UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





x
            QUARTERLYREPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





FOR THE QUARTERLY PERIOD ENDED
MARCH 31,
2009




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 001-33711





SP
ACQUISITION HOLDINGS, INC.


(Exact
name of Registrant as specified in its charter)





Delaware
              20-8523583(State
      or other jurisdiction of
              (I.R.S.
      EmployerIncorporation
      or organization)
              Identification
      Number)590
      MADISON AVENUE, 32ndFLOOR
                NEW
      YORK, NY
              10022(Address
      of principal executive offices)
              (Zip
      Code)





Registrant's
telephone number including area code: (212) 520-2300





Indicate by check mark whether the
Registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 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. YesxNoo




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o 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
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 xNon-accelerated
      filer o
              Smaller
      reporting company o




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 54,112,000 shares of the Registrant’s Common Stock, par value $.001,
outstanding on May 7, 2009.










SP
ACQUISITION HOLDINGS, INC.





FORM
10-Q





Quarter ended March 31, 2009





TABLE
OF CONTENTS





PagePART
      IFINANCIAL
      INFORMATIONItem
      1.
                              Condensed
      Financial Statements:Condensed
      Balance Sheets as of March 31, 2009 (unaudited) and December 31,
      2008
                              
                              4Condensed
      Statements of Operations (unaudited) for the three months ended March 31,
      2009 and 2008 and for the period from  February 14, 2007 (inception)
      through March 31, 2009
                              
                              5Condensed
      Statements of Cash Flows (unaudited) for the three months ended March 31,
      2009 and 2008, and for the period from February 14, 2007 (inception)
      through March 31, 2009
                              
                              6Condensed
      Statements of Stockholders’ Equity for the period February 14, 2007
      (inception) through December 31, 2008 and for the three months ended March
      31, 2009 (unaudited)
                              
                              7Notes
      to Condensed Financial Statements
                              
                              8Item
      2.
                              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                              
                              16Item
      3.
                              Quantitative
      and Qualitative Disclosures About Market Risk
                              
                              18Item
      4.
                              Controls
      and Procedures
                              
                              19PART
      IIOTHER
      INFORMATIONItem
      1.
                              Legal
      Proceedings
                              
                              19Item
      1A.
                              Risk
      Factors
                              
                              19Item
      2.
                              Unregistered
      Sales of Equity Securities and Use of Proceeds
                              
                              20Item
      3.
                              Defaults
      Upon Senior Securities
                              
                              20Item
      4.
                              Submission
      of Matters to a Vote of Security Holders
                              
                              20Item
      5.
                              Other
      Information
                              
                              20Item
      6.
                              Exhibits
                              
                              20Signatures
                              21Exhibit
      Index
                              
                              22Certifications


2


CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS





This
report, and the information incorporated by reference in it, include “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, (the “Exchange Act”). Our forward-looking statements include, but are
not limited to, statements regarding our or our management’s expectations,
hopes, beliefs, intentions or strategies regarding the future. In addition, any
statements that refer to projections, forecasts or other characterizations of
future events or circumstances, including any underlying assumptions, are
forward-looking statements. The words “anticipates,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,”
“potential,” “predicts,” “project,” “should,” “would” and similar expressions
may identify forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Forward-looking statements in this
report may include, for example, statements about our:




·
            ability to complete our initial
      business combination;





·
            success in retaining or
      recruiting, or changes required in, our officers, key employees or
      directors following our initial business
    combination;





·
            officers and directors allocating
      their time to other businesses and potentially having conflicts of
      interest with our business or in approving our initial business
      combination, as a result of which they would then receive expense
      reimbursements;





·
            potential ability to obtain
      additional financing to complete a business
      combination;





·
            ability of our officers and
      directors to generate a number of potential investment
      opportunities;





·
            potential change in control if we
      acquire one or more target businesses for
  stock;




·
            our public securities’ potential
      liquidity and trading; listing or delisting of our securities from the
      American Stock Exchange or the ability to have our securities listed on
      the American Stock Exchange following our initial business
      combination;





·
            use of proceeds not held in the
      trust account or available to us from interest income on the trust account
      balance; or





·
            financial
      performance.





The
forward-looking statements contained or incorporated by reference in this report
are based on our current expectations and beliefs concerning future developments
and their potential effects on us. There can be no assurance that future
developments affecting us will be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of
which are beyond our control) or other assumptions that may cause actual results
or performance to be materially different from those expressed or implied by
these forward-looking statements. These risks and uncertainties include, but are
not limited to, those factors described under the heading “Risk Factors.” Should
one or more of these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under
applicable securities laws.





References
in this report to “we,” “us” or “our company” refer to SP Acquisition Holdings,
Inc. References to “public stockholders” refer to purchasers of our securities
by persons other than our founders in, or subsequent to, our initial public
offering.


3




PART
1. FINANCIAL INFORMATION


SP
ACQUISITION HOLDINGS, INC.


(a
corporation in the development stage)


CONDENSED
BALANCE SHEETS




March
      31,
                                                    2009
                                                    (Unaudited)
                                                  
                                                  
                                                  December
      31,
                                                    2008Current
      assets:Cash
      and cash equivalents
                                                  
                                                  $
                                                  1,971,909
                                                  
                                                  
                                                  $
                                                  2,431,303Trust
      account attributable to deferred underwriter’s fee,
    restricted
                                                  
                                                  
                                                  17,315,840
                                                  
                                                  
                                                  
                                                  17,315,840Prepaid
      expenses
                                                  
                                                  
                                                  5,278
                                                  
                                                  
                                                  
                                                  30,757Total
      current assets
                                                  
                                                  
                                                  19,293,027
                                                  
                                                  
                                                  
                                                  19,777,900Non current
      assets:Cash
      and cash equivalents, restricted
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  429,194Trust
      account, restricted:Cash
      and cash equivalents held in trust account
                                                  
                                                  
                                                  409,144,301
                                                  
                                                  
                                                  
                                                  409,438,479Accrued
      interest receivable
                                                  
                                                  
                                                  64,680
                                                  
                                                  
                                                  
                                                  —Tax
      overpayment due to trust account
                                                  
                                                  
                                                  569,768
                                                  
                                                  
                                                  
                                                  130,641Trust
      account, restricted
                                                  
                                                  
                                                  409,778,749
                                                  
                                                  
                                                  
                                                  409,569,120Total
      assets
                                                  
                                                  $
                                                  429,071,776
                                                  
                                                  
                                                  $
                                                  429,776,214Current
      liabilities:Accounts
      payable
                                                  
                                                  $
                                                  49,161
                                                  
                                                  
                                                  $
                                                  22,743Advances
      payable to affiliate
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  5,132Accrued
      expenses
                                                  
                                                  
                                                  126,457
                                                  
                                                  
                                                  
