UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C.  20549
 
 FORM
20-F
 
  ̈
              REGISTRATION
      STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
      OF 1934
 OR
 x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 For
the fiscal year ended December 31, 2008
 OR
  ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 For the
transition period from ____________ to __________
 OR
  ̈
              SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
 
 COMMISSION
FILE No.  001-33916
 
 Asia Special Situation Acquisition
Corp.
 (Exact
name of Registrant as specified in its charter)
  Asia Special Situation
Acquisition Corp.
 (Translation
of Registrant's name into English)
  Cayman
Islands
 (Jurisdiction
of incorporation or organization)
 
 c/o M
& C Corporate Services Limited
 P.O. Box
309GT, Ugland House
 South
Church Street
 George
Town, Grand Cayman
 Cayman
Islands
 (Address
of principal executive offices)
 
 Geoffrey
W. Holmes, Chief Executive Officer
 600 Third
Avenue, 22nd floor
 New York,
NY 10016
 (212) 490-1100 Ext.
360
 (Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact
Person)
 
 Securities
registered or to be registered pursuant to Section 12(b) of the
Act:
  
  Units,
      each consisting of one Ordinary Share and one Warrant
                  
                  NYSE
      Alternext US ExchangeOrdinary
      Shares, $.0001 par value
                  
                  NYSE
      Alternext US ExchangeOrdinary Share Purchase
      Warrants
                  
                  NYSE Alternext US
  Exchange(Title
      of Class)
                  
                  (Name
      of exchange on which
registered)
 
 None
   None
 
 (Title of
Class)
 
 Number of
outstanding shares of each of the issuer's classes of capital or common stock as
of the close of the period covered by the annual report:14,000,000 ordinary
shares, $.0001 par value.
  Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
 Yes ̈Nox
  If this
report is an annual or transition report, indicate by check mark if the
Registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.
 Yes
 ̈      No
x
  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.                         YesxNo ̈
  Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.
 Large
      accelerated filer  ̈
                  Accelerated
      filer  ̈
                  Non-accelerated
      filer x
 
 Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:
  U.S.
      GAAP x
              International
      Financial Reporting Standards
              Other ̈as
      issued by the International AccountingStandards Board ̈
 
 If
“Other” has been checked in response to the previous question, indicate by check
mark which financial statement item the registrant has elected to
follow:
 Item
17  ̈    Item
18  ̈
 
 If this
is an annual report indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
 YesxNo ̈
  - PAGE -
ii -
  TABLE
OF CONTENTS
  FORM
      20-F
                        
                        ITABLE
      OF CONTENTS
                        
                        IIIPART
      I
                        
                        5ITEM
      1:
                        Identity
      of Directors, Senior Management and Advisors
                        
                        5ITEM
      2:
                        Offer
      Statistics and Expected Timetable
                        
                        5ITEM
      3:
                        Key
      Information
                        
                        5A.
                        Selected
      Financial Data
                        
                        5B.
                        Capitalization
      and Indebtedness
                        
                        5C.
                        Reasons
      For The Offer and Use Of Proceeds
                        
                        5D.
                        Risk
      Factors
                        
                        6ITEM
      4:
                        Information
      on the Company
                        
                        24A.
                        History
      and Development of the Company
                        
                        24B.
                        Business
      Overview
                        
                        30C.
                        Property,
      Plants and Equipment
                        
                        42ITEM
      4A:
                        Unresolved
      Staff Comments
                        
                        42ITEM
      5:
                        Operating
      and Financial Review and Prospects
                        
                        42A.
                        Operating
      Results
                        
                        45B.
                        Liquidity
      and Capital Resources
                        
                        47C.
                        Research
      and Development, Patents and Licenses, Etc.
                        
                        52D.
                        Trend
      Information
                        
                        52E.
                        Off-Balance
      Sheet Arrangements
                        
                        52F.
                        Tabular
      Disclosure of Contractual Obligations
                        
                        53ITEM
      6:
                        Directors,
      Senior Management, and Employees
                        
                        53A.
                        Directors
      and Senior Management
                        
                        53B.
                        Compensation
                        
                        57C.
                        Board
      Practices
                        
                        57D.
                        Employees
                        
                        59E.
                        Share
      Ownership
                        
                        60ITEM
      7:
                        Major
      Shareholders and Related Party Transactions
                        
                        63A.
                        Major
      Shareholders
                        
                        63B.
                        Related
      Party Transactions
                        
                        64C.
                        Interests
      of Experts and Counsel
                        
                        68ITEM
      8:
                        Financial
      Information
                        
                        68A.
                        Financial
      Statements and Other Financial Information
                        
                        68B.
                        Significant
      Changes
                        
                        68ITEM
      9:
                        The
      Offering and Listing
                        
                        69A.
                        Offer
      and Listing Details
                        
                        69B.
                        Plan
      of Distribution
                        
                        70C.
                        Markets
                        
                        70D.
                        Selling
      Shareholders
                        
                        70E.
                        Dilution
                        
                        70F.
                        Expenses
      of the Issue
                        
                        70ITEM 10:
                        Additional
      Information
                        
                        70A.
                        Share
      Capital
                        
                        70
  - PAGE -
iii -
  B.
                        Memorandum
      and Articles of Association
                        
                        70C.
                        Material
      Contracts
                        
                        70D.
                        Exchange
      Controls
                        
                        72E.
                        Taxation
                        
                        72F.
                        Dividends
      and Paying Agents
                        
                        77G.
                        Statements
      by Experts
                        
                        77H.
                        Documents
      on Display
                        
                        77I.
                        Subsidiary
      Information
                        
                        77ITEM
      11:
                        Quantitative
      and Qualitative Disclosures about Market Risk
                        
                        78ITEM
      12:
                        Description
      of Securities other than Equity Securities
                        
                        78PART
      II
                        
                        
                        78ITEM
      13:
                        Defaults,
      Dividend Arrearages and Delinquencies
                        
                        78ITEM
      14:
                        Material
      Modifications to the Rights of Security Holders and Use of
      Proceeds
                        
                        78ITEM
      15:
                        Controls
      and Procedures
                        
                        78ITEM
      16:
                        Reserved
                        
                        79A.
                        Audit
      Committee Financial Expert
                        
                        79B.
                        Code
      of Ethics
                        
                        79C.
                        Principal
      Accountant Fees and Services
                        
                        79D.
                        Exemptions
      From the Listing Standards for Audit Committees
                        
                        80E.
                        Purchases
      of Equity Services by the Issuer and Affiliated Purchasers
                        
                        80F.
                        Change
      in Registrant's Certified Accountant
                        
                        80PART
      III
                        
                        82ITEM
      17:
                        Financial
      Statements
                        
                        82A.
                        Audited
      Annual Financial Statements, December 31, 2008ITEM
      18:
                        Financial
      Statements
                        
                        F-1
      - F-14ITEM
      19:
                        Exhibits
                        
                        83SIGNATURES
                        
                        87
  - PAGE -
iv -
  PART
I
  ITEM
      1:
                Identity
      of Directors, Senior Management and
Advisors
 
 Not
Applicable.
 
 ITEM
      2:
                Offer
      Statistics and Expected
Timetable
 
 Not
Applicable.
 
 ITEM
      3:
                Key
      Information
 
 A.   Selected
Financial Data
 
 The
following selected financial data should be read in conjunction with our
financial statements and related notes and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations.” The data as of December 31,
2008 and for the period March 22, 2007 (inception) to December 31, 2008 are
derived from our audited financial statements which are included elsewhere in
this annual report. This selected financial data should be read in conjunction
with such financial statements and the related reports of our auditors
Rothstein, Kass & Company, P.C. The historical results are not
necessarily indicative of results to be expected for future
periods.
  Selected
Financial Data
  Balance Sheet Data
                        
                        Year Ended
                          December 31, 2008
                          (audited)
                        
                        
                        From inception (March 22, 2007) to
                          Year Ended December 31, 2007
                          (audited)Working
      capital (deficiency)
                        
                        $
                        (809,000
                        )
                        
                        $
                        (571,000
                        )Investment
      in Trust  Account
                        
                        $
                        115,000,000
                        
                        
                        
                        —Total
      assets
                        
                        $
                        115,888,000
                        
                        
                        $
                        1,035,000Deferred
      underwriters’ fee
                        
                        $
                        3,450,000
                        
                        
                        
                        —Total
      liabilities
                        
                        $
                        4,475,000
                        
                        
                        $
                        1,013,000Value
      of ordinary shares which may be converted to cash ($10.00 per
      share)
                        
                        $
                        40,250,000
                        
                        
                        
                        —Shareholders’
      equity
                        
                        $
                        71,163,000
                        
                        
                        $
                        22,000Statement
      of Operations DataFormation
      and operating costs
                        
                        $
                        924,000
                        
                        
                        $
                        6,000Net
      income (loss)
                        
                        $
                        129,000
                        
                        
                        $
                        (3,000
                        )Net
      income (loss) per ordinary share, basic and diluted, excluding shares
      subject to possible redemption
                        
                        $
                        0.01
                        
                        
                        $
                        0.00
 
 B.   Capitalization
and Indebtedness
 
 Not
Applicable.
 
 C.   Reasons
For The Offer and Use Of Proceeds
 
 Not
Applicable.
  5
 
 D.   Risk
Factors
 
 You
should carefully consider the following risk factors and the other information
included herein as well as the information included in other reports and filings
made with the Securities and Exchange Commission before investing in our
securities. If any of the following risks actually occurs, our business,
financial condition or results of operations could be harmed. The trading price
of our units, ordinary shares and warrants could decline due to any of these
risks, and you may lose part or all of your investment.
 
 Risks
Associated With Our Business
 
 We
are a newly formed company with no operating history and, accordingly, you will
not have any basis on which to evaluate our ability to achieve our business
objective.
 
 We are a
newly formed company with no operating results to date. Therefore, our ability
to begin operations is dependent upon obtaining financing through the public
offering of our securities and consummating a business combination. Since we do
not have any operations or an operating history, you will have no basis upon
which to evaluate our ability to achieve our business objective, which is to
complete a business combination with one or more unidentified operating
businesses, through a capital stock exchange, asset acquisition, stock purchase,
or other similar transaction, including obtaining a majority interest through
contractual arrangements, that is either located in, selling its products or
services in, or otherwise investing in Asia. We will only acquire a business or
businesses that, upon completion of our initial business combination, will be
our majority-owned subsidiaries and will be neither investment companies nor
companies excluded from the definition of investment company by Sections 3(c)(1)
or 3(c)(7) of the Investment Company Act of 1940. Other than the proposed share
exchange with White Energy Company Limited and its affiliates, we do not have
any specific business combination under consideration or contemplation. We will
not generate any revenues or income (other than interest income, net of taxes,
if any, on the proceeds of our offering) until, at the earliest, after the
consummation of a business combination. We cannot assure you as to when or if a
business combination will occur, or that even if we are successful in
consummating a business combination, that our company will operate profitably in
the future.
 
 If
we are forced to dissolve and liquidate before a business combination our
warrants will expire worthless.
 
 If we are
unable to complete the proposed White Energy share exchange or other business
combination and are forced to dissolve, liquidate and wind up, there will be no
amount payable upon such liquidation with respect to our outstanding warrants
and, accordingly, the warrants will expire worthless. For a more complete
discussion of the effects on our shareholders if we are unable to complete a
business combination, see the section entitled “Effecting a business
combination — Dissolution and liquidation if no business
combination.”
 
 You
will not be entitled to protections normally afforded to investors of blank
check companies including the ability to receive all interest earned on the
amount held in trust.
 
 Since the
net proceeds of our offering are intended to be used to complete a business
combination with White Energy and its affiliates or another target business, 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 upon
the consummation of our offering and have filed a Current Report on Form 8-K
with the SEC upon consummation of our offering, including an audited balance
sheet 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 will not be afforded the benefits or protections of those rules, such
as entitlement to all the interest earned on the funds deposited into the trust
account. Because we are not subject to Rule 419, a significant amount of the
interest earned on the funds deposited in the trust account will be released to
us to fund our working capital and will not be available at all to those public
shareholders redeeming in connection with a business combination and our units
will be immediately tradable.
  6
 
 Because there are numerous companies
with a business plan similar to ours seeking to effectuate a business
combination, including companies seeking to consummate a business combination
with companies in Asia, it may be more difficult for us to do
so.
 
 Based
upon publicly available information, as of January 15, 2008, approximately 145
similarly structured blank check companies have completed initial public
offerings in the United States. Of these companies, only 43 companies have
consummated a business combination, while 23 other companies have announced they
have entered into a definitive agreement for a business combination, but have
not consummated such business combination and seven companies have failed to
consummate a business combination and have either returned or announced their
intention to return proceeds to their stockholders. Accordingly, there are over
71 blank check companies with more than $11.0 billion in trust that are seeking
to carry out a business plan similar to our business plan. 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 those companies must
complete a business combination in specific industries, a number of them may
consummate a business combination in any industry they choose. Therefore, we may
be subject to competition from these and other companies seeking to consummate a
business plan similar to ours. Because of this competition, we cannot assure you
that we will be able to effectuate the proposed White Energy share exchange or
other business combination within the required time periods. Further, the fact
that only 66 of such companies have either consummated a business combination or
entered into a definitive agreement for a business combination may indicate that
there are fewer attractive target businesses available to such entities or that
many privately-held target businesses are not inclined to enter into these types
of transactions with publicly held blank check companies like ours.
 
 We
will proceed with a business combination only if public shareholders owning one
share less than 35% of the shares sold in our offering exercise their redemption
rights, which is a lower threshold than that of a traditional blank check
company and will make it easier for us to proceed with a proposed
acquisition.
 
 We will
proceed with the proposed White Energy share exchange only if: (i) a majority of
the ordinary shares cast at the meeting are voted in favor of the share
exchange, (ii) if public shareholders owning less than 35% of the total number
of shares sold in our offering exercise their redemption rights in accordance
with the instructions set forth in the proxy materials to be mailed to our
shareholders, and (iii) a majority of our outstanding ordinary shares are voted
in favor of an amendment to our amended and restated memorandum and articles of
association to permit our perpetual existence (as further discussed under the
heading “Effecting a business
combination — Redemption Rights”). Accordingly, public
shareholders owning up to one share less than 35% of the total number of shares
sold in our offering may exercise their redemption rights and we could still
consummate the proposed White Energy share exchange. As a result, this may have
the effect of making it more likely that we could consummate the White Energy
share exchange or other business combination even when a significant number of
public shareholders have voted against such transaction. We have increased the
redemption percentage from 20% to one share less than 35% of the total number of
shares sold in our offering 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 shareholders. While there are a few other business
combination companies similar to ours which contain redemption provisions
greater than 20%, the 20% threshold is customary and standard for offerings
similar to ours.
 
 We
may be required to issue a substantial number of additional shares of our
capital stock or debt securities to complete the proposed White Energy share
exchange or other business combination, which would reduce the equity interest
of our shareholders and likely cause a change in control of our
ownership.
 
 Our
amended and restated memorandum and articles of association authorizes the
issuance of up to 50,000,000 ordinary shares, par value $.0001 per share, and
1,000,000 shares of preferred stock, par value $.0001 per share. Immediately
after our offering and the sale of the insider warrants (including
the exercise of the underwriters’ over-allotment option), there were
17,825,000 authorized but unissued ordinary shares available for issuance (after
appropriate reservation for the issuance of shares upon full exercise of our
outstanding warrants and the underwriters’ unit purchase option) and all of the
1,000,000 shares of preferred stock were available for issuance. If more than
20% but not more than one share less than 35% of the shares owned by our public
shareholders vote against the proposed White Energy share exchange or other
business combination and exercise their redemption rights, we will still be
required to utilize 80% of the amount in our trust account for the business
combination (excluding deferred underwriting fees).
  7
  In the
past 12 months, and particularly in light of the world-wide economic recession,
many hedge funds and other institutional investors who invested in SPACs or
business combination companies have not voted in favor of proposed business
combinations and sought redemption of their original investments.  In
order to avoid liquidation and to effect the consummation of the White Energy
transaction, we may be required to find buyers for our shares and warrants held
by a number of our current public shareholders who will purchase such securities
and vote in favor of our proposed transaction, or sell ourselves additional
securities and use the proceeds to repurchase shares being
redeemed.  In such connection, we have engaged the services of
Canaccord Capital LLC and Roth Capital Partners LLC to assist us in such
financing efforts to the extent required.  In addition, if such
redemptions leaves us with an insufficient amount of funds to consummate the
proposed White Energy share exchange or other business combination, then we may
issue a significant amount of our debt or equity securities to the sellers of
such businesses and/or seek to raise additional funds through a private offering
of debt or equity securities. Although we have no commitments to purchase our
securities, we may issue a substantial number of additional ordinary or
preferred shares, or a combination of ordinary and preferred shares, to complete
the share exchange or other business combination. The issuance of additional
ordinary shares or any number of our preferred shares:
 
 ·
              may significantly reduce the
      equity interest of investors in our
  offering;
 ·
              will likely cause a change in
      control if a substantial number of our ordinary shares are issued, which
      may affect, among other things, our ability to use our net operating loss
      carry forwards, if any, and most likely also result in the resignation or
      removal of our present officers and directors;
  and
 ·
              may adversely affect prevailing
      market prices for our ordinary
shares.
 
 Exercise
of redemption rights must be effected pursuant to a specific process which may
take time to complete and may result in the expenditure of funds by shareholders
seeking redemption.
 
 A
shareholder requesting redemption of his, her or its ordinary shares for cash
may do so at any time after the mailing to our shareholders of the proxy
statement and prior to the vote taken with respect to the proposed White Energy
share exchange or other business combination. A shareholder would have from the
time we send out our proxy statement through the vote on the share exchange to
tender (either electronically or through the delivery of physical stock
certificates) such shareholder’s ordinary shares if he, she or it wishes to seek
to exercise his, her or its redemption rights. There is a nominal cost
associated with the above-referenced tendering process and the act of
certificating the shares or delivering them through the DWAC system. The
transfer agent will typically charge the tendering broker $35 and it would be up
to the broker whether or not to pass this cost on to the redeeming shareholder.
There may be additional mailing and other nominal charges depending on the
particular process used to tender the ordinary shares. Although we believe the
time period, costs and other potential burdens associated with the tendering
process are not onerous for an average investor, this process may result in
additional burdens for shareholders, including mis-delivery or any other defect
in the tendering process.
 
 Additionally,
if a vote on the proposed White Energy share exchange is held and is not
approved, we may continue to try to consummate a business combination with a
different target until twenty four months from the date of our prospectus. If
the proposed White Energy share exchange is not approved or completed for any
reason, public shareholders voting against such transaction who exercised their
redemption rights would not be entitled to redeem their ordinary shares into a
pro rata share of the aggregate amount then on deposit in the trust account. In
such case, if we have required public shareholders to tender their certificates
prior to the meeting, we will promptly return such certificates to the tendering
public shareholder. In such case, they would then have to comply with the
tendering process again for any vote against a subsequent business
combination.
  8
  The
terms on which we may effect a business combination can be expected to become
less favorable as we approach our 24 month deadline.
 
 Pursuant
to our amended and restated memorandum and articles of association, we must
effect and initiate procedures for our dissolution and liquidation and the
distribution of our assets, including the funds held in the trust account, if we
do not effect a business combination within 24 months after the completion of
our offering since a definitive agreement has been executed with White Energy
within 18 months after completion of our offering). We have agreed with the
trustee to promptly adopt a plan for the liquidation and distribution of our
assets, including the funds held in the trust account, upon expiration of the
time periods set forth above.
 
 Any
entity with which we negotiate, or attempt to negotiate, a business combination,
including White Energy and its affiliates, will, in all likelihood, be aware of
these time limitations and can be expected to negotiate accordingly.
Additionally, as the 18 or 24 month time periods draw closer, we may not have
the desired amount of leverage in the event any new information comes to light
after entering into the share exchange agreement with White Energy and its
affiliates but prior to consummation of the share exchange.
 
 If
third parties bring claims against us, the proceeds held in trust could be
reduced and the per-share liquidation price received by shareholders from the
trust account as part of our dissolution and liquidation may be less than $10.00
per share.
  Our
placing of funds in trust may not protect those funds from third party claims
against us. Although we will seek to have all vendors, prospective target
businesses or other entities with which we execute agreements waive any right,
title, interest or claim of any kind in or to any monies held in the trust
account for the benefit of our public shareholders, there is no guarantee that
they will execute such agreements, or even if they execute such agreements that
they would be prevented from bringing claims against the trust account,
including, but not limited to, fraudulent inducement, breach of fiduciary
responsibility and other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain an advantage with a
claim against our assets, including the funds held in the trust account. If any
third party refused to execute an agreement waiving such claims to the monies
held in the trust account, we would perform an analysis of the alternatives
available to us if we chose not to engage such third party and evaluate if such
engagement would be in the best interest of our shareholders if such third party
refused to waive such claims. Examples of possible instances where we may engage
a third party that refused to execute a waiver include the engagement of a third
party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to
execute a waiver or in cases where management is unable to find a provider of
required services willing to provide the waiver. In addition, there is no
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 not seek recourse against the trust account for any
reason.
 
 Accordingly,
the proceeds held in trust could be subject to claims that could take priority
over the claims of our public shareholders and the per-share liquidation price
could be less than the $10.00 per share held in the trust account, plus interest
(net of any taxes due on such interest, which taxes, if any, shall be paid from
the trust account and net of any amounts released to us as working capital, or
to fund costs associated with our automatic dissolution and liquidation if we do
not consummate the proposed White Energy share exchange or other business
combination), due to claims of such creditors. Additionally, in the event we do
not have sufficient funds available to us to consummate and complete our
dissolution and liquidation, our sponsor has agreed that either it or its
affiliates will fund all costs associated with our dissolution and liquidation.
Based on information we have obtained from such entities and individuals, we
currently believe that such entities and individuals are capable of funding both
a shortfall in our trust account and the costs associated with our dissolution
and liquidation, even though we have not asked them to reserve for such an
eventuality. However, we cannot assure you that our sponsor or its affiliates
will be able to satisfy those obligations. We believe the likelihood of our
sponsor, Noble Investment Fund Limited and Allius Ltd. having to indemnify the
trust account is minimal because we will endeavor to have all vendors and
prospective target businesses, as well as other entities, execute agreements
with us waiving all right, title, interest or claim of any kind in or to monies
held in the trust account.
  9
 
 Additionally,
if we are forced to declare insolvency or a case for involuntary liquidation is
filed against us which is not dismissed, the funds held in our trust account
will be subject to applicable Cayman Islands’ insolvency law, and may be
included in our estate and subject to the claims of third parties with priority
over claims of our public shareholders. To the extent any such claims deplete
the trust account we cannot assure you we will be able to return to public
shareholders the amounts payable to them upon a liquidation of the trust
account.
 
 Although
our disinterested directors will bring claims on our behalf to enforce the joint
and several indemnification obligations of our sponsor, Noble Investment Fund
Limited and Allius Ltd., there is no assurance that such claims would be
successful, resulting in a reduction in the amount of funds in the trust account
available for distribution to our public shareholders.
 
 Our
sponsor, Noble Investment Fund Limited and Allius Ltd. have agreed that they
will be jointly and severally liable to ensure that the proceeds in the trust
account are not reduced by the claims of target businesses or claims of vendors
or other entities that are owed money by us for services rendered or contracted
for or products sold to us, but only to the extent we have not obtained a valid
and enforceable waiver from such parties. In the event that the proceeds in the
trust account are reduced and our sponsor, Noble and Allius assert that they are
unable to satisfy their obligations or that they have no indemnification
obligations related to a particular claim, our disinterested directors will
cause us to take legal action against them for specific performance to enforce
their indemnification obligations. Our disinterested directors will cause us to
take action against our sponsor, Noble and Allius because our board of directors
has a fiduciary obligation to bring such claims and our amended and restated
memorandum and articles of association require our disinterested directors to
bring such claims, if required. However, we can provide no assurance that such
claims would be successful. If such claims are not successful, the amount of
funds in the trust account available for distribution to our public shareholders
may be reduced and the per share liquidation distribution could be less than the
initial $10.00 per share held in the trust account.
 
 We
will have only limited ability to evaluate the management of the target
business.
 
 It is
anticipated that, upon consummation of the proposed White Energy share exchange,
White Energy management will become the management of our company and
subsidiaries and our current executive officers will resign.  In
addition, after the closing date White Energy will have the right to appoint
four directors (including a Chairman) to our board and our existing shareholders
will have the right to appoint two directors to our board. Accordingly, the
future success or failure of our company will depend largely upon the efforts of
the senior management and board of directors of White Energy. Although we intend
to closely scrutinize the management of White in connection with evaluating the
desirability of effecting the share exchange, we cannot assure you that our
assessment of such management will prove to be correct.
 
 Although our
current officers and directors intend to resign upon consummation of the
proposed White Energy share exchange or other business
combination, under certain circumstances they may receive ongoing compensation
following such business combination.
 
 Our board
of directors and officers will not receive either from our company or the target
company any finder’s fee or related payment in connection with a business
combination, or condition such business combination upon any or all of them
receiving or retaining any position or obtaining any ongoing compensation
following the business combination through any employment or consulting
agreement or similar arrangement. However, if requested by the shareholders or
directors of a prospective target company, including, White Energy, one or more
members of our board of directors may remain as a director of or consultant to
our company and its subsidiaries following the proposed White Energy share
exchange or other business combination, and in connection therewith, will
receive compensation to be negotiated with the board of directors or
shareholders of the target company. If we acquire control of a target business
in an all-cash transaction, it is more likely that one or more current members
of management would remain with us as a director, or in senior management or
advisory positions. If a business combination is structured as a merger or
exchange of shares, such the proposed White Energy share exchange, whereby the
shareholders of the target company were to receive significant ordinary shares
in our company in connection with such business combination, it would be less
likely that any of our officers or directors will remain with the combined
company. If any of our management or board members are retained post-business
combination in any directorship or other consulting capacity, it may result in a
conflict of interest.
  10
  Our
officers and directors are or 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.
 
 None of
our officers, directors or initial shareholders are currently affiliated with
any entity whose primary business focus includes acquisitions in Asia. Each of
our officers, directors and initial shareholders have agreed that, until we
consummate a business combination or liquidate our trust account, they will not
become associated or affiliated with any such competing entity. In addition,
such persons have agreed that they will present to our board of directors any
acquisition opportunity in Asia they obtain access to and which could reasonably
be expected to be valued at 80% or more of the total amount placed in our trust
account upon completion of our offering (excluding deferred underwriting fees),
and provide us a right of first refusal to consummate such an acquisition.
However, there can be no assurance that these agreements will be fully complied
with in all instances. One or more of our officers, directors or initial
shareholders could breach these agreements by failing to present to our board of
directors one or more acquisition opportunities in Asia they obtain access to
and which meets the 80% threshold. If we become aware of any such breach, our
disinterested directors will cause us to bring a claim against such officer,
director or initial shareholders for specific performance or damages incurred by
us in connection with any such breach. However, no assurance can be given that
we would be successful with respect to any such claims. For a more complete
discussion of our management’s affiliations and the potential conflicts of
interest that you should be aware of, see the sections below entitled
“Management — Directors and Executive Officers” and
“Management — Conflicts of Interest.” We cannot assure you that these
conflicts will be resolved in our favor.
 
 Our
officers and directors may have other conflicts of interest.
 
 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, including,
the proposed White Energy share exchange. All of our executive officers and
directors own ordinary shares which will be released from escrow only if we
consummate the share exchange or other business combination and with respect to
which they are waiving their redemption and liquidation distribution rights if
we liquidate. In addition, immediately prior to the date of our prospectus, our
sponsor, which is co-managed and jointly owned by Angela Ho, our former chief
executive officer and former chairman of our board of directors, and Noble
Investment Fund Limited, purchased for $1.00 each, warrants to purchase an
aggregate of 5,725,000 of our ordinary shares, which insider warrants are
identical to the warrants in the units being offered by our prospectus, except
that (i) subject to limited exception, none of the insider warrants will be
transferable or salable until after we complete a business combination; (ii) the
warrants are not subject to redemption if held by the initial holders and their
permitted assigns; and (iii) the warrants are exercisable on a cashless basis if
held by the initial holder or its permitted assigns. Our sponsor and Noble
Investment Fund Limited each have a 50% beneficial ownership interest in the
insider warrants. Although none of the insider warrants may be sold, assigned or
transferred until we complete the White Energy share exchange or other business
combination, permitted assigns include (i) the required transfer of 50% of the
insider warrants to Noble Investment Fund Limited once we complete a business
combination, as partial consideration for, and in reduction of, a $5,725,000
loan to be provided by Noble to enable Ho Capital Management LLC to purchase the
insider warrants, or (ii) Angela Ho, a co-manager of Ho Capital Management LLC.
If we are forced to liquidate, the insider warrants will become
worthless.
 
 Accordingly,
the financial motivation of our sponsor and our officers and directors to
consummate the share exchange or other business combination may affect their
judgment in evaluating the merits of one or more prospective targets or result
in our overpaying for a specific acquisition candidate.
  11
 
 Although
we initially focused our efforts on acquiring an operating business in the
leisure and hospitality or financial services industries that is located in,
invests in, or provides products or services to consumers located in China, we
were not limited to a particular industry or area in Asia and have elected to
acquire control of a business engaged in the development and production of clean
coal technology; an industry that is beyond the expertise of our
management.
 
 There is
no specific timeframe or monetary amount established by management which caused
us to abandon our initial focus of acquiring an operating business in the
leisure and hospitality or financial services industries that invests in, is
located in, or provides products or services to consumers located in China, in
favor of other industries or other specified countries in Asia, including,
Sydney, Australia-based White Energy. Early in the process of searching for a
suitable target business, management intended to concentrate its focus on
acquiring an operating business in the leisure and hospitality or financial
services industries that invest in, is located in, or provides products or
services to consumers located in China. However, we determined to explore a
favorable business opportunity in the clean coal upgrading technology sector
with White Energy and its affiliates which management determined was in the best
interests of our company and shareholders. We concentrated on our primary
business and geographic focus during the first year of our business search, and
only expanded the scope of our search because we were unable during such year to
locate an attractive business combination in the leisure and hospitality or
financial services industries that invests in, is located in, or provides
products or services to consumers located in China.
 
 If a
favorable business opportunity presents itself to management in an industry,
other than the leisure and hospitality or financial services industries, or in
any one or more of the designated countries in Asia, other than China, such
industry or area may be outside of management’s expertise. As a result, our
ability to assess the growth potential, financial condition, experience and
skill of incumbent management, competitive position, regulatory environment and
other criteria in evaluating a business opportunity outside our primary business
focus or outside of China may be adversely affected by virtue of our limited
expertise. No assurance can be given that we will be able to successfully
complete such an acquisition and could result in the liquidation of the trust
account and dissolution of our company. For a more detailed discussion of
management’s process for searching for and selecting a target business, see
“Effecting a business combination — Selection of a target business and
structuring of a business combination”.
 
