**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, 2007





**[_]           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 #104****South
                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 Exchange*****Common
                Stock, par value $0.0001 per share**
            
            ***American
                Stock Exchange*****Warrants**
            
            ***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, or a non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.  (Check one):




Large
                Accelerated Filer  [  ]
            Accelerated
                Filer  [  ]
            Non-Accelerated
                Filer  [X]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes [X] No [ ]






As
      of
      October 10, 2007**,** the aggregate market value of the
      registrant’s voting and non-voting common equity held by non-affiliates of the
      registrant was**$**221.1 million**,** based on a
      closing price of $7.94 at July 31, 2007.




The
      number of outstanding shares of the registrant’s Common Stock, $.0001 par value,
      as of October 10,
      2007****was  34,097,500.




2


**STONELEIGH
      PARTNERS ACQUISITION CORP.**


**ANNUAL
      REPORT ON FORM 10-K**


**FOR
      THE FISCAL YEAR ENDED JULY 31, 2007**


**INDEX**




**** **Page
                No.**




PART
                I:ITEM.
                1  BUSINESS
            5ITEM
                1A.  RISK FACTORS
            19ITEM
                1B.  UNRESOLVED STAFF COMMENTS
            32ITEM
                2.  PROPERTIES
            32ITEM
                3.  LEGAL PROCEEDINGS
            32ITEM
                4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                HOLDERS
            32PART
                II
            33ITEM
                5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
                MATTERSAND
                ISSUER PURCHASES OF EQUITY SECURITIES
            33ITEM
                6.  SELECTED FINANCIAL DATA
            36ITEM
                7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                ANDRESULTS
                OF OPERATIONS
            38ITEM
              7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
              RISKS
            41ITEM
                8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
            41ITEM
                9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                ANDFINANCIAL
                DISCLOSURE
            41ITEM
                9A.  CONTROLS AND PROCEDURES
            42ITEM
                9B.  OTHER INFORMATION
            42PART
                III
            43ITEM
                10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE
                REGISTRANT
            43ITEM
                11.  EXECUTIVE COMPENSATION
            51ITEM
                12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT ANDRELATED
                STOCKHOLDER MATTERS
            52


3





ITEM
                13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
                DIRECTORINDEPENDENCE
            54ITEM
                14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
            60ITEM
                15.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON
                FORM 8-K
            611.           Financial
                Statements
            643.           Exhibits
            80





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 at www.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.


5





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, 2007, net cash used to pay formation and operating costs was
      $141,955.  The net proceeds deposited into the trust fund remain on
      deposit in the trust fund earning interest. Of the interest earned to date,
      $797,259 has been distributed to us in accordance with the terms of our
      investment management trust agreement.  As of July 31, 2007, there was
      $221,416,629 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.




*We
      have not identified a target business or target industry*




Although
      we intend initially to 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, we are not
      required to limit our search to any target business or target industry for
      a
      business combination.






6


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. The candidates comprising the list of potential business combinations
      will be examined 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.
      While we do not presently anticipate engaging the services of professional
      firms
      that specialize in business acquisitions on any formal basis (except as
      described below), we may engage these firms in the future, 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.




7


*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,




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;




•           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 will be 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 will conduct
      an extensive due diligence review which will encompass, among other things,
      meetings with incumbent management and inspection of facilities, as well as
      review of financial and other information which will be made available to us.
      This due diligence review will be conducted either by our management or by
      unaffiliated third parties we may engage, although we have no current intent
      to
      engage any such third parties. We will 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.


8


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
      National Association of Securities Dealers, Inc. 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.


9




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.




*Lack
      of business diversification*




While
      we
      may seek to effect business combinations
      with more than one target business, ourinitial 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.




10


*Limited
        ability to evaluate the target business’ management*
  Although
        we intend to scrutinize closely the management of a prospective target business
        when evaluating the desirability of  effecting  a business
        combination, we cannot assure  you thatour 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.


11


*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 in our initial public offering or 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 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 initial per-share conversion price would be approximately
      $7.94 (which includes $0.222 per share from the proceeds we received from the
      private placements of our initial shares and insider warrants), or $0.06 less
      than the per-unit offering price of $8.00.


12






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.
      Traditionally, in order to perfect conversion rights in connection with a blank
      check company’s business combination, a holder could simply vote no against a
      proposed business combination and check a box on the proxy card indicating
      such
      holder was seeking to convert. After the business combination was approved,
      the
      company would contact such stockholder to arrange for him to deliver his
      certificate to verify ownership. As a result, the stockholder then had an
“option window” after the consummation of the business combination during which
      he could monitor the price of the stock in the market. If the price rose above
      the conversion price, he could sell his shares in the open market before
      actually delivering his shares to the company for cancellation. Thus, the
      conversion right, to which stockholders were aware they needed to commit before
      the stockholder meeting, would become a “put” right surviving past the
      consummation of the business combination until the converting holder delivered
      his certificate. 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.


13




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.




14


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 remainingassets 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. 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 less than $7.94 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.






15


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 less than approximately $7.94 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.






16


*Competition*
  In
        identifying, evaluating and selecting a target business, we may encounter
        intense competition from other entities having
        a business objective similar to ours.  There are
        approximately 79 blank check companies in the United States with more than
        $8.4
        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.




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, Stamford,
      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 Stamford, 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.


17







*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.




18


**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.




***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,
      our
      general and administrative expenses and the anticipated costs of seeking a
      business combination. 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.




19


***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.




***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 118 blank check companies which have gone public
      in the United States since August 2003, of which 34 have completed a business
      combination.  Of the remaining 84 blank check companies, 79 have more
      than $8.4 billion in trust and are seeking to complete business combinations,
      while five companies have either dissolved or announced their intention to
      dissolve and return funds to investors. Of the 79 companies seeking to complete
      a business combination, only 27 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.


20


***We
      depend on interest earned on the trust account to fund our search for target
      businesses and to complete our initial business
      combination.***





As
      of
      July 31, 2007, we had approximately $1,035,420 of cash. We therefore depend
      to a
      large degree on sufficient interest being earned on the proceeds held in the
      trust account to provide us with additional working capital we need to identify
      one or more target businesses and to complete our initial business combination.
      While, as of July 31, 2007, we were entitled to have released to us for such
      purposes interest income of up to a maximum of $977,201, the timing of the
      availability of such interest income may result in our having insufficient
      funds
      available with which to structure, negotiate or close an initial business
      combination. In such event, we would need to borrow funds from our initial
      stockholders to operate or may be forced to liquidate.




***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 $7.94 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 $7.94 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 $7.94 per share.


21


***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.





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.


22


***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 9, 2007
      there are 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.






23






***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.




***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.


24





***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.


25




***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.






26


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.




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.


27


***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 34 of the 118 blank check companies that have
      gone public in the United States since August 2003 have completed a business
      combination and 27 of such companies have entered into either a definitive
      agreement or a letter of intent for a business combination, while five 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.


28




***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.




***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.


29





***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.


30


***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.




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.


31


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.




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




Not
      applicable.