                                                  223,588Income
      taxes payable
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  21,306Other
      payables - deferred underwriters’ fee
                                                  
                                                  
                                                  17,315,840
                                                  
                                                  
                                                  
                                                  17,315,840Total
      current liabilities
                                                  
                                                  
                                                  17,491,458
                                                  
                                                  
                                                  
                                                  17,588,609Common
      stock, subject to possible conversion, 12,986,879 shares at conversion
      value
                                                  
                                                  
                                                  127,772,726
                                                  
                                                  
                                                  
                                                  127,772,726Deferred
      interest, attributable to common stock subject to possible
      conversion
                                                  
                                                  
                                                  355,641
                                                  
                                                  
                                                  
                                                  421,510Commitments
      and contingenciesStockholders’
      equity:Preferred
      stock, $.001 par value; 1,000,000 authorized, none issued
                                                  
                                                  
                                                  —
                                                  
                                                  
                                                  
                                                  —Common
      stock, $.001 par value, 200,000,000 shares authorized; 54,112,000 shares
      issued and outstanding (including 12,986,879 shares subject to possible
      conversion)
                                                  
                                                  
                                                  41,125
                                                  
                                                  
                                                  
                                                  41,125Additional
      paid-in capital
                                                  
                                                  
                                                  280,353,184
                                                  
                                                  
                                                  
                                                  280,287,315Retained
      earnings accumulated during the development stage
                                                  
                                                  
                                                  3,057,642
                                                  
                                                  
                                                  
                                                  3,664,929Total
      stockholders’ equity
                                                  
                                                  
                                                  283,451,951
                                                  
                                                  
                                                  
                                                  283,993,369Total
      liabilities and stockholders’ equity
                                                  
                                                  $
                                                  429,071,776
                                                  
                                                  
                                                  $
                                                  429,776,214





The
accompanying notes are an integral part of these condensed financial
statements.


4


SP
ACQUISITION HOLDINGS, INC.


(a
corporation in the development stage)




CONDENSED
STATEMENTS OF OPERATIONS


(Unaudited)




For
      the Three
                                            Months
      Ended
                                            March
      31, 2009
                                          
                                          
                                          For
      the Three
                                            Months
      Ended
                                            March
      31, 2008
                                          
                                          
                                          For
      the Period
                                            from
      February
                                            14,
      2007
                                            (inception)
      to
                                            March
      31, 2009Formation
      and operating costs
                                          
                                          $
                                          338,949
                                          
                                          
                                          $
                                          197,464
                                          
                                          
                                          $
                                          1,655,970Loss
      from operations
                                          
                                          
                                          (338,949
                                          )
                                          
                                          
                                          (197,464
                                          )
                                          
                                          
                                          (1,655,970
                                          )Interest
      income - Trust
                                          
                                          
                                          95,502
                                          
                                          
                                          
                                          2,641,032
                                          
                                          
                                          
                                          9,416,201Interest
      income - other
                                          
                                          
                                          727
                                          
                                          
                                          
                                          13,477
                                          
                                          
                                          
                                          44,496Interest
      expense
                                          
                                          
                                          —
                                          
                                          
                                          
                                          (3,125
                                          )
                                          
                                          
                                          (15,581
                                          )(Loss)
      income before tax
                                          
                                          
                                          (242,720
                                          )
                                          
                                          
                                          2,453,920
                                          
                                          
                                          
                                          7,789,146Provision
      for income taxes
                                          
                                          
                                          (364,567
                                          )
                                          
                                          
                                          (1,477,996
                                          )
                                          
                                          
                                          (4,731,504
                                          )Net
      (loss) income
                                          
                                          
                                          (607,287
                                          )
                                          
                                          
                                          975,924
                                          
                                          
                                          
                                          3,057,642Deferred
      interest, attributable to common stock subject to possible
      conversion
                                          
                                          
                                          65,869
                                          
                                          
                                          
                                          (342,844
                                          )
                                          
                                          
                                          (355,641
                                          )Net
      (loss) income attributable to common stock
                                          
                                          $
                                          (541,418
                                          )
                                          
                                          $
                                          633,080
                                          
                                          
                                          $
                                          2,702,001Net
      (loss) income attributable to common stock per common share, basic and
      diluted
                                          
                                          $
                                          (0.01
                                          )
                                          
                                          $
                                          0.02Weighted
      average number of common shares outstanding - excluding shares subject to
      possible conversion, basic and diluted
                                          
                                          
                                          41,125,121
                                          
                                          
                                          
                                          41,125,121





The
accompanying notes are an integral part of these condensed financial
statements.


5




SP
ACQUISITION HOLDINGS, INC.


(a
corporation in the development stage)




CONDENSED
STATEMENTS OF CASH FLOWS


(Unaudited)


For
      the Three
                                                months
      ended
                                                March
      31, 2009
                                              
                                              
                                              For
      the Three
                                                months
      ended
                                                March
      31, 2008
                                              
                                              
                                              For
      the Period
                                                from
      February14,
                                                2007
      (inception)
                                                to
      March 31, 2009Cash
      flows from operating activities:Net
      (loss) income
                                              
                                              $
                                              (607,287
                                              )
                                              
                                              $
                                              975,924
                                              
                                              
                                              $
                                              3,057,642Adjustments
      to reconcile net (loss) income to net cash provided by(used
      in) operating activities:Deferred
      tax assets
                                              
                                              
                                              —
                                              
                                              
                                              
                                              125,406
                                              
                                              
                                              
                                              —Changes
      in operating assets and liabilities:Accrued
      interest receivable
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (12,104
                                              )
                                              
                                              
                                              —Other
      receivable
                                              
                                              
                                              —
                                              
                                              
                                              
                                              26,323
                                              
                                              
                                              
                                              —Prepaid
      expenses
                                              
                                              
                                              25,479
                                              
                                              
                                              
                                              (4,350
                                              )
                                              
                                              
                                              (5,278
                                              )Prepaid
      taxes
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (323,059
                                              )
                                              
                                              
                                              —Accounts
      payable
                                              
                                              
                                              26,418
                                              
                                              
                                              
                                              (62,281
                                              )
                                              
                                              
                                              49,161Advances
      payable to affiliate
                                              
                                              
                                              (5,132
                                              )
                                              
                                              
                                              4,397
                                              
                                              
                                              
                                              —Interest
      payable to affiliate
                                              
                                              
                                              —
                                              
                                              
                                              
                                              3,125
                                              
                                              
                                              
                                              —Accrued
      expenses
                                              
                                              
                                              (97,131
                                              )
                                              
                                              
                                              43,962
                                              
                                              
                                              
                                              126,457Income
      taxes payable
                                              
                                              
                                              (21,306
                                              )
                                              
                                              
                                              (652,351
                                              )
                                              
                                              
                                              —Net
      cash (used in) provided by operating activities
                                              
                                              
                                              (678,959
                                              )
                                              