 Our
shareholders may be held liable for claims by third parties against us to the
extent of distributions received by them.
 
 Section
172 of our amended and restated memorandum and articles of association provides
that we will continue in existence only until eighteen months from the
consummation of our offering or until twenty-four months if a letter of intent,
an agreement in principle, or a definitive agreement to complete a business
combination has been entered into, except if holders of 95% or more of our
outstanding ordinary shares approve an extension of such time period. If we have
not completed the proposed White Energy share exchange or other business
combination by January 2010, our corporate existence will cease except for the
purposes of winding up our affairs and liquidating. At this time, we will become
subject to a voluntary liquidation procedure under the Companies Law (2007
Revision) of the Cayman Islands (the “Companies Law”). Our liquidator would give
at least 21 days’ notice to creditors of his intention to make a distribution by
notifying known creditors (if any) who have not submitted claims and by placing
a public advertisement in the Cayman Islands Official Gazette, although in
practice this notice requirement need not necessarily delay the distribution of
assets if the liquidator is satisfied that no creditors would be adversely
affected as a consequence of a distribution before this time period has expired.
We anticipate that the trust account should be liquidated shortly following
expiration of the 21-day period. As soon as the affairs of our company are fully
wound-up, the liquidator must lay his final report and accounts before a final
general meeting which must be called by a public notice at least one month
before it takes place. After the final meeting, the liquidator must make a
return to the registrar confirming the date on which the meeting was held and
three months after the date of such filing our company is
dissolved.
  12
  Additionally,
in any liquidation proceedings of our company under Cayman Islands’ law, the
funds held in our trust account may be included in our estate and subject to the
claims of third parties with priority over the claims of our shareholders. To
the extent any such claims deplete the trust account we cannot assure you we
will be able to return to our public shareholders the liquidation amounts
payable to them. Furthermore, a liquidator of our company might seek to hold a
shareholder liable to contribute to our estate to the extent of distributions
received by them pursuant to the dissolution of the trust account beyond the
date of dissolution of the trust account. Cayman Islands law does not limit the
amount of time available to a liquidator to recover funds for the estate from
shareholders that received distributions. Additionally, we cannot assure you
that third parties will not seek to recover from our shareholders amounts owed
to them by us. 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 for having paid public
shareholders 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.
 
 If we are
unable to consummate the proposed White Energy share exchange or other
transaction within the necessary time periods, our purpose and powers will be
limited to winding up and ultimately dissolving. Upon notice from us, the
trustee of the trust account will distribute the amount in our trust account to
our public shareholders as part of our automatic dissolution and liquidation.
Concurrently, we propose that our liabilities and obligations will be paid from
funds not held in trust, although we cannot assure you that there will be
sufficient funds for such purpose. If there are insufficient funds held outside
the trust account for such purpose, our sponsor, Noble Investment Fund Limited
and Allius Ltd. have agreed that they will be jointly and severally liable to
ensure that the proceeds in the trust account are not reduced by the claims of
target businesses or claims of vendors or other entities that are owed money by
us for services rendered or contracted for or products sold to us. We have not
independently verified whether our sponsor, Noble Investment Fund Limited or
Allius Ltd. have sufficient funds to satisfy their respective indemnity
obligations and, therefore, we cannot assure you that they would be able to
satisfy these obligations.
 
 We
will dissolve and liquidate if we do not consummate the White Energy share
exchange or other business combination.
 
 Pursuant
to, among other documents, our amended and restated memorandum and articles of
association, if we do not complete the proposed White Energy share exchange or
other business combination within 24 months after the consummation of our
offering, our corporate existence will cease except for the purposes of winding
up our affairs and liquidating. Upon dissolution, we will distribute to all of
our public shareholders, in proportion to their respective equity interest, an
aggregate sum equal to the amount in the trust account (net of taxes payable and
that portion of the interest earned previously released to us). Our initial
shareholders, as well as our sponsor who purchased insider warrants immediately
prior to the date of our prospectus, have waived their rights to participate in
any liquidation distribution with respect to their initial shares and the
insider warrants will expire worthless upon our liquidation and dissolution.
There will be no distribution from the trust account with respect to our
warrants which will expire worthless. We will pay the costs of our dissolution
and liquidation. Our sponsor, Noble Investment Fund Limited and Allius Ltd. have
agreed to indemnify us, jointly and severally, for these expenses to the extent
there are insufficient funds available from the proceeds not held in the trust
account and interest released to us. Upon notice from us, the trustee of the
trust account will liquidate the investments constituting the trust account and
will turn over the proceeds to our transfer agent for distribution to our public
shareholders as part of our dissolution and liquidation. Concurrently, we shall
pay, or reserve for payment, from interest released to us from the trust account
if available, our liabilities and obligations, although we cannot give you
assurances that there will be sufficient funds for such purpose. The amounts
held in the trust account may be subject to claims by third parties, such as
vendors, prospective target business or other entities, if we do not obtain
waivers in advance from such third parties prior to such parties providing us
with services or entering into arrangements with them.
 
 These
procedures may result in substantial delays in the liquidation of our trust
account to our public shareholders as part of our automatic dissolution and
liquidation.
  13
  We
may choose to redeem our outstanding warrants at a time that is disadvantageous
to our warrant holders.
  Subject
to there being a current prospectus under the Securities Act of 1933 with
respect to the ordinary shares issuable upon exercise of the warrants, we may
elect to redeem the warrants issued as a part of our units, without the prior
consent of any third party, at any time after the warrants become exercisable in
whole and not in part, at a price of $.01 per warrant, upon a minimum of 30
days’ prior written notice of redemption, if and only if, the last sales price
of our ordinary shares equals or exceeds $14.25 per share for any 20 trading
days within a 30 trading day period ending three business days before we send
the notice of redemption. Redemption of the warrants could force the warrant
holders (i) to exercise the warrants and pay the exercise price thereafter at a
time when it may be disadvantageous for the holders to do so, (ii) to sell the
warrants at the then current market price when they might otherwise wish to hold
the warrants, or (iii) to accept the nominal redemption price which, at the time
the warrants are called for redemption, is likely to be substantially less than
the market value of the warrants. The foregoing does not apply to the warrants
included as part of the 5,725,000 insider warrants purchased immediately prior
to the date of our prospectus, as such warrants are not subject to redemption
while held by the initial holder or any permitted transferee of such initial
holder.
 
 Although
we are required to use our best efforts to have an effective registration
statement covering the issuance of the shares underlying the warrants at the
time that our warrant holders exercise their warrants, we cannot guarantee that
a registration statement will be effective, in which case our warrant holders
may not be able to exercise our warrants and sell the underlying
shares.
 
 Holders
of our warrants will be able to exercise the warrant only if (i) a current
registration statement under the Securities Act of 1933 relating to our ordinary
shares underlying the warrants is then effective and (ii) such shares are
qualified for sale or exempt from qualification under the applicable securities
law of the states in which the various holders of warrants reside. Although we
have undertaken in the warrant agreement, and therefore have a contractual
obligation, to use our best efforts to maintain a current registration statement
covering the shares underlying the warrants following completion of our offering
to the extent required by federal securities law, and we intend to comply with
such undertaking, we cannot assure you that we will be able to do so. The
warrants, including the warrants included in the representative’s unit purchase
option, may expire unexercised or unredeemed if there is no effective
registration statement (as required by federal securities laws). In addition,
there are no circumstances under which we will be required to net-cash settle
the warrants, including the warrants included in the representative’s unit
purchase option, and a purchaser, including the representative upon exercise of
the unit purchase option, may pay the full unit purchase price solely for the
shares included in the units. Moreover, we have agreed to use our reasonable
efforts to register the shares underlying the warrants under the blue sky laws
of the states of residence of the exercising warrant holders, to the extent an
exemption is not available. The value of the warrants may be greatly reduced if
a registration statement covering the shares issuable upon the exercise of the
warrants is not kept current or if the securities are not qualified, or exempt
from qualification, in the states in which the holders of warrants reside.
Holders of warrants who reside in jurisdictions in which the shares underlying
the warrants are not qualified and in which there is no exemption will be unable
to exercise their warrants and would either have to sell their warrants in the
open market or allow them to expire unexercised.
 
 We
may have insufficient resources to cover our operating expenses and the expenses
of consummating the proposed White Energy share exchange or other business
combination.
 
 We will
pay approximately $50,000 (not including up to $2,000,000 of interest we may
earn on funds in the trust account, which we are entitled to receive in order to
cover our operating expenses and our costs associated with our dissolution and
liquidation if we do not consummate a business combination) from the proceeds of
our offering, the sale of the insider warrants and another financings we may
consummate, including, but not limited to, up to $1,250,000 of 12% promissory
notes to be issued pursuant to our December 2008 Funding Agreement ($500,000 was
borrowed under the notes on December 26, 2008), to cover our operating expenses
for the next 12 months and to cover the expenses incurred in connection
with the proposed White Energy share exchange or other business combination.
This amount is based on management’s estimates of the costs needed to fund our
operations for the next 12 months and consummate the business combination.
Those estimates may prove inaccurate if we expend a significant portion of the
available proceeds in pursuit of the proposed share exchange or other business
combination that is not consummated. If we do not have sufficient proceeds
available to fund our expenses, we may be forced to obtain additional financing,
either from our management or the initial shareholders or from third parties. We
may not be able to obtain additional financing and our initial shareholders and
management are not obligated to provide any additional financing. If we do not
have sufficient proceeds and cannot find additional financing, we may be forced
to dissolve and liquidate prior to consummating the proposed White Energy share
exchange or other business combination.
  14
  None
of our officers or directors has ever been associated with a blank check company
which could adversely affect our ability to consummate a business
combination.
 
 None of
our officers or directors has ever been associated with a blank check company.
Accordingly, you may not have sufficient information with which to evaluate the
ability of our management team to identify and complete a business combination
using the proceeds of our offering and the sale of the insider warrants. Our
management’s lack of experience in operating a blank check company could
adversely affect our ability to consummate a business combination and force us
to dissolve and liquidate the trust account to our public shareholders in an
automatic dissolution and liquidation.
 
 Our
officers and directors may allocate their time to other businesses thereby
causing conflicts of interest in their determination as to how much time to
devote to our affairs. This could have a negative impact on our ability to
consummate the proposed White Energy share exchange or other 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. Each of our
officers are engaged in several other business endeavors and are not obligated
to contribute any specific number of hours per week to our affairs. If our
officers’ 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 have a negative impact on our ability to consummatethe
share exchange or other business combination. For a discussion of potential
conflicts of interest that you should be aware of, see the section entitled
“Management — Conflicts of Interest.” We cannot assure you that these
conflicts will be resolved in our favor.
 
 Our
officers and directors own 21.9% of our outstanding ordinary shares, and our
Sponsor owns insider warrants which will not participate in the liquidation of
the trust account in the event of our automatic dissolution and liquidation;
therefore such persons may have a conflict of interest in determining whether
White Energy or other  target business is appropriate for a business
combination.
 
 Our
officers and directors own 21.9% of our outstanding ordinary shares, and our
sponsor, an entity that is co-managed and jointly owned by Angela Ho, our former
chief executive officer and former chairman of the board of directors, and Noble
Investment Fund Limited, owns our insider warrants purchased for $5,725,000
immediately prior to the date of our prospectus. Angela Ho and Noble Investment
Fund Limited each have a 50% beneficial ownership interest in the insider
warrants held in the name of our sponsor. Our officers and directors and our
sponsor have waived their right to the liquidation of the trust account in the
event of our automatic dissolution and liquidation with respect to those shares
upon the liquidation of the trust account to our public shareholders if we are
unable to complete the proposed White Energy share exchange or other business
combination. The shares and warrants owned by these persons (including our
officers and directors) will be worthless if we do not consummate a business
combination. The personal and financial interests of these officers and
directors and our sponsor may influence their motivation in identifying and
selecting a target business and completing a business combination in a timely
manner. Consequently, these officers and directors’ 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 shareholders’ best
interest.
  Our initial
shareholders will not receive reimbursement for any out-of-pocket expenses
incurred by them to the extent that such expenses exceed the amount available
outside the trust account unless the proposed White
Energy share exchange or other business combination is consummated and therefore
they may have a conflict of interest.
  Our
initial shareholders will not receive reimbursement for any out-of-pocket
expenses incurred by them to the extent that such expenses exceed the amount
available outside the trust account, unless the share exchange or other business
combination is consummated. The amount of available proceeds is based on
management estimates of the capital needed to fund our operations for the next
12 months and to consummate the White Energy share exchange or other business
combination. Those estimates may prove to be inaccurate, especially if we expend
a significant portion in pursuit of the share exchange or other acquisition that
is not consummated. The financial interest of such persons could influence their
motivation in selecting a target business and thus, there may be a conflict of
interest when determining whether a particular business combination is in the
shareholders’ best interest.
  15
  If
our ordinary shares become subject to the SEC’s penny stock rules,
broker-dealers may experience difficulty in completing customer transactions and
trading activity in our securities may be adversely affected.
  If at any
time we have net tangible assets of less than $5,000,000 and our ordinary shares
have a market price per share of less than $5.00, transactions in our ordinary
shares may be subject to the “penny stock” rules promulgated under the
Securities Exchange Act of 1934, as amended. Under these rules, broker-dealers
who recommend such securities to persons other than institutional accredited
investors must:
 
 ·
              make a special written
      suitability determination for the
  purchaser;
 ·
              receive the purchaser’s written
      agreement to a transaction prior to
sale;
 ·
              provide the purchaser with risk
      disclosure documents which identify certain risks associated with
      investing in “penny stocks” and which describe the market for these “penny
      stocks” as well as a purchaser’s legal remedies;
  and
 ·
              obtain a signed and dated
      acknowledgment from the purchaser demonstrating that the purchaser has
      actually received the required risk disclosure document before a
      transaction in a “penny stock” can be
  completed.
 
 If our
ordinary shares become subject to these rules, broker-dealers may find it
difficult to effectuate customer transactions and trading activity in our
securities may be adversely affected. As a result, the market price of our
securities may be depressed, and you may find it more difficult to sell our
securities.
 
 Our
proposed initial business combination with White Energy and its affiliates is
with a single target business, which may cause us to be solely dependent on a
single business and a limited number of products or services. Additionally, we
may face obstacles to completing simultaneous acquisitions.
 
 Our
initial business combination (including the proposed White Energy share
exchange) must be with a business or businesses with a collective fair market
value of at least 80% of the amount in our trust account (excluding $3,450,000
of deferred compensation to be held for the benefit of the underwriters) at the
time of such acquisition, which amount is required as a condition to the
consummation of our initial business combination with White Energy or other
target companies. In addition, if more than 20% but not more than one share less
than 35% of the shares owned by our public shareholders vote against the share
exchange or other business combination and exercise their redemption rights, we
will still be required to utilize 80% of the amount in our trust account for the
business combination. In the event that such redemption leaves us with an
insufficient amount of funds to consummate the proposed White Energy share
exchange or other business combination then, we may issue a significant amount
of our debt or equity securities to the sellers of such businesses and/or seek
to raise additional funds through a private offering of debt or equity
securities. We have not entered into any such fund raising arrangement and have
no current intention of doing so (other than the 5,725,000 insider warrants for
an aggregate of $5,725,000 and 12% promissory notes under the December 2008
Funding Agreement for an aggregate of $1,250,000, of which $500,000 was borrowed
by us as of the date hereof). We may not be able to acquire more than one target
business because of this and various other factors, including the amount of
funds available to consummate a business combination, possible complex
accounting issues, which would include generating pro forma financial statements
reflecting the operations of several target businesses as if they had been
combined, and numerous logistical issues, which could include attempting to
coordinate the timing of negotiations, proxy statement disclosure and closings
with multiple target businesses. In addition, we may not have sufficient
management, financial and other resources to effectively investigate the
business and affairs of multiple acquisition candidates simultaneously or to
negotiate the terms of multiple acquisition agreements at the same time which
could result in a failure to properly evaluate multiple acquisitions. Further,
we would also be exposed to the risk that conditions to closings with respect to
the acquisition of one or more of the target businesses would not be satisfied
bringing the fair market value of the initial business combination below the
required fair market value of 80% of the amount in our trust account (excluding
$3,450,000 of deferred compensation to be held for the benefit of the
underwriters) threshold. Accordingly, while it is possible we may attempt to
effect our initial business combination with more than one target business, we
are more likely to choose a single target business (such as White Energy and its
affiliates) if deciding between one target business meeting such 80% threshold
and comparable multiple target business candidates collectively meeting the 80%
threshold. Consequently, it is probable that, unless the purchase price consists
substantially of our equity, we will have the ability to complete only the
initial business combination with the proceeds of our offering and the sale of
the insider warrants. Accordingly, the prospects for our success may
be:
  16
  ·
              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 or
      services.
 
 In this
case, we will 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.
 
 The
ability of our shareholders to exercise their redemption rights may not allow us
to effectuate the most desirable business combination or optimize our capital
structure.
 
 At the
time we seek shareholder approval of the proposed White Energy share exchange or
other business combination, we will offer each public shareholder the right to
have such shareholder’s ordinary shares redeemed for cash if the shareholder
votes against the share exchange or other business combination and such business
combination is approved and completed. Accordingly, if our business combination
requires us to use substantially all of our cash to pay the purchase price,
because we will not know how many shareholders may exercise such redemption
rights, we may either need to reserve part of the trust account for possible
payment upon such redemption, or we may need to arrange third party financing to
help fund our business combination in case a larger percentage of shareholders
exercise their redemption rights than we expected. Therefore, we may not be able
to consummate a business combination that requires us to use all of the funds
held in the trust account as part of the purchase price, or we may end up having
a leverage ratio that is not optimal for our business combination. This may
limit our ability to effectuate the most attractive business combination
available to us.
 
 We
will not be required to obtain an opinion from an investment banking firm as to
the fair market value of a proposed business combination if our board of
directors independently determines that the target business has sufficient fair
market value.
 
 The
initial target business that we acquire (including White Energy and its
affiliates) must have a fair market value equal to at least 80% of the amount in
our trust account (excluding $3,450,000 of deferred compensation to be held for
the benefit of the underwriters) at the time of such acquisition. There is no
limitation on our ability to raise funds privately or through loans that would
allow us to acquire a target business or businesses with a fair market value in
an amount considerably greater than 80% of the amount in our trust account
(excluding $3,450,000 of deferred compensation to be held for the benefit of the
underwriters) at the time of such acquisition. Other than in connection with our
12% promissory notes under the December 2008 Funding Agreement for aggregate
proceeds of $1,250,000 ($500,000 of which was loaned to us in December 2008), we
have not had any preliminary discussions, or made any agreements or
arrangements, with respect to financing arrangements with any third party. The
fair market value of White Energy and its affiliates or other target 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, and the price for which comparable
businesses have recently been sold. If our board is not able to independently
determine that the target business has a sufficient fair market value, we will
obtain an opinion from an unaffiliated, independent investment banking firm
which is a member of the Financial Industry Regulatory Authority with respect to
the satisfaction of such criteria. Since any opinion, if obtained, would merely
state that fair market value meets the 80% threshold described above, it is not
anticipated that copies of such opinion would be distributed to our
shareholders, although copies will be provided to shareholders who request it.
If we do obtain the opinion of an investment banking firm, a summary of the
opinion will be contained in the proxy statement that will be mailed to
shareholders in connection with obtaining approval of the share exchange or
other business combination, and the investment banking firm will consent to the
inclusion of their report in our proxy statement. In addition, information about
how shareholders will be able to obtain a copy of the opinion from us will be
contained in the proxy statement. However, we do not anticipate that
shareholders will be entitled to rely on any such opinion. If the independent
investment banking firm takes the view that shareholders may not rely on the
opinion, we will not consider such a view as a factor in deciding which
investment banking firm to hire. We will not be required to obtain an opinion
from an investment banking firm as to the fair market value of the share
exchange or other business combination if our board of directors independently
determines that the target business has sufficient fair market
value.
  17
  We
may be unable to obtain additional financing, if required, to complete the share
exchange or other business combination or to fund the operations and growth of
the target business, which could compel us to restructure the transaction or
abandon the business combination.
 
 Although
we believe that the net proceeds of our offering, the sale of the insider
warrants and the sale of our 12% notes under our December 2008 Funding Agreement
will be sufficient to allow us to consummate the proposed White Energy share
exchange or other business combination, we cannot guarantee the amount of
capital requirements for any particular transaction. If the net proceeds of our
offering and the sale of the insider warrants and notes 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 redeem for cash a significant number of shares
from dissenting shareholders, 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 the share exchange or other 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 the White Energy or other business combination, we may require
additional financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material adverse effect
on the continued development or growth of White Energy and its affiliates or
other target business. None of our officers, directors or shareholders is
required to provide any financing to us in connection with or after a business
combination.
  Our
initial shareholders, including our officers and directors, control a
substantial interest in us and thus may influence certain actions requiring
shareholder vote.
 
 Upon
consummation of our offering our initial shareholders (including all of our
officers and directors) will collectively own approximately 20% of our issued
and outstanding ordinary shares. Our officers, directors and initial
shareholders, have advised us that that they do not intend to purchase any units
in our offering. However, our officers, directors and our initial shareholders,
may make any purchases either in the open market, in private placements or other
private transactions following the offering, although we are not aware that any
of such persons or entities intend to do so. While we cannot be certain of all
of the factors that would cause our existing officers, directors or shareholders
to purchase our securities, we believe that some of the factors they would
consider are: (i) the trading price of our securities, (ii) their aggregate
investment in our securities, (iii) whether it appears that a substantial number
of public shareholders are voting against the share exchange or other business
combination, and (iv) their interest in White Energy, its affiliates or other
target business. Any shares acquired by such individuals in our offering or in
the aftermarket will be voted in favor of the business combination. Accordingly,
any purchase of our shares by our officers and directors, including all of our
initial shareholders, in our offering or in the aftermarket could influence the
result of a vote submitted to our shareholders in connection with the share
exchange or other business combination by making it more likely that such
business combination would be approved.
 
 Our board
of directors is divided into two classes, each of which will generally serve for
a term of two years with only one class of directors being elected in each year.
It is unlikely that there will be an annual meeting of shareholders to elect new
directors prior to the consummation of the share exchange or other business
combination, in which case all of the current directors will continue in office
at least until the consummation of the share exchange or other business
combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, initially only a minority of the board of directors will be
considered for election and our initial shareholders, because of their ownership
position, will have considerable influence regarding the outcome. Accordingly,
our initial shareholders will continue to exert control at least until the
consummation of the business combination. In addition, our initial shareholders
and their affiliates and relatives are not prohibited from purchasing units in
our offering or in the open market. If they do, we cannot assure you that our
initial shareholders will not have considerable influence upon the vote in
connection with the share exchange or other business
combination.
  18
  Since
our initial shareholders will lose their entire investment in us if a business
combination is not consummated and may be required to pay costs associated with
our liquidation, our initial shareholders may purchase ordinary shares from
shareholders who would otherwise choose to vote against the proposed White
Energy share exchange or other business combination or exercise their redemption
rights in connection with such business combination.
 
 Our
initial shareholders own ordinary shares that will be worthless if we do not
consummate the proposed White Energy share exchange or other business
combination. In addition, immediately prior to the date of our prospectus, our
sponsor purchased warrants exercisable for our ordinary shares (for an aggregate
of $5,725,000), which will also be worthless if we do not consummate a business
combination.
 
 Given the
interest that our initial shareholders have in a business combination being
consummated, it is possible that our initial shareholders will acquire
securities from public shareholders (in the open market and/or in privately
negotiated transactions) who have elected to redeem their ordinary shares in
order to change their vote and insure that the share exchange or other business
combination will be approved (which could result in a business combination being
approved even if, after the announcement of the business combination, 35% or
more of our public shareholders would have elected to exercise their redemption
rights, or more than 50% of our public shareholders would have voted against the
share exchange or other business combination, but for the purchases made by our
initial shareholders). Any privately negotiated transaction with a shareholder
would include a contractual acknowledgement that such shareholder, although
still the record holder of our ordinary shares is no longer the beneficial owner
thereof and therefore agrees to vote such ordinary shares as directed by our
initial shareholders. In the event our initial shareholders purchase shares in
privately negotiated transactions from public shareholders who have already cast
votes against the share exchange or other business combination and requested
redemption of their shares, such selling shareholders would be required to
revoke their prior votes against the business combination and to revoke their
prior elections to redeem their shares and to cast new votes in favor of the
business combination. The revocation of prior negative votes and substitution
therefor of votes in favor of the share exchange or other business combination
would have the effect of reducing redemptions and increasing votes in favor of
the business combination, thereby making it more likely that the share exchange
or other business combination would be approved.
 
 We
will be dependent upon interest earned on the trust account to fund the
consummation of the White Energy share exchange or other business
combination.
 
 At
December 31, 2008, approximately $756,000 of future trust earnings is available
for distribution as approximately $1,244,000 has been distributed to working
capital.  We will be dependent upon sufficient interest being earned
on the proceeds held in the trust account and up to $1,250,000 of our 12%
promissory notes, to provide us with the additional working capital we will need
to consummate the proposed White Energy share exchange or other business
combination. While we are entitled to a portion of the interest earned on the
trust account in excess of the amount necessary to allow for a $10.00 per share
liquidation price to our public shareholders for such purpose, if interest rates
were to decline substantially, we may not have sufficient funds available to
complete a business combination. In such event, we would need to borrow funds
from our insiders or others or be forced to dissolve, liquidate and wind
up.
  19
 Our
outstanding warrants may have an adverse effect on the market price of ordinary
shares and make it more difficult to effect a business
combination.
  In
connection with the sale of the 10,000,000 units, we offered and sold,
immediately prior to the date of our prospectus to our sponsor, for $1.00 each,
warrants to purchase 5,725,000 ordinary shares. In addition, we have sold to the
underwriters an option to purchase up to an aggregate of 475,000 units for
$12.50 per unit (which includes an aggregate of 475,000 ordinary shares and
475,000 warrants to purchase ordinary shares). To the extent we issue ordinary
shares to effect a business combination, including in connection with the
proposed White Energy share exchange, the potential for the issuance of
substantial numbers of additional shares upon exercise of these warrants 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 ordinary shares and reduce the value of the ordinary shares issued
to complete the business combination. Accordingly, our warrants may make it more
difficult to effectuate the share exchange or other business combination or
increase the cost of the target business. Additionally, the sale, or even the
possibility of sale, of the ordinary shares underlying the warrants 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 are
exercised, you may experience dilution to your holdings.
 
 If
our initial shareholders (including our sponsor who purchased the insider
warrants) exercise their registration rights, it may have an adverse effect on
the market price of our ordinary shares and the existence of these rights may
make it more difficult to effect the proposed White Energy share exchange or
other business combination.
 
 Our
initial shareholders, including our sponsor purchased insider warrants
immediately prior to the date of our prospectus, are entitled to require us to
register the resale of their ordinary shares at any time after the date on which
their shares are released from escrow. With respect to the ordinary shares
underlying the 5,725,000 insider warrants sold to our sponsor, our sponsor is
entitled to require us to register the resale of their ordinary shares upon our
announcement of the entering into a definitive agreement to complete a business
combination. If such initial shareholders exercise their registration rights
with respect to all of their ordinary shares (including those 5,725,000 ordinary
shares issuable upon exercise of the insider warrants), then there will be an
additional 8,225,000 ordinary shares eligible for trading in the public market
and we will bear the costs of registering such securities. The presence of this
additional number of ordinary shares eligible for trading in the public market
may have an adverse effect on the market price of our ordinary shares. In
addition, the existence of these rights may make it more difficult to effectuate
the share exchange or other business combination or increase the cost of the
target business, as the shareholders of the target business may be discouraged
from entering into a business combination with us or will request a higher price
for their securities as a result of these registration rights and the potential
future effect their exercise may have on the trading market for our ordinary
shares.
 
 A
market for our securities has only existed since January 16, 2008; a lack of
prior market history about our securities could adversely affect the liquidity
and price of such securities.
 
 A market
for our securities has only existed since January 16, 2008. Therefore,
shareholders should be aware that they cannot benefit from information about
prior market history as to their decisions to invest which means they are at
further risk if they invest. In addition, the price of the securities, after the
offering, can vary due to general economic conditions and forecasts, our general
business condition and the release of our financial reports.
 
 The
NYSE Alternext US Exchange may delist our securities, which could limit
investors’ ability to make transactions in our securities and subject us to
additional trading restrictions.
 
 Although
our securities are listed on the NYSE Alternext US Exchange, we cannot assure
you that we will be able to maintain that listing. Additionally, in connection
with our business combination, it is likely that the NYSE Alternext US 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. If we are unable to meet those stricter initial listing
requirements, our securities would not be listed on the NYSE Alternext US
Exchange and might not be listed on any securities exchange.
 
 If we are
unable to maintain the listing of our securities on the NYSE Alternext US
Exchange, we could face significant material adverse consequences
including:
 
 ·
              decreased trading liquidity and a
      limited availability of market quotations for our
      securities;
 ·
              a
      determination that our ordinary shares are “penny stock,” with the
      consequences described in “If our ordinary shares become subject to the
      SEC’s penny stock rules, broker-dealers may experience difficulty in
      completing customer transactions and trading activity in our securities
      may be greatly reduced”;
 
  20
  ·
              a limited amount of news and
      analyst coverage for our company;
and
 ·
              a decreased ability to issue
      additional securities or obtain additional
    financing.
 
 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.
 
 We may be
deemed to be an investment company, as defined under Sections 3(a)(1)(A) and (C)
of the Investment Company Act of 1940, as amended, because, following the
offering and prior to the consummation of a business combination, we may be
viewed as engaging in the business of investing in securities (in this case
United States government securities as described below) having a value exceeding
40% of our total assets. If we are deemed to be an investment company under the
Investment Company Act of 1940, our activities may be restricted which, among
other problems, may make it difficult for us to complete a business combination.
Such restrictions include:
 
 ·
              restrictions on the nature of our
      investments; and
 ·
              restrictions on the 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.
 
 However,
we do not believe that our anticipated principal activities will subject us to
the Investment Company Act of 1940. To this end, the proceeds held in trust may
only be invested by the trust agent in “government securities” with specific
maturity dates or in money market funds 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 avoid being deemed
an investment company within the meaning of the Investment Company Act of 1940.
Our offering is not intended for persons who are seeking a return on investments
in government securities. The trust account and the purchase of government
securities for the trust account is intended as a holding place for funds
pending the earlier to occur of either: (i) the consummation of our primary
business objective, which is a business combination, or (ii) absent a business
combination, our dissolution and return of the funds held in this trust account
to our public shareholders as part of our automatic dissolution and liquidation.
Notwithstanding our belief that we are not required to comply with the
requirements of such act, we may be considered to be an investment company and
thus required to comply with such act. If we were deemed to be subject to the
act, compliance with these additional regulatory burdens would require
additional expense that we have not allotted for.
 
