**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-Q**





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





**FOR
      THE QUARTERLY PERIOD ENDED** **SEPTEMBER 30, 2007**


**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.
                Employer**Incorporation
                or organization)*
            *Identification
                Number)***590
                MADISON AVENUE, 32****nd****FLOOR**
              **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. Yes o No x**




**Indicate
      by check mark whether the Registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act). (Check
      one):**




**Large
      accelerated filer o
      Accelerated filer o Non-accelerated
      filer x**






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




**Yes
      x No o**







**There
      were 54,112,000 shares of the Registrant’s Common Stock, par value $.001,
      outstanding on October 31, 2007.**








**SP
      ACQUISITION HOLDINGS, INC.**





**FORM
      10-Q**





**Quarter
      ended September 30, 2007**





**TABLE
      OF CONTENTS**








**PART
                I**
            PageFINANCIAL
                INFORMATIONItem 1.
            Condensed
                Financial Statements:Condensed
                Balance Sheets as of September 30, 2007 (unaudited) and March 31,
                2007
            4Condensed
                Statements of Operations (unaudited) for the three and six month
                periods
              ended
                September 30, 2007 and for the period February 14, 2007
                (inception)
              through
                September 30, 2007
            5Condensed
                Statement of Cash Flows (unaudited) ) for the six month period
              ended
                September 30, 2007 and for the period February 14,
                2007(inception)
              through
                September 30, 2007
            6Condensed
                Statement of Stockholders’ Deficiency for the period February 14,
              2007
                (inception) through March 31, 2007 and for the six months ended September
                30,
              2007
                (unaudited).
            7Notes
                to Condensed Financial Statements
            8Item 2.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            15


Item 3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            17Item 4.
            Controls
                and Procedures
            17**PART
                II**OTHER
                INFORMATIONItem 1.
            Legal
                Proceedings
            18Item 1A.
            Risk
                Factors
            18Item 2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            18Item 4.
            Submission
                of Matters to a Vote of Security Holders
            19Item 5.
            Other
                information
            20Item 6.
            Exhibits
            20Signature
            20Exhibit
              Index
            21








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 andpotentially
                  having conflicts of interest with our business or in approvingour
                  initial business combination, as a result of which they would
                  thenreceive
                  expense reimbursements;*
              potential
                  ability to obtain additional financing to complete a businesscombination;*
              ability
                  of our officers and directors to generate a number of
                  potentialinvestment
                  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 frominterest
                  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**





**Item
      1. Financial Statements**





**SP
      ACQUISITION HOLDINGS, INC.**


(a
      corporation in the development stage)





**CONDENSED
      BALANCE SHEETS**






**September
                30,**
              **2007**
              **(unaudited)**
            
            **March
                31, 2007****ASSETS****Current
                asset**,
                cash
            
            $
            186,585
            
            $
            275,000**Other
                assets**,
                deferred offering costs
            
            
            749,994
            
            
            190,000$
            936,579
            
            $
            465,000**LIABILITIES
                AND STOCKHOLDERS’ DEFICIENCY****Current
                Liabilities**:Note
                payable to affiliate
            
            $
            250,000
            
            $
            250,000Advances
                payable to affiliate
            
            
            26,818
            
            
            10,436Interest
                payable to affiliate
            
            
            6,310
            
            
            —Accrued
                expenses
            
            
            10,000
            
            
            15,000Accrued
                offering costs
            
            
            661,579
            
            
            190,000**Total
                current liabilities**
            
            
            954,707
            
            
            465,436**Commitments
                and contingencies**
            
            
            —
            
            
            —**Stockholders’
                deficiency**:Preferred
                stock, $.001 par value; 1,000,000 authorized, none issued
            
            
            —
            
            
            —Common
                stock, $.001 par value, 200,000,000 shares authorized; 11,500,000
                shares
                issued and outstanding
            
            
            11,500
            
            
            11,500Additional
                paid-in capital
            
            
            13,500
            
            
            13,500Deficit
                accumulated during the development stage
            
            
            (43,128
            )
            
            (25,436
            )Total
                stockholders’ deficiency
            
            
            (18,128
            )
            
            (
                436
            )$
            936,579
            
            $
            465,000





See
      accompanying notes to financial statements.