                                              
                                              124,992
                                              
                                              
                                              
                                              3,227,982Cash
      flows from investing activities:Cash
      and cash equivalents, restricted
                                              
                                              
                                              429,194
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —Trust
      account, restricted
                                              
                                              
                                              (209,629
                                              )
                                              
                                              
                                              279,061
                                              
                                              
                                              
                                              (427,094,589
                                              )Net
      cash provided by (used in) investing activities
                                              
                                              
                                              219,565
                                              
                                              
                                              
                                              279,061
                                              
                                              
                                              
                                              (427,094,589
                                              )Cash
      flows from financing activities:Proceeds
      from issuance of founder’s units
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              25,000Proceeds
      from issuance of additional founder’s warrants
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              7,000,000Proceeds
      from note payable to affiliate
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              250,000Repayment
      of note payable to affiliate
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (250,000
                                              )Proceeds
      from initial public offering
                                              
                                              
                                              —
                                              
                                              
                                              
                                              —
                                              
                                              
                                              
                                              432,896,000Payment
      of offering costs
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (383,991
                                              )
                                              
                                              
                                              (14,082,484
                                              )Net
      cash (used in) provided by financing activities
                                              
                                              
                                              —
                                              
                                              
                                              
                                              (383,991
                                              )
                                              
                                              
                                              425,838,516Net
      (decrease) increase in cash
                                              
                                              
                                              (459,394
                                              )
                                              
                                              
                                              20,062
                                              
                                              
                                              
                                              1,971,909Cash
      and cash equivalents at the beginning of the period
                                              
                                              
                                              2,431,303
                                              
                                              
                                              
                                              1,317,688
                                              
                                              
                                              
                                              —Cash
      and cash equivalents at the end of the period
                                              
                                              $
                                              1,971,909
                                              
                                              
                                              $
                                              1,337,750
                                              
                                              
                                              $
                                              1,971,909Supplemental
      disclosure of non-cash financing activities:Deferred
      offering costs included in accounts payable
                                              
                                              $
                                              —
                                              
                                              
                                              $
                                              —
                                              
                                              
                                              $
                                              383,991Accrual
      of deferred underwriters’ discount
                                              
                                              $
                                              —
                                              
                                              
                                              $
                                              —
                                              
                                              
                                              $
                                              17,315,840Supplemental
      disclosure of cash flow data:Cash
      payments for Federal, state and city income taxes
                                              
                                              $
                                              825,000
                                              
                                              
                                              $
                                              2,328,000
                                              
                                              
                                              $
                                              5,300,500





The accompanying notes are an integral part of these condensed financial
statements.


6




SP
ACQUISITION HOLDINGS, INC.


(a
corporation in the development stage)





CONDENSED
STATEMENTS OF STOCKHOLDERS’ EQUITY





Common
                            Stock
                            Shares
                          
                          
                          Common
                            Stock
                            Amount
                          
                          
                          Additional
      Paid-
                            in
      Capital
                          
                          
                          Retained
                            Earnings
                            Accumulated
                            During
      the
                            Development
                            Stage
                          
                          
                          Total
                            Stockholders’
                            EquityProceeds
      from founder’s units issued at $0.003 per unit on March 22,
      2007
                          
                          
                          7,500,000
                          
                          
                          $
                          7,500
                          
                          
                          $
                          17,500
                          
                          
                          $
                          —
                          
                          
                          $
                          25,000Unit
      dividend of 0.15 units issued for each outstanding share of common stock
      declared on August 8, 2007
                          
                          
                          1,125,000
                          
                          
                          
                          1,125
                          
                          
                          
                          (1,125
                          )
                          
                          
                          —
                          
                          
                          
                          —Unit
      dividend of one-third of a unit issued for each outstanding share of
      common stock declared on September 4, 2007
                          
                          
                          2,875,000
                          
                          
                          
                          2,875
                          
                          
                          
                          (2,875
                          )
                          
                          
                          —
                          
                          
                          
                          —Proceeds
      from issuance of 40,000,000 units, net of underwriters’ commissions and
      offering expenses of $29,030,049 at $10.00 per unit on October 16,
      2007
                          
                          
                          40,000,000
                          
                          
                          
                          40,000
                          
                          
                          
                          370,929,951
                          
                          
                          
                          —
                          
                          
                          
                          370,969,951Net
      proceeds subject to possible conversion of 11,999,999
    shares
                          
                          
                          (11,999,999
                          )
                          
                          
                          (12,000
                          )
                          
                          
                          (118,187,990
                          )
                          
                          
                          
                          
                          
                          
                          (118,199,990
                          )Proceeds
      from issuance of 7,000,000 warrants on October 16, 2007
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          7,000,000
                          
                          
                          
                          —
                          
                          
                          
                          7,000,000Proceeds
      from issuance of 3,289,600 units, net of underwriters’ commissions and
      offering expenses of $2,368,275 at $10.00 per unit on October 31,
      2007
                          
                          
                          3,289,600
                          
                          
                          
                          3,290
                          
                          
                          
                          30,524,435
                          
                          
                          
                          —
                          
                          
                          
                          30,527,725Net
      proceeds subject to possible conversion of 986,880 shares
                          
                          
                          (986,880
                          )
                          
                          
                          (987
                          )
                          
                          
                          (9,571,749
                          )
                          
                          
                          —
                          
                          
                          
                          (9,572,736
                          )Founder’s
      units forfeited on October 31, 2007
                          
                          
                          (677,600
                          )
                          
                          
                          (678
                          )
                          
                          
                          678
                          
                          
                          
                          —
                          
                          
                          
                          —Net
      income
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          1,466,293
                          
                          
                          
                          1,466,293Balances
      at December 31, 2007
                          
                          
                          41,125,121
                          
                          
                          
                          41,125
                          
                          
                          
                          280,708,825
                          
                          
                          
                          1,466,293
                          
                          
                          
                          282,216,243Deferred
      interest, attributable to common stock subject to possible
      conversion
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          (421,510
                          )
                          
                          
                          —
                          
                          
                          
                          (421,510
                          )Net
      income
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          2,198,636
                          
                          
                          
                          2,198,636Balances
      at December 31, 2008
                          
                          
                          41,125,121
                          
                          
                          
                          41,125
                          
                          
                          
                          280,287,315
                          
                          
                          
                          3,664,929
                          
                          
                          
                          283,993,369Deferred
      interest, attributable to common stock subject to possible
      conversion
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          65,869
                          
                          
                          
                          —
                          
                          
                          
                          65,869Net
      loss
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          (607,287
                          )
                          
                          
                          (607,287
                          )Balances
      at March 31, 2009 (unaudited)
                          
                          
                          41,125,121
                          
                          
                          $
                          41,125
                          
                          
                          $
                          280,353,184
                          
                          
                          $
                          3,057,642
                          
                          
                          $
                          283,451,951


The
accompanying notes are an integral part of these condensed financial
statements.