 Since
we are not an operating company, the pricing of the units in our offering is
relatively arbitrary.
 
 Prior to
our offering there has been no public market for any of our securities. The
public offering price of the units and the terms of the warrants were negotiated
between us and Maxim Group LLC. Factors considered in determining the prices and
terms of the units, including the ordinary shares and warrants underlying the
units, include:
 
 ·
              the history and prospects of
      companies whose principal business is the acquisition of other
      companies;
 ·
              prior offerings of those
      companies;
 ·
              our prospects for acquiring an
      operating business at attractive
values;
 ·
              our capital
      structure;
 ·
              an
      assessment of our management and their experience in identifying operating
      companies;
 
  21
  ·
              general conditions of the
      securities markets at the time of the offering;
  and
 ·
              other factors as were deemed
      relevant
 
 However,
although these factors were considered, the determination of our offering price
is more arbitrary than the pricing of securities for an operating company in a
particular industry since the underwriters are unable to compare our financial
results and prospects with those of public companies operating in the same
industry.
 
 The
inability of the sellers of companies we may acquire to fulfill their
indemnification obligations to us under our acquisition agreements could
increase our liabilities and adversely affect our results of operations and
financial position.
 
 We intend
to negotiate as a term of our acquisition agreements that the respective sellers
will agree to retain responsibility for and indemnify us against damages
resulting from certain third-party claims or other liabilities. However, there
may be instances in which we determine to ultimately enter into an acquisition
agreement without such seller indemnification obligations, such as in purchases
of assets out of bankruptcy or purchases of certain hospitality-related assets.
The lack of seller indemnification obligations or the failure of any seller to
satisfy its obligations with respect to claims and retained liabilities covered
by the acquisition agreements could have an adverse effect on our results of
operations and financial position because claimants may successfully assert that
we are liable for those claims and/or retained liabilities. In addition, we
expect that certain obligations of the sellers to indemnify us will terminate
upon expiration of the applicable indemnification period and will not cover
damages in excess of the applicable coverage limit. The assertion of third-party
claims after the expiration of the applicable indemnification period or in
excess of the applicable coverage limit or the failure of any seller to satisfy
its indemnification obligations with respect to breaches of its representations
and warranties, could have an adverse effect on our results of operations and
financial position.
 
 Risks
Related to the Proposed White Energy Acquisition
 
 The
commercialization of the BCB clean coal upgrading technology is subject to all
of the risks and uncertainties inherent in the development of a new technology
and product.
 
 The
commercialization of the BCB clean coal upgrading technology is subject to all
of the risks and uncertainties inherent in the development of a new technology
and product, including, the inability of the technology to produce lower-cost
upgraded coal products, actual costs of construction of coal upgrading
facilities exceeding budgeted amounts and delays in construction.  Due
to these factors, White Energy cannot forecast with any degree of accuracy when
or if its will become operationally profitable or, if it achieves such
profitability, that White Energy would be able to sustain it.
 
 The
construction and operation of clean coal facilities is capital intensive,
traditionally using substantial amounts of indebtedness to finance acquisitions
and working capital needs.
 
 The
construction and operation of clean coal facilities is capital intensive,
traditionally using substantial amounts of indebtedness to finance acquisitions
and working capital needs. If White Energy finances the purchase of assets or
operations through the issuance of debt securities, it could result
in:
 
 ·
              default and foreclosure on White
      Energy’s assets if its operating revenues after the business combination
      were insufficient to pay its debt
  obligations;
 ·
              acceleration of White Energy’s
      obligations to repay the indebtedness even if its has made all principal
      and interest payments when due if the debt security contained covenants
      that required the maintenance of certain financial ratios or reserves and
      any such covenant were breached without a waiver or renegotiation of that
      covenant;
 ·
              White
      Energy’s immediate payment of all principal and accrued interest, if any,
      if the debt security was payable on demand;
and
 
  22
  ·
              White Energy’s inability to
      obtain additional financing, if necessary, if the debt security contained
      covenants restricting its ability to obtain additional financing while
      such security was
outstanding.
 
 Competition
within the clean coal technology industry is intense and includes numerous, well
established competitors. If White Energy is unable to compete effectively, our
business would be harmed.
  Competition
in the clean coal technology industryis
intense, and White Energy expects competition to increase. Many of White
Energy’s competitors and potential competitors have substantially greater name
recognition and technical, financial and marketing resources than White Energy
has. If White Energy is unable to compete successfully, its business will be
harmed and its results of operations and financial condition would be adversely
affected. White Energy cannot assure you that it will have the financial
resources, technical expertise or marketing, distribution and support
capabilities to compete successfully. Competitive pressures could adversely
affect White Energy in the following ways once commercialization commences, if
it commences at all:
  ·
              reduce
      demand for White Energy’s products if customers shift their purchasing to
      competitors; or
 ·
              cause
      White Energy to reduce prices on its existing or future offerings and
      thereby adversely affecting gross
margins.
 
 Intellectual
property infringement claims against White Energy could harm its
business.
  If any
claims are brought against White Energy or its customers for intellectual
property infringement, whether or not these have merit, White Energy could be
required to expend significant resources in defense of such claims. In the event
of such an infringement claim, White Energy may be required to spend a
significant amount of money to develop non-infringing alternatives or obtain
licenses. White Energy may not be successful in developing such alternatives or
obtaining such a license on reasonable terms or at all.
 
 White Energy’s
success is dependent upon its ability to
produce upgraded coal products on a large scale commercial basis.  If
White Energy is unable to produce upgraded coal products on a large scale
commercial basis, its business will be harmed.
 
 White
Energy’s success is dependent upon its ability to produce upgraded coal products
on a large scale commercial basis.  Although White Energy competes in
a highly fragmented market, its ability to increase revenue and achieve
profitability depends, in large part, on widespread acceptance of its upgraded
coal products by medium-sized and large commercial businesses and White Energy’s
ability to provide its customers with upgraded coal products on a large scale
commercial basis. White Energy’s efforts to produce upgraded coal products on a
large scale commercial basis may not be successful. In particular, because White
Energy is a relatively new company with a limited operating history, these
target customers may have concerns regarding White Energy’s viability and may
prefer to purchase services from one of its larger, more established
competitors. If White Energy is unable to produce upgraded coal products on a
large scale commercial basis, its business will be harmed.
 
 Risks
of Doing Business in Australia
 
 Any
devaluation of the currency used in Australia could negatively impact our target
business’ results of operations and could cause the cost of a target business as
measured in dollars to increase.
 
 Because
our objective is to acquire control of a target business having its primary
operating facilities located in Asia, including Sydney, Australia-based White
Energy Company Limited, and because substantially all revenues and income would
be received in a foreign currency, i.e., the Australian dollar, the dollar
equivalent of our net assets and distributions, if any, would be adversely
affected by reductions in the value of the Australian dollar. The value of the
Australian dollar fluctuates and is affected by, among other things, changes in
Australia’s political and economic conditions. Any devaluation of such
currencies may materially and adversely affect a target business. If the
Australian dollar appreciates in value against the dollar prior to the
consummation of the White Energy share exchange, the cost of a target business
as measured in dollars will increase.
  23
 
 Because
Australian law will govern almost all of White Energy’s and/or its
affiliates’  material agreements, we may not be able to enforce our
rights within Australia or elsewhere, which could result in a significant loss
of business, business opportunities or capital.
 
 Australian
law will govern almost all of White Energy’s and/or its affiliates’ material
agreements, some of which may be with Australian governmental agencies. We
cannot assure you that White Energy will be able to enforce any of its material
agreements or that remedies will be available outside of Australia. The system
of laws and the enforcement of existing laws in Australia may not be as certain
in implementation and interpretation as in the United States. To the extent that
our target business’ material agreements are with Australian governmental
agencies, we may not be able to enforce or obtain a remedy from such agencies
due to sovereign immunity, in which the government is deemed to be immune from
civil lawsuit or criminal prosecution. The inability to enforce or obtain a
remedy under any of our future agreements could result in a significant loss of
business, business opportunities or capital.
 
 Fluctuations
in the exchange rate between Australian dollar and the United States dollar
could adversely affect our operating results.
 
 The
functional currency of our operations in Australia would be the Australian
dollar. However, results of our operations are translated at average exchange
rates into United States dollars for purposes of reporting results. As a result,
fluctuations in exchange rates may adversely affect our expenses and results of
operations as well as the value of our assets and liabilities. Fluctuations may
adversely affect the comparability of period-to-period results. Although we may
use hedging techniques in the future (which we currently do not use), we may not
be able to eliminate the effects of currency fluctuations. Thus, exchange rate
fluctuations could cause our profits, and therefore our stock prices, to
decline.
  ITEM
      4:
                Information
      on the Company
  A.   History
and Development of the Company
 
 We were
formed as a blank check company with the corporate name Asia Special Situation
Acquisition Corp. under Cayman Islands law on March 22, 2007. We were formed for
the purpose of acquiring control of one or more unidentified operating
businesses, through a capital stock exchange, asset acquisition, stock purchase,
or other similar transaction, including obtaining a majority interest through
contractual arrangements. We will only acquire a business or businesses that,
upon completion of our initial business combination, will be our majority-owned
subsidiaries and will be neither investment companies nor companies excluded
from the definition of investment company by Sections 3(c)(1) or 3(c)(7) of the
Investment Company Act of 1940. We intend to utilize cash derived from the
proceeds of our offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination. We will not acquire
a minority interest in any operating business.
 
 Pursuant
to our amended and restated memorandum and articles of association, we must
effect and initiate procedures for our dissolution and liquidation and the
distribution of our assets, including the funds held in the trust account, if we
do not effect a business combination within 24 months after the completion of
our offering since a definitive agreement with White Energy has been executed
within 18 months after completion of our offering. We have agreed with the
trustee to promptly adopt a plan for the liquidation and distribution of our
assets, including the funds held in the trust account, upon expiration of the
time periods set forth above.
 
 To date,
our efforts have been limited to organizational activities, activities related
to our offering and acquisition efforts, including sourcing and identifying
potential target acquisitions such as White Energy and WET. We intend to
identify prospective acquisitions that are either located in Asia (including
Australia), provide products or services to consumers located in Asia, or invest
in Asia. Although not limited to any specific country in Asia, we initially
focused our initial efforts on acquiring control of an operating business or
businesses in the leisure and hospitality or financial services industries that
are either located in China, provide products or services to consumers in China,
or invest in China.
  24
 
 Although we initially focused our
search on an operating business or businesses in the leisure and hospitality or
financial services industries that is located in, provides products or services
to consumers located in China, or invests in China, we determined to explore a
favorable business opportunity in the clean coal upgrading technology sector
with White Energy and its affiliates which management determined was in the best
interests of our company and shareholders.  We concentrated on our
primary business and geographic focus during the first year of our business
search, and only expanded the scope of our search because we were unable during
such year to locate an attractive business combination in the leisure and
hospitality or financial services industries that invests in, is located in, or
provides products or services to consumers located in China.  We will
seek to consummate the share exchange with White Energy and its affiliates,
which in the opinion of management, may provide our company and its shareholders
with the most favorable growth potential, due to a variety of factors, including
its financial condition and results of operations, experience and skill of
incumbent management, value of the intellectual property owned by the business,
its competitive position, the regulatory environment in which it operates, or
other criteria determined by management.For a more detailed discussion of
management’s process for searching for and selecting a target business, see
“Effecting a business combination — Selection of a target business and
structuring of a business combination” below.
 
 We intend
to acquire all or a controlling interest in the equity of such operating
business or businesses. If our initial business combination involves a
transaction in which we acquire less than a 100% interest in the target company,
the value of that interest that we acquire will be equal to at least 80% of the
balance in the trust account (excluding deferred underwriting discounts and
commissions). In all instances, we would control the target company. The key
factors that we will rely on in determining control would be our acquisition of
at least 51% of the voting equity interests of the target company and/or control
of the majority of any governing body of the target company through contractual
arrangements or otherwise.
 
 Agreements
with ChinaTel Group, Inc.
 
 On July
8, 2008, we entered into a Stock Purchase Agreement (the “Stock Purchase
Agreement”) with ChinaTel Group, Inc. (“ChinaTel”) and Trussnet USA, Inc.
(“Trussnet”).   The Stock Purchase Agreement provided for the
investment by us into ChinaTel of between $201,675,000 and $270,000,000 at a
price of $2.25 per share.   All of the proceeds from the sale of
the ChinaTel securities would have gone to ChinaTel, and no shareholders of
ChinaTel would have sold their shares.
  On August
6, 2008, we, ChinaTel, Trussnet and George Alvarez amended and restated the
Stock Purchase Agreement in its entirety, by executing an Amended and Restated
Stock Purchase Agreement dated as of July 31, 2008 (the “Amended Stock Purchase
Agreement”). In addition to the Amended Stock Purchase Agreement, on August 6,
2008 we entered into an Agreement and Plan of Merger dated as of July 31, 2008
(the “Merger Agreement”) with ChinaTel, CHTL Acquisition Corp., a wholly owned
subsidiary of our company that was subsequently dissolved (“CHTL Acquisition”),
George Alvarez, and the other principal shareholders of ChinaTel.  Under
the Merger Agreement, at the effective time of the merger, CHTL Acquisition was
to be merged into ChinaTel, with ChinaTel as the surviving corporation of the
merger (the “Merger”), as a result of which, ChinaTel would have become a
wholly-owned subsidiary of our company.
  On
November 3, 2008, pursuant to a Termination and Mutual Release Agreement (the
“Termination Agreement”) with ChinaTel, we and ChinaTel agreed to terminate the
Stock Purchase Agreement, the Amended and Restated Stock Purchase Agreement and
the Merger Agreement (collectively, the “ChinaTel Agreements”) in their
entirety. In addition, the parties agreed to release each other, and their
respective officers, directors, employees, agents, shareholders, representatives
and affiliates against any and all rights, claims, liabilities, demands,
actions, proceedings and causes of action, in law or in equity, by reason of any
matter, event, cause or thing whatsoever, including, but not limited to, the
obligations of the parties under the ChinaTel Agreements. We elected to
terminate the ChinaTel Agreements primarily due to the fact that we believed
there were a number of unresolved regulatory due diligence issues in the
People’s Republic of China relating to the proposed transaction.
  25
  Acquisition
Framework Agreement with White Energy Company Limited and Binderless Coal
Briquetting Company Pty Limited.
  On
December 17, 2008, the Company entered into an Acquisition Framework Agreement
(the “Agreement”) with White Energy Company Limited (“WEC”) and Binderless Coal
Briquetting Company Pty Limited, a wholly owned subsidiary of WEC
(“BCBC”).  Under the terms of the Agreement, the Company agreed to
acquire, through an exchange of shares, WEC’s South-East Asian business operated
by its indirect wholly owned subsidiary, BCBC Singapore Pte Ltd. (“BCBC
Singapore”). Upon completion of the transaction, it was anticipated that BCBC
would issue to the Company 100% of the issued and outstanding share capital of
BCBC Singapore (the “BCBC Singapore Exchange Shares”) in exchange for the
Company’s issuance to BCBC of its ordinary shares (the “Company Exchange
Shares”), representing an estimated 56% of the issued and outstanding ordinary
shares of the Company after giving effect to the share exchange (the “Share
Exchange”). The Company’s existing shareholders were to retain the remaining
ordinary shares, representing an estimated 44% of the issued and outstanding
shares of the Company, subject to adjustment as provided below.
 
 BCBC
Singapore is the exclusive licensee for South East Asia of clean coal upgrading
technology developed by the Commonwealth Scientific Industrial Research
Organization (CSIRO), the science agency of the Australian government, and
exclusively licensed to WEC for commercialization worldwide. The coal technology
successfully upgrades low energy coal (sub-bituminous) to high-energy coal
(bituminous) through a proprietary patented process of compaction and
dehydration. The resulting coal product has a range of environmentally enhanced
properties, as well as commercial benefits.
 
 Under the
terms of the Agreement, if the annual coal production level of the coal
upgrading plant of BCBC Singapore as of December 31, 2012 (the “2012 Production
Level”) is at the minimum rate of 7.0 million tons per annum, the Company would
have issued, by no later than March 31, 2013, such number of additional ordinary
shares (the “Performance Shares”) representing 2.5% of the Company’s outstanding
ordinary shares at the time of issuance. If the 2012 Production Level exceeded 7
million tons, the Performance Shares in such calendar year were to be prorated
so that Performance Shares representing 0.0000025% of the outstanding number of
ordinary shares of the Company at the time of issuance for each 1 full ton of
2012 Production Level in excess of 7 million tons.  If the 2012
Production Level exceeded 7.0 million tons, for each 1.0 million tons in excess
of the 7.0 million tons, the Company would have issued such number of ordinary
shares representing an additional 2.5% of the Company’s outstanding ordinary
shares at the time of issuance. The maximum number of Performance Shares which
would have been issued in accordance with the foregoing could not have
represented more than 10% of the outstanding number of ordinary shares of the
Company as of the closing date, after giving effect to the issuance of all
Company Exchange Shares.
 
 Following
the closing date, WEC would have been responsible for the day-to-day management
of the Company and its subsidiaries.  In addition, after the closing
date BCBC had the right to appoint 4 directors (including a Chairman) to the
board of the Company and the existing shareholders of the Company had the right
to appoint 2 directors to the board of the Company.  Moreover,
immediately following the closing date the Company would have changed its
corporate name to “White Energy South East Asia Corporation” or such other name
as acceptable to WEC.
 
 The
parties agreed that the Funds held by the Company in its trust account were to
be used by the Company to expand BCBC Singapore’s operations in South East Asia,
which included, without limitation, capital to fund the costs of coal upgrading
plants to be built in South East Asia, the repayment of debt owed by BCBC
Singapore, and for general working capital purposes.
 
 Share
Exchange Agreement with White Energy Company Limited and White Energy Technology
Company Limited
 
 On March
12, 2009, the Company entered into a Share Exchange Agreement (the “Agreement”)
with White Energy Company Limited (“White Energy”) and White Energy Technology
Company Limited (“WET”).  Based in Sydney, Australia, White Energy, an
Australian corporation, is a public company traded on the Australian Stock
Exchange (ASX: WEC).  WET is a wholly-owned subsidiary of White
Energy.  The Company is a special purpose acquisition corporation
whose units of securities, ordinary shares and warrants trade on the NYSE
Alternext US Exchange (NYSE Alternext US: CIO.U, CIO and CIO.WS).  In
January 2008, the Company completed its initial public offering and retains
approximately $115.0 million in trust funds, pending application in connection
with the consummation of a business combination that is approved by the
requisite vote or consent of the Company’s public shareholders.
  26
 
 As used
herein, all dollar amounts are reflected in United States
dollars.  The agreed upon exchange rate in the Agreement is (AUS)
$1.00 equals (USD) $0.66.
 
 Under the
terms of the Agreement, the Company has agreed to acquire from White Energy,
through an exchange of shares, 100% of the share capital of WET (the “WET
Shares”) and the equity shares of the direct and indirect subsidiaries of WET
(with WET, the “Constituent Corporations”).  Upon completion of the
transaction, it is anticipated that, in exchange for the WET Shares, the Company
will issue to White Energy a percentage of the aggregate number of ordinary
shares of the Company to be issued and outstanding after giving effect to the
share exchange, as shall be determined by the amount by which the “White Energy
Market Value” (as defined) bears to the “Transaction Value” (as
defined).   The White Energy Market Value has been calculated at
approximately $157.0 million, representing the product of the White Energy
Diluted Shares (as defined) as at March 12, 2009 and the $0.9905 volume-weighted
average price (expressed in U.S. dollars) of White Energy common shares, as
traded on the ASX for the 20 trading days prior to March 12,
2009.  The Transaction Value is defined as the sum of the White Energy
Market Value and the Adjusted Funds.  The term “Adjusted Funds” is
defined as the total cash available to the Company and the Constituent
Corporations as at the closing date of the transaction (including net proceeds
of any additional securities sold by the Company or any of the Constituent
Corporations between March 12, 2009 and the closing date), less the sum of (i)
transaction expenses, (ii) amounts paid or payable in respect of share
redemptions that are requested on a timely basis by any of the Company’s public
shareholders, and (iii) the amount of debt securities, if any, issued by the
Company or any of the Constituent Corporations between March 12, 2009 and the
closing date.  Such additional securities (including debt securities)
may only be issued on terms mutually agreed to by the Company and White
Energy.  Accordingly, assuming that the Adjusted Funds at closing are
$105.0 million, the Transaction Value at closing would be approximately $263.0
million and White Energy would be entitled to receive in the share exchange an
aggregate of approximately 60% of the total Company shares to be outstanding,
and the Company’s existing shareholders will retain the remaining 40% of the
total Company shares to be outstanding.  If, in the above example,
there remain 14,000,000 ordinary shares of the Company that are issued and
outstanding at the closing, White Energy would be entitled to receive a total of
approximately 20,930,140 Company shares.  However, irrespective of the
final calculations of White Energy Market Value, Transaction Value or Adjusted
Funds, White Energy will not receive more than 72.5% of the fully diluted
ordinary shares of the Company after giving effect to the
acquisition.
 
 In
addition, upon consummation of the share exchange, the Company will assume the
liabilities of the Constituent Corporations (other than obligations to White
Energy) and assume or guaranty approximately $30.0 million of net indebtedness
of White Energy.
 
 Following
the closing date, White Energy management will become the management of the
Company and its subsidiaries and the current executive officers of the Company
will resign.  In addition, after the closing date White Energy will
have the right to appoint four directors (including a Chairman) to the board of
the Company and the existing shareholders of the Company will have the right to
appoint two directors to the board of the Company.  Moreover,
immediately following the closing date the Company will change its corporate
name to “White Energy Coal Technology Corporation” or such other name as shall
be acceptable to White Energy.
 
 The
Agreement also provides for certain Company Management Performance Shares, to
represent up to 10% of the total Company shares to be outstanding at closing
after giving effect to the share exchange, that may be issued to members of the
management of the Constituent Corporations in relation to achieved target
production levels of the Company and its subsidiaries of up to 20,000,000 annual
tons of upgraded coal production by December 31, 2012 from facilities using the
Binderless Coal Briquetting technology described below.
 
 WET is a
technology-enabled natural resources company. A wholly-owned subsidiary of WET
holds the exclusive world-wide rights to commercialize the Binderless Coal
Briquetting (“BCB”) clean coal upgrading technology developed by the
Commonwealth Scientific Industrial Research Organization (CSIRO), the science
agency of the Australian government.
  27
  WET is
developing industrial-scale coal upgrading facilities at strategic locations
throughout the world which are situated at or near large low rank coal deposits
that have appropriate infrastructure for the transportation of the upgraded coal
product. WET has identified a number of such locations, and has entered into a
series of joint venture, development, and long term coal supply
agreements.  In addition, White Energy has advised that by early April
2009 it will have completed the construction and begun commissioning of a
1,000,000 ton per annum industrial scale facility in Indonesia under a joint
venture with Bayan Resources, a publicly traded coal producer. The joint venture
agreement with Bayan Resources contemplates the construction of additions to the
clean coal upgrading plant facilities by 2011 to enable it to produce an
additional 4,000,000 tons per annum, and includes a fixed price feedstock coal
supply agreement and an agreement providing for a five year upgraded coal
offtake purchase commitment for partial production representing over $200
million in anticipated revenues over such period.
 
 In
addition to its initial joint venture, through WET, White Energy has entered
into and contemplates entering into additional joint ventures,
including:
 
 „           a
second proposed Indonesian joint venture with Adaro Group, the largest coal
company in Indonesia, and Itochu Corporation of Japan for a proposed initial one
million ton per annum facility with increased capacity planned up to 8 million
tons per annum;
 
 „           an
agreement to construct and operate all Asia-Pacific facilities with mining
contractor Theiss, a wholly owned subsidiary of Leighton Industries, one of the
largest publicly traded engineering, procurement and construction companies in
Australia;
 
 „           an
agreement with Buckskin Mining Company (an indirect wholly owned subsidiary of
Kiewit Corporation) for the development of a one million ton per annum coal
upgrading facility in the Powder River Basin near Gillette, Wyoming, with
planned increases in annual production capacity of up to eight million
tons;
 
 „           a
letter of intent with Datang International Power Company Ltd, the second largest
power generation company in China, for development of a production facility on a
Datang-owned sub-bituminous deposit in Inner Mongolia of up to 10 million tons
per annum; and
 
 „           a
Joint Venture Agreement with Black River Asset Management (a subsidiary of
Cargill Corporation and shareholder of White Energy) whereby Black River will
own a 49% equity interest in consideration for contributing up to $70 million in
funding for exploitation of WET upgrading technology in Africa.
 
 As set
forth above, we previously entered into a framework agreement with White Energy
to acquire, in exchange for Company shares, the equity of one of the White
Energy Constituent Corporations that held rights to commercialize the Binderless
Coal Briquetting clean coal upgrading technology in Indonesia and certain other
countries in Southeast Asia.  Upon review of the worldwide potential
for this technology and after further negotiations among representatives of
White Energy, the Company and our investment bankers, we mutually agreed to
significantly expand the scope of the proposed transaction so that the Company,
through its acquisition of 100% of the shares of WET, will acquire all of White
Energy’s global clean coal upgrading business including the exclusive rights to
commercialize the Binderless Coal Briquetting clean coal upgrading technology
throughout the world, associated management and existing joint ventures and
operations.
 
 The
Agreement between White Energy and the Company contemplates that available
Adjusted Funds at closing will be used to expand operations and for general
working capital purposes.  Based on its current project forecasts,
White Energy believes that the available funds at closing of the transaction
with the Company will be adequate to meet capital requirements over the next
12-18 months for the Bayan and Adaro (Indonesia) joint ventures and Datang
(China) joint venture, and that future cash flows from these joint ventures will
provide adequate working capital to fund the development and financing
requirements for the additional joint ventures referred to
above.  However, it should be noted that significant additional
construction financing may be required to be obtained by the Constituent
Corporations following the closing of the share exchange to enable the Company
and its subsidiaries to construct and operate all coal upgrading facilities
under contemplated joint ventures. There can be no assurance that such
additional financing, if and when required, will be available on commercially
attractive terms, if at all.
  28
  Consummation
of the transactions between the Company and White Energy under the Agreement
will be subject to certain conditions, including, without limitation (i)
completion of a mutually satisfactory due diligence investigation; (ii)
obtaining the required approvals of shareholders of both White Energy and the
Company; (iii) obtaining certain third party consents, and (iv) otherwise
complying with the Company’s obligations and requirements as a special purpose
acquisition corporation.  Subject to satisfaction of the
aforementioned conditions, it is anticipated that the transaction will be
completed within the next 60 to 90 days.
 
 There can
be no assurances that the transactions contemplated by the Agreement will be
consummated.
 
 The
Company’s principal executive offices are located at:
  c/o M
& C Corporate Services Limited
 P.O. Box
309GT, Ugland House
 South
Church Street
 George
Town, Grand Cayman
 Cayman
Islands
 
 Its
registered and records office is located at its principal executive offices at
the address set forth above.
 
 The
Company has financed its operations through the financings listed in the table
shown below.
 
 Table
No. 1: Financings
 
 Date of
                                      Offering/Financing
                                    
                                    Nature of Issuance
                                    
                                    Number of Securities
                                    
                                    Capital RaisedJanuary
      14, 2008
                                    
                                    Private
      Placement(1)
                                    
                                    5,725,000
      warrants(1)
                                    
                                    $5,725,000January
      23, 2008
                                    
                                    Initial
      Public Offering (2)
                                    
                                    10,000,000
      units(2)
                                    
                                    $100,000,000January
      30, 2008
                                    
                                    Initial
      Public Offering (3)
                                    
                                    1,500,000
      units(3)
                                    
                                    $15,000,000February
      28, 2008
                                    
                                    Line
      of Credit(4)
                                    
                                    Up
      to $500,000 promissory note(4)
                                    
                                    Up
      to $500,000December
      16, 2008
                                    
                                    Funding
      Agreement(5)
                                    
                                    Up
      to $1,250,000 promissory note(5)
                                    
                                    Up
      to
$1,250,000
 
 (1)  On
January 14, 2008, the Company completed a private placement of 5,725,000
warrants to the Company’s sponsor in connection with the initial public
offering, Ho Capital Management LLC, an entity co-managed and jointly owned by
Angela Ho, the Company’s former chief executive officer and former chairman, and
Noble Investment Fund Limited, generating gross proceeds of
$5,725,000.
 
 (2) 
On January 23, 2008, the initial public offering of 10,000,000 units of the
Company was consummated. Each unit issued in the initial public offering (the
“Units”) consists of one ordinary share, $.0001 par value per share (the
“Ordinary Shares”), and one warrant, each warrant to purchase one Ordinary Share
at an exercise price of $7.50 per Ordinary Share. The Units were sold at an
offering price of $10.00 per Unit, generating gross proceeds of
$100,000,000.
 
 (3)  On
January 30, 2008, the underwriters for the initial public offering of the
Companyexercised
their over-allotment option in full, to the extent of 1,500,000 Units. The
initial public offering, including the exercise of the over-allotment option,
generated total gross proceeds of $115,000,000 to the Company (excluding
proceeds of $5,725,000 from the sale of private placement warrants to the
Company’s sponsor in connection with the initial public offering, Ho Capital
Management LLC, an entity co-managed and jointly owned by Angela Ho, the
Company’s former chief executive officer and former chairman, and Noble
Investment Fund Limited).
 
 (4)  On
February 28, 2008, the Company consummated a Loan and Security Agreement with a
bank pursuant to which it issued a $500,000 promissory note to the bank in
exchange for a line of credit to be used for working capital and general
corporate purposes. On March 28, 2008, the Company drew down $190,000, and on
June 8, 2008 the Company repaid $50,000, under the note payable and on July 3,
2008 the remaining $140,000 principal amount, plus interest, was repaid.
Borrowings under the promissory note bore interest at the bank’s prime rate (the
“Interest Rate”) or, upon the occurrence of a default by the Company, at a
default rate equal to the Interest Rate plus 2%, and were secured by certain
assets of the Company.
  29
  (5)  On
December 16, 2008, the Company consummated a Funding Agreement (the “Agreement”)
with a placement agent calling for loans of up to $1,250,000 in 12% promissory
notes (the “Notes”) that mature on the earlier of (a) January 16, 2010, or (b)
the consummation of a business combination satisfactory to the
lender.  The Notes are non-recourse to the amounts held in the
Company’s trust account in favor of the public shareholders and are secured by
the assignment of 100,000 shares of the Company's stock that are owned by
certain initial shareholders.  In addition, the Notes are secured by
the interest earned in the Trust account up to $2,000,000.  Pursuant
to the Agreement, $500,000 was borrowed under the Notes on December 26,
2008.
  Capital
Expenditures
 
 The table
below shows historical capital expenditures
 
 Fiscal Year
                    
                    ExpendituresFiscal
      2007
                    
                    $
                    0Fiscal
      2008
                    
                    $
                    0
 
 B.   Business
Overview
 
 General
 
 We were
formed as a blank check company with the corporate name Asia Special Situation
Acquisition Corp. under Cayman Islands law on March 22, 2007. We were formed for
the purpose of acquiring control of one or more unidentified operating
businesses, through a capital stock exchange, asset acquisition, stock purchase,
or other similar transaction, including obtaining a majority interest through
contractual arrangements. We will only acquire a business or businesses that,
upon completion of our initial business combination, will be our majority-owned
subsidiaries and will be neither investment companies nor companies excluded
from the definition of investment company by Sections 3(c)(1) or 3(c)(7) of the
Investment Company Act of 1940. We intend to utilize cash derived from the
proceeds of our offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination. We will not acquire
a minority interest in any operating business.
 