32


**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**
            
            **Warrants****High**
            **Low**
            
            **High**
            **Low**
            
            **High**
            **Low**2007:Fourth
                Quarter (through July 31, 2007)
            $8.44
            $8.06
            
            $7.54
            $7.45
            
            $0.94
            $0.80





**Holders**




As
      of
      September 27, 2007, there were 175 holders of record of our units, 233 holders
      of record of our common stock and 234 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.




**Initial
      Public Offering**




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 $222,780,000
      of gross proceeds.  After deducting the underwriting discounts and
      commissions and the offering expenses, the total net proceeds to us from the
      initial public
      offering were approximately $221.1 million of which $220,439,650 was deposited
      into the trust account and the remaining proceeds ($758,421) 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, 2007, net cash used to pay general and administrative
      expenses was $18,172.  The net proceeds deposited into the trust fund
      remain on deposit in the trust fund earning interest. All of the $797,259 of
      interest earned as of July 31, 2007 has been distributed to us in accordance
      with the terms of our investment management trust agreement. As
      of  July 31, 2007, there was $221,416,629 held in the trust
      fund.  The securities sold in our initial public offering were
      registered under the Securities Act of 1933 on a registration statement on
      Form
      S-1 (No. 333-133235).


33





We
      paid a
      total of $7,240,350 of underwriting discounts and commissions and $872,679
      for
      other costs and expenses related to our initial public offering. 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 fund and the
      remaining proceeds of approximately $300,000 became available to for business,
      legal and accounting due diligence on prospective business combinations and
      continuing general and administrative expenses. The net proceeds deposited
      into
      the trust fund remain on deposit in the trust fund and have earned $1,774,460
      in
      interest through July 31, 2007.  An additional $966,276 was
      transferred from the trust to us in September 2007.




**Recent
      Sales of Unregistered Securities and Use of Proceeds**




(a)           During
      the past three years, we sold the following securities without registration
      under the Securities Act:




The
      shares of common stock and warrants, referred to as the original warrants,
      were
      issued on October 15, 2005 in connection with our organization as
      follows:




**Name**
            
            **Number
                of**
              **Shares
                of**
              **Common
                Stock**
            
            **Number
                of**
              **Warrants**Milton
                J. Walters
            
            
            100
            
            
            2,715,000Gary
                D. Engle
            
            
            —
            
            
            2,720,000JAC
                Opportunity Fund I, LLC
            
            
            —
            
            
            2,715,000





The
      issuances were made pursuant to the exemption from registration contained in
      Section 4(2) of the Securities Act as they were sold to sophisticated, wealthy
      individuals and an accredited investor. The shares of common stock were sold
      at
      a purchase price of $0.01 per share for an aggregate price of $1.00 and the
      warrants were sold at a purchase price of $0.05 per warrant for an aggregate
      price of $407,500. No underwriting discounts or commissions were paid with
      respect to such sales.




On
      March
      15, 2006, we issued an aggregate of 4,075,000 Class W warrants and 4,075,000
      Class Z warrants to our three then-existing warrantholders in exchange for
      the
      return cancellation
      of the then outstanding 8,150,000 warrants held by them. The original warrants
      were exercisable at a price of $5.00 per share and expired eight years from
      the
      date of the prospectus related to our initial public offering. The original
      warrants were exchanged for Class W warrants and
      Class
      Z warrants, referred to as the March 2006 Class W warrants and the March 2006
      Class Z warrants. The March 2006 Class W warrants and March 2006 Class Z
      warrants issued in exchange for the original warrants were exercisable at $5.00
      and had expiration dates of five and seven years from the date of the prospectus
      related to our initial public offering, respectively. The March 2006 Class
      W
      warrants and March 2006 Class Z warrants were issued pursuant to the exemption
      from registration contained in Section 3(a)(9) of the Securities Act, as no
      commission or other remuneration was paid or given directly or indirectly for
      soliciting such exchange.


34




On
      March
      15, 2006, we issued warrants as follows:




**Name**
            
            **Number of**
              **March
                2006 Class W**
              **Warrants**
            
            **Number of**
              **March
                2006 Class Z**
              **Warrants**Milton
                J. Walters
            
            
            167,500
            
            
            167,500Gary
                D. Engle
            
            
            165,000
            
            
            165,000JAC
                Opportunity Fund I, LLC
            
            
            167,500
            
            
            167,500Geoffrey
                A. Thompson
            
            
            100,000
            
            
            100,000Michael
                Clayton
            
            
            100,000
            
            
            100,000




The
      March
      2006 Class W and March 2006 Class Z warrants were issued pursuant to the
      exemption from registration contained in Section 4 (2) of the Securities
      Act, as they were sold to sophisticated, wealthy individuals and each recipient
      was an accredited investor. The March 2006 Class W and March 2006 Class Z
      warrants were sold at a purchase price of $0.05 per warrant for an aggregate
      price of $70,000. No underwriting discount or commissions were paid with respect
      to such sales.




On
      May
      25, 2006, we issued additional March 2006 Class W warrants and March 2006 Class
      Z warrants as follows:




**Name**
            
            **Number of**
              **March
                2006 Class W**
              **Warrants**
            
            **Number of**
              **March
                2006 Class Z**
              **Warrants**Milton
                J. Walters
            
            
            1,700,000
            
            
            1,700,000Gary
                D. Engle
            
            
            3,400,000
            
            
            3,400,000JAC
                Opportunity Fund I, LLC
            
            
            1,700,000
            
            
            1,700,000Geoffrey
                A. Thompson
            
            
            125,000
            
            
            125,000





The
      March
      2006 Class W and March 2006 Class Z warrants were issued pursuant to the
      exemption from registration contained in Section 4 (2) of the Securities
      Act, as they were sold to sophisticated, wealthy individuals and an accredited
      investor. The March 2006 Class W and March 2006 Class Z warrants were sold
      at a
      purchase price of $0.05 per warrant for an aggregate price of $692,500. No
      underwriting discount or commissions were paid with respect to such
      sales.


On
      January 23, 2007, we issued an aggregate of 11,700,000 Class W warrants and
      11,700,000 Class Z warrants, collectively referred to as the January 2007
      Class W warrants and the January 2007 Class Z warrants, to our five
      then-existing warrantholders in exchange for the
      return  for  cancellation  of  the  then
      outstanding 23,400,000 warrants held by them. The January 2007
      Class W warrants and January 2007 Class Z warrants were issued pursuant to
      the
      exemption from registration contained in Section 3(a)(9) of the Securities
      Act,
      as no commission or other remuneration was paid or give directly or indirectly
      for soliciting such exchange.


35






On
      January 23, 2007, we issued January 2007 Class W warrants and January 2007
      Class
      Z warrants as follows:




**Name**
            
            **Number of**
              **January
                2007**
              **Class
                W**
              **Warrants**
            
            **Number of**
              **January
                2007**
              **Class
                Z**
              **Warrants**Milton J. Walters
            
            
            475,000
            
            
            475,000Gary
                D. Engle
            
            
            950,000
            
            
            950,000JAC
                Opportunity Fund I, LLC
            
            
            475,000
            
            
            475,000Jonathan
                Davidson
            
            
            950,000
            
            
            950,000Brian
                Kaufman
            
            
            950,000
            
            
            950,000




The
      January 2007 Class W and January 2007 Class Z warrants were issued pursuant
      to
      the exemption from registration contained in Section 4(2) of the Securities
      Act
      as they were sold to sophisticated, wealthy individuals and an accredited
      investor. The January 2007 Class W and January 2007 Class Z warrants were sold
      at a purchase price of $0.05 warrant for an aggregate price of $380,000. No
      underwriting discount or commissions were paid with respect to such
      sales.




