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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended September 30, 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 001-33746


TM ENTERTAINMENT AND MEDIA, INC.




Delaware
    
    20-8951489(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)


307 East 87th Street, New York, NY
    
    10128(Address of principal executive offices)
    
    (Zip Code)











þ o




Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o




þ o












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TABLE OF CONTENTS
 PART I FINANCIAL INFORMATION
    
    
    F-1ITEM 1. FINANCIAL STATEMENTS
    
    
    F-1ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    1ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    6ITEM 4. CONTROLS AND PROCEDURES.
    
    
    6PART II OTHER INFORMATION
    
    
    8ITEM 1: LEGAL PROCEEDINGS
    
    
    8ITEM 1A: RISK FACTORS
    
    
    8ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    8ITEM 3: DEFAULTS UPON SENIOR SECURITIES
    
    
    8ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    8ITEM 5: OTHER INFORMATION
    
    
    8ITEM 6: EXHIBITS
    
    
    8EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION
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PART I
 FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 TM ENTERTAINMENT AND MEDIA, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
Condensed Balance Sheets
 September 30, 2008
    
    
    December 31, 2007(Unaudited)ASSETSCurrent assetsCash
    
    $
    448,255
    
    
    $
    465,373Prepaid expenses
    
    
    122,861
    
    
    
    199,930Total current assets
    
    
    571,116
    
    
    
    665,303Cash held in trust   restricted
    
    
    80,978,800
    
    
    
    80,978,800Total assets
    
    $
    81,549,916
    
    
    $
    81,644,103LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    837,919
    
    
    $
    299,025Total current liabilities
    
    
    837,919
    
    
    
    299,025Deferred underwriting fee
    
    
    3,281,600
    
    
    
    3,281,600Total liabilities
    
    
    4,119,519
    
    
    
    3,580,625CommitmentsCommon stock, subject to possible conversion of 3,075,475 shares
    
    
    24,285,542
    
    
    
    24,285,542Stockholders equityPreferred stock  1,000,000 shares authorized, $.001 par value, none outstanding
    
    
    
    
    
    
    Common stock  40,000,000 authorized, $.001 par value, 12,505,000 outstanding
(which includes 3,075,475 shares subject to possible conversion)
    
    
    12,505
    
    
    
    12,505Additional paid-in capital
    
    
    53,575,335
    
    
    
    53,575,335(Deficit) retained earnings accumulated during the development stage
    
    
    (442,985
    )
    
    
    190,096Total stockholders equity
    
    
    53,144,855
    
    
    
    53,777,936Total liabilities and stockholders equity
    
    $
    81,549,916
    
    
    $
    81,644,103
 The accompanying notes are an integral part of the condensed financial statements.
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TM ENTERTAINMENT AND MEDIA, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
 Condensed Statements of Operations
(unaudited)
 For the Period
    
    
    For theFor the
    
    
    For the
    
    
    
    
    
    
    From
    
    
    Period from MayThree Months
    
    
    Three Months
    
    
    
    
    
    
    May 1, 2007
    
    
    1, 2007Ended
    
    
    Ended
    
    
    For the
    
    
    (Inception)
    
    
    (Inception) toSeptember 30,
    
    
    September 30,
    
    
    Nine Months Ended
    
    
    to September
    
    
    September 30,2008
    
    
    2007
    
    
    September 30, 2008
    
    
    30, 2007
    
    
    2008Formation and operating expenses
    
    $
    (340,071
    )
    
    $
    (3,095
    )
    
    $
    (1,860,768
    )
    
    $
    (30,330
    )
    
    $
    (2,156,365
    )Interest expense
    
    
    0
    
    
    
    (1,260
    )
    
    
    0
    
    
    
    (1,822
    )
    
    
    (2,664
    )Interest income
    
    
    421,588
    
    
    
    15
    
    
    
    1,227,687
    
    
    
    152
    
    
    
    1,716,044Income (loss) before Taxes
    
    
    81,517
    
    
    
    (4,340
    )
    
    
    (633,081
    )
    
    
    (32,000
    )
    
    
    (442,985
    )Income taxes
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    
    0
    
    
    
    0Net Income (loss)
    
    $
    81,517
    
    
    $
    (4,340
    )
    
    $
    (633,081
    )
    
    $
    (32,000
    )
    
    $
    (442,985
    )Net loss per shareBasic and diluted
    
    $
    0.01
    
    
    $
    (0.00
    )
    
    $
    (0.05
    )
    