7


SP
ACQUISITION HOLDINGS, INC.


(a
corporation in the development stage)





NOTES
TO CONDENSED FINANCIAL STATEMENTS


(Unaudited)




NOTE
A — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND INTERIM FINANCIAL
INFORMATION




SP
Acquisition Holdings, Inc. (a corporation in the development stage) (the
“Company”) was incorporated in Delaware on February 14, 2007. The Company was
formed to acquire one or more businesses or assets through a merger, capital
stock exchange, asset acquisition, stock purchase or other similar business
combination (“Business Combination”). The Company has neither engaged in any
operations nor generated operating revenues to date. The Company will not
generate any operating revenues until after the completion of its initial
business combination. Since the completion of its initial public offering, the
Company generates non-operating income in the form of interest income on cash
and cash equivalents.




The
Company is considered to be in the development stage as defined in Statement of
Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting By
Development Stage Enterprises,” and is subject to the risks associated with
activities of development stage companies.




The
Company was initially formed and capitalized through the sale of founder’s units
to a related entity, SP Acq LLC (See Note D).




The
registration statement for the Company’s initial public offering (“Offering”)
was declared effective on October 10, 2007. The Company consummated the Offering
on October 16, 2007 and recorded proceeds of $370,969,951, net of the
underwriters’ discount of $28,000,000 and offering costs of $1,030,049.
Simultaneously with the consummation of the Offering, the Company consummated
the private sale of 7,000,000 warrants to SP Acq LLC at a price of $1 per
warrant (an aggregate purchase price of $7,000,000) (see Note D).




On
October 31, 2007, the underwriters exercised a portion and terminated the
balance of their over allotment option granted in connection with the initial
public offering and consummated the purchase of an additional 3,289,600 units at
a price of $10.00 per unit, for gross proceeds of $32,896,000 or net proceeds of
$30,527,725, net of the underwriters’ discount of $2,302,720 and offering costs
of $65,555.




The
Company’s management has broad discretion with respect to the specific
application of the net proceeds of the Offering, although substantially all of
the net proceeds of the Offering are intended to be generally applied toward
consummating a Business Combination. Furthermore, there is no assurance that the
Company will be able to successfully effect a Business Combination.




A total
of $425,909,120 (or approximately $9.84 per share), including $371,000,000 of
the net proceeds from the Offering, $7,000,000 from the sale of warrants to the
founding shareholders (see Note D), $30,593,280 of net proceeds of the over
allotment issuance and $17,315,840 of deferred underwriting discounts, has been
placed in a trust account at JPMorgan Chase Bank, N.A., with Continental Stock
Transfer & Trust Company as trustee (the “Trust”) which is to be invested in
United States “government securities” within the meaning of Section 2(a)(16) of
the Investment Company Act of 1940 having a maturity of 180 days or less or in
money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act of 1940. Except for up to $3,500,000 of Trust
interest income to be released to the Company to fund expenses relating to
investigating and selecting a target business and other working capital
requirements, and any additional amounts needed to pay income taxes on the Trust
earnings, the proceeds held in the Trust will not be released from the Trust
until the earlier of the completion of the Company’s Business Combination or the
liquidation of the Company. As of March 31, 2009, the balance in the Trust
account was $427,094,589, which includes accrued interest receivable and
overpayments of taxes due to the Trust. Through March 31, 2009, the Trust has
released $3,500,000 of interest income to the Company and the Company had paid a
total of $5,300,500 in taxes, of which $5,300,500 has been reimbursed by the
Trust.


8


The
placing of funds in the Trust may not protect those funds from third party
claims against the Company. Although the Company will seek to have all vendors
and service providers (which would include any third parties we engaged to
assist us in any way in connection with our search for a target business) and
prospective target businesses execute agreements with the Company waiving any
right, title, interest or claim of any kind in or to any monies held in the
Trust, there is no guarantee that they will execute such
agreements.




SP Acq
LLC has agreed that it will be liable to the Company if and to the extent claims
by third parties reduce the amounts in the Trust available for payment to our
stockholders in the event of a liquidation and the claims are made by a vendor
for services rendered, or products sold, to us, or by a prospective target
business. A “vendor” refers to a third party that enters into an agreement with
us to provide goods or services to us. However, the agreement entered into by SP
Acq LLC specifically provides for two exceptions to the indemnity given: there
will be no liability (1) as to any claimed amounts owed to a third party who
executed a legally enforceable waiver, or (2) as to any claims under our
indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. Furthermore, there
could be claims from parties other than vendors, third parties with which we
entered into a contractual relationship or target businesses that would not be
covered by the indemnity from SP Acq LLC, such as shareholders and other
claimants who are not parties in contract with us who file a claim for damages
against us.




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 30% or more of the outstanding stock (excluding, for this purpose, those
shares of common stock issued prior to the Offering) vote against the Business
Combination and exercise their conversion rights described below, the Business
Combination will not be consummated. Public stockholders voting against a
Business Combination will be entitled to convert their stock to cash at a per
share conversion price equal to the aggregate amount then in the Trust (before
payment of deferred underwriters fees and including interest, net of any income
taxes payable on such interest, which shall be paid from the Trust, and net of
interest income of up to $3.5 million earned on the Trust balance previously
released to the Company to fund working capital requirements), if the Business
Combination is approved and consummated. However, voting against the Business
Combination alone will not result in election to exercise a stockholder’s
conversion rights. A stockholder must also affirmatively exercise such
conversion rights at or prior to the time the Business Combination is voted upon
by the stockholders. All of the Company’s stockholders prior to the Offering,
and all of the officers and directors of the Company have agreed to vote all of
the shares of the Company stock held by them that they acquired prior to the
consummation of the offering in accordance with the vote of the majority in
interest of all other stockholders of the Company.




We will
seek to consummate a Business Combination until October 10,
2009.   If we are unable to complete a Business Combination, the
proceeds held in the Trust, including the unpaid portion of the underwriters’
commission (See Note D) will be distributed to the Company’s public stockholders
(excluding SP Acq LLC, Steel Partners II, L.P. and Anthony Bergamo, Ronald
LaBow, Howard M. Lorber, Leonard Toboroff and S. Nicholas Walker, each a
director of the Company, to the extent of their pre-Offering stock
holdings).




These
unaudited interim condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”) for interim financial information and the instructions to Form
10-Q. Accordingly, they do not include all of the information and footnotes
required by GAAP for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included and such adjustments are of a normal recurring
nature.  The operating results for the interim periods presented are
not necessarily indicative of the results to be expected for any other interim
period or for the full year.