On
      April
      4, 2007, we issued 6,249,900 shares of common stock in exchange for the return
      and cancellation of the 31,000,000 then outstanding warrants. The shares of
      common stock were issued pursuant to the exemption from registration contained
      in Section 3(a)(9) of the Securities Act, as no commission or other remuneration
      was paid or give directly or indirectly for soliciting such
      exchange.




On
      June
      5, 2007, we sold 5,975,000 warrants, referred to as the insider warrants,
      generating total proceeds of $4,450,000. These warrants were purchased by Gary
      D. Engle, JAC Opportunity Fund I, LLC (an affiliate of James A. Coyne, our
      Vice
      Chairman and Chief Financial Officer), Brian Kaufman, Jonathan Davidson and
      Milton J. Walters, five of our directors, officers and senior advisors. Such
      warrants are identical to the warrants included in the units sold in our initial
      public offering except that if we call the warrants for redemption, the insider
      warrants may be exercisable on a cashless basis so long as such insider warrants
      are held by the purchasers or their affiliates. The purchasers of the insider
      warrants have agreed that the


insider
      warrants will not be sold or transferred by them until after we have completed
      a
      business combination.




**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.


36


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****Year
                ended**
            
            
            **(September
                30, 2005)****July
                31, 2007**
            
            
            **to
                July 31, 2006****Statement
                of Operation Data**Loss
                from operations
            
            $
            (126,875
            )
            
            $
            (15,080
            )Interest
                income
            
            
            1,828,031
            
            
            
            12,850Net
                income (loss)
            
            
            1,040,419
            
            
            
            (2,230
            )Accretion
                of Trust Fund relating tocommon
                stock subject to possible conversion
            
            
            (317,741
            )
            
            
            -Net
                income (loss) attributable to other stockholdersand
                common stockholders
            
            
            722,678
            
            
            
            (2,230
            )*Earnings
                per share data:*Common
                shares outstandingsubject
                to possible conversion
            
            
            8,351,465
            
            
            
            -Net
                income per common share subject to possibleconversion,
                basic and diluted
            
            $
            0.04
            
            
            $
            -**Weighted
                average number of shares outstanding**Basic
                and diluted
            
            
            9,256,354
            
            
            
            6,250,000**Net
                income (loss) per share**Basic
                and diluted
            
            $
            0.08
            
            
            $
            -**Other
                Financial Data:**Net
                cash provided by operating activities
            
            $
            761,649
            
            
            $
            3,019Cash
                contributed to trust fund
            
            
            (220,439,650
            )
            
            
            -Net
                proceeds from public offering allocable tostockholders’
                equity
            
            
            148,605,085
            
            
            
            -Portion
                of net proceeds from public offeringallocable
                to Common Stock subject to possible conversion(including
                accretion)
            
            
            66,427,592
            
            
            
            -**Selected
                Balance Sheet Data:**
            
            **July
                31, 2007**
            
            
            **July
                31, 2006**Cash
                and cash equivalents
            
            $
            1,035,420
            
            
            $
            912,426Trust
                fund
            
            
            221,416,629
            
            
            
            -Net
                working capital (a)
            
            
            311,039
            
            
            
            777,029Total
                assets
            
            
            222,665,591
            
            
            
            1,303,168Common
                stock subject to possible conversion
            
            
            66,427,592
            
            
            
            -Total
                stockholders’ equity
            
            
            155,327,584
            
            
            
            1,167,771(a)
                Excludes restricted investments held in Trust






37




**ITEM
        7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS**




The
      following discussion should be read in conjunction with our financials
      statements 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, referred to as our 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. 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 evaluating and identifying 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.




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 Part II, Item 8 of this Form 10-K.




**Results
      of Operations**




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 offset by formation and operating 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 directors and officers (“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
      federal 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 formation and operating costs of $15,080 which consisted
      of
      fees of $80 and  professional fees of $15,000.




38


**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 our 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 that will not be held in
      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 in a private placement from us prior to the IPO
      for
      $1,550,000, and 5,975,000 warrants, purchased for $4,450,000 in a private
      placement 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 our cash and cash equivalents, in addition to the additional 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.  At the time of our initial public
      offering, we estimated that up to $3,300,000 of working capital and reserves
      shall be allocated as follows: $800,000 of expenses for legal, accounting and
      other expenses attendant to the due diligence investigations, structuring and
      negotiating of 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, 2007, we had $1,035,420 in cash and cash
      equivalents.  Through July 31, 2007, $797,259 of interest income was
      released to us from the trust account.  In September 2007, we had an
      additional $966,276 of interest income release to us from 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, other than for additional funds that may
      be
      required to complete a business combination. 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.


39


**Off-Balance
      Sheet Arrangements**




As
      of
      July 31, 2007 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,
      2007:





**Payment
                due by period**





**Less
                than 1**
            
            
            ****
            **1-3**
            
            
            ****
            **3-5**
            
            
            **More
                than****Total**
            
            
            **year**
            
            
            **years**
            
            
            **years**
            
            
            **5
                years**Contractual
                ObligationsAdministrative
                service agreement (1)
            
            $
            165,000
            
            
            $
            90,000
            
            
            $
            75,000
            
            
            $
            -
            
            
            $
            -Insurance
                policy (2)
            
            
            181,228
            
            
            
            108,736
            
            
            
            72,492
            
            
            
            -
            
            
            
            -Total
            
            $
            346,228
            
            
            $
            198,736
            
            
            $
            147,492
            
            
            $
            -
            
            
            $
            -




(1)
      We
      are obligated, through May 31, 2009, 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 $15,000 is included in general and administrative expenses
      on the accompanying statement of operations for the year ended July 31, 2007,
      pursuant to this arrangement.




(2)
      We
      have financed our director and officer 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 monthly installments of
      principal and interest of $9,700, commencing June 30, 2007.




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 $7.95 per share based on the value in the trust fund as of
      July
      31, 2007.




**Critical
      Accounting Policies**




Investments
      Held in Trust - The restricted investment held in the Trust Fund at July 31,
      2007 is comprised U.S. Government Institutional money market securities with
      maturities of up to 30 days. Such securities generate current income which
      is
      subject to federal income tax and the Company is incorporated in Delaware and
      accordingly is subject to franchise taxes.


40


Fair
      Value of Financial Instruments and Derivatives - The fair values of our assets
      and liabilities that qualify as financial instruments under SFAS No. 107
      approximate their carrying amounts presented in the balance sheet at July 31,
      2007.




We
      account for derivative instruments in accordance with SFAS No. 133 “Accounting
      for Derivative Instruments and Hedging Activities,” as amended, (“SFAS 133”)
      which establishes accounting and reporting standards for derivative instruments
      and hedging activities, including certain derivative instruments imbedded in
      other financial instruments or contracts and requires recognition of all
      derivatives on the balance sheet at fair value. Accounting for the changes
      in
      the fair value of the derivative instruments depends on whether the derivatives
      qualify as hedge relationships and the types of the relationships designated
      are
      based on the exposures hedged. Changes in the fair value of derivative
      instruments which are not designated as hedges are recognized in earnings as
      other income (loss).