4


**SP
      ACQUISITION HOLDINGS, INC.**




**(a
      corporation in the development stage)**




**CONDENSED
      STATEMENTS OF OPERATIONS**




**(Unaudited)**




**For
                the three months ended September 30, 2007**
            
            
            **For
                the six months ended September 30,****2007**
            
            
            **For
                the cumulative period from February 14, 2007 (date of inception)
                to
                September 30, 2007**Formation
                and operating costs
            
            $
            11,250
            
            $
            11,382
            
            $
            36,818Interest
                expense
            
            
            3,125
            
            
            6,310
            
            
            6,310Net
                (loss)
            
            $
            (14,375
            )
            $
            (17,692
            )
            $
            (43,128
            )Net
                loss per common share, basic and diluted
            
            $
            -
            
            $
            -
            
            $
            -Weighted
                average number of common shares outstanding, basic and
                diluted
            
            
            10,000,000
            
            
            10,000,000
            
            
            10,000,000





See
      accompanying notes to financial statements.




5


**SP
      ACQUISITION HOLDINGS, INC.**




**(a
      corporation in the development stage)**




**CONDENSED
      STATEMENTS OF CASH FLOWS**




**(Unaudited)**






**For
                the six months ended September 30, 2007**
            
            **For
                the period from February 14, 2007 (date of inception) to September
                30,
                2007**Cash
                flows from operating activities:Net
                loss
            
            $
            (17,692
            )
            $
            (43,128
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Interest
                payable to affiliate
            
            
            6,310
            
            
            6,310Changes
                in asset and liability accounts:Advances
                payable to affiliate
            
            
            16,382
            
            
            26,818Accrued
                expenses
            
            
            (5,000
            )
            
            10,000Net
                    cash used in operating activities
            
            
            —
            
            
            —Cash
                flows from financing activities:Proceeds
                from note payable to affiliate
            
            
            —
            
            
            250,000Proceeds
                from units issued to founders
            
            
            —
            
            
            25,000Payment
                of offering costs
            
            
            (88,415
            )
            
            (88,415
            )Net
                cash (used in) provided by financing activities
            
            
            (88,415
            )
            
            186,585Net
                (decrease) increase in cash
            
            
            (88,415
            )
            
            186,585Cash
                at the beginning of the period
            
            
            275,000
            
            
            —Cash
                at the end of the period
            
            $
            186,585
            
            $
            186,585Supplemental
                disclosure of non-cash financing activities:Incurred
                but unpaid offering costs
            
            $
            471,579
            
            $
            661,579




See
      accompanying notes to financial statements.




6




**SP
      ACQUISITION HOLDINGS, INC.**


**(a
      corporation in the development stage)**





**CONDENSED
      STATEMENT OF STOCKHOLDERS’ DEFICIENCY**


**For
      the period from February 14, 2007 (inception) through March 31,
      2007**


**And
      for the six months ended September 30, 2007**







**Common**
              **Stock
                Shares**
            
            **Common
                Stock**
              **Amount**
            
            **Additional
                Paid-in Capital**
            
            **Deficit
                Accumulated During the Development Stage**
            
            **Total
                Stockholders’**
              **(Deficiency)**Proceeds
                from founders’ units issued
            
            
            11,500,000
            
            $
            11,500
            
            $
            13,500
            
            $
            —
            
            $
            25,000Net
                loss for the period February 14, 2007 (inception) through March 31,
                2007
            
            
            —
            
            
            —
            
            
            —
            
            
            (25,436
            )
            
            (25,436
            )Balances
                at March 31, 2007
            
            
            11,500,000
            
            
            11,500
            
            
            `
                13,500
            
            
            (25,436
            )
            
            (436
            )Net
                loss (unaudited) for the six months ended September 30, 2007
            
            
            —
            
            
            —
            
            
            —
            
            
            (17,692
            )
            
            (17,692
            )Balances
                at September 30, 2007 (unaudited)
            
            
            11,500,000
            
            $
            11,500
            
            $
            13,500
            
            $
            (43,128
            )
            $
            (18,128
            )





See
      accompanying notes to financial statements.




7


**SP
      ACQUISITION HOLDINGS, INC.**


**(a
      corporation in the development stage)**





**NOTES
      TO CONDENSED FINANCIAL STATEMENTS**


**(Unaudited)**







**NOTE
      A — ORGANIZATION AND NATURE OF 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 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 has selected December 31 as its fiscal year
      end.




The
      Company has neither engaged in any operations nor generated any revenue. All
      activity through September 30, 2007 relates to the formation of the Company
      and
      its initial public offering described below and in Note C. The Company will
      not
      generate any operating revenues until after the completion of its initial
      business combination. The Company may generate non-operating income in the
      form
      of interest income on cash.




The
      Company was initially formed and capitalized through the sale of founders units
      to a related entity, SP Acq LLC (See Note D). The Company closed its initial
      public offering (“the Offering”) on October 16, 2007. (See Note H).




