UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-K
 
 [X]           Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the
fiscal year ended July 31, 2008
 
 [_]           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: 001-33502
 _____________________
 
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (Exact
name of registrant as specified in its charter)
 ___________________
 
 Delaware
              
              20-3483933(State
      or other jurisdiction of
              
              (I.R.S.
      Employerincorporation
      or organization)
              
              Identification
      No.)20
      Marshall Street #104South
      Norwalk, CT
              
              06854(Address
      of principal executive offices)
              
              (Zip
      code)
 
 Registrant’s
telephone number, including area code:  (203)
663-4200
 
 Securities
registered pursuant to Section 12(b) of the Exchange Act:
 
 Title
      of each class:
              
              Name
      of exchange on which registered:Units,
      each consisting of common stock, par value $0.0001 per share and one
      warrant
              
              American
      Stock ExchangeCommon
      Stock, par value $0.0001 per share
              
              American
      Stock ExchangeWarrants
              
              American
      Stock Exchange
 
 Securities
registered pursuant to Section 12(g) of the Exchange Act:
 
 None
 (Title
of Class)
 
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes [  ] No [X]
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes [  ] No [X]
  
 
 
 
 
  1
  
 
 
  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 [ ]
  Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X ]
  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 and large accelerated
filer” in Rule 12b-2 of the Exchange Act.  (Check one):
  Large
      Accelerated Filer  [  ]
              Accelerated
      Filer  [ X ]
              Non-Accelerated
      Filer  [ ]
              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 [ ]
   As of
January 31, 2008, the aggregate market value of the registrant’s voting and
non-voting common equity held by non-affiliates of the registrant was$213,230,234.80, based on a closing price of
$7.54 at January 31, 2008.
  The
number of outstanding shares of the registrant’s Common Stock, $.0001 par value,
as of October 3, 2008was 34,097,500.
  
 
 
 
  2
  
 
 STONELEIGH
PARTNERS ACQUISITION CORP.
 ANNUAL
REPORT ON FORM 10-K
 FOR
THE FISCAL YEAR ENDED JULY 31, 2008
 INDEX
 
  
 Page
No.
  PART
      I:
              5ITEM.
      1  BUSINESS
              5ITEM
      1A.  RISK FACTORS
              13ITEM
      1B.  UNRESOLVED STAFF COMMENTS
              20ITEM
      2.  PROPERTIES
              20ITEM
      3.  LEGAL PROCEEDINGS
              20ITEM
      4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
              21PART
      II
              21ITEM
      5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
      MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
              21ITEM
      6.  SELECTED FINANCIAL DATA
              22ITEM
      7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS
              23ITEM
      7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
      RISKS
              25ITEM
      8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
              25ITEM
      9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE
              25ITEM
      9A.  CONTROLS AND PROCEDURES
              25ITEM
      9B.  OTHER INFORMATION
              27PART
      III
              27ITEM
      10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE
      REGISTRANT
              27ITEM
      11.  EXECUTIVE COMPENSATION
              32ITEM
      12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT RELATED STOCKHOLDER MATTERS
              33
 
  3
 
 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS AND DIRECTOR INDEPENDENCE
              35ITEM
      14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
              36PART
      IV
              37ITEM
      15.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON
      FORM 8-K
              371.           Financial
      Statements
              372.           Exhibits
              37
                                
  4
  
 PART I
 
  ITEM.
1  BUSINESS
  CAUTIONARY
NOTE CONCERNING FORWARD-LOOKING STATEMENTS:
  Certain
statements in this Form 10-K constitute forward-looking statements for purposes
of the securities laws. Forward-looking statements include all statements that
do not relate solely to the historical or current facts, and can be identified
by the use of forward looking words such as “may”, “believe”, “will”, “expect”,
“expected”, “project”, “anticipate”, “anticipates”, “estimates”, “plans”,
“strategy”, “target”, “prospects” or “continue”. These forward looking
statements are based on the current plans and expectations of our management and
are subject to a number of uncertainties and risks that could significantly
affect our current plans and expectations, as well as future results of
operations and financial condition and may cause our actual results,
performances or achievements to be materially different from any future results,
performances or achievements expressed or implied by such forward-looking
statements. This Form 10-K contains important information as to risk factors
above. In making these forward-looking statements, we claim the protection of
the safe-harbor for forward-looking statements contained in the Private
Securities Reform Act of 1995. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to have been correct. We do not
assume any obligation to update these forward-looking statements to reflect
actual results, changes in assumptions, or changes in other factors affecting
such forward-looking statements.
  The term
“public stockholders” means holders of common stock sold in our initial public
offering.  The term “initial stockholders” means our officers,
directors and senior administrators and certain of their affiliates who acquired
securities prior to our initial public offering or in the private placement that
closed simultaneously with our initial public offering.
  AVAILABLE
INFORMATION
  This
report may be read or copied at the SEC’s Public Reference Room at 100 F Street,
NE, Washington, DC 20549 or atwww.sec.gov
.. Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330.
  Introduction
  We are a
Delaware blank check company incorporated under the laws of the State of
Delaware on September 9, 2005, to serve as a vehicle to effect a merger, capital
stock exchange, asset acquisition or other similar business combination with an
operating business. Our efforts in identifying a prospective target business are
not limited to a particular industry, although our management will focus on
businesses having a majority of their assets, based on either a historical
balance sheet valuation or a fair market valuation, represented by real estate
or other physical assets, or which utilize these types of assets to derive at
least a majority of their revenue.
 
 
 On June 5, 2007, we consummated our
initial public offering of 25,000,000 units.  Each unit consists of
one share of common stock, $.0001 par value per share and one warrant to
purchase one share of common stock.  The units were sold at an
offering price of $8.00 per unit.  On June 12, 2007, we consummated
the closing of an additional 2,847,500 units.  Our initial public
offering generated gross proceeds of $222,780,000.  After deducting
the underwriting discounts and commissions and the offering expenses, the total
net proceeds to us from the initial public offering were approximately $220.7
million of which $220,439,650 was deposited into the trust account and the
remaining proceeds (approximately $300,000) became available to be used to
provide for business, legal and accounting due diligence on prospective business
combinations and continuing general and administrative expenses. Through July
31, 2008, net cash used to pay formation and operating costs was
$767,698.  The net proceeds deposited into the trust fund remain on
deposit in the trust fund earning interest. Of the interest earned to date,
$7,218,294 has been distributed to us of which $4,242,303 was used to pay income
and franchise taxes in accordance with the terms of our investment management
trust agreement.  As of July 31, 2008, there was $223,183,301 held in
the trust fund.
  Effecting
a business combination
  General
  We are
not presently engaged in, and we will not engage in, any substantive commercial
business until we consummate a business combination.  We intend to
utilize our cash, including the funds held in trust, our capital stock, debt or
a combination of these in effecting a business combination. A business
combination may involve the acquisition of, or merger with, a company which does
not need substantial additional capital but which desires to establish a public
trading market for its shares, while avoiding what it may deem to be adverse
consequences of undertaking a public offering itself. These transactions include
time delays, significant expense, loss of voting control and compliance with
various federal and state securities laws. In the alternative, we may seek to
consummate a business combination with a company that may be financially
unstable or in its early stages of development or growth, which would subject us
to the numerous risks inherent in such companies. We are currently in the
process of identifying and evaluating targets for an initial transaction. We
have not entered into any definitive business combination
agreement.
  5
 We
have not identified a target business or target industry.
  Although
we initially focused on businesses having a majority of their assets, based on
either a historical balance sheet valuation or a fair market valuation,
represented by real estate or other physical assets, or which utilize these
types of assets to derive at least a majority of their revenue, we are not
required to limit our search to any target business or target industry for a
business combination.
  Subject to the limitations that a target business or the controlling interest
(but not less than a majority of the voting interest) therein that we acquire,
have a fair market value of at least 80% of our net assets at the time of the
acquisition, as described below in more detail, we have virtually unrestricted
flexibility in identifying and selecting a prospective acquisition candidate. We
have not established any other specific attributes or criteria (financial or
otherwise) for prospective target businesses. There is no basis for our
investors to evaluate the possible merits or risks of the particular industry in
which we may ultimately operate or the target business with which we may
ultimately complete a business combination. To the extent we effect a business
combination with a financially unstable company or an entity in its early stage
of development or growth, including entities without established records of
sales or earnings, we may be affected by numerous risks inherent in the business
and operations of financially unstable and early stage or potential emerging
growth companies. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will
properly ascertain or assess all significant risk factors.
  Sources
of target businesses
  We
believe that there are numerous acquisition candidates for us to target. We have
generated a list of potential target opportunities from a host of different
sources. We continue to add potential target opportunities to this
list.  We have examined the candidates comprising the list of
potential business combinations through analysis of available information and
general due diligence to identify inefficiencies or high cost structures within
such enterprises. We plan to narrow our search for potential target
opportunities through this due diligence process, focusing on what we determine
are the most promising businesses that can most readily benefit from efforts to
improve operating efficiencies and cost structures. We anticipate that target
business candidates will be brought to our attention from various unaffiliated
sources, including securities broker-dealers, investment bankers, venture
capitalists, bankers and other members of the financial community. Target
businesses may be brought to our attention by such unaffiliated sources as a
result of being solicited by us through calls, meetings or mailings. These
sources may also introduce us to target businesses they think we may be
interested in on an unsolicited basis, since many of these sources will have
read our public filings and reports and know the types of businesses we are
targeting. Our initial stockholders, including our officers and directors, and
their affiliates may also bring to our attention target business candidates that
they become aware of through their business contacts as a result of formal or
informal inquiries or discussions they may have, as well as attending trade
shows or conventions. A professional firm that specializes in business
acquisitions may bring to our attention a potential business combination, in
which event we may pay a finder’s fee or other compensation to be determined in
an arm’s length negotiation based on the terms of the transaction. In no event,
however, will any of our initial stockholders, including our officers,
directors, or senior advisors or any entity with which they are affiliated, be
paid any finder’s fee, consulting fee or other compensation prior to, or for
services they render in order to effectuate, the consummation of a business
combination. If we determine to enter into a business combination with a target
business that is affiliated with our initial stockholders, officers, directors
or senior advisors or their affiliates, we would do so only if we obtained an
opinion from an independent investment banking firm indicating that the business
combination is fair to our unaffiliated stockholders from a financial point of
view.
  Selection
of a target business and structuring of a business combination
  Subject
to the requirement that our initial business combination must be with a target
business,  or  of
a  controlling  interest (but not less than a majority of
the voting interest) therein,  that has a fair market value that is
equal to at least 80% of our net assets at the time of such acquisition, our
management has virtually unrestricted flexibility in identifying and selecting a
prospective target business. We have not established any other specific
attributes or criteria (financial or otherwise) for prospective target
businesses, though our focus is on middle market companies with significant real
estate or other physical assets. Moreover, there is no limitation on our ability
to raise additional funds through the sale of our securities or through loan
transactions that would, if we were successful in raising such funds, enable us
to acquire a target company, or controlling interest (but not less than a
majority of the voting interest) therein, with a fair market value significantly
in excess of 80% of our net assets.
  In
evaluating a prospective target business, our management will consider, among
other factors, the following:
  •  financial
condition and results of operation;
  •  growth
potential;
  •  experience
and skill of management and availability of additional personnel;
  •  capital
requirements;
  6
 •  competitive
position;
  •  barriers
to entry;
  •  stage
of development of the products, processes or services;
  •  degree
of current or potential market acceptance of the products, processes or
services;
  •  proprietary
features and degree of intellectual property or other protection of the
products, processes or services;
  •  regulatory
environment of the industry; and
  •  costs
associated with effecting the business combination.
  The above
criteria are not intended to be exhaustive. Any evaluation relating to the
merits of a particular business combination is based, to the extent relevant, on
the above factors as well as other considerations deemed relevant by our
management in effecting a business combination consistent with our business
objective. In evaluating a prospective target business, we conduct an extensive
due diligence review which encompasses, among other things, meetings with
incumbent management and inspection of facilities, as well as review of
financial and other information made available to us. This due diligence review
is conducted either by our management or by unaffiliated third parties we may
engage. To date, we have not engaged third parties to conduct our due diligence
and we have no current intent to engage any such third parties. We also seek to
have all prospective target businesses execute agreements with us waiving any
right, title, interest or claim of any kind in or to any monies held in the
trust. If any prospective target business refuses to execute such agreement, it
is unlikely we would continue negotiations with such target
business.
 
 We will
endeavor to structure a business combination so as to achieve the most favorable
tax treatment to us, the target business and both companies’ stockholders. We
cannot assure you, however, that the Internal Revenue Service or appropriate
state tax authorities will agree with our tax treatment of the business
combination.
  The time
and costs required to select and evaluate a target business and to structure and
complete the business combination cannot presently be ascertained with any
degree of certainty. Any costs incurred with respect to the identification and
evaluation of a prospective target business with which a business combination is
not ultimately completed will result in a loss to us and reduce the amount of
capital available to otherwise complete a business combination.
  We have
engaged HCFP/Brenner Securities, the representative of the underwriters of our
initial public offering, and Pali Capital, one of the underwriters of our
initial public offering, on a non-exclusive basis, to act as our investment
bankers to assist us in obtaining approval of a business combination (but not
for purposes of locating potential target candidates for our business
combination). We will pay a cash fee for these services at the closing of our
business combination of $7,400,000. We believe that the fee is reasonable in
light of the services we expect to be provided to us, the likely size of a
business combination and the fact that these entities may provide services in
connection with potential business combinations which may not be
completed.
  Fair
market value of target business
  The
initial target business, or controlling interest (but not less than a majority
of the voting interest) therein, that we acquire must have a fair market value
equal to at least 80% of our net assets at the time of such acquisition,
although we may acquire a target business whose fair market value significantly
exceeds 80% of our net assets. We can also satisfy the requirement that the
business combination have a fair market value at least equal to 80% of our net
assets in a business combination where we acquire less than a 100% interest in
the target business, provided that the fair market value of the interest in such
business or businesses is at least equal to 80% of our net assets at the time of
such acquisition. We may pay an amount in excess of the proceeds of the trust
fund to acquire a target business. Therefore, we may seek to raise additional
funds through the sale of our securities or through loan arrangements if such
funds are required to consummate such a business combination, although we have
not engaged or retained, had any discussions with, or entered into any
agreements with, any third party regarding any such potential financing
transactions. If we were to seek such additional funds, any such arrangement
would only be consummated simultaneously with our consummation of a business
combination. The fair market value of such business will be determined by our
board of directors based upon standards generally accepted by the financial
community, such as actual and potential sales, earnings and cash flow and book
value. If our board is not able to determine independently that the target
business has a sufficient fair market value, we will obtain an opinion from an
unaffiliated, independent investment banking firm that is a member of the
Financial Industry Regulating Authority with respect to the satisfaction of such
criteria. Since any opinion, if obtained, would merely state that the fair
market value of the target business meets the 80% of net assets threshold, it is
not anticipated that copies of such opinion would be distributed to our
stockholders, although copies will be provided to stockholders who request it.
We will not be required to obtain an opinion from an investment banking firm as
to the fair market value if our board of directors independently determines that
the target business has sufficient fair market value.
  In the
event we acquire a controlling interest in a target business or businesses, the
portion of such business that we acquire shall represent at least a majority of
the voting interest and must have a fair market value equal to at least 80% of
our net assets. Such portion will be calculated based on a valuation of 100% of
such target business or businesses. The portion of such business or businesses
that we will acquire shall be based on the portion of assets, stock or other
interest we acquire.
  7
 Lack
of business diversification
  While we
may seek to effect business combinations with more than one target business, our
initial business combination must be with a target business which satisfies the
minimum valuation standard at the time of such acquisition, as discussed above.
Consequently, initially we have the ability to complete only a single business
combination, although this may entail the simultaneous acquisitions of several
closely related operating businesses. If we acquire a single operating business,
the prospects for our success may be entirely dependent upon the future
performance of such single business. Unlike other entities which may have the
resources to complete several business combinations of entities operating in
multiple industries or multiple areas of a single industry, it is probable that
we will not have the resources to diversify our operations or benefit from the
possible spreading of risks or offsetting of losses. By consummating a business
combination with only a single entity, our lack of diversification
may:
  •    subject
us to numerous economic, competitive and regulatory developments, any or all of
which may have a substantial adverse impact upon the particular industry in
which we may operate subsequent to a business combination, and
  •    result
in our dependency upon the development or market acceptance of a single or
limited number of products, processes or services.
  Additionally,
in the event our business combination involves the simultaneous acquisition of
several related businesses and such businesses are owned by different sellers,
we will need for each of such sellers to agree that our purchase of its business
is contingent on the simultaneous closings of the other acquisitions, which may
make it more difficult for us, and delay our ability, to complete the business
combination. With multiple acquisitions, we could also face additional risks,
including additional burdens and costs with respect to possible multiple
negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the
operations and services or products of the acquired companies in a single
operating business.
 
 Limited
ability to evaluate the target business’ management
  Although
we scrutinize closely the management of a prospective target business when
evaluating the desirability of effecting a business combination, we cannot
assure you that our assessment of the target business’ management will prove to
be correct. In addition, we cannot assure you that the future management will
have the necessary skills, qualifications or abilities to manage a public
company intending to embark on a program of business development. Furthermore,
because there are many factors which can influence the decision of each member
of management’s decision whether to remain with us following a business
combination, some of which may be personal to each individual and therefore
cannot be anticipated by us, the future role of our officers and directors, if
any, in the target business cannot presently be stated with any certainty.
Although we expect Messrs. Engle and Coyne, our executive officers, to remain
with us in senior management or advisory positions following a business
combination, it is possible that some of them will not devote their full efforts
to our affairs subsequent to a business combination. Moreover, they would only
be able to remain with the company after the consummation of a business
combination if they are able to negotiate employment or consulting agreements in
connection with the business combination. Such negotiations would take place
simultaneously with the negotiation of the business combination and could
provide for such individuals to receive compensation in the form of cash
payments and/or our securities for services they would render to our company
after the consummation of the business combination. While the personal and
financial interests of such individuals may cause them to have a conflict of
interest in determining whether a potential business combination is most
appropriate for us and influence their motivation in identifying and selecting a
target business, the ability of such individuals to remain with our company
after the consummation of a business combination will not be the determining
factor in our decision as to whether or not we will proceed with any potential
business combination. Additionally, we cannot assure you that our officers and
directors will have significant experience or knowledge relating to the
operations of the particular target business.
  Following
a business combination, we may seek to recruit additional managers to supplement
the incumbent management of the target business. We cannot assure you that we
will have the ability to recruit additional managers, or that any such
additional managers will have the skills, knowledge or experience necessary to
enhance the incumbent management.
  Provisions
of our charter relating to a business combination
  Article
Seventh of our charter provides that certain provisions that apply to a business
combination may not be amended, including those provisions relating to: the
requirement that public stockholders approve the business combination;
conversion rights afforded to public stockholders; our inability to consummate a
business combination if holders of 30% or more of the shares of common stock
sold in our initial public offering exercise their conversion rights; the
requirement that our initial business combination be a target business, or a
controlling interest (but not less than a majority of the voting interest)
therein, whose fair market value be at least 80% of our net assets at the time
of the acquisition; and the distribution of the trust fund if a business
combination does not occur within the specified time periods. However, these
restrictions on charter amendments may not be enforceable under Delaware law.
Nevertheless, we view these business combination procedures in our charter as
obligations to our investors and we will not propose any amendment to these
procedures to our stockholders.
 
 8
 Opportunity
for stockholder approval of business combination
  Prior to
the completion of a business combination, we will submit the transaction to our
stockholders for approval, even if the nature of the acquisition would not
ordinarily require stockholder approval under applicable state law. The
“completion” of a business combination means the closing of a transaction in
which we acquire, merge or otherwise combine with a target business. The
execution of a definitive agreement does not constitute the “completion” of a
business combination. In connection with any such transaction, we will also
submit to our stockholders for approval a proposal to amend our amended and
restated certificate of incorporation to provide for our corporate life to
continue perpetually following the completion of such business combination. Any
vote to extend our corporate life to continue perpetually following the
completion of a business combination will be taken only if the business
combination is approved. We will only consummate a business combination if
stockholders vote both in favor of such business combination and our amendment
to extend our corporate life.
  In
connection with seeking stockholder approval of a business combination, we will
furnish our stockholders with proxy solicitation materials prepared in
accordance with the Securities Exchange Act of 1934, which, among other matters,
will include a description of the operations of the target business and audited
historical financial statements of the business.
  In
connection with the vote required for any business combination, all of our
initial stockholders, including all of our officers, directors and senior
advisors, have agreed to vote their respective initial shares in accordance with
the majority of the shares of common stock voted by the public
stockholders.  This voting arrangement shall not apply to shares
included in units purchased following our initial public offering in the
aftermarket by any of our initial stockholders, officers, directors or senior
advisors, including any shares included within the units purchased by each of
Gary D. Engle, James A. Coyne, Jonathan Davidson and Brian Kaufman under an
agreement with HCFP/Brenner Securities, pursuant to which such individuals, or
entities they control, will place limit orders for up to an aggregate of $15
million of our units, commencing 30 calendar days after we file a preliminary
proxy statement seeking approval of our stockholders for a business combination
and ending 30 days thereafter. Accordingly, they may vote the shares included in
such units any way they choose, including in connection with a vote on a
business combination.
  We will
not proceed with a business combination if the holders of a majority of the
shares of common stock sold in our initial public offering cast at the meeting
to approve the business combination fail to vote in favor of such business
combination or if stockholders owning 30% or more of the outstanding shares of
common stock sold in our initial public offering both exercise their conversion
rights and vote against the business combination.
  Conversion
rights
  At the
time we seek stockholder approval of any business combination, we will offer
each public stockholder the right to have his, her or its shares of common stock
converted to cash if he, she or it votes against the business combination and
the business combination is approved and completed. Our initial stockholders do
not have such conversion rights with respect to any shares of common stock owned
by them, directly or indirectly, whether included in their initial shares or
purchased by them in our initial public offering or in the aftermarket. The
actual per-share conversion price will be equal to the amount in the trust fund
inclusive of any interest (net of taxes and interest amounts released to us)
calculated as of two business days prior to the proposed consummation of the
business combination, divided by the number of shares sold in our initial public
offering. Without taking into account any interest earned on the trust fund, the
per-share conversion price was $8.01 as of July 31, 2008, or $0.01 more than the
per-unit offering price of $8.00.
 
