemed if the Company fails to
      maintain an effective registration statement
      covering the units (including the common stock and warrants) issuable upon
      exercise of the option. There are no circumstances
      upon which the Company will be required to net cash settle the
      option.




The
      Company has accounted for this purchase option as a cost of raising capital
      and
      has included the instrument as equity
      in
      its financial statements. Accordingly, there is no net impact on the Company’s
      financial position or results of operations, except for the recording of the
      $100 proceeds from the sale. The Company has estimated, based upon a Black Scholes
      model, that the fair value of the purchase option on the date of sale was
      approximately $4.46 per unit (a total value of $468,300), using an expected
      life
      of five years, volatility of 47.60% and a risk-free rate of 4.75%. The
      volatility calculation is based on the average volatility of 12 companies in
      the
      U.S. homeland security and defense industries during the
      period from March 14, 2002 to March 15, 2007. Because the Company did not have
      a
      trading history, the Company needed to estimate the potential volatility of
      its
      unit price, which depended on a number of factors which could not be ascertained
      at the time. The Company used these companies because management believed that
      the volatility of these companies
      was a reasonable benchmark to use in estimating the expected volatility for
      the
      Company’s units. Although an expected life of five years was used in the
      calculation, if the Company does not consummate a business combination within the
      prescribed time period and it liquidates, the option will become
      worthless.




The

      Company has engaged the representative of the underwriters, on a non-exclusive
      basis, as its agent for the solicitation
      of the exercise of the warrants. To the extent not inconsistent with the
      guidelines of the NASD and the rules and regulations of the Securities and
      Exchange Commission, the Company has agreed to pay the representative for bona fide
      services rendered a cash commission equal to 5% of the exercise price for each
      warrant exercised more than one year after
      the
      effective date of the prospectus if the exercise was solicited by the representative.
      In addition to soliciting, either orally or in writing, the exercise of the
      warrants, the representative’s services may
      also
      include disseminating information,


10







ALPHA
      SECURITY GROUP CORPORATION


(a
      corporation in the development stage)





NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008







**4.
      Commitments (continued)**




either
      orally or in writing, to warrant holders about the Company or the market
      for the Company’s securities, and assisting in the processing of the exercise of
      the warrants. No compensation will be paid to the representative upon the
      exercise of the warrants if:




·
            the
                market price of the underlying shares of common stock is lower than
                the
                exercise price;




·
            the
                holder of the warrants has not confirmed in writing that the
                representative solicited the
                exercise;




·
            the
                warrants are held in a discretionary
                account;




·
            the
                warrants are exercised in an unsolicited transaction;
                or




·
            the
                arrangement to pay the commission is not disclosed in the prospectus
                provided to warrant holders at the time ofexercise.




**5.
      Income Taxes**




The
      Company’s provision for (benefit from) income taxes is as follows:







**3 months ended**
            
            **Year ended****March
                31, 2008**
            
            **December 31, 2007****Current:**
            
            ****Federal
            
            $
            148,009
            
            $
            574,837State
            
            
            89,691
            
            
            348,047Total
                Current
            
            **$**
            **237,700**
            
            **$**
            **922,884****Deferred:**Federal
            
            $
            (29,823
            )
            $
            (93,658
            )State
            
            
            (18,072
            )
            
            (56,562
            )Total
                deferred
            
            **$**
            (47,895
            )
            $
            (150,220
            )**Total
                provision**
            
            **$**
            **189,805**
            
            **$**
            **772,664**




11




ALPHA
      SECURITY GROUP CORPORATION


(a
      corporation in the development stage)





NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008




Significant
      components of the Company’s deferred tax asset are as follows:





**March 31, 2008**
            
            **December 31, 2007******Expenses
                deferred for income tax purposes
            
            $
            246,010
            
            $
            193,878Valuation
                allowance
            
            
            (47,895
            )
            
            (43,658
            )**Total
                deferred tax asset**
            
            **$**
            **198,115**
            
            **$**
            **150,220**




A
      reconciliation of the Company’s income tax provision (benefit) at the federal
      statutory rate to the actual income tax provision (benefit) is as
      follows:


**March 31, 2008**
              
              **December 31, 2007**Federal
                  income tax rate
              
              
              34.00
              %
              
              34.00
              %State
                  & local tax rate
              
              
              10.90
              %
              
              10.90
              %Valuation
                  Allowance
              
              
              3.70
              %
              
              3.70
              %**Effective
                  Tax Rate**
              
              
              48.60
              %
              
              48.60
              %




Deferred
      income taxes represent the net tax effects of temporary differences between
      the
      carrying amounts of assets and liabilities for financial reporting purposes
      and
      amounts used for income tax purposes. The Company had net deferred tax assets
      of
      approximately $198,115 on March 31, 2008 and $150,220 on December 31, 2007
      partially offset by valuation allowances. A valuation allowance was established
      for the realizability of certain tax benefits considering the expected future
      taxable income of the Company.


