**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** **MARCH 31, 2008**


**OR**





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





**For
      the transition period from ____________ to ____________.**





**Commission
      File Number 001-33711**





**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 x No o**




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




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




**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 9, 2008.**










**SP
      ACQUISITION HOLDINGS, INC.**





**FORM
      10-Q**





**Quarter
      ended** **March
      31, 2008**





**TABLE
      OF CONTENTS**





Page**PART
                I**FINANCIAL
                INFORMATIONItem
                1.
            Condensed
                Financial Statements:Condensed
                Balance Sheets as of March 31, 2008 (unaudited) and December 31,
                2007
            5Condensed
                Statements of Operations (unaudited) for the three months ended March
                31,
                2008, for the period February 14, 2007 (inception) through March
                31, 2007,
                for the period February 14, 2007 (inception) through March 31,
                2008
            6Condensed
                Statement of Cash Flows for the three months ended March 31, 2008
                (unaudited), for the period February 14, 2007 (inception) through
                March
                31, 2007 and for the period February 14, 2007 (inception) through
                March
                31, 2008
            7Condensed
                Statement of Stockholders’ Equity for the period February 14, 2007
                (inception) through December 31, 2007 and for the three months ended
                March
                31, 2008 (unaudited)
            8Notes
                to Condensed Financial Statements
            9Item
                2.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            18Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            20Item
                4.
            Controls
                and Procedures
            21**PART
                II**OTHER
                INFORMATIONItem
                1.
            Legal
                Proceedings
            21Item
                1A.
            Risk
                Factors
            21Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            22Item
                3.
            Defaults
                Upon Senior Securities
            22Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            22Item
                5.
            Other
                information
            22Item
                6.
            Exhibits
            22Signatures
            23Exhibit
                Index
            23Certifications


2


**CAUTIONARY
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





This
      report, and the information incorporated by reference in it, includes
“forward-looking statements” within the meaning of Section 27A of the Securities
      Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
      1934,
      as amended, (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,
                keyemployees,
                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
                forstock;




*
            our
                public securities’ potential liquidity and trading, listing, or delisting
                of our securitiesfrom
                the American Stock Exchange or the ability to have our securities
                listed
                on theAmerican
                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.


3





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.


4





**PART
      1. FINANCIAL INFORMATION**





**SP
      ACQUISITION HOLDINGS, INC.**


(a
      corporation in the development stage)


**CONDENSED
      BALANCE SHEETS**




**March
                31,**
              **2008**
              **(Unaudited)**
            
            **December
                31,**
              **2007****Current
                Assets**:Cash
            
            $
            1,337,750
            
            $
            1,317,688Cash
                and cash equivalents, held in Trust
            
            
            426,619,242
            
            
            426,898,303Accrued
                interest receivable on Trust assets
            
            
            481,809
            
            
            469,705Accounts
                receivable other
            
            
            —
            
            
            26,323Prepaid
                income taxes
            
            
            323,059
            
            
            —Prepaid
                expenses
            
            
            112,374
            
            
            108,024**Total
                current assets**
            
            
            428,874,234
            
            
            428,820,043Deferred
                tax assets – non current
            
            
            —
            
            
            125,406**Total
                Current Assets**
            
            $
            428,874,234
            
            $
            428,945,449**Current
                Liabilities**:Accounts
                payable
            
            $
            2,922
            
            $
            449,194Note
                payable to affiliate
            
            
            250,000
            
            
            250,000Advances
                payable to affiliate
            
            
            31,215
            
            
            26,818Interest
                payable to affiliate
            
            
            12,560
            
            
            9,435Accrued
                expenses
            
            
            140,877
            
            
            96,915Taxes
                payable
            
            
            155,927
            
            
            808,278Other
                payables- deferred underwriters’ fee
            
            
            17,315,840
            
            
            17,315,840**Total
                Current Liabilities**
            
            
            17,909,341
            
            
            18,956,480**Common
                stock, subject to possible conversion, 12,986,879 shares at conversion
                value:**
            
            
            127,772,726
            
            
            127,772,726**Deferred
                interest, net of taxes of $282,783, attributable to Common Stock
                subject
                to possible conversion**
            
            
            342,844
            
            
            —**Commitments
                and Contingencies:**
            
            
            —
            
            
            —**Stockholders’
                Equity**:Preferred
                stock, $.001 par value; 1,000,000 authorized, noneissued
            