 Public
stockholders wishing to exercise their conversion rights must (i) vote against
the proposed business combination and (ii) demand that we convert their shares
into cash. Additionally, we may require public stockholders to tender their
certificates to our transfer agent prior to the meeting or to deliver their
shares to the transfer agent electronically using Depository Trust Company’s
DWAC (Deposit/Withdrawal At Custodian) System. The proxy solicitation materials
that we will furnish to stockholders in connection with the vote for any
proposed business combination will indicate whether we are requiring
stockholders to satisfy such certification and delivery requirements. The
requirement for physical or electronic delivery prior to the meeting ensures
that a converting holder’s election to convert is irrevocable once the business
combination is approved.
  Any
request for conversion, once made, may be withdrawn at any time up to the date
of the meeting. If a stockholder delivered his certificate for conversion and
subsequently decided prior to the meeting not to elect conversion, he may simply
request that the transfer agent return the certificate (physically or
electronically). It is anticipated that the funds to be distributed to
stockholders entitled to convert their shares who elect conversion will be
distributed promptly after completion of a business combination. Any public
stockholder who converts his, her or its stock into his, her or its share of the
trust fund still has the right to exercise any warrants they still
hold.
  If a vote
on our initial business combination is held and the business combination is not
approved, we may continue to try to consummate a business combination with a
different target until May 31, 2009. If the initial business combination is not
approved or completed for any reason, then public stockholders voting against
our initial business combination who exercised their conversion rights would not
be entitled to convert their shares of common stock into a pro rata share of the
aggregate amount then on deposit in the trust account. In such case, if we have
required public stockholders to tender their certificates prior to the meeting,
we will promptly return such certificates to the tendering public stockholder.
Public stockholders would be entitled to receive their pro rata share of the
aggregate amount on deposit in the trust account only in the event that the
initial business combination they voted against was duly approved and
subsequently completed, or in connection with our liquidation.
  9
 We will
not complete any business combination if public stockholders owning 30% or more
of the shares sold in our initial public offering, both vote against the
business combination and exercise their conversion rights. Accordingly, it is
our understanding and intention in every case to structure and consummate a
business combination in which approximately 29.99% of the public stockholders
may exercise their conversion rights and a business combination will still go
forward. We believe a 30% threshold is appropriate in order to reduce the
likelihood that a small group of investors holding a large block of our stock
will be able to stop us from completing a business combination that is otherwise
approved by a large majority of our public stockholders. As this is unfair and
detrimental to the vast majority of our public stockholders, we determined the
higher conversion threshold was appropriate.
  Liquidation
if no business combination
  Our
amended and restated certificate of incorporation provides that we will continue
in existence only until May 31, 2009. This provision may not be amended except
in connection with the consummation of a business combination. If we have not
completed a business combination by such date, our corporate existence will
cease except for the purposes of winding up our affairs and liquidating,
pursuant to Section 278 of the Delaware General Corporation Law. This has the
same effect as if our board of directors and stockholders had formally voted to
approve our dissolution pursuant to Section 275 of the Delaware General
Corporation Law.  Accordingly, limiting our corporate existence to a
specified date as permitted by Section 102(b)(5) of the Delaware General
Corporation Law removes the necessity to comply with the formal procedures set
forth in Section 275 (which would have required our board of directors and
stockholders to formally vote to approve our dissolution and liquidation and to
have filed a certificate of dissolution with the Delaware Secretary of State).
We view this provision terminating our corporate life by May 31, 2009 as an
obligation to our stockholders and will not take any action to amend or waive
this provision to allow us to survive for a longer period of time except in
connection with the consummation of a business combination.
 
 If we are
unable to complete a business combination by May 31, 2009, we will distribute to
all of our public stockholders, in proportion to their respective equity
interests, an aggregate sum equal to the amount in the trust account, inclusive
of any interest, plus any remaining net assets (subject to our obligations under
Delaware law to provide for claims of creditors as described below). We
anticipate notifying the trustee of the trust account to begin liquidating such
assets promptly after such date and anticipate it will take no more than 10
business days to effectuate such distribution. Our initial stockholders have
waived their rights to participate in any liquidation distribution with respect
to their initial shares. There will be no distribution from the trust account
with respect to our warrants, which will expire worthless. We will pay the costs
of liquidation from our remaining assets outside of the trust account. If such
funds are insufficient, our chief executive officer and chief financial officer
have agreed to advance us the funds necessary to complete such liquidation
(currently anticipated to be no more than approximately $15,000) and have agreed
not to seek repayment of such expenses.
  If we
were to expend all of the net proceeds generated by our initial public offering,
other than the proceeds deposited in the trust account, and without taking into
account interest, if any, earned on the trust account, the initial per-share
liquidation price would be approximately $7.94. As of July 31, 2008, the per
share amount held in the trust account, including accrued interest, was $8.01.
The proceeds deposited in the trust account could, however, become subject to
the claims of our creditors (which could include vendors and service providers
we have engaged to assist us in any way in connection with our search for a
target business and that are owed money by us, as well as target businesses
themselves) which could have higher priority than the claims of our public
stockholders. Each of Messrs. Engle and Coyne have agreed that they will be
personally liable to ensure that the proceeds in the trust fund are not reduced
by the claims of target businesses or of vendors or other entities that are owed
money by us for services rendered or contracted for or products sold to us and
that have not executed an agreement waiving any right, title, interest or claim
of any kind in or to any monies held in the trust. We have questioned these
individuals and reviewed their financial information and believe that each of
these individuals has a substantial net worth. As a result, we believe that
these individuals will be able to satisfy their indemnification obligations.
However, we cannot assure you that these individuals will be able to satisfy
those obligations. Accordingly, the per-share liquidation price could be reduced
due to claims of creditors.
  A public
stockholder is entitled to receive funds from the trust fund only in the event
we do not complete a business combination within the applicable time period or
if the public stockholder elected to convert his, her or its shares into cash
upon our completion of a business combination that the public stockholder voted
against and such business combination is actually completed by us. In no other
circumstances shall a public stockholder have any right or interest of any kind
to or in the trust fund.
  10
 Under the Delaware General Corporation Law, stockholders may be held liable for
claims by third parties against a corporation to the extent of distributions
received by them in a dissolution. If the corporation complies with certain
procedures set forth in Section 280 of the Delaware General Corporation Law
intended to ensure that it makes reasonable provision for all claims against it,
including a 60-day notice period during which any third-party claims can be
brought against the corporation, a 90-day period during which the corporation
may reject any claims brought, and an additional 150-day waiting period before
any liquidating distributions are made to stockholders, any liability of
stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to
the stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. However, as stated above, it is our
intention to make liquidating distributions to our stockholders as soon as
reasonably possible after May 31, 2009 and, therefore, we do not intend to
comply with those procedures. As such, our stockholders could potentially be
liable for any claims to the extent of distributions received by them (but no
more) and any liability of our stockholders may extend well beyond the third
anniversary of such date. Because we will not be complying with Section 280,
Section 281(b) of the Delaware General Corporation Law requires us to adopt a
plan that will provide for our payment, based on facts known to us at such time,
of (i) all existing claims, (ii) all pending claims and (iii) all claims that
may be potentially brought against us within the subsequent 10 years.
Accordingly, we would be required to provide for any claims of creditors known
to us at that time or those that we believe could be potentially brought against
us within the subsequent 10 years prior to our distributing the funds in the
trust account to our public stockholders. However, because we are a blank check
company, rather than an operating company, and our operations are limited to
searching for prospective target businesses to acquire, the only likely claims
to arise would be from our vendors and service providers (such as accountants,
lawyers and investment bankers) and potential target businesses. As described
above, in accordance with our obligations contained in our underwriting
agreement, we attempt to have all vendors, service providers and prospective
target businesses execute agreements with us waiving any right, title, interest
or claim of any kind they may have in or to any monies held in the trust
account. We therefore believe that any necessary provision for creditors will be
reduced and should not have a significant impact on our ability to distribute
the funds in the trust account to our public stockholders. Nevertheless, we
cannot assure you of this fact as there is no guarantee that vendors, service
providers and prospective target businesses will execute such agreements. Nor is
there any guarantee that, even if they execute such agreements with us, they
will not seek recourse against the trust account. A court could also conclude
that such agreements are not legally enforceable.  As a result, if we
liquidate, the per-share distribution from the trust account could be reduced
due to claims or potential claims of creditors.
  If we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance”. As a result, a
bankruptcy court could seek to recover all amounts received by our stockholders.
Furthermore, because we intend to distribute the proceeds held in the trust
account to our public stockholders promptly after May 31, 2009, this may be
viewed or interpreted as giving preference to our public stockholders over any
potential creditors with respect to access to or distributions from our assets.
Furthermore, our board may be viewed as having breached their fiduciary duties
to our creditors and/or may have acted in bad faith, and thereby exposing itself
and our company to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors. We cannot
assure you that claims will not be brought against us for these
reasons.
  Competition
  In
identifying, evaluating and selecting a target business, we may encounter
intense competition from other entities having
a business objective similar to ours.  As of
September 1, 2008, there were 56 blank check companies in the United States with
more than $11.3 billion in trust that are seeking to carry out a business plan
similar to our business plan and there are likely to be more blank check
companies filing registration statements for initial public offerings after we
file this report and prior to the completion of a business combination.
Additionally, we are subject to competition from other companies looking to
expand their operations through the acquisition of a target business. Many of
these entities are well established and have extensive experience identifying
and effecting business combinations directly or through affiliates. Many of
these competitors possess greater technical, human and other resources than us
and our financial resources are relatively limited when contrasted with those of
many of these competitors. While we believe there are numerous potential target
businesses that we could acquire with the net proceeds of our initial public
offering, our ability to compete in acquiring certain sizable target businesses
are limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of a target
business. Further:
  •   our
obligation to seek stockholder approval of a business combination may delay the
completion of a transaction;
  •   our
obligation to convert into cash shares of common stock held by our public
stockholders if such holders both vote against the business combination and also
seek conversion of their shares may reduce the resources available to us for a
business combination; and
  •   our
outstanding warrants and option, and the future dilution they potentially
represent, may not be viewed favorably by certain target
businesses.
  Any of
these factors may place us at a competitive disadvantage in successfully
negotiating a business combination. Our management believes, however, that our
status as a public entity and potential access to the United States public
equity markets may give us a competitive advantage over privately-held entities
having a similar business objective as ours in acquiring a target business on
favorable terms.
  11
 If we
succeed in effecting a business combination, there will be, in all likelihood,
intense competition from competitors of the target business. In particular,
certain industries which experience rapid growth frequently attract an
increasingly larger number of competitors, including competitors with
increasingly greater financial, marketing, technical and other resources than
the initial competitors in the industry. The degree of competition
characterizing the industry of any prospective target business cannot presently
be ascertained. We cannot assure you that, subsequent to a business combination,
we will have the resources to compete effectively, especially to the extent that
the target business is in a high-growth industry.
  Facilities
  We
maintain our executive offices at 20 Marshall Street, Suite 104, South Norwalk,
CT 06854. The cost for this space is included in the $7,500 per-month fee PLM
International Inc. charges us for general and administrative services pursuant
to a letter agreement between us and PLM International Inc., an affiliate of
Messrs. Engle and Coyne. We believe, based on rents and fees for similar
services in the South Norwalk, CT area, that the fee charged by PLM
International Inc. is at least as favorable as we could have obtained from an
unaffiliated person. We consider our current office space adequate for our
current operations.
  
 Employees
  We have
two executive officers, each of whom is also a member of our board of directors.
These individuals are not obligated to contribute any specific number of hours
to our matters and intend to devote only as much time as they deem necessary to
our affairs. The amount of time they will devote in any time period will vary
based on whether a target business has been selected for a business combination
and the stage of our business combination process. Accordingly, once management
locates a suitable target business to acquire, they will spend more time
investigating such target business and negotiating and processing the business
combination (and consequently more time on our affairs) than they would prior to
locating a suitable target business. We do not intend to have any full time
employees prior to the consummation of a business combination.
  Legal
Proceedings
  We have
not been, and are not currently, a party to any legal proceedings and we are not
aware that there are any pending legal proceedings against us.
  Periodic
Reporting and Audited Financial Statements
  We have
registered our securities under the Securities Exchange Act of 1934, as amended,
and have reporting obligations, including the requirement that we file annual
and quarterly reports with the SEC. In accordance with the requirements of the
Securities Exchange Act of 1934, our annual reports contain financial statements
audited and reported on by our independent registered public accounting
firm.
  We will
not acquire a target business if audited financial statements cannot be obtained
for the target business. Additionally, our management provides our stockholders
with audited financial statements, prepared in accordance with generally
accepted accounting principles, of the prospective target business as part of
the proxy solicitation materials sent to stockholders to assist them in
assessing the target business. Our management believes that the requirement of
having available audited financial statements for the target business will not
materially limit the pool of potential target businesses available for
acquisition.
  
  12
  ITEM
1A.  RISK FACTORS
  Future
results of our operations involve a number of known and unknown risks and
uncertainties. Factors that could affect future operating results and cash flows
and cause actual results to vary materially from historical results include, but
are not limited to those risks set forth below:
  Risks
Associated with our Business
  We are a
development stage company with no operating history and very limited
resources.
  We are a
development stage company with no operating results to date. Since we do not
have an operating history, you have no basis upon which to evaluate our ability
to achieve our business objective, which is to acquire an operating business. We
are currently in the process of identifying and evaluating prospective target
businesses; however, we may be unable to complete a business combination. As
described in this report, we will not generate any revenue until, at the
earliest, after the consummation of a business combination. We cannot assure you
that a business combination will occur. If we spend all of the proceeds from our
initial public offering not held in trust and interest income earned up to
$3,000,000 on the balance of the trust account that may be released to us to
fund our working capital requirements in seeking business combination, but fail
to complete such a combination, we will never generate any operating
revenues.
  The
report of the independent registered public accounting firm that audited our
financial statements includes a “going concern” explanatory paragraph due to the
possibility that we may not consummate a business combination within the
required time frame, which will require us to dissolve and
liquidate.
 
 The audit report in our financial
statements for the year ended July 31, 2008, includes an explanatory paragraph
that states that due to the possibility that a business combination may not be
consummated within the required timeframe, there is “substantial doubt” about
our ability to continue as a going concern.  We must complete a
business combination with a fair market value of at least 80% of our net
assets at the time of acquisition by May 31, 2009.
 
 If
we are forced to liquidate and distribute the trust account before a business
combination, our public stockholders may receive less than $8.00 per share and
our warrants will expire worthless.
  If we are
unable to complete a business combination within the prescribed time frames and
are forced to liquidate our assets, the per-share liquidation distribution may
be less than $8.00 because of the expenses of our initial public offering and
potential claims against the trust. Furthermore, there will be no distribution
with respect to our outstanding warrants which will expire worthless if we
liquidate before the completion of a business combination.
  If
we are unable to consummate a business combination, our public stockholders will
be forced to wait until May 31, 2009 before receiving liquidation
distributions.
  We have
until May 31, 2009 to complete a business combination.  We have no
obligation to return funds to investors prior to such date unless we consummate
a business combination prior thereto and only then in cases where investors have
sought conversion of their shares.  Only after the expiration of this full
time period will public stockholders be entitled to liquidation distributions if
we are unable to complete a business combination.  Accordingly, investors’
funds may be unavailable to them until such date.
  You
are not entitled to protections normally afforded to investors of blank check
companies.
  Since the
net proceeds of our initial public offering are intended to be used to complete
a business combination with a target business that has not been identified, we
may be deemed to be a “blank check” company under the United States securities
laws. However, since we have net tangible assets in excess of $5,000,000 and
have filed a Current Report on Form 8-K with the SEC upon consummation of our
initial public offering including audited financial statements demonstrating
this fact, we are exempt from rules promulgated by the SEC to protect investors
of blank check companies such as Rule 419. Accordingly, investors are not
afforded the benefits or protections of those rules, such as completely
restricting the transferability of our securities until the consummation of a
business combination, requiring us to complete a business combination within 18
months of the effective date of the initial registration statement and
restricting the use of interest earned on the funds held in the trust account.
Because we are not subject to Rule 419, our units are immediately tradable, we
are entitled to withdraw a certain amount of interest earned on the funds held
in the trust account prior to the completion of a business combination and we
have a longer period of time to complete such a business combination than we
would if we were subject to such rule.
  13
 Because
there are numerous companies with a business plan similar to ours seeking to
effectuate a business combination, it may be more difficult for us to complete a
business combination.
  Based
upon publicly available information, we have identified 161 blank check
companies which have gone public in the United States since August 2003, of
which 56 have as of September 1, 2008 completed a business
combination.  Of the remaining 105 blank check companies, 56 have more
than $11.3 billion in trust and are seeking to complete business combinations,
while twenty companies have either dissolved or announced their intention to
dissolve and return funds to investors. Of the 85 companies seeking to complete
a business combination, only 29 companies have announced that they have entered
into either a definitive agreement or a letter of intent for a business
combination but not yet consummated them. Furthermore, there are a number of
additional offerings for blank check companies that are still in the
registration process but have not completed initial public offerings and there
are likely to be more blank check companies filing registration statements for
initial public offerings after the date of this report and prior to our
completion of a business combination. While some of the blank check companies
must complete their respective business combinations in specific industries, a
number of them may consummate their business combinations in any industry they
choose. Therefore, we may be subject to competition from these and other
companies seeking to consummate a business combination. We cannot assure you
that we will be able to compete successfully for an attractive business
combination. Additionally, because of this competition, we cannot assure you
that we will be able to effectuate a business combination within the required
time period.
  If
third parties bring claims against us, the proceeds held in trust could be
reduced and the per-share distribution received by stockholders could be less
than $8.00 per share.
  Our
placing of funds in trust may not protect those funds from third party claims
against us. Although we attempt to have all vendors, prospective target
businesses or other entities we engage, execute agreements with us waiving any
right, title, interest or claim of any kind in or to any monies held in the
trust fund for the benefit of the holders of our common stock, there is no
guarantee that they will execute such agreements or that even if they execute
such agreements that they would be prevented from bringing claims against the
trust fund. Nor is there any guarantee that such entities will agree to waive
any claims they may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with us and will not seek recourse against
the trust fund for any reason. If we are unable to complete a business
combination and are forced to distribute the proceeds held in trust to our
public common stock holders Messrs. Gary D. Engle and James A. Coyne have
agreed that they are personally liable to ensure that the proceeds in the trust
fund are not reduced by the claims, if any, of target businesses or of vendors
or other entities that are owed money by us for services rendered or contracted
for or products sold to us and that have not executed an agreement waiving any
right, title, interest or claim of any kind in or to any monies held in the
trust. We have questioned these individuals and reviewed their financial
information and believe that each of these individuals has a substantial net
worth. As a result, and because of the significant limitations on their
indemnification obligations described above, we believe that these individuals
will be able to satisfy their indemnification obligations. However, we cannot
assure you that this will be the case. Accordingly, the proceeds held in trust
could be subject to claims which could take priority over the claims of the
holders of our common stock sold in our initial public offering. We cannot
assure you that the per-share distribution from the trust fund will not be less
than $8.00 due to claims of creditors.
 
 Additionally,
if we are forced to file a bankruptcy case or an involuntary bankruptcy case is
filed against us which is not dismissed, the proceeds held in the trust fund
could be subject to applicable bankruptcy law, and may be included in our
bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the
trust fund, we cannot assure you that we will be able to return to our public
stockholders at least $8.00 per share.
 
 Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them.
  Our
amended and restated certificate of incorporation provides that we will continue
in existence only until May 31, 2009. If we have not completed a business
combination by such date and amended this provision in connection thereto,
pursuant to the Delaware General Corporation Law, our corporate existence will
cease except for the purposes of winding up our affairs and liquidating. Under
Sections 280 through 282 of the Delaware General Corporation Law, stockholders
may be held liable for claims by third parties against a corporation to the
extent of distributions received by them in a dissolution. If the corporation
complies with certain procedures set forth in Section 280 of the Delaware
General Corporation Law intended to ensure that it makes reasonable provision
for all claims against it, including a 60-day notice period during which any
third-party claims can be brought against the corporation, a 90-day period
during which the corporation may reject any claims brought, and an additional
150-day waiting period before any liquidating distributions are made to
stockholders, any liability of stockholders with respect to a liquidating
distribution is limited to the lesser of such stockholder’s pro rata share of
the claim or the amount distributed to the stockholder, and any liability of the
stockholder would be barred after the third anniversary of the dissolution.
However, it is our intention to make liquidating distributions to our
stockholders as soon as reasonably possible after May 31, 2009 and, therefore,
we do not intend to comply with those procedures. Because we will not be
complying with those procedures, we are required, pursuant to Section 281 of the
Delaware General Corporation Law, to adopt a plan that will provide for our
payment, based on facts known to us at such time, of (i) all existing claims,
(ii) all pending claims and (iii) all claims that may be potentially brought
against us within the subsequent 10 years. Accordingly, we would be required to
provide for any creditors known to us at that time or those that we believe
could be potentially brought against us within the subsequent 10 years prior to
distributing the funds held in the trust to stockholders. We cannot assure you
that we will properly assess all claims that may be potentially brought against
us. As such, our stockholders could potentially be liable for any claims to the
extent of distributions received by them (but no more) and any liability of our
stockholders may extend well beyond the third anniversary of the date of
distribution. Accordingly, we cannot assure you that third parties will not seek
to recover from our stockholders amounts owed to them by us.
 
 14
 If we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our stockholders.
Furthermore, because we intend to distribute the proceeds held in the trust
account to our public stockholders promptly after May 31, 2009, this may be
viewed or interpreted as giving preference to our public stockholders over any
potential creditors with respect to access to or distributions from our assets.
 Furthermore, our board may be viewed as having breached their fiduciary
duties to our creditors and/or may have acted in bad faith, and thereby exposing
itself and our company to claims of punitive damages, by paying public
stockholders from the trust account prior to addressing the claims of creditors.
We cannot assure you that claims will not be brought against us for these
reasons.
 