    $
    (0.01
    )Pro forma diluted
    
    $
    0.01
    
    
    $
    (0.00
    )
    
    $
    (0.05
    )
    
    $
    (0.01
    )Weighted average shares outstandingBasic and diluted
    
    
    12,505,000
    
    
    
    2,250,000
    
    
    
    12,505,000
    
    
    
    2,250,000Pro forma diluted
    
    
    15,663,054
    
    
    
    2,250,000
    
    
    
    12,505,000
    
    
    
    2,250,000
 The accompanying notes are an integral part of the condensed financial statements.
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TM ENTERTAINMENT AND
MEDIA, INC.
(A CORPORATION IN THE
DEVELOPMENT STAGE)
 Condensed Statement of Stockholders
Equity
 For the Period from May 1, 2007 (inception) to September 30, 2008(Deficit)Retained EarningsAccumulatedCommon
    
    
    Common
    
    
    Additional
    
    
    DuringStock
    
    
    Stock
    
    
    Paid-In
    
    
    Development
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Stage
    
    
    EquityIssuance of common stock to
initial stockholders on
May 1, 2007 at$.011 per share
    
    
    2,250,000
    
    
    $
    2,250
    
    
    $
    22,750
    
    
    
    
    
    
    $
    25,000Sale of Private Placement
Warrants
    
    
    
    
    
    
    
    
    
    
    2,100,000
    
    
    
    
    
    
    
    2,100,000Sale of 10,255,000 units
through public offering
(net of underwriters
discount and offering
expenses)
Including 3,075,475 shares
subject to possible
Conversion
    
    
    10,255,000
    
    
    
    10,255
    
    
    
    75,738,027
    
    
    
    
    
    
    
    75,748,282Proceeds from sale of
underwriters purchase
option
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100Proceeds subject to possible
conversion
    
    
    
    
    
    
    
    
    
    
    (24,285,542
    )
    
    
    
    
    
    
    (24,285,542
    )Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    190,096
    
    
    
    190,096Balance at December 31, 2007
    
    
    12,505,000
    
    
    
    12,505
    
    
    
    53,575,335
    
    
    
    190,096
    
    
    
    53,777,936Net loss for the nine months
ended September 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (633,081
    )
    
    
    (633,081
    )Balance at September 30,
2008 (unaudited)
    
    $
    12,505,000
    
    
    $
    12,505
    
    
    $
    53,575,335
    
    
    $
    (442,985
    )
    
    $
    53,144,855
 The accompanying notes are an integral part of the condensed financial statements.
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TM ENTERTAINMENT AND MEDIA, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
 Condensed Statements of Cash Flows
(unaudited)
 For the Period From
    
    
    For the Period fromFor the Nine Months Ended
    
    
    May 1, 2007 (Inception)
    
    
    May 1, 2007 (Inception)September 30, 2008
    
    
    to September 30, 2007
    
    
    to September 30, 2008Cash flows from operating activitiesNet loss
    
    $
    (633,081
    )
    
    $
    (32,000
    )
    
    $
    (442,985
    )(Increase) decrease in prepaid expenses
    
    
    77,069
    
    
    
    0
    
    
    
    (122,861
    )Increase in accounts payable and accrued liabilities
    
    
    538,894
    
    
    
    10,795
    
    
    
    837,919Increase in notes payable
    
    
    
    
    
    
    0Net cash provided by operating activities
    
    
    (17,118
    )
    
    
    (21,205
    )
    
    
    272,073Cash flows from investing activitiesCash placed in Trust
    
    
    0
    
    
    
    0
    
    
    
    (80,978,800
    )Net cash used in investing activities
    
    
    0
    
    
    
    0
    
    
    
    (80,978,800
    )Cash flows from financing activitiesProceeds from sale of shares of common stock to
Initial Stockholders
    
    
    0
    
    
    
    25,000
    
    
    
    25,000Proceeds from sale of units to public
    
    
    0
    
    
    
    0
    
    
    
    82,040,000Proceeds from private placement of warrants
    
    
    0
    
    
    
    0
    
    
    
    2,100,000Proceeds from note payable to Initial Stockholder
    
    
    0
    
    
    
    100,000
    
    
    
    100,000Proceeds from sale of underwriters purchase option
    
    
    0
    
    
    
    0
    
    
    
    100Payment of deferred offering costs
    
    
    0
    
    
    
    (97,556
    )
    
    
    (3,110,118
    )Net cash provided by (used in) financing activities
    
    
    0
    
    
    