 Pursuant
to our amended and restated memorandum and articles of association, we must
effect and initiate procedures for our dissolution and liquidation and the
distribution of our assets, including the funds held in the trust account, if we
do not effect a business combination within 24 months after the completion of
our offering since a definitive agreement has been executed with White Energy
within 18 months after completion of our offering). We have agreed with the
trustee to promptly adopt a plan for the liquidation and distribution of our
assets, including the funds held in the trust account, upon expiration of the
time periods set forth above.
 
 To date,
our efforts have been limited to organizational activities, activities related
to our offering and acquisition efforts, including sourcing and identifying
potential target acquisitions such as White Energy and WET. We intend to
identify prospective acquisitions that are either located in Asia (including
Australia), provide products or services to consumers located in Asia, or invest
in Asia. Although not limited to any specific country in Asia, we initially
focused our initial efforts on acquiring control of an operating business or
businesses in the leisure and hospitality or financial services industries that
are either located in China, provide products or services to consumers in China,
or invest in China.
  30
  Although we initially focused our
search on an operating business or businesses in the leisure and hospitality or
financial services industries that is located in, provides products or services
to consumers located in China, or invests in China, we determined to explore a
favorable business opportunity in the clean coal upgrading technology sector
with White Energy and its affiliates which management determined was in the best
interests of our company and shareholders.  We concentrated on our
primary business and geographic focus during the first year of our business
search, and only expanded the scope of our search because we were unable during
such year to locate an attractive business combination in the leisure and
hospitality or financial services industries that invests in, is located in, or
provides products or services to consumers located in China.  We will
seek to consummate the share exchange with White Energy and its affiliates,
which in the opinion of management, may provide our company and its shareholders
with the most favorable growth potential, due to a variety of factors, including
its financial condition and results of operations, experience and skill of
incumbent management, value of the intellectual property owned by the business,
its competitive position, the regulatory environment in which it operates, or
other criteria determined by management.For a more detailed discussion of
management’s process for searching for and selecting a target business, see
“Effecting a business combination — Selection of a target business and
structuring of a business combination” below.
 
 We intend
to acquire all or a controlling interest in the equity of such operating
business or businesses. If our initial business combination involves a
transaction in which we acquire less than a 100% interest in the target company,
the value of that interest that we acquire will be equal to at least 80% of the
balance in the trust account (excluding deferred underwriting discounts and
commissions). In all instances, we would control the target company. The key
factors that we will rely on in determining control would be our acquisition of
at least 51% of the voting equity interests of the target company and/or control
of the majority of any governing body of the target company through contractual
arrangements or otherwise.
 
 Our
Management Team
 
 Our
management team, board of directors and board of advisors have experience in
investments, financing, acquisitions and operations in four core sectors in
Asia: (i) hospitality and leisure (including gaming), (ii) financial services,
(iii) real property development, and (iv) sea and air transport. Although there
is no direct nexus between management’s experience in the real property
development and sea and air transport sectors in Asia and our initial focus on
the hospitality and leisure and financial services sectors in Asia, we believe
that our management’s and board of directors’ experience in the real property
development and sea and air transport sectors is relevant if we determine to
abandon our initial focus to explore opportunities in such other business
sectors if we feel that it is in the best interests of our company and
shareholders. As set forth above, we believe that there are opportunities in
hospitality and leisure and in financial services in Asia and that we have a
significant network of contacts to identify such targets. We also believe that
we have the local knowledge and resources to effectively evaluate business
targets and to manage local risks.
 
 Although
our officers and directors have a significant level of involvement in hedge
funds, investment funds and/or companies doing business in China and Asia, we
will not consider an acquisition of, or directly or indirectly acquire, any
entity that is either a portfolio company of a hedge fund, investment fund, or
an affiliate thereof, with which our management is directly or indirectly
affiliated.
 
 Competitive
Strengths
 
 Regional
Expertise — Members of our management team, board of directors
and board of advisors have participated in acquisitions, operations and
disposals of businesses in our target region and industry sectors. We believe
that we have extensive experience in managing public companies with Asia-based
operations. In addition, we believe that Asian rules and regulations and Asian
business customs may be unique to the region and require specialized knowledge
that we possess.
 
 Established Deal
Sourcing Network — We believe management, the board of
directors and advisory board’s current positions, experience in the target
industries and network of industry contacts will assist in providing flow for a
potential initial business acquisition. These contacts and sources include
executives employed with, and consultants engaged by, public and private
businesses in our target industries, investment bankers, attorneys, and
accountants, among others, with knowledge of these industries. Members of our
management have significant experience in dealing in Asia, particularly in the
hotel, casino and transportation industries, and have been operating
successfully for the past 46 years. We also believe that such persons have
unique political affiliations in the region which we believe enhance our
opportunities.
  31
  Innovation,
Strategic Planning and Business Development Experience — In a
highly competitive marketplace, management believes that businesses that
consistently outperform their peers frequently attribute that success to their
ability to serve their consumers in new and creative ways. At the executive
level, the management team has participated in strategic planning and business
development for the various companies with which the team has been
involved.
 
 Financial Acumen,
Corporate Finance and Transactional Expertise — We believe,
given our management, board of directors and advisory board’s transactional
experience and network of contacts within both the target industries and
financial community, our team has the ability to identify, source, negotiate,
structure, and close strategic investments of various types, including business
combinations, “add-on” acquisitions, and other strategic
arrangements.
 
 Effecting
a business combination
 
 General
 
 We are
not presently engaged in, and we will not engage in, any substantive commercial
business for an indefinite period of time following our offering. We intend to
utilize cash derived from the proceeds of our offering, the sale of the insider
warrants and up to $1,250,000 of our 12% promissory notes, in additional to our
capital stock, debt or a combination of the foregoing in effecting the proposed
White Energy share exchange or other business combination. Although
substantially all of the net proceeds of our offering and the sale of the
insider warrants and notes are intended to be generally applied toward effecting
the share exchange or other business combination, the proceeds are not otherwise
being designated for any more specific purposes. Accordingly, prospective
investors have invested in us without an opportunity to evaluate the specific
merits or risks of any one or more business combinations. A business combination
may involve the acquisition of 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 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.
 
 Sources
of target businesses
 
 Target
business candidates, including White Energy and its affiliates, have been and
may continue to be brought to our attention from various unaffiliated sources,
including investment bankers, attorneys, accountants, venture capital funds,
private equity funds, leveraged buyout funds, management buyout funds, brokers
and consultants and other members of the financial community, who may present
solicited or unsolicited proposals. We expect such sources to become aware that
we are seeking a business combination candidate by a variety of means, such as
publicly available information relating to our offering, public relations and
marketing efforts, articles that may be published in industry trade papers
discussing our intent on making acquisitions, and/or direct contact by
management which commenced following the completion of our offering. Our initial
shareholders, officers and directors as well as their affiliates may also bring
to our attention target business candidates. While our officers and directors
make no commitment as to the amount of time they will spend trying to identify
or investigate potential target businesses, they believe that the various
relationships they have developed over their careers together with their direct
inquiry of their contacts will generate a number of potential target businesses
that will warrant further investigation. While we do not presently anticipate
engaging the services of professional firms that specialize in business
acquisitions on any formal basis, we may engage these firms in the future, in
which event we may pay a finder’s fee or other compensation. The terms of any
such arrangements will be negotiated with such persons on arm’s length basis and
disclosed to our shareholders in the proxy materials we provide in connection
with any proposed business combination. In no event, however, will we pay any of
our existing officers, directors, advisors or shareholders or any entity with
which they are affiliated any finder’s fee or other compensation for services
rendered to us prior to or in connection with the consummation of a business
combination. We will not enter into any business combination with any affiliates
of our sponsor, initial shareholders, advisors, officers or directors. In
addition, none of our officers, directors, advisors, or initial shareholders or
our sponsor, or any of their respective affiliates, will receive any finder’s
fee, consulting fees or any similar fees or other compensation from any other
person or entity in connection with any business combination other than any
compensation or consulting fees which may be received for any services provided
to the resulting business following such business combination, if requested by
the target company and separately negotiated at arms-length between the parties.
However, the payment of any such compensation or consulting fees for any
services provided following the business combination will not be a criterion in
the selection of an acquisition candidate. We do have a policy prohibiting the
payment of such fees or reimbursements from the resulting business and as part
of such policy, our officers, directors, initial shareholders and sponsor have
entered into a letter agreement which provides, among other things, that such
persons or entities or their affiliates will not receive any finder’s fee,
consulting fees or any similar fees or other compensation from the resulting
business in connection with the business combination. Although we are not under
any contractual obligation to engage any of the underwriters to provide any
services for us after our offering, and have no present intent to do so, any of
the underwriters may, among other things, introduce us to potential target
businesses or assist us in raising additional capital, as needs may arise in the
future. If any of the underwriters provide services to us after our offering, we
may pay such underwriter fair and reasonable fees that would be determined at
that time in arm’s length negotiations.
  32
  Regulation
 
 Following a business combination, we
may be subject to certain Australian rules and regulations which require us to
obtain and/or maintain various licenses and permits which must be periodically
renewed and may be revoked or suspended. We may also be subject to environmental
regulations with respect to any properties we may
acquire.  Violations of laws in one jurisdiction
could result in disciplinary action in other jurisdictions.
 
 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 with a fair market value that is at least 80% of the amount in our
trust account (less deferred underwriting compensation of $3,450,000) at the
time of such acquisition, our management will have virtually unrestricted
flexibility in identifying and selecting a prospective target business,
including White Energy and its affiliates. We intend to acquire all or a
controlling interest in the equity of such operating business or businesses. If
our initial business combination involves a transaction in which we acquire less
than a 100% interest in the target company, the value of that interest that we
acquire will be equal to at least 80% of the balance in the trust account
(excluding deferred underwriting discounts and commissions). In all instances,
we would control the target company. The key factors that we will rely on in
determining control would be our acquisition of at least 51% of the voting
equity interests of the target company and/or control of the majority of any
governing body of the target company through contractual arrangements or
otherwise. The fair market value of White Energy and its affiliates will be
determined by our board of directors based upon one or more standards generally
accepted by the financial community (examples of which may include actual and
potential sales, earnings and cash flow and book value). If our board is not
able to independently determine that the target business has a sufficient fair
market value, we will obtain an opinion from an unaffiliated, independent FINRA
registered investment banking firm with respect to the satisfaction of such
criteria. Since any opinion, if obtained, would merely state that fair market
value meets the 80% threshold, it is not anticipated that copies of such opinion
would be distributed to our shareholders, although copies will be provided to
shareholders upon request. If we do obtain the opinion of an investment banking
firm, a summary of the opinion will be contained in the proxy statement that
will be mailed to shareholders in connection with obtaining approval of the
White Energy share exchange or other business combination, and the investment
banking firm will consent to the inclusion of their report in our proxy
statement. In addition, information about how shareholders will be able to
obtain a copy of the opinion from us will be contained in the proxy statement.
However, we do not anticipate that shareholders will be entitled to rely on any
such opinion. If the independent investment banking firm takes the view that
shareholders may not rely on the opinion, we will not consider such a view as a
factor in deciding which investment banking firm to hire. 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 complies with the 80% threshold.
  33
 
 In
addition, if more than 20% but not more than one share less than 35% of the
shares owned by our public shareholders vote against a the proposed White Energy
share exchange or other business combination and exercise their redemption
rights, we will still be required to utilize 80% of the amount in our trust
account for the business combination. In the event that such redemption leaves
us with an insufficient amount of funds to consummate the share exchange or
other business combination then, we may issue a significant amount of our debt
or equity securities to the sellers of such businesses and/or seek to raise
additional funds through a private offering of debt or equity securities. We
have not entered into any such fund raising arrangement and have no current
intention of doing so (other than the 5,725,000 insider warrants for an
aggregate of $5,725,000 and up to $1,250,000 of our 12% notes under our December
2008 Funding Agreement, of which $500,000 was borrowed by us as of the date
hereof). This could limit our selection of a target business and/or the
structure of the acquisition.
 
 In
evaluating a prospective target business, our management will consider, among
other factors, the following:
 
 ·
              growth
      potential;
 ·
              financial condition and results
      of operation;
 ·
              experience and skill of
      management;
 ·
              capital
      requirements;
 ·
              the value of the intellectual
      property owned by the
business;
 ·
              competitive
      position;
 ·
              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 protection of the products, processes or
    services;
 ·
              adaptability of products or
      services to new forms of
communication;
 ·
              regulatory environment of the
      industry; and
 ·
              costs associated with effecting
      the business combination.
 
 These
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, where applicable, and inspection of
facilities, as well as review of financial and other information which will be
made available to us.
 
 In
seeking the share exchange or other business combination, we intend to utilize
cash derived from the proceeds of our offering and the sale of the insider
warrants and 12% notes, as well as our capital stock or debt, or a combination
of cash, capital stock and debt, and there is no limit on the issuance of
capital stock or incurrence of debt we may undertake in effecting a business
combination. In the event the share exchange or other business combination is
consummated, all sums remaining in the trust account will be released to us
immediately thereafter, and there will be no restriction on our use of such
funds.
 
 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’ shareholders. We
cannot assure you, however, that the Internal Revenue Service, appropriate state
tax authorities or Australian authorities, as applicable, will agree with our
tax treatment of the business combination.
 
 The time
and costs required to complete the business combination cannot presently be
ascertained with any degree of certainty. Any costs incurred with respect to the
identification and evaluation of White Energy and its affiliates or other 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. While we may pay fees or compensation to third
parties for their efforts in introducing us to a potential target business, in
no event, however, will we pay any of our existing officers, directors,
advisors, or shareholders or any entity with which they are affiliated any
finder’s fee or other compensation for services rendered to us prior to or in
connection with the consummation of a business combination. In addition, none of
our officers, directors, special advisors or initial shareholders will receive
any finder’s fee, consulting fees or any similar fees from any other person or
entity in connection with any business combination involving us other than any
compensation or fees that may be received for any services provided following
such business combination.
  34
  Fair
Market Value of Target Business
 
 The
initial target business that we acquire (including White Energy and its
affiliates) must have a fair market value equal to at least 80% of the amount in
our trust account (less deferred underwriting compensation of $3,450,000) at the
time of such acquisition. There is no limitation on our ability to raise funds
privately or through loans that would allow us to acquire a target business or
businesses with a fair market value in an amount considerably greater than 80%
of the amount in our trust account (less deferred underwriting compensation of
$3,450,000) at the time of acquisition. Other than up to $1,250,000 of our 12%
notes under our December 2008 Funding Agreement, of which $500,000 was borrowed
by us as of the date hereof, we have not had any preliminary discussions, or
made any agreements or arrangements, with respect to financing arrangements with
any third party. 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, and the price for which comparable businesses have recently been sold. If
our board is not able to independently determine that the target business has a
sufficient fair market value, we will obtain an opinion from an unaffiliated,
independent FINRA registered investment banking firm which is a member of the
Financial Industry Regulatory Authority with respect to the satisfaction of such
criteria. Since any opinion, if obtained, would merely state that fair market
value meets the 80% of the amount in our trust account (less deferred
underwriting compensation of $3,450,000) threshold, it is not anticipated that
copies of such opinion would be distributed to our shareholders, although copies
will be provided to shareholders who request it. If we do obtain the opinion of
an investment banking firm, a summary of the opinion will be contained in the
proxy statement that will be mailed to shareholders in connection with obtaining
approval of the share exchange or other business combination, and the investment
banking firm will consent to the inclusion of their report in our proxy
statement. In addition, information about how shareholders will be able to
obtain a copy of the opinion from us will be contained in the proxy statement.
However, we do not anticipate that shareholders will be entitled to rely on any
such opinion. If the independent investment banking firm takes the view that
shareholders may not rely on the opinion, we will not consider such a view as a
factor in deciding which investment banking firm to hire. We will not be
required to obtain an opinion from an investment banking firm as to the fair
market value of a proposed business combination if our board of directors
independently determines that the target business has sufficient fair market
value.
 
 Probable
lack of business diversification
 
 While we
may seek to effect business combinations with more than one target business, our
initial business combination, including with White Energy and its affiliates,
must be with a target business or target businesses which satisfy the minimum
valuation standard at the time of such acquisition, as discussed above.
Consequently, it is probable that we will have the ability to effect only a
single business combination, although this may entail the simultaneous
acquisition of several compatible operating businesses or assets. 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 limited number of
entities, our lack of diversification may:
 
 ·
              leave us solely dependent upon
      the performance of a single business;
and
 ·
              result in our dependency upon the
      development or market acceptance of a single or limited number of products
      or services.
 
 Additionally,
since our business combination may entail the simultaneous acquisitions of
several assets or operating businesses at the same time and may be with
different sellers, we will need to convince such sellers to agree that the
purchase of their assets or closely related businesses is contingent upon the
simultaneous closings of the other acquisitions.
  35





Limited
ability to evaluate the target business’s management





It is
anticipated that, upon consummation of the proposed White Energy share exchange,
White Energy management will become the management of our company and
subsidiaries and our current executive officers will resign.  In
addition, after the closing date White Energy will have the right to appoint
four directors (including a Chairman) to our board and our existing shareholders
will have the right to appoint two directors to our board.  Moreover,
our current management will only be able to remain with the combined company, if
at all, after the consummation of a business combination if they are able to
negotiate terms with the combined company as part of any such combination.
Although we intend to closely scrutinize such individuals, we cannot assure you
that our assessment will prove to be correct. In addition, we cannot assure you
that new members that join our management following a business combination will
have the necessary skills, qualifications or abilities to help manage a public
company.





Opportunity
for shareholder approval of business combination





Prior to
the completion of the White Energy share exchange or other business combination,
we will submit the transaction to our shareholders for approval, even if the
nature of the acquisition is such as would not ordinarily require shareholder
approval under applicable Cayman Islands’ Law. In connection with seeking
shareholder approval of the share exchange or other business combination, we
will furnish our shareholders 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 White Energy and its
affiliates and certain required financial information regarding the
business.





In
connection with the vote required for any business combination, all of our
initial shareholders, including all of our officers and directors, have agreed
to vote their respective ordinary shares owned by them immediately prior to our
offering in accordance with the majority of the ordinary shares voted by the
public shareholders. Initial shareholders who purchase ordinary shares in
connection with, in our offering or after our offering have agreed to vote such
shares in favor of any proposed business combination. We will proceed with the
White Energy share exchange only if: (i) a majority of the ordinary shares cast
at the meeting are voted in favor of the share exchange, (ii) public
shareholders owning up to one share less than 35% of the shares sold in our
offering exercise their redemption rights, each in accordance with the
instructions set forth in the proxy materials to be mailed to our shareholders
(as further discussed below), and (iii) a majority of our outstanding ordinary
shares are voted in favor of an amendment to our amended and restated memorandum
and articles of association to permit our perpetual existence; provided,
however, that as part of the negotiations toward a business combination, our
board of directors may, in the exercise of its business judgment, agree to a
redemption rights exercise percentage that is less than one share below 35%.
This would be done in order to preserve cash in the trust account in order to
facilitate a particular business combination, and may result in us having a
redemption rate lower than 35% as part of the agreement to consummate such a
business combination. Voting against the share exchange or other business
combination alone will not result in redemption of a shareholder’s shares into a
pro rata share of the trust account. Such shareholder must have also exercised
its redemption rights described below.





Redemption
rights





In
connection with a shareholder vote with respect to the proposed White Energy
share exchange, an eligible shareholder may request redemption at any time after
the mailing to our shareholders of the proxy statement and prior to the vote
taken with respect to the proposed business combination at a meeting held for
that purpose, but the request will not be granted unless the shareholder votes
against the business combination and the business combination is approved and
completed. Additionally, we may require public shareholders, whether they are a
record holder or hold their shares in “street name,” to either tender their
ordinary share certificates to our transfer agent at any time through the vote
on the business combination or to deliver their shares to the transfer agent
electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At
Custodian) System, at the holder’s option. In connection with a shareholder vote
with respect to the share exchange, the proxy solicitation materials that we
will furnish to shareholders in connection with the vote for the business
combination will indicate whether we are requiring shareholders to satisfy such
certification and delivery requirements. Accordingly, a shareholder would have
from the time we send out our proxy statement through the vote on share exchange
or other business combination to tender his or its shares if such shareholder
wishes to seek to exercise their redemption rights, a period that will not be
less than 10 days. This time period is expected to vary depending on the
specific facts of each transaction. However, as the delivery process can be
accomplished by the shareholder, whether or not he or it is a record holder or
his or its shares are held in “street name,” in a matter of hours (because the
transfer is made electronically once final instruction is given to Depository
Trust Company) by simply contacting the transfer agent or his or its broker and
requesting delivery of his or its shares through the DWAC System, we believe
this time period is sufficient for an average investor. However, because we do
not have any control over this process, it may take significantly longer than we
anticipated. Additionally, if the ordinary shares cannot be transferred through
the DWAC system, the process may take such number of days required to complete
the proper paperwork, obtain the necessary authorizations and consents and to
locate and deliver physical stock certificates, if any.




36




Traditionally,
in order to perfect redemption rights in connection with a blank check company’s
business combination, a shareholder could simply vote against a proposed
business combination and check a box on the proxy card indicating such
shareholder was seeking to redeem. After the business combination was approved,
we would contact such shareholder to arrange for him or it to deliver his or its
certificate to verify ownership. As a result, the shareholder then had an
“option window” after the consummation of the business combination during which
he or it could monitor the price of the stock in the market. If the price rose
above the redemption price, the shareholder could sell his or its shares in the
open market before actually delivering his or its shares to the company for
cancellation. Thus, the redemption right, to which shareholders were aware they
needed to commit before the shareholder meeting, would become a right of
redemption surviving past the consummation of the business combination and which
we would be obligated to honor until the redeeming shareholder delivered the
share certificate. The requirement for physical or electronic delivery prior to
the meeting ensures that a redeeming shareholder’s election to redeem is
irrevocable once the business combination is approved. There is a nominal cost
associated with the above-referenced tendering process and the act of
certificating the shares or delivering them through the DWAC system. The
transfer agent will typically charge the tendering broker $35 and it would be up
to the broker whether or not to pass this cost on to the redeeming shareholder.
This fee would be incurred regardless of whether or not we require shareholders
seeking to exercise redemption rights to tender their shares prior to the
meeting. The need to deliver shares is a requirement of redemption regardless of
the timing of when such delivery must be effectuated. Accordingly, this would
not result in any increased cost to shareholders when compared to the
traditional process; however, in the event a shareholder elects redemption of
their shares but the proposed business combination is not approved, a
shareholder will have paid $35 to elect conversion but would not actually have
their shares redeemed. Further, it is possible this tendering process will be
cost-prohibitive for shareholders in the event their aggregate holdings of our
ordinary shares do not exceed $35.





Any
request for redemption, once made, may be withdrawn at any time up to the date
of the meeting. Furthermore, if a shareholder delivered his or its certificate
for redemption and subsequently decided prior to the meeting not to elect
redemption, such shareholder may simply request that the transfer agent return
the certificate (physically or electronically). It is anticipated that the funds
to be distributed to shareholders entitled to redeem their shares who elect
redemption will be distributed promptly after completion of a business
combination. Public shareholders who redeem their shares into their share of the
trust account still have the right to exercise any warrants they still
hold.





If a vote
on the share exchange is held and the business combination is not approved, we
may continue to try to consummate a business combination with a different target
until 24 months after the completion of our offering since a definitive
agreement has been executed with White Energy within 18 months after completion
of our offering). If the share exchange is not approved or completed for any
reason, then public shareholders voting against such business combination who
exercised their redemption rights would not be entitled to redeem their ordinary
shares into a pro rata share of the aggregate amount then on deposit in the
trust account. In such case, if we have required public shareholders to tender
their certificates prior to the meeting, we will promptly return such
certificates to the tendering public shareholder without any further action on
the part of such shareholder. Public shareholders 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 share exchange voted against was duly approved and
subsequently completed, or in connection with our liquidation.




37




The
actual per-share redemption price will be equal to $10.00. Interest will be
payable to public shareholders redeeming in connection with a business
combination, pro rata, net of amounts previously released to us and taxes
payable. An eligible shareholder may request redemption at any time after the
mailing to our shareholders of the proxy statement and prior to the vote taken
with respect to the share exchange or other business combination at a meeting
held for that purpose, but the request will not be granted unless the
shareholder votes against the business combination and the business combination
is approved and completed. Any request for redemption, once made, may be
withdrawn at any time up to the date of the meeting. It is anticipated that the
funds to be distributed to shareholders entitled to redeem their shares who
elect redemption will be distributed promptly after completion of a business
combination. Public shareholders who redeem their stock into their share of the
trust account still have the right to exercise the warrants that they received
as part of the units. We will not complete the share exchange or any business
combination if public shareholders, owning more than 35% of the shares sold in
our offering, exercise their redemption rights; provided, however, that as part
of the negotiations toward a business combination, our board of directors may,
in the exercise of their business judgment, agree to a redemption right exercise
percentage that is less than one share below 35%. This one share less than 35%
redemption requirement which we have established is different than that of a
traditional blank check offering, which generally will proceed with an
acquisition of a target business if both shareholders owning a majority of the
outstanding shares vote in favor of the business combination and no more than
20% of the public shareholders exercise their redemption rights. We have
increased the redemption percentage from 20% to one share less than 35% 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 the share exchange or other
business combination that may otherwise approved by a large majority of our
public shareholders. Accordingly, the one share less than 35% redemption
requirement which we have established is a lower threshold and will make it
easier for us to proceed with the proposed business combination than what is
customary in a traditional blank check offering. Even if one share less than 35%
or less of the shareholders, as described above, exercise their redemption
rights, we may be unable to consummate the business combination if such
redemption leaves us with funds less than a fair market value equal to at least
80% of the amount in our trust account (excluding any funds held for the benefit
of any of the underwriters) at the time of such acquisition, which amount is
required for the share exchange. In the event that such redemption leaves us
with an insufficient amount of funds to consummate the proposed business
combination then, we may be forced to either find additional financing to
consummate such business combination, consummate a different business
combination or dissolve, liquidate and wind up.





Investors
who choose to remain as shareholders and do not exercise their redemption rights
will have assumed the entire cost of the offering, including the underwriters’
discount (but not including the deferred compensation owed to the
underwriters).





Automatic
dissolution and liquidation if no business combination





If we do
not complete a business combination within 24 months from the date of our
offering, we will dissolve and promptly return and liquidate all funds from our
trust account only to our public shareholders as part of our dissolution and
liquidation in proportion to their respective equity interests, an aggregate sum
equal to the amount in the trust account, inclusive of any interest not
previously released to us less the amount of taxes paid, if any, on interest
earned.





Section
172 of our amended and restated memorandum and articles of association provides
that we will continue in existence only until eighteen months from the
consummation of our offering or until twenty-four months if a letter of intent,
an agreement in principle, or a definitive agreement to complete a business
combination has been entered into, except if holders of 95% or more of our
outstanding ordinary shares approve an extension of such time period. 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. At this
time, we will become subject to a voluntary liquidation procedure under the
Companies Law (2007 Revision) of the Cayman Islands (the “Companies Law”). Our
liquidator would give at least 21 days’ notice to creditors of his intention to
make a distribution by notifying known creditors (if any) who have not submitted
claims and by placing a public advertisement in the Cayman Islands Official
Gazette, although in practice this notice requirement need not necessarily delay
the distribution of assets if the liquidator is satisfied that no creditors
would be adversely affected as a consequence of a distribution before this time
period has expired. We anticipate the trust account should be liquidated shortly
following expiration of the 21 day period. As soon as the affairs of the company
are fully wound-up, the liquidator must lay his final report and accounts before
a final general meeting which must be called by a public notice at least one
month before it takes place. After the final meeting, the liquidator must make a
return to the registrar confirming the date on which the meeting was held and
three months after the date of such filing the company is
dissolved.




38




Pursuant
to the terms of our amended and restated memorandum and articles of association,
our powers following the expiration of the permitted time periods for
consummating a business combination will automatically thereafter be limited to
acts and activities relating to dissolving and winding up our affairs, including
liquidation. The funds held in our trust account may not be distributed except
upon our dissolution, and the funds held in our trust account will not be
released until then. Our shareholders have voted by shareholder resolution, as
permitted under the Companies Law (2007 Revision) of the Cayman Islands (the
“Companies Law”), to amend Section 169 of our amended and restated memorandum
and articles of association to provide that certain provisions of our articles
may not be amended prior to our consummation of a business combination without
the prior written consent of at least 95% of our outstanding ordinary shares,
including our requirements (i) to seek shareholder approval of such a business
combination (Section 170), (ii) to allow our shareholders to seek redemption of
their shares if they do not approve of such a business combination (Section
171), (iii) that we will continue in existence only until eighteen months from
the consummation of our offering or until twenty-four months if a letter of
intent, an agreement in principle, or a definitive agreement to complete a
business combination has been entered into, except if holders of 95% or more of
our outstanding ordinary shares approve an extension of such time period
(Section 172), (iv) to provide distributions from the trust account to public
shareholders only in the event of redemptions or our liquidation (Section 173),
and (v) election, classification and removal of our directors (Section 174).
While these rights and protections have been established for the purchasers of
units in our offering, it is nevertheless possible that the prohibition against
amending or modifying these rights and protections at any time prior to the
consummation of the business combination could be challenged as unenforceable
under Cayman Islands law, although, pursuant to the underwriting agreement we
are prohibited from amending or modifying these rights and protections at any
time prior to the consummation of the business combination without the
affirmative vote of at least 95% of our outstanding ordinary shares. We have not
sought an unqualified opinion regarding the enforceability of the prohibition on
amendment or modification of such provisions without the affirmative vote of at
least 95% of our outstanding ordinary shares because we view these provisions as
fundamental and contractual terms of our offering. We believe these provisions
to be obligations of our company to its shareholders and that investors will
make an investment in our company relying, at least in part, on the
enforceability of the rights and obligations set forth in these provisions
including, without limitation, the prohibition on any amendment or modification
of such provisions without the affirmative vote of at least 95% of our
outstanding ordinary shares. Although Section 169 makes it difficult for us to
amend such provisions in our amended and restated memorandum and articles of
association, they are intended to protect our shareholders by requiring a
supermajority of our shareholders to vote in favor of such a change in order for
it to become effective.