 Since
our search and selection of a target business with which to complete a business
combination is not limited to any particular industry, we cannot currently
ascertain the merits or risks of the business which we may ultimately acquire or
the industry in which we may ultimately operate.
  We may
consummate a business combination with a company in any industry we choose and
are not limited to any particular industry or type of business. There is no
current basis for you to evaluate the possible merits or risks of the particular
industry in which we may ultimately operate or the target business which we may
ultimately acquire. If we complete a business combination with an entity with a
poorly focused business plan or unresolved liabilities, we are subject to the
risks that we will not be able to successfully implement a more beneficial
business plan or improve the target business’ operating results following the
business combination or favorably resolve any unresolved liabilities. To the
extent we complete a business combination with a financially unstable company or
an entity in its development stage, we may be affected by numerous risks
inherent in the business operations of those entities. If we complete a business
combination with an entity in an industry characterized by a high level of risk,
we may be affected by the currently unascertainable risks of that industry.
Although our management will endeavor to evaluate the risks inherent in a
particular industry or target business, we cannot assure you that we will
properly ascertain or assess all of the significant risk factors.
  We
may issue shares of our capital stock or debt securities to complete a business
combination, which would reduce the equity interest of our stockholders and
likely cause a change in control of our ownership.
  Our
certificate of incorporation, as amended, authorizes the issuance of up to
100,000,000 shares of common stock, par value $.0001 per share, and 5,000,000
shares of preferred stock, par value $.0001 per share. As of October 3, 2008
there were 34,580,000 authorized but unissued shares of our common stock
available for issuance (after appropriate reservation for the issuance of shares
upon full exercise of our outstanding warrants and the purchase option granted
to HCFP/Brenner Securities, the representative of the underwriters) and all of
the 5,000,000 shares of preferred stock available for issuance. Although we have
no commitments as of the date of this report to issue our securities, we will,
in all likelihood, issue a substantial number of additional shares of our common
stock or preferred stock, or a combination of common and preferred stock, to the
shareholders of a potential target or in connection with a related simultaneous
financing to complete a business combination. The issuance of additional shares
of our common stock or any number of shares of our preferred stock:
  ·
              may
      significantly reduce the equity interest of investors in our initial
      public offering;
  ·
              may
      subordinate the rights of holders of common stock if preferred stock is
      issued with rights senior to those afforded to our common 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   carryforwards, if any, and most
      likely also result in the resignation or removal of some or all of our
      present officers and directors; and
  ·
              may
      adversely affect prevailing market prices for our common
      stock.
   We may issue debt
securities or incur indebtedness to complete a business combination, which could
subject us to risks relating to leverage.
  If we
issue debt securities or borrow money in connection with a business combination,
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 contains
      covenants that require the maintenance of certain financial ratios or
      reserves and any such covenant is breached without a waiver or
      renegotiation of that covenant;
  ·
              our
      immediate payment of all principal and accrued interest, if any, if the
      debt security is payable on demand; and
  ·
              our
      inability to obtain additional financing, if necessary, if the debt
      security contains covenants restricting our ability to obtain additional
      financing while such security is
outstanding.
   15
  Our
ability to effect a business combination successfully and to be successful
afterwards is totally dependent upon the efforts of our key personnel, some of
whom may join us following a business combination and whom we would have only a
limited ability to evaluate.
  Our
ability to effect a business combination successfully is totally dependent upon
the efforts of our key personnel. Because there are many factors which can
influence the decision of each member of management whether to remain with us
following a business combination, some of which may be personal to each
individual and therefore cannot be anticipated by us, the future role of our key
personnel in the target business cannot presently be ascertained. Although we
expect Messrs. Engle and Coyne to remain with us in senior management or
advisory positions following a business combination, we may employ other
personnel following the business combination. Moreover, management will only be
able to remain with the company after the consummation of a business combination
if members of management are able to negotiate employment or consulting
agreements in connection with the business combination. Such negotiations would
take place simultaneously with the negotiation of the business combination and
could provide for such individuals to receive compensation in the form of cash
payments and/or securities for services they would render to the company after
the consummation of the business combination. While the personal and financial
interests of such individuals may cause them to have a conflict of interest in
determining whether a potential business combination is appropriate for us and
influence their motivation in identifying and selecting a target business, the
ability of such individuals to remain with the company after the consummation of
a business combination will not be the determining factor in our decision as to
whether or not we will proceed with any potential business combination. While we
intend to closely scrutinize any
additional  individuals  we  engage  after  a  business
combination, we cannot assure you that our assessment of these individuals will
prove to be correct. These individuals may be unfamiliar with the requirements
of operating a public company which could cause us to have to expend time and
resources helping them become familiar with such requirements. This could be
expensive and time-consuming and could lead to various regulatory
issues.
 
 Because
our officers and directors allocate their time to other businesses, it could
interfere with our ability to consummate a business combination.
 
 Our
officers and directors are not required to commit their full time to our
affairs, which may result in a conflict of interest in allocating their time
between our operations and other businesses. We do not intend to have any full
time employees prior to the consummation of a business combination. All of our
officers and directors are engaged in several other business endeavors and are
not obligated to contribute any specific number of hours to our affairs. If
their other business affairs require them to devote more substantial amounts of
time to such affairs, it could limit their ability to devote time to our affairs
and could interfere with our ability to consummate a business
combination.
  Our
officers, directors and senior advisors may in the future become affiliated with
entities engaged in business activities similar to those intended to be
conducted by us and accordingly, may have conflicts of interest in determining
which entity a particular business opportunity should be presented
to.
  While our
officers and directors do not currently have any obligations to present
potential business combination opportunities to any other “blank check” company,
such individuals are affiliated with other businesses and as a result may have
similar legal obligations for presenting business opportunities to such entities
as well as to our company. Additionally, our officers and directors may in the
future become affiliated with entities, including other “blank check” companies,
engaged in business activities similar to those intended to be conducted by us.
Our officers and/or directors may become aware of business opportunities which
may be appropriate for presentation to us as well as the other entities to which
they have fiduciary obligations. Accordingly, they may have conflicts of
interest in determining to which entity a particular business opportunity should
be presented. Additionally, our senior advisors have fiduciary obligations to
the other entities with which they serve as directors or officers, and they have
no fiduciary obligations to us. Therefore, they have no obligation to present
business opportunities to us at all and will only do so if the other entities
decline those opportunities first. We cannot assure you that these conflicts
will be resolved in our favor.
  All
of our officers and directors own shares of our common stock and warrants. These
shares and warrants will not participate in liquidation distributions and,
therefore, our officers and directors may have a conflict of interest in
determining whether a particular target business is appropriate for a business
combination.
  All of
our officers and directors own shares of our common stock and warrants. Such
individuals have waived their right to receive distributions with respect to
their initial shares upon our liquidation if we are unable to consummate a
business combination. Accordingly, the shares of common stock acquired by our
officers and directors prior to our initial public offering, as well as any
warrants owned by our officers or directors will be worthless if we do not
consummate a business combination. The personal and financial interests of our
directors and officers may influence their motivation in timely identifying and
selecting a target business and completing a business combination. Consequently,
our directors’ and officers’ discretion in identifying and selecting a suitable
target business may result in a conflict of interest when determining whether
the terms, conditions and timing of a particular business combination are
appropriate and in our stockholders’ best interest.
   16
 
 We
will proceed with a business combination only if public stockholders owning less
than 30% of the shares sold in our initial public offering exercise their
conversion rights.
  We will
proceed with a business combination only if public stockholders owning less than
30% of the shares sold in our initial public offering exercise their conversion
rights. Accordingly, approximately 29.99% of the public stockholders may
exercise their conversion rights and we could still consummate a proposed
business combination. As a result, this may have the effect of making it more
likely that we could consummate a proposed business combination even when a
significant number of public stockholders have voted against such transaction.
We have set the conversion percentage at 30% in order to reduce the likelihood
that a small group of investors holding a block of our stock will be able to
stop us from completing a business combination that may otherwise be approved by
a large majority of our public stockholders.
  Our
business combination may require us to use substantially all of our cash to pay
the purchase price. In such a case, because we will not know how many
stockholders may exercise such conversion rights, we may need to arrange third
party financing to help fund our business combination in case a larger
percentage of stockholders exercise their conversion rights than we expect.
Additionally, even if our business combination does not require us to use
substantially all of our cash to pay the purchase price, if a significant number
of stockholders exercise their conversion rights, we will have less cash
available to use in furthering our business plans following a business
combination and may need to arrange third party financing.  We have
not taken any steps to secure third party financing for either situation. We
cannot assure you that we will be able to obtain such third party financing on
terms favorable to us or at all.
 
 The
American Stock Exchange may delist our securities from quotation on its exchange
which could limit our securityholders ability to make transactions in our
securities and subject us to additional trading restrictions.
 
 Our
securities are listed on the American Stock Exchange, a national securities
exchange. We cannot assure you that our securities will continue to be listed on
the American Stock Exchange in the future prior to a business combination.
Additionally, in connection with our business combination, it is likely that the
American Stock Exchange may require us to file a new initial listing application
and meet its initial listing requirements as opposed to its more lenient
continued listing requirements. We cannot assure you that we will be able to
meet those initial listing requirements at that time.
  If
the American Stock Exchange delists our securities from trading on its exchange,
we could face significant material adverse consequences, including:
  ·
              a limited availability of
      market quotations for our
securities;
  ·
              a determination that our
      common stock is a “penny stock” which will require brokers trading in our
      common stock to adhere to more stringent rules, possibly resulting in a
      reduced level of trading activity in the secondary trading market for our
      common stock;
  ·
              a limited amount of news and
      analyst coverage for our company;
and
  ·
              a decreased ability to issue
      additional securities or obtain additional financing in the
      future.
  Initially,
we are able to complete only one business combination, which will cause us to be
solely dependent on a single business and a limited number of products or
services.
  Our
initial business combination must be with a target business, or of a controlling
interest (but not less than a majority of the voting interest) therein, with a
fair market value of at least 80% of our net assets at the time of such
acquisition. Consequently, currently, we have the ability to complete only a
single business combination, although this may entail the simultaneous
acquisitions of several closely related operating businesses. By consummating a
business combination with only a single entity, our lack of diversification may
subject us to numerous economic, competitive and regulatory developments, any or
all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to a business combination. Further, we would
not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the
resources to complete several business combinations in different industries or
different areas of a single industry. Accordingly, the prospects for our success
may be:
  ·
              solely dependent upon the
      performance of a single business; or
 
 
 ·
              dependent upon the development
      or market acceptance of a single or limited number of products, processes
      or services.
   17
  
 Alternatively,
if our business combination entails the simultaneous acquisitions of several
operating businesses and with different sellers, each seller must agree that the
purchase of its business is contingent upon simultaneous closings of the other
acquisitions which may make it more difficult for us, and delay our ability, to
complete the business combination. If we were to consummate a business
combination with several operating businesses, we could also face additional
risks, including burdens and costs with respect to possible multiple
negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the
operations and services or products of the acquired companies into a single
operating business. If we are unable to adequately address these risks, we may
not be able to achieve the optimal result of the merger, including improving
productivity, efficiencies, profitability and operating results.
 
 Because
of our limited resources and structure, we may not be able to consummate an
attractive business combination.
  We expect
to encounter intense competition from other entities with business objectives
similar to ours, including venture capital funds, leveraged buyout funds and
operating businesses competing for acquisitions. Many of these entities are well
established and have extensive experience in identifying and effecting business
combinations directly or through affiliates. Many of these competitors possess
greater technical, human and other resources than we do and our financial
resources will be relatively limited when contrasted with those of many of these
competitors. While we believe that there are numerous potential target
businesses that we could acquire with the net proceeds of our initial public
offering, our ability to compete in acquiring certain sizable target businesses
is limited by our available financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of certain
target businesses. Further, the obligation we have to seek stockholder approval
of a business combination may delay the consummation of a transaction, and our
obligation to convert into cash the shares of common stock in certain instances
may reduce the resources available for a business combination. Additionally, our
outstanding warrants, and the future dilution they potentially represent, may
not be viewed favorably by certain target businesses. Any of these factors may
place us at a competitive disadvantage in successfully negotiating a business
combination. The fact that only 56 of the 161 blank check companies that have
gone public in the United States from August 2003 through September 1, 2008 have
completed a business combination and 29 of such companies have entered into
either a definitive agreement or a letter of intent for a business combination,
while twenty companies have either dissolved or announced their intention to
dissolve, may indicate that many privately held target businesses are not
inclined to enter into a business combination with a blank check company. If we
are unable to consummate a business combination with a target business within
the prescribed time period, we will be forced to liquidate.
  We
may be unable to obtain additional financing, if required, to complete a
business combination or to fund the operations and growth of the target
business, which could compel us to restructure the transaction or abandon a
particular business combination.
  Although
we believe that the net proceeds of our initial public offering are sufficient
to allow us to consummate a business combination, in as much as we have not yet
identified any prospective target business, we cannot ascertain the capital
requirements for any particular transaction. If the proceeds of our initial
public offering prove to be insufficient, either because of the size of the
business combination or the depletion of the available net proceeds in search of
a target business, or because we become obligated to convert into cash a
significant number of shares of common stock from dissenting stockholders, we
will be required to seek additional financing. We cannot assure you that such
financing would be available on acceptable terms, if at all. To the extent that
additional financing proves to be unavailable when needed to consummate a
particular business combination, we would be compelled to restructure the
transaction or abandon that particular business combination and seek an
alternative target business candidate. In addition, if we consummate a business
combination, we may require additional financing to fund the operations or
growth of the target business. The failure to secure additional financing could
prevent or severely limit the continued development or growth of the target
business. None of our officers, directors or stockholders is required to provide
any financing to us in connection with or after a business
combination.
 
 The
loss of the services of any of our executive officers would make it more
difficult to find a suitable company for a business combination which makes it
more likely that we will be required to distribute the proceeds of our trust
fund to our public stockholders.
  Our
ability to effect a business combination successfully is largely dependent upon
the efforts of our executive officers. We have not entered into an employment
agreement with any of our executive officers, nor have we obtained any “key man”
life insurance on any of their lives. The loss of any or all of their services
could have a material adverse effect on our ability to successfully achieve our
business objectives, including seeking a suitable target business to effect a
business combination.
   18
  Our
outstanding warrants and option may have an adverse effect on the market price
of our common stock and warrants and make it more difficult to effect a business
combination.
  We have
issued warrants to purchase 34,822,500 shares of common stock, which includes
the warrants we issued in our initial public offering and our insider warrants.
We have also issued an option to purchase 1,250,000 units to the representative
of the underwriters which, if exercised, will result in the issuance of an
additional 1,250,000 shares of common stock and warrants to purchase 1,250,000
shares of common stock. To the extent we issue shares of common stock to effect
a business combination, the potential for the issuance of substantial numbers of
additional shares upon exercise of these warrants and option could make us a
less attractive acquisition vehicle in the eyes of a target business as such
securities, when exercised, will increase the number of issued and outstanding
shares of our common stock and reduce the value of the shares issued to complete
the business combination. Accordingly, our warrants and option may make it more
difficult to effectuate a business combination or increase the cost of the
target business. Additionally, the sale, or even the possibility of sale, of the
securities underlying the warrants and option could have an adverse effect on
the market price for our securities or on our ability to obtain future public
financing. If and to the extent these warrants and option are exercised, you may
experience dilution to your holdings.
 
 If
our initial stockholders or the purchasers of the insider warrants exercise
their registration rights with respect to their initial shares or insider
warrants and underlying securities, it may have an adverse effect on the market
price of our common stock and the existence of these rights may make it more
difficult to effect a business combination.
 
 Our
initial stockholders are entitled to make a demand that we register the resale
of their initial shares at any time commencing three months prior to the date on
which their shares are released from escrow. Additionally, the purchasers of the
insider warrants are entitled to demand that we register the resale of their
insider warrants and underlying shares of common stock at any time after we
consummate a business combination. If such individuals exercise their
registration rights with respect to all of their securities, then there will be
an additional 6,250,000 shares of common stock and 5,975,000 warrants (as well
as 5,975,000 shares of common stock underlying the warrants) eligible for
trading in the public market. The presence of these additional shares of common
stock trading in the public market may have an adverse effect on the market
price of our common stock. In addition, the existence of these rights may make
it more difficult to effectuate a business combination or increase the cost of
acquiring the target business, as the stockholders of the target business may be
discouraged from entering into a business combination with us or may request a
higher price for their securities because of the potential effect the exercise
of such rights may have on the trading market for our common stock.
 
 An
effective registration statement may not be in place when you desire to exercise
your warrants, thus precluding you from being able to exercise your warrants and
causing such warrants to be practically worthless.
  No
warrant held by public stockholders or issuable upon exercise of the
representative’s purchase option is exercisable and we are not obligated to
issue shares of common stock unless at the time a holder seeks to exercise such
warrant, a prospectus relating to the common stock issuable upon exercise of the
warrant is current. Under the terms of the warrant agreement, we have agreed to
use our best efforts to meet these conditions and to maintain a current
prospectus relating to the common stock issuable upon exercise of the warrants
until the expiration of the warrants. However, we cannot assure you that we will
be able to do so, and if we do not maintain a current prospectus related to the
common stock issuable upon exercise of the warrants, holders will be unable to
exercise their warrants, we will not be required to settle any such warrant
exercise. If the prospectus relating to the common stock issuable upon the
exercise of the warrants is not current, the warrants held by public
stockholders or issuable upon exercise of the representative’s purchase option
may have no value, the market for such warrants may be limited, such warrants
may expire worthless and you have already paid the full purchase price of the
unit solely for the shares included in the unit. In no event are we required to
net cash settle the exercise of the warrants. Even if the prospectus relating to
the common stock issuable upon exercise of the warrants is not current, the
warrants issued to our initial stockholders may be exercisable for unregistered
shares of common stock.
 
 You
are able to exercise a warrant only if the issuance of common stock upon such
exercise has been registered or qualified or is deemed exempt under the
securities laws of the state of residence of the holder of the
warrants.
  No
warrants will be exercisable and we are not obligated to issue shares of common
stock unless the common stock issuable upon such exercise has been registered or
qualified or deemed to be exempt under the securities laws of the state of
residence of the holder of the warrants. At the time that the warrants become
exercisable (following our completion of a business combination), we expect to
continue to be listed on a national securities exchange, which would provide an
exemption from registration in every state. Accordingly, we believe holders in
every state will be able to exercise their warrants as long as our prospectus
relating to the common stock issuable upon exercise of the warrants is current.
However, we cannot assure you of this fact. As a result, the warrants may be
deprived of any value, the market for the warrants may be limited and the
holders of warrants may not be able to exercise their warrants if the common
stock issuable upon such exercise is not qualified or exempt from qualification
in the jurisdictions in which the holders of the warrants reside.
 
 
 Our
initial stockholders, including our officers, directors and senior advisors,
control a substantial interest in us and thus may influence certain actions
requiring a stockholder vote.
 
 Our
initial stockholders (including all of our officers, directors and senior
advisors) collectively own approximately 17% of our issued and outstanding
shares of common stock. In addition, Gary D. Engle, James A. Coyne, Jonathan
Davidson and Brian Kaufman have entered into an agreement with HCFP/Brenner
Securities pursuant to which such individuals, or entities they control, will
place limit orders for an aggregate of $15 million of units commencing 30
calendar days after we file a preliminary proxy statement seeking approval of
our holders of common stock for a business combination and ending 30 days
thereafter. Each of Messrs. Engle, Coyne, Davidson and Kaufman may vote the
shares of common stock included in these units on a proposed business
combination in any manner they choose. Accordingly, our officers and directors
may influence actions requiring a stockholder vote, including a business
combination.
   19
  Our board
of directors is divided into three classes, each of which generally serves for a
term of three years with only one class of directors being elected in each year.
It is unlikely that there will be an annual meeting of stockholders to elect new
directors prior to the consummation of a business combination, in which case all
of the current directors will continue in office until at least the consummation
of the business combination. If there is an annual meeting, as a consequence of
our “staggered” board of directors, only a minority of the board of directors
will be considered for election and our initial stockholders, because of their
ownership position, will have considerable influence regarding the outcome.
Accordingly, our initial stockholders continue to exert control at least until
the consummation of a business combination.
  If
we are deemed to be an investment company, we may be required to institute
burdensome compliance requirements and our activities may be restricted, which
may make it difficult for us to complete a business combination.
  A company
that, among other things, is or holds itself out as being engaged primarily, or
proposes to engage primarily, in the business of investing, reinvesting, owning,
trading or holding certain types of securities would be deemed an investment
company under the Investment Company Act of 1940. Since we have invested the
proceeds held in the trust fund, it is possible that we could be deemed an
investment company. Notwithstanding the foregoing, we do not believe that our
principal activities subject us to the Investment Company Act of 1940. To this
end, the proceeds held in trust may be invested by the trustee only in United
States “government securities” as such term is defined in the Investment Company
Act of 1940, and one or more selected by us, which invest principally in either
short-term securities issued or guaranteed by the United States having a rating
in the highest investment category granted thereby by a nationally recognized
credit rating agency at the time of acquisition or short-term exempt municipal
bonds issued by governmental entities located within the United States and
otherwise meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act of 1940. By restricting the investment of the proceeds to
these instruments, we intend to meet the requirements for the exemption provided
in Rule 3a-1 promulgated under the Investment Company Act of 1940.
 
