UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 
 FORM 10-Q 
 (Mark One) x

          Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2008 o

          Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from _____________ to _____________ Commission File Number 333-144028 
 Secure America Acquisition Corporation (Exact Name of Registrant as Specified in Its Charter)  Delaware

          

          26-0188408(State or other Jurisdiction ofIncorporation or Organization)

          

          (I.R.S. EmployerIdentification No.)
 1005 North Glebe Road, Suite 550 Arlington, Virginia 22201 (Address of Principal Executive Office) (703) 528-7073 (Registrants Telephone Number, Including Area Code) 
 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 the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):  Large Accelerated Filer o

          

          Accelerated Filer oNon-Accelerated Filer o

          

          Smaller reporting company x(Do not check if a smaller reporting company)
 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 As of May 5, 2008, 12,500,000 shares of common stock, par value $.0001 per share, were issued and outstanding.
   TABLE OF CONTENTS

SECURE AMERICA ACQUISITION CORPORATION

INDEX TO FORM 10-Q



PagePART I.FINANCIAL INFORMATIONItem 1.Financial StatementsCondensed Balance Sheet as of March 31, 2008 (unaudited) and as of December 31, 2007



1Condensed Statement of Operations (unaudited) for the three months ended March 31, 2008 and for the period from May 14, 2007 (date of inception) to March 31, 2008



2Condensed Statement of Stockholders Equity for the period from May 14, 2007 (date of inception) to March 31, 2008 (unaudited)



3Condensed Statement of Cash Flows (unaudited) for the three months ended March 31, 2008 and for the period from May 14, 2007 (date of inception) to March 31, 2008



4Notes to Condensed Financial Statements



5Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations



10Item 3.Quantitative and Qualitative Disclosures About Market Risk



11Item 4T.Controls and Procedures



12PART II.OTHER INFORMATIONItem 1.Legal Proceedings



13Item 2.Unregistered Sales of Equity Securities and Use of Proceeds



13Item 3.Defaults Upon Senior Securities



13Item 4.Submission of Matters to a Vote of Security Holders



13Item 5.Other Information



13Item 6.Exhibits



13SIGNATURES



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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)

CONDENSED BALANCE SHEET



March 31, 2008

          

          December 31, 2007(unaudited)AssetsCurrent assets:Cash

          

          $

          42,454

          

          

          $

          6,867Investments held in Trust Fund

          

          

          79,530,551

          

          

          

          79,466,371Prepaid expenses

          

          

          76,620

          

          

          

          95,015Total current assets

          

          

          79,649,625

          

          

          

          79,568,253Deferred acquisition costs

          

          

          199,668

          

          

          

          Deferred tax asset

          

          

          64,111

          

          

          

          26,058Total assets

          

          $

          79,913,404

          

          

          $

          79,594,311Liabilities and Stockholders EquityCurrent liabilities:Accrued expenses

          

          $

          82,445

          

          

          $

          47,274Accounts payable

          

          

          67,172

          

          

          

          33,005Income taxes payable

          

          

          235,071

          

          

          

          198,382Deferred underwriters discounts and commissions

          

          

          3,200,000

          

          

          

          3,200,000Note payable to stockholder

          

          

          

          

          

          

          50,000Total current liabilities

          

          

          3,584,688

          

          

          

          3,528,661Common subject to possible conversion, 2,999,999 shares at conversion value

          

          

          22,799,992

          

          

          

          22,799,992CommitmentStockholders' equityPreferred stock, $.0001 par value, Authorized 1,000,000 shares; none issued and outstanding

          

          

          

          

          

          

          Common stock, $.0001 par value, Authorized 50,000,000 shares; 12,500,000 shares issued and outstanding (including 2,999,999 shares subject to possible conversion)

          

          

          1,250

          

          

          

          1,250Additional paid-in capital

          

          

          52,985,665

          

          

          

          52,985,665Income accumulated during the development stage

          

          

          541,809

          

          

          

          278,743Total stockholders' equity

          

          

          53,528,724

          

          

          

          53,265,658Total liabilities and stockholders' equity

          

          $

          79,913,404

          

          

          $

          79,594,311

See Notes to Unaudited Condensed Financial Statements.