These
      unaudited condensed financial statements as of September 30, 2007 and for the
      three and six months ended September 30, 2007, respectively, and for the period
      February 14, 2007 (inception) through September 30, 2007, have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America for interim financial information and with the instructions to Form
      10-Q. Accordingly, they do not include all of the information and footnotes
      required by accounting principles generally accepted in the United States of
      America for complete financial statements. In the opinion of management, all
      adjustments (consisting of normal recurring accruals) considered necessary
      for a
      fair presentation have been included. 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.




These
      unaudited condensed financial statements should be read in conjunction with
      the
      financial statements and notes thereto for the period ended March 31, 2007
      included in SP Acquisition Holdings, Inc.’s Form S-1, as amended. The accounting
      policies used in preparing these unaudited condensed financial statements are
      consistent with those described in the March 31, 2007 financial statements
      included in the Company’s Form S-1, as amended.









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




***1.*** ***Development
        Stage Company and Liquidity:***




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




8


The
      Company has incurred significant 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 September 30, 2007, the Company
      had cash on hand of $186,585. During the period from February 14, 2007 to
      September 30, 2007 the Company used $88,415 of cash. The Company’s use of cash
      was due to payment of certain costs that were not otherwise advanced to the
      Company by Steel Partners Ltd. Management has reviewed its cash requirements
      as
      of September 30, 2007 and believes that its cash on hand together with the
      cash
      available from the proceeds of the offering completed on October 16, 2007 is
      sufficient to cover its expenses at least for the next twelve
      months.




Additionally,
      as discussed in Note D, the note with Steel Partners Ltd. has a due date of
      December 31, 2007. Steel Partners Ltd. has advised the Company that it will
      not
      call the note before October 17, 2008, unless there are funds available from
      the
      trust account to repay such note.




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




***2.*** ***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 unit dividends are
      presented as if they were stock splits and presented retroactively each period
      presented. All unit amounts outstanding reflect such dividends, except for
      weighted average shares outstanding as discussed in Note B-3.




***3.
      Net Loss Per Common Share:***




Loss
      per
      common share is based on the weighted average number of common shares
      outstanding. Basic loss per common share excludes dilution and is computed
      by
      dividing loss available to common stockholders by the weighted-average common
      shares outstanding for the period. Common share equivalents include the
      outstanding warrants discussed below, and an aggregate of 1,500,000 shares
      of
      common stock that are subject to forfeiture as more fully discussed in Note
      D.
      These forfeitable shares of common stock are excluded from the weighted average
      shares outstanding since they are considered contingent shares for purposes
      of
      calculating loss per common share and are therefore excluded from basic net
      loss
      per share (see Note H).




The
      weighted average common shares issued and outstanding for the period from
      February 14, 2007 (inception) to September 30, 2007 take into effect the
      11,500,000 shares outstanding during that period, less 1,500,000 shares subject
      to forfeiture. The weighted average common shares for the three and six month
      periods ended September 30, 2007, take into effect the 11,500,000 shares
      outstanding for the total number of days during each of those periods, less
      1,500,000 shares subject to forfeiture.




As
      of
      September 30, 2007, the Company had 11,500,000 outstanding warrants, of which
      approximately 1,500,000 of such warrants are subject to forfeiture as more
      fully
      disclosed in Note D. The Company has not computed diluted loss per share
      since the impact of any common share equivalents would be anti-dilutive.




***4*** **.**  ***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 depository insurance coverage of $100,000. As of September
      30, 2007 and March 31, 2007 the Company had $186,585 and $275,000, respectively,
      in cash which exceeded Federally insured limits.




9


**5****.
      Fair Value of Financial Instruments:**




The
      fair
      value of the Company’s assets and liabilities, except for the related party
      note, 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.




***6.
      Use of Estimates:***




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




***7.
      Offering Costs:***




The
      Company complies with the requirements of the SEC Staff Accounting Bulletin
      (SAB) Topic 5A “Expenses of Offering.” Deferred offering costs consisted
      principally of estimated legal, printing, accounting and related costs which
      were incurred in connection with the Offering and were charged to capital upon
      the completion of the Offering (See Note H).




Accrued
      offering costs as of September 30, 2007 and March 31, 2007 consisted principally
      of estimated unpaid legal, printing, accounting and related fees that were
      incurred in connection with the Offering.




The
      Company has made estimates of certain accrued offering costs included in these
      financial statements. In accordance with AICPA Statement of Position 94-6,
      “Disclosure of Certain Risks and Uncertainties”, the Company has determined that
      it is at least reasonably possible that these estimates may change in the near
      term, however, it is unlikely that the effect of this change could be material
      to the financial statements. The Company has accrued its best estimate of
      offering costs as of September 30, 2007 in accordance with SFAS No. 5,
      "Accounting for Contingencies."