 If,
however, we are deemed to be an investment company under the Investment Company
Act of 1940, we may be subject to certain restrictions that may make it
difficult for us to complete a business combination, including:
 
 ·
              restrictions
      on the nature of our investments; and
  ·
              restrictions
      on our issuance of securities.
  In
addition, we may have imposed upon us burdensome requirements,
including:
  ·
              registration
      as an investment company;
  ·
              adoption
      of a specific form of corporate structure;
and
  ·
              reporting,
      record keeping, voting, proxy and disclosure requirements and other rules
      and regulations.
  Compliance
with these additional regulatory burdens would require additional expenses for
which we have not allotted.
  ITEM
1B.  UNRESOLVED STAFF COMMENTS
  Not applicable.
  ITEM
2.  PROPERTIES
  We
maintain our executive office at 20 Marshall Street, Suite 104, South Norwalk,
CT 06854 pursuant to an agreement with PLM International, Inc., an affiliate of
Messrs. Engle and Coyne, our Chairman of the Board and Chief Executive Officer,
and our Vice Chairman and Chief Financial Officer, respectively.  We
pay PLM International a monthly fee of $7,500 which is for general and
administrative services, including office space, utilities and secretarial
support.  We believe, based on rents and fees for similar services in
the South Norwalk, CT area, that the fee charged by PLM International, Inc. is
at least as favorable as we could have obtained from an unaffiliated
person.  We consider our current office space adequate for our current
operations.
  ITEM
3.  LEGAL PROCEEDINGS
  We may
from time to time be involved in legal proceedings arising from the normal
course of business.  As of the date of this report, we are not
involved in any legal proceedings.
   20
 
 ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Not
applicable.
 PART
II
  ITEM
5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
  Market
Information
  Our
units, common stock and warrants are traded on the American Stock Exchange under
the symbols SOC.U, SOC and SOC.WS, respectively. Each of our units consists of
one share of common stock and one warrant.  The following table sets
forth the range of high and low closing prices for the units, common stock and
warrants for the periods indicated since the units commenced public trading on
May 31, 2007 and since the common stock and warrants commenced public trading on
June 26, 2007.  Prior to May 31, 2007, there was no established
trading market for our securities.
  Units
              
              Common
      Stock
              
              WarrantsHigh
              Low
              
              High
              Low
              
              High
              Low2008:Fourth
      Quarter
              $8.10
              $7.85
              
              $7.72
              $7.50
              
              $0.45
              $0.25Third
      Quarter
              $8.15
              $7.85
              
              $7.57
              $7.49
              
              $0.70
              $0.30Second
      Quarter
              $8.22
              $8.08
              
              $7.55
              $7.41
              
              $0.80
              $0.67First
      Quarter
              $8.28
              $7.97
              
              $7.52
              $7.38
              
              $0.80
              $0.652007:Fourth
      Quarter (through July 31, 2007)
              $8.44
              $8.06
              
              $7.54
              $7.45
              
              $0.94
              $0.80
 
 Holders
  As of
September 25, 2008, there was 1 holder of record of our units, 9 holders of
record of our common stock and 6 holders of record of our warrants.
  Dividends
  We have
not paid any cash dividends on our common stock to date and do not intend to pay
cash dividends prior to the completion of a business combination. The payment of
cash dividends in the future will be contingent upon our revenues and earnings,
if any, capital requirements and general financial condition subsequent to
completion of a business combination. The payment of any dividends subsequent to
a business combination will be within the discretion of our then board of
directors. It is the present intention of our board of directors to retain all
earnings, if any, for use in our business operations and, accordingly, our board
does not anticipate declaring any dividends in the foreseeable
future.
   21
  ITEM
6.  SELECTED FINANCIAL DATA
  The
following tables should be read in conjunction with our financial statements and
the notes thereto appearing elsewhere in this Annual Report on Form 10-K.
The selected financial data has been derived from our financial statements,
which have been audited by BDO Seidman, LLP, independent registered public
accounting firm, as indicated in their report included elsewhere
herein.
  From
      inception
                
                
                From
      inceptionYear
      ended
                
                
                Year
      ended
                
                
                (September
      30, 2005) to
                
                
                (September
      30, 2005) toJuly
      31, 2008
                
                
                July
      31, 2007
                
                
                July
      31, 2006
                
                
                July
      31, 2008Statement
      of Operation Data:Loss
      from operations
                
                $
                (661,284
                )
                
                $
                (126,875
                )
                
                $
                (15,080
                )
                
                $
                (803,239
                )Interest
      income
                
                
                8,285,456
                
                
                
                1,828,031
                
                
                
                12,850
                
                
                
                10,126,337Net
      income (loss)
                
                
                4,627,581
                
                
                
                1,040,419
                
                
                
                (2,230
                )
                
                
                5,665,770Accretion
      of Trust Fund relating tocommon
      stock subject to possible conversion
                
                
                (1,473,706
                )
                
                
                (317,741
                )
                
                
                -
                
                
                
                (1,791,447
                )Net
      income (loss) attributable to commonstockholders
                
                
                3,153,875
                
                
                
                722,678
                
                
                
                (2,230
                )
                
                
                3,874,323Earnings
      per share data:Shares
      outstandingsubject
      to possible conversion
                
                
                8,351,465
                
                
                
                8,351,465
                
                
                
                -Net
      income per common share subject to possibleconversion,
      basic and diluted
                
                $
                0.18
                
                
                $
                0.04
                
                
                $
                -Weighted
      average number of shares outstandingBasic
      and diluted
                
                
                25,746,035
                
                
                
                9,256,354
                
                
                
                6,250,000Net
      income (loss) per shareBasic
      and diluted
                
                $
                0.12
                
                
                $
                0.08
                
                
                $
                0.00Other
      Financial Data:Net
      cash provided by operating activities
                
                $
                1,885,123
                
                
                $
                761,649
                
                
                $
                3,019
                
                
                $
                2,649,791Net
      cash used in investing activities;cash
      contributed to trust fund
                
                
                -
                
                
                
                (220,439,650
                )
                
                
                -
                
                
                
                (220,439,650
                )Net
      cash provided by (used in) financing activities,primarily
      proceeds from publicoffering
      in fiscal 2007
                
                $
                (120,275
                )
                
                $
                219,800,995
                
                
                $
                909,407
                
                
                $
                220,590,127Selected
      Balance Sheet Data:
                
                July
      31, 2008
                
                
                July
      31, 2007Cash
      and cash equivalents
                
                $
                2,800,268
                
                
                $
                1,035,420Investments
      held in Trust
                
                
                223,183,301
                
                
                
                221,416,629Net
      working capital (a)
                
                
                3,199,456
                
                
                
                411,039Total
      assets
                
                
                226,525,700
                
                
                
                222,665,591Common
      stock, subject to possible conversion
                
                
                67,901,298
                
                
                
                66,427,592Total
      stockholders’ equity
                
                
                158,481,459
                
                
                
                155,327,584(a)
      Excludes investments held in Trust
 
 
 
       
 22
 
 Item7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations.
 
  The
following discussion should be read in conjunction with our financials statement
and footnotes thereto contained in this report.
 
 General
 
 We were
formed on September 9, 2005 for the purpose of acquiring one or more assets or
control of one or more operating businesses through a merger, capital stock
exchange, asset acquisition, stock purchase or other similar business
combination. Our initial business combination must be with an acquisition target
or targets whose collective fair market value is at least equal to 80% of our
net assets at the time of such acquisition.
 
 We
completed our initial public offering (“IPO”) on June 5, 2007. Our entire
activity from inception through the consummation of our IPO was to prepare for
and complete our IPO, and since the consummation of our IPO, our activity has
been limited to identifying and evaluating targets for a business combination.
We have not yet entered into any letters of intent, arrangements or agreements
with any companies with respect to a business combination.
 
 We are
currently continuing the process of identifying and evaluating targets for a
business combination. We are not presently engaged in, and will not engage in,
any substantive commercial business until we consummate a business combination.
We intend to utilize cash derived from the proceeds of our IPO, our capital
stock, debt or a combination of cash, capital stock and debt, in effecting a
business combination.
  We
believe that we have sufficient available funds to complete our efforts to
effect a business combination with an operating business.
  For a
description of the proceeds generated in our IPO and a discussion of the use of
such proceeds, we refer you to Notes 1 and 2 of the financial statements
included in Item 15 of this report.
 
 Results of
Operations
  Net
income for the year ended July 31, 2008 was $4,627,581, which consisted of
interest income of the trust fund of $8,189,985 and interest income on cash and
cash equivalents of $95,471, partially offset by general and administrative
costs of $661,284, which was comprised of professional fees of $214,937, filing
fees of $19,837, $90,000 for a monthly administrative services agreement with an
affiliate, $110,750 of directors and officers (“D&O”)
insurance,  $194,959 for Delaware franchise taxes, and $30,801 for
miscellaneous expenses. We also incurred $7,660 of interest expense for the
financing of the D&O insurance and a $2,988,931 provision for income
taxes.
   Net
income for the year ended July 31, 2007 was $1,040,419, which consisted of
interest income of the trust fund of $1,774,460, and interest income on cash and
cash equivalents of $53,571, partially offset by general and administrative
costs of $126,875, which was comprised of general and administrative fees of
$18,172, professional fees of $40,039, $15,000 for a monthly administrative
services agreement with an affiliate, $18,123 of D&O insurance and $35,541
for Delaware franchise taxes. We also incurred $1,277 of interest expense for
the financing of the D&O insurance and a $659,460 provision for income
taxes
   Net loss
for the period from inception (September 9, 2005) to July 31, 2006 was ($2,230),
which was comprised of interest income on cash and cash equivalents of $12,850
offset by general and administrative costs of $15,080 which consisted of fees of
$80 and professional fees of $15,000.
   Net
income  for the period from inception (September 9, 2005) to July 31,
2008 was $5,665,700 which consisted of interest income of the trust fund of
$9,964,446 and interest income on cash and cash equivalents of $161,891,
partially offset by general and administrative costs of $803,239 which was
comprised of professional fees of $269,976, filing fees of $20,770, $105,000 for
a monthly administrative services payment to an affiliate, $129,208 for D&O
Insurance, $230,560 for Delaware franchise taxes, and $47,725 for miscellaneous
expenses.  We also incurred $8,937 of interest expense for the
financing of the D&O Insurance and a $3,648,391 provision for income
taxes.
  
 
 23
 
  Liquidity and Capital
Resources
 
 Of the
gross proceeds from our IPO, including the exercise of an over allotment option
on June 12, 2007: (i) we deposited approximately $220.4 million into a trust
account at Morgan Stanley, maintained by Continental Stock Transfer & Trust
Company, as trustee, which amount included  $4,450,000 that we
received from the sale of warrants to the Initial Stockholders in a private
placement on June 5, 2007; (ii) the underwriters received $7,240,350 as
underwriting discount; (iii) we retained $300,000 for our use outside of the
trust account; and (iv) we used $872,679 for offering expenses.
 
 Our
officers purchased an aggregate of $6,000,000 of our securities, consisting of
6,250,000 shares purchased from us prior to the IPO for $1,550,000, and
5,975,000 warrants, purchased for $4,450,000 concurrent with the
IPO.
 
 The
proceeds deposited in the trust account will not be released from the trust
account until the earlier of the consummation of a business combination or the
expiration of the time period during which we may consummate a business
combination. The proceeds held in the trust account may be used as consideration
to pay the sellers of an acquisition target with which we complete a business
combination. To the extent that our capital stock is used in whole or in part as
consideration to effect a business combination, the proceeds held in the trust
account will be used to finance the operations of the acquisition target. We may
also use the proceeds held in the trust account to pay a finder's fee to any
unaffiliated party that provides information regarding prospective targets to
us.
 
 We
believe that the working capital available to us, in addition to the funds
available to us outside of the trust account will be sufficient to allow us to
operate until May 31, 2009, assuming that a business combination is not
consummated during that time. We have estimated that up to $3,300,000 of working
capital and reserves shall be allocated as follows for our operating expenses
from our initial public offering through May 31, 2009: $800,000 of expenses for
legal, accounting and other expenses attendant to the due diligence
investigations and structuring and negotiating a business combination; up to
$180,000 for the administrative fee payable to PLM International Inc. ($7,500
per month for 24 months), an affiliated third party; $100,000 of expenses in
legal and accounting fees relating to our SEC reporting obligations; and
$2,220,000 for general working capital that can be used for fairness opinions in
connection with our acquisition plans, director and officer liability insurance
premiums, and other miscellaneous expenses and reserves. As of July 31, 2008, we
had $2,800,268 of cash and cash equivalents available for our use outside of the
trust account.
 
 We do not
believe we will need to raise additional funds in order to meet the expenditures
required for operating our business. However, we may need to raise additional
funds through a private offering of debt or equity securities if such funds are
required to consummate a business combination that is presented to us. We would
only consummate such a fund raising simultaneously with the consummation of a
business combination.
 
 Through
July 31, 2008, $7,218,294 of interest income was released to the Company from
the trust account of which $4,242,303 was used to pay income and franchise
taxes.
 
  Off-Balance
Sheet Arrangements
   As of
July 31, 2008 we did not have any off-balance sheet arrangements as defined in
Item 303(a)(4)(ii) of Regulation S-K.
  Contractual
Obligations and Commitments
  Our
contractual obligations are set forth in the following table as of July 31,
2008:
 Payment
      due by period
 
 Less
      than 1
                
                
                
                1-3
                
                
                
                3-5
                
                
                More
      thanTotal
                
                
                year
                
                
                years
                
                
                years
                
                
                5
      yearsContractual
      ObligationsAdministrative
      service agreement (1)
                
                $
                75,000
                
                
                $
                75,000
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Insurance (2)
                
                
                72,491
                
                
                
                72,491
                
                
                
                -
                
                
                
                -
                
                
                
                -Total
                
                $
                147,491
                
                
                $
                147,491
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
  (1) We
are obligated, beginning May 31, 2007, to pay an affiliate of our Chairman of
the Board and Chief Executive Officer and a member of our board of directors, a
monthly fee of $7,500 for office and administrative services. This arrangement
is for our benefit and is not intended to provide compensation in lieu of a
salary. An amount of $90,000 and $15,000 is included in general and
administrative expenses on the accompanying statement of operations for the
years ended July 31, 2008 and 2007 respectively, pursuant to this
arrangement.
  (2)
The Company financed its D&O insurance policy for the amount of $199,350
(the ‘‘Payable’’) due to First Insurance Funding Corp of New
York.  This amount is payable in 22 equal installments of principal
and interest of $9,700, commencing June 30, 2007.
   24
 
 If we do
not complete a business combination by May 31, 2009, if certain extension
criteria have not been satisfied, we will distribute to our stockholders, in
proportion to their respective equity interests in the common stock, an
aggregate sum equal to the amount in the Trust Fund, inclusive of any interest,
and all then outstanding common stock held by public stockholders will be
automatically cancelled. There will be no distribution from the Trust Fund with
respect to common stock held by our initial stockholders. However, any remaining
net assets following the distribution of the Trust Fund will be available for
our use to pay any creditors and to affect our dissolution and liquidation. The
distribution per share, taking into account interest earned on the trust fund,
is approximately $8.01 per share based on the value in the trust fund as of July
31, 2008.
 
 ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  To date,
our efforts have been limited to organizational activities and activities
relating to our initial public offering and the identification of a target
business. We have neither engaged in any operations nor generated any revenues.
As the proceeds from our initial public offering held in trust have been
invested in short term investments, our only market risk exposure relates to
fluctuations in interest.
  As of
July 31, 2008, $223,183,301 was held in trust for the purposes of consummating a
business combination. The proceeds held in trust have been invested in a money
market fund which invests in United States Treasury Bills, commercial paper and
other money market instruments. As of July 31, 2008, the effective annualized
interest rate payable on our investment was 2.31%.
  We have
not engaged in any hedging activities since our inception on September 9, 2005.
We do not expect to engage in any hedging activities with respect to the market
risk to which we are exposed.
  ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
  Our
financial statements, the related notes, the Independent Auditors’ Report
thereon, Management’s Report on Internal Control Over Financial Reporting and
the Independent Auditors’ Report on internal control over financial reporting
are included in our 2008 Financial Statements and are filed as a part of this
report on page 40 following the signatures.
  ITEM 9. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  There
were no changes in or disagreements with accountants on accounting and financial
disclosure.
 
 ITEM 9A. CONTROLS AND
PROCEDURES
 
 We maintain disclosure controls and
procedures that are designed to ensure that the information we are required to
disclose in our reports filed or submitted under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission’s rules and forms. Our
disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information is accumulated and communicated
to management, including our chief executive officer and our chief financial
officer, to allow timely decisions regarding required disclosure.
 
 As required by Rules 13a-15 and 15d-15
under the Exchange Act, our chief executive officer and chief financial officer
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures as of July 31, 2008.  Based
upon 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 as of the end of the period covering the report.
 
 Management’s Report on Internal Control
over Financial Reporting
 
 Our management is responsible for
establishing and maintaining adequate internal control over financial reporting.
As defined in Rule 13a-15 under the Securities Exchange Act of 1934, as amended,
internal control over financial reporting is a process designed by, or under the
supervision of, our principal executive officer and principal financial or
accounting officer and effected by our board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles.
 
 Under the supervision and with the
participation of our management, including our Chief Executive Officer and our
Chief Financial Officer (who also serves as our principal financial officer), we
carried out an evaluation of the effectiveness of our internal control over
financial reporting as of July 31, 2008 based on the criteria in “Internal
Control–Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission.  Based upon this evaluation,
our management concluded that our internal control over financial reporting was
effective as of July 31, 2008.
 
 Changes in Internal Control Over
Financial Reporting
  There was no change in our internal
control over financial reporting that occurred during our last fiscal year that
materially affected, or is likely to materially affect, our internal control
over financial reporting. Our auditor has not notified us that any material
weakness exists with respect to our internal financial
controls.
  25
  
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the
Board of Directors and the Stockholders of
 Stoneleigh
Partners Acquisition Corp.
  We have
audited the internal control over financial reporting, as of July 31, 2008, of
Stoneleigh Partners Acquisition Corp., a development stage company (the
“Company”), based on criteria established in Internal Control — Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the
Treadway Commission (the COSO criteria). The Company’s management is responsible
for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting.
Our responsibility is to express an opinion on the company’s internal control
over financial reporting based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
 
 A
company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the
financial statements.
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
 
 In our
opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of July 31, 2008, based on the COSO
criteria.
 
 We also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the balance sheets of the Company as of July
31, 2008 and 2007 and the related statements of operations, stockholders’
equity, and cash flows for the years ended July 31, 2008 and 2007 and for the
period from September 9, 2005 (date of inception) through July 31, 2008 and our
report dated October 2, 2008 (which contains an explanatory paragraph regarding
the Company’s ability to continue as a going concern) expressed an unqualified
opinion thereon.
  /s/ BDO
Seidman, LLP
 New York,
New York
 October
2, 2008
  26
   ITEM 9B. OTHER
INFORMATION:
  Not
applicable.
  
 
 PART
III
  ITEM
10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  Our
current directors, executive officers and senior advisors are as
follows:
  Name
              Age
              PositionGary
      D.
      Engle
              60
              Chairman
      of the Board and Chief Executive OfficerJames
      A.
      Coyne
              48
              Vice
      Chairman and Chief Financial OfficerMichael
      Clayton
              61
              DirectorJonathan
      Davidson
              42
              DirectorGeoffrey
      A.Thompson
              67
              DirectorBrian
      Kaufman
              44
              Senior
      AdvisorMilton
      J.
      Walters
              66
              Senior
      Advisor
 
 Gary D.
Engle has been our Chief Executive Officer and Chairman since our
inception. From December 1994 until December 2005, Mr. Engle served as
President, Chief Executive Officer and controlling shareholder of Equis
Corporation. Through Equis and other affiliates, Mr. Engle owned and
operated a variety of equipment finance, leasing and real estate companies.
Equis and its affiliates have managed in excess of $1 billion of real estate
assets and equipment leasing assets, have structured and financed more than $2
billion in lease financing transactions and remarketed over $1 billion in
equipment. Since February 2001, Mr. Engle has been a director of PLM
International Inc., a transportation company that leases marine containers,
shipping vessels, commercial aircraft and other assets. PLM sold its rail
leasing assets to CIT Group in August 2005 and its marine, aviation and other
leasing businesses to an affiliate of AMA Capital Partners in November 2005.
Since August 2003, Mr. Engle has served as a member of the executive
committee of CBI Acquisition, LLC, the holding company of Caneel Bay, a luxury
resort on the island of St. John, U.S.V.I. Since May 2000, Mr. Engle has
served on the Board of Managers of DSC/Purgatory, LLC and, since 1999, he has
served on the Board of Managers of Mountain Springs Kirkwood, LLC. DSC and
Mountain Springs own and operate ski resorts in the western United States. Since
March 2000, Mr. Engle has been a member of the Board of Managers of Echelon
Development Holdings, LLC, a Florida-based commercial and residential real
estate development company. Since 1997, Mr. Engle has been the Chairman and
Chief Executive Officer of Semele Group Inc., which serves as a holding company
for a number of investments and is a joint venture partner in Rancho Malibu, a
264-acre residential development in Malibu, California. Semele Group also owns
the general partner of Kettle Valley, a 1,012 unit residential development in
Kelowna, British Columbia. From 1987 to 1994, Mr. Engle was a principal of
Cobb Partners Development Inc., a mortgage trading and real estate company which
he co-founded in 1987. From 1980 to 1987, Mr. Engle served in various
capacities with Arvida Disney Company, a large-scale community real estate
company owned by The Walt Disney Company, including Senior Vice President from
April 1980 to 1987; Chief Financial Officer and Senior Vice President –
Acquisitions from May 1984 to 1987; and Chief Executive Officer of Arvida Disney
Financial Services from May 1984 to 1987. Mr. Engle was a founding Director
of Disney Development, the real estate development division of The Walt Disney
Company. Mr. Engle received a B.S. from the University of Massachusetts
(Amherst) and an M.B.A. from Harvard University.
 