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)

CONDENSED STATEMENT OF OPERATIONS (unaudited)



For the Three Months Ended March 31, 2008

          

          For the Period May 14, 2007 (inception) to March 31, 2008Income:Net interest Income

          

          $

          559,182

          

          

          $

          1,105,559Total Income

          

          

          559,182

          

          

          

          1,105,559Expenses:Formation and operating costs

          

          

          132,480

          

          

          

          227,790Net income for the period before income taxes

          

          

          426,702

          

          

          

          877,769State and federal income taxes

          

          

          163,636

          

          

          

          335,960Net income for the period

          

          $

          263,066

          

          

          $

          541,809Weighted average number of shares outstanding  basic and diluted

          

          

          12,500,000

          

          

          

          7,298,762Net income per share  basic and diluted

          

          $

          .02

          

          

          $

          .07

See Notes to Unaudited Condensed Financial Statements.

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)

CONDENSED STATEMENT OF STOCKHOLDERS EQUITY For the period from May 14, 2007 (inception) to March 31, 2008



Addition Paid-in Capital

          

          IncomeAccumulatedDuring the Development Stage

          

          Stockholders EquityCommon StockShares

          

          AmountCommon shares issued May 14, 2004 at $.01 per share

          

          

          2,500,000

          

          

          $

          250

          

          

          $

          24,750

          

          

          

          

          

          

          $

          25,000Common shares issued October 29, 2007, par value $0.0001, net of underwriters discount and offering expenses (includes 2,999,999 shares subject to possible conversion)

          

          

          10,000,000

          

          

          

          1,000

          

          

          

          73,685,907

          

          

          

          

          

          

          

          73,686,907Proceeds from private placement of Founder Warrants

          

          

          

          

          

          

          

          

          

          

          2,075,000

          

          

          

          

          

          

          

          2,075,000Proceeds subject to possible conversion of 2,999,999 shares

          

          

          

          

          

          

          

          

          

          

          (22,799,992

          )

          

          

          

          

          

          

          (22,799,992

          )Net Income

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          278,743

          

          

          

          278,743Balance at December 31, 2007

          

          

          12,500,000

          

          

          

          1,250

          

          

          

          52,985,665

          

          

          

          278,743

          

          

          

          53,265,658Unaudited:Net Income

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          263,066

          

          

          

          263,066Balance at March 31, 2008

          

          

          12,500,000

          

          

          $

          1,250

          

          

          $

          52,985,665

          

          

          $

          541,809

          

          

          $

          53,528,724

See Notes to Unaudited Condensed Financial Statements.

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)

CONDENSED STATEMENT OF CASH FLOWS (unaudited)



For the Period January 1, 2008 to March 31, 2008

          

          For the Period May 14, 2007(inception) toMarch 31, 2008Cash flows from operating activitiesNet income

          

          $

          263,066

          

          

          $

          541,809Adjustments to reconcile net loss to net cash used in operating activities:Interest income on U.S. government securities money market

          

          

          (559,180

          )

          

          

          (1,105,551

          )Deferred income taxes

          

          

          (38,053

          )

          

          

          (64,111

          )Decrease (increase) in prepaid expenses

          

          

          18,395

          

          

          

          (76,620

          )Increase in accounts payable

          

          

          26,538

          

          

          

          27,639Increase in accrued expenses

          

          

          35,171

          

          

          

          82,445Increase in income taxes payable

          

          

          36,689

          

          

          

          235,071Net cash used in operating activities

          

          

          (217,374

          )

          

          

          (359,318

          )Cash flows from investing activitiesInvestments deposited in trust account

          

          

          

          

          

          

          (79,200,000

          )Interest drawn from trust account

          

          

          495,000

          

          

          

          775,000Payment of deferred acquisition costs

          

          

          (160,135

          )

          

          

          (160,135

          )Net cash provided by (used in) investing activities

          

          

          334,865

          

          

          

          (78,585,135

          )Cash flows from financing activitiesGross proceeds of public offering

          

          

          

          

          

          

          80,000,000Proceeds from private placement of Founder Warrants

          

          

          

          

          

          

          2,075,000Proceeds from notes payable, stockholder

          

          

          

          

          

          

          215,000Payment of note payable, stockholder

          

