##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 001-32574
 JK ACQUISITION CORP.
  Delaware
    
    87-0745202(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)4400 Post Oak Parkway, Suite 2530Houston, Texas
    
    77027(Address of principal executive
    
    (Zip Code)offices)
 (713) 978-7557
 þ o
  o o þ
 þ o




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JK ACQUISITION CORP.
Table of Contents
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    1Balance Sheets (Unaudited)
    
    
    1Statements of Operations (Unaudited)
    
    
    2Statements of Cash Flows (Unaudited)
    
    
    3Notes to Unaudited Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    14Item 4. Controls and Procedures
    
    
    14PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    16Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 6. Exhibits
    
    
    17SIGNATURES
    
    
    18INDEX TO EXHIBITS
    
    
    19Certification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification by Principal Executive Officer Pursuant to Section 302Certification by Principal Financial Officer Pursuant to Section 302Certification by Principal Executive Officer and Principal Financial Officer Pursuant to Section 906




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 JK ACQUISITION CORP.
(A Development Stage Company)
 
 BALANCE
SHEETS
 As
of June 30, 2007 and December 31, 2006
 (Unaudited)
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash
    
    $
    75,484
    
    
    $
    220,104Deferred tax asset
    
    
    1,613
    
    
    
    1,613Total current assets
    
    
    77,097
    
    
    
    221,717Trust fund
    
    
    79,002,279
    
    
    
    77,627,249Deferred acquisition costs
    
    
    
    
    
    
    788,234Total Assets
    
    $
    79,079,376
    
    
    $
    78,637,200LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    379,510
    
    
    $
    299,870Federal income tax payable
    
    
    8,412
    
    
    
    15,640Advances from stockholders
    
    
    200,000
    
    
    
    Derivative liabilities
    
    
    
    
    
    
    15,636,834Total Liabilities
    
    
    587,922
    
    
    
    15,952,344Common stock subject to redemption, 2,710,311 shares
    
    
    15,792,556
    
    
    
    15,517,687Stockholders equity:Preferred stock, $0.0001 par value, 1,000,000 shares authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.0001 par value, 50,000,000 shares authorized, 16,516,667 shares issued and
outstanding at June 30, 2007 and December 31, 2006 (including 2,710,311 shares subject to
redemption)
    
    
    1,652
    
    
    
    1,652Paid-in capital
    
    
    60,640,440
    
    
    
    46,747,075Earnings accumulated during the development stage
    
    
    2,056,806
    
    
    
    418,442Total Stockholders Equity
    
    
    62,698,898
    
    
    
    47,167,169Total Liabilities and Stockholders Equity
    
    $
    79,079,376
    
    
    $
    78,637,200
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JK ACQUISITION CORP.
(A Development Stage Company)
 
 STATEMENTS OF OPERATIONS
Three Months ended June 30, 2007 and 2006,
Six Months ended June 30, 2007 and 2006 and
Period from May 11, 2005 (Inception) to June 30, 2007
(Unaudited)
 Period fromInception toThree Months Ended June 30,
    
    
    Six Months Ended June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007Operating Expenses:General & administrative
    
    $
    172,131
    
    
    $
    62,711
    
    
    $
    237,074
    
    
    $
    67,665
    
    
    $
    534,446Impairment of deferred transaction costs
    
    
    975,419
    
    
    
    
    
    
    
    975,419
    
    
    
    
    
    
    
    975,419Operating Loss
    
    
    (1,147,550
    )
    
    
    (62,711
    )
    
    
    (1,212,493
    )
    
    
    (67,665
    )
    
    
    (1,509,865
    )Other income:Interest income
    
    
    713,720
    
    
    
    591,569
    
    
    
    1,382,258
    
    
    
    591,569
    
    
    
    3,377,103Gain on derivative liabilities
    
    
    0
    
    
    
    2,594,715
    
    
    
    1,468,600
    
    
    
    2,594,715
    
    
    
    203,596Total other income
    
    
    713,720
    
    
    
    3,186,284
    
    
    
    2,850,858
    
    
    
    3,186,284
    
    
    
    3,580,699Net income (loss) before income tax expense
    
    
    (433,830
    )
    
    
    3,123,573
    
    
    
    1,638,365
    
    
    
    3,118,619
    
    
    
    2,070,834Income tax expense
    
    
    
    
    
    
    29,276
    
    
    
    
    
    
    
    29,276
    
    
    
    14,027Net income (loss)
    
    $
    (433,830
    )
    
    $
    3,094,297
    
    
    $
    1,638,365
    
    
    $
    3,089,343
    
    
    $
    2,056,807Earnings (loss) per shareBasic
    
    $
    (0.03
    )
    
    $
    0.22
    
    
    $
    0.10
    
    
    $
    0.36Diluted
    
    $
    (0.03
    )
    
    $
    0.20
    
    
    $
    0.08
    
    
    $
    0.33Weighted average number of common shares
outstanding:Basic
    
    
    16,516,667
    
    
    