 James A.
Coyne has been our Vice Chairman since January 2007 and our Chief
Financial Officer and a member of our Board of Directors since our inception. He
has also served as President and Chief Executive Officer of PLM International
Inc. since August 2002, and has been a member of its Board of Directors since
February 2001. From December 1994 until December 2005, Mr. Coyne served as
the Senior Vice President of Equis Corporation. Since May 2000, Mr. Coyne
has served on the Board of Managers of DSC/Purgatory, LLC, and, since 1999, has
served on the Board of Managers of Mountain Springs Kirkwood, LLC. Since March
2000, Mr. Coyne has been a member of the Board of Managers of Echelon
Development Holdings, LLC. In January 2007, Mr. Coyne became a Director of
Xybernaut Corporation, a technology company acquired by East River Capital, a
private equity firm that is an affiliate of Mr. Coyne. Since 1997,
Mr. Coyne has served as President and a member of the Board of Directors of
Semele Group, Inc. Mr. Coyne received a B.S. from John Carroll University,
a Master of Accountancy from Case Western Reserve University, and is a certified
public accountant.
   27
  Michael
Clayton has been a member of our Board of Directors since March 2006.
Since August 2005, Mr. Clayton has been a Principal and Managing Director
of ACM Capital, an acquisition evaluation, advisory, and private equity firm.
From April 2002 through November 2005, Mr. Clayton served as President of
PLM Transportation Equipment Corp., a former subsidiary of PLM International.
From May 2001 to April 2002, Mr. Clayton was a Principal of Highland
Capital, a financial services and asset management firm. From 1997 to May 2001,
Mr. Clayton served as Senior Vice President, Global Operations and
Development, and was a member of the Executive Committee of GATX Corporation, a
New York Stock Exchange listed lessor of freight and tank cars. Prior to joining
GATX, Mr. Clayton had over 30 years of additional experience in various
capacities. Mr. Clayton was a Senior Vice President – Original Equipment
and International Operations (1992-1995) and Vice President – International
Operations (1991-1992) of Fel Pro, Inc., a company engaged in the manufacturing
and distribution of automotive engine components to original equipment
manufacturers and after-market sectors. From 1979-1991, Mr. Clayton served
in several capacities at Navistar International Corp., a producer of trucks and
diesel engines. Mr. Clayton currently serves on the Board of Directors of
Andy Frain and Associates, a commercial security and crowd management company
and Coreblox Inc., a hosted website IT support company. He is a Fellow of
Leadership Greater Chicago and recipient of the Urban League’s annual service
award. Mr. Clayton received a B.A. from Illinois Institute of Technology
and an M.B.A. from the University of Chicago.
  Jonathan
Davidson has been a member of our Board of Directors since April 2007 and
served as our Senior Advisor from January 2007 to April 2007. Since November
2004, Mr. Davidson has been a Director of Centinela Freeman Holdings, Inc. In
July 2003, Mr. Davidson co-founded Westridge Capital LLC and has served as a
Managing Member since inception. From September 2003 to September 2004, Mr.
Davidson also served as a Vice President of PLM International. From 1996 to July
2003, Mr. Davidson served as a Managing Director of Digital Coast Partners (now
known as Montgomery & Co.) where he managed the Business and Consumer
Services Group. From 1994 to 1996, Mr. Davidson was a founder and the Chief
Financial Officer of Screenz, L.L.C., the developer of ScreenzNet, a private
online service. From 1987 to 1994, Mr. Davidson served as a Vice President of
Chemical Securities (now known as JPMorgan Chase), where he provided corporate
finance and merger and acquisition advisory services. Mr. Davidson received a
B.A. and an M.B.A. from the University of California at Los
Angeles.
 
 Geoffrey A.
Thompson has been a member of our Board of Directors since March 2006.
Since September 2003, Mr. Thompson has been a Partner at Palisades
Advisors, LLC, a private equity firm. From 1997 to September 2003,
Mr. Thompson served as an independent business consultant. From 1995 to
1997, Mr. Thompson served as a Principal at Kohlberg & Company, a
private equity firm specializing in middle-market investing. In 1992,
Mr. Thompson retired as Chief Executive Officer of Marine Midland Bank,
Inc. (currently HSBC Bank (USA)). Mr. Thompson is a member of the Board of
Directors of Guardian Trust Company, a Guardian Life Insurance subsidiary.
Mr. Thompson is also lead director of Thor Industries, Inc., a New York
Stock Exchange listed producer and seller of a wide range of recreation vehicles
and small and mid-size buses in the United States and Canada. Mr. Thompson
also serves as trustee of the Woods Hole Oceanographic Institution.
Mr. Thompson received a B.A. from Columbia University and an M.B.A. from
Harvard University.
 
 Brian
Kaufman has been our Senior Advisor since January 2007. Since November
2004, Mr. Kaufman has been a Director of Centinela Freeman Holdings, Inc., an
owner of three general acute care hospitals in Los Angeles. In July 2003, Mr.
Kaufman co-founded Westridge Capital LLC and has served as a Managing Member
since inception. Westridge is a private equity firm specializing in investments
in companies that have significant tangible asset bases. From September 2003 to
September 2004, Mr. Kaufman also served as a Vice President of PLM
International. From February 2000 to July 2003, Mr. Kaufman served as a Managing
Director of Digital Coast Partners (now known as Montgomery & Co.), a
boutique investment banking firm where he managed activities in both the Middle
Market and Media Groups. From 1998 to 2000, Mr. Kaufman served as a principal of
Imperial Capital LLC, a boutique investment banking firm, where Mr. Kaufman
worked in both investment banking and the firm’s private investments. From 1994
to 1998, Mr. Kaufman was a co-founder and principal of Kirkland Messina LLC, a
boutique merchant bank targeting leveraged buy-outs of middle market companies.
From 1992 to 1994, Mr. Kaufman was an associate at the law firm of Brobeck,
Phleger & Harrison. From 1989 to 1992, Mr. Kaufman attended law school at
Georgetown University Law Center. From 1986 to 1989, Mr. Kaufman was at Drexel
Burnham Lambert Incorporated, where he provided corporate finance and merger and
acquisition advisory services to financial institutions.  Mr. Kaufman
received a B.B.A. degree from the University of Notre Dame, with highest honors,
and a J.D. degree from Georgetown University Law Center, cum laude.
  Milton J.
Walters has been our Senior Advisor since April 2007 and served as our
President and a member of our Board of Directors from our inception until April
2007. Mr. Walters has served as the President of MJW Partners, Inc., doing
business as Tri-River Capital, a boutique investment banking company, since he
founded that company in 1999. Mr. Walters also founded and served as the
President of the predecessor company to Tri-River, Walters & Co.
Incorporated, doing business as Tri-River Capital Group, from 1988 to 1997. From
1997 to 1999, Mr. Walters served as a Managing Director in the financial
institutions investment banking group of Prudential Securities. From 1984 to
1988, Mr. Walters served as the Manager of the financial institutions
investment banking group of Smith Barney. At AG Becker, and its successor,
Warburg Paribas Becker, Mr. Walters headed investment banking for financial
institutions from 1969 to 1984. Since November 2001, Mr. Walters has served
on the Board of Directors and as Chairman of the Audit and Compensation
Committee of Sun Healthcare Group, Inc., a Nasdaq-listed company.
Mr. Walters also serves on the Board of Directors of several private
companies. Mr. Walters received a B.A. from Hamilton College.
   28
  Our board
of directors is divided into three classes with only one class of directors
being elected in each year and each class serving a three-year term. The term of
office of the first class of directors, consisting of Messrs. Coyne and
Thompson, will expire at our first annual meeting of stockholders. The term of
office of the second class of directors, consisting of Messrs. Davidson and
Clayton, will expire at the second annual meeting. The term of office of the
third class of directors, consisting of Mr. Engle, will expire at the third
annual meeting.
  These
individuals will play a key role in identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring,
negotiating and consummating its acquisition. None of our officers or directors
have been or currently is a principal of, or affiliated with, a blank check
company. However, we believe that the skills and expertise of these individuals,
their collective access to acquisition opportunities and ideas, their contacts,
and their transactional expertise should enable them to successfully identify
and effect an acquisition.
  Audit
Committee
  Our audit
committee of the board of directors consists of Geoffrey A. Thompson, Michael
Clayton and Jonathan Davidson, each of whom is an independent director under the
American Stock Exchange’s listing standards. The audit committee’s duties, which
are specified in our audit committee charter, include, but are not limited
to:
  ·
              reviewing
      and discussing with management and the independent registered public
      accountant the annual audited financial statements, and recommending to
      the board whether the audited financial statements should be included in
      our Form 10-K;
  ·
              discussing
      with management and the independent registered public accountant
      significant financial reporting issues and judgments made in connection
      with the preparation of our financial
  statements;
  ·
              discussing
      with management major risk assessment and risk management
      policies;
  ·
              monitoring
      the independence of the independent registered public
      accountant;
  ·
              verifying
      the rotation of the lead (or coordinating) audit partner having primary
      responsibility for the audit and the audit partner responsible for
      reviewing the audit as required by
law;
  ·
              reviewing
      and approving all related-party
transactions;
  ·
              inquiring
      and discussing with management our compliance with applicable laws and
      regulations;
  ·
              pre-approving
      all audit services and permitted non-audit services to be performed by our
      independent registered public accountant, including the fees and terms of
      the services to be performed;
  ·
              appointing
      or replacing the independent registered public
  accountant;
  ·
              determining
      the compensation and oversight of the work of the independent registered
      public accountant (including resolution of disagreements between
      management and the independent auditor regarding financial reporting) for
      the purpose of preparing or issuing an audit report or related work;
      and
  ·
              establishing
      procedures for the receipt, retention and treatment of complaints received
      by us regarding accounting, internal accounting controls or reports which
      raise material issues regarding our financial statements or accounting
      policies.
  Financial
Experts on Audit Committee
  The audit
committee is comprised exclusively of “independent directors” who are
“financially literate” as defined under the American Stock Exchange listing
standards. The American Stock Exchange listing standards define “financially
literate” as being able to read and understand fundamental financial statements,
including a company’s balance sheet, income statement and cash flow
statement.
  In
addition, the board of directors has determined that Jonathan Davidson satisfies
the American Stock Exchange’s definition of financial sophistication and also
qualifies as an “audit committee financial expert,” as defined under rules and
regulations of the SEC.
  
 29
 
 Nominating
Committee
  Our
nominating committee of the board of directors consists of Geoffrey A. Thompson,
Michael Clayton and Jonathan Davidson, each of whom is an independent director
under the American Stock Exchange’s listing standards. The nominating committee
is responsible for overseeing the selection of persons to be nominated to serve
on our board of directors. The nominating committee considers persons identified
by its members, management, shareholders, investment bankers and
others.
  Guidelines
for Selecting Director Nominees
  The
guidelines for selecting nominees, which are specified in the nominating
committee charter, generally provide that persons to be nominated:
  ·
              should
      have demonstrated notable or significant achievements in business,
      education or public service;
  ·
              should
      possess the requisite intelligence, education and experience to make a
      significant contribution to the board of directors and bring a range of
      skills, diverse perspectives and backgrounds to its deliberations;
      and
 
 ·
              should
      have the highest ethical standards, a strong sense of professionalism and
      intense dedication to serving the interests of the
      stockholders.
  The
nominating committee will consider a number of qualifications relating to
management and leadership experience, background and integrity and
professionalism in evaluating a person’s candidacy for membership on the board
of directors. The nominating committee may require certain skills or attributes,
such as financial or accounting experience, to meet specific board needs that
arise from time to time. The nominating committee does not distinguish among
nominees recommended by stockholders and other persons.
  Code
of Ethics
  We have
adopted a code of ethics that applies to all of our executive officers,
directors and employees. The code of ethics codifies the business and ethical
principles that govern all aspects of our business.  A copy of our
code ethics is available at no charge upon written request addressed to our Vice
Chairman at our principal executive offices.
  Conflicts
of Interest
  Potential
investors should be aware of the following potential conflicts of
interest:
  ·
              none
      of our officers and directors are required to commit their full time to
      our affairs and, accordingly, they may have conflicts of interest in
      allocating management time among various business
    activities.
  ·
              in
      the course of their other business activities, our officers and directors
      may become aware of investment and business opportunities which may be
      appropriate for presentation to us as well as the other entities with
      which they are affiliated. They may have conflicts of interest in
      determining to which entity a particular business opportunity should be
      presented. For a complete description of our management’s other
      affiliations, see the previous section entitled “— Directors and Executive
      Officers.”
  ·
              our
      officers and directors may in the future become affiliated with entities,
      including other blank check companies, engaged in business activities
      similar to those intended to be conducted by
us.
  ·
              the
      initial shares owned by our officers, directors and senior advisors will
      be released from escrow only if a business combination is successfully
      completed, and the insider warrants purchased by our officers, directors
      and senior advisors and any warrants which they may have purchased in our
      initial public offering or in the aftermarket will expire worthless if a
      business combination is not consummated. Additionally, our officers,
      directors and senior advisors will not receive liquidation distributions
      with respect to any of their initial shares. Furthermore, our officers,
      directors and senior advisors have agreed that the insider warrants will
      not be sold or transferred by them until after we have completed a
      business combination. For the foregoing reasons, our board may have a
      conflict of interest in determining whether a particular target business
      is appropriate to effect a business combination
  with.
 
  30
   ·
              our
      directors and officers may enter into consulting or employment agreements
      with the company as part of a business combination pursuant to which they
      may be entitled to compensation for their services following the business
      combination. The personal and financial interests of our directors and
      officers may influence their motivation in identifying and selecting a
      target business, and completing a business combination in a timely
      manner.
  ·
              Gary
      D. Engle, our Chairman and Chief Executive Officer, James A. Coyne, our
      Vice Chairman and Chief Financial Officer, Jonathan Davidson, a director,
      and Brian Kaufman, one of our Senior Advisors, have entered into an
      agreement with HCFP/Brenner Securities pursuant to which such individuals,
      or entities they control, will place limit orders for an aggregate of $15
      million of our units commencing 30 calendar days after we file a
      preliminary proxy statement seeking approval of our stockholders for a
      business combination and ending 30 days thereafter. Each of Messrs. Engle,
      Coyne, Davidson and Kaufman has agreed that he will not sell or transfer
      any units purchased by him pursuant to this agreement (or any of the
      securities included in such units) until the earlier of the completion of
      a business combination or our liquidation. If Messrs. Engle, Coyne,
      Davidson and Kaufman purchase units pursuant to that agreement or if any
      of them or any of our other officers, directors or senior advisors
      purchased units or common stock as part of our initial public offering or
      in the open market, they are entitled to vote the shares of common stock
      they so acquire on a proposed business combination any way they choose
      which may influence whether or not the business combination is
      approved.
  In
general, officers and directors of a corporation incorporated under the laws of
the State of Delaware are required to present business opportunities to a
corporation if:
  ·
              the
      corporation could financially undertake the opportunity;
  ·
              the
      opportunity is within the corporation’s line of business; and
  ·
              it
      would not be fair to the corporation and its stockholders for the
      opportunity not to be brought to the attention of the
      corporation.
  Accordingly,
as a result of multiple business affiliations, our officers and directors may
have similar legal obligations relating to presenting business opportunities
meeting the above-listed criteria to multiple entities. In addition, conflicts
of interest may arise when our board evaluates a particular business opportunity
with respect to the above-listed criteria. We cannot assure you that any of the
above mentioned conflicts will be resolved in our favor. If any of these
conflicts are not resolved in our favor, it may diminish our ability to complete
a favorable business combination.
 
 In order
to minimize potential conflicts of interest which may arise from multiple
corporate affiliations, each of our officers and directors has agreed, until the
earlier of a business combination or the distribution of the trust fund to our
public stockholders, or such time as he ceases to be an officer or director, to
present to our company for our consideration, prior to presentation to any other
entity, any suitable business opportunity which may reasonably be required to be
presented to us subject to any pre-existing fiduciary or contractual obligations
he might have. Our management has advised us that the entities with which they
are affiliated do not seek to acquire assets with a purchase price in excess of
$55 million. Because the initial target business, or the controlling
interest (but not less than a majority of the voting interest) therein, that we
acquire must have a fair market value equal to at least 80% of our net assets at
the time of the acquisition, a transaction which could be consummated as a
business combination would not be considered by any entities affiliated with our
management.
  Our
senior advisors have fiduciary obligations to the other entities with which they
are directors or officers. They have no fiduciary obligations to present to us
for our consideration any suitable business opportunity.
  In
connection with the vote required for any business combination, all of our
initial stockholders, including all of our officers, directors and senior
advisors, have agreed to vote their respective initial shares in accordance with
the vote of the public stockholders owning a majority of the shares of our
common stock sold in our initial public offering.  In addition, they have
agreed to waive their respective rights to participate in any liquidation
distribution with respect to those shares of common stock acquired by them prior
to our initial public offering. Any common stock acquired by initial
stockholders in our initial public offering or aftermarket are considered part
of the holdings of the public stockholders.  Except with respect to the
conversion rights afforded to public stockholders, these initial stockholders
have the same rights as other public stockholders with respect to such shares,
including voting rights in connection with a potential business combination.
Accordingly, they may vote such shares on a proposed business combination any
way they choose.
  To
further minimize potential conflicts of interest, we have agreed not to
consummate a business combination with an entity which is affiliated with any of
our initial stockholders unless we obtain an opinion from an independent
investment banking firm that the business combination is fair to our
stockholders from a financial point of view. Such fairness opinion will be
received by us either prior to the execution of a definitive agreement relating
to the business combination, or such opinion will be a condition to the
consummation of such business combination.
   31
  If we
receive a fairness opinion at the time we enter into a definitive agreement
relating to the business combination, we expect that we would pay all or a
portion of the fee upon delivery of the opinion and the balance, if any, upon
closing of the business combination. If we receive the fairness opinion and
payment is contingent on the consummation of the business combination (which we
do not anticipate happening), we expect that the fee would not be payable until
the business combination is completed.
  Additionally,
in no event will any of our existing officers, directors, stockholders or senior
advisors, or any entity with which they are affiliated, be paid any finder’s
fee, consulting fee or other compensation prior to, or for any services they
render in order to effectuate, the consummation of a business
combination.
  Section
16(A) Beneficial Ownership Reporting Compliance
  Section
16(a) of the Securities Exchange Act of 1934 requires certain officers and
directors of Stoneleigh Partners Acquisition Corp., and any persons who own more
than ten-percent of the common stock outstanding to file forms reporting their
initial beneficial ownership of shares and subsequent changes in that ownership
with the Securities and Exchange Commission and the NASDAQ Stock Market.
Officers and directors of Stoneleigh Partners Acquisition Corp., and greater
than ten-percent beneficial owners are also required to furnish us with copies
of all such Section 16(a) forms they file. Based solely on a review of the
copies of the forms furnished to us, or written representations from certain
reporting persons that no Forms 5 were required, we believe that during
the  fiscal year ended July 31, 2008 we complied with all section
16(a) filing requirements.
  ITEM
11.  EXECUTIVE COMPENSATION
  Compensation
Discussion and Analysis
  None of
our executive officers, directors or senior advisors has received any cash
compensation for services rendered.  Additionally, we have not entered
into employment agreements with any of our executive officers, directors or
senior advisors.  Commencing May 31, 2007, we began paying PLM
International Inc., an affiliate of Messrs. Engle and Coyne, a fee of
$7,500 per month for providing us with office space and certain office and
administrative services. However, this arrangement is solely for our benefit and
is not intended to provide Messrs. Engle or Coyne compensation in lieu of a
salary. Other than this $7,500 per-month fee, no compensation of any kind,
including finder’s and consulting fees, has been paid to any of our initial
stockholders, officers, directors, senior advisorsor any of their
respective affiliates, prior to, or for any services they render in order to
effectuate, the consummation of a business combination. However, they are
reimbursed for any out-of-pocket expenses incurred in connection with activities
on our behalf such as identifying potential target businesses and performing due
diligence on suitable business combinations. There is no limit on the amount of
these out-of-pocket expenses and there is no review of the reasonableness of the
expenses by anyone other than our board of directors (which includes persons who
may seek reimbursement) or a court of competent jurisdiction if such
reimbursement is challenged. Because of the foregoing, we generally do not have
the benefit of independent directors examining the propriety of expenses
incurred on our behalf and subject to reimbursement.
  Since our
formation, we have not granted any stock options or stock appreciation rights or
any awards under long-term incentive plans.
  Other
than the securities described above and in the section appearing below in this
Annual Report on Form 10-K entitled “Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters,” neither our officers nor
our directors have received any of our equity securities.
  Compensation Committee Interlocks and
Insider Participation
 
 None.
 
 Compensation
Report
  Since we
do not have a compensation committee, the board of directors has reviewed and
discussed with our management the Compensation Discussion and Analysis. Based on
this review and these discussions with management, the board of directors has
determined that the Compensation Discussion and Analysis be included in this
Annual Report on Form 10-K.
   32
  ITEM
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
 
  ·
              The
      following table sets forth information regarding the beneficial ownership
      of our common stock as of  October 3, 2008,
  by:
  ·
              each
      person known by us to be the beneficial owner of more than 5% of our
      outstanding shares of common stock;
  ·
              each
      of our officers, directors and senior advisors;
  and
  ·
              all
      our officers and directors as a
group.
 
 
 Name and
      Address of Beneficial Owner(1)
              Amount
      and Nature of Beneficial Ownership
              Approximate
      Percentage of
                Outstanding
      Common StockGary D. Engle(2)
              1,003,874(3)
              2.9%Gary
      D. Engle 2008 GRAT(4)
              2,342,370(5)
              6.87%James A. Coyne(2)
              2,107,422(6)
              6.18%Brian Kaufman(7)
              307,335(8)
              *Jonathan Davidson(7)
              307,335(8)
              *Milton
      J. Walters
              125,037(9)
              *Geoffrey
      A. Thompson
              39,203
              *Michael Clayton(10)
              17,424
              *Credit
      Suisse(11)
              3,101,400
              9.1%Fir Tree, Inc.(12)
              1,780,350
              5.2%QVT Financial LP(13)
              2,689,000
              7.89%Deutsche
      Bank AG(14)
              2,339,708
              6.86%HBK
      Investments L.P. (15)
              2,202,500
              6.5%President
      and Fellows of Harvard College (16)
              2,307,000
              6.8%All
      directors and executive officers as a group (five
    individuals)
              3,475,258(17)
              9.08%
 
 * Less
than 1%.
  (1)
              Unless
      otherwise noted, the business address of each of the following is 20
      Marshall Street, South Norwalk, CT
06854.
  (2)
              The
      business address of this individual is c/o Hera East Holdings, LLC, 20
      Marshall Street, Suite 104, South Norwalk, CT
  06854.
  (3)
              Does
      not include 3,273,434 shares of common stock issuable upon exercise of
      insider warrants held by Mr. Engle which are not currently exercisable and
      will not become exercisable within 60
days.
 