          

          (50,000

          )

          

          

          (215,000

          )Proceeds from sale of shares of common stock

          

          

          

          

          

          

          25,000Payment of costs related to proposed offering

          

          

          (31,904

          )

          

          

          (3,113,093

          )Net cash (used in) provided by financing activities

          

          

          (81,904

          )

          

          

          78,986,907Net increase in cash

          

          

          35,587

          

          

          

          42,454Cash at beginning of the period

          

          

          6,867

          

          

          

          Cash at the end of the period

          

          $

          42,454

          

          

          $

          42,454Non cash investing financing activities:Accrual of acquisition costs

          

          $

          39,533

          

          

          $

          39,533Accrual of deferred underwriters discounts and commissions

          

          

          

          

          

          $

          3,200,000

See Notes to Unaudited Condensed Financial Statements.

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)   NOTES TO UNAUDITED FINANCIAL STATEMENTS

1. Basis of Presentation

The financial statements of Secure America Acquisition Corporation (the Company) at March 31, 2008, for the three months ended March 31, 2008 and for the period from May 14, 2007 (inception) to March 31, 2008 (cumulative) are unaudited. In the opinion of management, all adjustments (consisting of normal accruals) have been made that are necessary to present fairly the financial position of the Company as of March 31, 2008 and the results of its operations and its cash flows for the three months ended March 31, 2008 and for the period from May 14, 2007 (inception) to March 31, 2008 (cumulative). Operating results for the interim periods
are not necessarily indicative of the results to be expected for a full fiscal year. The December 31, 2007 balance sheet and the statement of stockholders equity for the period from May 14, 2007 (inception) to December 31, 2007 have been derived from audited financial statements.

The statements and related notes have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles may be omitted pursuant to such rules and regulations. See the Companys Annual Report on Form 10-K for the year ended December 31, 2007 for additional disclosures relating to the Companys financial statements and accounting principles.

2. Organization and Business Operations

The Company was incorporated in Delaware on May 14, 2007 as a blank check company for the purposes of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more domestic or international operating businesses, which we refer to as our initial business combination. The Companys efforts in identifying a prospective target business will be limited to the homeland security industry, but not businesses that design, build or maintain mission-critical facilities.

The registration statement for the Companys initial public offering (Offering) was declared effective October 23, 2007. The Company consummated the Offering on October 29, 2007, issuing 10,000,000 Units at a price of $8.00 per Unit, which started trading separately on January 18, 2008. 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 with an operating business (Business Combination). There is no
assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Offering, management placed $7.92 per Unit sold in the Offering, or $79,200,000 into a trust account (Trust Account) and invested these proceeds 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 until the earlier of (i) the consummation of its first Business Combination and (ii) liquidation of the Company. The investments in the Trust Account have been accounted for as trading securities and are recorded at their market value of approximately $79,530,551 at March 31, 2008. The placing of funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all
vendors, providers of financing, prospective target businesses or other entities it engages, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements. Two of the Companys affiliates have agreed that they will be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors, providers of financing, service providers or other entities that are owed money by the Company for services rendered to or contracted for or products sold to the Company. There can be no assurance that they will be able to satisfy those obligations. The net proceeds not held in the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Additionally, up to

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)   NOTES TO UNAUDITED FINANCIAL STATEMENTS

2. Organization and Business Operations   (continued)

an aggregate of $1,000,000 of interest earned on the Trust Account balance may be released to the Company to fund working capital requirements and additional funds may be released to fund tax obligations. An additional $150,000 of interest earned (net of taxes) on the Trust Account balance may be released to the Company to repay a loan made to the Company by Secure America Acquisition Holdings, LLC. The reconciliation of investments held in trust as of March 31, 2008 is as follows:



Contribution to trust

          

          

          79,200,000Interest income received

          

          

          1,105,551Withdrawals to fund loan repayments

          

          

          (150,000

          )Withdrawals to fund income taxes

          

          

          (200,000

          )Withdrawals to fund operations(a)

          

          

          (425,000

          )Total investments held in trust

          

          

          79,530,551




(a)

          amount is limited to $1,000,000.The Company, after signing a definitive agreement for the acquisition of a target business, is required to submit such transaction for stockholder approval. In the event that stockholders owning 30% or more of the shares sold in the Offering vote against the Business Combination and exercise their conversion rights described below, the Business Combination will not be consummated. All of the Companys stockholders prior to the Offering (Founders), have agreed to vote their 2,500,000 founding shares of common stock in accordance with the vote of the majority of the shares voted by all other stockholders of the Company (Public
Stockholders) with respect to any Business Combination. After consummation of a Business Combination, these voting safeguards will no longer be applicable.