***8.
      Income Tax:***




Deferred
      income tax assets and liabilities are computed for differences between the
      financial statement and tax bases of assets and liabilities 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. ******




The
      Company’s deferred tax asset is offset by a full valuation allowance at
      September 30, 2007 and March 31, 2007 due to the uncertainty as to whether
      the
      Company will generate sufficient future taxable income. Internal Revenue Code
      Section 382 (“Section 382”) provides a complex set of rules potentially limiting
      the use of net operating loss carryforwards and built in deduction items where
      there is a greater than 50% ownership change of the Company. Management is
      currently evaluating the impact that Section 382 will have on the Company’s
      ability to utilize the deferred tax asset.




***9.
      Recent Accounting Pronouncements:***




In
      June
      2006, the Financial Accounting Standards Board (“FASB”) issued 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 attribute 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 periods, disclosure, and
      transition. FIN 48 is effective for fiscal years beginning after December 15,
      2006. We adopted the provisions of FIN 48 from our inception (February 14,
      2007). The adoption of FIN 48 had no effect on our financial position or results
      of operations.




10


In
      September 2006, the FASB issued FASB Statement No. 157, "Fair Value
      Measurements," ("SFAS 157"). The standard provides guidance for using fair
      value to measure assets and liabilities. The standard also responds to
      investors’ requests for expanded information about the extent to which companies
      measure assets and liabilities at fair value, the information used to measure
      fair value, and the effect of fair value measurements on earnings. The standard
      applies whenever other standards require or permit assets or liabilities to
      be
      measured at fair value. The standard does not expand the use of fair value
      in
      any new circumstances. SFAS 157 must be adopted prospectively as of the
      beginning of the year it is initially applied. SFAS 157 is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. The Company is still evaluating
      the impact that this standard will have on its financial position and results
      of
      operations.




In
      February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option
      for Financial Assets and Financial Liabilities—Including an amendment of FASB
      Statement No. 115” (“SFAS 159”). SFAS 159 creates a “fair value option” under
      which an entity may elect to record certain financial assets or liabilities
      at
      fair value upon their initial recognition. Subsequent changes in fair value
      would be recognized in earnings as those changes occur. The election of the
      fair
      value option would be made on a contract-by contract basis and would need to
      be
      supported by concurrent documentation or a preexisting documented policy. SFAS
      159 requires an entity to separately disclose the fair value of these items
      on
      the balance sheet or in the footnotes to the financial statements and to provide
      information that would allow the financial statement user to understand the
      impact on earnings from changes in the fair value. SFAS 159 is effective for
      us
      beginning with fiscal year 2008. The Company is currently evaluating the impact
      that the adoption of SFAS 159 will have on its consolidated financial
      statements.




**NOTE
      C — INITIAL PUBLIC OFFERING**




The
      Company’s Offering called for the public sale of up to 40,000,000 units
      (“Units”). Each Unit consisted of one share of the Company’s common stock,
      $0.001 par value, and one redeemable common stock purchase warrant (“Warrant”).
      The Offering price was $10.00 per unit. Each Warrant entitles the holder to
      purchase from the Company one share of common stock 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. 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.




The
      Registration Statement for the Company’s initial public offering was declared
      effective on October 10, 2007 and on October 16, 2007 the Company consummated
      the offering. On October 31, 2007, the underwriters exercised a portion of
      their
      over-allotment option (See Note H).




In
      connection with the Offering the Company agreed to pay the underwriters a fee
      of
      7% of the gross offering proceeds. As further discussed in Note H, a portion
      of
      this fee was placed in trust on October 16, 2007 and October 31, 2007 and will
      be paid to the underwriters in connection with the consummation of an initial
      business combination and will not be available to the Company. In the event
      that
      the Company does not consummate its initial business combination by October
      10,
      2009, the underwriters will forfeit any right to that amount, which will be
      included in the liquidation distribution to the Company’s public stockholders.




11


Public
      stockholders (representing no more that 30% of the Company’s voting stock)
      voting against the Company’s Business Combination will be entitled to convert
      their shares of common stock into a pro rata share of the aggregate amount
      then
      on deposit in the trust account (before payment of deferred underwriting
      discounts and commissions and including interest earned on their pro rata
      portion on the trust account, net of income taxes payable on such interest
      and
      net of interest income of up to $3.5 million on the trust account balance
      previously released to the Company to fund its working capital requirements)
      if
      the Company’s business combination is approved and completed. If the initial
      business combination is not approved or completed for any reason, the public
      stockholders voting against the Company’s business combination would not be
      entitled to convert their shares of common stock into a pro rata share of the
      aggregate amount then on deposit in the trust account. Those public stockholders
      would be entitled to receive their pro rata share of the aggregate amount on
      deposit in the trust account only the event that the business combination they
      voted against was duly approved and subsequently completed, or in connection
      with the Company’s dissolution and liquidation.