 (4)
              The
      business address of this entity is Gary D. Engle 2008 GRAT, c/o Wayne
      Engle, 398 Highland Avenue, Winchester, MA
  01890.
 
 (5)
              These
      shares are held by Wayne E. Engle as Trustee of the Gary D. Engle 2008
      GRAT.  The beneficiaries of the GRAT are members of Gary D.
      Engle’s immediate family.
 
 (6)
              These
      shares are held by JAC Opportunity Fund I, LLC, a family-held entity of
      which Mr. Coyne is the sole manager. Does not include 2,061,567 shares of
      common stock issuable upon exercise of insider warrants held by JAC
      Opportunity Fund I, LLC which are not currently exercisable and will not
      become exercisable within 60 days.
  (7)
              The
      business address of this individual is 11150 Santa Monica Boulevard, Suite
      700, Los Angeles, California 90025.
  (8)
              Does
      not include 300,648 shares of common stock issuable upon exercise of
      insider warrants held by such individual which are not currently
      exercisable and will not become exercisable within 60
  days.
  (9)
              Does
      not include 38,703 shares of common stock issuable upon exercise of
      insider warrants held by Mr. Walters which are not currently exercisable
      and will not become exercisable within 60
days.
   33
   (10)
              The
      business address of this individual is 3030 Blackthorn Road, Riverwoods,
      Illinois 60015.
 
 (11)
              Based
      on a Schedule 13G filed with the Securities and Exchange Commission on
      August 22, 2008 on behalf of the subsidiaries of Credit Suisse to the
      extent that they constitute the Investment Banking Division, the
      Alternative Investments business within the Asset Management division and
      the U.S. private client services business within the Private Banking
      division.  The business address is Uetlibergstrasse 231, P.O.
      Box 900, CH 8070 Zurich,
Switzerland.
 
 (12)
              Based
      on a Schedule 13G/A filed with the Securities and Exchange Commission on
      February 14, 2008 on behalf of Sapling, LLC (“Sapling”), Fir Tree Capital
      Opportunity Master Fund, L.P. (“Fir Tree Capital Opportunity”) and Fir
      Tree, Inc. (“Fir Tree”).  Such filing indicates that (a) Sapling
      has shared voting and dispositive power with respect to 1,457,950 shares,
      (b) Fir Tree Capital Opportunity has shared voting and dispositive power
      with respect to 322,400 shares and (c) Fir Tree has shared and dispositive
      power with respect to 1,780,350 shares.  Fir Tree is the
      investment manager for each of Sapling and Fir Tree Capital Opportunity
      and has been granted investment discretion over portfolio investments,
      including the common stock, held by each of them.  The business
      addresses are as follows:  Fir Tree, Inc. and Sapling, LLC 505
      Fifth Avenue,  23rd
      Floor, New York, NY 10017 and Fir Tree Recovery Master Fund, L.P., c/o
      Admiral Administration Ltd., Admiral Financial Center, 5th
      Floor, 90 Fort Street, Box 32021 SMB, Grand Cayman, Cayman
      Islands.
  (13)
              Based
      on a Schedule 13G/A filed with the Securities and Exchange Commission on
      February 11, 2008 on behalf of QVT Financial LP, QVT Financial GP LLC, QVT
      Fund LP and QVT Associates GP LLC.  QVT Financial LP is the
      investment manager for QVT Fund LP (the “Fund”), which beneficially owns
      2,161,535 shares of common stock, and for Quintessence Fund L.P.
      (“Quintessence”), which beneficially owns 239,602 shares of common
      stock.  QVT Financial LP is also the investment manager for a
      separate discretionary account managed for Deutsche Bank AG (the “Separate
      Account”), which beneficially holds 287,863 shares of common
      stock.  Accordingly, QVT Financial LP may be deemed to
      beneficially own an aggregate of 2,689,000 shares consisting of the shares
      owned by the Fund and Quintessence and the shares held in the Separate
      Account.  QVT Financial GP LLC, as General Partner of QVT
      Financial LP may be deemed to beneficially own the shares of common stock
      reported by QVT Financial LP.  The business addresses are as
      follows:  QVT Financial LP, QVT Financial GP LLC, QVT Associates
      GP LLC, 1177 Avenue of the Americas, 9th
      Floor, New York, NY 10036, QVT Fund LP, Walkers SPV, Walkers House, Mary
      Street, George Town, Grand Cayman KY1-9002, Cayman
  Islands.
 
 (14)
              Based
      on a Schedule 13G/A filed with the Securities and Exchange Commission on
      February 6, 2008 on behalf of Deutsche Bank AG, and reflects the
      securities beneficially owned by the Corporate and Investment Banking
      business group and the Corporate  Investments business group
      (collectively, “CIB”) of Deutsche Bank AG and its subsidiaries and
      affiliates (collectively, “DBAG”). The amount does not reflect securities,
      if any, beneficially owned by any other business group of
      DBAG. CIB disclaims beneficial ownership of the securities
      beneficially owned by (i) any client accounts with respect to which
      CIB or its employees have voting or  investment discretion, or both,
      and (ii) certain investment entities, of which CIB is the general
      partner, managing general partner, or other manager, to the extent
      interests in such entities are held by persons other than
      CIB.  The business address of the holder is Theodor-Heuss-Allee
      70, 60468 Frankfurt am Main, Federal Republic of
  Germany.(15)
              Based
      on a Schedule 13G/A filed with the Securities and Exchange Commission on
      February 11, 2008 on behalf of HBK Investments L.P., HBK Services LLC, HBK
      Partners II L.P., HBK Management LLC and HBK Master Fund
      L.P.  The business addresses are as follows:  HBK
      Investments L.P., HBK Services LLC, HBK Partners II L.P. and HBK
      Management LLC, 300 Crescent Court, Suite 700, Dallas, Texas 75201 and HBK
      Master Fund L.P. is c/o HBK Services LLC, 300 Crescent Court, Suite 700,
      Dallas, Texas 75201.(16)
              Based
      on a Schedule 13G filed with the Securities and Exchange Commission on
      February 14, 2008 on behalf of President and Fellows of Harvard
      College.  The business address is c/o Harvard Management
      Company, Inc., 600 Atlantic Avenue, Boston, MA
  02210.
  (17)
              Does
      not include 5,635,649 shares of common stock issuable upon exercise of
      insider warrants held by such individuals which are not currently
      exercisable and will not become exercisable within 60
  days.
 
 All of
the initial stockholders’ initial shares has been placed in escrow with
Continental Stock Transfer & Trust Company, as escrow agent, until one year
after the consummation of our initial business combination. The initial shares
may be released from escrow earlier than this date if, within the first year
after we consummate a business combination, we consummate a subsequent
liquidation, merger, stock exchange or other similar transaction which results
in all of our stockholders having the right to exchange their shares of common
stock for cash, securities or other property. During the escrow period, the
holders of these shares are not able to sell or transfer their securities except
(i) to relatives and trusts for estate planning purposes or (ii) by private
sales made at or prior to the consummation of a business combination to
individuals that the holders believe may bring value to our company, at prices
no greater than the price at which the shares were originally purchased, in each
case where the transferee agrees to the terms of the escrow agreement, but
retain all other rights as our stockholders, including, without limitation, the
right to vote their shares of common stock and the right to receive cash
dividends, if declared. Transfers made pursuant to clause (ii) of the previous
sentence may result in our incurring a share-based compensation charge if the
transfer is deemed compensatory in nature. The initial stockholders have no
current intention or plans to make any such transfers. If dividends are declared
and payable in shares of common stock, such dividends will also be placed in
escrow. If we are unable to effect a business combination and liquidate, none of
our initial stockholders will receive any portion of the liquidation proceeds
with respect to their initial shares.
   34
 
 Our
officers, directors and senior advisors purchased insider warrants on a private
placement basis simultaneously with the consummation of our initial public
offering. The insider warrants are identical to warrants underlying the units
sold in our initial public offering except that if we call the warrants for
redemption, the insider warrants are exercisable on a cashless basis so long as
they are still held by the purchasers or their affiliates. Our officers,
directors and senior advisors have agreed not to sell or transfer the insider
warrants held by them until after the consummation of our initial business
combination.
  In
addition, Gary D. Engle, our Chairman and Chief Executive Officer, James A.
Coyne, our Vice Chairman and Chief Financial Officer, Jonathan Davidson, a
director, and Brian Kaufman, one of our Senior Advisors, have entered into an
agreement with HCFP/Brenner Securities which is intended to comply with Rule
10b5-1 under the Exchange Act, pursuant to which such individuals, or entities
such individuals control, will place limit orders for an aggregate of $15
million of our units commencing 30 calendar days after we file a preliminary
proxy statement seeking approval of a business combination and ending 30 days
thereafter. If $15 million of units are purchased under this agreement at a
price of $8.65 per unit, these officers, directors and senior advisors would
own, in the aggregate, approximately 22.9% of the outstanding common stock, in
addition to any common stock they may purchase in the market after our initial
public offering. Each of Messrs. Engle, Coyne, Davidson and Kaufman may vote the
shares of common stock included in these units on a proposed business
combination in any manner they choose and may influence whether or not the
business combination is approved. They have also agreed that none of them will
sell or transfer any units purchased pursuant to this agreement (or any of the
securities included in such units) until the earlier of the completion of a
business combination or our liquidation. It is intended that these purchases
will comply with Rule 10b-18 under the Exchange Act and, accordingly, any
purchases that are not in compliance with the safe harbor provisions of Rule
10b-18 will not be made. These purchases will be made at a price not to exceed
$8.65 per unit and will be made by HCFP/Brenner Securities or another
broker-dealer mutually agreed upon by such individuals and HCFP/Brenner
Securities in such amounts and at such times as HCFP/Brenner Securities or such
other broker-dealer may determine, in its sole discretion, so long as the
purchase price does not exceed the above-referenced per unit purchase price.
Each of Messrs. Engle, Coyne, Davidson and Kaufman has made available, and has
agreed to make available in the future, to HCFP/Brenner Securities monthly
statements confirming that such individual has sufficient funds to satisfy these
transactions. Messrs. Engle, Coyne, Davidson and Kaufman have agreed with each
other that, to the extent that one of such individuals does not satisfy his pro
rata portion of his obligation under that agreement, he will transfer all or a
portion of his shares to the individual or individuals that are required by
HCFP/Brenner Securities to satisfy his obligation under that
agreement.
  Messrs. Engle
and Coyne are deemed to be our “promoters,” as such term is defined under the
Federal securities laws.
  ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
  PLM
International, an affiliate of Messrs. Engle and Coyne, makes available to
us office space and certain office and administrative services, as we may
require from time to time. Commencing on May 31, 2007 through the consummation
of a business combination, we are paying PLM International $7,500 per month for
these services. Mr. Engle is a director of PLM International and
Mr. Coyne is the President and Chief Executive Officer of PLM
International. Mr. Engle’s and Mr. Coyne’s families own approximately
62% and 33%, respectively, of PLM International through various family entities.
Consequently, each benefits from this transaction to the extent of his interest
in PLM International. However, this arrangement is solely for our benefit and is
not intended to provide Messrs. Engle or Coyne compensation in lieu of a
salary. We believe, based on rents and fees for similar services in the South
Norwalk, CT area, that the fees charged by PLM International is at least as
favorable as we could have obtained from an unaffiliated person. However, as our
directors may not be deemed “independent,” we did not have the benefit of
disinterested directors approving this transaction.
  We will
reimburse our initial stockholders, including our officers and directors, for
any reasonable out-of-pocket business expenses incurred by them in connection
with certain activities on our behalf such as identifying and investigating
possible target businesses and business combinations. There is no limit on the
amount of accountable out-of-pocket expenses reimbursable by us, which will be
reviewed only by our board or a court of competent jurisdiction if such
reimbursement is challenged.
  Other
than the $7,500 per-month administrative fee payable to PLM International Inc.
and reimbursable out-of-pocket expenses payable to our officers and directors,
no compensation or fees of any kind, including finders and consulting fees, will
be paid to any of our initial stockholders, officers or directors, or to any of
their affiliates prior to, or for any services they render in order to
effectuate, the consummation of the business combination.
  Any
ongoing or future transactions between us and any of our officers, directors,
senior advisors or their respective affiliates, including loans by our officers,
directors or senior advisors will require prior approval in each instance by a
majority of our disinterested “independent” directors (to the extent we have
any) or the members of our board who do not have an interest in the transaction.
These directors will, if they determine necessary or appropriate, have access,
at our expense, to our attorneys or independent legal counsel. We will not enter
into any such transaction unless our disinterested “independent” directors (or,
if there are no “independent” directors, our disinterested directors) determine
that the terms of such transaction are no less favorable to us than those that
would be available to us with respect to such a transaction from unaffiliated
third parties.
   35
 
 The
American Stock Exchange requires that a majority of our board must be composed
of “independent directors,” which is defined generally as a person other than an
officer or employee of the company or its subsidiaries or any other individual
having a relationship, which, in the opinion of our board of directors would
interfere with the director’s exercise of independent judgment in carrying out
the responsibilities of a director.
  The board
has determined that each of Geoffrey A. Thompson, Michael Clayton and Jonathan
Davidson are independent directors as defined under the American Stock
Exchange’s listing standards, constituting a majority of our board.
  Any
affiliated transactions will be on terms no less favorable to us than could be
obtained from independent parties. Any affiliated transactions must be approved
by a majority of our independent and disinterested directors.  The
disclosure set forth in this annual report on Form 10-K serves as our written
policy as to the approval of related party transactions.
  Unless
otherwise indicated, we believe that all persons named in the table have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them.
  
 ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES:
 
 The firm
of BDO Seidman, LLP (“BDO”) acts as our independent registered public accounting
firm. The following is a summary of fees for services
rendered:
 
 
 From
      September 9,2005
                (inception)
      to
                July
      31, 2007
              
              
              From
      August 1, 2007 to
                July
      31, 2008Audit
      fees
              
              $
              115,470
              
              
              $
              76,135Audit-related
              
              
              -
              
              
              
              -Tax
      fees
              
              
              -
              
              
              
              -All
      other fees
              
              
              -
              
              
              
              -Total
              
              $
              115,470
              
              
              $
              76,135
 
 Audit fees for the period from
inception to July 31, 2007 related to professional services rendered in
connection with our initial public offering (comprised of various financial
statements included in our Registration Statement on Form S-1, including all
amendments, and our Current Report on Form 8-K filed with the SEC on June 7,
2007), aggregating $86,650, the audit of our financial statements for the period
from September 9, 2005 (date of inception) to July 31, 2007, $20,940, and the
quarterly review of financial statements included in our quarterly report on
Form 10-Q for the quarterly period ended April 30, 2007, $7,880.
 
 Audit fees for the fiscal year ended
July 31, 2008 relate to professional services rendered for the audit of our
financial statements and internal control for the fiscal year, estimated at
$38,000, and the quarterly reviews of financial statements included in our
quarterly reports on Form 10-Q for the quarters ended October 31, 2007, January
31, 2008 and April 30, 2008, aggregating $38,135.
   Pre-Approval
Policy
  Our audit
committee pre-approved all of the foregoing services for our fiscal year ended
July 31, 2008.  Any services rendered prior to the formulation of our
audit committee were approved by our board of directors. Since the formation of
our audit committee, and on a going-forward basis, the audit committee has and
will continue to pre-approve all auditing services and permitted non-audit
services to be performed for us by BDO, including the fees and terms thereof
(subject to the de minimis exceptions for non-audit service described in the
Exchange Act which are approved by the audit committee prior to the completion
of the audit). The audit committee may form and delegate authority to grant
pre-approvals of audit and permitted non-audit services, provided that decisions
of such subcommittee to grant pre-approvals shall be presented to the full audit
committee at its next scheduled meeting.
  
 36
 
 PART
IV
  ITEM
15.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM
8-K:
  1.
              Financial
      Statements
 
 PagesReport
      of Independent Registered Public Accounting Firm
              
              F-1Financial
      Statements:Balance
      Sheets, July 31, 2008 and  2007
              
              F-2Statements
      of Operations, for the years ended July 31, 2008 and 2007, the period from
      September 9, 2005 (inception) to July 31, 2006 and  the period
      from September 9, 2005 (inception) to July 31, 2008
              
              F-3Statements
      of Stockholders’ Equity, from September 9, 2005 (inception) to July 31,
      2008
              
              F-4Statements
      of Cash Flows,  for the years ended July 31, 2008 and 2007, the
      period from September 9, 2005 (inception) to July 31, 2006
      and  for the period  September 9, 2005 (inception) to
      July 31, 2008
              
              F-5Notes
      to Financial Statements
              
              F-6
 
 
 2.
              Exhibits
  Exhibits
marked with an asterisk (*) are incorporated by reference to documents
previously filed by us with the SEC, as exhibits to our registration statement
on Form S-1 (File No. 333-128335). All other documents listed are filed with
this report.
  Exhibit
      No.
                Description3.1*
                Form
      of Amended and Restated Certificate of Incorporation.3.2*
                By-laws.4.1*
                Specimen
      Unit Certificate.4.2*
                Specimen
      Common Stock Certificate.4.3*
                Specimen
      Warrant Certificate.4.4*
                Form
      of Unit Purchase Option to be granted to
Representative.4.5*
                Form
      of Warrant Agreement between Continental Stock Transfer & Trust
      Company and the Registrant.10.1*
                Letter
      Agreement among the Registrant, HCFP/Brenner Securities LLC and Milton J.
      Walters.10.2*
                Letter
      Agreement among the Registrant, HCFP/Brenner Securities LLC and Gary D.
      Engle.10.3*
                Letter
      Agreement among the Registrant, HCFP/Brenner Securities LLC and James A.
      Coyne.10.4*
                Letter
      Agreement among the Registrant, HCFP/Brenner Securities LLC and Geoffrey
      A. Thompson.10.5*
                Letter
      Agreement among the Registrant, HCFP/Brenner Securities LLC and Michael
      Clayton.10.6*
                Letter
      Agreement among the Registrant, HCFP/Brenner Securities LLC and JAC
      Opportunity Fund I, LLC.10.7*
                Form
      of Investment Management Trust Agreement between Continental Stock
      Transfer & Trust Company and the Registrant.10.8*
                Form
      of Registration Rights Agreement among the Registrant and the Initial
      Stockholders.10.9*
                Form
      of Administrative Services Agreement between the Registrant and PLM
      International Inc.
 
  37
  
 10.10*
                Form
      of Letter Agreement among the Registrant, HCFP/Brenner Securities LLC and
      Jonathan Davidson.10.11*
                Form
      of Letter Agreement among the Registrant, HCFP/Brenner Securities LLC and
      Brian Kaufman.10.12*
                Form
      of Letter Agreement among the Registrant, Gary D. Engle, James A. Coyne,
      Milton J. Walters, Jonathan Davidson, Brian Kaufman and HCFP/Brenner
      Securities LLC.10.13*
                Form
      of Stock Escrow Agreement between the Registrant, Continental Stock
      Transfer & Trust Company and the Initial
  Stockholders.10.14*
                Form
      of Warrant Subscription Agreement.14.1
                Code
      of Ethics.31.1
                Section
      302 Certification by Chief Executive Officer.31.2
                Section
      302 Certification by Chief Financial Officer.32.1
                Section
      906 Certification by Chief Executive Officer.32.2
                Section
      906 Certification  by Chief Financial
Officer.99.1
                Charter
      of the Nominating Committee of the Board of Directors.99.2
                Charter
      of the Audit Committee of the Board of
  Directors.
           
 
  38
  
 
 SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) 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 on the 6th day of October,
2008.
  STONELEIGH
PARTNERS
 ACQUISITION
CORP.
 
 By:  /s/ Gary D.
Engle
 Gary D.
Engle
 Chairman
of the Board and
 Chief
Executive Officer
 
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on the 6th day of October, 2008 by the following persons
on behalf of the registrant and in the capacity indicated.
  
 Name
              Title/s/ Gary D.
      Engle
                Gary
      D. Engle
              Chairman
      of the Board and Chief Executive Officer
                (Principal
      Executive Officer)/s/ James A.
      Coyne
                James
      A. Coyne
              Vice
      Chairman, Chief Financial Officer, Secretary and Director
                (Principal
      Accounting Officer)/s/ Michael
      Clayton
                Michael
      Clayton
              Director/s/ Jonathan
      Davidson
                Jonathan
      Davidson
              Director/s/ Geoffrey
      Thompson
                Geoffrey
      Thompson
              Director
  39
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   Board of
Directors and Stockholders
  Stoneleigh
Partners Acquisition Corp.
  