With respect to a Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company convert his or her shares. The per share conversion price will equal the amount in the Trust Account, calculated as of two business days prior to the consummation of the proposed Business Combination, divided by the number of shares of common stock held by Public Stockholders at the consummation of the Offering. Accordingly, Public Stockholders holding 2,999,999 shares sold in the Offering may seek conversion of their shares in the event of a Business Combination. Accordingly, a
portion of the proceeds of the Offering (29.999% of the amounts placed in the Trust Account other than those related to deferred underwriters discounts and commissions as described in Note 3) have been classified as common stock subject to possible conversion in the accompanying balance sheet. Such Public Stockholders are entitled to receive their per share interest in the Trust Account (after the deduction of the permissible withdrawals of interest for working capital, income taxes , and loan repayment described above) computed without regard to the shares of common stock held by the Founders prior to the consummation of the Offering.

On the effective date of the Offering (Effective Date), the Companys Certificate of Incorporation was amended (i) to provide that the Company will continue in existence only until 24 months from the Effective Date of the Offering and (ii) to increase the number of authorized shares to 50,000,000. If the Company has not completed a Business Combination by such date, its corporate existence will cease and it will dissolve and liquidate. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Fund assets) will be less than the initial public
offering price per share in the Offering (assuming no value is attributed to the warrants contained in the Units to be offered in the Offering discussed in Note 2).

Income Per Share  Income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period.

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)   NOTES TO UNAUDITED FINANCIAL STATEMENTS

2. Organization and Business Operations   (continued)

The effect of the 10,000,000 outstanding warrants included in the units issued in connection with the Offering and the 2,075,000 outstanding warrants issued in connection with the private placement has not been considered in the diluted income per share calculation since such warrants are contingently exercisable.

New Accounting Pronouncements  In December 2007, the Financial Accounting Standards Board released Statement of Financial Accounting Standards No. 141R, Business Combinations (SFAS 141R) that is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The pronouncement resulted from a joint project between the FASB and the International Accounting Standards Board and continues the movement toward the greater use of fair values in financial reporting. SFAS 141R is expected to significantly
change how future business acquisitions are accounted for and will impact financial statements both on the acquisition date and in subsequent periods.

In December 2007, the Financial Accounting Standards Board released Statement of Financial Accounting Standards No. 160 Non-controlling Interests in Consolidated Financial Statements( SFAS 160) that is effective for annual periods beginning on or after December 15, 2008. The pronouncement resulted from a joint project between the FASB and the International Accounting Standards Board and continues the movement toward the greater use of fair values in financial reporting. Upon adoption of SFAS 160, the Company will re-classify any non-controlling interests as a component of equity.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

3. Initial Public Offering

On October 29, 2007, the Company sold 10,000,000 Units at a price of $8.00 per Unit. Each Unit consists of one share of the Companys common stock and one warrant. Each warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $5.25 commencing on the later of the completion of a Business Combination and 12 months from the Effective Date and expiring four years from the Effective Date. The Company may redeem all of the warrants, at a price of $.01 per warrant upon 30 days notice while the warrants are exercisable, only in the event that the last sale price of the common stock is at least
$11.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given. In accordance with the warrant agreement relating to the warrants to be sold and issued in the Offering, the Company is only required to use its best efforts to maintain the effectiveness of the registration statement covering the warrants. The Company will not be obligated to deliver securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective at the time of exercise. Additionally, in the event that a registration is not effective at the time of exercise, the holder of such warrant shall not be entitled to exercise such warrant and in no event (whether in the case of a registration statement not being effective or otherwise) will the Company be required to net cash settle the warrant exercise. Consequently, the warrants may expire unexercised and unredeemed.