            
            —
            
            
            —Common
                stock, $.001 par value, 200,000,000 shares authorized; 41,125,121
                shares
                issued and outstanding (excluding 12,986,879 shares subject to possible
                conversion)
            
            
            41,125
            
            
            41,125Additional
                paid-in capital
            
            
            280,708,825
            
            
            280,708,825Retained
                earnings accumulated during the development stage
            
            
            2,099,373
            
            
            1,466,293**Total
                Stockholders’ Equity**
            
            
            282,849,323
            
            
            282,216,243$
            428,874,234
            
            $
            428,945,449





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 OPERATIONS (Unaudited)**




**For the Three**
              **Months Ended**
              **March 31, 2008**
            
            **For the Period from**
              **February 14, 2007**
              **(date of inception)**
              **to March 31, 2007**
            
            **For the Period from**
              **February 14, 2007**
              **(date of inception)**
              **to March 31, 2008**Formation
                and operating costs
            
            $
            197,464
            
            $
            25,436
            
            $
            461,837Loss
                from operations
            
            
            (197,464
            )
            
            (25,436
            )
            
            (461,837
            )Interest
                income - Trust
            
            
            2,641,032
            
            
            —
            
            
            5,585,425Interest
                income – other
            
            
            13,477
            
            
            —
            
            
            19,557Interest
                expense
            
            
            (3,125
            )
            
            —
            
            
            (12,560
            )Income
                (loss) before tax
            
            
            2,453,920
            
            
            (25,436
            )
            
            5,130,585Provision
                for income taxes
            
            
            (1,477,996
            )
            
            —
            
            
            (2,688,368
            )Net
                income (loss)
            
            
            975,924
            
            
            (25,436
            )
            
            2,442,217Deferred
                interest, net of taxes,attributable
                to common stock subjectto
                possible conversion
            
            
            (342,844
            )
            
            —
            
            
            (342,844
            )Net
                income (loss) attributable tocommon
                stock
            
            $
            633,080
            
            $
            (25,436
            )
            $
            2,099,373Net
                income (loss) attributable tocommon
                stock per common share,basic
                and diluted
            
            $
            0.02
            
            $
            (0.00
            )
            $
            0.09Weighted
                average number of commonshares
                outstanding, basic and diluted
            
            
            41,125,121
            
            
            10,000,000
            
            
            22,487,545





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 CASH FLOWS**




**For the Three**
              **Months ended**
              **March 31, 2008
                (unaudited)**
            
            **For the Period**
              **from February**
              **14, 2007 (date**
              **of inception) to**
              **March 31, 2007**
            
            **For the Period from February**
              **14, 2007 (date**
              **of inception) to**
              **March 31, 2008**
              **(unaudited)**Cash
                flows from operating activities:Net
                income (loss) attributable to commonshareholders
            
            $
            633,080
            
            $
            (25,436
            )
            $
            2,099,373Adjustments
                to reconcile net income (loss) tonet
                cash provided by operating activities:Deferred
                interest attributable toconvertible
                common
            
            
            342,844
            
            
            —
            
            
            342,844Deferred
                tax asset and valuation allowance
            
            
            125,406
            
            
            —
            
            
            —Changes
                in asset and liability accounts:Interest
                receivable
            
            
            (12,104
            )
            
            —
            
            
            (481,809
            )Other
                receivable
            
            
            26,323
            
            
            —
            
            
            —Prepaid
                expenses
            
            
            (4,350
            )
            
            —
            
            
            (112,374
            )Prepaid
                taxes
            
            
            (323,059
            )
            
            —
            
            
            (323,059
            )Accounts
                payable
            
            
            (62,281
            )
            
            —
            
            
            2,922Advances
                payable to affiliate
            
            
            4,397
            
            
            10,436
            
            
            31,215Interest
                payable to affiliate
            
            
            3,125
            
            
            —
            
            
            12,560Accrued
                expenses
            
            
            43,962
            
            
            15,000
            
            
            140,877Income
                taxes payable
            
            
            (652,351
            )
            
            —
            
            
            155,927Net
                cash provided by operating activities
            
            
            124,992
            
            
            —
            
            
            1,868,476Cash
                flows from investing activities:Cash
                and cash equivalents withdrawnfrom
                or (invested in) in Trust
            