Public
      stockholders who convert their common stock into a pro rata share of the trust
      account will be paid the conversion price on the closing date of the initial
      business combination and will continue to have the right to exercise any
      warrants they own.




**NOTE
      D — RELATED PARTY TRANSACTIONS**




SP
      Acq
      LLC is a holding company founded to hold an investment in the founder’s
      securities. The Chairman of the Company is the managing member of SP Acq LLC
      and
      the other directors and officers of the Company are also members of the SP
      Acq
      LLC. On March 22, 2007, SP Acq LLC purchased 11,500,000 of the Company’s
      founder’s units, each consisting of a common share and a 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 each of the founders agreed
      to vote its founder’s common stock 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 common
      stock if the Company’s Business Combination is approved by a majority of its
      public stockholders. The founder’s common stock 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 founder’s warrants may not be sold or transferred until at least one
      year after the completion of a Business Combination.




The
      founder’s units include up to 1,500,000 units as of September 30, 2007 that were
      subject to forfeiture by SP Acq LLC to the extent that the underwriters’
over-allotment option was not exercised or was exercised in part such that
      the
      holders of the Company’s founder’s units would collectively own 20% of the
      Company’s units after consummation of the Offering and exercise or expiration of
      the over-allotment option (assuming none of the holders of the founder’s units
      purchase units in the Offering). On October 31, 2007, 677,600 of such founder’s
      units were forfeited to the Company (see Note H).




The
      Company has issued warrants to purchase 11,500,000 common shares at $7.50 per
      share as part of the founder’s units in connection with its initial
      capitalization on March 22, 2007 (“Founder’s Warrants”). Founders’ Warrants are
      not redeemable while held by SP Acq LLC or its permitted transferees and the
      exercisability of Founder’s Warrants are subject to certain additional
      restrictions. Each 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. As of September 30, 2007, 1,500,000 of such warrants were
      subject to forfeiture by SP Acq LLC to the extent that the underwriters’
over-allotment option was not exercised or was exercised in part. On October
      31,
      2007, 677,600 of such warrants were forfeited to the Company (see Note
      H).




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.




12


SP
      Acq
      LLC, pursuant to an agreement dated March 22, 2007, 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 a formula in such agreement based on the number
      of units sold in the Offering once the underwriters’ over-allotment option is
      exercised or expires. As of October 31, 2007 upon the closing of the
      underwriters’ over-allotment option, Steel Partners II, L.P. owned 668,988
      founder’s units (See Note H).




On
      October 16, 2007, SP Acq LLC purchased 7,000,000 warrants at a price of $1
      per
      warrant (an aggregate purchase price of $7,000,000) from the Company in a
      private placement and not as part of the Offering. Each warrant (“Founders
      Warrant”) will entitle the holder to purchase from the Company one share of
      common stock at an exercise price of $7.50 commencing on the completion of
      a
      Business Combination with a target business, and will expire October 10, 2012.
      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. The Company believes the purchase price of these warrants
      equals the fair value of such warrants as of the purchase date. As of September
      30, 2007 none of these warrants were issued by the Company.




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 bears
      interest at a rate of 5% per annum, is unsecured and principal and interest
      payments are due no later than December 31, 2007. Interest payable of $6,310
      at
      September 30, 2007 relates to interest accrued on such promissory
      note.




Advances
      payable of $26,818 and $10,436 at September 30, 2007 and March 31, 2007,
      respectively, are due to Steel Partners, Ltd. These advances relate to certain
      costs paid by Steel Partners Ltd. on behalf of the Company. The Company intends
      to repay such advances and thus such amounts are reflected as a liability to
      affiliate. 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 the
      closing of the Offering.




In
      addition, Steel Partners II, L.P., has entered into an agreement with the
      Company requiring Steel Partners II, L.P. 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 its founders’ units and additional
      founders’ additional 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 these units have been issued
      by the Company as of September 30, 2007.




**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
      September 30, 2007.




**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.




13


**NOTE
      G — WARRANTS**




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




**NOTE
      H — SUBSEQUENT EVENT**




The
      registration statement for the Company’s Offering was declared effective October
      10, 2007. The Company consummated the Offering on October 16, 2007 of 40,000,000
      units and received total gross proceeds of $400,000,000. Net proceeds were
      $370,969,951 after 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 placement 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).