The Company agreed to pay the underwriters in the Offering an underwriting discount of 7.0% of the gross proceeds of the Offering. The underwriters were paid an underwriting discount of 3.0% of the gross proceeds of the Offering at closing. However, the underwriters have agreed that 4.0% of the underwriting discounts will not be payable unless and until the Company completes a Business Combination and have waived their right to receive such payment upon the Companys liquidation if it is unable to complete a Business Combination and to forfeit, on a pro rata basis, to pay converting stockholders (as described in Note 1). The Company has included
$3,200,000 in deferred underwriters discounts and commissions on the accompanying balance sheets.

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)   NOTES TO UNAUDITED FINANCIAL STATEMENTS

4. Deferred Underwriters Discounts and Commissions

Deferred underwriters discounts and commissions at March 31, 2008 were $3,200,000. The underwriters have agreed that 4.0% of the underwriting discounts will not be payable unless and until the Company completes a Business Combination and have waived their right to receive such payment upon the Companys liquidation if it is unable to complete a Business Combination and to forfeit, on a pro rata basis, to pay converting stockholders (as described in Note 1).

5. Commitments and Related Party Transactions

The Company presently occupies office space provided by an affiliate of one of the Founders. This affiliate has agreed that, until the Company consummates a Business Combination, it will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company has agreed to pay such affiliate a total of $7,500 per month for such services commencing on the Effective Date. The Company records this fee as rent expense. For the three months ended March 31, 2008 and the period from May 14, 2007 (inception) through March 31, 2008, the Company recorded $22,500 and
$31,194, respectively, in rent expense under this agreement.

Pursuant to letter agreements which the Founders entered into with the Company and the underwriters, the Founders have waived their right to receive distributions with respect to their founding shares upon the Companys liquidation.

Secure America Acquisition Holdings, LLC, the principal initial stockholder of the Company, purchased a total of 2,075,000 warrants (Founder Warrants) at $1.00 per Warrant (for an aggregate purchase price of $2,075,000) privately from the Company. This purchase took place simultaneously with the consummation of the Offering. All of the proceeds received from this purchase were placed in the Trust Account. The Founder Warrants are identical to the warrants offered in this offering, except that (i) the Founder Warrants are not subject to redemption, (ii) the Founder Warrants may be exercised on a cashless basis while the warrants included
in the units sold in this offering cannot be exercised on a cashless basis, (iii) upon an exercise of the Founder Warrants, the holders of the Founder Warrants will receive unregistered shares of our common stock, and (iv) subject to certain limited exceptions, the Founder Warrants are not transferable until they are released from escrow, as described below, which would only be after the consummation of a Business Combination. The Founder Warrants are differentiated from warrants sold as part of the Units in the Offering through legends contained on the certificates representing the Founder Warrants indicating the restrictions and rights specifically applicable to such Founder Warrants.

Secure America Acquisition Holdings, LLC, the holder of the Founder Warrants, is beneficially owned by two of the Companys independent directors. The Company has determined that the purchase price of $1.00 per Founder Warrant is above the average trading price for warrants of similarly structured blank check companies. Accordingly, the Company believes that the purchase price of the Founder Warrants is greater than the fair value of the warrants included in the Units and, therefore, the Company has not recorded compensation expense upon purchase of the Founder Warrants.

Exercising warrants on a cashless basis means that, in lieu of paying the aggregate exercise price for the shares of common stock being purchased upon exercise of the warrant in cash, the holder forfeits a number of shares issuable upon exercise of the warrant with a market value equal to such aggregate exercise price. Accordingly, the Company will not receive additional proceeds to the extent the Founder Warrants are exercised on a cashless basis.

Warrants included in the Units sold in the Offering are not exercisable on a cashless basis and the exercise price with respect to these warrants will be paid directly to the Company. The Founder Warrants have been placed in an escrow account at Continental Stock Transfer & Trust Company, acting as escrow agent, and will not be released from escrow until the later of (i) one year after the consummation of the Offering and (ii) sixty days after the consummation of the Companys initial Business Combination.