12


ALPHA
      SECURITY GROUP CORPORATION


(a
      corporation in the development stage)





NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2008




**6.
      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.




**7** . **Stockholders’
      Equity**




On
      September 8, 2006, the Company redeemed 20,000 shares of its common stock at
      a
      price of $0.0125 per share.





On
      September 15, 2006, the Company effected a 0.80 for 1 reverse stock split.
      All
      share numbers herein reflect this adjustment.




On
      January 16, 2007, the Company filed its Third Amended and Restated Certificate
      of Incorporation with the State of Delaware,
      reducing its authorized capitalization from 100,000,000 shares of common stock,
      par value $.0001 per share, and
      1,000,000 shares of preferred stock, par value $.0001 per share, to 30,000,000
      shares of common stock, par value $.0001
      per share, and 1,000,000 shares of preferred stock, par value $.0001 per share.
      Such reduction has been given retroactive
      effect in these financial statements.




On
      February 7, 2007, the Company filed its Fourth Amended and Restated Certificate
      of Incorporation with the State of Delaware,
      amending the restriction against the Company proceeding with a business
      combination from disallowing such a transaction
      if the holders of less than 30% of the number of shares sold in the Public
      Offering vote against a business combination
      and subsequently exercise their dissolution rights, increasing such percentage
      to 35%.


13




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




**Forward
      Looking Statements**




This
      Quarterly Report on Form 10-Q includes forward-looking statements within the
      meaning of Section 27A of the Securities
      Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
      1934,
      as amended. We have based these
      forward-looking statements on our current expectations and projections about
      future events. These forward-looking statements
      are subject to known and unknown risks, uncertainties and assumptions about
      us
      that may cause our actual results,
      levels of activity, performance or achievements to be materially different
      from
      any future results, levels of activity, performance
      or achievements expressed or implied by such forward-looking statements. In
      some
      cases, you can identify forward-looking statements by terminology such as "may,"
      "should," "could," "would," "expect," "plan," "anticipate," "believe,"
      "estimate," "continue," or the negative of such terms or other similar
      expressions. Factors that might cause or contribute to such a discrepancy
      include, but are not limited to, those described under "Risk Factors" (pages
      16-36) in our final
      prospectus dated March 23, 2007, as amended, relating to the Public Offering,
      and in our other Securities and Exchange Commission filings. The following
      discussion should be read in conjunction with our Financial Statements and
      related Notes thereto included elsewhere in this report.




**Overview**




We
      were
      formed on April 20, 2005, to serve as a vehicle to acquire one or more domestic
      or international operating businesses in the U.S. homeland security or defense
      industries or a combination thereof, through a merger, capital stock exchange,
      asset acquisition or other similar business combination. Our initial business
      combination must be with a target business or businesses whose fair market
      value
      is equal to at least 80% of our net assets at the time of such acquisition.
      Since our offering, we have been actively searching for a suitable business
      combination candidate. We currently have not entered into any definitive
      agreement with any potential target businesses. We are not engaged in, and
      will
      not engage in, any substantive commercial business until we consummate an
      initial transaction. We intend to utilize cash derived from the proceeds of
      our
      recently completed public offering and private placement, our capital stock,
      debt or a combination thereof, in effecting a business combination. restricting
      our ability
      to obtain additional financing while such securities were
      outstanding.




We
      cannot
      assure investors that we will find a suitable business combination in the
      allotted time.




**Results
      of Operations for The Three-Month Periods Ended March 31, 2008 and March 31,
      2007**




We
      reported net income of $192,418 for the three-month period ended March 31,
      2008.
      Net income consisted of interest income of $540,574 reduced by of $158,351
      of
      operating expenses. Operating expenses consisted of consulting and professional
      fees of $43,867, insurance expense of $16,113, travel expense of $38,990,
      Delaware franchise fees of $15,563 and other operating costs of
      $43,818.




The
      trust
      account earned interest of $540,574 during the three months ended March 31,
      2008, none of which is attributable to common stock subject to possible
      redemption. We had $60,933,914 in trust as of March 31, 2008.




Until
      we
      enter into a business combination, we will not generate operating
      revenues.