  We have
audited the accompanying balance sheets of Stoneleigh Partners Acquisition Corp.
(a corporation in the development stage) as of July 31, 2008 and 2007, and
the related statements of operations, stockholders’ equity and cash flows for
the years ended July 31, 2008 and 2007, the period from September 9, 2005
(inception) to July 31, 2006 and for the period from September 9, 2005
(inception) to July 31, 2008.  These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
  
 We
conducted our audits in accordance with the standards of Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Stoneleigh Partners Acquisition
Corp. as of July 31, 2008 and 2007, and its results of operations and its cash
flows for the years ended July 31, 2008 and 2007, the period from September
9, 2005 (inception) to  July 31, 2006 and for the period from
September 9, 2005 (inception) to  July 31, 2008, in conformity with
accounting principles generally accepted in the United States of
America.
   The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company is required to consummate a business combination
by May 31, 2009. The possibility of such business combination not being
consummated raises substantial doubt about the Company's ability to continue as
a going concern, and the financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
   We also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the effectiveness of the Company’s internal
control over financial reporting as of July 31, 2008, based on criteria
established in Internal
Control – Integrated Frameworkissued by the Committee of Sponsoring
Organiztations of the Treadway Commission (COSO) and our report dated October 2,
2008 expressed an unqualified opinion thereon.
  /s/ BDO Seidman, LLP
 New York,
NY
  October
2, 2008
  
  
  
  
  
  
 
 
 
 
 
  F-1
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 BALANCE SHEETS
 
 July
      31, 2008
                
                July
      31, 2007ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
                $
                2,800,268
                
                
                $
                1,035,420Investments
      held in Trust (Notes 1 and 3)
                
                223,183,301
                
                
                
                221,416,629Prepaid
      federal and state income taxes
                
                426,826
                
                
                
                -Prepaid
      expenses
                
                115,305
                
                
                
                213,542Total
      current assets
                
                226,525,700
                
                
                
                222,665,591TOTAL
    ASSETS
                $
                226,525,700
                
                
                $
                222,665,591LIABILITIES AND STOCKHOLDERS’
      EQUITYCURRENT
      LIABILITIES:Accounts
      payable and accrued expenses
                $
                70,452
                
                
                $
                27,460Accrued
      registration costs
                
                -
                
                
                
                11,538Federal
      and state taxes payable
                
                -
                
                
                
                690,189Note
      payable, current portion (Note 7)
                
                72,491
                
                
                
                108,736Total
      current liabilities
                
                142,943
                
                
                
                837,923LONG TERM
      LIABILITIESNote
      payable, long term (Note 7)
                
                -
                
                
                
                72,492COMMON STOCK SUBJECT TO
      POSSIBLE CONVERSION(8,351,465
      shares at conversion value) (Note 1)
                
                67,901,298
                
                
                
                66,427,592COMMITMENTS (Note
      5)
                
                -
                
                
                
                -STOCKHOLDERS' EQUITY(Notes 2, and 6):Preferred
      stock, $0.0001 par value, 5,000,000 shares authorized, 0 issued and
      outstandingCommon
      stock, par value $0.0001 per share, 100,000,000 shares
      authorized,25,746,035
      shares issued and outstanding (excluding 8,351,465 shares subject to
      possible conversion)
                
                2,575
                
                
                
                2,575Additional
      paid-in capital
                
                152,813,114
                
                
                
                154,286,820Earnings
      accumulated in the development stage
                
                5,665,770
                
                
                
                1,038,189TOTAL STOCKHOLDERS’
      EQUITY
                
                158,481,459
                
                
                
                155,327,584TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY
                $
                226,525,700
                
                
                $
                222,665,591
 
 
 
 
 
 
 The accompanying notes should be
read in conjunction with the financial statements.
   F-2
  
 
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 STATEMENTS
OF OPERATIONS
 
 For
      the year
                
                
                For
      the year
                
                
                From
      September 9, 2005
                
                
                From
      September 9, 2005ended
                
                
                ended
                
                
                (inception)
      to
                
                
                (inception)
      toJuly
      31, 2008
                
                
                July
      31, 2007
                
                
                July
      31, 2006
                
                
                July
      31, 2008Operating
      ExpensesGeneral and
      administrative costs (Notes 4 and 5)
                
                $
                661,284
                
                
                $
                126,875
                
                
                $
                15,080
                
                
                $
                803,239Loss
      from operations
                
                
                (661,284
                )
                
                
                (126,875
                )
                
                
                (15,080
                )
                
                
                (803,239
                )Other
      income (expense)Interest
      income (Note 1)
                
                
                8,285,456
                
                
                
                1,828,031
                
                
                
                12,850
                
                
                
                10,126,337Interest
      expense (Note 7)
                
                
                (7,660
                )
                
                
                (1,277
                )
                
                
                -
                
                
                
                (8,937
                )Income
      (loss) before provision for income taxes
                
                
                7,616,512
                
                
                
                1,699,879
                
                
                
                (2,230
                )
                
                
                9,314,161Provision
      for federal and stateincome
      taxes (Note 4)
                
                
                2,988,931
                
                
                
                659,460
                
                
                
                -
                
                
                
                3,648,391Net
      income  (loss) for the period
                
                $
                4,627,581
                
                
                $
                1,040,419
                
                
                $
                (2,230
                )
                
                $
                5,665,770Accretion
      of Trust Fund relating tocommon
      stock subject to possible conversion
                
                
                (1,473,706
                )
                
                
                (317,741
                )
                
                
                -
                
                
                
                (1,791,447
                )Net
      income (loss) attributable to common stockholders
                
                $
                3,153,875
                
                
                $
                722,678
                
                
                $
                (2,230
                )
                
                $
                3,874,323Shares
      outstanding subject to possible conversion
                
                
                8,351,465
                
                
                
                8,351,465
                
                
                
                -Net
      income  per share subject to possibleconversion, basic and
      diluted
                
                $
                0.18
                
                
                $
                0.04
                
                
                $
                -Weighted
      average number of shares outstanding,
                
                
                25,746,035
                
                
                
                9,256,354
                
                
                
                6,250,000Net
      income (loss) per share:Basic
      and diluted
                
                $
                0.12
                
                
                $
                0.08
                
                
                $
                (0.00
                )
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 The
accompanying notes should be read in conjunction with the financial
statements.
   F-3
  STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 STATEMENTS
OF STOCKHOLDERS’ EQUITY
 From
September 9, 2005 (inception) to July 31, 2008
  (Deficit)
      EarningsCommon
      stock
                  
                  
                  Additional
                  
                  
                  Accumulated
      in theShares
                  
                  
                  Amount
                  
                  
                  Paid-In-Capital
                  
                  
                  Development
      Stage
                  
                  
                  TotalBalance, September 9, 2005
      (inception)
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Issuance
      of Common Stock to initial stockholder
                  
                  
                  100
                  
                  
                  
                  -
                  
                  
                  
                  1
                  
                  
                  
                  -
                  
                  
                  
                  1Issuance
      of 8,150,000 Warrants at $0.05per
      warrant
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  407,500
                  
                  
                  
                  -
                  
                  
                  
                  407,500Issuance
      of 4,075,000 Class Z warrants and4,075,000
      Class W warrants with an aggregate value of$407,500
      in exchange for the cancellation of 8,150,000warrants
      with an aggregate value of $407,500
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Issuance
      of 700,000 Class Z warrants and700,000
      Class W warrants at $0.05 perwarrant
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  70,000
                  
                  
                  
                  -
                  
                  
                  
                  70,000Issuance
      of 6,925,000 Class Z warrants and6,925,000
      Class W warrants at $0.05 perwarrant
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  692,500
                  
                  
                  
                  -
                  
                  
                  
                  692,500Net
      loss for the period
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (2,230
                  )
                  
                  
                  (2,230
                  )Balance, July 31,
      2006
                  
                  
                  100
                  
                  
                  $
                  -
                  
                  
                  $
                  1,170,001
                  
                  
                  $
                  (2,230
                  )
                  
                  $
                  1,167,771Issuance
      of 3,800,000 Class Z warrants and3,800,000
      Class W warrants at $0.05 perwarrant
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  380,000
                  
                  
                  
                  -
                  
                  
                  
                  380,000Issuance
      of common stock to initial stockholderswith
      an aggregate value of $1,550,000 in exchangefor
      the return and cancellation of 15,500,000Class
      Z warrants and 15,500,000 Class W warrantswith
      an aggregate value of $1,550,000
                  
                  
                  6,249,900
                  
                  
                  
                  625
                  
                  
                  
                  (625
                  )
                  
                  
                  -
                  
                  
                  
                  -Proceeds
      from sale of underwriter purchase option
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  100
                  
                  
                  
                  -
                  
                  
                  
                  100Proceeds
      from issuance of insider warrants
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4,450,000
                  
                  
                  
                  -
                  
                  
                  
                  4,450,000Sale
      of 27,847,500 units through publicoffering
      net of underwriter discount andoffering
      expenses and excluding $66,109,851 ofproceeds
      allocable to 8,351,465 sharesof
      common stock subject to possible conversion
                  
                  
                  19,496,035
                  
                  
                  
                  1,950
                  
                  
                  
                  148,605,085
                  
                  
                  
                  -
                  
                  
                  
                  148,607,035Accretion of trust
      fund relating to common stocksubject topossible
      conversion
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (317,741
                  )
                  
                  
                  -
                  
                  
                  
                  (317.,741
                  )Net
      income for the year
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,040,419
                  
                  
                  
                  1,040,419Balance, July 31,
      2007
                  
                  
                  25,746,035
                  
                  
                  $
                  2,575
                  
                  
                  $
                  154,286,820
                  
                  
                  $
                  1,038,189
                  
                  
                  $
                  155,327,584Accretion
      of trust fund relating to common stock subject topossible
      conversion
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,473,706
                  )
                  
                  
                  -
                  
                  
                  
                  (1,473,706
                  )Net
      income for the year
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4,627,581
                  
                  
                  
                  4,627,581Balance, July 31,
      2008
                  
                  
                  25,746,035
                  
                  
                  $
                  2,575
                  
                  
                  $
                  152,813,114
                  
                  
                  $
                  5,665,770
                  
                  
                  $
                  158,481,459
  
 
 
 
 
 
 
 
 The
accompanying notes should be read in conjunction with the financial
statements.
   F-4
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 STATEMENTS
OF CASH FLOWS
  For
      the year
                  
                  
                  For
      the year
                  
                  
                  From
      September 9, 2005
                  
                  
                  From
      September 9, 2005ended
                  
                  
                  ended
                  
                  
                  (inception)
      to
                  
                  
                  (inception)
      toJuly
      31, 2008
                  
                  
                  July
      31, 2007
                  
                  
                  July
      31, 2006
                  
                  
                  July
      31, 2008OPERATING
      ACTIVITIESNet
      income (loss) for the period
                  
                  $
                  4,627,581
                  
                  
                  $
                  1,040,419
                  
                  
                  $
                  (2,230
                  )
                  
                  $
                  5,665,770Increases
      in investments held in trust fund, net
                  
                  
                  (1,766,672
                  )
                  
                  
                  (976,979
                  )
                  
                  
                  -
                  
                  
                  
                  (2,743,651
                  )Adjustments
      to reconcile net income (loss) to net cash provided
      byoperating activities:Changes in:Prepaid federal
      and state income taxes
                  
                  
                  (426,826
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (426,826
                  )Prepaid expenses
                  
                  
                  98,237
                  
                  
                  
                  (14,191
                  )
                  
                  
                  -
                  
                  
                  
                  84,046Accounts payable and accrued expenses
                  
                  
                  42,992
                  
                  
                  
                  22,211
                  
                  
                  
                  5,249
                  
                  
                  
                  70,452Federal and state income taxes payable
                  
                  
                  (690,189
                  )
                  
                  
                  690,189
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      cash provided by operating activities
                  
                  
                  1,885,123
                  
                  
                  
                  761,649
                  
                  
                  
                  3,019
                  
                  
                  
                  2,649,791INVESTING
      ACTIVITIESPurchase
      of investments held in Trust Fund
                  
                  
                  (6,423,312
                  )
                  
                  
                  (441,856,279
                  )
                  
                  
                  -
                  
                  
                  
                  (448,279,591
                  )Maturities of investments held in Trust Fund
                  
                  
                  6,423,312
                  
                  
                  
                  221,416,629
                  
                  
                  
                  -
                  
                  
                  
                  227,839,941Net
      cash uned in investing activities
                  
                  
                  -
                  
                  
                  
                  (220,439,650
                  )
                  
                  
                  -
                  
                  
                  
                  (220,439,650
                  )FINANCINGACTIVITIESProceeds from issuance of common stock to initial
investors
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1
                  
                  
                  
                  1Proceeds from issuance of insider warrants in private placements
                  
                  
                  -
                  
                  
                  
                  4,450,000
                  
                  
                  
                  -
                  
                  
                  
                  4,450,000Proceeds from issuance of underwriter's purchase option
                  
                  
                  -
                  
                  
                  
                  100
                  
                  
                  
                  -
                  
                  
                  
                  100Portion of net proceeds from sale of units through public
    offeringallocated to shares of common stock subject to possible
    conversion
                  
                  
                  -
                  
                  
                  
                  66,109,851
                  
                  
                  
                  -
                  
                  
                  
                  66,109,851Proceeds from issuance of warrants to security holders
                  
                  
                  -
                  
                  
                  
                  380,000
                  
                  
                  
                  1,170,000
                  
                  
                  
                  1,550,000Principal payment on notes
                  
                  
                  (108,737
                  )
                  
                  
                  (18,123
                  )
                  
                  
                  -
                  
                  
                  
                  (126,860
                  )Payment
      of deferred registration costs
                  
                  
                  (11,538
                  )
                  
                  
                  -
                  
                  
                  
                  (260,594
                  )
                  
                  
                  (272,132
                  )Net proceeds from sale of units through public
      offeringincluding the proceeds from underwriters' over-allotment
exercise
                  
                  
                  -
                  
                  
                  
                  148,879,167
                  
                  
                  
                  -
                  
                  
                  
                  148,879,167Net
      cash (used in) provided by financing activities
                  
                  
                  (120,275
                  )
                  
                  
                  219,800,995
                  
                  
                  
                  909,407
                  
                  
                  
                  220,590,127Net
      increase in cash and cash equivalents
                  
                  
                  1,764,848
                  
                  
                  
                  122,994
                  
                  
                  
                  912,426
                  
                  
                  
                  2,800,268Cash
      and cash equivalentsBeginning of period
                  
                  
                  1,035,420
                  
                  
                  
                  912,426
                  
                  
                  
                  -
                  
                  
                  
                  -End of period
                  
                  $
                  2,800,268
                  
                  
                  $
                  1,035,420
                  
                  
                  $
                  912,426
                  
                  
                  $
                  2,800,268Supplemental
      disclosure of non-cash financing activitiesFair value of underwriter purchase option included in offering
    costs
                  
                  $
                  -
                  
                  
                  $
                  4,372,000
                  
                  
                  $
                  -
                  
                  
                  $
                  4,372,000Accretion relating to common stock subject to possible
conversion
                  
                  $
                  1,473,706
                  
                  
                  $
                  (317,741
                  )
                  
                  $
                  -
                  
                  
                  $
                  1,791,447Accrued registration costs
                  
                  $
                  -
                  
                  
                  $
                  11,538
                  
                  
                  $
                  130,148
                  
                  
                  $
                  -Financed insurance
                  
                  $
                  72,491
                  
                  
                  $
                  181,228
                  
                  
                  $
                  -
                  
                  
                  $
                  199,350Supplemental
      disclosure of cash flow informationCash paid for interest
                  
                  $
                  7,660
                  
                  
                  $
                  1,277
                  
                  
                  $
                  -
                  
                  
                  $
                  8,936Cash paid for income taxes
                  
                  $
                  4,070,405
                  
                  
                  $
                  4,812
                  
                  
                  $
                  -
                  
                  
                  $
                  4,075,217
 The
accompanying notes should be read in conjunction with the financial
statements.
 F-5
  
 
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 
 NOTE
1 — DISCUSSION OF THE COMPANY’S ACTIVITIES
 
 Organization and activities –
Stoneleigh Partners Acquisition Corp. (the “Company”) was incorporated in
Delaware on September 9, 2005 to serve as a vehicle to effect a merger, capital
stock exchange, asset acquisition or other similar business combination with a
currently unidentified operating business (a “Target Business”). All activities
from inception (September 9, 2005) through July 31, 2008 relate to the Company’s
formation and capital raising activities.
 
 The
Company is considered to be a development stage company and as such the
financial statements presented herein are presented in accordance with Statement
of Financial Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by
Development Stage Enterprises.
 
 The
registration statement for the Company’s initial public offering (“IPO” or the
“Offering”) was declared effective on May 31, 2007. The Company consummated the
Offering on June 5, 2007 and received net proceeds of approximately $197.8
million, which includes approximately $4.45 million from the Insider Warrants
sold in a private placement (described in Note 6) and a portion of the proceeds
of the sale of the Company’s shares of common stock sold to the Company’s
stockholders prior to the Offering (“Initial Stockholders”). On June 12, 2007
the Company consummated the closing of an additional 2,847,500 Units, which were
subject to an underwriter over-allotment option, generating additional gross
proceeds of $22,780,000.
 
 The
Company’s management intends to apply substantially all of the net proceeds of
the Offering toward consummating a Business Combination (as defined in the
Company’s Certificate of Incorporation). The initial Target Business must have a
fair market value equal to at least 80% of the Company’s net assets at the time
of such acquisition. However, there is no assurance that the Company will be
able to effect a Business Combination successfully.
 
 The
Company’s Certificate of Incorporation provides that the Company’s corporate
existence will cease in the event it does not consummate a Business Combination
by May 31, 2009. If the Company does not effect a Business Combination by May
31, 2009 (the “Target Business Acquisition Period”), the Company will promptly
distribute the amount held in trust (the “Trust Account”), which is
substantially all of the proceeds from the Offering, including any accrued
interest, to its public stockholders.
 
 In
connection with the IPO, approximately $220.4 million (or approximately $7.91
per Unit) of the net proceeds of the Offering, the sale of the Insider Warrants
(defined in Note 6) and the sale of common stock to the Initial Stockholders
were initially held in the Trust Account and invested in permitted United States
government securities and money market funds. 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, prospective acquisition
targets 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. There may be released to the Company from the Trust Account (i)
interest income earned on the Trust Account balance to pay any tax obligations
of the Company, and (ii) up to an aggregate amount of $3,000,000 in interest
earned on the Trust Account to fund expenses related to investigation and
selection of a Target Business and the Company’s other working capital
requirements. As of July 31, 2008, the Company has transferred $7,218,294 of
interest income to its operating account of which $4,242,303 was used to pay
income and franchise taxes.
 
  F-6
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
1 — DISCUSSION OF THE COMPANY’S ACTIVITIES – (CONTINUED)
 
 The
Company, after signing a definitive agreement for a Business Combination, is
obligated to submit such transaction for approval by a majority of the public
stockholders of the Company. Stockholders that vote against such proposed
Business Combination and exercise their conversion rights are, under certain
conditions described below, entitled to convert their shares into a pro-rata
distribution from the Trust Account (the “Conversion Right”).  The
actual per share conversion price will be equal to the amount in the Trust
Account (inclusive of interest thereon other than (i) up to $3.0 million
distributed to the Company for working capital and (ii) amounts necessary to pay
any of the Company’s tax obligations), calculated as of two business days prior
to the proposed Business Combination, divided by the number of shares sold in
the Offering, or approximately $8.01 per share based on the value of the Trust
Account as of July 31, 2008.  As a result of the Conversion Right,
$67,901,298 (including accumulated accretion of $1,791,447) has been classified
as common stock subject to possible conversion. The Initial Stockholders have
agreed to vote their 6,250,000 founding shares of common stock in accordance
with the manner in which the majority of the shares of common stock offered in
the Offering are voted by the Company’s public stockholders (“Public
Stockholders”) with respect to a Business Combination.
 
 In the
event that a majority of the outstanding shares of common stock voted by the
Public Stockholders vote for the approval of the Business Combination and
holders owning 30% or more of the outstanding common stock do not vote against
the Business Combination and do not exercise their Conversion Rights, the
Business Combination may then be consummated.
 
 With
respect to a Business Combination which is approved and consummated, any Public
Stockholder who voted against the Business Combination may contemporaneously
with or prior to such vote exercise their Conversion Right and their common
shares would be cancelled and returned to the status of authorized but unissued
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 less than 30% of the aggregate number of shares
owned by all Public Stockholders may convert their shares in the event of a
Business Combination.
 
 NOTE
2 — OFFERING AND PRIVATE PLACEMENT OF INSIDER WARRANTS
 
 In
the Offering, effective May 31, 2007 (closed on June 5, 2007), the Company sold
to the public 25,000,000 units (the “Units” or a “Unit”) at a price of $8.00 per
Unit. Net proceeds from the Offering totaled approximately $193 million, which
was net of approximately $6.5 million in underwriting fees and other expenses
paid at closing. Each unit consists of one share of the Company’s common stock
and one warrant (a “Warrant”). The Company sold to HCFB/Brenner Securities LLC
(“HCFP” or “Representative”), the Representative of the underwriters in the
Offering, a purchase option to purchase up to a total of 1,250,000 additional
Units (Note 6). The Company also granted to the Representative a 45-day option
to purchase up to 3,750,000 Units solely to cover over allotments.
 
 On
June 12, 2007 the Company consummated the closing of an additional 2,847,500
Units which were subject to the underwriter’s over-allotment option generating
net proceeds of $22 million, which was net of $740,000 in underwriting discount
fees.
 
 Simultaneously
with the closing of the Offering, the Company sold to certain of the Initial
Stockholders 5,975,000 Insider Warrants for an aggregate purchase price of
$4,450,000. See discussion in Note 6.
  F-7
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Cash and Cash Equivalents –
Included in cash and cash equivalents are deposits with financial institutions
as well as short-term money market instruments with original maturities of three
months or less when purchased.
 
 Investments held in trust- The
Company’s investment held in the Trust Account at July 31, 2008 are
invested in U.S. Government Institutional money market securities. The Company
recognized interest income of $8,189,985 and $1,774,460 on investment held
in trust for the years ended July 31, 2008 and 2007, respectively, and
$9,964,445 for the period from inception (September 9, 2005) to July 31, 2008
which are included on the accompanying  statements of income.At July 31,
2008 the investment held in trust was invested in a Morgan Stanley Government
Portfolio Institutional Class fund.In September
2008, the investment held
 in trust
was moved to a Morgan Stanley Treasury Portfolio fund.
 
 Concentration of Credit Risk –
Financial instruments that potentially subject the Company to a significant
concentration of credit risk consist primarily of cash and cash equivalents and
investments held in trust.  The Company may maintain deposits in
federally insured financial institutions in excess of federally insured limits.
However, management believes the Company is not exposed to significant credit
risk due to the financial position of the depository institutions in which those
deposits are held.
 
 Net Income Per Share – Net
income per share is computed based on the weighted average number of shares of
common stock outstanding.
 