            
            279,061
            
            
            —
            
            
            (426,619,242
            )Net
                cash provided by (used in) investingactivities
            
            
            279,061
            
            
            —
            
            
            (426,619,242
            )Cash
                flows from financing activities:Proceeds
                from issuance of founder’sunits
            
            
            —
            
            
            25,000
            
            
            25,000Proceeds
                from issuance of additionalfounder’s
                warrants
            
            
            —
            
            
            —
            
            
            7,000,000Proceeds
                from note payable to affiliate
            
            
            —
            
            
            250,000
            
            
            250,000Proceeds
                from initial public offering
            
            
            —
            
            
            —
            
            
            432,896,000Payment
                of offering costs
            
            
            (383,991
            )
            
            —
            
            
            (14,082,484
            )Net
                cash (used in) provided by financingactivities
            
            
            (383,991
            )
            
            275,000
            
            
            426,088,516Net
                increase in cash
            
            
            20,062
            
            
            275.000
            
            
            1,337,750Cash
                at the beginning of the period
            
            
            1,317,688
            
            
            —
            
            
            —Cash
                at the end of the period
            
            $
            1,337,750
            
            $
            275,000
            
            $
            1,337,750Supplemental
                disclosure of non-cashfinancing
                activities:Deferred
                offering costs
            
            $
            —
            
            $
            190,000
            
            $
            —Accrual
                of deferred underwriters’ discount
            
            $
            —
            
            $
            —
            
            $
            17,315,840Cash
                payments for federal, state and localincome
                taxes
            
            $
            2,328,000
            
            $
            —
            
            $
            2,855,500




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


7





**SP
      ACQUISITION HOLDINGS, INC.**


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


**STATEMENT
      OF STOCKHOLDERS’ EQUITY**




**Common**
              **Stock Shares**
            
            **Common**
              **Stock**
              **Amount**
            
            **Additional**
              **Paid-in**
              **Capital**
            
            **Retained**
              **Earnings
                Accumulated During the Development**
              **Stage**
            
            **Total**
              **Stockholders’
                Equity**Proceeds
                from founder’s units issued on March 22, 2007
            
            
            11,500,000
            
            $
            11,500
            
            $
            13,500
            
            $
            —
            
            $
            25,000Proceeds
                from issuance of 40,000,000 units, net of underwriters’ commissions and
                offering expenses of $29,030,049 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 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
            )Common
                stock forfeited by founders 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
            
            
            282,216,243Net
                income attributable to common stockholders (unaudited)
            
            
            —
            
            
            —
            
            
            —
            
            
            633,080
            
            
            633,080Balances
                at March 31, 2008 (unaudited)
            
            
            41,125,121
            
            $
            41,125
            
            $
            280,708,825
            
            $
            2,099,373
            
            $
            282,849,323




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




8





**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 revenue 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 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’ fee 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
      and
      commissions, 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, 2008, the balance
      in the Trust account was $426,619,242 and interest receivable on trust assets
      was $481,809. Through March 31, 2008, the Trust has released $3,062,170 of
      interest income to the Company. Through March 31, 2008, the Company has paid
      a
      total of $2,855,500 in taxes, of which $1,331,324 has been reimbursed by the
      Trust and the balance was funded from working capital. The Company intends
      to
      seek reimbursement of the balance of the taxes from the Trust.


9




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 account 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 into a pro rata
      share of the Trust (including the additional 4% of the gross proceeds payable
      to
      the underwriters upon the Company’s consummation of a Business Combination),
      including any interest earned (net of taxes payable and the amount distributed
      to the Company to fund its working capital requirements) on their pro rata
      share, 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 in accordance with
      the
      vote of the majority in the interest of all other stockholders 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, 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 condensed financial statements are unaudited and 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.




10




These
      unaudited condensed financial statements should be read in conjunction with
      the
      financial statements and notes thereto included in the Company’s December 31,
      2007 Annual Report on Form 10-K, filed on March 26, 2008. The accounting
      policies used in preparing these unaudited condensed financial statements are
      consistent with those described in the audited financial statements included
      in
      the Company’s December 31, 2007 Form 10-K.