    27,444
    
    
    
    81,154,982Net increase (decrease) in cash
    
    
    (17,118
    )
    
    
    6,239
    
    
    
    448,255Cash at beginning of period
    
    
    465,373
    
    
    
    
    
    
    
    Cash at end of period
    
    $
    448,255
    
    
    $
    6,239
    
    
    $
    448,255Supplemental
disclosure:Taxes paid
    
    $
    204,668
    
    
    $
    
    
    
    $
    204,668Supplemental disclosure of non cash financing
activitiesAccrual of deferred underwriting fee
    
    $
    
    
    
    $
    
    
    
    $
    3,261,600Accrual of deferred offering costs
    
    $
    
    
    
    $
    230,823
    
    
    $
    
 The accompanying notes are an integral part of the condensed financial statements.
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TM ENTERTAINMENT AND MEDIA, INC.
(A CORPORATION IN THE DEVELOPMENT STAGE)
Notes to Condensed Financial Statements (unaudited)
 1. Basis of Reporting
  2.  Organization and Business Operations
     F-5




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Basis of Presentation
 Cash and cash equivalents
 F-6




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Concentration of Credit Risk
 Income Taxes
    Net
Loss Per Share
   Use of Estimates
 Fair Value Measurements 
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
 F-7




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
    
    Level 2  Inputs other than Level 1 that are observable, either
directly or indirectly, such as quoted prices for similar assets or
liabilities, quoted prices in markets that are not active, or other
inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities.
    
    Level 3  Unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the
assets or liabilities.
  The Fair Value Option for Financial Assets and
Financial Liabilities
  3.  Initial Public Offering
    4.   Related Party Transactions
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5. Common Stock Subject to Possible Redemption
   
    
    the initial amount in the Trust Account which includes the amount attributable
to deferred underwriting discounts and commissions and all accrued interest (less taxes
payable and up to $1,500,000 of interest income released to the Company to fund its
working capital), as of two business days prior to the proposed consummation of the
Business Combination, divided by
    
    the number of shares of Common Stock sold in the Offering.
 F-9




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6.  Preferred Stock
   F-10




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward Looking Statements
  
    
    Ability to complete a combination with one or more target businesses;
    
    Success in retaining or recruiting, or changes required in, our management or
directors following a business combination;
    
    Potential inability to obtain additional financing to complete a business combination;
    
    Limited pool of prospective target businesses;
    
    Potential change in control if we acquire one of more target businesses for stock;
    
    Public securities limited liquidity and trading;
    
    The delisting of our securities from the American Stock Exchange or an
inability to have our securities listed on the American Stock Exchange following a
business combination;
    
    Use of proceeds not in trust or available to us from interest income on the
trust account of the Company (Trust Account) balance; or
    
    Financial performance.
   1




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Overview
      
    
    may significantly reduce the equity interest of our current stockholders;
    
    may subordinate the rights of holders of Common Stock if preferred stock is
issued with rights senior to those afforded to our Common Stock;
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
    
    may cause a change in control if a substantial number of our shares of Common
Stock or preferred stock are issued, which may affect, among other things, our
ability to use our net operating loss carry forwards, if any, and most likely also
result in the resignation or removal of one or more of our present officers and
directors; or
    
    could enhance or adversely affect prevailing market prices for our securities.
  
    
    default and foreclosure on our assets, if our operating revenues after an
initial transaction 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 required 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 was payable on demand; or
    
    our inability to obtain additional financing, if necessary, if the debt
security contained covenants restricting our ability to obtain additional
financing while such security was outstanding.
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Results of Operations
      Liquidity and Capital Resources
    4




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Off-Balance Sheet Arrangements
  Impact of Recently Issued Accounting Standards
 Fair Value Measurements Fair Value
Measurement
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES.
 Effectiveness of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
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PART II
 OTHER INFORMATION
 
 ITEM 1: LEGAL PROCEEDINGS
  
 ITEM 1A: RISK FACTORS
  
 ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3: DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5: OTHER INFORMATION
  
 ITEM 6: EXHIBITS
  31.1    
    
    Certification by Co-Chief Executive Officer and Interim Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2    
    
    Certification by Co-Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1    
    
    Certification by Co-Chief Executive Officers and Interim Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
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SIGNATURES
   TM ENTERTAINMENT AND MEDIA, INC.By:
    /s/ Theodore S. GreenName:
    Theodore S. GreenTitle:
    Chairman, Co-Chief Executive Officer and
Interim Chief Financial Officer 8