    13,983,791
    
    
    
    16,516,667
    
    
    
    8,576,427Diluted
    
    
    16,516,667
    
    
    
    15,644,372
    
    
    
    19,944,649
    
    
    
    9,411,305
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JK ACQUISITION CORP.
(A Development Stage Company)
 
 STATEMENTS OF CASH FLOWS
Six Months ended June 30, 2007 and 2006 and
Period from May 11, 2005 (Inception) to June 30, 2007
(Unaudited)
 Period fromInception toSix Months Ended June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    1,638,365
    
    
    
    $3,089,342
    
    
    $
    2,056,807Adjustments to reconcile net income (loss) to net cash used in
operating activities:Investment income
    
    
    (1,382,258
    )
    
    
    (591,569
    )
    
    
    (3,377,103
    )Gain on derivative liabilities
    
    
    (1,468,600
    )
    
    
    (2,594,715
    )
    
    
    (2,733,604
    )Impairment of deferred transaction costs
    
    
    975,419
    
    
    
    
    
    
    
    975,419Change in:Deferred Tax Asset
    
    
    
    
    
    
    
    
    
    
    (1,613
    )Accrued liabilities and accounts payable
    
    
    79,640
    
    
    
    29,277
    
    
    
    379,510Federal income tax payable
    
    
    (7,228
    )
    
    
    
    
    
    
    8,412Net cash used in operating activities
    
    
    (164,663
    )
    
    
    (67,665
    )
    
    
    (2,692,172
    )CASH FLOWS FROM INVESTING ACTIVITIESDeferred transaction costs
    
    
    (187,185
    )
    



    
    
    
    (975,419
    )Payment to trust account
    
    

    
    
    
    (76,532,404
    )
    
    
    (76,532,404
    )Disbursements from trust account
    
    
    7,228
        

    

    
    
    
    907,228Net cash used in investing activities
    
    
    (179,957
    )
    
    
    (76,532,404
    )
    
    
    (76,600,595
    )CASH FLOWS FROM FINANCING ACTIVITIESGross proceeds from public offering
    
    
    
    
    
    
    79,350,000
    
    
    
    79,350,000Gross proceeds from private placement
    
    
    
    
    
    
    2,000,004
    
    
    
    2,000,004Proceeds from sale of stock
    
    
    
    
    
    
    
    
    
    
    31,250Proceeds from sale of underwriter option
    
    
    
    
    
    
    100
    
    
    
    100Proceeds from advances from stockholders
    
    
    200,000
    
    
    
    
    
    
    
    529,000Payments on advances from stockholders
    
    
    
    
    
    
    (329,000
    )
    
    
    (329,000
    )Cash paid for offering costs
    
    
    
    
    
    
    (4,413,991
    )
    
    
    (4,743,110
    )Net cash provided by financing activities
    
    
    200,000
    
    
    
    76,607,113
    
    
    
    76,838,244Net change in cash
    
    
    (144,620
    )
    
    
    7,044
    
    
    
    75,484Cash at beginning of period
    
    
    220,104
    
    
    
    26,137
    
    
    
    Cash at end of period
    
    $
    75,484
    
    
    $
    33,181
    
    
    $
    75,484Supplemental disclosures:Cash paid for interest
    
    $
    
    
    
    $
    
    
    
    $
    
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Period fromInception toSix Months Ended June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007Cash paid for income taxes
    
    
    7,228
    
    
    
    
    
    
    
    7,228Non-cash transactions:Common stock subject to redemption
    
    $
    
    
    
    $
    15,417,082
    
    
    $
    15,299,099Increase in value of common stock subject to redemption
    
    
    274,869
    
    
    
    14,371,830
    
    
    
    494,901Inception of warrants accounted for as derivative liabilities
    
    
    
    
    
    
    
    
    
    
    15,636,834Adjustment for elimination of derivatives at fair value  warrants
    
    
    14,168,233
    
    
    
    
    
    
    
    14,168,233
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JK ACQUISITION CORP.
(A Development Stage Company)
 
 NOTES TO FINANCIAL STATEMENTS
(Unaudited)
 NOTE 1  BASIS OF PRESENTATION
  NOTE 2  INITIAL PUBLIC OFFERING
    NOTE 3  TRUST FUND
  NOTE 4  ADVANCES FROM SHAREHOLDERS
   NOTE 5  DERIVATIVE LIABILITY
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NOTE 6  EQUITY
   NOTE 7  STOCK OPTION
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NOTE 8  RELATED PARTY TRANSACTION
  NOTE 9 DEFERRED ACQUISITION COSTS
  NOTE 10 PROPOSED MERGER
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
    
    13,203,700 shares of JK Acquisition common stock;
    