**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 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, 2008, the Company had cash on hand of
      $1,337,750 as well as $426,619,242 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, 2008, $3,062,170 of Trust
      interest has been released to the Company. Management has reviewed its cash
      requirements as of March 31, 2008 and believes that its cash on hand, along
      with
      the funds available to it from the interest income from the Trust is sufficient
      to cover its expenses for the next twelve months.




As
      discussed in Note D, the note with Steel Partners Ltd. has a due date of
      December 31, 2007. Steel Partners Ltd. has confirmed on May 7, 2008 that the
      note is not in default and that the payment may be made on or before December
      31, 2008.




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 presented retroactively 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 Statement of Financial Accounting Standards
      (“SFAS”) 128, “Earnings Per Share” (“SFAS 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 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.
      Earnings per common share amounts, assuming dilution (“Diluted EPS”), gives
      effect to dilutive 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. In accordance with SFAS No.
      128, the Company has not considered the effect of its outstanding Warrants
      in
      the calculation of diluted earnings per share since the exercise of the Warrants
      is contingent upon the occurrence of future events.




11




***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 depository insurance coverage of $100,000. As of March
      31,
      2008 the Company had $427,956,992 in cash and cash equivalents which exceeded
      Federally insured limits.




***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.***  ***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.




***8.***  ***Trust
      Account:***




As
      discussed in Note A, the Trust is invested in T Bills with a 30 day maturity
      as
      of March 31, 2008 and December 31, 2007, respectively.




***9.***  **Income
      Tax****:**




The
      Company complies with SFAS 109, “Accounting for Income Taxes,” (“FAS 109”)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.




12




***11.***  **Recent****Accounting
      Pronouncements:**




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 adopted this standard
      effective January 1, 2008.




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. The Company adopted SFAS
      159
      effective January 1, 2008 and has elected not to record any assets for the
“fair
      value option” at this time.




In
      December 2007, the FASB issued Statement No. 141 (revised 2007), “Business
      Combinations,” (“SFAS 141(R)”).  SFAS 141(R) retains the fundamental
      requirements of SFAS 141 that the acquisition method of accounting (which SFAS
      141 called the purchase method) be used for all business combinations and for
      an
      acquirer to be identified for each business combination.  SFAS 141(R)
      establishes principles and requirements for recognizing and measuring
      identifiable assets and goodwill acquired, liabilities assumed, and any
      noncontrolling interest in an acquisition, at their fair value as of the
      acquisition date.  SFAS 141(R) also requires an acquirer to recognize
      assets acquired and liabilities assumed arising from contractual contingencies
      as of the acquisition date, measured at their acquisition-date fair
      values.  Additionally, SFAS 141(R) will require that
      acquisition-related costs in a business combination be expensed as incurred,
      except for costs incurred to issue debt and equity securities. This statement
      applies prospectively to business combinations effective with the Company’s
      first fiscal quarter of 2009.  Early adoption is not
      permitted.  The Company is evaluating the impact that this standard
      may have on its financial position and results of operations.





In
      December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements – an Amendment of Accounting Research
      Bulletin No. 51,” (“SFAS 160”).  SFAS 160 amends Accounting Research
      Bulletin No. 51 to establish accounting and reporting standards for the
      noncontrolling interest, also referred to as minority interest, in a subsidiary
      and for the deconsolidation of a subsidiary.  SFAS 160 requires that
      the noncontrolling interest in a subsidiary be clearly identified and presented
      within the equity section of the consolidated statement of financial position
      but separate from the company’s equity.  Consolidated net income
      attributable to the parent and to the noncontrolling interest must be clearly
      identified and presented on the face of the consolidated statement of
      income.  SFAS 160 requires that any subsequent changes in a parent’s
      ownership interest while still retaining its controlling financial interest
      in
      its subsidiary must be accounted for as equity transactions on a consistent
      basis.  In addition, SFAS 160 requires that upon the deconsolidation
      of a subsidiary, both the gain or loss arising from the deconsolidation and
      any
      retained noncontrolling equity investment in the former subsidiary be measured
      at fair value.  SFAS 160 is effective commencing with the Company’s
      first fiscal quarter of 2009.  Early adoption is not
      permitted.  The Company is evaluating the impact that this standard
      may have on its financial position and results of operations.