The
condensed balance sheet information as of December 31, 2008 was derived from the
audited balance sheet included in the Company’s Annual Report on Form 10-K for
the year ended December 31, 2008.  These unaudited interim condensed
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company’s December 31, 2008 Annual Report on
Form 10-K, filed on March 10, 2009 and amended on Form 10-K/A, filed on April
24, 2009. The accounting policies used in preparing these unaudited interim
condensed financial statements are consistent with those described in the
audited financial statements included in the Company’s December 31, 2008 Form
10-K as amended.


9


NOTE
B — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES




1.
   Development Stage
Company:




The
Company complies with the reporting requirements of SFAS No. 7, “Accounting and
Reporting by Development Stage Enterprises.”




As
indicated in the accompanying unaudited interim condensed financial statements,
the Company has incurred substantial organizational, legal, accounting and
offering costs in the pursuit of its financing plans and expects to incur
additional costs in pursuit of its acquisition plans. As of March 31, 2009, the
Company had cash on hand of $1,971,909 as well as $426,460,141 of cash and cash
equivalents in the Trust. Under terms of the investment management trust
agreement, up to $3,500,000 of interest may be released to the Company in such
amounts and such intervals as we request, subject to availability. At March 31,
2009, $3,500,000 of Trust interest has been released to the
Company.  Management has reviewed its cash requirements as of March
31, 2009 and believes that its cash on hand, along with the funds available to
it from the interest income from the Trust for the payment of income tax
liabilities on Trust earnings (See Note A) is sufficient to cover its expenses
for the next twelve months.




There is
no assurance that the Company’s plan to complete a Business Combination will be
successful.




2.
   Cash and Cash
Equivalents:




The
Company considers investments with a maturity of three months or less when
purchased to be cash equivalents.




3.
   Common Stock and
Unit Dividends:




Each
share of common stock has one vote. As discussed in Note F, on August 8, 2007,
the Company declared a unit dividend of 0.15 units for each unit outstanding and
on September 4, 2007 declared a unit dividend of one third of a unit for each
unit outstanding. All of the unit holders agreed to transfer their units due
them with respect to these dividends to SP Acq LLC. Such stock dividends are
presented as if they were stock splits and are presented retroactively for each
period presented. All unit amounts outstanding reflect such dividends, except
for weighted average shares outstanding as discussed in
Note B-4.




4.
   Net Income (Loss)
Per Common Share:




The
Company follows the provisions of SFAS No. 128, “Earnings Per Share” (“SFAS No.
128”). In accordance with SFAS No. 128, earnings per common share amounts
(“Basic EPS”) is computed by dividing earnings by the weighted average number of
common shares outstanding for the period. Common shares subject to possible
conversion of 12,986,879 shares have been excluded from the calculation of basic
earnings per share since such shares, if redeemed, only participate in their pro
rata shares of the trust earnings. Such earnings are deducted from earnings
available to common stockholders. Earnings per common share amounts, assuming
dilution (“Diluted EPS”), gives effect to dilutive options, warrants and other
potential common stock outstanding during the period. SFAS No. 128 requires the
presentation of both Basic EPS and Diluted EPS on the face of the statements of
operations. The effect of the 61,112,000 outstanding Warrants issued in
connection with the Public Offering and the Private Placement described in Note
A has not been considered in the diluted earnings per share calculation since
the exercise of the Warrants are contingent upon the occurrence of future
events, and therefore, not includable in the calculation of diluted earning per
share in accordance with SFAS No. 128.


10




5.         Concentration of Credit
Risk:




Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of cash accounts in a financial institution, which at times,
exceeds the Federal Deposit Insurance Corporation and the Securities Investor
Protection Corporation limits.  Management believes the risk of loss
to be minimal.




6.         Fair Value of Financial
Instruments:




The fair
value of the Company’s assets and liabilities, which qualify as financial
instruments under SFAS No. 107, “Disclosure About Fair Value of Financial
Instruments,” approximate the carrying amounts represented in the balance sheet
because of their short-term maturities.





7.
   Cash and Cash
Equivalents-Restricted:




Pursuant
to the terms of the investment management trust agreement, the Company is
permitted to have released from the Trust account, interest income to pay income
taxes on interest income earned on the Trust account balance.  As of
December 31, 2008, the Company transferred excess amounts from the Trust account
totaling $429,294 for the payment of Federal estimated taxes due on January 15,
2009.  These amounts were reflected as cash and cash equivalents,
restricted in the accompanying condensed balance sheet as of December 31,
2008.




8.         Trust
Account-Restricted:




The
Company considers the restricted portion of the funds held in the Trust Account
to be a non-current asset. A current asset is one that is reasonably expected to
be used to pay current liabilities, such as accounts payable or short-term debt
or to pay current operating expenses, or will be used to acquire other current
assets. Since the acquisition of a business is principally considered to be for
a long-term purpose, with long-term assets such as property and tangibles
typically being a major part of the acquired assets, the Company has reported
the funds anticipated to be used in the acquisition as a non-current
asset.




As
discussed in Note A, the Trust Account is invested in T Bills with a 60 day
maturity as of March 31, 2009.


11


9.         Income Taxes:




The
Company follows the provisions of SFAS No. 109, “Accounting for Income Taxes,”
which requires an asset and liability approach to financial accounting and
reporting for income taxes. Deferred income tax assets and liabilities are
computed for differences between the financial statement and tax bases of assets
and liabilities that will result in future taxable or deductible amounts, based
on enacted tax laws and rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are established,
when necessary, to reduce deferred tax assets to the amount expected to be
realized.




On
February 14, 2007, the Company adopted the provisions of Financial Accounting
Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48
prescribes a recognition threshold and measurement process for financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return and also provides guidance on derecognition,
classification, interest and penalties, accounting in interim period, disclosure
and transition.




10.         Share-Based
Compensation:




The
Company accounts for stock options and warrants using the fair value recognition
provisions of SFAS No. 123 (Revised 2004), “ Share-Based Payment ”, (“SFAS
123(R)”). SFAS 123(R) addresses all forms of share based compensation awards
including shares issued under employment stock purchase plans, stock options,
restricted stock and stock appreciation rights. Under SFAS 123 (R), share based
payment awards will be measured at fair value on the awards grant date, based on
estimated number of awards that are expected to vest and will be reflected as
compensation expense in the financial statements.





NOTE
C — INITIAL PUBLIC OFFERING




On
October 16, 2007, the Company sold to the public an aggregate of 40,000,000
units at a price of $10.00. Each unit consists of one share of the Company’s
common stock, $0.001 par value, and one redeemable common stock purchase
warrant. On October 31, 2007, the underwriters exercised a portion and cancelled
the balance of their over-allotment option granted in connection with the
Offering and consummated the sale of an additional 3,289,600 units at a price of
$10.00 per unit.