A
      total
      of $394,000,000, including $371,000,000 of the net proceeds from the Offering,
      $7,000,000 from the`private placement of warrants and $16,000,000 of deferred
      underwriting discounts and commissions, has been placed in a trust account
      at
      JPMorgan Chase Bank, N.A., with the Continental Stock Transfer & Trust
      Company as trustee (the “Trust”). Additionally, on October 16, 2007, an
      aggregate of $1,000,000 was distributed to the Company, representing $900,000
      to
      pay offering expenses and $100,000 for working capital. Under terms of the
      investment management trust agreement, an additional amount of up to $3,500,000
      of interest income may be released to the Company, subject to availability,
      and
      may be used to pay offering expenses, accounting, legal, due diligence and
      other
      expenses. The remaining proceeds held in the Trust will not be released from
      the
      Trust until the earlier of the completion of the Company’s Initial Business
      Combination or the liquidation of the Company. In the event the Company does
      not
      consummate a business combination on or before October 10, 2009, the proceeds
      held in the Trust will be distributed to the Company’s public stockholders,
      excluding the founding stockholders to the extent of their pre-Offering
      stockholdings.




Additionally,
      pursuant to the Director’s Purchase Agreement dated as of June 25, 2007, SP Acq
      LLC sold 500,000 of the additional founder’s warrants to certain directors on
      October 16, 2007.




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
      $30,593,280, net of the underwriters’ fee of $2,302,720. A total of $31,909,120,
      including net proceeds, and $1,315,840 of deferred underwriters’ fees, was
      deposited in the Trust account.




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
      exercise for a total of $30,302,720 in underwriting fees. Of these fees,
      $12,000,000 was paid at the closing of the Offering on October 16, 2007,
      $986,880 was paid at the closing of the over-allotment exercise on October
      31,
      2007 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. In the event
      that
      the Company does not consummate its initial business combination by October
      10,
      2009, the underwriters will forfeit any right to that amount, which will be
      included in the liquidation distribution to the Company’s public
      stockholders.




As
      a
      result of the partial exercise of the underwriters’ over-allotment option on
      October 31, 2007, SP Acq LLC surrendered 677,600 units (out of a total of
      1,500,000 units they held prior to the Company’s initial public offering that
      were subject to forfeiture) to the Company and will retain the balance of their
      pre-initial public offering units. In addition, on October 31, 2007, SP Acq
      LLC
      transferred an additional 6,197 units to Steel Partners II, L.P. bringing the
      total founders units held by Steel Partners II L.P. to 668,988.




14


**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, which we refer to as our “initial
      business combination.” To date, our efforts have been limited to organizational
      activities as well as activities related to our initial public offering (the
“Offering”). On October 16, 2007, we completed our Offering of 40,000,000 units
      at a price of $10 per unit. On October 31, 2007 the underwriters of our Offering
      exercised their option to purchase an additional 3,289,600 units at a price
      of
      $10 per unit. We received total net proceeds of $401,563,231 from our Offering
      and exercise of the underwriters’ option.





We
      issued
      to SP Acq LLC, in a private placement, 7,000,000 warrants concurrently with
      the
      Offering, at a price of $1 per warrant (an aggregate purchase price of
      approximately $7,000,000), which we will refer to as “additional founders’
warrants.” A total of 500,000 additional founders warrants were subsequently
      sold to certain directors of the Company. The purchase and issuance of the
      additional founders’ warrants occurred simultaneously with the consummation of
      the Offering on a private placement basis.




For
      a
      description of the proceeds of our recently completed Offering and a discussion
      of the use of such proceeds, we refer you to Note H of the unaudited condensed
      financial statements included in Part I, Item 1 of this Current Report on Form
      10-Q.




We
      intend
      to utilize the cash derived from the proceeds of our recently completed
      Offering, our capital stock, debt or combination of cash, capital stock and
      debt, to effect an initial business combination.





**Results
      of Operations and Known Trends or Future Events**




We
      have
      neither engaged in any operations nor generated any revenues to date. Our only
      activities since inception have been organizational activities and those
      necessary to consummate our Offering and the sale of the additional founder’s
      warrants. Following the Offering, we will not generate any operating revenues
      until after completion of our initial business combination, at the earliest.
      We
      will generate non-operating income in the form of interest income on cash and
      cash equivalents.. We expect to incur increased expenses as a result of being
      a
      public company (for legal, financial reporting, accounting and auditing
      compliance), as well as for due diligence expenses. We expect our expenses
      to
      increase substantially following the closing of the Offering and the sale of
      the
      additional founder’s warrants.




15


For
      the
      three and six months ended September 30, 2007, and for the period from February
      14, 2007 (inception) through September 30, 2007, we had a net loss of $14,375,
      $17,692 and $43,128, respectively. We incurred costs of $749,994 with regard
      to
      the Offering which were classified as deferred offering costs on our balance
      sheet at September 30, 2007.