 Basic
earnings  per share excludes dilution and is computed by dividing
income available to common stockholders by the weighted average common shares
outstanding for the period. In addition to the 100 shares purchased by the
Initial Stockholders upon formation, the 6,249,900 shares of the Company’s
common stock issued on April 4, 2007 (Note 6) and 19,496,035 shares issued in
the Offering have been included in the weighted average common shares
outstanding for the periods presented. Basic net income per share subject to
possible conversion is calculated by dividing accretion of Trust Account
relating to common stock subject to possible conversion by 8,351,465 shares
subject to possible conversion.  Diluted earnings per share reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock or resulted in
the issuance of common stock that then shared in the earnings of the entity. No
such securities were outstanding as of July 31, 2008 and since the outstanding
warrants to purchase common stock and the underwriters purchase option (“UPO”)
are contingently exercisable, they have been excluded from the Company’s
computation of diluted net income per share for the years ended July 31, 2008
and 2007.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  F-8
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-(CONTINUED)
 
 Use of Estimates – The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain 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 revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
 
 Income Taxes– Deferred income
tax assets and liabilities are computed for differences between the financial
statement and tax basis of assets and liabilities that will result in future
taxable or deductible amounts and are 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 income tax assets to the amount expected to be realized. As of July 31,
2008 and July 31, 2007, there were no temporary differences and therefore no
deferred tax has been established.
 
 In July
2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation
No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes, and
Interpretation of FASB Statement No. 109.” FIN 48 clarifies the accounting for
uncertainty in income taxes recognized in a company’s financial statements and
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in an income tax return. FIN 48 also provides guidance in derecognition,
classification, interest and penalties, accounting in interim periods,
disclosures and transition. The adoption of FIN 48 did not have a material
impact on the Company’s financial statements.
 
 New Accounting Pronouncements
– In September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement No. 157, Fair Value Measurements (“SFAS No. 157”), which defines fair
value, establishes a framework for measuring fair value under GAAP, and expands
disclosures about fair value measurements. SFAS No. 157 applies to other
accounting pronouncements that require or permit fair value estimates. The new
guidance was effective for financial statements issued for fiscal years
beginning after November 15, 2007, and for interim periods within those fiscal
years. The Company does not expect the adoption of SFAS No. 157 will have a
material impact on its financial position and results of
operations.
 
 In
December 2007, the FASB issued SFAS 141 (revised 2007), Business
Combinations,(“SFAS 141(R)”). SFAS 141(R) retains the fundamental requirements
of the original pronouncement requiring that the purchase method be used for all
business combinations, but also provides revised guidance for recognizing and
measuring identifiable assets and goodwill acquired and liabilities assumed
arising from contingencies, the capitalization of in-process research and
development at fair value, and the expensing of acquisition-related costs as
incurred. SFAS 141(R) is effective for fiscal years beginning after December 15,
2008. In the event that the Company completes acquisitions subsequent to its
adoption of SFAS 141 (R), the application of its provisions will likely have a
material impact on the Company’s results of operations, although the Company is
not currently able to estimate that impact.
 
 
 
 
 
 
 
  F-9
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-(CONTINUED)
 
 In
December 2007, the FASB issued SFAS 160, Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51. SFAS 160
requires that ownership interests in subsidiaries held by parties other than the
parent, and the amount of consolidated net income, be clearly identified,
labeled and presented in the consolidated financial statements. It also requires
that once a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary be initially measured at fair value.
Sufficient disclosures are required to clearly identify and distinguish between
the interests of the parent and the interests of the noncontrolling owners. It
is effective for fiscal years beginning after December 15, 2008, and requires
retroactive adoption of the presentation and disclosure requirements for
existing minority interests. All other requirements are applied prospectively.
The Company does not expect the adoption of SFAS 160 to have a material impact
on its financial condition or results of operations.
 
 On March
19, 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities” (“SFAS 161”), to improve financial reporting
of derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entity’s financial position, financial performance, and cash
flows.  SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, which will
require the Company to adopt these provisions beginning in fiscal 2009 and
thereafter.  Management is currently evaluating the effect that SFAS
161 may have on the Company’s financial statement disclosures.
 
 The
Company 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.
  NOTE
4 — TAXES
 
 The
Company’s effective tax rate approximates the combined federal and state
statutory rate. The Company is incorporated in Delaware and accordingly is
subject to franchise taxes. Included as part of general and administrative costs
in the accompanying statement of operations for the years ended July 31, 2008
and 2007 is Delaware franchise tax expense of $194,959 and $35,541,
respectively, and $230,560 for the period from September 9, 2005 (inception)
through July 31, 2008.
  Provision
for income taxes consists of:
 For
      the year
                
                
                For
      the year
                
                
                From
      September 9, 2005
                
                
                From
      September 9, 2005ended
                
                
                ended
                
                
                (inception)
      to
                
                
                (inception)
      toJuly
      31, 2008
                
                
                July
      31, 2007
                
                
                July
      31, 2006
                
                
                July
      31, 2008Federal
                
                $
                2,420,341
                
                
                $
                499,517
                
                
                $
                -
                
                
                $
                2,919,858State
                
                
                568,590
                
                
                
                159,943
                
                
                
                -
                
                
                
                728,533$
                2,988,931
                
                
                $
                659,460
                
                
                $
                -
                
                
                $
                3,648,391
 
      
 
 
 
 
  F-10
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
5 — COMMITMENTS
 
 Administrative
Services Agreement
 
 The
Company agreed to pay an affiliate of two stockholders $7,500 per month
commencing on May 31, 2007 (effective date of the Offering) for office,
secretarial and administrative services. For the years ended July 31, 2008 and
2007 and the period from September 9, 2005 (inception) through July 31, 2008,
$90,000, $15,000 and $105,000, respectively, for these services is included in
general and administrative costs in the accompanying statements of
operations.
  Underwriting
Agreement
 
 In
connection with the Offering, the Company entered into an underwriting agreement
(the “Underwriting Agreement”) with HCFP/Brenner Securities LLC (“HCFP”), the
representative of the underwriters in the Offering.
 
 Pursuant
to the Underwriting Agreement, the Company paid to the underwriters certain fees
and expenses related to the Offering, including underwriting discounts of
$7,240,350.
 
 In
addition, in accordance with the terms of the Underwriting Agreement, the
Company engaged HCFP, on a non-exclusive basis, to act as its agent for the
solicitation of the exercise of the Company’s Warrants. In consideration for
solicitation services, the Company will pay HCFP a commission equal to 5% of the
exercise price for each Warrant exercised more than one year after June 5, 2007
if the exercise is solicited by HCFP.
 
 HCFP and
another underwriter were engaged by the Company to act as the Company’s
non-exclusive investment bankers in connection with a proposed Business
Combination (Note 1). For assisting the Company in obtaining approval of a
Business Combination, the Company will pay a cash transaction fee of $7,475,000
upon consummation of a Business Combination.
 
 The
Company sold to HCFP an option to purchase the Company’s Units (Note
6).
 
 Insider
Purchase Commitment
 
 The
Company’s Chairman and Chief Executive Officer, the Company’s Vice Chairman and
Chief Financial Officer, a director, and one of the Company’s Senior Advisors,
have entered into an agreement with HCFP which is intended to comply with Rule
10b5-1 under the Exchange Act, pursuant to which such individuals, or entities
such individuals control, will place limit orders for an aggregate of $15
million of the Company’s Units commencing 30 calendar days after the Company
files a preliminary proxy statement seeking approval of the holders of common
stock for a Business Combination and ending 30 days thereafter. Each of these
individuals has agreed that he will not sell or transfer any Units purchased by
him pursuant to this agreement (or any of the securities included in such units)
until the completion of a Business Combination or the Company’s liquidation. It
is intended that these purchases will comply with Rule 10b-18 under the Exchange
Act. These purchases will be made at a price not to exceed $8.65 per unit and
will be made by HCFP or another broker dealer mutually agreed upon by such
individuals and HCFP in such amounts and at such times as HCFP or such other
broker dealer may determine, in its sole discretion, so long as the purchase
price does not exceed the above-referenced per unit purchase price.
 
 
  F-11
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 
 NOTE
6 — COMMON AND PREFERRED STOCK, WARRANTS AND UNDERWRITER PURCHASE
OPTION
 
 a.
Common and Preferred Stock
 
 On May
30, 2007, the Company amended and restated its Certificate of Incorporation
authorizing the issuance of up to 100,000,000 shares of common stock, par value
$.0001 per share, and 5,000,000 shares of preferred stock, par value $.0001 per
share. In addition, the May 30, 2007 amendment to the Company’s Certificate of
Incorporation changed the capital stock’s par value from $0.01 to $0.0001. All
of the references in the accompanying financial statements to the par value have
been retroactively restated to reflect the change in par value.
 
 b.
Warrants
 
 In March
2006, the Company issued an aggregate of 4,075,000 Class W warrants and
4,075,000 Class Z warrants to its three existing warrant holders in exchange for
the return and cancellation of the outstanding 8,150,000 warrants which were
purchased in October 2005, for an aggregate $407,500, or $0.05 per warrant. On
March 15, 2006, the Company sold and issued additional Class W warrants to
purchase 700,000 shares of the Company’s common stock, and additional Class Z
warrants to purchase 700,000 shares of the Company’s common stock, for an
aggregate purchase price of $70,000, or $0.05 per warrant. On May 25, 2006, the
Company sold and issued additional Class W warrants to purchase 6,925,000 shares
of the Company’s common stock, and additional Class Z Warrants to purchase
6,925,000 shares of the Company’s common stock, to its existing warrant holders
for an aggregate purchase price of $692,500 or $0.05 per warrant.
 
 On
January 23, 2007, the 11,700,000 old Class Z warrants were exchanged for
11,700,000 new Class Z warrants (the “Class Z Warrants”) and the 11,700,000 old
Class W warrants were exchanged for 11,700,000 new Class W warrants (the “Class
W Warrants”) and the Company sold and issued additional Class W warrants to
purchase 3,800,000 shares of the Company’s common stock and additional 3,800,000
Class Z warrants to purchase 3,800,000 shares of the Company’s common stock to
its existing warrant holders and to two other accredited investors for an
aggregate purchase price $380,000 or $0.05 per warrant.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  F-12
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 NOTE
6 — COMMON STOCK, WARRANTS AND UNDERWRITER PURCHASE OPTION –
(CONTINUED)
 
 Each
Class W Warrant was exercisable for one share of common stock. Except as set
forth below, the Class W Warrants entitled the holder to purchase shares at
$1.75 per share, subject to adjustment in the event of stock dividends and
splits, reclassifications, combinations and similar events, for a period
commencing on the completion of the Business Combination and ending
June 5, 2015.
 
 Each Class Z Warrant was exercisable for one share of common stock. Except as
set forth below, the Class Z Warrants entitled the holder to purchase shares at
$1.50 per share, subject to adjustment in the event of stock dividends and
splits, reclassifications, combinations and similar events, for a period
commencing on the completion of the Business Combination and ending June 5,
2015.
 
 On April
4, 2007, 15,500,000 Class W Warrants and 15,500,000 Class Z Warrants with an
aggregate value of $1,550,000 were returned by the warrant holders and cancelled
by the Company. In exchange for the return of the Class W Warrants and Class Z
Warrants, the Company issued 6,249,900 shares of the Company’s common stock with
an aggregate value of $1,550,000 to such individuals.
 
 Simultaneously
with the consummation of the Offering, certain of the Company’s officers,
directors, and senior advisors purchased 5,975,000 Warrants for an aggregate
purchase price of $4,450,000 (“Insider Warrants”).
 
 Public
Warrants
 
 Each
warrant sold in the Offering (a “Public Warrant”) is exercisable for one share
of common stock. The Public Warrants entitle the holder to purchase shares at
$5.50 per share, subject to adjustment in the event of stock dividends and
splits, reclassifications, combinations and similar events for a period
commencing on the completion of the Business Combination and ending May 31,
2011. The Company has the ability to redeem the Public Warrants, in whole or in
part, at a price of $.01 per Public Warrant, at any time after the Public
Warrants become exercisable, upon a minimum of 30 days’ prior written notice of
redemption, and if, and only if, the last sale price of the Company’s common
stock equals or exceeds $11.50 per share, for any 20 trading days within a 30
trading day period ending three business days before the Company sent the notice
of redemption.
 
 Insider
Warrants
 
 At the
closing of the Offering (Notes 1 and 2), the Company sold to certain of the
Initial Stockholders 5,975,000 Insider Warrants for an aggregate purchase price
of $4,450,000. All of the proceeds received from these purchases have been
placed in the Trust Account. The Insider Warrants are identical to the Public
Warrants in the Offering except that they may be exercised on a cashless basis
so long as they are held by the original purchasers, members of their immediate
families or their controlled entities, and may not be sold or transferred,
except in limited circumstances, until after the consummation of a Business
Combination. If the Company dissolves before the consummation of a Business
Combination, there will be no distribution from the Trust Account with respect
to such Insider Warrants, which will expire worthless.
 
 
 
  F-13
  
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
 
 NOTES
TO FINANCIAL STATEMENTS
 
 
 NOTE
6 — COMMON STOCK, WARRANTS AND UNDERWRITER PURCHASE OPTION –
(CONTINUED)
 
 As the
proceeds from the exercise of the Insider Warrants will not be received until
after the completion of a Business Combination, the expected proceeds from
exercise will not have any effect on the Company’s financial condition or
results of operations prior to a Business Combination.
 
 Each
Insider Warrant is exercisable for one share of common stock. The Insider
Warrants entitle the holder to purchase shares at $5.50 per share, subject to
adjustment in the event of stock dividends and splits, reclassifications,
combinations and similar events, for a period commencing on the completion
of the Business Combination and ending May 31, 2011.
 
 The
Company is required to use its best efforts to cause a registration statement
covering the Insider Warrants and the Public Warrants to be declared effective
and, once effective, the Company will use its best efforts to maintain its
effectiveness. Accordingly, the Company’s obligation is merely to use its best
efforts in connection with the registration rights agreement and upon exercise
of the Warrants.   The Company may satisfy its obligation under
the registration rights agreement by delivering unregistered shares of common
stock. If a registration statement is not effective at the time a Public Warrant
is exercised, the Company will not be obligated to deliver registered shares of
common stock, and there are no contracted penalties for its failure to do
so.  Consequently, the Public Warrants may expire
worthless.
 
 c.
Underwriter Purchase Option
 
 Upon
closing of the Offering, the Company sold and issued an option (the “UPO”) for
$100 to HCFP, to purchase up to 1,250,000 Units at an exercise price of $10.00
per Unit. The Units underlying the UPO will be exercisable in whole or in part,
solely at holders’ discretion, commencing on the consummation of a Business
Combination and expire on May 31, 2012. The Company accounted for the fair value
of the UPO, inclusive of the receipt of the $100 cash payment, as an expense of
the Offering resulting in a charge directly to stockholders’ equity, which was
offset by an equivalent increase in stockholder’s equity for the issuance of the
UPO. As of June 5, 2007, the Company calculated, using a Black-Scholes option
pricing model, the fair value of the 1,250,000 Units underlying the UPO to be
approximately $4,372,000. The fair value of the UPO granted was calculated as of
the date of grant using the following assumptions: (1) expected volatility of
51.12% (2) risk-free interest rate of 4.86% and (3) contractual life of 5 years.
The UPO may be exercised for cash or on a “cashless” basis, at the holder’s
option, such that the holder may use the appreciated value of the UPO (the
difference between the exercise prices of the UPO and the underlying warrants
and the market price of the units and underlying securities) to exercise the UPO
without the payment of any cash.
 
 The
Company has no obligation to net cash settle the exercise of the UPO or the
warrants underlying the UPO. The holder of the UPO will not be entitled to
exercise the UPO or the warrants underlying the UPO unless a registration
statement covering the securities underlying the UPO is effective or an
exemption from registration is available. If the holder is unable to exercise
the UPO or underlying warrants, the UPO or warrants, as applicable, will expire
worthless.
 
 
 
 
 
  F-14
 
 STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
  NOTES
TO FINANCIAL STATEMENTS
  
 NOTE
7 — NOTE PAYABLE
 
 The
Company financed its Directors’ and Officers’ insurance policy for the amount of
$199,350 (the ‘‘Payable’’) due to First Insurance Funding Corp. of New York
(secured by the uncovered premium of the policy).  The Payable bears
interest at 7.2% per annum. Payments of $9,700 commenced June 30, 2007 and will
continue through March 31, 2009. For the years ended July 31, 2008 and 2007
and  for the period from September 9, 2005 (inception) through July
31, 2008 the Company recognized $7,660, $1,277 and $8,937, respectively, of
interest expense and at July 31, 2008, the Payable balance was
$72,491.
 
 NOTE
8 — SUMMARIZED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
  The
Company’s unaudited condensed quarterly financial information is as follows for
the interim quarter ended:
  Quarter
      Ended
 July
      31, 2008
                
                
                April
      30, 2008
                
                
                January
      31, 2008
                
                
                October
      31, 2007YEAR ENDED JULY 31,
      2008Operating
      expenses
                
                $
                (218,916
                )
                
                $
                (160,406
                )
                
                $
                (139,818
                )
                
                $
                (142,144
                )Interest
      income
                
                
                1,306,103
                
                
                
                1,674,261
                
                
                
                2,498,209
                
                
                
                2,806,883Interest
      expense
                
                
                (1,912
                )
                
                
                (1,916
                )
                
                
                (1,916
                )
                
                
                (1,916
                )Income
      before provision for taxes
                
                
                1,085,275
                
                
                
                1,511,939
                
                
                
                2,356,475
                
                
                
                2,662,823Provision
      for taxes
                
                
                388,353
                
                
                
                592,859
                
                
                
                862,689
                
                
                
                1,145,030Net
      income
                
                
                696,922
                
                
                
                919,080
                
                
                
                1,493,786
                
                
                
                1,517,793Accretion
      of Trust Fund relating to common stocksubject
      to possible conversion
                
                
                (232,469
                )
                
                
                (297,738
                )
                
                
                (468,060
                )
                
                
                (475,439
                )Net
      income attributable to common stockholders
                
                $
                464,453
                
                
                $
                621,342
                
                
                $
                1,025,726
                
                
                $
                1,042,354
  Shares
      outstanding subject to possible conversion
                  
                  8,351,465
                  
                  
                  8,351,465
                  
                  
                  8,351,465
                  
                  
                  8,351,465Net
      income per share subject topossible conversion, basic and diluted
                  
                  $
                  0.03
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.06
                  
                  
                  $
                  0.06Weighted
      average number of shares outstanding
                  
                  
                  25,746,035
                  
                  
                  
                  25,746,035
                  
                  
                  
                  25,746,035
                  
                  
                  
                  25,746,035Net income per share, basic and diluted
                  
                  $
                  0.02
                  
                  
                  $
                  0.02
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.04
  Quarter
      Ended
 July
      31, 2007
                
                
                April
      30, 2007
                
                
                January
      31, 2007
                
                
                October
      31, 2006YEAR ENDED JULY 31,
      2007Operating
      expenses
                
                $
                (115,334
                )
                
                $
                (3,824
                )
                
                $
                (5,601
                )
                
                $
                (2,116
                )Interest
      income
                
                
                1,784,954
                
                
                
                15,755
                
                
                
                11,920
                
                
                
                15,402Interest
      expense
                
                
                (1,277
                )
                
                
                -
                
                
                
                -
                
                
                
                -Income
      before provision for taxes
                
                
                1,668,343
                
                
                
                11,931
                
                
                
                6,319
                
                
                
                13,286Provision
      for taxes
                
                
                (647,476
                )
                
                
                (4,534
                )
                
                
                (2,401
                )
                
                
                (5,049
                )Net
      income
                
                
                1,020,867
                
                
                
                7,397
                
                
                
                3,918
                
                
                
                8,237Accretion
      of Trust Fund relating to common stocksubject
      to possible conversion
                
                
                (317,741
                )
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income attributable to common stockholders
                
                $
                703,126
                
                
                $
                7,397
                
                
                $
                3,918
                
                
                $
                8,237
 Shares
      outstanding subject to possible conversion
                    
                    8,351,465
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Net
      income per share subject topossible conversion, basic and diluted
                    
                    $
                    0.04
                    
                    
                    $
                    0.00
                    
                    
                    $
                    0.00
                    
                    
                    $
                    0.00Weighted
      average number of shares outstanding
                    
                    
                    9,256,354
                    
                    
                    
                    6,250,000
                    
                    
                    
                    6,250,000
                    
                    
                    
                    6,250,000Net income per share, basic and diluted
                    
                    $
                    0.08
                    
                    
                    $
                    0.00
                    
                    
                    $
                    0.00
                    
                    
                    $
                    0.00
  F-15
  STONELEIGH
PARTNERS ACQUISITION CORP.
 (a
corporation in the development stage)
  NOTES
TO FINANCIAL STATEMENTS
  
 NOTE
8 — SUMMARIZED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) –
(CONTINUED)
 September
      9, 2005Quarter
      Ended
                  
                  (inception)
      to
 July
      31, 2006
                
                
                April
      30, 2006
                
                
                January
      31, 2006
                
                
                October
      31, 2005FROM INCEPTION TO JULY 31,
      2006Operating
      expenses
                
                $
                (4,520
                )
                
                $
                (2,560
                )
                
                $
                -
                
                
                $
                (8,000
                )Interest
      income
                
                
                5,269
                
                
                
                3,865
                
                
                
                3,649
                
                
                
                67Interest
      expense
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Income
      (loss) before provision for taxes
                
                
                749
                
                
                
                1,305
                
                
                
                3,649
                
                
                
                (7,933
                )Provision
      for taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income (loss)
                
                
                749
                
                
                
                1,305
                
                
                
                3,649
                
                
                
                (7,933
                )Accretion
      of Trust Fund relating to common stocksubject
      to possible conversion
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      income (loss) attributable to common stockholders
                
                $
                749
                
                
                $
                1,305
                
                
                $
                3,649
                
                
                $
                (7,933
                )
  Shares
      outstanding subject to possible conversion
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Net
      income per share subject topossible conversion, basic and diluted
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.00Weighted
      average number of shares outstanding
                  
                  
                  6,250,000
                  
                  
                  
                  6,250,000
                  
                  
                  
                  6,250,000
                  
                  
                  
                  6,250,000Net income per share, basic and diluted
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                      
  F-16