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SECURE AMERICA ACQUISITION CORPORATION (a Corporation in the Development Stage)   NOTES TO UNAUDITED FINANCIAL STATEMENTS

5. Commitments and Related Party Transactions   (continued)

Except for transfers to members of Secure America Acquisition Holdings, LLC, the Founder Warrants are not transferable (except in limited circumstances) or salable by the purchaser until the Company consummates a Business Combination, and are non-redeemable so long as the purchaser or a member transferee holds such warrants. The holders of Founder Warrants and the underlying shares of common stock are entitled to registration rights under an agreement to be signed on the date of the Offering to enable their resale commencing on the date such warrants become exercisable. The Company has elected to make the Founder Warrants non-redeemable in order to
provide the purchaser and its member transferees a potentially longer exercise period for those warrants because they bear a higher risk while being required to hold such warrants until the consummation of a Business Combination. With those exceptions, the Founder Warrants have terms and provisions that are substantially identical to those of the warrants being sold as part of the Units in this Offering.

Prior to their release from escrow, the Founder Warrants may be transferred (i) to persons or entities controlling, controlled by, or under common control with Secure America Acquisition Holdings, LLC, or to any stockholder, member, partner or limited partner of such entity, or (ii) to family members and trusts of permitted assignees for estate planning purposes, or, upon the death of any such person, to an estate or beneficiaries of permitted assignees; in each case, such transferees will be subject to the same transfer restrictions as Secure America Acquisition Holdings, LLC until after the Company completes its initial Business Combination. If the
purchaser or member transferees acquire warrants for their own account in the open market, any such warrants will be redeemable. If the Companys other outstanding warrants are redeemed and the market price of a share of the Companys common stock rises following such redemption, holders of the Founder Warrants could potentially realize a larger gain on exercise or sale of those warrants than is available to other warrant holders, although the Company does not know if the price of its common stock would increase following a warrant redemption. If the Companys share price declines in periods subsequent to the redemption of the warrants and Secure America Acquisition Holdings, LLC or one of its existing members continue to hold the Founder Warrants, the value of the Founder Warrants still held by such persons may also decline.

6. 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.

The agreement with the underwriters prohibits the Company, prior to a Business Combination, from issuing preferred stock which participates in the proceeds of the Trust Account or which votes as a class with the Common Stock on a Business Combination.

7. Deferred Acquisition Costs

Through March 31, 2008, the Company deferred $199,668 of costs in connection with a potential acquisition. If the potential acquisition is abandoned, these costs will be charged to operations.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q includes assumptions concerning our operations, future results, prospects and other 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). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different
from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as may, should, could, would, expect, plan, anticipate, believe, estimate, continue, or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

The following discussion should be read in conjunction with our unaudited financial statements and related notes thereto included elsewhere in this report.

Overview

We were formed on May 14, 2007, as a blank check company for the purpose of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination, one or more domestic or international operating businesses, which we refer to as our initial business combination. Our efforts in identifying a prospective target business will be limited to the homeland security industry, but not businesses that design, build or maintain mission-critical facilities. Mission-critical facilities are those facilities that shelter and support an organization's people, equipment and
data to a level that far exceeds standards for normal facilities. Mission-critical facilities generally serve or house an essential business or government function that must operate absolutely reliably around the clock, 365 days per year, under any circumstances, such as data centers, operation centers, network facilities, server rooms, security operations centers, communications facilities and the infrastructure systems that are critical to their function. Services that may be provided to mission-critical facilities include technology consulting, engineering and design management, construction management, system installations, operations management and facilities management and maintenance. We changed our name from Fortress America Acquisition Corporation II to Secure America Acquisition Corporation on August 6, 2007.

Results of Operations

Three month period ended March 31, 2008

For the three months ended March 31, 2008, we had a total income of $559,182, consisting of net interest income on investments held in trust and on cash balances maintained.

Total expenses for the three months ended March 31, 2008 were $296,116, consisting of $132,480 in operating expenses and $163,636 in income tax expense. We had net income of $263,066 for this period.

Period from May 14, 2007 (inception) through March 31, 2008

For the period from May 14, 2007 (inception) through September 30, 2007, we had a total income of $1,105,559, consisting of net interest income on investments held in trust and on cash balances maintained.

Total expenses for this period were $563,750, consisting of $227,790 in formation and operating expenses and $335,960 in income tax expense. We had net income of $541,809 for this period.