**ITEM
        7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
        RISKS**




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, 2007, $221,416,629 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,
      2007, the effective annualized interest rate payable on our investment was
      5.15%.




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 2006 Financial Statements and are filed as a part of this
      report on page F-1 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.


41


**ITEM
      9A.  CONTROLS AND PROCEDURES**




Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer, evaluated the effectiveness of our disclosure controls and
      procedures as of July 31, 2007. The term “disclosure controls and procedures,”
as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
      of
      1934 (the “Exchange Act”), means controls and other procedures of a company that
      are designed to ensure that information required to be disclosed by a company
      in
      the reports that it files or submits under the Exchange Act is recorded,
      processed, summarized and reported, within the time periods specified in the
      SEC’s rules and forms. Disclosure controls and procedures include, without
      limitation, controls and procedures designed to ensure that information required
      to be disclosed by a company in the reports that it files or submits under
      the
      Exchange Act is accumulated and communicated to the company’s management,
      including its principal executive and principal financial officers, as
      appropriate to allow timely decisions regarding required disclosure. Management
      recognizes that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving their objectives
      and management necessarily applies its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures.




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, 2007. Based upon their evaluation, they concluded
      that
      our disclosure controls and procedures were effective.




**Management’s
      Annual Report on Internal Control Over Financial Reporting**




This
      annual report does not include a report of management’s assessment regarding
      internal control over financial reporting or an attestation report of the
      company’s registered public accounting firm due to a transition period
      established by the rules of the Securities and Exchange Commission for newly
      public companies.




**Changes
      In Internal Control Over Financial Reporting**




There
      has been no change in our internal control over financial reporting during
      the
      fourth fiscal quarter ended July 31, 2007 that has materially affected, or
      is
      reasonably likely to materially affect, our internal control over financial
      reporting.




**ITEM
        9B.  OTHER INFORMATION:**




Not
      applicable.




42





**PART
      III**




**ITEM
        10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE
        REGISTRANT**




Our
      current directors, executive officers
      and senior advisors are as follows:




**Name**
            **Age**
            **Position**Gary
                D.
                Engle
            59
            Chairman
                of the Board and Chief Executive OfficerJames
                A.
                Coyne
            47
            Vice
                Chairman and Chief Financial OfficerMichael
                Clayton
            60
            DirectorJonathan
                Davidson
            41
            DirectorGeoffrey
                A.
                Thompson
            66
            DirectorBrian
                Kaufman
            43
            Senior
                AdvisorMilton
                J.
                Walters
            65
            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.


43


***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.




***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.


44





***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.


45




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;


46





·
            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.




**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


47


·
            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.


48




·
            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.


49


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.




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.


50




**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
      2007
      fiscal year 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 advisors****or 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
      will generally 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.






51




**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.




**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 10, 2007**,**
                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 Stock**Gary
                D. Engle(2)
            3,346,244(3)
            9.8%James
                A. Coyne(2)
            2,107,422(4)
            6.2%Brian
                Kaufman(5)
            307,335(6)
            *Jonathan
                Davidson(5)
            307,335(6)
            *Milton
                J. Walters
            125,037(7)
            *Geoffrey
                A. Thompson
            39,203
            *Michael
                Clayton(8)
            17,424
            *Sapling,
                LLC(9)
            1,442,100
            4.2%QVT
                Financial LP(10)
            2,172,700
            6.4%All
                directors and executive officers as a group (five
                individuals)
            5,817,628(11)
            17.1%





*
      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.
 52


(4)
            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.




(5)
            The
                business address of this individual is 11150 Santa Monica Boulevard,
                Suite
                700, Los Angeles, California 90025.




(6)
            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.




(7)
            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.




(8)
            The
                business address of this individual is 3030 Blackthorn Road, Riverwoods,
                Illinois 60015.




(9)
            Based
                on a Schedule 13G filed with the Securities and Exchange Commission
                on
                July 3, 2007 on behalf of Fir Tree Recovery Master Fund, L.P., Fir
                Tree,
                Inc. and Sapling LLC.  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.




(10)
            Based
                on a Schedule 13G/A filed with the Securities and Exchange Commission
                on
                August 10, 2007 on behalf of QVT Financial LP, QVT Financial GP,
                LLC, QVT
                Fund LP and QVT Associates GP LLC.  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




(11)
            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.




53


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**




On
      October 15, 2005, in connection with our organization, we issued the following
      securities:


54





**Name**
            **Number
                of Shares of Common Stock**
            **Number
                of**
              **Warrants**Milton
                J. Walters
            100
            2,715,000Gary
                D. Engle
            -
            2,720,000JAC
                Opportunity Fund I, LLC (1)
            -
            2,715,000


——————


(1)           JAC
      Opportunity Fund I, LLC is a family-held entity of which Mr. Coyne is the sole
      manager.





The
      100
      shares of common stock were sold at a purchase price of $0.01 per share for
      an
      aggregate price of $1.00 and the 8,150,000 warrants were sold at a purchase
      price of $0.05 per warrant for an aggregate price of $407,500.  The
      warrants were exercisable at a price of $5.00 per share and expired eight years
      from the date of the prospectus related to our initial public
      offering.




On
      March
      15, 2006, we issued an aggregate of 4,075,000 Class W warrants and 4,075,000
      Class Z warrants to three existing warrantholders in exchange for the return
      and
      cancellation of the then outstanding 8,150,000 warrants held by them.  On
      the same date, we also issued additional Class W warrants and Class Z warrants
      as follows:




**Name**
            **Number
                of Class W Warrants**
            **Number
                of**
              **Class
                Z  Warrants**Milton
                J. Walters
            167,500
            167,500Gary
                D. Engle
            165,000
            165,000JAC
                Opportunity Fund I, LLC (1)
            167,500
            167,500Geoffrey
                A. Thompson
            100,000
            100,000Michael
                Clayton
            100,000
            100,000


——————


(1)           JAC
      Opportunity Fund I, LLC is a family-held entity of which Mr. Coyne is the sole
      manager.





All
      of
      these warrants were sold at a purchase price of $0.05 per warrant for an
      aggregate purchase price of $70,000.  These Class W warrants and Class Z
      warrants were exercisable at $5.00 per share and had expiration dates of five
      and seven years from the date of the prospectus related to our initial public
      offering, respectively.




On
      May
      25, 2006, we issued additional warrants as follows:




**Name**
            **Number
                of Class W Warrants**
            **Number
                of**
              **Class
                Z**
              **Warrants**Milton
                J. Walters
            1,700,000
            1,700,000Gary
                D. Engle
            3,400,000
            3,400,000JAC
                Opportunity Fund I, LLC (1)
            1,700,000
            1,700,000Geoffrey
                A. Thompson
            125,000
            125,000


——————


(1)           JAC
      Opportunity Fund I, LLC is a family-held entity of which Mr. Coyne is the sole
      manager.





All
      of
      these warrants were sold at a purchase price of $0.05 per warrant for an
      aggregate price of $692,500.