We
      reported net income of $11,938 for the three-month period ended March 31, 2007.
      Net income consisted of interest income of $37,660 reduced by of $25,722 of
      operating expenses. Operating expenses consisted of travel expense of $12,508,
      Delaware franchise fees of $10,552 and other operating costs of
      $2,662.





The
      trust
      account earned interest of $37,660 during the three months ended March 31,
      2007,
      none of which is attributable to common stock subject to possible redemption.
      We
      had $60,036,134 in trust as of March 31, 2007.





14




**Liquidity
      and Capital Resources**





On
      March
      21, 2007, we sold to Steven M. Wasserman (500,000 warrants), our Chief Executive
      Officer, President and Co-Chairman
      of the board of directors, and Constantinos Tsakiris (2,700,000 warrants),
      a
      former director, an aggregate of 3,200,000
      warrants in a private placement for $1.00 per warrant or aggregate consideration
      of $3,200,000. The warrants in the
      private placement have identical terms to the warrants included in
      the
      units offered as part of the public offering. On March 28, 2007, we consummated
      our initial public offering of 6,000,000
      units at a purchase price of $10.00 per unit or gross proceeds of $60,000,000.
      Each unit in the public offering consisted
      of one share of common stock and one redeemable common stock purchase warrant.
      Each warrant entitles the holder
      to
      purchase from us one share of common stock at an exercise price of $7.50 per
      share. Prior to the closing, Steven M.
      Wasserman loaned us $250,000 for expenses of the public offering, which loan
      will be repaid within 90 days of the closing.




On
      March
      28, 2007, the closing date of our public offering, $60,002,831 was placed in
      the
      Trust Account at JP Morgan
      Chase New York, New York. This amount includes net proceeds of the public
      offering of $54,628,431 and the private
      placement of $3,200,000 plus interest of $2,831 thereon. The funds in the Trust
      Account will be invested until the earlier
      of (i) consummation of a business combination or (ii) the liquidation of the
      Trust Account as part of a plan of distribution
      and liquidation approved by our stockholders.




In
      addition to the net proceeds from the sale of the units in this offering and
      the
      sale of warrants in our private placement,
      on the closing date of the public offering the trust account included $1,800,000
      of deferred underwriting compensation to be paid to Maxim Group LLC with accrued
      interest if and only if a business combination is consummated, and
      $90,000 of deferred legal fees to be paid, without contingency, from interest
      income earned on the trust account released
      to us.




While
      funds are held in the trust account, they will only be invested in Treasury
      Bills issued by the United States government having a maturity of 180 days
      or
      less or money market funds meeting the criteria under Rule 2a-7 under the 1940
      Act.
      Interest earned will be applied in the following order of priority:




·
            payment
                of taxes on trust account interest
                income;




·
            payment
                of State of Delaware franchise
                taxes;




·
            repayment
                of up to $250,000 of an additional officer loan made prior to the
                closing
                of this offering by Steven M.Wasserman;




·
            our
                working capital requirements before we complete a business combination
                and, if necessary, funding the costs of our potential dissolution
                and
                liquidation;




·
            solely
                if we complete a business combination, interest on the amount of
                deferred
                underwriters' compensation payable
                to the underwriters; and




·
            the
                balance, if any, to us if we complete a business combination or to
                our
                public stockholders if we do not complete a business
                combination.




We
      believe that the interest income earned on trust account funds in the period
      before we effect a business combination will be sufficient to fund the costs
      and
      expenses relating to our liquidation and dissolution if we do not consummate
      a business
      combination.




We
      will
      use substantially all of the net proceeds of the public offering and from the
      private placement, and interest income earned on the funds in the trust account,
      to acquire a target business, including identifying and evaluating prospective
      acquisition candidates, selecting the target business, and structuring,
      negotiating and consummating the business
      combination. Costs and expenses incurred prior to the consummation of a business
      combination, including those that
      relate to a business combination that is not consummated, will be paid from
      the
      interest earned on funds held in the trust
      account (to the extent such interest is released to us). To the extent that
      our
      capital stock is used in whole or in part as consideration
      to effect a business combination, the proceeds held in the trust account as
      well
      as any other net proceeds not e xpended
      will be used to finance the operations of the target business.