    26,407,400 warrants (each warrant may be exchanged for one share of JK Acquisition common
stock solely pursuant to the grant of an Earnout Award (as defined in the Merger Agreement)
pursuant to the Merger Agreement); and
    
    the assumption of third-party indebtedness, which is expected to be approximately $49,400,000.
  NOTE 11LIQUIDITY
   NOTE 12  OTHER CONTINGENCIES
   8




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
       Developments in Finding a Suitable Business Target
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Merger Consideration
  
    
    13,203,700 shares of JKA common stock (Parent Shares);
    
    26,407,400 warrants (each warrant may be exchanged for one share of JKA common stock solely
pursuant to the grant of an Earnout Award (as defined in the Amended Merger Agreement)
pursuant to the Amended Merger Agreement)(Parent Warrants); and
    
    the assumption of Third-Party Indebtedness, which is expected to be approximately
$49,400,000.
     Escrow Amounts
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Closing of the Merger
  Representations and Warranties
   Interim Operations Relating to JKA and Multi-Shot
  No Solicitation
   Indemnification
   Conditions to the Completion of the Merger
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
    
    no order or injunction enjoining the Merger;
 
    
    no statute, rule, order or decree shall have been enacted or promulgated which would prohibit the Merger or
otherwise make the Merger illegal;
 
    
    receipt of certain consents;
 
    
    entering into the registration rights agreement, escrow agreement and certain other agreements;
 
    
    termination of certain Multi-Shot existing plans and agreements;
 
    
    the majority of voting JKA stockholders shall have approved the transactions contemplated by the Amended Merger
Agreement and public JKA stockholders owning not more than twenty percent (20%) of JKAs shares of common stock
issued in JKAs initial public offering and outstanding immediately before the closing shall have exercised their
rights to convert their shares into a pro rata share of the trust fund rather than approve the Merger;
 
    
    certain of the officers of Multi-Shot shall have entered into employment agreements;
 
    
    the Members shall have approved the transactions contemplated by the Amended Merger Agreement;
 
    
    all specified waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, if any, shall have expired, and
 
    
    the absence of any action, suit or proceeding challenging or preventing the Merger.
 Termination
  
    
    by Multi-Shot if JKA is unable to obtain stockholder approval by July 31, 2007;
 
    
    at any time, by mutual written agreement as duly authorized by the Board of Directors of JKA and the Board of
Managers of Multi-Shot;
 
    
    at any time after July 31, 2007, by either Multi-Shot or JKA if the closing shall not have occurred for any reason
other than a breach by the terminating party;
 
    
    by JKA or Multi-Shot upon the issuance of any order which is final and nonappealable that would prevent or prohibit
the consummation of the Merger;
 
    
    by JKA, if there is a material breach of any representation, warranty or obligation by Multi-Shot under the Amended
Merger Agreement that renders the satisfaction of any condition to JKAs obligations impossible and such breach is
not waived by JKA;
 
    
    by Multi-Shot, if there is a material breach by JKA of any representation, warranty or obligation under the Amended
Merger Agreement, that renders the satisfaction of any condition to Multi-Shots obligations impossible and such
breach is not waived by Multi-Shot;
 
    
    by JKA if Multi-Shots adjusted or updated Gross Enterprise Value (as defined in the Amended Merger Agreement) as of
June 30, 2007 is less than the Gross Enterprise Value as defined in Section 2.01(b)(i) of the Amended Merger
Agreement; or
 
    
    by Multi-Shot in the event: (i) the Investor Purchase Agreement (as defined in the Amended Merger Agreement) is not
consummated on or before March 31, 2007, or (ii) in the sole reasonable discretion of Multi-Shot, at any earlier
date to the extent Multi-Shot does not believe that the Investor Purchase Agreement is likely to be consummated on
or before March 31, 2007.
  Effect of Termination
  
    
    JKA and MSI are obligated to return all document and work papers obtained from Multi-Shot or the Members;
 
    
    all filings with any government agencies shall be withdrawn, to the extent practicable;
 
    
    certain confidentiality obligations will survive closings; and
 
    
    no party shall be relieved of any liability for willful breach of the Amended Merger Agreement.
 Multi-Shot Litigation
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RESULTS OF OPERATIONS
 Comparison of Three Months Ended June 30, 2007 and 2006
  Comparison of Six Months Ended June 30, 2007 with Period from Inception to June 30, 2007
  CHANGES IN FINANCIAL CONDITION
 Liquidity and Capital Resources
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Off-Balance Sheet Arrangements
  Contractual Obligations
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
        16




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Item 6. Exhibits.
 Number
    
    Description31.1
    
    Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification by 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
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SIGNATURES
  JK ACQUISITION CORP.Date: August 17, 2007
    By:
    /s/ James P. WilsonJames P. WilsonChairman of the Board of Directors, Chief
Executive Officer and Secretary

(Principal Executive Officer)

(Principal Financial and Accounting Officer) 18




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INDEX TO EXHIBITS
 Number
    
    Description31.1
    
    Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification by 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
 19