55





On
      January 23, 2007, we issued an aggregate of 11,700,000 Class W warrants and
      11,700,000 Class Z warrants to our five existing warrantholders in exchange
      for
      the return for cancellation of all of the then outstanding warrants.  On
      the same date, we also issued additional warrants as follows:




**Name**
            **Number
                of Class W Warrants**
            **Number
                of**
              **Class
                Z**
              **Warrants**Milton
                J. Walters
            475,000
            475,000Gary
                D. Engle
            950,000
            950,000JAC
                Opportunity Fund I, LLC  (1)
            475,000
            475,000Jonathan
                Davidson
            950,000
            950,000Brian
                Kaufman
            950,000
            950,000


——————


(1)           JAC
      Opportunity Fund I, LLC is a family-held entity of which Mr. Coyne is the sole
      manager.





All
      of
      these warrants were sold at a purchase price of $0.05 per warrant for an
      aggregate price of $380,000. The Class W warrants and Class Z warrants issued
      in
      January 2007 were exercisable at prices of $1.75 per share and $1.50 per share,
      respectively, and expired eight years from the date of the prospectus related
      to
      our initial public offering.




On
      April 4, 2007, we issued 6,249,900 shares of our common stock in exchange
      for the return and cancellation of the 31,000,000 then outstanding warrants.
      In
      May 2007, Brian Kaufman transferred 74,206 shares of common stock to Gary D.
      Engle and Jonathan Davidson transferred 16,856 shares of common stock to Mr.
      Engle and 57,350 shares of common stock to James A. Coyne. The shares were
      transferred at the same price that Messrs. Kaufman and Davidson originally
      paid
      for them. Accordingly, as of May 31, 2007 we had issued 6,250,000 shares of
      common stock for $1,550,000 in cash, or a purchase price of $0.248 per share,
      as
      follows:




**Name**
            **Number
                of**
              **Shares
                of**
              **Common
                Stock**
            **Relationship
                to Us**Gary
                D.
                Engle
            3,346,244
            Chairman
                of the Board and Chief Executive OfficerJames
                A.
                Coyne
            2,107,422(1)
            Vice
                Chairman and Chief Financial OfficerMichael
                Clayton
            307,335
            DirectorJonathan
                Davidson
            307,335
            DirectorGeoffrey
                A.
                Thompson
            125,037
            DirectorBrian
                Kaufman
            39,203
            Senior
                AdvisorMilton
                J.
                Walters
            17,424
            Senior
                Advisor


——————


(1)
            These
                shares are held by JAC Opportunity Fund I, LLC, a family-held entity
                of
                which Mr. Coyne is the sole
                manager.




On
      June
      5, 2007 we sold 5,975,000 insider warrants, generating total proceeds of
      $4,450,000. These warrants were purchased by Gary D. Engle, JAC Opportunity
      Fund
      I, LLC (an affiliate of James A. Coyne, our Vice Chairman and Chief Financial
      Officer), Brian Kaufman, Jonathan Davidson and Milton J. Walters, five of our
      directors, officers and senior advisors. Such warrants are identical to the
      warrants included in the units sold in our initial public offering except that
      if we call the warrants for redemption, the insider warrants may be exercisable
      on a cashless basis so long as such insider warrants are held by the purchasers
      or their affiliates. The purchasers of the insider warrants have agreed that
      the
      they will not sell or transfer insider warrants held by them until after we
      have
      completed a business combination.


56





The
      holders of the majority of these securities are entitled to make up to two
      demands that we register these securities pursuant to a registration rights
      agreement we entered into in connection with our initial public offering. The
      holders of the majority of these securities may elect to exercise these
      registration rights at any time commencing three months prior to the date on
      which these shares of common stock are released from escrow. In addition, these
      stockholders have certain “piggy-back” registration rights with respect to
      registration statements filed subsequent to the consummation of a business
      combination. We will bear the expenses incurred in connection with the filing
      of
      any such registration statements.




Our
      officers, directors and senior advisors have purchased the insider warrants
      for
      a total purchase price of $4,450,000, or approximately $0.75 per warrant from
      us
      in a private placement that closed simultaneously with the consummation of
      our
      initial public offering. The insider warrants were priced at a slight premium
      in
      relation to what we had anticipated would be the approximate market price for
      our warrants at the time the common stock and warrants commenced separate
      trading based upon the trading prices of similar warrants of other blank check
      companies. The insider warrants are identical to warrants underlying the public
      units except that if we call the public 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. The purchasers have agreed that they will
      not sell or transfer the insider warrants until after the consummation of our
      initial business combination. The holders of the majority of these insider
      warrants (or underlying shares) are entitled to demand that we register these
      securities pursuant to a registration rights agreement. The holders of the
      majority of these securities may elect to exercise these registration rights
      with respect to such securities at any time after we consummate a business
      combination. In addition, these holders have certain “piggy-back” registration
      rights with respect to registration statements filed subsequent to such date.
      We
      will bear the expenses incurred in connection with the filing of any such
      registration statements.




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. Each of Messrs. Engle, Coyne, Davidson and Kaufman may vote the
      shares of common stock included in such units on a proposed business combination
      any way they choose. 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 individual 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 agreed to make available to HCFP/Brenner Securities monthly
      statements confirming that such individual has sufficient funds to satisfy
      these
      transactions. 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 open market after our
      initial public offering which could result in these individuals having the
      ability to influence whether or not the business combination is approved. 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. 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.






57






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
      Stamford, 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.




58


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.




59


**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 paid to BDO for services
      rendered:


**From
                  September 9,****2005
                  (inception)****to
                  July 31, 2007**Audit
                  fees
              
              $
              114,530Audit-related
              
              
              -Tax
                  fees
              
              
              -All
                  other fees
              
              
              -Total
              
              $
              114,530
  Audit
      fees for the fiscal year ended 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,
      estimated at $20,000, 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.




**Pre-Approval
      Policy**




Since
      our
      audit committee was not formed until June 2007, the audit committee did not
      pre-approve all of the foregoing services, although 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.




60


**PART
      IV**






**ITEM
        15.  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM
        8-K:**




**1.**
            **Financial
                Statements**


**Page**Report
                of Independent Registered Public Accounting Firm
            
            65Financial
                Statements:Balance
                Sheets, July 31, 2007 and July 31, 2006
            
            66Statements
                of Operations, for the year ended July 31, 2007, the period from
                September
                9, 2005 (inception) to July 31, 2006 and the period from September
                9, 2005
                (inception) to July 31, 2007
            
            67Statements
                of Stockholders’ Equity, from September 9, 2005 (inception) to July 31,
                2007
            
            68Statements
                of Cash Flows,  for the year ended July 31, 2007, the period
                from September 9, 2005 (inception) to July 31, 2006 and  for the
                period  September 9, 2005 (inception) to July 31,
                2007
            
            69Notes
                to Financial Statements
            
            70
                - 79





**3.**
            **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.
  61
   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.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.31.1
              Section
                  302 Certification by Chief Executive Officer31.2
              Section
                  302 Certification by Chief Financial Officer32.1
              Section
                  906 Certification by Chief Executive Officer32.2
              Section
                  906 Certification  by Chief Financial
                  Officer