We
      believe that the funds available to us from interest income earned on the trust
      account ($1,825,000) will be sufficient
      to allow us to operate for at least 24 months or March 2009, assuming that
      a
      business combination is not consummated
      during that time. Over this time period, the following estimated expenditures
      are anticipated: $400,000 of expenses
      for legal, accounting and other expenses attendant to the structuring,
      negotiating  and
      consummation of a business combination, $500,000 of expenses for identification,
      evaluation and
      due
      diligence investigation of a target business, $180,000 for administrative
      services and support payable to an affiliated third party ($7,500 per month
      for
      24 months), $100,000 of expenses in legal and accounting fees relating to our SEC
      reporting obligations, $150,000 for directors' and officers' liability insurance
      and $495,000 for general working capital
      that will be used for miscellaneous expenses and reserves, deferred legal fees
      of $90,000, costs of dissolution and liquidation
      and reserves, if any, which we currently estimate to be approximately $50,000
      to
      $75,000, potential deposits, down
      payments or funding of a "no-shop" provision in connection with a particular
      business combination and key-man insurance.




15




We
      do not
      believe we will need to raise additional funds in order to meet the expenditures
      required for operating our business
      prior to consummating a business combination. However, we may need to raise
      additional funds through a private offering
      of debt or equity securities if such funds are required to consummate a business
      combination.




In
      addition to the above described allocation of interest accrued on the trust
      account, at March 31, 2008, we had funds aggregating $16,351 held outside of
      the
      trust account.




**Off-Balance
      Sheet Arrangements**




We
      do not
      have any off-balance sheet arrangements.




**Contractual
      Obligations**




We
      do not
      have any long-term debt, capital lease obligations, operating lease obligations,
      purchase obligations or other long-term liabilities.




**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





This
      information has been omitted based on the Company’s status as a smaller
      reporting company.




**ITEM
      4T. CONTROLS AND PROCEDURES**




An
      evaluation of the effectiveness of our disclosure controls and procedures as
      of
      March 31, 2008 was made under the supervision and with the participation of
      our
      management, including our principal executive and principal financial officer.
      Based on that evaluation, our chief executive officer and principal financial
      officer concluded that our disclosure controls and procedures are effective
      as
      of the end of the period covered by this report to ensure that information
      required to be disclosed by us in reports that we file or submit under the
      Securities Exchange Act of 1934 is recorded, processed, summarized and reported
      within the time periods specified in Securities and Exchange Commission rules
      and forms. During the most recently completed fiscal quarter, there has been
      no
      significant 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 .




**Compliance
      with Section 404 of the Sarbanes-Oxley Act of 2002**




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




Pursuant
      to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Act”), beginning with our
      Annual Report on Form 10-K for the fiscal year ending December 31, 2008, we
      will
      be required to furnish a report by our management on our internal control over
      financial reporting. This report will contain, among other matters, an
      assessment of the effectiveness of our internal control over financial reporting
      as of the end of our fiscal year, including a statement as to whether or not
      our
      internal control over financial reporting is effective. This assessment must
      include disclosure of any material weaknesses in our internal control over
      financial reporting identified by management. If we identify one or more
      material weaknesses in our internal control over financial reporting, we will
      be
      unable to assert our internal control over financial reporting is effective.
      This report will also contain a statement that our independent registered public
      accountants have issued an attestation report on management’s assessment of such
      internal controls and conclusion on the operating effectiveness of those
      controls.




Management
      acknowledges its responsibility for internal controls over financial reporting
      and seeks to continually improve those controls. In order to achieve compliance
      with Section 404 of the Act within the prescribed period, we are currently
      performing the system and process documentation and evaluation needed to comply
      with Section 404, which is both costly and challenging. We believe our process,
      which began in 2007 and continues in 2008 for documenting, evaluating and
      monitoring our internal control over financial reporting is consistent with
      the
      objectives of Section 404 of the Act.




16




**PART
      II- OTHER INFORMATION**




**ITEM
      1. LEGAL PROCEEDINGS**




None.




**ITEM
      1A. RISK FACTORS**




This
      information has been omitted based on the Company’s status as a smaller
      reporting company.




**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




None.




**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**




None.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




None.




**ITEM
      5. OTHER INFORMATION**




None.




**ITEM
      6. EXHIBITS**




Exhibit No.
            
            Description31.1
            
            Certification
                of the Chief Executive Officer and Chief Financial Officer (Principal
                Executive and Financial Officer) pursuant to Rule 13a-14(a) of the
                Securities Exchange Act, as amended.32.1
            
            Certification
                of the Chief Executive Officer and Chief Financial Officer (Principal
                Executive and Financial Officer) pursuant to 18 U.S.C. 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.


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**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.


ALPHA
                  SECURITY GROUP CORPORATIONMay
                  20, 2008
              By:
              /s/
                  Steven M. WassermanSteven
                  M. WassermanChief
                  Executive Officer and Chief Financial Officer(Principal
                  Executive and Financial
                  Officer)




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