In
effecting our dissolution and liquidation, we will liquidate our trust account
to our public shareholders. Concurrently, we shall pay, or reserve for payment,
from interest released to us from the trust account if available, our
liabilities and obligations. Our initial shareholders have waived their rights
to participate in any liquidation of our trust account or other assets with
respect to ordinary shares owned by them prior to our offering (including any
insider warrants or shares they or their designees have acquired). In addition,
the underwriters have agreed to waive their rights to the $3,450,000 of deferred
underwriting compensation deposited in the trust account for their benefit.
There will be no liquidation amounts in connection with a dissolution with
respect to our warrants, which will expire worthless.





If we are
unable to consummate a business combination and expend all of the net proceeds
of our offering and the sale of the insider warrants, 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 to
holders of the 11,500,000 shares entitled to participate in the liquidation of
our trust account would be equal to the $10.00 per unit offering price plus
interest net of taxes. The proceeds deposited in the trust account could,
however, become subject to the claims of our creditors which could be prior to
the claims of our public shareholders.




39




Although
we will seek 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 account for the
benefit of our public shareholders, there is no guarantee that they will execute
such agreements or even if they execute such agreements that they would be
prevented from bringing claims against the trust account including but not
limited to fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver,
in each case in order to gain an advantage with a claim against our assets,
including the funds held in the trust account. If any third party refused to
execute an agreement waiving such claims to the monies held in the trust
account, we would perform an analysis of the alternatives available to us if we
chose not to engage such third party and evaluate if such engagement would be in
the best interest of our shareholders if such third party refused to waive such
claims.





Examples
of possible instances where we may engage a third party that refused to execute
a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to
those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a provider of required services willing to
provide the waiver.





Ho
Capital Management LLC, our sponsor, Noble Investment Fund Limited and Allius
Ltd. have agreed to indemnify us, jointly and severally, to make up for any
shortfall in the trust account. Although enforcement of such indemnification
obligations depends upon action by our board of directors, the exercise of their
fiduciary duties as well as our amended and restated memorandum and articles of
association obligate our disinterested directors to cause us to take action
against our Sponsor, Noble Investment Fund Limited and Allius Ltd. for specific
performance to enforce their indemnification obligations. However, we cannot
provide any assurance that such claims would be successful. If such claims are
not successful, the amount of funds in the trust account available for
distribution to our public shareholders may be reduced and the per share
liquidation distribution could be less than the initial $10.00 per share held in
the trust account. Although each of Angela Ho and Noble Investment Fund Limited,
the members of Ho Capital Management LLC (our sponsor) and Dr. Gary T. Hirst and
Noble Investment Fund Limited (the members of Allius Ltd.), have agreed that,
prior to the consummation of a business combination, they will not withdraw as
members of Ho Capital Management LLC and Allius Limited, a withdrawal by any
member of our sponsor, Allius Ltd. or Noble Investment Fund Limited will not
affect the joint and several indemnification obligations of our sponsor, Allius
Ltd., or Noble Investment Fund Limited to our company. We have not independently
verified whether our sponsor, Noble Investment Fund Limited, or Allius Ltd. have
sufficient funds to satisfy their respective indemnification obligations and,
therefore, we cannot assure you that they would be able to satisfy these
obligations. In addition, none of our officers or directors have agreed to be
personally liable or make up for any shortfall in the trust account.
Accordingly, we cannot assure you that the actual per-share liquidation price
will not be less than $10.00, plus interest (net of taxes payable), 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 funds held in our trust account
will be subject to applicable bankruptcy law, and may be included in our
bankruptcy estate and subject to claims of third parties with priority over the
claims of our public shareholders. To the extent bankruptcy claims deplete the
trust account, we cannot assure you we will be able to return to our public
shareholders the liquidation amounts due them.





Our
public shareholders will be entitled to receive funds from the trust account
only in the event of our liquidation or if they seek to redeem their respective
shares for cash upon a business combination which the shareholder voted against
and which is completed by us. In no other circumstances will a shareholder have
any right or interest of any kind to or in the trust account.





We expect
that all costs associated with the implementation and completion of our
dissolution and liquidation as well as funds for payments to creditors, if any,
will be funded by the interest earned on the trust account released to us,
although we cannot give you assurances that there will be sufficient funds for
such purposes.





Pursuant
to the terms of our amended and restated memorandum and articles of association,
our powers following the expiration of the permitted time periods for
consummating a business combination will automatically thereafter be limited to
acts and activities relating to dissolving and winding up our affairs, including
liquidation. The funds held in our trust account may not be distributed except
upon our dissolution and, until then, the funds held in our trust account will
not be released.




40




Competition
for Target Businesses





In
identifying, evaluating and selecting a target business, including White Energy
and its affiliates, we may encounter intense competition from other entities
having a business objective similar to ours. 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
will be 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 offering and the sale of the
insider warrants, our ability to compete in acquiring certain sizable target
businesses will be 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
      shareholder approval of a business combination or obtain the necessary
      financial information to be included in the proxy statement to be sent to
      shareholders in connection with such business combination may delay or
      prevent the completion of a
transaction;


·
            our obligation to redeem for cash
      ordinary shares held by our public shareholders in certain instances may
      reduce the resources available to us for a business
      combination;


·
            our outstanding warrants and
      options, and the future dilution they potentially represent, may not be
      viewed favorably by certain target businesses;
  and


·
            the requirement to acquire assets
      or an operating business that has a fair market value equal to at least
      80% of the amount in our trust account (less deferred underwriting
      compensation of $3,450,000) at the time of the acquisition could require
      us to acquire several assets or closely related operating businesses at
      the same time, all of which sales would be contingent on the closings of
      the other sales, which could make it more difficult to consummate the
      business combination.





Additionally,
we face competition from other blank-check companies which have formed recently,
a number of which may consummate a business combination in any industry they
choose. We may therefore be subject to competition from these companies, which
are seeking to consummate a business plan similar to ours and which will, as a
result, increase demand for privately-held companies to combine with companies
structured similarly to ours. Further, it may be the case that there are only a
limited number of attractive target businesses available to such entities or
that many privately-held target businesses may not be inclined to enter into
business combinations with publicly held blank check companies like
us.





Any of
these factors may place us at a competitive disadvantage in negotiating and
completing a business combination. Our management believes, however, that to the
extent that our target business is a privately held entity, our status as a
well-financed public entity and the substantial industry experience of our
officers, directors, and board of advisors may give us a competitive advantage
over entities having a similar business objective as ours in acquiring a target
business with significant growth potential 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. We cannot assure
you that, subsequent to a business combination. we will have the resources or
ability to compete effectively.




41




C.   Property,
Plants and Equipment




General





Our
registered office in the Cayman Islands is c/o M&C Corporate Services
Limited, P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand
Cayman, Cayman Islands. Pending consummation of a business combination or
dissolution, we intend to lease other administrative office space in Florida or
New York City. The cost for such space is anticipated to be $7,500 per-month for
general and administrative services which will be paid to, and such services
will be provided by, an unaffiliated third party. We consider our current office
space adequate for our current operations.




ITEM
      4A:
            Unresolved
      Staff Comments




None.




ITEM
      5:
            Operating
      and Financial Review and Prospects





The following is a discussion of the
results of operations of the Company for the fiscal years ended December 31,
2008 and 2007 and should be read in conjunction with the audited financial
statements of the Company for such periods, together with the accompanying
notes, included elsewhere in this Annual Report.





Forward
Looking Statements




This Annual Report includes
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “could,” “would,” “expect,”
“plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such
terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
Securities and Exchange Commission filings. The following discussion should be
read in conjunction with our audited financial statements and related
notes thereto included elsewhere in this report.





Overview





We were
formed as a blank check company with the corporate name Asia Special Situation
Acquisition Corp. under Cayman Islands law on March 22, 2007. We were formed for
the purpose of acquiring control of one or more unidentified operating
businesses, through a capital stock exchange, asset acquisition, stock purchase,
or other similar transaction, including obtaining a majority interest through
contractual arrangements. We will only acquire a business or businesses that,
upon completion of our initial business combination, will be our majority-owned
subsidiaries and will be neither investment companies nor companies excluded
from the definition of investment company by Sections 3(c)(1) or 3(c)(7) of the
Investment Company Act of 1940. We intend to utilize cash derived from the
proceeds of our offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination. We will not acquire
a minority interest in any operating business.





Pursuant
to our amended and restated memorandum and articles of association, we must
effect and initiate procedures for our dissolution and liquidation and the
distribution of our assets, including the funds held in the trust account, if we
do not effect a business combination within 24 months after the completion of
our offering since a definitive agreement has been executed with White Energy
within 18 months after completion of our offering). We have agreed with the
trustee to promptly adopt a plan for the liquidation and distribution of our
assets, including the funds held in the trust account, upon expiration of the
time periods set forth above.





To date,
our efforts have been limited to organizational activities, activities related
to our offering and acquisition efforts, including sourcing and identifying
potential target acquisitions such as White Energy and WET. We intend to
identify prospective acquisitions that are either located in Asia (including
Australia), provide products or services to consumers located in Asia, or invest
in Asia. Although not limited to any specific country in Asia, we initially
focused our initial efforts on acquiring control of an operating business or
businesses in the leisure and hospitality or financial services industries that
are either located in China, provide products or services to consumers in China,
or invest in China.




42




Although we initially focused our
search on an operating business or businesses in the leisure and hospitality or
financial services industries that is located in, provides products or services
to consumers located in China, or invests in China, we determined to explore a
favorable business opportunity in the clean coal upgrading technology sector
with White Energy and its affiliates which management determined was in the best
interests of our company and shareholders.  We concentrated on our
primary business and geographic focus during the first year of our business
search, and only expanded the scope of our search because we were unable during
such year to locate an attractive business combination in the leisure and
hospitality or financial services industries that invests in, is located in, or
provides products or services to consumers located in China.  We will
seek to consummate the share exchange with White Energy and its affiliates,
which in the opinion of management, may provide our company and its shareholders
with the most favorable growth potential, due to a variety of factors, including
its financial condition and results of operations, experience and skill of
incumbent management, value of the intellectual property owned by the business,
its competitive position, the regulatory environment in which it operates, or
other criteria determined by management.For a more detailed discussion of
management’s process for searching for and selecting a target business, see
“Effecting a business combination — Selection of a target business and
structuring of a business combination” below.





We intend
to acquire all or a controlling interest in the equity of such operating
business or businesses. If our initial business combination involves a
transaction in which we acquire less than a 100% interest in the target company,
the value of that interest that we acquire will be equal to at least 80% of the
balance in the trust account (excluding deferred underwriting discounts and
commissions). In all instances, we would control the target company. The key
factors that we will rely on in determining control would be our acquisition of
at least 51% of the voting equity interests of the target company and/or control
of the majority of any governing body of the target company through contractual
arrangements or otherwise.





We intend
to utilize cash derived from the proceeds of our offering and the sale of the
insider warrants, our capital stock, debt or a combination of cash, capital
stock and debt, in effecting such acquisition. The issuance of additional
capital stock, including upon conversion of any convertible debt securities we
may issue, or the incurrence of debt could have material consequences for our
business and financial condition. The issuance of additional shares of our
capital stock (including upon conversion of convertible debt
securities):





·
            may significantly reduce the
      equity interest of our
shareholders;


·
            will likely cause a change in
      control if a substantial number of our ordinary shares are issued, which
      may affect, among other things, our ability to use our net operating loss
      carry forwards, if any, and may also result in the resignation or removal
      of one or more of our present officers and directors;
      and


·
            may adversely affect prevailing
      market prices for our ordinary
shares.





Similarly,
if we issued debt securities, it could result in:





·
            default and foreclosure on our
      assets if our operating revenues after a business combination were
      insufficient to pay our debt
obligations;


·
            acceleration of our obligations
      to repay the indebtedness even if we have made all principal and interest
      payments when due if the debt security contained covenants that required
      the maintenance of certain financial ratios or reserves and any such
      covenant were breached without a waiver or renegotiation of that
      covenant;


·
            our immediate payment of all
      principal and accrued interest, if any, if the debt security was payable
      on demand; and


·
            our inability to obtain
      additional financing, if necessary, if the debt security contained
      covenants restricting our ability to obtain additional financing while
      such security was
outstanding.




43




The net
proceeds from the sale of the units in our offering and the insider warrants
were approximately $99,865,000 at January 23, 2008 (approximately $114,115,000
on January 30, 2008 upon exercise of the over-allotment option in full), after
deducting offering expenses of approximately $5,860,000 (approximately
$6,610,000 on January 30, 2008 upon exercise of the underwriters over-allotment
option in full, not including the underwriters' deferred fees). At January 23,
2008, an aggregate of $100,000,000, and approximately $114,250,000 upon the
January 30, 2008 exercise of the underwriters’ over-allotment option in full, is
being held in trust for our benefit and is available to consummate a business
combination (after payment of the underwriters’ deferred fees).





We will
use substantially all of the net proceeds of our offering and the sale of the
insider warrants and 12% notes, as well as interest on the funds in the trust
account released to us including those funds held in trust, to acquire control
of White Energy and its affiliates or other target business, including
consummating the business combination. The proceeds held in the trust account
(exclusive of any funds held for the benefit of the underwriters or used to pay
public shareholders who have exercised their redemption rights in accordance
with the instructions set forth in the proxy materials to be mailed to our
shareholders, may be used as consideration to pay the sellers of a target
business with which we ultimately complete a business combination or, if there
are insufficient funds not held in trust, to pay other expenses relating to such
transaction such as reimbursement to insiders for out-of-pocket expenses, third
party due diligence expenses or potential finders fees, in each case only upon
the consummation of a business combination.





Any
amounts not paid as consideration to the sellers of the target business may be
used to finance operations of the target business or to effect other
acquisitions, as determined by our board of directors at that time. Such working
capital funds to finance operations of the target business could be used in a
variety of ways including continuing or expanding the target business’
operations, for strategic acquisitions and for marketing, research and
development of existing or new products. Such funds could also be used to repay
any operating expenses or finders’ fees which we had incurred prior to the
completion of our business combination if the funds available to us outside of
the trust account were insufficient to cover such expenses. To the extent our
capital stock is used in whole or in part as consideration to effect a business
combination, the proceeds held in the trust account as well as any other net
proceeds not expended will be released to us and will be used to finance the
operations of the target business.





We
believe that, the funds in the trust account, including up to $2,000,000 of the
interest earned on funds in the trust account which will be released to us, plus
the funds available to us outside of the trust account, including, without
limitation, up to $1,250,000 in 12% promissory notes to be issued pursuant to
the December 2008 Funding Agreement, of which the Company borrowed $500,000 on
December 26, 2008, will be sufficient to allow us to operate for at least the
next 12 months, assuming that a business combination is not consummated during
that time. Over this time period, we are budgeting approximately $2,000,000 of
expenses for legal, accounting and other expenses, including finders fees,
consulting fees and contract deposits, that are expected to be incurred in
connection with the due diligence investigation, structuring and negotiating of
a business combination and seeking shareholder approval of such business
combination; approximately $450,000 for administrative services, reimbursement
of officer and director expenses, insurance, costs associated with dissolution
and liquidation if we do not consummate a business combination, and rent and
office support services payable at the rate of $7,500 per month; approximately
$200,000 for legal and accounting fees relating to our SEC reporting
obligations; and approximately $400,000 for general working capital that will be
used for miscellaneous expenses. Up to approximately $2,000,000 of the interest
earned on the trust account will be released to us to fund the above anticipated
expenses.





We do not
believe we will need to raise additional funds following our offering and the
sale of the insider warrants and our 12% notes, in order to meet the
expenditures required for operating our business prior to a business
combination. However, we may need to raise additional funds through a private
offering of debt or equity securities if such funds are required to consummate a
business combination that is presented to us. We would only consummate such a
fundraising simultaneously with the consummation of a business
combination.





In
seeking a business combination, we intend to utilize cash derived from the
proceeds of our offering and the sale of the insider warrants and notes, as well
as our capital stock or debt, or a combination of cash, capital stock and debt,
and there is no limit on the issuance of capital stock or incurrence of debt we
may undertake in effecting a business combination. In the event the share
exchange or other business combination is consummated, all sums remaining in the
trust account will be released to us immediately thereafter, and there will be
no restriction on our use of such funds.




44




Our
sponsor agreed to make available to us a line of credit of up to $500,000, which
was used to pay a portion of the expenses of our offering, such as SEC
registration fees, FINRA registration fees, and certain legal and accounting
fees and expenses. These loans were paid on January 23, 2008.





We have
granted a purchase option to the underwriters issued upon the effective date of
our offering. We have accounted for this purchase option as a cost of raising
capital and will include the instrument as equity in our financial statements.
Accordingly, there will be no net impact on our financial position or results of
operations, except for the recording of the $100 proceeds from the sale. We have
estimated, based upon a Black-Scholes model, that the fair value of the purchase
option on the date of sale is approximately $0.78 per unit (a total value of
$368,525), using an expected life of five years, volatility of 9.45% and a
risk-free rate of 4.17%. The volatility calculation is based on the average
volatility of 16 business combination companies that have completed their public
offerings in amounts ranging from $75,000,000 to $150,000,000, but have not yet
announced an acquisition, during the period from January 1, 2002 to September
26, 2007. These 16 companies represent all business combination companies that
have completed their public offerings in amounts ranging from $75,000,000 to
$150,000,000, but have not yet announced an acquisition, during such period.
Because we do not have a trading history, we needed to estimate the potential
volatility of the unit price, which will depend on a number of factors which
cannot be ascertained at this time. We used these companies because management
believes that the volatility of these companies is a reasonable benchmark to use
in estimating the expected volatility for our units. Although an expected life
of five years was used in the calculation, if we do not consummate a business
combination within the prescribed time period and our company is liquidated, the
option will become worthless.





We do not
believe that the sale of the warrants in the private placement completed
immediately before the date of our prospectus will result in a compensation
expense because they are being sold at or above fair market value.





On
February 28, 2008, the Company consummated a Loan and Security Agreement with a
bank pursuant to which it issued a $500,000 promissory note to the bank in
exchange for a line of credit to be used for working capital and general
corporate purposes. On March 28, 2008, the Company drew down $190,000, and on
June 8, 2008 the Company repaid $50,000, under the note payable and on July 3,
2008 the remaining $140,000 principal amount, plus interest, was repaid.
Borrowings under the promissory note bore interest at the bank’s prime rate (the
“Interest Rate”) or, upon the occurrence of a default by the Company, at a
default rate equal to the Interest Rate plus 2%, and were secured by certain
assets of the Company.





On
December 16, 2008, the Company consummated a Funding Agreement (the “Agreement”)
with a placement agent calling for loans of up to $1,250,000 in 12% promissory
notes (the “Notes”) that mature on the earlier of (a) January 16, 2010, or (b)
the consummation of a business combination satisfactory to the
lender.  The Notes are non-recourse to the amounts held in the
Company’s trust account in favor of the public shareholders and are secured by
the assignment of 100,000 shares of the Company's stock that are owned by
certain initial shareholders.  In addition, the Notes are secured by
the interest earned in the Trust account up to $2,000,000.  Pursuant
to the Agreement, $500,000 was borrowed under the Notes on December 26,
2008.





A.   Operating
Results





Critical
Accounting Policies




Basis
of Presentation




Our
financial statements are presented in U.S. dollars and have been prepared in
accordance with accounting principles generally accepted in the United States of
America and pursuant to the rules and regulations of the Securities and Exchange
Commission.




45




Development
Stage Company




We comply
with the reporting requirements of SFAS No. 7, “Accounting and Reporting by
Development Stage Enterprises.”




Net
Income Per Ordinary Share




We comply
with the accounting and disclosure requirements of SFAS No. 128, “Earnings Per
Share.”  Net income (loss) per ordinary share is computed by dividing
net income (loss) by the weighted average number of ordinary shares outstanding
for the period.  Net income (loss) per ordinary share, assuming
dilution, reflects the maximum potential dilution that could occur if securities
or other contracts to issue ordinary shares were exercised or converted into
ordinary shares and would then share in the earnings of the Company except where
the result would be antidilutive.





Our
statement of operations includes a presentation of net income per share for
ordinary shares subject to possible conversion in a manner similar to the
two-class method of net income per share.  Net income per ordinary
share, basic and diluted amount for the maximum number of shares subject to
possible conversion is calculated by dividing the interest income, net of
applicable income taxes, attributable to ordinary shares subject to conversion
by the weighted average number of ordinary shares subject to possible
conversion.




Use
of Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.




Income
Taxes




We follow
the asset and liability method of accounting for income taxes. Deferred tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that included the
enactment date.




Under the
laws of the Cayman Islands, we are not subject to income taxes. Accordingly, no
provision for income taxes has been made in the accompanying financial
statements.




Foreign
Currency Translation




The
United States dollar is our reporting and functional currency.




In
accordance with SFAS 52, “Foreign Currency Translation”, foreign currency
balance sheets will be translated using the end of period exchange rates, and
statements of operations will be translated at the average exchange rates for
each period. The resulting translation adjustments to the balance sheet will be
recorded in accumulated other comprehensive income (loss) within stockholders’
equity.




Foreign
currency transaction gains and losses will be included in the statement of
operations as they occur.




46




Recently
Issued Accounting Pronouncements





In
December 2007, the FASB issued SFAS No 141R, “Business Combinations” (“SFAS
141R”). SFAS 141R replaces SFAS 141 and establishes principles and requirements
for how an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any non controlling
interest in the acquiree and the goodwill acquired. SFAS 141R also establishes
disclosure requirements which will enable users to evaluate the nature and
financial effects of the business combination. Acquisition costs associated with
the business combination will generally be expensed as incurred. SFAS 141R is
effective for business combinations occurring in fiscal years beginning after
December 15, 2008, which will require us to adopt these provisions for business
combinations occurring in fiscal 2009 and thereafter.





In
December 2007, the FASB issued SFAS 160, Noncontrolling Interests in
Consolidated Financial Statements - an amendment of ARB No. 51. SFAS 160
requires that ownership interests in subsidiaries held by parties other than the
parent, and the amount of consolidated net income, be clearly identified,
labeled and presented in the consolidated financial statements. It also requires
once a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary be initially measured at fair value.
Sufficient disclosures are required to clearly identify and distinguish between
the interests of the parent and the interests of the noncontrolling owners. It
is effective for fiscal years beginning after December 15, 2008, and requires
retroactive adoption of the presentation and disclosure requirements for
existing minority interests. All other requirements are applied prospectively.
The Company cannot determine whether SFAS 160 will have any impact until it
completes its first business combination.





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





Year
ended December 31, 2008 compared with year ended December 31, 2007





We reported a net income of
$129,000 for the year ended December 31, 2008 and a net loss of $(3,000) for the
period ended December 31, 2007. During the period ended December 31, 2007, the
Company was newly formed, had minimal expenses and interest income on its
limited capital. During the year ended December 31, 2008, we expensed $978,000
of costs associated with the ChinaTel agreementsand White Energy
agreementswhich were partially offset
with interest income resulting from our initial public offering in January 2008.
Until we enter into a business combination, we will not have
revenues.





Our trust account earned
interest of $2,054,000for theyear ended December 31,2008, and our
funds outside of the trust account did not earn any material interest. Interest
of $3,000was earned in
theperiod ended
December 31,2007 since we had not yet
consummated our initial public offering and private
placement.





Overall, for theyear ended December 31,2008, we
incurred $1,902,000of formation, operating costs
and costs associated with the planned acquisition ofChinaTel(which was terminated) and
White Energy,
including expensing approximately $60,000of income tax withholding on
our investments which we are not likely to recover. Since we are not subject to
income taxes, we have organized our investment accounts to avoid such
withholding in the future.




B.   Liquidity
and Capital Resources





At December 31,2008, we had cash of
approximately $96,000and at December
31,2008,
we had a deficit in working capital of approximately $(809,000)due primarily
to acquisition costs incurred in connection with the Stock Purchase Agreement
with ChinaTel and the Share Exchange Agreement with White Energy.





On
January 16, 2008, we completed a private placement of 5,725,000 warrants to our
sponsor in connection with our offering, Ho Capital Management LLC, an entity
co-managed and jointly owned by Angela Ho, our former chief executive officer
and former chairman, and Noble Investment Fund Limited, an affiliate of Arie Jan
van Roon, our chief financial officer and director, generating gross proceeds of
$5,725,000.




47




On
January 23, 2008, our initial public offering of 10,000,000 units was
consummated. Each unit issued in our offering consists of one ordinary share and
one warrant, each warrant to purchase one ordinary share at an exercise price of
$7.50 per ordinary share. The units were sold at an offering price of $10.00 per
unit, generating gross proceeds of $100,000,000. On January 30, 2008, the
underwriters for our initial public offering exercised their over-allotment
option in full, and purchased 1,500,000 units. Each unit consists of one
ordinary share and one warrant, each warrant to purchase one ordinary share at
an exercise price of $7.50 per ordinary share. The offering, including the
exercise of the over-allotment option, generated total gross proceeds of
$115,000,000 to us (excluding proceeds of $5,725,000 from the sale of private
placement warrants to our sponsor in connection with the offering, Ho Capital
Management LLC and Noble Investment Fund Limited).




On
February 28, 2008, the Company consummated a Loan and Security Agreement with a
bank pursuant to which it issued a $500,000 promissory note to the bank in
exchange for a line of credit to be used for working capital and general
corporate purposes. On March 28, 2008, the Company drew down $190,000, and on
June 8, 2008 the Company repaid $50,000, under the note payable and on July 3,
2008 the remaining $140,000 principal amount, plus interest, was repaid.
Borrowings under the promissory note bore interest at the bank’s prime rate (the
“Interest Rate”) or, upon the occurrence of a default by the Company, at a
default rate equal to the Interest Rate plus 2%, and were secured by certain
assets of the Company.





On
December 16, 2008, the Company consummated a Funding Agreement (the “Agreement”)
with a placement agent calling for loans of up to $1,250,000 in 12% promissory
notes (the “Notes”) that mature on the earlier of (a) January 16, 2010, or (b)
the consummation of a business combination satisfactory to the
lender.  The Notes are non-recourse to the amounts held in the
Company’s trust account in favor of the public shareholders and are secured by
the assignment of 100,000 shares of the Company's stock that are owned by
certain initial shareholders.  In addition, the Notes are secured by
the interest earned in the Trust account up to $2,000,000.  Pursuant
to the Agreement, $500,000 was borrowed under the Notes on December 26,
2008.




The
Company is permitted to use up to $2,000,000 of interest income from the trust
account to fund working capital. At December 31,2008,
approximately $1,244,000had been
transferred from the income of the trust account to fund working capital. We
believe that, the funds in the trust account, including up to $2,000,000 of the
interest earned on funds in the trust account which will be released to us, plus
the funds available to us outside of the trust account, including, without
limitation, up to $1,250,000 in 12% promissory notes to be issued pursuant to
the December 2008 Funding Agreement, of which the Company borrowed $500,000 on
December 26, 2008, will be sufficient to allow us to operate for at least the
next 12 months, assuming that the share exchange or other business combination
is not consummated during that time. However, if the funds available to us are
not sufficient to fund our working capital needs throughout this period, we will
seek to secure additional capital to pay for, or defer payment of, all or a
significant portion of any expenses we incur.





Agreements
with ChinaTel Group, Inc.





On July
8, 2008, we entered into a Stock Purchase Agreement (the “Stock Purchase
Agreement”) with ChinaTel Group, Inc. (“ChinaTel”) and Trussnet USA, Inc.
(“Trussnet”).   The Stock Purchase Agreement provided for the
investment by us into ChinaTel of between $201,675,000 and $270,000,000 at a
price of $2.25 per share.   All of the proceeds from the sale of
the ChinaTel securities would have gone to ChinaTel, and no shareholders of
ChinaTel would have sold their shares.




On August
6, 2008, we, ChinaTel, Trussnet and George Alvarez amended and restated the
Stock Purchase Agreement in its entirety, by executing an Amended and Restated
Stock Purchase Agreement dated as of July 31, 2008 (the “Amended Stock Purchase
Agreement”). In addition to the Amended Stock Purchase Agreement, on August 6,
2008 we entered into an Agreement and Plan of Merger dated as of July 31, 2008
(the “Merger Agreement”) with ChinaTel, CHTL Acquisition Corp., a wholly owned
subsidiary of our company which was subsequently dissolved (“CHTL Acquisition”),
George Alvarez, and the other principal shareholders of ChinaTel.  Under
the Merger Agreement, at the effective time of the merger, CHTL Acquisition was
to be merged into ChinaTel, with ChinaTel as the surviving corporation of the
merger (the “Merger”), as a result of which, ChinaTel would have become a
wholly-owned subsidiary of our company.




48




On
November 3, 2008, pursuant to a Termination and Mutual Release Agreement (the
“Termination Agreement”) with ChinaTel, we and ChinaTel agreed to terminate the
Stock Purchase Agreement, the Amended and Restated Stock Purchase Agreement and
the Merger Agreement (collectively, the “ChinaTel Agreements”) in their
entirety. In addition, the parties agreed to release each other, and their
respective officers, directors, employees, agents, shareholders, representatives
and affiliates against any and all rights, claims, liabilities, demands,
actions, proceedings and causes of action, in law or in equity, by reason of any
matter, event, cause or thing whatsoever, including, but not limited to, the
obligations of the parties under the ChinaTel Agreements. We elected to
terminate the ChinaTel Agreements primarily due to the fact that we believed
there were a number of unresolved regulatory due diligence issues in the
People’s Republic of China relating to the proposed transaction.





Acquisition
Framework Agreement with White Energy Company Limited and Binderless Coal
Briquetting Company Pty Limited.





On
December 17, 2008, the Company entered into an Acquisition Framework Agreement
(the “Agreement”) with White Energy Company Limited (“WEC”) and Binderless Coal
Briquetting Company Pty Limited, a wholly owned subsidiary of WEC
(“BCBC”).  Under the terms of the Agreement, the Company agreed to
acquire, through an exchange of shares, WEC’s South-East Asian business operated
by its indirect wholly owned subsidiary, BCBC Singapore Pte Ltd. (“BCBC
Singapore”). Upon completion of the transaction, it was anticipated that BCBC
would issue to the Company 100% of the issued and outstanding share capital of
BCBC Singapore (the “BCBC Singapore Exchange Shares”) in exchange for the
Company’s issuance to BCBC of its ordinary shares (the “Company Exchange
Shares”), representing an estimated 56% of the issued and outstanding ordinary
shares of the Company after giving effect to the share exchange (the “Share
Exchange”). The Company’s existing shareholders were to retain the remaining
ordinary shares, representing an estimated 44% of the issued and outstanding
shares of the Company, subject to adjustment as provided below.