62








**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 10th day of
      October,
      2007.




**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 10th day of October, 2007 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/s/
                James A.
                Coyne
              James
                A. Coyne
            Vice
                Chairman, Chief Financial Officer, Secretary and
                Director/s/
                Michael
                Clayton
              Michael
                Clayton
            Director/s/
                Jonathan
                Davidson
              Jonathan
                Davidson
            Director/s/
                Geoffrey
                Thompson
              Geoffrey
                Thompson
            Director





63


**STONELEIGH
      PARTNERS ACQUISITION CORP.**


(a
      corporation in the development stage)




**INDEX
      TO FINANCIAL STATEMENTS**




**Pages**Report
                of Independent Registered Public Accounting Firm
            
            65Financial
                Statements:Balance
                Sheets, July 31, 2007 and  2006
            
            66Statements
                of Operations, for the year ended July 31, 2007, the period from
                September
                9, 2005 (inception) to July 31, 2006 and the period from September
                9, 2005
                (inception) to July 31, 2007
            
            67Statements
                of Stockholders’ Equity, from September 9, 2005 (inception) to July 31,
                2007
            
            68Statements
                of Cash Flows,  for the year ended July 31, 2007, the period
                from September 9, 2005 (inception) to July 31, 2006 and  for the
                period  September 9, 2005 (inception) to July 31,
                2007
            
            69Notes
                to Financial Statements
            
            70
                - 79







64


**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, 2007 and 2006, and
      the related statements of operations, stockholders’ equity and cash flows for
      the year ended July 31, 2007, for the period from September 9, 2005
      (inception) to July 31, 2006 and for the period from September 9, 2005
      (inception) to July 31, 2007.  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. The Company is not
      required to have, nor were we engaged to perform, an audit of its internal
      control over financial reporting. Our audits included consideration of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion. 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, 2007 and  2006, and its results of operations and
      its cash flows for to the year ended July 31, 2007, for the period from
      September 9, 2005 (inception) to July 31, 2006 and for the period from
      September 9, 2005 (inception) to  July 31, 2007, in conformity with
      accounting principles generally accepted in the United States of
      America.







/s/
      BDO Seidman, LLP




New
      York,
      NY




September
      27, 2007









65





**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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





**BALANCE
      SHEETS**





July
                31, 2007
            
            July
                31, 2006**ASSETS****CURRENT
                ASSETS:**Cash
                and cash equivalents
            $
            1,035,420
            
            
            $
            912,426Investments
                held in Trust (Notes 1 and 3)
            
            221,416,629
            
            
            
            -Prepaid
                insurance and other expenses
            
            213,542
            
            
            
            -Total
                current assets
            
            222,665,591
            
            
            
            912,426Deferred
                registration costs (Note 4)
            
            -
            
            
            
            390,742**TOTAL
                ASSETS**
            $
            222,665,591
            
            
            $
            1,303,168**LIABILITIES
                AND STOCKHOLDERS’ EQUITY****CURRENT
                LIABILITIES:**Accounts
                payable and accrued expenses
            $
            27,460
            
            
            $
            5,249Accrued
                registration costs
            
            11,538
            
            
            
            130,148Taxes
                payable
            
            690,189
            
            
            
            -Note
                payable, current portion (Note 8)
            
            108,736
            
            
            
            -Total
                current liabilities
            
            837,923
            
            
            
            135,397**LONG
                TERM LIABILITIES**Note
                payable, long term (Note 8)
            
            72,492
            
            
            
            -**COMMON
                STOCK SUBJECT TO POSSIBLE CONVERSION**(8,351,465
                shares at conversion value) (Note 1)
            
            66,427,592
            
            
            
            -**COMMITMENTS**
                (Note 6)
            
            -
            
            
            
            -**STOCKHOLDERS'
                EQUITY**(Notes 2, 4, and 7):Preferred
                stock, $0.0001 par value, 5,000,000 shares authorized, 0
                issuedand
                outstandingCommon
                stock, par value $0.0001 per share, 100,000,000 sharesauthorized,
                25,746,035 shares issued and outstanding (excluding8,351,465
                shares subject to conversion) and 100 shares issued andoutstanding
            
            2,575
            
            
            
            -Additional
                paid-in capital
            
            154,286,820
            
            
            
            1,170,001Earnings
                (deficit) accumulated in the development stage
            
            1,038,189
            
            
            
            (2,230
            )**TOTAL
                STOCKHOLDERS’ EQUITY**
            
            155,327,584
            
            
            
            1,167,771**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            $
            222,665,591
            
            
            $
            1,303,168




















*The
      accompanying notes should be read in conjunction with the financial
      statements.*




66





**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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





**STATEMENTS
      OF OPERATIONS**











**For
                the year**
            
            
            **From
                September 9,**
            
            
            **From
                September 9,****ended**
            
            
            **2005
                (inception)**
            
            
            **2005
                (inception)****July
                31, 2007**
            
            
            **to
                July 31, 2006**
            
            
            **to
                July 31, 2007****Operating
                Expenses**Formation
                and operating costs (Notes 5 and 6)
            
            $
            126,875
            
            
            $
            15,080
            
            
            $
            141,955**Loss
                from operations**
            
            
            (126,875
            )
            
            
            (15,080
            )
            
            
            (141,955
            )**Other
                income (expense)**Interest
                income (Note 1)
            
            
            1,828,031
            
            
            
            12,850
            
            
            
            1,840,881Interest
                expense (Note 8)
            
            
            (1,277
            )
            
            
            -
            
            
            
            (1,277
            )**Income
                (loss) before provision for income taxes**
            
            
            1,699,879
            
            
            
            (2,230
            )
            
            
            1,697,649Provision
                for federal income taxes (Note 5)
            
            
            659,460
            
            
            
            -
            
            
            
            659,460**Net
                income  (loss) for the period**
            
            
            1,040,419
            
            
            
            (2,230
            )
            
            
            1,038,189Accretion
                of Trust Fund relating tocommon
                stock subject to possible conversion
            
            
            (317,741
            )
            
            
            -
            
            
            
            (317,741
            )Net
                income (loss) attributable to common stockholders
            
            $
            722,678
            
            
            $
            (2,230
            )
            
            $
            720,448**Shares
                outstanding subject to possible conversion**
            
            
            8,351,465
            
            
            
            -**Net
                income  per share subject to possible****conversion**,
                basic and diluted
            
            $
            0.04
            
            
            $
            -**Weighted
                average number of shares outstanding,**
            
            
            9,256,354
            
            
            
            6,250,000**Net
                income (loss) per share:**Basic
                and diluted
            
            $
            0.08
            
            
            $
            (0.00
            )














































*The
      accompanying notes should be read in conjunction with the financial
      statements.*




67










**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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





**STATEMENTS
      OF STOCKHOLDERS’ EQUITY**


**From
      September 9, 2005 (inception) to July 31, 2007**





(Deficit)
                EarningsCommon
                stock
            
            
            Additional
            
            
            Accumulated
                in theShares
            
            
            Amount
            
            
            Paid-In-Capital
            
            
            Development
                Stage
            
            
            Total**Balance,
                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 anaggregate
                value of $407,500 in exchangefor
                the cancellation of 8,150,000 warrantswith
                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 discountoffering
                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
                to possible conversion
            
            
            
            
            
            
            
            
            
            
            (317,741
            )
            
            
            
            
            