The
Company has incurred an underwriters’ fee of 7% of the gross offering proceeds
in connection with the completion of the Offering and the over-allotment. Of
this fee, $12,000,000 and $986,880 were paid at the closing of the Offering and
over-allotment on October 16, 2007 and October 31, 2007, respectively, and
$17,315,840 is held in the Trust and will be paid to the underwriters in
connection with the consummation of a Business Combination. As of March 31,
2009, the remaining underwriting commitment of $17,315,840 is included as Other
payables - deferred underwriters’ fee.




NOTE
D — RELATED PARTY TRANSACTIONS




SP Acq
LLC purchased 11,500,000 of the Company’s founder’s units subject to the terms
of the Founder’s Unit Purchase Agreement (the “Purchase Agreement”) dated March
30, 2007 and the Founders Unit Adjustment Agreement (the “Adjustment Agreement”)
dated August 8, 2007, each consisting of one common share and one warrant to
purchase a common share, for a price of $25,000 in a private placement. The
units are identical to those sold in the Offering, except that SP Acq LLC, Steel
Partners II, L.P., and Messrs. Bergamo, LaBow, Lorber, Toboroff and Walker
agreed to vote their founder’s shares in the same manner as a majority of the
public stockholders who vote at the special or annual meeting called for the
purpose of approving the Company’s Business Combination. As a result, they will
not be able to exercise conversion rights with respect to the founder’s shares
if the Company’s Business Combination is approved by a majority of its public
stockholders. The founder’s shares included therein will not participate with
the common stock included in the units sold in the Offering in any liquidating
distribution. The founder’s units, including the founder’s shares and initial
founder’s warrants, may not be sold or transferred until at least one year after
the completion of a Business Combination.


12


The
agreements referred to above provide for the Founders to maintain a 20% interest
in the Company after taking into consideration the number of units ultimately
sold in the initial public offering (“IPO”).  In order for the
Founders to hold the number of shares necessary to maintain a 20% interest in
the Company, 677,600 units were forfeited and cancelled on the date of the IPO,
leaving the Founders with 10,822,400 or 20% of the 54,112,000 units outstanding
at that time.  The Company accounted for the transaction employing the
price associated with the original sale because in the opinion of management,
the adjustment in the number of shares was contemplated in the Purchase
Agreement and Adjustment Agreement entered into prior to the IPO.




The
Company has issued warrants to purchase 11,500,000 common shares at an exercise
price of $7.50 per share as part of the founder’s units in connection with its
initial capitalization on March 22, 2007 (“initial founder’s warrants”). On
October 31, 2007, in connection with the partial exercise of the underwriters’
over-allotment option, 677,600 initial founder’s warrants were forfeited to the
Company and cancelled.




Additionally,
pursuant to the Director’s Purchase Agreement dated as of June 25, 2007, SP Acq
LLC has sold a total of 500,000 founder’s units to certain directors of the
Company.




SP Acq
LLC, pursuant to an agreement dated March 22, 2007, also sold to its affiliate
Steel Partners II, L.P. a portion of its founder’s units, with the final number
of units to be determined based on the number of units sold in the Offering once
the underwriters’ over-allotment option was exercised or expired. As of October
16, 2007, upon the closing of the Offering, Steel Partners II, L.P. owned
662,791 founder’s units. On October 31, 2007, the underwriters exercised a
portion of their over-allotment option and SP Acq LLC sold an additional 6,197
of its founders units to Steel Partners II, L.P., bringing Steel Partners II,
L.P. ownership to 668,988 units.




On March
28, 2007, the Company issued a $250,000 unsecured promissory note to Steel
Partners, Ltd., an affiliate of SP Acq LLC and the Company. This note bore
interest at 5% per annum, was unsecured and principal and interest payments were
due on December 31, 2007. Steel Partners Ltd. confirmed on May 7, 2008 that the
promissory note was not in default and that payment may be made on or before
December 31, 2008.  Interest payable of $15,581 was accrued on this
note through June 27, 2008, at which time the note and accrued interest were
repaid in full.




Advances
payable of $0 and $5,132 at March 31, 2009 and December 31, 2008, respectively,
relate to certain costs paid by Steel Partners, Ltd. on behalf of the Company.
None of the officers and directors of the Company received compensation for
their services to the Company.




The
Company presently occupies office space provided by Steel Partners, Ltd. Steel
Partners, Ltd. has agreed that, until the acquisition of a target business by
the Company, it will make such office space, as well as certain office,
administrative and secretarial services, available to the Company, as may be
required by the Company from time to time. The Company has agreed to pay Steel
Partners, Ltd. $10,000 per month for such services. Services commenced on
October 16, 2007. The Company has incurred $150,000 and $120,000 for such
services through March 31, 2009 and December 31, 2008, respectively, of which
$30,000 and $60,000 are included in accrued expenses at March 31, 2009 and
December 31, 2008, respectively.




SP Acq
LLC purchased, in a private placement on October 16, 2007, 7,000,000 additional
founder’s warrants at a price of $1 per warrant (an aggregate purchase price of
$7,000,000) directly from the Company and not as part of the Offering. The
purchase price of these additional founder’s warrants has been determined by the
Company to be the fair value of such warrants as of the October 16, 2007
purchase date. An aggregate of 500,000 additional founder’s warrants were sold
by SP Acq LLC to certain directors.




In
addition, Steel Partners II, L.P. has entered into an agreement with the Company
requiring it to purchase 3,000,000 units (“co-investment units”) at a price of
$10 per unit (an aggregate price of $30,000,000) from the Company in a private
placement that will occur immediately prior to the Company’s consummation of a
Business Combination. These private placement units will be identical to the
units sold in the Offering. It has also agreed that these units will not be
sold, transferred, or assigned until at least one year after the completion of
the Business Combination. In the event that Steel Partners II, L.P. does not
purchase the co-investment units, SP Acq LLC, Steel Partners II, L.P. and the
directors who purchased founder’s units have agreed to surrender and forfeit
their founder’s units and additional founder’s warrants to the Company, provided
however that such surrender and forfeiture will not be required if SP Acq LLC
purchases the co-investment units. In such event, Steel Partners II, L.P. has
agreed to transfer its founder’s units to SP Acq LLC. None of the co-investment
units have been issued by the Company as of March 31, 2009.




13


NOTE
E — 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. No shares have been issued as of March
31, 2009




NOTE
F — UNIT DIVIDENDS




Effective
August 8, 2007, the Board of Directors of the Company declared a unit dividend
to the holders of record. The dividend consisted of 0.15 units for each
outstanding share of common stock and totaled 1,125,000 units. Effective
September 4, 2007, the Board of Directors of the Company declared a unit
dividend to the holders of record. The dividend consisted of one-third of a unit
for each outstanding share of common stock and totaled 2,875,000 units. All of
the unit holders agreed to transfer their units due them with respect to these
dividends to SP Acq LLC.