BCBC
Singapore is the exclusive licensee for South East Asia of clean coal upgrading
technology developed by the Commonwealth Scientific Industrial Research
Organization (CSIRO), the science agency of the Australian government, and
exclusively licensed to WEC for commercialization worldwide. The coal technology
successfully upgrades low energy coal (sub-bituminous) to high-energy coal
(bituminous) through a proprietary patented process of compaction and
dehydration. The resulting coal product has a range of environmentally enhanced
properties, as well as commercial benefits.





Under the
terms of the Agreement, if the annual coal production level of the coal
upgrading plant of BCBC Singapore as of December 31, 2012 (the “2012 Production
Level”) is at the minimum rate of 7.0 million tons per annum, the Company would
have issued, by no later than March 31, 2013, such number of additional ordinary
shares (the “Performance Shares”) representing 2.5% of the Company’s outstanding
ordinary shares at the time of issuance. If the 2012 Production Level exceeded 7
million tons, the Performance Shares in such calendar year were to be prorated
so that Performance Shares representing 0.0000025% of the outstanding number of
ordinary shares of the Company at the time of issuance for each 1 full ton of
2012 Production Level in excess of 7 million tons.  If the 2012
Production Level exceeded 7.0 million tons, for each 1.0 million tons in excess
of the 7.0 million tons, the Company would have issued such number of ordinary
shares representing an additional 2.5% of the Company’s outstanding ordinary
shares at the time of issuance. The maximum number of Performance Shares which
would have been issued in accordance with the foregoing could not have
represented more than 10% of the outstanding number of ordinary shares of the
Company as of the closing date, after giving effect to the issuance of all
Company Exchange Shares.





Following
the closing date, WEC would have been responsible for the day-to-day management
of the Company and its subsidiaries.  In addition, after the closing
date BCBC had the right to appoint 4 directors (including a Chairman) to the
board of the Company and the existing shareholders of the Company had the right
to appoint 2 directors to the board of the Company.  Moreover,
immediately following the closing date the Company would have changed its
corporate name to “White Energy South East Asia Corporation” or such other name
as acceptable to WEC.




49




The
parties agreed that the Funds held by the Company in its trust account were to
be used by the Company to expand BCBC Singapore’s operations in South East Asia,
which included, without limitation, capital to fund the costs of coal upgrading
plants to be built in South East Asia, the repayment of debt owed by BCBC
Singapore, and for general working capital purposes.





Share
Exchange Agreement with White Energy Company Limited and White Energy Technology
Company Limited





On March
12, 2009, the Company entered into a Share Exchange Agreement (the “Agreement”)
with White Energy Company Limited (“White Energy”) and White Energy Technology
Company Limited (“WET”).  Based in Sydney, Australia, White Energy, an
Australian corporation, is a public company traded on the Australian Stock
Exchange (ASX: WEC).  WET is a wholly-owned subsidiary of White
Energy.  The Company is a special purpose acquisition corporation
whose units of securities, ordinary shares and warrants trade on the NYSE
Alternext US Exchange (NYSE Alternext US: CIO.U, CIO and CIO.WS).  In
January 2008, the Company completed its initial public offering and retains
approximately $115.0 million in trust funds, pending application in connection
with the consummation of a business combination that is approved by the
requisite vote or consent of the Company’s public shareholders.





As used
herein, all dollar amounts are reflected in United States
dollars.  The agreed upon exchange rate in the Agreement is (AUS)
$1.00 equals (USD) $0.66.





Under the
terms of the Agreement, the Company has agreed to acquire from White Energy,
through an exchange of shares, 100% of the share capital of WET (the “WET
Shares”) and the equity shares of the direct and indirect subsidiaries of WET
(with WET, the “Constituent Corporations”).  Upon completion of the
transaction, it is anticipated that, in exchange for the WET Shares, the Company
will issue to White Energy a percentage of the aggregate number of ordinary
shares of the Company to be issued and outstanding after giving effect to the
share exchange, as shall be determined by the amount by which the “White Energy
Market Value” (as defined) bears to the “Transaction Value” (as
defined).   The White Energy Market Value has been calculated at
approximately $157.0 million, representing the product of the White Energy
Diluted Shares (as defined) as at March 12, 2009 and the $0.9905 volume-weighted
average price (expressed in U.S. dollars) of White Energy common shares, as
traded on the ASX for the 20 trading days prior to March 12,
2009.  The Transaction Value is defined as the sum of the White Energy
Market Value and the Adjusted Funds.  The term “Adjusted Funds” is
defined as the total cash available to the Company and the Constituent
Corporations as at the closing date of the transaction (including net proceeds
of any additional securities sold by the Company or any of the Constituent
Corporations between March 12, 2009 and the closing date), less the sum of (i)
transaction expenses, (ii) amounts paid or payable in respect of share
redemptions that are requested on a timely basis by any of the Company’s public
shareholders, and (iii) the amount of debt securities, if any, issued by the
Company or any of the Constituent Corporations between March 12, 2009 and the
closing date.  Such additional securities (including debt securities)
may only be issued on terms mutually agreed to by the Company and White
Energy.  Accordingly, assuming that the Adjusted Funds at closing are
$105.0 million, the Transaction Value at closing would be approximately $263.0
million and White Energy would be entitled to receive in the share exchange an
aggregate of approximately 60% of the total Company shares to be outstanding,
and the Company’s existing shareholders will retain the remaining 40% of the
total Company shares to be outstanding.  If, in the above example,
there remain 14,000,000 ordinary shares of the Company that are issued and
outstanding at the closing, White Energy would be entitled to receive a total of
approximately 20,930,140 Company shares.  However, irrespective of the
final calculations of White Energy Market Value, Transaction Value or Adjusted
Funds, White Energy will not receive more than 72.5% of the fully diluted
ordinary shares of the Company after giving effect to the
acquisition.





In
addition, upon consummation of the share exchange, the Company will assume the
liabilities of the Constituent Corporations (other than obligations to White
Energy) and assume or guaranty approximately $30.0 million of net indebtedness
of White Energy.





Following
the closing date, White Energy management will become the management of the
Company and its subsidiaries and the current executive officers of the Company
will resign.  In addition, after the closing date White Energy will
have the right to appoint four directors (including a Chairman) to the board of
the Company and the existing shareholders of the Company will have the right to
appoint two directors to the board of the Company.  Moreover,
immediately following the closing date the Company will change its corporate
name to “White Energy Coal Technology Corporation” or such other name as shall
be acceptable to White Energy.




50




The
Agreement also provides for certain Company Management Performance Shares, to
represent up to 10% of the total Company shares to be outstanding at closing
after giving effect to the share exchange, that may be issued to members of the
management of the Constituent Corporations in relation to achieved target
production levels of the Company and its subsidiaries of up to 20,000,000 annual
tons of upgraded coal production by December 31, 2012 from facilities using the
Binderless Coal Briquetting technology described below.





WET is a
technology-enabled natural resources company. A wholly-owned subsidiary of WET
holds the exclusive world-wide rights to commercialize the Binderless Coal
Briquetting (“BCB”) clean coal upgrading technology developed by the
Commonwealth Scientific Industrial Research Organization (CSIRO), the science
agency of the Australian government.





WET is
developing industrial-scale coal upgrading facilities at strategic locations
throughout the world which are situated at or near large low rank coal deposits
that have appropriate infrastructure for the transportation of the upgraded coal
product. WET has identified a number of such locations, and has entered into a
series of joint venture, development, and long term coal supply
agreements.  In addition, White Energy has advised that by early April
2009 it will have completed the construction and begun commissioning of a
1,000,000 ton per annum industrial scale facility in Indonesia under a joint
venture with Bayan Resources, a publicly traded coal producer. The joint venture
agreement with Bayan Resources contemplates the construction of additions to the
clean coal upgrading plant facilities by 2011 to enable it to produce an
additional 4,000,000 tons per annum, and includes a fixed price feedstock coal
supply agreement and an agreement providing for a five year upgraded coal
offtake purchase commitment for partial production representing over $200
million in anticipated revenues over such period.





In
addition to its initial joint venture, through WET, White Energy has entered
into and contemplates entering into additional joint ventures,
including:





„           a
second proposed Indonesian joint venture with Adaro Group, the largest coal
company in Indonesia, and Itochu Corporation of Japan for a proposed initial one
million ton per annum facility with increased capacity planned up to 8 million
tons per annum;





„           an
agreement to construct and operate all Asia-Pacific facilities with mining
contractor Theiss, a wholly owned subsidiary of Leighton Industries, one of the
largest publicly traded engineering, procurement and construction companies in
Australia;





„           an
agreement with Buckskin Mining Company (an indirect wholly owned subsidiary of
Kiewit Corporation) for the development of a one million ton per annum coal
upgrading facility in the Powder River Basin near Gillette, Wyoming, with
planned increases in annual production capacity of up to eight million
tons;





„           a
letter of intent with Datang International Power Company Ltd, the second largest
power generation company in China, for development of a production facility on a
Datang-owned sub-bituminous deposit in Inner Mongolia of up to 10 million tons
per annum; and





„           a
Joint Venture Agreement with Black River Asset Management (a subsidiary of
Cargill Corporation and shareholder of White Energy) whereby Black River will
own a 49% equity interest in consideration for contributing up to $70 million in
funding for exploitation of WET upgrading technology in Africa.





As set
forth above, we previously entered into a framework agreement with White Energy
to acquire, in exchange for Company shares, the equity of one of the White
Energy Constituent Corporations that held rights to commercialize the Binderless
Coal Briquetting clean coal upgrading technology in Indonesia and certain other
countries in Southeast Asia.  Upon review of the worldwide potential
for this technology and after further negotiations among representatives of
White Energy, the Company and our investment bankers, we mutually agreed to
significantly expand the scope of the proposed transaction so that the Company,
through its acquisition of 100% of the shares of WET, will acquire all of White
Energy’s global clean coal upgrading business including the exclusive rights to
commercialize the Binderless Coal Briquetting clean coal upgrading technology
throughout the world, associated management and existing joint ventures and
operations.




51




The
Agreement between White Energy and the Company contemplates that available
Adjusted Funds at closing will be used to expand operations and for general
working capital purposes.  Based on its current project forecasts,
White Energy believes that the available funds at closing of the transaction
with the Company will be adequate to meet capital requirements over the next
12-18 months for the Bayan and Adaro (Indonesia) joint ventures and Datang
(China) joint venture, and that future cash flows from these joint ventures will
provide adequate working capital to fund the development and financing
requirements for the additional joint ventures referred to
above.  However, it should be noted that significant additional
construction financing may be required to be obtained by the Constituent
Corporations following the closing of the share exchange to enable the Company
and its subsidiaries to construct and operate all coal upgrading facilities
under contemplated joint ventures. There can be no assurance that such
additional financing, if and when required, will be available on commercially
attractive terms, if at all.





Consummation
of the transactions between the Company and White Energy under the Agreement
will be subject to certain conditions, including, without limitation (i)
completion of a mutually satisfactory due diligence investigation; (ii)
obtaining the required approvals of shareholders of both White Energy and the
Company; (iii) obtaining certain third party consents, and (iv) otherwise
complying with the Company’s obligations and requirements as a special purpose
acquisition corporation.  Subject to satisfaction of the
aforementioned conditions, it is anticipated that the transaction will be
completed within the next 60 to 90 days.





There can
be no assurances that the transactions contemplated by the Agreement will be
consummated.





C.   Research
and Development, Patents and Licenses, Etc.





From
March 22, 2007 (inception) through December 31, 2008, the Company has not
engaged in any research and development activities.




D.   Trend
Information





Not
Applicable.





E.   Off-Balance
Sheet Arrangements





We do not
have any off balance sheet arrangements that are reasonably likely to have a
current or future effect on our financial condition, revenues, results of
operations, liquidity or capital expenditures.




52




F.   Tabular
Disclosure of Contractual Obligations





The
following table sets forth a summary of the Company’s contractual obligations as
at December 31, 2008:





LESS
      THAN
                                1
      YEAR
                              
                              
                              1-3
                                YEARS
                              
                              
                              TOTALContractual
      Obligations:Debt
      maturing within:
                              
                              
                              —
                              
                              
                              $
                              500,000
                              
                              
                              $
                              500,000Administrative
      service
                              
                              $
                              52,500
                              
                              
                              
                              —
                              
                              
                              $
                              52,500Investment
      banking agreements
                              
                              $
                              600,000
                              
                              
                              $
                              50,000
                              
                              
                              $
                              650,000Total
      contractual cash obligations
                              
                              $
                              652,500
                              
                              
                              $
                              550,000
                              
                              
                              $
                              1,202,500




ITEM
      6:
                Directors,
      Senior Management, and
Employees




A.   Directors
and Senior Management





Our
current directors and executive officers are listed below. None of such persons
are, or have been, involved in any other blank-check companies.





Name
              
              Age
              
              PositionGeoffrey
      W. Holmes
              
              63
              
              Chief
      Executive OfficerDr.
      Gary T. Hirst
              
              56
              
              President
      and DirectorArie
      Jan van Roon
              
              64
              
              Chief
      Financial Officer and DirectorAndrew
      Tse
              
              55
              
              Vice
      PresidentMichael
      Hlavsa
              
              55
              
              Secretary
      and DirectorStuart
      A. Sundlun
              
              55
              
              DirectorKeith
      Laslop
              
              37
              
              DirectorLeonard
      de Waal
              
              61
              
              DirectorArie
      Bos
              
              60
              
              Director





A brief education and relevant work
history of our Directors and Management follows:





Geoffrey W. Holmeswas
appointed as our Chief Executive Officer on January 21, 2009.  Mr.
Holmes brings to the Company over 35 years of public company communication
experience, and has a background in corporate finance, technology, mergers and
acquisitions, and investor relations. From 2004 to the present, Mr. Holmes has
been an investor in, and has served as the Chief Executive Officer and
Chairman of the Board of Directors of, Blood Cell Storage, Inc., a medical
device company focused on blood analysis technologies. From 1995 to 2003, Mr.
Holmes has financed and organized several new companies, including Summit
Properties International (SPI), which represents the PGA TOUR for international
trademark licensing worldwide. From 1980 to 1997, Mr. Holmes held senior
executive positions at Time Warner and its affiliates and predecessor Warner
Communications. From 1993 to 1995, Mr. Holmes was named as Chairman and CEO of
Time Warner Interactive, a leading developer and publisher of interactive
consumer entertainment products.  From 1989 to 1995, he served as
Senior Vice President of Technology for Time Warner Inc. While serving in that
capacity, Mr. Holmes was responsible for the development of most of the
applications for Time Warner’s Full Service Network. In addition, while at Time
Warner Inc. Mr. Holmes also managed the Investor Relations Programs as well as
working with the various divisions of Time Warner in developing synergistic
opportunities across all of Time Warner. From 1980 to 1989, he was Senior Vice
President of Warner Communications Inc. where his responsibilities included
managing investor and public relations as well as working with senior management
in developing strategies to enable the company to more fully exploit new
technology. Mr. Holmes earned a Bachelor of Science degree in economics from
Colorado State University in 1968.




53




Dr. Gary T.
Hirstwas originally
appointed as our Co-Chief Executive Officer on an interim basis, Dr. Hirst was
appointed as our President in October 2007. He has been a director of our
company since our inception. Dr. Hirst has been responsible for the development
and investment management of both offshore and domestic hedge funds, including
global macro funds, funds-of-funds, currency funds, and a number of structured
investment products (synthetic investment instruments, typically created by
combining securities, such as notes or common stock, with derivatives such as
options, that are specially created to meet specific needs that cannot be met
from the standard financial instruments available in the markets) including for
principal protected notes issued by Zurich Capital Markets and Rabobank which
invested in diversified global portfolios of hedge funds. From 1991 to 2006, Dr.
Hirst was Chairman and Chief Investment Officer of Hirst Investment Management.
In his roles with Hirst Investment Management, Dr. Hirst managed over $600
million in assets on behalf of multi-national banks, pension plans, insurance
companies, foundations and endowments, public companies, family offices and high
net worth investors. Under his leadership, the firm established itself as a
developer of innovative financial products and services, with a focus on
maximizing the risk-adjusted return on its clients’ investments. From 1976 to
1991, Dr. Hirst was Investment Manager for the Hirst Family Office where he
managed allocation and trading for all investment portfolios of the Hirst family
and its associates. These investments included traditional asset portfolios,
real estate, and a range of alternate investment strategies including hedge
funds, private equity, futures trading and physical commodities. From 2003 to
2005, Dr. Hirst was a director of Alpine Select A.G., a publicly traded (Swiss
Exchange) investment company based in Zug, Switzerland.





Arie Jan van Roon has served
as a director since our inception and was appointed as our Chief Financial
Officer on May 9, 2008. From January 2000 to the present, he has served as the
managing partner of TransTax LLP, a Swiss-based private wealth management firm.
The firm provides financial advisory services to high net worth investors and
family offices principally within the European Union. In January 2007, he
established Pure Glow Finance Limited of which he is the Managing Director as
well as the sole shareholder, with the same activities as TransTax LLP and also
the beneficial owner and investment advisor of Noble Investment Fund Limited,
one of our principal shareholders. Prior to founding this firm, from 1984 to
2000, Mr. van Roon established van Roon Partners, Ltd., a private equity and
advisory firm with an emphasis on investment in distressed, turn around and
special situations with a geographic focus on Europe and across a wide range of
industries. In addition to investment management experience, during this period
he also developed operational experience in his capacity as acting interim CEO
for investee companies in the consumer goods, airline and service industries
including Girmi spa, an Italian industrial firm, Intair GMBH, an airline
handling company based in Germany, and Aerolloyd, a German airline. In 1990, Mr.
van Roon entered into a joint venture arrangement with US-based Quantum
Development Corporation, a boutique venture capital firm specializing in early
stage high tech and pharmaceutical companies. In connection with this activity,
from January 2000 to May 2000 he acted as interim CEO of Alyn Corporation, a
NASDAQ listed innovative materials firm. Mr. van Roon has never been employed by
any of the above companies and has always acted as a consultant or owner. Mr.
van Roon is a Dutch citizen who lives in Lugano, Switzerland and in Milan,
Italy. He obtained a doctoral degree (Drs) from Erasmus Rotterdam University in
1971, where his thesis centered on Bayesian Statistics.





Andrew Tse has served as our
Vice President since our inception. From 1981 to 2006, Mr. Tse was associated
with a number of businesses located in China (Hong Kong and Macau), including
Shun Tak Holdings Ltd., Heli Express Ltd. and Hong Kong Express Airways Ltd.
which are engaged in the business of sea transport, helicopter transport and
scheduled airline services, respectively. From 1981 to 2006, Mr. Tse was an
executive director, and from 1989 to 1996 served as the chief financial officer
and a member of the board of directors of, Shun Tak Holdings Limited. Shun Tak
Holdings Limited is a leading Hong Kong-based conglomerate established in 1972
and listed on the Hong Kong Stock Exchange since 1973 with core businesses in
transportation, casino investment and operations and property investments.
During his tenure with Shun Tak, Mr. Tse was instrumental in listing the company
on the Hong Kong Stock Exchange and was instrumental in negotiating and
financing many of Shun Tak’s acquisitions and business expansion initiatives.
From 1989 to 2003, Mr. Tse served as executive director of Air Hong Kong Ltd., a
dedicated cargo airline based in Hong Kong offering scheduled service to Europe
and the United States. Mr. Tse was instrumental in the sale of Air Hong Kong to
Cathay Pacific Airways in 2003. From 1997 to 2006, Mr. Tse also served as chief
executive officer of Heli Express Limited, a helicopter airline operating
between Hong Kong and Macau, with more than 50 daily flights. From 1997 to the
present, Mr. Tse has served as the founder and chief executive officer of Hong
Kong Express Airways Limited, a new regional airline that commenced operation in
2005 and provides scheduled Boeing 737 and Embraer E170 service between Hong
Kong and secondary cities in Mainland China and Taiwan. A 1977 graduate of
McMaster University in Canada, Mr. Tse also received an MBA from McMaster
University in 1978.




54




Michael Hlavsahas been a
director since our inception and was appointed as our Secretary in January 2008.
He served as our Chief Financial Officer from our inception through May 9,
2008.  Mr. Hlavsa is an experienced executive that has over 30 years
of combined financial and operational experience. He is both a Certified Public
Accountant and a Certified Internal Auditor. He has spent over 18 years working
in the United States casino industry. From 2004 to the present, he has been the
founder and principal owner of Signature Gaming Management LLC, a consulting
firm specializing in advising emerging companies engaged in gaming operations.
In 2005, he served as Chief Executive Officer for Titan Cruise Lines, a casino
business which operated a 2,000 passenger ship and high speed shuttles. From
2001 to 2004, Mr. Hlavsa was the Chief Executive Officer for SunCruz Casinos,
the largest day cruise gaming company in the United States. From 1997 to 2000,
Mr. Hlavsa was Managing Partner at Casino Princesa in Miami, Florida where he
was responsible for the development and operation of a large mega-yacht gaming
vessel. From 1993 to 1997, he served as Chief Financial Officer and Vice
President, Midwest region, for Lady Luck Gaming Corporation, a publicly traded
company. While at Lady Luck, he participated in that company’s initial public
offering of equity and a $185 million debt financing. From 1991 to 1993, Mr.
Hlavsa was the Vice President of Finance and Administration for the Sands Hotel
and Casino in Las Vegas, Nevada. His first 12 years of gaming experience was in
Atlantic City, New Jersey in various audit and finance positions with
well-established gaming companies such as Caesars, Tropicana and Trump Plaza. He
received a bachelor of science degree from Canisius College in Buffalo, New York
in 1975.





Stuart A. Sundlun has served
as a director since our inception in March 2007. Originally appointed as our
President on an interim basis, Mr. Sundlun resigned such office in October 2007.
From September 2007 to the present, Mr. Sundlun has been Managing Director of
BMB Advisors Ltd, a company providing financial advisory services to the BMB
Group SPC, an alternative asset management firm investing in privately-owned
hedge funds, real estate funds, private equity funds and direct investments.
From 1998 to September 2007, Mr. Sundlun was a managing director of Global
Emerging Markets, a New York City based investment fund that acquires and
invests in both public and privately owned businesses. From 1998 to the present,
Mr. Sundlun has been actively involved in structuring and negotiating equity
investments in emerging growth companies including Digital River, Inc., Star
Scientific, Inc and Intercontinental Fuels, LLC. From 2001 to the present, Mr.
Sundlun has been an advisor to Triago SA, a Paris based leading placement agent
for private equity funds. From 1994 to the present, Mr. Sundlun has structured a
variety of private equity investments in Russia including South Oil Corporation,
which is developing an oil field in Astrakhan, Russia and Helios Petroleum
Holdings, AG, which intends to own and operate many oil refineries in Russia and
elsewhere. Mr. Sundlun serves on the board of South Oil Corporation. From 2005
to the present, Mr. Sundlun has also served on the Board and investment
committee of the Dignity Fund LLC, which makes loans to microfinance
institutions. From 1986 to 1994, Mr. Sundlun was a Managing Director of
Grosvenor Equities, Inc. and participated in the raising of equity for a variety
of private companies including early stage venture capital, growth stage and
leveraged management buyouts. From 1982 to 1985, he was an associate in the
Corporate Finance department of Lehman Brothers and advised a variety of medium
and large corporations on financial strategies and financing. Mr. Sundlun
received his BA degree cum laude 1975 (government) from Harvard University, and
his MBA (finance) from Columbia University Graduate School of Business in
1982.





Keith Laslopwas appointed as
a director of the Company on May 9, 2008. From September 2004 to February 2008,
Mr. Laslop has served as the President of Prolexic Technologies, Inc., a managed
security service provider, where he is responsible for achieving growth and
maximizing the financial performance and shareholder value of the company. While
at Prolexic Technologies, Mr. Laslop put in place sales and marketing strategies
that took the company from approximately $1 million in annual revenue to
approximately $9 million in over 3 years, increased realized profitability and
recruited and shaped a new senior management team. From September 2001 to April
2004, he served as the Chief Financial Officer and Business Development Director
of Elixir Studios Ltd., a London-based interactive entertainment software
developer, where he was responsible for originating and negotiating new
development contracts, as well as managing the financial performance of the
company, including fund raising and cost control. While at Elixir Studios, Mr.
Laslop brought the company to profitability for the first time in its 5-year
history by securing multi-million dollar development contracts and securing
approximately $8.5 million in equity and debt financing for the company. Mr.
Laslop earned a Business Administration degree from the University of Western
Ontario in 1993 and his Chartered Accountant designation from the Canadian
Institute of Chartered Accountants in 1996. In addition, he earned his Chartered
Financial Analysts designation from the Institute of Chartered Financial
Analysts in 1999.




55




Leonard de Waal has served as
a director since April 2008.  He has over 32 years experience in the
financial industry and in particular, portfolio management. From 1984 to July
2002, Mr. de Waal served as a senior relationship manager and discretionary
portfolio manager with Merrill Lynch (Luxembourg).  From January 2005
to August 2006, he has served as a part-time managing director of Eduma
Marketing & Education S.A.  From November 2004 to January 2006,
Mr. de Waal has served as a part-time senior portfolio manager for Fuchs &
Associés Finance Luxembourg S.A. and as a part-time accounting manager of Shire
Holdings Europe S.à r.l. and Shire Holdings Ireland Ltd., Luxembourg Branch from
September 2005 to the present. From March 2007 to the present, Mr. de Waal has
served as a part-time manager of Triseas Korea Property Sàrl, Luxembourg.From April
2008 to the present, he has served as a part-time accounting supervisor of
Severn Trent Luxembourg Finance SA, Severn Trent Luxembourg Holdings SA, Severn
Trent Luxembourg Overseas Holdings SA, Severn Trent Luxembourg Overseas Finance
SA and Severn Trent European Limited, S.à r.l.  Mr. de Waal is a US
registered broker-dealer (FINRA Series 7, 6 and 3) and Discretionary Asset
Manager (Merrill Lynch Corporate Campus).





Arie Boswas appointed as a
director of the Company on January 21, 2009. From 2002 to 2006, Mr. Bos served
as the Business Development Manager at Fortis Luxembourg, a commercial banking
firm, where he was responsible for mergers and acquisitions for the
firm.  From 1980 to 2002, Mr. Bos served as an options and operations
specialist, administrative director and financial consultant at Merrill Lynch
International in London and Luxembourg.  From 1978 to 1980, he was a
clearing manager at the European Option Exchange.  Mr. Bos is
currently retired. He earned 3 degrees from the School of Graphic Design and
School of Commerce in Accountancy and Modern Business Administration from
Utrecht University in 1969, 1970 and 1972.  Mr. Bos received his
Series 3 and Series 7 certifications from the Financial Industry Regulatory
Authority in 1989 (Series 3) and 1990 (Series 7).





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 these individuals has been
a principal of or affiliated with a public company or blank check company that
executed a business plan similar to our business plan and none of these
individuals is currently affiliated with such an entity. However, we believe the
skills and expertise of these individuals, their collective access to
acquisition opportunities and ideas, their contacts, and their transaction
expertise with public and private companies should enable them to identify and
effect an acquisition although we cannot assure you that they will, in fact, be
able to do so.





Family
Relationships.




There are
no family relationships among our executive officers and directors.





Involvement in Certain Legal
Proceedings.




None of
our officers or directors have, during the last five years: (i) been
convicted in or is currently subject to a pending a criminal proceeding;
(ii) been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to any federal or state securities
or banking laws including, without limitation, in any way limiting involvement
in any business activity, or finding any violation with respect to such law, nor
(iii) has any bankruptcy petition been filed by or against the business of
which such person was an executive officer or a general partner, whether at the
time of the bankruptcy of for the two years prior thereto.




56




Code
of Conduct and Ethics.





We have
adopted a code of conduct and ethics applicable to our directors, officers and
employees in compliance with applicable federal securities laws and the rules of
the NYSE Alternext US Exchange.





B.   Compensation





No
executive officer has received any cash compensation for services rendered. No
compensation of any kind, including finder’s and consulting fees, will be paid
to any of our initial shareholders, including our officers and directors and our
sponsor or any of their respective affiliates, for services rendered prior to or
in connection with a business combination. However, these individuals will be
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 will be 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.





Upon
completion of a business combination or our liquidation, we will no longer be
required to pay these out-of-pocket expenses. No compensation of any kind,
including finder’s and consulting fees, will be paid to any of our initial
shareholders, including our directors, or any of their respective affiliates for
services rendered prior to or in connection with a business combination.
However, our initial shareholders will be 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. Such individuals may be paid consulting, management or
other fees from target businesses as a result of the business combination, with
any and all amounts being fully disclosed to shareholders, to the extent then
known, in the proxy solicitation materials furnished to the shareholders. There
is no limit on the amount of these out-of-pocket expenses and there will be 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.





Long-Term
Incentive, Retirement and Pension Plans





The
Company does not have a long-term incentive plan or pension plan and does not
provide retirement benefits to its employees.





No
Termination Agreements for Executive Officers and Directors





The
Company has no plans or arrangements that would result in the compensation of an
executive officer or director in the event such person’s employment is
terminated, as a result of either resignation, retirement, change of control, or
change of responsibilities following a change in control.





C.   Board
Practices





Our board
of directors is currently divided into two classes, each of which will generally
serve for a term of two years with only one class of directors being elected in
each year. There is no cumulative voting with respect to the election of
directors, with the result that the holders of more than 50% of the shares
eligible to vote for the election of directors can elect all of the
directors.




None of
the Company’s directors have any service contracts for serving as
directors.





Board
of Advisors





In
addition to our executive officers and directors, the following individuals have
agreed since our inception to serve as members of our board of advisors. It is
anticipated that our board of advisors will provide professional advice and
assistance to our board of directors in evaluating and structuring potential
business combination opportunities. No member of our board of advisors has
received any cash compensation for services rendered. No compensation of any
kind, including finder’s and consulting fees, will be paid to any of our
advisors for services rendered prior to or in connection with a business
combination. However, these individuals will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as providing
professional advice and assistance in 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 will be 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.




57




Adam Hartis managing
director-equities, corporate finance, at Fairfax I.S. PLC, an investment bank
based in London focusing on small and mid-cap companies listed on the London
Stock Exchange and other international exchanges. He joined Fairfax I.S. PLC in
2007. For approximately 14 years prior thereto, Mr. Hart served in various
capacities including, head of business development at KBC Peel Hunt, another
London-based investment bank, which he joined in 1993 from Lloyds Merchant Bank,
the investment banking subsidiary of Lloyds Bank PLC (now Lloyds TSB PLC). He
has been involved in a lead advisory role across a range of corporate finance
transactions such as IPOs, mergers and acquisitions and secondary fundraisings
as well as private equity financings in London. Mr. Hart is Chairman of the
London Stock Exchange’s AIM Advisory Group which is made up of external
practitioners who advise the Exchange on all matters affecting the operation and
regulation of AIM, a member of the AIM Disciplinary Panel and is a past member
of the Corporate Finance Technical Committee of the Institute of Chartered
Accountants in England and Wales. Mr. Hart has a bachelor’s degree in law and
became qualified as a chartered accountant with Touche Ross & Co. (now
Deloitte & Touche LLP).