            
            (317.,741
            )Net
                income for the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,040,419
            
            
            
            1,040,419**Balance,
                July 31, 2007**
            
            
            25,746,035
            
            
            $
            2,575
            
            
            $
            154,286,820
            
            
            $
            1,038,189
            
            
            $
            155,327,584























*The
      accompanying notes should be read in conjunction with the financial
      statements.*




68







**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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





**STATEMENTS
      OF CASH FLOWS**





**For
                the year**
            
            **From
                September 9,**
            
            **From
                September 9,****ended**
            
            **2005
                (inception) to**
            
            **2005
                (inception) to****July
                31, 2007**
            
            **July
                31, 2006**
            
            **July
                31, 2007**





**OPERATING
                ACTIVITIES**Net
                income (loss) for the period
            
            $
            1,040,419
            
            
            $
            (2,230
            )
            
            $
            1,038,189Gains
                on investments held in trust fund
            
            
            (976,979
            )
            
            
            --
            
            
            
            (976,979
            )**Adjustments
                to reconcile net income (loss) to net cash provided****by
                operating activities**Changes
                in:Prepaid
                insurance and other expenses
            
            
            (14,191
            )
            
            
            -
            
            
            
            (14,191
            )Accrued
                payable and accrued expenses
            
            
            22,211
            
            
            
            5,249
            
            
            
            27,460Taxes
                payable
            
            
            690,189
            
            
            
            -
            
            
            
            690,189**Net
                cash provided by operating activities**
            
            
            761,649
            
            
            
            3,019
            
            
            
            764,668**INVESTING
                ACTIVITIES**Purchase
                of investments held in Trust Fund
            
            
            (441,856,279
            )
            
            
            -
            
            
            
            (441,856,279
            )Maturities
                of investments held in Trust Fund
            
            
            221,416,629
            
            
            
            -
            
            
            
            221,416,629**Net
                cash used in investing activities**
            
            
            (220,439,650
            )
            
            
            -
            
            
            
            (220,439,650
            )**FINANCING
                ACTIVITIES**Proceeds
                from issuance of common stock to initial stockholders
            
            
            -
            
            
            
            1
            
            
            
            1Proceeds
                from issuance of insider warrants in private placement
            
            
            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
            
            
            (18,123
            )
            
            
            -
            
            
            
            (18,123
            )Payment
                of deferred registration costs
            
            
            -
            
            
            
            (260,594
            )
            
            
            (260,594
            )Net
                proceeds from sale of units through public offeringincluding the proceeds from underwriter over-allotment
                exercise
            
            
            148,879,167
            
            
            
            -
            
            
            
            148,879,167**Net
                cash provided by financing activities**
            
            
            219,800,995
            
            
            
            909,407
            
            
            
            220,710,402**Net
                increase in cash and cash equivalents**
            
            
            122,994
            
            
            
            912,426
            
            
            
            1,035,420**Cash
                and Cash equivalents**Beginning
                of period
            
            
            912,426
            
            
            
            -
            
            
            
            -End
                of period
            
            $
            1,035,420
            
            
            $
            912,426
            
            
            $
            1,035,420**Supplemental
                disclosure of non-cash financing activities**Fair
                value of underwriter purchase option included in offering
                costs
            
            $
            4,372,000
            
            
            $
            -
            
            
            $
            4,372,000Accretion
                relating to common stock subject to possible conversion
            
            $
            (317,741
            )
            
            $
            -
            
            
            $
            (317,741
            )Accrued
                registration costs
            
            $
            11,538
            
            
            $
            130,148
            
            
            $
            11,538Financed
                insurance
            
            $
            181,228
            
            
            $
            -
            
            
            $
            181,228**Supplemental
                disclosure of cash flow information**Cash
                paid for interest
            
            $
            1,277
            
            
            $
            -
            
            
            $
            1,277Cash
                paid for taxes
            
            $
            4,812
            
            
            $
            -
            
            
            $
            4,812










*The
      accompanying notes should be read in conjunction with the financial
      statements.*




69







**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,
      2007 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 7) 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. 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 successfully effect a Business
      Combination.





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.




Management
      agreed that approximately $220.4 million (or approximately $7.95 per Unit)
      of the net proceeds of the Offering, the sale of the Insider Warrants
      (defined in Note 7) and the sale of common stock to the Initial
      Stockholders will be 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, 2007, the Company has transferred $797,259
      of interest income to its operating account (See Note 9).





70





**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
      obliged 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 any interest thereon), calculated as of two business
      days
      prior to the proposed Business Combination, divided by the number of shares
      sold
      in the Offering, or approximately $7.95 per share based on the value of the
      Trust Account as of July 31, 2007.  As a result of the Conversion
      Right, $66,427,592 (including accretion of $317,741) 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 $193.2 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 7). The Company also has granted to the Representative a 45-day
      option to purchase up to 3,750,000 Units solely to cover over allotments, if
      any.





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 $22,040,000, 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 7.





71





**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 restricted investment held in the Trust
      Fund at July 31, 2007 is invested in U.S. Government Institutional money market
      securities. The Company recognized interest income of $1,774,460 on investment
      held in trust for the year ended July 31, 2007 and for the period from inception
      (September 9, 2005) to July 31, 2007, which is included on the accompanying
      statements of operations.  No interest was earned on investments held
      in trust prior to the Offering.




**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 (Loss) Per Share**– Net income (loss) per share is computed based
      on the weighted average number of shares of common stock
      outstanding.




Basic
      earnings (loss) per share excludes dilution and is computed by dividing income
      (loss) 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 7) and shares issued in the
      Offering  have been  included to 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 Fund
      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, 2007 and since the effect
      of outstanding warrants to purchase common stock and upo is antidilutive, they
      have been excluded from the Company’s computation of diluted net income (loss)
      per share for the periods ending July 31, 2007.




**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, 2007 there were no temporary differences
      and therefore no deferred tax has been established.







72





**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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




**NOTES
      TO FINANCIAL STATEMENTS**









**NOTE
      3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-(CONTINUED)**









**New
      Accounting Pronouncements**– In July 2006, the Financial Accounting
      Standards Board (“FASB”) issued Interpretation No. 48 (“FIN 48”), “Accounting
      for Uncertainty in Income Taxes, an 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. FIN 48 is effective
      for fiscal years beginning after December 15, 2006. The adoption of FIN 48
      is
      not expected to have  a significant effect on the Company’s balance
      sheet or statements of operations.




In
      September 2006, the FASB issued FASB 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 measurements. The new guidance is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and for interim periods within those fiscal years. The adoption of SFAS No.
      157
      is not expected to have a material effect on the Company’s  financial
      position and  results of operations.




In
      February 2007, the FASB issued SFAS No. 159, ‘‘The Fair Value Option
      for Financial Assets and Financial Liabilities — including an amendment of FASB
      Statement No. 115’’ (‘‘SFAS No. 159’’). SFAS No. 159 permits
      entities to elect to measure many financial instruments and certain other items
      at fair value. Upon adoption of SFAS No. 159, an entity may elect the fair
      value option for eligible items that exist at the adoption date. Subsequent
      to
      the initial adoption, the election of the fair value option should only be
      made
      at initial recognition of the asset or liability or upon a remeasurement event
      that gives rise to new-basis accounting. SFAS No. 159 does not affect any
      existing accounting literature that requires certain assets and liabilities
      to
      be carried at fair value nor does it eliminate disclosure requirements included
      in other accounting standards. SFAS No. 159 is effective for fiscal years
      beginning after November 15, 2007 and may be adopted earlier but only if
      the adoption is in the first quarter of the fiscal year. The adoption of SFAS
      No. 159 is not expected to have a material effect on the Company’s
      financial position and results of operations.