Liquidity and Capital Resources

Prior to the consummation of our initial public offering, our liquidity needs were satisfied through receipt of $25,000 in stock subscriptions from our initial stockholders and a loan of $150,000 from Secure America Acquisition Holdings, LLC.

The net proceeds from (i) the sale of the units in our initial public offering, after deducting offering expenses of approximately $713,000 (of which approximately $88,000 was paid from interest earned on

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amounts held in the trust account) and underwriting discounts and commissions of approximately $5,600,000, (ii) the sale of the founder warrants in a private placement which occurred immediately prior to the closing of our initial public offering for an aggregate purchase price of $2,075,000 and (iii) the $150,000 loan made to us by Secure America Acquisition Holdings, LLC, were approximately $76,000,000. This entire amount was placed in the trust account. An additional amount equal to 4.0% of the gross proceeds of our initial public offering, or $3,200,000, was also placed in the trust account and will be used to pay the underwriters a deferred fee
(or paid to public stockholders who elect to convert their common stock in connection with our initial business combination, as the case may be) upon the consummation of our initial business combination, and will not be available for our use to acquire a target business. We expect that most of the amounts 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 a business combination. We will use substantially all of the net proceeds of our initial public offering not in the trust account to acquire, or acquire control of, a target business, including identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the amounts 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.

Up to an aggregate of $1,000,000 of interest earned (net of taxes) on the trust account balance may be released to us to fund working capital requirements and additional funds may be released to fund our income tax obligations. We believe that these amounts will be sufficient to allow us to operate for at least the next 24 months, assuming that a business combination is not consummated during that time. Over this time period, we anticipate making the following expenditures:



          approximately $400,000 of expenses for legal, accounting and other expenses attendant to the due diligence investigations, structuring and negotiation of a business combination;

          approximately $100,000 of expenses for the due diligence and investigation of a target business;

          approximately $150,000 of expenses in legal and accounting fees relating to our SEC reporting obligations;

          approximately $180,000 of expenses in fees relating to our office space and certain general and administrative services; and

          approximately $170,000 for general working capital that will be used for miscellaneous expenses and reserves, including approximately $130,000 for director and officer liability and other insurance premiums, finders fees, consulting fees or other similar compensation, potential deposits, down payments or funding of a no-shop provision with respect to a particular business combination.An additional $150,000 of interest earned (net of taxes) on the trust account balance was permitted to be released to us to repay the loan made to us by Secure America Acquisition Holdings, LLC.

Through March 31, 2008, we have drawn $775,000 of the funds that may be used by us from the trust account to fund working capital requirements, to fund income tax payments and to repay loans made to us.

We do not believe we will need additional financing following our initial public offering in order to meet the expenditures required for operating our business prior to our initial business combination. We will need to obtain additional financing to the extent such financing is required to consummate a business combination or because we become obligated to convert into cash a significant number of shares from dissenting stockholders, in which case we may issue additional securities or incur debt in connection with such business combination. Following a business combination, if cash on hand is insufficient, we may need to obtain additional financing
in order to meet our obligations.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements, financings or other relationships with unconsolidated entities or other persons, also known as special purpose entities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable as we are a smaller reporting company.

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Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officers and principal financial officer, of the effectiveness of our disclosure controls and procedures as of March 31, 2008. Based on that evaluation, our principal executive officers and principal financial officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there has been no significant 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 as such term is defined in Rules 13a-15 and 15d-15 of the Exchange Act.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

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 Securities Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits



Exhibit

          

          Description31.1

          

          Certification of the Companys Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.31.2

          

          Certification of the Companys Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.31.3

          

          Certification of the Companys Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.32.1

          

          Certification of the Companys 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 the Companys Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.32.3

          

          Certification of the Companys Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



SECURE AMERICA ACQUISITION CORPORATIONDate: May 14, 2008

          

          By:/s/ C. Thomas McMillenC. Thomas McMillen Chairman and Co-Chief Executive Officer (Principal Executive Officer and Authorized Officer)Date: May 14, 2008

          

          By:/s/ Harvey L. WeissHarvey L. Weiss Co-Chief Executive Officer(Principal Executive Officer and Authorized Officer)

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