13




**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.




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,
      2008, and December 31, 2007, respectively, 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, 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.




The
      founder’s units included up to 1,500,000 units 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 our founder’s units purchase units in
      the Offering). On October 31, 2007, in connection with the partial exercise
      of
      the over-allotment option, 677,600 founder’s units were forfeited to the Company
      and cancelled.




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 (“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 founder’s units to Steel Partners II, L.P., bringing Steel Partners II,
      L.P. ownership to 668,988 units.




14




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 were due on December 31, 2007. Interest payable of $12,560 has been
      accrued on this note through March 31, 2008. Steel Partners, Ltd. has confirmed
      that the promissory note is not in default at March 31, 2008 and that payment
      may be made on or before December 31, 2008.




Advances
      payable of $31,215 and $26,818 at March 31, 2008 and December 31, 2007,
      respectively, 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
      October 16, 2007. The Company has accrued $55,000 and $25,000 for such services
      through March 31, 2008 and December 31, 2007, 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 its
      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, 2008 or December 31,
      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 March
      31, 2008 or December 31, 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.




15




**NOTE
      G — WARRANTS**




The
      following table presents warrants outstanding:




**December 31, 2007**
            
            **March 31, 2008**Initial
                founder’s warrants
            
            
            10,822,400
            
            
            10,822,400Additional
                founder’s warrants
            
            
            7,000,000
            
            
            7,000,000Public
                warrants
            
            
            43,289,600
            
            
            43,289,600Total
            
            
            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. 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
      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.




16


**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. In the quarter ended March 31, 2008,
      the Company recorded a full valuation allowance for its deferred tax assets,
      as
      the Company determined that it no longer met the more likely than not
      realization criteria of FAS 109.





The
      Company has paid a total of $2,855,500 since inception in estimated tax payments
      for federal, state and local income taxes.





The
      difference between the provision for income taxes and the amounts computed
      by
      applying the federal statutory income taxes to the income before tax is due
      to
      state and local taxes and due to the increase in the deferred tax valuation
      allowance.




17




**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;





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.


18




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





We
      have
      neither engaged in any operations nor generated any 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 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. Net loss for the period from February 14, 2007, (inception) to March
      31,
      2007, was $25,436, which consisted of formation and related costs. Net income
      for the period from February 14, 2007 (inception) through March 31, 2008, was
      $2,442,217, which consisted of $5,604,982 in interest income partially offset
      by
      $461,837 in formation and operating expenses, $12,560 in interest expense,
      and
      $2,688,368 in taxes on income. Through March 31, 2008, we did not engage in
      any
      significant operations. Our entire activity from inception through March 31,
      2008, was to prepare for our initial public offering and begin the
      identification of, and negotiations with a suitable business
      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. 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 expectations, 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.




19




**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. In the quarter ended March 31, 2008, the Company recorded a full
      valuation allowance for its deferred tax assets, as the Company determined
      that
      it no longer met the more likely than not realization criteria of FAS 109.
      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, 2008, 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 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, 2008, the balance in the trust
      account was $426,619,242. 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 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 March 31, 2008, the effective annualized interest rate
      payable on our investment was approximately 1.7%. Assuming no other changes
      to
      our holdings at March 31, 2008, a 1% decrease in the underlying interest rate
      payable on our investment as of March 31, 2008, would result in a decrease
      of
      approximately $ 1.0 million 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.


20




**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
      March 31, 2008. 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.





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, or 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 from those in this
      report are any of the risks described in our December 31, 2007 Form 10-K 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.


21




As
      of May
      9, 2008, there have been no material changes to the risk factors disclosed
      in
      our December 31, 2007 Form 10-K, filed with the SEC, except we may disclose
      changes to such factors or disclose additional factors from time to time in
      our
      future filings with the SEC. ****




**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 24.





**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. LichtensteinChairman, President and Chief Executive OfficerSP Acquisition Holdings, Inc.By:
            /s/
                Jack L. HowardJack
                L. HowardChief Operating Officer and SecretaryPrincipal Accounting Officer





Dated:
      May 9, 2008


22


**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 Officer, pursuant to Rule 13a-14 and 15d-14
                of the
                Securities Exchange Act of 1934.32.1
            
            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
                2002.32.2
            
            Certification
                of Principal Financial Officer pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.




23