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 — DEFERRED REGISTRATION COSTS**




As
      of
      July 31, 2006, the Company had incurred deferred registration costs of $390,742
      relating to expenses incurred in connection to the Offering. Upon consummation
      of the Offering, this amount, along with additional registration costs incurred
      through June 5, 2007 of $481,937 (aggregating $872,679) was charged to
      equity.


73







**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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




**NOTES
      TO FINANCIAL STATEMENTS**









**NOTE
      5 — TAXES**




Provision
      for income taxes consists of:







**For
                the year**
            
            
            **From
                September 9,**
            
            
            **From
                September 9,****ended**
            
            
            **2005
                (inception)**
            
            
            **2005
                (inception)****July
                31, 2007**
            
            
            **to
                July 31, 2006**
            
            
            **to
                July 31, 2007**Current
                Federal & State
            
            $
            659,460
            
            
            $
            -
            
            
            $
            659,460$
            659,460
            
            
            $
            -
            
            
            $
            659,460





The
      Company’s effective tax rate approximates the federal statutory rate. No
      provision for state and local income taxes has been made since the Company
      was
      formed as a vehicle to effect a Business Combination and, as a result does
      not
      conduct operations and is not engaged in trade or business in any
      state.  The Company is incorporated in Delaware and accordingly is
      subject to franchise taxes. Included as part of formation and operating costs
      in
      the accompanying statement of operations for the period ended July 31, 2007
      is
      Delaware franchise tax expense of $35,541.




**NOTE
      6 — COMMITMENTS**




**Administrative
      Services Agreement**




The
      Company has 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 period from September 9, 2005
      (inception) through July 31, 2007, $15,000 for these services is included in
      formation and operating 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 Proposed 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 has sold to HCFP a purchase option to purchase the Company’s Units (Note
      7),







74







**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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




**NOTES
      TO FINANCIAL STATEMENTS**





**NOTE
      7 — COMMON AND PREFERRED STOCK, WARRANTS AND UNDERWRITER PURCHASE
      OPTION**




**Insider
      Purchase Commitment**




Gary
      D.
      Engle, the Company’s Chairman and Chief Executive Officer, James A. Coyne, the
      Company’s Vice Chairman and Chief Financial Officer, Jonathan Davidson, a
      director, and Brian Kaufman, 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 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 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.




*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.




75





**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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




**NOTES
      TO FINANCIAL STATEMENTS**






**NOTE
      7 — 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 later of: (a) completion of the Business Combination and
      (b) June 5, 2008, 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 later of: (a) completion of the Business Combination and
      (b) June 5, 2008, 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 and 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 later of: (a) completion of the Business Combination and
      (b) May 31, 2008 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 (the “Insider Warrants”). 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.




As
      the
      proceeds from the exercise of the 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.





76





**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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




**NOTES
      TO FINANCIAL STATEMENTS**






**NOTE
      7 — COMMON STOCK, WARRANTS AND UNDERWRITER PURCHASE OPTION –
(CONTINUED)**





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 later of:
      (a) completion of the Business Combination and (b) May 31,
      2008 and ending May 31, 2011.





The
      Company is only required to use its best efforts to cause the registration
      statement to be declared effective and, once effective, the Company will use
      its
      best efforts to maintain its effectiveness. Accordingly, its obligation is
      merely to use its best efforts in connection with the registration rights
      agreement and upon exercise of the Warrants.   The Company will
      satisfy its obligation by delivering unregistered shares of common stock. If
      a
      registration statement is not effective at the time a 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 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 later of (i) the consummation
      of a Business Combination and (ii) May 31, 2008, 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.




**NOTE
      8 — NOTE PAYABLE**





The
        Company has 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 with payments commencing June 30, 2007 and
        continuing through March 31, 2009. The Company will pay 22 equal installments
        of
        principal and interest of $9,700. For the year ended July 31, 2007 the Company
        recognized $1,277 of interest expense and at July 31, 2007, the note payable
        balance was $181,228.


77





**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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




**NOTES
      TO FINANCIAL STATEMENTS**






**NOTE
      9 — SUBSEQUENT EVENTS**





The
      Company has transferred $976,979 of interest income on its Trust Account to
      its
      operating account in August 2007, $966,276 in September 2007 and $259,263 in
      October 2007.










78





**STONELEIGH
      PARTNERS ACQUISITION CORP.**


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




**NOTES
      TO FINANCIAL STATEMENTS**









**NOTE
      10 — 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, 2007
            
            
            April
                30, 2007
            
            
            January
                31, 2007
            
            
            October
                31, 2006**YEAR
                ENDED JULY 31, 2007**Interest
                income
            
            $
            1,784,954
            
            
            $
            15,755
            
            
            $
            11,920
            
            
            $
            15,402Interest
                expense
            
            
            (1,277
            )
            
            
            -
            
            
            
            -
            
            
            
            -Formation and
                operating costs
            
            
            (115,334
            )
            
            
            (3,824
            )
            
            
            (5,601
            )
            
            
            (2,116
            )Net
                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





Common
                shares outstanding subject topossible
                conversion
            
            
            8,351,465
            
            
            
            -
            
            
            
            -
            
            
            
            -Basic
                and diluted net income per share subject topossible
                conversion
            
            $
            0.04
            
            
            $
            0.00
            
            
            $
            0.00
            
            
            $
            0.00Weighted
                average common shares outstanding
            
            
            9,256,354
            
            
            
            6,250,000
            
            
            
            6,250,000
            
            
            
            6,250,000Basic
                and diluted net income per share
            
            $
            0.08
            
            
            $
            0.00
            
            
            $
            0.00
            
            
            $
            0.00





September
                  9, 2005**Quarter
                  Ended**
              
              (inception)
                  to


July
                31, 2006
            
            
            April
                30, 2006
            
            
            January
                31, 2006
            
            
            October
                31, 2005**FROM
                INCEPTION TO JULY 31, 2006**Interest
                income
            
            $
            5,269
            
            
            $
            3,865
            
            
            $
            3,649
            
            
            $
            67Formation
                and operating costs
            
            
            (4,520
            )
            
            
            (2,560
            )
            
            
            -
            
            
            
            (8,000
            )Net
                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
            )





Common
                shares outstanding subject topossible
                conversion
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Basic
                and diluted net income per share subject topossible
                conversion
            
            $
            0.00
            
            
            $
            0.00
            
            
            $
            0.00
            
            
            $
            (0.00
            )Weighted
                average common shares outstanding
            
            
            6,250,000
            
            
            
            6,250,000
            
            
            
            6,250,000
            
            
            
            6,250,000Basic
                and diluted net income per share
            
            $
            0.00
            
            
            $
            0.00
            
            
            $
            0.00
            
            
            $
            (0.00
            )








79