NOTE
G — WARRANTS




The
following table presents warrants outstanding:





March 31, 2009
                        
                        December 31, 2008Initial
      Founder’s Warrants
                        
                        
                        10,822,400
                        
                        10,822,400Additional
      Founder’s Warrants
                        
                        
                        7,000,000
                        
                        7,000,000Public
      Warrants
                        
                        
                        43,289,600
                        
                        43,289,600Totals
                        
                        
                        61,112,000
                        
                        61,112,000




Initial
founder’s warrants are not redeemable while held by SP Acq LLC or its permitted
transferees and the exercisability of initial founder’s warrants are subject to
certain additional restrictions. Each initial founder’s warrant entitles the
holder to purchase from the Company one share of common stock at an exercise
price of $7.50 only in the event that the last sale price of the common stock is
at least $14.25 per share for any 20 trading days within a 30 trading day period
beginning 90 days after a Business Combination. If the Company is unable to
deliver registered shares of common stock to the holder upon exercise of the
warrants during the exercise period, there will be no cash settlement of the
warrants and the warrants will expire worthless.




Additional
founder’s warrants entitle the holder to purchase from the Company one share of
common stock at an exercise price of $7.50 for each warrant commencing on the
completion of a Business Combination with a target business, and expire five
years from the date of the prospectus. SP Acq LLC has also agreed that the
warrants purchased by it will not be sold or transferred until after the
completion of a Business Combination, and will be non-redeemable so long as they
are held by the Company’s founders or their permitted transferees. Additionally,
pursuant to the Director’s Purchase Agreement dated as of June 25, 2007, SP Acq
LLC sold 500,000 of such initial founder’s warrants to certain directors on
October 16, 2007.




Public
warrants entitle the holder to purchase from the Company one share of common
stock for each warrant at an exercise price of $7.50 commencing on the later of
(a) one year from the date of the final prospectus for the Offering or (b) the
completion of a Business Combination with a target business, and will expire
five years from the date of the prospectus. The warrants are redeemable at the
option of the Company at a price of $0.01 per warrant upon 30 days prior notice
after the warrants become exercisable, only in the event that the last sale
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 business day prior to the
date on which notice of redemption is given. The warrants will not be
exercisable and the Company will not be obligated to issue shares of common
stock upon the exercise of the warrants by a holder unless, at the time of such
exercise, an effective registration statement under the Securities Act covering
the shares of common stock issuable upon exercise of the warrants and a current
prospectus relating to them is available.  Although the Company has
undertaken in the warrant agreement, and therefore has a contractual obligation,
to use its best efforts to have an effective registration statement covering
shares of common stock issuable upon exercise of the warrants from the date the
warrants become exercisable and to maintain a current prospectus relating to
that common stock until the warrants expire or are redeemed, and the Company
intends to comply with it undertaking, the Company cannot assure you that it
will be able to do so. If the Company is unable to deliver registered shares of
common stock to the holder upon exercise of the warrants during the exercise
period, there will be no cash settlement of the warrants and the warrants will
expire worthless.


14




As
disclosed in Note D, the initial founder’s warrants and additional founder’s
warrants have certain restrictions and may be surrendered or forfeited under
certain circumstances.




Pursuant
to a registration rights agreement between the Company and SP Acq LLC, Steel
Partners II, L.P. and Messrs. Bergamo, LaBow, Lorber, Toboroff and Walker, the
holders of our founder’s units, founder’s shares and initial founder’s warrants
and shares issuable upon exercise thereof will be entitled to certain
registration rights at any time commencing three months prior to the date that
they are no longer subject to transfer restrictions.




NOTE
H — TAXES ON INCOME




Deferred
tax assets reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial statement purposes and
the amounts used for income tax purposes.





The
Company has paid a total of $5,300,500 since inception in estimated tax payments
for Federal, New York State and City income taxes.





The
difference between the provision for income taxes and the amounts computed by
applying the federal statutory income tax rate to the income before tax is due
to state and local taxes, including New York capital based
taxes.


15




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




Forward
Looking Statements




All
statements other than statements of historical fact included in this Form 10-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 operation, are “forward looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933, as amended (the “Security Act”) and Section 21E of the Securities
Exchange Act of 1934. When used in this Form 10-Q, words such as "anticipate,"
"believe," "plan," "expect," "future," "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




We are a
blank check company organized under the laws of the State of Delaware on
February 14, 2007. We were formed for the purpose of acquiring, through a
merger, capital stock exchange, asset acquisition or other similar business
combination, one or more businesses or assets. We consummated our initial public
offering on October 16, 2007. We are currently in the process of evaluating and
identifying targets for a business combination. We intend to utilize cash from
our initial public offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination. The issuance of
additional shares of our capital stock:





·
            may significantly reduce the
      equity interest of our
stockholders;





·
            will likely cause a change in
      control if a substantial number of our shares of common stock are issued,
      which may affect, among other things, our ability to use our net operating
      loss carry forwards, if any, and may also result in the resignation or
      removal of one or more of our current officers and directors;
      and





·
            may adversely affect prevailing
      market prices for our common
stock.





Similarly,
if we issue debt securities, it could result in:




·
            default and foreclosure on our
      assets if our operating revenues after a business combination were
      insufficient to pay our debt
obligations;





·
            acceleration of our obligations
      to repay the indebtedness even if we have made all principal and interest
      payments when due if the debt security contained covenants that require
      the maintenance of certain financial ratios or reserves and any such
      covenant were breached without a waiver or renegotiation of that covenant;
      and





·
            our immediate payment of all
      principal and accrued interest, if any, if the debt security were payable
      on demand; and our inability to obtain additional financing, if necessary,
      if the debt security contained covenants restricting our ability to do so;
      and





·
            Our
      inability to obtain additional financing, if necessary, if the debt
      security contained covenants restricting our ability to do
    so.


16




Results
of Operations and Known Trends or Future Events





We have
neither engaged in any operations nor generated any operating revenues to date.
We will not generate any operating revenues until after completion of our
initial business combination, at the earliest. We will continue to generate
non-operating income in the form of interest income on cash and cash
equivalents. Net loss for the three months ended March 31, 2009 was $607,287,
which consisted of $338,949 in operating expenses, and $364,567 in taxes on
income and capital based taxes, partially offset by $96,229 in interest income.
Net income for the three months ended March 31, 2008 was $975,924, which
consisted of $2,654,509 in interest income partially offset by $197,464 in
operating expenses, $3,125 in interest expense and $1,477,996 in taxes on income
and capital based taxes. Net income for the period from February 14, 2007
(inception) through March 31, 2009 was $3,057,642, which consisted of $9,460,697
in interest income partially offset by $1,655,970 in formation and operating
expenses, $15,581 in interest expense and $4,731,504 in taxes on income and
capital based taxes. Through March 31, 2009, we did not engage in any
significant operations. Our entire activity from inception through March 31,
2009 was to prepare for our initial public offering and begin the identification
of and negotiations with a suitable business combination candidate.