Dr. Rory Knight is Chairman of
the Oxford Metrica group, an independent strategic advisor that provides
research-based intelligence on all aspects of financial performance. Dr. Knight
has extensive experience in working and consulting in the financial and
corporate sectors. For five years, he was Dean of Templeton College, University
of Oxford (Oxford University’s business college), where he was responsible for
Templeton’s overall strategy and direction. Dr. Knight is Dean Emeritus at
Templeton and Fellow in Finance. He has been published widely on investments in
the Financial Times and other journals. While Dean at Oxford he co-authored
Financial Performance (Butterworth-Heinemann) and devised the Value Creation
Quotient (VCQTM) a key
financial performance metric. Previously a Deputy Director in the Swiss National
Bank (SNB), Dr. Knight’s role included providing policy advice on international
financial matters. He is currently on the Board of Advisors of the John
Templeton Foundation, which was established by Sir John Templeton.





James Tagliaferri is the
controlling shareholder of TAG Virgin Islands Inc. of St. Thomas, US Virgin
Islands. TAG Virgin Islands and its predecessor companies is an asset management
firm founded in 1983 by Mr. Tagliaferri that provides asset management services
on a discretionary basis principally to high net worth individuals, as well as
certain non-discretionary asset management. Mr. Tagliaferri manages fixed income
and equity portfolios, including various strategies tailored for individual
client objectives. Taurus is also an investor in private placements and
corporate finance transactions, including leading the negotiation and
structuring of equity and debt instruments from public and private issuers. Mr.
Tagliaferri has been in the investment business since 1967, having previously
been an asset manager at Julius Baer Group, and Lionel Edie & Company, the
investment management division of Manufacturers Hanover Trust, which was merged
into Chase Bank. Mr. Tagliaferri is a Certified Financial Analyst and a
registered investment advisor with the Securities and Exchange Commission
pursuant to the Investment Advisors Act of 1940.





Director
Independence





The board
of directors of the Company has determined that Messrs. Bos, Laslop and de Waal
are “independent directors” as defined in the rules and regulations of the NYSE
Alternext US Exchange and the Sarbanes-Oxley Act of 2002, as
amended.





Board
Committees





Our board
of directors has established the following committees: (i) audit committee, (ii)
nominating committee, (iii) compensation committee, and (iv) business
combination committee. The board of directors has adopted charters for these
committees.




58




Audit
Committee





Our audit
committee consists of Messrs. Bos, Laslop and de Waal, with Mr. de Waal serving
as chairman of the audit committee. Each member of our audit committee is
financially literate under the current listing standards of the NYSE Alternext
US Exchange, and our board of directors has determined that each of the members
of the audit committee qualify as an “audit committee financial expert,” as such
term is defined by SEC and the NYSE Alternext rules.





The audit
committee reviews the professional services and independence of our independent
registered public accounting firm and our accounts, procedures and internal
control. The audit committee selects our independent registered public
accounting firm, review and approve the scope of the annual audit, review with
the independent public accounting firm our annual audit and annual financial
statements, review with management the status of internal accounting control,
evaluate problem areas having a potential financial impact on us that may be
brought to the committee’s attention by management, the independent registered
public accounting firm or the board of directors, and evaluates all of our
public financial reporting documents.





Nominating
Committee





Our
nominating committee consists of Messrs. Bos, Laslop and de Waal, with Mr. de
Waal serving as chairman of the nominating committee. The nominating committee
is responsible for selecting, researching and nominating directors for election
by our shareholders, selecting nominees to fill vacancies on the board or a
committee of the board, developing and recommending to the board a set of
corporate governance principles and overseeing the evaluation of the board and
our management.





Compensation
Committee





Our
compensation committee consists of Messrs. Bos, Laslop and de Waal, with Mr. de
Waal serving as chairman of the compensation committee. Once we have completed a
business combination, our board of directors will determine that all members of
the compensation committee qualify as independent directors under the NYSE
Alternext US Exchange independence standards. The principal function of the
compensation committee is to review the compensation payable to our officers and
directors.





The
composition of our audit committee, our nominating committee, our compensation
committee may change when we complete a business combination. However, the names
and business experience of any new or additional members of such audit committee
will be included in the proxy statement submitted to our public shareholders in
connection with their approval of such business combination.





Business
Combination Committee





Our
business combinationcommittee
consists ofMessrs.
van Roon, Laslop and de Waal, with Mr. Laslop serving as chairman of the
business combination committee. The business combinationcommittee
was formed for the purpose of assisting the board of directors in (i)
identifying companies that we could acquire (“Targets”); (ii) negotiating and
executing letters of intent with Targets; (iii) commencing and completing due
diligence on Targets; and (iv) negotiating and preparing definitive transaction
documents to acquire Targets.  The business combinationcommittee will be
dissolved when we complete a business combination.





D.   Employees





As of
March 31, 2009, we had five officers, three of whom are also members of our
board of directors. These individuals are not obligated to contribute any
specific number of hours per week 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 the availability of suitable target businesses to
investigate. We do not intend to have any full time employees prior to the
consummation of a business combination.




59




E.   Share
Ownership





The
following table sets forth information regarding the beneficial ownership of our
ordinary shares as of March 31, 2009 by:





·
            each person known by us to be the
      beneficial owner of more than 5% of our outstanding ordinary
      shares;


·
            each of our officers and
      directors; and


·
            all our officers and directors as
      a group.





Based on
information available to us, all persons named in the table have sole voting and
investment power with respect to all ordinary shares beneficially owned by them,
unless otherwise indicated. Beneficial ownership is determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. In
computing the number of ordinary shares beneficially owned by a person or a
group and the percentage ownership of that person or group, ordinary shares
subject to options or warrants currently exercisable or exercisable within 60
days after the date of our prospectus are deemed outstanding, but are not deemed
outstanding for the purpose of computing the percentage of ownership of any
other person.




Table No. 2: Beneficial
      OwnershipName
      of Beneficial Owner
                              
                              Number
      of
                                Shares
                              
                              
                              Percentage
                                of
      Shares
                                Beneficially
                                Owned
      (1)Ho
      Capital Management LLC(2)
                                386
      Columbus Avenue, Apt. 17A
                                New
      York, New York 10024
                              
                              1,312,500 shares
                              
                              
                              
                              9.4
                              %Angela
      Ho(2)
                                386
      Columbus Avenue, Apt. 17A
                                New
      York, New York 10024
                              
                              1,312,500 shares
                              
                              
                              
                              9.4
                              %Noble
      Investment Fund Limited(3)
                                c/o
      Pure Glow Finance Limited, investment advisor
                                World
      Trade Centre, Via Lugano 11
                                6982
      Lugano-Agno Switzerland
                              
                              1,812,500 shares
                              
                              
                              
                              13.0
                              %Arie
      Jan van Roon(4)
                                World
      Trade Centre, Via Lugano 11
                                6982
      Lugano-Agno
                                Switzerland
                              
                              1,937,500 shares
                              
                              
                              
                              13.8
                              %Allius
      Ltd.(5)
                                Harbour
      House, Second Floor
                                Waterfront
      Drive, Road Town
                                Tortola,
      British Virgin Islands
                              
                              500,000 shares
                              
                              
                              
                              3.6
                              %Dr.
      Gary T. Hirst(6)
                                1515
      International Parkway, Suite 2031
                                Lake
      Mary, FL 32746
                              
                              625,000 shares
                              
                              
                              
                              4.5
                              %Stuart
      A. Sundlun
                                BMB
      Advisors Ltd.
                                399
      Park Avenue, 39th
      Floor
                                New
      York, New York 10022
                              
                              125,000 shares
                              
                              
                              
                              *Andrew
      Tse
                                Apartment
      26B The Albany
                                No.
      1 Albany Road, Hong Kong
                              
                              125,000 shares
                              
                              
                              
                              *Michael
      Hlavsa
                                5
      11 SE 5th Ave., #621
                                Ft.
      Lauderdale, FL 33301
                              
                              62,500 shares
                              
                              
                              
                              *Geoffrey
      Holmes
                                600
      Third Avenue, 22nd
      Floor
                                New
      York, New York 10016
                              
                              
                              —
                              
                              
                              
                              —Keith
      Laslop
                                92A
      Walmer Road
                                Toronto,
      Ontario M5R2X7
                                Canada
                              
                              
                              200,000
                              (6)
                              
                              
                              1.4
                              %Arie
      Bos
                                Dijkwag
      356D
                                Andijk,
      1619JL
                                Netherlands
                              
                              
                              —
                              
                              
                              
                              —Leonard
      de Waal
                                10,
      rue Emile Lavandier, L-1924
                                Luxembourg
                              
                              
                              —
                              
                              
                              
                              —All
      directors and executive officers as a group (9 persons)
                              
                              3,075,000
      shares
                              (7)
                              
                              
                              21.9
                              %(7)




*Less
than 1%




60




(1)
Includes the sale of 11,500,000 units in our offering, including the 1,500,000
units covering the underwriter’s over allotment option, but not: (a) the
exercise of the 10,000,000 warrants to purchase ordinary shares included in such
units, (b) the exercise of the 5,725,000 insider warrants to purchase ordinary
shares as described herein, (c) an aggregate of 475,000 ordinary shares included
in the representative’s unit purchase option or (d) an aggregate of 475,000
ordinary shares underlying warrants included in the representative’s unit
purchase option.





(2) Ho
Capital Management LLC was formed solely for the purpose of owning ordinary
shares and insider warrants in our company. Angela Ho, our former chief
executive officer and former chairman of the board, owns 66.7% of the members
interests in Ho Capital Management LLC. The remaining 33.3% of the members
interests in Ho Capital Management LLC are owned by Noble Investment Fund
Limited. Angela Ho and Noble Investment Fund Limited jointly control and
co-manage Ho Capital Management LLC and therefore share voting, investment and
dispositive power over all assets of Ho Capital Management LLC (including our
ordinary shares and insider warrants). Thus, the shares listed under Ms. Ho’s
name include all shares owned by Ho Capital Management LLC. These shares include
437,500 shares beneficially owned by Noble Investment Fund Limited which has a
right to receive legal ownership to such shares upon consummation of a business
combination (see footnote (4) below). This share amount does not include a 50%
beneficial interest held by Angela Ho in the 5,725,000 insider warrants to be
issued to the Sponsor immediately prior to the date of our prospectus, and the
5,725,000 ordinary shares issuable upon exercise of the insider warrants. The
members of Ho Capital Management LLC have agreed that their members interest may
not be transferred, sold or assigned for three years. In addition, each of
Angela Ho and Noble Investment Fund Limited, the members of Ho Capital
Management LLC, have agreed that prior to the consummation of a business
combination, they will not withdraw as members of such entity. See “Certain
Relationships and Related Transactions and Director Independence”
below.




61




(3) Noble
Investment Fund Limited is a Gibralter-based company that invests and manages
portfolio investments of other investment funds. Mr. van Roon is the natural
person with sole voting, investment and dispositive power over all assets of
Noble Investment Fund Limited (including our ordinary shares and insider
warrants), and shares listed in the table as beneficially owned by him include
those owned by Noble Investment Fund Limited. Mr. van Roon is also the sole
shareholder, officer and director of Pure Glow Finance Limited, the sole
investment advisor of Noble Investment Fund Limited. Noble Investment Fund
Limited owns 33.3% of the membership interests in Ho Capital Management LLC.
Under the terms of the operating agreement of Ho Capital Management LLC, Noble
Investment Fund Limited has a beneficial interest in 437,500 shares or 33.3% of
the 1,312,500 shares owned by Ho Capital Management LLC, and upon consummation
of a business combination, has the right to withdraw as a member of Ho Capital
Management LLC and receive a distribution of 437,500 ordinary shares as well as
50% of the ,725,000 insider warrants to be owned by Ho Capital Management LLC.
However, the amount of shares listed for each of Mr. van Roon and for Noble
Investment Fund Limited includes all of the 1,312,500 shares beneficially owned
by Ho Capital Management LLC because Ms. Ho and Noble Investment Fund Limited
jointly control Ho Capital Management LLC, and, as such, share voting and
dispositive control over its shares. The amount of shares listed for each of Mr.
van Roon and for Noble Investment Fund Limited includes 500,000 shares
beneficially owned by them through Allius Ltd. This does not include a 50%
beneficial interest in the 5,725,000 insider warrants to be issued to the
Sponsor immediately prior to the date of our prospectus, and the 5,725,000
ordinary shares issuable upon exercise of the insider warrants. See “Certain
Relationships and Related Transactions and Director Independence”
below.





(4)
Allius Ltd. is a British Virgin Islands company formed by Dr. Gary T. Hirst, our
president and director, and Noble Investment Fund Limited, for the purpose of
owing ordinary shares in our company. Dr. Hirst and Noble Investment Fund
Limited each own 50% of the outstanding members interests in Allius Ltd. and are
co-managers of Allius Ltd. Accordingly, shares listed for each of Dr. Hirst and
Noble Investment Fund Limited include all shares owned by Allius Ltd. and
125,000 shares owned directly by Dr. Gary Hirst. The members of Allius Ltd. have
agreed that their members interest in Allius Ltd. may not be transferred, sold
or assigned for three years. In addition, each of Dr. Gary T. Hirst and Noble
Investment Fund Limited, the members of Allius Ltd., have agreed that prior to
the consummation of a business combination, they will not withdraw as members of
such entity. See “Certain Relationships and Related Transactions and Director
Independence” below.





(5)
Includes 125,000 shares owned directly by Dr. Gary Hirst and 500,000 shares
indirectly owned through Dr. Hirst’s 50% beneficial interest in Allius
Ltd.





(6)
Includes a 4-year warrant to purchase 200,000 ordinary shares at an exercise
price equal to $7.50 per share issued as compensation for services performed on
behalf of our company.





(7) These
amounts reflect “beneficial” ownership rather than actual ownership by our
directors and executive officers resulting in total beneficial ownership before
the offering exceeding our total shares outstanding by 500,000 shares. Under the
definition of “beneficial” ownership in Rule 13d-1 of the Exchange Act, we are
required to include 500,000 shares owned by Allius Ltd. in the amounts for each
of Dr. Hirst and Mr. van Roon because they are each deemed to control Allius
Ltd. Similarly, we are required to include the 1,312,500 shares owned by Ho
Capital Management LLC in the amounts for each of Ms. Ho and Mr. van Roon. As a
result, these shares are being counted twice in the calculation of total shares
beneficially owned by our directors and officers.





As of the
date of this report, the Company has no stock, option or equity compensation
plan or arrangement in effect covering officers, directors, employees or
otherwise.  Accordingly, the Company has no outstanding ordinary share
options.




62




ITEM
      7:
            Major
      Shareholders and Related Party
Transactions




A.   Major
Shareholders





At March 31, 2009, the Company had
14,000,000 ordinary shares outstanding. At such date, based upon Schedule 13Gs
filed with the Securities and Exchange Commission, the Company believes
that (i) Ho Capital
Management LLC and Angela Ho; (ii) Noble Investment Fund Limited and Arie Jan
van Roon; (iii) Jonathan M. Glaser, JMG Capital Management, LLC, JMG Capital
Management, Inc., Daniel Albert David, Roger Richter, Pacific Assets Management,
LLC and Pacific Capital Management, Inc.; (iv) Azimuth Opportunity, Ltd.,
Commerce Court Value, Ltd. and Peter W. Poole; and (v) HBK Investments L.P., HBK
Services LLC, HBK New York LLC, HBK Partners II L.P., HBK Management LLC, HBK
Special Opportunity Fund I L.P. and HBK Master Fund L.P., each are
persons/entities beneficially owning more than 5% of the Company’s outstanding
ordinary shares.





Ho
Capital Management LLC is co-managed and jointly owned by Angela Ho, our former
chief executive officer and former chairman of our board of
directors.  Ho Capital Management LLC and Ms. Ho beneficially own
1,312,500 of our ordinary shares, representing 9.4% of our issued and
outstanding ordinary shares.  Such shares consist of 1,312,500
ordinary shares held by Ho Capital Management LLC, which also beneficially owns
50% of 5,725,000 warrants issued to Ho Capital Management LLC on January 16,
2008 which are not included herein as such Warrants may be exercised only during
the period commencing on the later of: (i) the consummation by us of a business
combination, or (ii) January 16, 2009.





Noble
Investment Fund Limited and Mr. van Roon beneficially own 1,812,500 and
1,937,500 of our ordinary shares, respectively, representing 13.0% and 13.8% of
our issued and outstanding ordinary shares, respectively.  Such shares
consist of (i) 125,000 Ordinary Shares held by Mr. van Roon, (ii) 1,312,500
Ordinary Shares held by Ho Capital Management LLC, and (iii) 500,000 Ordinary
Shares held by Allius Ltd. Mr. van Roon is the natural person with sole voting,
investment and dispositive power over all assets of Noble Investment Fund
Limited. In addition, Mr. van Roon is the sole shareholder, officer and director
of Pure Glow Finance Limited, the sole investment advisor of Noble Investment
Fund Limited. Noble Investment Fund Limited owns 33.3% of the membership
interests in Ho Capital Management LLC. Under the terms of the operating
agreement of Ho Capital Management LLC, Noble Investment Fund Limited has a
beneficial interest in 437,500 shares or 33.3% of the 1,312,500 shares owned by
Ho Capital Management LLC, and upon consummation of a business combination by
the Company, has the right to withdraw as a member of Ho Capital Management LLC
and receive a distribution of 437,500 Ordinary Shares. However, the amount
of shares listed for Mr. van Roon includes all of the 1,312,500 shares
beneficially owned by Ho Capital Management LLC because Angela Ho and Noble
Investment Fund Limited jointly control Ho Capital Management LLC, and, as such,
share voting and dispositive control over its shares. Noble Investment Fund
Limited owns 50% of the outstanding members interests in Allius Ltd. and is a
co-manager of Allius Ltd. Accordingly, shares listed for Mr. van Roon include
all shares owned by Allius Ltd. Noble Investment Fund Limited beneficially owns
50% of 5,725,000 Warrants issued to Ho Capital Management LLC on January 16,
2008 which are not included herein as such Warrants may be exercised only during
the period commencing on the later of: (i) the consummation by the Issuer of a
business combination, or (ii) January 16, 2009.





Jonathan
M. Glaser beneficially owns 625,000 ordinary shares, representing 7.4% of our
issued and outstanding ordinary shares. JMG Capital Management, LLC, JMG Capital
Management, Inc., Daniel Albert David, Pacific Assets Management, LLC, Pacific
Capital Management, Inc. and Roger Richter beneficially own 462,500 ordinary
shares, representing 3.7% of our issued and outstanding ordinary shares. PAM and
JMG LLC are investment advisers whose clients have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the stock. No client separately holds more than five percent of the outstanding
stock. PCM is a member of PAM and JMG Inc. is a member of JMG LLC. Mr. Glaser,
Mr. David and Mr. Richter are control persons of PCM and PAM. Mr. Glaser is the
control person of JMG Inc. and JMG LLC.





Azimuth
Opportunity, Ltd. beneficially owns 189,400 ordinary shares, representing 1.4%
of our issued and outstanding ordinary shares. Commerce Court Value, Ltd.
beneficially owns 816,500 ordinary shares, representing 5.8% of our issued and
outstanding ordinary shares.  Peter W. Poole beneficially owns
1,005,900 ordinary shares, representing 7.2% of our issued and outstanding
ordinary shares. Peter W. Poole is the Director of Commerce Court Value, Ltd.
and Azimuth Opportunity, Ltd and consequently may be deemed to have shared
voting control and investment discretion over securities owned by Commerce Court
Value, Ltd. and Azimuth Opportunity, Ltd.  The foregoing should not be
construed in and of itself as an admission by Peter W. Poole as to the
beneficial ownership of the shares owned by Commerce Court Value, Ltd. and
Azimuth Opportunity, Ltd.




63




HBK
Investments L.P., HBK Services LLC, HBK New York LLC, HBK Partners II L.P., HBK
Management LLC, HBK Special Opportunity Fund I L.P. and HBK Master Fund L.P.
beneficially own 1,100,825 ordinary shares, representing 7.9% of our issued and
outstanding ordinary shares.  Jamiel A. Akhtar, Richard L. Booth,
David C. Haley, Lawrence H. Lebowitz, and William E. Rose are each managing
members of HBK Management LLC.  The members expressly declare that
this statement shall not be construed as an admission that they are, for the
purpose of Section 13(d) or 13(g) of the Securities Exchange Act of 1934,
beneficial owners of the securities.





B.   Related
Party Transactions





On March
23, 2007, we issued an aggregate of 1,312,500 ordinary shares to our sponsor, Ho
Capital Management LLC and an aggregate of 1,187,500 ordinary shares certain of
our officers and directors and their affiliates, for a total of $25,000 in cash,
or a purchase price of $0.01 per share. Ho Capital Management LLC is co-managed
and jointly owned by Angela Ho, our former chief executive officer and former
chairman of our board of directors.





The
ordinary shares owned by our sponsor and the 1,187,500 ordinary shares owned by
our officers and directors and their affiliates, were placed in escrow and may
not be sold, transferred or assigned for a period of three years from the date
of completion of our offering, except for estate planning purposes.





The
holder of these shares will be entitled to make up to two demands that we
register these shares pursuant to an agreement signed on January 16, 2008. The
holders of the majority of these shares may elect to exercise these registration
rights at any time after the date on which these ordinary shares are released
from escrow, which, except in limited circumstances, is not before three years
from the date of our prospectus. In addition, these shareholders have certain
“piggy-back” registration rights on registration statements filed subsequent to
the date on which these ordinary shares are released from escrow. We will bear
the expenses incurred in connection with the filing of any such registration
statements.





On
January 16, 2008, Ho Capital Management LLC, which is co-managed and jointly
owned by Angela Ho, our former chief executive officer and former chairman of
our board of directors and Noble Investment Fund Limited, purchased an aggregate
of 5,725,000 insider warrants from us at a price of $1.00 per warrant in a
private placement made in accordance with Regulation D under the Securities Act
of 1933, as amended. All of the proceeds received from the insider warrants (an
aggregate of $5,725,000) were placed in the trust account together with the net
proceeds of our offering. Ho Capital Management LLC and Noble Investment Fund
Limited each have a 50% beneficial ownership interest in the insider warrants.
So long as the insider warrants are owned by Ho Capital Management LLC, Noble
Investment Fund Limited or Angela Ho (a co-manager of Ho Capital Management
LLC), the insider warrants may be exercised on a cashless basis and will not be
subject to redemption.





On
January 16, 2008, Noble Investment Fund Limited loaned $5,725,000 to Ho Capital
Management LLC, our sponsor, to enable the Sponsor to purchase the 5,725,000
insider warrants. The $5,725,000 loan bears interest at the rate of 4.5% per
annum and is payable, together with accrued interest, five years from the date
of issuance (but subject to mandatory prepayment to the extent of any net
proceeds received by Ho Capital Management LLC from the sale of any insider
warrants or shares issuable upon exercise of such warrants). Ho Capital
Management LLC used the proceeds of such loan to purchase the insider warrants.
The insider warrants were pledged to Noble to secure repayment of such loan. In
the event and upon our consummation of a business combination, the record and
beneficial ownership of 2,862,500 insider warrants, or 50% of such insider
warrants will be transferred by Ho Capital Management LLC to Noble Investment
Fund Limited; and such transfer shall represent repayment of 50% of the
$5,725,000 loan. The remaining $2,862,500 principal amount of the Noble loan,
together with accrued interest thereon at the rate of 4.5% per annum, will be
repaid by Ho Capital Management LLC and Angela Ho solely out of the proceeds of
any one or more sales of the insider warrants or underlying shares. Accordingly,
except for the remaining 2,862,500 pledged insider warrants and proceeds from
periodic sales of such warrants or underlying shares, the loan from Noble
Investment Fund Limited to our sponsor is non-recourse to both our sponsor and
Angela Ho, and none of the other assets of our sponsor or Ms. Ho (including
their legal and beneficial interest in our ordinary shares) are subject to
attachment or any liability for repayment of the loan. The $5,725,000 loan from
Noble Investment Fund Limited to Ho Capital Management LLC was made based upon a
pre-existing business arrangement between Noble and Angela Ho whereby Ms. Ho
agreed to organize the sponsor and management of our company, Noble agreed to
provide the financing for the purchase of the insider warrants, and the parties
agreed to share equally in such insider warrants. The holders of the insider
warrants will not have any right to any liquidation distributions with respect
to the ordinary shares underlying the insider warrants in the event we fail to
consummate a business combination and the insider warrants will expire
worthless.




64




Noble
Investment Fund Limited owns 33.3% of the members interest equity in our
sponsor. Under the terms of the operating agreement of Ho Capital Management
LLC, Noble Investment Fund Limited has a beneficial interest in 437,500 shares
or 33.3% of the 1,312,500 shares owned by Ho Capital Management LLC, and upon
consummation of a business combination, has the right to withdraw as a member of
Ho Capital Management LLC and receive a distribution of 437,500 ordinary shares
(33.3% of the 1,312,500 ordinary shares owned by Ho Capital Management LLC) as
well as 50% of the 5,725,000 insider warrants owned by Ho Capital Management
LLC. In the event Noble Investment Fund Limited withdraws as a member of Ho
Capital Management LLC after the completion of our business combination, the
437,500 ordinary shares transferable to Noble Investment Fund Limited by Ho
Capital Management will be placed in the three year escrow account together with
the remaining 875,000 ordinary shares owned of record and beneficially by Ho
Capital Management LLC; provided that, each of Angela Ho and Noble Investment
Fund Limited, the members of Ho Capital Management LLC, have agreed that prior
to the consummation of a business combination, they will not withdraw as members
of such entity. Including its interest in 250,000 ordinary shares, or 50% of the
ordinary shares owned by Allius Ltd., Noble Investment Fund Limited has the
right to receive an aggregate of 687,500 of our ordinary shares (250,000 shares
transferable from Allius and 437,500 shares transferable from Ho Capital
Management), as well as 2,862,500 insider warrants (transferable from Ho Capital
Management).





Noble
Investment Fund Limited has also loaned to our sponsor $500,000 to enable our
sponsor to pay expenses related to our offering. Such loan does not bear
interest and is payable by the Sponsor on January 31, 2008 or earlier upon
completion of our offering from the proceeds of our offering not being placed in
the trust account and not from the $2,000,000 to be released to us from interest
earned in the trust account to fund our working capital. Pursuant to a line of
credit promissory note the sponsor has advanced to us a total of $500,000 to
cover certain of the expenses related to our offering. Such loan will be payable
without interest on the consummation of the offering. We intend to repay the
outstanding amount on this line of credit from the proceeds of our offering not
being placed in the trust account and not from the $2,000,000 to be released to
us from interest earned in the trust account to fund our working capital. This
line of credit promissory note is non-interest bearing and matures on the
earlier to occur of (a) the date of closing of the offering being made by our
prospectus, or (b) January 31, 2008. The loan was repaid on January 23,
2008.





As
consideration for providing the Sponsor with a $500,000 working capital loan and
with the $5,725,000 to enable our sponsor to purchase the 5,725,000 insider
warrants, our sponsor issued to Noble Investment Fund Limited a 33.3% beneficial
interest in the 1,312,500 ordinary shares owned by our sponsor (437,250 ordinary
shares), agreed that Noble Investment Fund Limited could purchase (through its
50% members interest in Allius Ltd.) an additional 250,000 ordinary shares for
$25,000, and agreed to distribute legal and beneficial ownership in 50% of the
insider warrants to Noble Investment Fund Limited upon completion of a business
combination.





We will
also reimburse 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 such payments, no compensation or fees of any kind, including finders
and consulting fees, will be paid to any of our initial shareholders, officers
or directors, or to any of their respective affiliates for services rendered to
us prior to or with respect to the business combination.




65




Our
initial shareholders will not receive either compensation or reimbursement for
any out-of- pocket expenses incurred by them to the extent that such expenses
exceed the amount not held in the trust account unless the business combination
is consummated and there are sufficient funds available for reimbursement after
such consummation. The financial interest of such persons could influence their
motivation in selecting a target business and thus, there may be a conflict of
interest when determining whether a particular business combination is in the
shareholders’ best interest.





After the
consummation of a business combination, if any, to the extent our management
remains as officers of the resulting business, we anticipate that our officers
and directors may enter into employment or consulting agreements, the terms of
which shall be negotiated and which we expect to be comparable to employment or
consulting agreements with other similarly-situated companies in the industry in
which we consummate a business combination. Further, after the consummation of a
business combination, if any, to the extent our directors remain as directors of
the resulting business, we anticipate that they will receive compensation
comparable to directors at other similarly-situated companies in the industry in
which we consummate a business combination.





All
ongoing and future transactions between us and any of our officers and directors
or their respective affiliates, including loans by our officers and directors,
will be on terms believed by us to be no less favorable than are available from
unaffiliated third parties and such transactions or loans, including any
forgiveness of loans, will require prior approval in each instance by a majority
of our uninterested “independent” directors or the members of our board who do
not have an interest in the transaction, in either case who had access, at our
expense, to our attorneys or independent legal counsel.





Each of
Ho Capital Management LLC and Allius Ltd. were entities formed for the specific
purpose of acquiring shares in our company. In order to protect the amounts held
in the trust account, our sponsor, Noble Investment Fund Limited and Allius Ltd.
have each agreed to indemnify us, jointly and severally, for claims of creditors
(including any of our officers or directors) that have not executed a valid and
enforceable waiver of their right to seek payment of amounts due to them out of
the trust account. Except for claims for reimbursement of expenses payable to
any of our officers or directors (which claims against the trust account must be
waived in writing), we may elect to forego obtaining waivers only if we receive
the approval of our Chief Executive Officer and the approving vote or written
consent of at least a majority of our board of directors, including all of our
independent directors. Each of Angela Ho and Noble Investment Fund Limited, the
members of Ho Capital Management LLC (our sponsor) and Dr. Gary T. Hirst and
Noble Investment Fund Limited (the members of Allius Ltd.), have agreed that,
prior to the consummation of a business combination, they will not withdraw as
members of Ho Capital Management LLC or Allius Ltd. However, a withdrawal by any
member of our sponsor, Allius Ltd. or Noble Investment Fund Limited will not
affect the indemnification obligations of our sponsor, Allius Ltd., or Noble
Investment Fund Limited to our company. We have not independently verified
whether our sponsor, Noble Investment Fund Limited or Allius Ltd. have
sufficient funds to satisfy their respective indemnity obligations and,
therefore, we cannot assure you that they would be able to satisfy these
obligations.