Our
      entire activity from February 14, 2007 (inception) through September 30, 2007
      has been to prepare for our Offering.




**Liquidity
      and Capital Resources**




As
      of
      September 30, 2007, we have cash of $186,585. Until the initial public offering,
      as described above, our only source of liquidity was a loan made by Steel
      Partners, Ltd. an affiliate of SP Acq LLC and the Company, advances made by
      Steel Partners, Ltd, and our initial sale of common stock. As of September
      30,
      2007, we owe Steel Partners, Ltd. $250,000 for a loan, due December 31, 2007,
      as
      well as $6,310 for interest accrued on the loan, as well as $26,818 for certain
      advances. Our liquidity needs have been satisfied to date through the receipt
      of
      $25,000 for the purchase of founder’s shares by SP Acq LLC and the loan and
      advances, as described above. Our liabilities were all related to costs
      associated with the Offering, as well as audit fees and interest on the
      loan.




We
      believe that, with the consummation of the Offering and the exercise of the
      over-allotment option and the sale of the additional founder’s warrants, the
      funds available to us outside of the trust account, together with interest
      income of up to $3.5 million on the balance of the trust account which may
      be
      released to us for working capital requirements, will be sufficient to allow
      us
      to operate for at least the next 24 months, assuming that our initial business
      combination is not consummated during that time.





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 $3.5 million 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, we may need to
      obtain additional financing to consummate our initial business combination
      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.




**Off-Balance
      Sheet Financing Arrangements**





We
      have
      no obligations, assets or liabilities which would be considered off-balance
      sheet arrangements. We do not participate in transactions that create
      relationships with unconsolidated entities or financial partnerships, often
      referred to as variable interest entities, which would have been established
      for
      the purpose of facilitating off-balance sheet arrangements.













**Contractual
      Obligations**




The
      Company does not have any long-term debt, capital lease obligations, operating
      lease obligations or long-term liabilities.




16


**Critical
      Accounting Policies**





The
      Company’s significant accounting policies are more fully described in Note B to
      the 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 judgments by management.
      As a result, the 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
      September 30, 2007, our efforts were limited to organizational activities and
      activities relating to our initial public offering; we had neither engaged
      in
      any operations nor generated any revenues.





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 October 31, 2007, the balance in the trust
      account was $427,168,000. 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 form a 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
      October 31, 2007, the effective annualized interest rate payable on our
      investment was approximately 3.77%. Assuming no other changes to our holdings
      at
      October 31, 2007, a 1% decrease in the underlying interest rate payable on
      our
      investment as of October 31, 2007 would result in a decrease of approximately
      $1,068,000 in the interest earned in our investment for the following 90-day
      period, and a corresponding decrease in our net increase in stockholders’ equity
      resulting from operations, if any, for that period. We do not believe that
      the
      effect of other changes, such as foreign exchange rates, commodity prices and/or
      equity prices currently pose significant market risk for us.




**ITEM
      4. CONTROLS AND PROCEDURES**





Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in company reports filed or
      submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
      recorded, processed, summarized and reported, within the time periods specified
      in the Securities and Exchange Commission’s rules and forms. Disclosure controls
      and procedures include, without limitation, controls and procedures designed
      to
      ensure that information required to be disclosed in company reports filed or
      submitted under the Exchange Act is accumulated and communicated to management,
      including our Chief Executive Officer and Chief Operating Officer and
      Secretary.




As
      required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief executive
      officer and chief operating officer and secretary carried out an evaluation
      of
      the effectiveness of the design and operation of our disclosure controls as
      of
      September 30, 2007. Based on their evaluation, they concluded that our
      disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15
      (e) under the Exchange Act) were effective.





17


Our
      internal control over financial reporting is a process designed by, or under
      the
      supervision of, our chief executive officer and our chief operating officer
      and
      secretary and effected by our board of directors, management and other
      personnel, to provide reasonable assurance regarding the reliability of our
      financial reporting and the preparation of our financial statements for external
      purposes in accordance with generally accepted accounting principles (United
      States). Internal control over financial reporting includes policies and
      procedures that pertain to the maintenance of records that in reasonable detail
      accurately and fairly reflect the transactions and dispositions of our assets,
      provide reasonable assurance that transactions are recorded as necessary to
      permit preparation of our financial statements in accordance with generally
      accepted accounting principles (United States), and that our receipts and
      expenditures are being made only in accordance with the authorization of our
      board of directors and management, and provide reasonable assurance regarding
      prevention or timely detection of unauthorized acquisition, use of disposition
      of our assets that could have a material effect on our financial
      statements.