The
trustee of the trust account will pay any taxes resulting from interest accrued
on the funds held in the trust account out of the funds held in the trust
account. In addition, we will incur expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as
well as for due diligence expenses.





Off-Balance
Sheet Arrangements





We have
never entered into any off-balance sheet financing arrangements and have never
established any special purpose entities. We have not guaranteed any debt or
commitments of other entities or entered into any options on non-financial
assets.





Contractual
Obligations





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





Liquidity
and Capital Resources





The net
proceeds from (i) the sale of the units in our initial public offering
(including the underwriters’ over-allotment option), after deducting offering
expenses of approximately $1,095,604 and underwriting discounts and commissions
of approximately $30,302,720, together (ii) with $7,000,000 from SP Acq LLC’s
investment in the additional founder’s warrants, were approximately
$408,497,676. We expect that most of the proceeds held in the trust account will
be used as consideration to pay the sellers of a target business or businesses
with which we ultimately complete our initial business
combination.  As of March 31, 2009, assets in the trust account of
$426,460,141 were invested in United States Government Treasury-Bills which
mature on May 7, 2009. bearing interest at an per annum rate of
0.21%.  We expect to use substantially all of the net proceeds of our
initial public offering not in the trust account to pay expenses in locating and
acquiring a target business, including identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring,
negotiating and consummating our initial business combination. To the extent
that our capital stock or debt financing is used in whole or in part as
consideration to effect our initial business combination, any proceeds held in
the trust account as well as any other net proceeds not expended will be used to
finance the operations of the target business.





We do not
believe we will need additional financing in order to meet the expenditures
required for operating our business prior to our initial business combination.
However, we will rely on interest earned of up to $3,500,000 on the trust
account to fund such expenditures and, to the extent that the interest earned is
below our expectation, we may have insufficient funds available to operate our
business prior to our initial business combination. Moreover, in addition to the
co-investment we may need to obtain additional financing to consummate our
initial business combination. We may also need additional financing because we
may become obligated to convert into cash a significant number of shares of
public stockholders voting against our initial business combination, in which
case we may issue additional securities or incur debt in connection with such
business combination. Following our initial business combination, if cash on
hand is insufficient, we may need to obtain additional financing in order to
meet our obligations.


17




Critical
Accounting Policies





The
Company’s significant accounting policies are more fully described in Note B to
the unaudited interim condensed financial statements. However, certain
accounting policies are particularly important to the portrayal of financial
position and results of operations and require the application of significant
judgment by management. As a result, the unaudited interim condensed financial
statements are subject to an inherent degree of uncertainty. In applying those
policies, management used its judgment to determine the appropriate assumptions
to be used in determination of certain estimates. These estimates are based on
the Company’s historical experience, terms of existing contracts, observance of
trends in the industry and information available from outside sources, as
appropriate.




ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Interest
Rate Sensitivity




As of
March 31, 2009, our efforts were limited to organizational activities and
activities relating to our initial public offering. Since our initial public
offering, we have been identifying possible acquisition candidates. We have
neither engaged in any operations nor generated any operating revenues other
than interest income.





Market
risk is a broad term for the risk of economic loss due to adverse changes in the
fair value of a financial instrument. These changes may be the result of various
factors, including interest rates, foreign exchange rates, commodity prices
and/or equity prices. $418,909,120 of the net Offering proceeds, including
$17,315,840 of the proceeds attributable to the underwriters’ deferred fees from
the Offering, as well as $7,000,000 of the proceeds of the private placement of
7,000,000 additional founders warrants were placed in a trust account at
JPMorgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust
Company, acting as trustee. As of March 31, 2009, the balance in the trust
account was $426,524,821 (which includes interest receivable on the trust
account of $64,680). The proceeds held in trust have only been invested in U.S.
Government securities having a maturity of 90 days or less or in money market
funds which invest principally in either short term securities issued or
guaranteed by the United States or having the highest rating from recognized
credit rating agency or tax exempt municipal bonds issued by government entities
located within the United States or otherwise meeting the conditions under Rule
2a-7 under the Investment Company Act. Thus, we are currently subject to market
risk primarily through the effect of changes in interest rates on short-term
government securities and other highly rated money-market instruments. As of
March 31, 2009, assets in the Trust account of $426,524,821 were invested in
United States Government Treasury-Bills which mature on May 7, 2009 and bear
interest at an per annum rate of 0.21%. A one percentage point change in the
interest rate received on our cash, short-term government securities and
money-market instruments of $428,496,730 at March 31, 2009 would result in an
increase or decrease of up to $1,071,000 in interest income over the following
90-day period. Management cannot provide any assurance about the actual effect
of changes in interest rates on net interest income.  The estimate
provided does not include the effects of possible strategic changes in the
balances of various assets and liabilities throughout 2009 or additional actions
the Company could undertake in response to changes in interest
rates.


18




ITEM
4. CONTROLS AND PROCEDURES




As of the
end of the period covered by this report, management, including our chief
executive officer and chief operating officer and secretary, evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures. Based upon, and as of the date of, the evaluation, our chief
executive officer and chief operating officer and secretary concluded that the
disclosure controls and procedures were effective, in all material respects, to
ensure that information required to be disclosed in the reports we file and
submit under the Exchange Act is recorded, processed, summarized and reported as
and when required.





The
Company’s certifying officers have indicated that there were no significant
changes in internal controls over financial reporting that have occurred during
the fiscal quarter ended March 31, 2009 that materially affected, or were
reasonably likely to materially affect, internal controls over financial
reporting.




PART
II. OTHER INFORMATION





ITEM
1. LEGAL PROCEEDINGS




None.





ITEM
1A. RISK FACTORS





There are
no material changes from risk factors as previously disclosed in the Company’s
Annual Report on Form 10-K filed on March 10, 2009


19





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





An index
of exhibits filed as part of this Report is on page 22.


20





SIGNATURE





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.




SP Acquisition Holdings, Inc.By:
                    /s/ Warren G. LichtensteinWarren G. Lichtenstein
                      Chairman, President and Chief Executive Officer
                      (Principal Executive Officer)SP Acquisition Holdings, Inc.By:
                    /s/ Jack L. HowardJack L. Howard
                      Chief Operating Officer and Secretary
                      (Principal Financial Officer and Principal Accounting Officer)





Dated:
May  8, 2009


21





EXHIBIT
INDEX





Exhibit
                  Number
                
                Description31.1
                
                Certification
      of Principal Executive Officer, pursuant to Rule 13a -14 and 15d-14 of the
      Securities Exchange Act of 1934.31.2
                
                Certification
      of Principal Financial and Principal Accounting Officer, pursuant to Rule
      13a-14 and 15d-14 of the Securities Exchange Act of
193432.1
                
                Certification
      of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      200232.2
                
                Certification
      Principal Financial and Principal Accounting Officer pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002


22