During
      the most recently completed fiscal quarter, there has been no change in our
      internal control over financial reporting that has materially affected, or
      is
      reasonably likely to materially affect, our internal control over financial
      reporting.








**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**




None.





**ITEM
      1A. RISK FACTORS**





Factors
      that could cause our actual results to differ materially form those in this
      report are any of the risks described in our prospectus dated October 10, 2007
      filed with the SEC. Any of these factors could result in significant or material
      adverse effect on our results of operations or financial condition. Additional
      risk factors not presently known to us or that we currently deem immaterial
      may
      also impair our business or results of operations.





As
      of
      November 16, 2007 there have been no material changes to the risk factors
      disclosed in our prospectus dated October 10, 2007, filed with the
      SEC.





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





SP
      Acq
      LLC is a holding company founded to hold an investment in the founder’s
      securities. The Chairman of the Company is the managing member of SP Acq LLC
      and
      the other directors and officers of the Company are also members of the SP
      Acq
      LLC. On March 22, 2007, SP Acq LLC purchased 11,500,000 of the Company’s
      founder’s units, each consisting of a common share and a warrant to purchase a
      common share, for a price of $25,000 in a private placement. The founders’ units
      are identical to those sold in the Offering, except that each of the founders
      agreed to vote its founder’s common stock 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 common
      stock if the Company’s Business Combination is approved by a majority of its
      public stockholders. The founder’s common stock 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 founder’s warrants may not be sold or transferred until at least one
      year after the completion of a Business Combination.




18


A
      total
      of 677,600 founder’s units were subsequently forfeited by SP Acq LLC following
      the partial exercise of the underwriters’ over-allotment option so that the
      holders of the Company’s founder’s units would collectively own 20% of the
      Company’s units after consummation of the Offering and exercise or expiration of
      the over-allotment option. On October 31, 2007, the underwriters’ exercised
      their option for an additional 3,289,600 units (54.8% of the over-allotment
      option).




We
      also
      consummated the private sale of 7,000,000 warrants simultaneously with the
      consummation of our Offering at a price of $1.00 per warrant (for an aggregate
      purchase price of $7,000,000). The warrants were purchased by SP Acq LLC.





Each
      of
      the aforementioned issuances were made pursuant to the exemption from
      registration contained in Section 4(2) of the Securities Act.. The Section
      4(2)
      exemption applies because the founders’ units and additional founders’ warrants
      were sold to a limited number of people all of when were accredited investors
      as
      defined in the Securities Act. In addition, we have placed a restrictive legend
      on the back of the founders’ units, the securities underlying the founders’
units and the additional founders’ warrants alerting the buyer to the
      restrictive character of the securities.




*Use
      of Proceeds From the Offering*




On
      October 16, 2007 we closed our public offering of 40,000,000 units, with each
      unit consisting of one share of our common stock and one warrant, each to
      purchase one share of our common stock at an exercise price of $7.50 per share.
      On October 31, 2007 we closed the underwriters’ over-allotment option for an
      additional 3,289,600 units and the underwriters terminated the balance of their
      over-allotment option. The units from the public offering and the over-allotment
      units were sold at an offering price of $10.00 per unit, generating total gross
      proceeds of $432,896,000. UBS Investment Bank and Ladenburg Thalmann & Co.
      Inc. served as joint book-running managers for the offering, with Jeffries
      and
      Company serving as co-manager (together, the “Underwriters”). The securities
      sold in the offering were registered under the Securities Act on a registration
      statement on Form S-1 (No. 333-142696). The Securities and Exchange Commission
      declared the registration statement effective on October 10, 2007.





We
      incurred a total of $30,302,720 in underwriting discounts and commissions and
      $1,030,049 for other costs and expenses related to the offering and the
      over-allotment option.




After
      deducting the underwriting discounts and commissions and the offering expenses,
      the total net proceeds from the offering including the over-allotment, the
      deferred underwriting fees and the proceeds from the private placement of
      7,000,000 additional founders’ warrants, $425,909,120 (or approximately $9.84
      per unit sold in the initial public offering) was placed in trust.





For
      a
      description of the use of proceeds generated in our initial public offering,
      see
      Part 1, Item 1 of this Form 10-Q.








**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





None.








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





None.





19




**ITEM** **5. OTHER INFORMATION**





None.





**ITEM** **6.** **EXHIBITS**





An
      index
      of exhibits filed as part of this Report is on page 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. LichtensteinDated:
                  November 16, 2007
              
              Chairman,
                    President andChief
                  Executive Officer


By:
            /s/ Jack
              L.
              HowardJack L. HowardChief
                Operating Officer and
              Secretary
              (Principal financial
                Officer)




20


**EXHIBIT
      INDEX**





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







21