On
December 16, 2008, the Company consummated a Funding Agreement (the “Agreement”)
with a placement agent calling for loans of up to $1,250,000 in 12% promissory
notes (the “Notes”) that mature on the earlier of (a) January 16, 2010, or (b)
the consummation of a business combination satisfactory to the
lender.  The Notes are non-recourse to the amounts held in the
Company’s trust account in favor of the public shareholders and are secured by
the assignment of 100,000 shares of the Company's stock that are owned by
certain initial shareholders.  In addition, the Notes are secured by
the interest earned in the Trust account up to $2,000,000.  Pursuant
to the Agreement, $500,000 was borrowed under the Notes on December 26,
2008.





Conflicts
of Interest





Potential
investors should be aware of the following potential conflicts of
interest:




None of
our officers or directors is 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.




66




None of
our officers, directors or initial shareholders are currently affiliated with
any entity whose primary business focus includes acquisitions in Asia. Each of
our officers, directors and initial shareholders have agreed that, until we
consummate a business combination or liquidate our trust account, they will not
become associated or affiliated with any such competing entity. In addition,
such persons have agreed that they will present to our board of directors any
acquisition opportunity in Asia they obtain access to and which could reasonably
be expected to be valued at 80% or more of the total amount placed in our trust
account upon completion of our offering (excluding deferred underwriting fees),
and provide us a right of first refusal to consummate such an acquisition. Each
member of our management and board of directors has confirmed to us that they do
not, and will not, have any pre-existing relationships or contractual
obligations which would have priority over us with respect to the presentation
of a business opportunity that meets our investment criteria of a fair market
value of 80% or more of the total amount placed in our trust account upon
completion of our offering (excluding deferred underwriting fees) and which is
located in or primarily doing business in or investing in Asia.





Our board of directors may have a
conflict of interest in determining whether a particular target business is
appropriate to effect a business combination. Their personal and financial
interests may influence their motivation in identifying and selecting a target
business and completing a business combination for the following
reasons:





·
            our sponsor and all of our
      officers and directors or their affiliates own ordinary shares which will
      be released from escrow after three years from the date of our prospectus
      and only if we consummate a business combination and with respect to which
      they are waiving their redemption and liquidation distribution rights if
      we liquidate.





Although
we have attempted to minimize potential conflicts of interest by establishing
policies whereby:





·
            our company will not acquire
      control or effect a business combination with any entity in which any of
      our officers, directors or initial shareholders are officers, directors,
      employees, or owners of more than 5% of the equity of such entity, or
      otherwise directly or indirectly an affiliate of such
      entity;


·
            none of our officers, directors
      or any of their affiliates will receive any finders fees or other
      compensation, either from us or from a prospective target company, in
      connection with any business
combination;


·
            we are requiring each of our
      officers and directors to provide us with a right of first refusal to
      acquire any corporate or business opportunities that are located in or
      primarily doing business in or investing in Asia they obtain access to,
      whether individually or through a company they are or may become
      affiliated with, and which could reasonably be valued at 80% or more of
      the total amount placed in our trust account upon completion of our
      offering (excluding deferred underwriting fees). In addition, each of the
      entities currently affiliated with our officers and directors have
      confirmed to us that such agreement will not violate any prior fiduciary
      duty or agreement with such entity. Such entities executed a written
      confirmation and delivered to us in which they acknowledged that they have
      received a copy of, and have reviewed, the applicable right of first
      refusal agreement and that compliance with such agreement by the
      applicable officer, director or initial shareholders will not violate any
      prior fiduciary duty or agreement with such entity;
    and


·
            prior to the consummation of a
      business combination, the liquidation of our company, or their ceasing to
      be a shareholder, officer or director of our company, each of our
      officers, directors or initial shareholders have agreed not to become
      affiliated with any entity, including other blank check companies, with a
      primary focus on completing an acquisition in
  Asia.





Subject
to the above policies, our officers and directors may in the future become
affiliated with entities, including other blank check or business combination
companies, engaged in business activities similar to those intended to be
conducted by our company. Since our directors beneficially own ordinary shares
which will be released from escrow only if a business combination is
successfully completed, our board may have a conflict of interest in determining
whether a particular target business is appropriate to effect a business
combination. The personal and financial interests of our directors and officers
may influence their motivation in identifying and selecting a target business,
completing a business combination timely and securing the release of their
stock.




67




If we
were to make a deposit, down payment or fund a “no shop” provision in connection
with a potential business combination, we may have insufficient funds outside of
the trust to pay for due diligence, legal, accounting and other expenses
attendant to completing a business combination. In such event, our initial
shareholders may have to incur such expenses in order to proceed with the
proposed business combination. As part of any such combination, such initial
shareholders may negotiate the repayment of some or all of any such expenses,
without interest or other compensation, which if not agreed to by the target
business’ management, could cause our management to view such potential business
combination unfavorably, thereby resulting in a conflict of
interest.





After the
consummation of a business combination, if any, to the extent our management
remains as officers of the resulting business, some of our officers and
directors may enter into employment agreements, the terms of which shall be
negotiated and which we expect to be comparable to employment agreements with
other similarly-situated companies in Asia. Further, after the consummation of a
business combination, if any, to the extent our directors remain as directors of
the resulting business, we anticipate that they will receive compensation
comparable to directors at other similarly-situated companies in
Asia.





All
ongoing and future transactions between us and any of our officers and directors
or their respective affiliates, including the provision of the loans by our
officers and directors, will be on terms believed by us at that time, based upon
other similar arrangements known to us, to be no less favorable than are
available from unaffiliated third parties and any transactions or loans,
including any forgiveness of loans, will require prior approval in each instance
by a majority of our uninterested “independent” directors (to the extent we have
any) or the members of our board who do not have an interest in the transaction,
in either case who had 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.





To
further minimize potential conflicts of interest, we will not enter into any
business combination with any affiliates of our sponsor, initial shareholders,
advisors, officers or directors, or any affiliates thereof.





C.   Interests
of Experts and Counsel





Not
Applicable.




ITEM
      8:
            Financial
      Information




A.   Financial
Statements and Other Financial Information





Reference
is made to Item 17. Financial
Statements for the financial statements included in this Annual
Report.





There are
no legal proceedings of a material nature pending against the Company. The
Company is unaware of any legal proceedings known to be contemplated by any
governmental authorities.





B.   Significant
Changes





Subsequent to December 31, 2008, there
have been no significant changes in the Company’s financial
condition.




68




ITEM
      9:
            The
      Offering and Listing.




A.   Offer
and Listing Details





Our
units, ordinary shares and warrants are traded on the NYSE Alternext US Exchange
under the symbols “CIO.U”, “CIO”, and “CIO.WS”, respectively. Our units were
approved for listing on the NYSE Alternext US Exchange (f/k/a the American Stock
Exchange) on January 16, 2008. Commencing on February 13, 2008, the ordinary
shares and warrants included in our units began trading separately. The
following table shows the reported high and low closing bid quotations per share
for our units, ordinary shares and warrants based on information provided by the
NYSE Alternext US Exchange.





As of
March 31, 2009, there were 9 holders of record of our ordinary shares and we had
14,000,000 shares issued and outstanding. Because brokers and other institutions
hold many of the shares on behalf of shareholders, we are unable to determine
the actual number of shareholders represented by these record
holders.





Dividends





We have
never declared or paid cash dividends on our ordinary shares. We currently
anticipate that we will retain all future earnings to fund the operation of our
business and do not anticipate paying dividends on our ordinary shares in the
foreseeable future.





Recent
Issuances of Unregistered Stock





On
January 16, 2008, we completed a private placement of 5,725,000 warrants to our
sponsor in connection with our offering, Ho Capital Management LLC, an entity
co-managed and jointly owned by Angela Ho, our former chief executive officer
and former chairman, and Noble Investment Fund Limited, generating gross
proceeds of $5,725,000.





All of
the proceeds received from the insider warrants (an aggregate of $5,725,000)
were placed in the trust account. Ho Capital Management LLC and Noble Investment
Fund Limited will each have a 50% beneficial ownership interest in the insider
warrants. So long as the insider warrants are owned by Ho Capital Management
LLC, Noble Investment Fund Limited or Angela Ho, the insider warrants may be
exercised on a cashless basis and will not be subject to redemption. The insider
warrants may not be sold, assigned or transferred by Ho Capital Management LLC
(nor may the members interest in Ho Capital Management LLC be sold, assigned or
transferred) until we have consummated a business combination. Immediately prior
to the date of our prospectus, Noble Investment Fund Limited provided Ho Capital
Management LLC with a $5,725,000 loan, the proceeds of which were used to
purchase the insider warrants, and the insider warrants were pledged to Noble to
secure repayment of such loan. The record and beneficial ownership of 2,862,500
warrants, or 50% of such insider warrants, will be transferred by Ho Capital
Management LLC to Noble Investment Fund Limited upon our completion of a
business combination; and such transfer shall represent repayment of 50% of the
$5,725,000 loan. The remaining $2,862,500 of such loan, plus accrued interest at
the rate of 4.5% per annum, is payable by Ms. Ho only from the proceeds of
periodic sales of the insider warrants and underlying shares. The $5,725,000
loan from Noble Investment Fund Limited to Ho Capital Management LLC was made
based upon a pre-existing business arrangement between Noble and Angela Ho
whereby Ms. Ho agreed to organize the sponsor and management of our company,
Noble agreed to provide the financing for the purchase of the insider warrants,
and the parties agreed to share equally in such insider warrants. The holders of
the insider warrants will not have any right to any liquidation distributions
with respect to the shares underlying the warrants in the event we fail to
consummate a business combination and the insider warrants will expire
worthless. The insider warrants transfer restrictions expire on the earlier of
(i) a business combination or (ii) our liquidation.





The above
offering and sale was deemed to be exempt under rule 506 of Regulation D and
Section 4(2) of the Securities Act of 1933, as amended. No advertising or
general solicitation was employed in offering the securities. The offering and
sale was made to a limited number of persons, all accredited investors, and
transfer was restricted by us in accordance with the requirements of the
Securities Act of 1933. In addition to representations by the above-referenced
persons, we have made independent determinations that all of the
above-referenced persons were accredited or sophisticated investors, and that
they were capable of analyzing the merits and risks of their investment, and
that they understood the speculative nature of their investment.




69




B.   Plan
of Distribution





Not applicable.





C.   Markets





See A.
above                                .





D.   Selling
Shareholders





Not applicable.





E.   Dilution





Not
applicable.




F.   Expenses
of the Issue





Not applicable.




ITEM
      10:
            Additional
      Information




A.   Share
Capital





Not applicable.





B.   Memorandum
and Articles of Association





The Company’s Amended and Restated
Memorandum and Articles of Association was filed with the Securities and
Exchange Commission on November 2, 2007 as Exhibit 3.1 to Amendment No. 2 to the
Company’s Registration Statementon Form S-1 (File No.
333-145163).





C.   Material
Contracts





The following material contracts
have been entered into by the Company within the past three years:





1.  Underwriting
Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K (File No. 001-33916), as filed with the Securities
and Exchange Commission on January 25, 2008).





2.  Warrant
Agreement between Continental Stock Transfer & Trust Company and the
Company. (incorporated herein by reference to Exhibit 4.1 to the Company’s
Current Report on Form 8-K (File No. 001-33916), as filed with the Securities
and Exchange Commission on January 25, 2008).





3.  Unit
Purchase Option in favor of Maxim Partners LLC (incorporated herein by reference
to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 001-33916),
as filed with the Securities and Exchange Commission on January 25, 2008).





4.  Unit
Purchase Option in favor of CRT Capital Group LLC (incorporated herein by
reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (File No.
001-33916), as filed with the Securities and Exchange Commission on January 25,
2008).




70







5. 
Form of Letter Agreement by Insiders of the Company to Maxim Group LLC and the
Company (incorporated herein by reference to Exhibit 10.1 to Amendment No. 4 to
the Company’s Registration Statement on Form S-1 (File No. 333-145163), as
filed with the Securities and Exchange Commission on December 17, 2007).





6.  Investment
Management Trust Agreement between Continental Stock Transfer & Trust
Company and the Company (incorporated herein by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K (File No. 001-33916), as filed with the
Securities and Exchange Commission on January 25, 2008).





7.  Stock
Escrow Agreement between the Company, Continental Stock Transfer & Trust
Company and the Initial Shareholders (incorporated herein by reference to
Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-33916),
as filed with the Securities and Exchange Commission on January 25,
2008).





8.  Registration
Rights Agreement among the Company and the Initial Shareholders (incorporated
herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
(File No. 001-33916), as filed with the Securities and Exchange Commission on
January 25, 2008).





9.  Subscription
Agreement between the Company and certain officers and directors of the Company
(incorporated herein by reference to Exhibit 10.5 to the Company’s Current
Report on Form 8-K (File No. 001-33916), as filed with the Securities and
Exchange Commission on January 25, 2008).





10.  Form
of Letter Agreement by affiliated entities of the Company’s officers, directors
and initial shareholders to Maxim Group LLC and the Company (incorporated herein
by reference to Exhibit 10.12 to Amendment No. 2 to the Company’s Registration
Statement on Form
S-1 (File No. 333-145163), as filed with the Securities and Exchange Commission
on November 2, 2007).





11.  Stock
Purchase Agreement dated as of July 8, 2008 by and among Asia Special Situation
Acquisition Corp., China Tel Group, Inc. and Trussnet USA, Inc. (incorporated
herein by reference to Exhibit 10.1 to the Company’s Report on Form 6-K (File
No. 001-33916), as filed with the Securities and Exchange Commission on July 10,
2008).





12.  Amended
and Restated Stock Purchase Agreement dated as of July 31, 2008 by and among
Asia Special Situation Acquisition Corp., ChinaTel Group, Inc., Trussnet USA,
Inc. and George Alvarez (incorporated herein by reference to Exhibit 10.1 to the
Company’s Report on Form 6-K (File No. 001-33916), as filed with the Securities
and Exchange Commission on August 11, 2008).





13.  Agreement
and Plan of Merger dated as of August 4, 2008 by and among Asia Special
Situation Acquisition Corp., ChinaTel Group, Inc., CHTL Acquisition Corp.,
George Alvarez, and the other principal shareholders of ChinaTel Group, Inc.
(incorporated herein by reference to Exhibit 10.2 to the Company’s Report on
Form 6-K (File No. 001-33916), as filed with the Securities and Exchange
Commission on August 11, 2008).





14.  Form
of Pledge Agreement by and among Asia Special Situation Acquisition Corp.,
ChinaTel Group, Inc. and Horwitz, Cron & Jasper, P.L.C., as collateral agent
(incorporated herein by reference to Exhibit 10.3 to the Company’s Report on
Form 6-K (File No. 001-33916), as filed with the Securities and Exchange
Commission on August 11, 2008).





15. 
Form of Promissory Note of Asia Special Situation Acquisition Corp. to be issued
to ChinaTel Group, Inc. (incorporated herein by reference to Exhibit 10.4 to the
Company’s Report on Form 6-K (File No. 001-33916), as filed with the Securities
and Exchange Commission on August 11, 2008).





16    Termination
and Mutual Release Agreement dated as of November 3, 2008 by and between Asia
Special Situation Acquisition Corp. and ChinaTel Group, Inc. (incorporated
herein by reference to Exhibit 10.1 to the Company’s Report on Form 6-K (File
No. 001-33916), as filed with the Securities and Exchange Commission on November
7, 2008).


71





17.  Acquisition
Framework Agreement as of December 17, 2008 by and among Asia Special Situation
Acquisition Corp., White Energy Company Limited and Binderless Coal Briquetting
Company Pty Limited (incorporated herein by reference to Exhibit 10.1 to the
Company’s Report on Form 6-K (File No. 001-33916), as filed with the Securities
and Exchange Commission on December 19, 2008).





18. 
Share Exchange Agreement as of March 12, 2009 by and among Asia Special
Situation Acquisition Corp., White Energy Company Limited and White Energy
Technology Company Limited (incorporated herein by reference to Exhibit 10.1 to
the Registrant’s Report on Form 6-K (File No. 001-33916), as filed with the
Securities and Exchange Commission on March 16, 2009).





D.   Exchange
Controls





See the
disclosure set forth under “Risk Factors” and “Business Overview” beginningon pages 6 and 30, respectively, of this Annual Report.





E.   Taxation





See the
disclosure set forth under “Risk Factors” and “Business Overview” beginningon pages 6 and 30, respectively, of this Annual Report.





In
addition, the following summary of the material Cayman Islands and United States
federal income tax consequences of an investment in ordinary shares is based
upon laws and relevant interpretations thereof in effect as of the date of our
prospectus, all of which are subject to change. This summary does not deal with
all possible tax consequences relating to an investment in our ordinary shares,
such as the tax consequences under state, local and other tax laws.





Cayman
Islands Taxation





The
Government of the Cayman Islands, will not, under existing legislation, impose
any income, corporate or capital gains tax, estate duty, inheritance tax, gift
tax or withholding tax upon the company or its shareholders. The Cayman Islands
are not party to any double taxation treaties.





We have
applied for and can expect to receive an undertaking from the
Governor-in-Cabinet of the Cayman Islands that, in accordance with section 6 of
the Tax Concessions Law (1999 Revision) of the Cayman Islands, for a period of
20 years from the date of the undertaking, no law which is enacted in the Cayman
Islands imposing any tax to be levied on profits, income, gains or appreciations
shall apply to us or our operations and, in addition, that no tax to be levied
on profits, income, gains or appreciations or which is in the nature of estate
duty or inheritance tax shall be payable (i) on the shares, debentures or other
obligations of the company or (ii) by way of the withholding in whole or in part
of a payment of dividend or other distribution of income or capital by the
company to its members or a payment of principal or interest or other sums due
under a debenture or other obligation of the company.





Certain
United States Federal Income Tax Consequences





The
following is a general summary of certain United States federal income tax
consequences, under current law, generally applicable to a U.S. Holder (as
defined below) of the acquisition, ownership and disposition of our ordinary
shares and warrants. This section does not address any aspect of United States
federal gift or estate tax, or the state, local or foreign tax consequences of
an investment in our ordinary shares and warrants. United States alternative
minimum tax considerations are not addressed in this summary. This section only
applies to U.S. Holders who acquire ordinary shares and warrants in this
offering as capital assets for tax purposes and who hold the shares and warrants
directly (e.g., not through an intermediary entity such as a corporation,
partnership, LLC or trust).


72





The
following summary is based upon the Internal Revenue Code of 1986, as amended
(the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”)
rulings, published administrative positions of the IRS, and court decisions that
are currently applicable, any of which could be materially and adversely
changed, possibly on a retroactive basis, at any time. This summary does not
consider the potential effects, both adverse and beneficial, of any recently
proposed legislation which, if enacted, could be applied (possibly on a
retroactive basis) at any time (including, without limitation, changes in
applicable tax rates). No ruling from the IRS has been or will be sought on any
of the issues discussed below. As a result, there can be no assurance that the
IRS will not successfully challenge the tax treatment described
herein.





This
discussion does not discuss all the tax consequences that may be relevant to
particular investors in light of their circumstances or to investors that are
subject to special rules, including:





·
            a
      bank;


·
            a
      dealer in securities or currencies;


·
            a
      trader in securities that elects to use a mark-to-market method of
      accounting for your securities
holdings;


·
            a
      tax-exempt organization;


·
            a
      qualified retirement plan, individual retirement account and other
      tax-deferred accounts;


·
            an
      insurance company;


·
            a
      person that holds ordinary shares that are a hedge or that are hedged
      against currency risks or as part of a straddle or a conversion
      transaction;


·
            a
      person who acquires his/her ordinary shares and warrants as compensation
      for services; or


·
            a
      U.S. Holder (as defined below) whose functional currency is not the U.S.
      dollar.





For
purposes of the United States federal income tax discussion below, you are a
U.S. Holder if you are a beneficial owner of ordinary shares or warrants and you
are: (1) a citizen or individual resident (as defined under United States tax
laws) of the United States; (2) a corporation or other entity taxable as a
corporation created or organized in or under the laws of the United States or of
any political subdivision thereof; (3) an estate whose income is subject to
United States federal income tax regardless of its source; (4) or a trust if (A)
a United States court can exercise primary supervision over the trust’s
administration and one or more United States persons are authorized to control
all substantial decisions of the trust, or (B) the trust was in existence on
August 20, 1996, and validly elected to continue to be treated as a United
States domestic trust.





This
summary is for general information only and it is not intended to be, nor should
it be construed to be, legal or tax advice to any U.S. Holder, and no opinion or
representation with respect to the United States federal income tax consequences
to any such holder or prospective holder is made. Accordingly, U.S. Holders and
prospective holders of ordinary shares and warrants, should consult their own
tax advisors about the federal, state, local, and foreign tax consequences of
purchasing, owning and disposing of shares and warrants.





REQUIRED
NOTICE




To ensure compliance with Internal
Revenue Service Circular 230, U.S. Holders are hereby notified that: (a) any
discussion of U.S. federal tax issues is not intended or written to be relied
upon, and cannot be relied upon by U.S. Holders, for the purpose of avoiding
penalties that may be imposed on U.S. Holders under the Internal Revenue Code;
(b) such discussion is written in connection with the promotion or marketing of
the transactions or matters addressed; and (c) each U.S. Holder should seek
advice based on its particular circumstances from an independent tax
advisor.





Allocation
of Purchase Price Between Ordinary Shares and Warrants




For U.S.
federal income tax purposes, a U.S. Holder generally must allocate the purchase
price of a unit between the ordinary share and each warrant that comprise the
unit based on the relative fair market value of each. The price allocated to
each ordinary share and each warrant generally will be the U.S. Holder’s tax
basis in such share or warrant, as the case may be. While uncertain, the IRS, by
analogy to the rules relating to the allocation of the purchase price to
components of a unit consisting of debt and equity, may take the position that
our allocation of the purchase price will be binding on a U.S. Holder of a unit,
unless the U.S. Holder explicitly discloses in a statement attached to the U.S.
Holder’s timely filed U.S. federal income tax return for the taxable year that
includes the acquisition date of the unit that the U.S. Holder’s allocation of
the purchase price between the ordinary share and each warrant that comprise the
unit is different than our allocation. Our allocation is not, however, binding
on the IRS.


73





Each U.S.
Holder is advised to consult such holder’s own tax advisor with respect to the
risks associated with an allocation of the purchase price between the ordinary
shares and the warrants that comprise a unit that is inconsistent with our
allocation of the purchase price.





Taxation
of Dividends




Under the
United States federal income tax laws, and subject to the personal foreign
investment company rules discussed below, the gross amount of any dividend we
pay out of our current or accumulated earnings and profits (as determined for
United States federal income tax purposes) is subject to United States federal
income taxation. If you are a non-corporate U.S. Holder, dividends paid to you
in taxable years beginning before January 1, 2011 that constitute qualified
dividend income will be taxable to you at a maximum tax rate of 15% provided
that you hold our ordinary shares for more than 60 days during the 121-day
period beginning 60 days before the ex-dividend date and meet other holding
period requirements. Dividends paid with respect to shares will be qualified
dividend income provided that, our ordinary shares are readily tradable on an
established securities market in the United States in the year that you receive
the dividend, you do not treat the dividend as “investment income” for purposes
of the investment interest deduction rules and we are not a passive foreign
investment company in the year in which the dividend is paid or in the preceding
taxable year.





A
corporate U.S. Holder generally will not be entitled to a dividends received
deduction. Distributions in excess of current and accumulated earnings and
profits, as determined for United States federal income tax purposes, will be
treated as a non-taxable return of capital to the extent of your basis in our
ordinary shares and thereafter as capital gain.





If the
dividend is declared and paid in a foreign currency, the amount of the dividend
distribution that you must include in your income as a U.S. Holder will be the
U.S. dollar value of the payments made in the foreign currency, determined at
the spot foreign currency/U.S. dollar rate on the date the dividend distribution
is includible in your income, regardless of whether the payment is in fact
converted into U.S. dollars. Therefore, since the value of the foreign currency
may decrease before you actually convert the currency into U.S. dollars, you may
actually be taxed on a larger amount in U.S. dollars than the U.S. dollar amount
that you will ultimately receive. Generally, any gain or loss resulting from
currency exchange fluctuations during the period from the date you include the
dividend payment in income to the date you convert the payment into U.S. dollars
will be treated as ordinary income or loss and will not be eligible for the
special tax rate applicable to qualified dividend income.





Sale
or Exchange of Shares




Subject
to the PFIC rules discussed below, if you are a U.S. Holder and you sell or
otherwise dispose of your ordinary shares, you will recognize capital gain or
loss for United States federal income tax purposes in an amount equal to the
difference between the U.S. dollar value of the amount that you realize and your
tax basis, determined in U.S. dollars, in your ordinary shares. Capital gain of
a non-corporate U.S. Holder that is recognized before January 1, 2011 is
generally taxed at a maximum rate of 15% where the holder has a holding period
greater than one year. Your ability to deduct capital losses is subject to
limitations.


74





Exercise,
Disposition or Lapse of Warrants




Subject
to the PFIC rules discussed below, a U.S. Holder generally will not recognize
gain or loss upon the exercise of a warrant. Ordinary shares acquired pursuant
to the exercise of a warrant will have a tax basis equal to the U.S. Holder’s
tax basis in the warrant (that is, an amount equal to the portion of the
purchase price of each unit allocated to the warrant as described above in
“Allocation of Purchase Price Between Ordinary Shares and Warrants”), increased
by the amount paid to exercise the warrant. The holding period of such ordinary
share would begin on the day following the date of exercise of the warrant and
will not include the period during which the U.S. Holder held the
warrant.





Subject
to the PFIC rules discussed below, upon the sale or other disposition of a
warrant (other than by exercise), a U.S. Holder will recognize capital gain or
loss in an amount equal to the difference between the amount realized and the
U.S. Holder’s tax basis in the warrant (that is, as discussed above, the portion
of the purchase price of a unit allocated to such warrant). Such gain or loss
will be long-term capital gain or loss if the U.S. Holder has held the warrant
for more than one year. Under certain circumstances, we have the right to redeem
the warrants, without the prior consent of any third party. A redemption of
warrants may, in certain circumstances, be treated as a sale or exchange of the
warrants.





If a
warrant is allowed to lapse unexercised, a U.S. Holder will recognize a capital
loss in an amount equal to such holder’s tax basis in the warrant. Such loss
will be long-term if the warrant has been held for more than one year. The
ability to deduct any such loss may be subject to certain limitations, and
holders should consult their own tax advisors as to the potential application of
such limitations.





As
discussed above in “Allocation of Purchase Price Between Ordinary Shares and
Warrants”, the allocation of purchase price of a unit between the Ordinary Share
and the warrant comprising such unit is not binding on the IRS. If the IRS were
to successfully challenge your allocation, the amount of gain recognized upon
disposition of an ordinary share or warrant could be increased, and the amount
of loss recognized upon disposition of an ordinary share or warrant or upon
lapse of a warrant could be reduced.





U.S.
Anti-Deferral Regimes




There are
two regimes applicable to foreign corporations under United States federal
income tax law that potentially may apply to our company - the “controlled
foreign corporation” (“CFC”) regime and the passive foreign investment company
(“PFIC”) regime.





Generally,
a foreign corporation is not a CFC unless more than fifty percent (by vote or
value) of its stock is owned by “U.S. Shareholders” (generally, United States
owners with ten percent or more of the votes of the foreign corporation). It is
anticipated that our company will not have more than fifty percent ownership by
U.S. Shareholders, and therefore our company will not be a CFC. If our company
were a CFC, the United States federal tax consequences summarized herein could
be materially and adversely different.





Passive
Foreign Investment Company Rules




Special
United States tax rules apply to a company that is considered a PFIC. PFIC
status is not conditioned on a certain level of ownership of the foreign
corporation by U.S. Shareholders. Under these rules, we will be classified as a
PFIC for United States federal income tax purposes in any taxable year in which
either:





·
            at
      least 75% of our gross income for the taxable year is passive income;
      or


·
            at
      least 50% of the gross value, determined on the basis of a quarterly
      average, of our assets is attributable to assets that produce or are held
      for the production of passive
income.





Passive
income generally includes dividends, interest, royalties, rents (not including
certain rents and royalties derived in the active conduct of a trade or
business), annuities and gains from assets that produce passive income. If a
foreign corporation owns directly or indirectly at least 25% by value of the
stock of another corporation, the foreign corporation is treated for purposes of
the PFIC tests as owning its proportionate share of the assets of the other
corporation, and as receiving directly its proportionate share of the other
corporation’s income.


75





Newly
formed corporations, such as us, are, under certain circumstances, excepted out
of the PFIC rules for their first year of existence. We cannot assure you that
we will not be a PFIC for the current or any future year.





If we are
treated as a PFIC, and you are a U.S. Holder that does not make a QEF election
or mark-to-market election, as described below, you will be subject to special
rules with respect to:





·
            any
      gain you realize on the sale or other disposition of your ordinary shares
      or warrants; and


·
            any
      excess distribution that we make to you (generally, any distributions to
      you during a single taxable year that are greater than 125% of the average
      annual distributions received by you in respect of the ordinary shares
      during the three preceding taxable years or, if shorter, your holding
      period for the ordinary shares or ordinary
  shares).





Under
these rules the gain or excess distribution will be allocated ratably over your
holding period for the ordinary shares. Amounts allocated to the taxable year in
which you realized the gain or excess distribution will be taxed as ordinary
income; and the amount allocated to each prior year, with certain exceptions,
will be taxed at the highest tax rate in effect for that year. In addition, the
interest charge generally applicable to underpayments of tax will be imposed in
respect of the tax attributable to each such year.





These
unfavorable tax results may potentially be avoided if the U.S. Holder makes a
QEF election to be taxed currently on his, her or its pro rata portion of our
income and gain, whether or not such income or gain is distributed in the form
of dividends or otherwise, and our company provides certain annual statements
which include the information necessary to determine inclusions and assure
compliance with the PFIC rules. We intend to provide information reasonably
necessary to comply with the QEF rules to any U.S. Holder who requests it of
us.





The QEF
election is made on a shareholder-by-shareholder basis and can be revoked only
with the consent of the IRS. A shareholder makes a QEF election by attaching a
completed IRS Form 8621 to a timely filed U.S. federal income tax return and by
filing a copy of the form with the IRS. We intend to provide such information as
the IRS may require in order to enable U.S. Holders to make the QEF election.
However, there is no assurance that we will have timely knowledge of our status
as a PFIC in the future. Even if a QEF election is not made, each U.S.
shareholder of a PFIC must annually file a completed Form 8621 with the
shareholder’s tax return and with the IRS.




The
warrants would most likely be treated as options for purposes of the PFIC rules,
so that the U.S. Holder of a warrant would be treated as a shareholder for
certain purposes under proposed Treasury Regulations regarding PFICs. A U.S.
Holder of warrants, however, may not be eligible to make a QEF Election while it
holds the warrants that will apply to either the warrant itself or the ordinary
shares that may be received upon exercise of the warrant. Therefore, the U.S.
Holder may be unable to make a timely QEF Election that would apply to the
warrants and the ordinary shares into which the warrants may be converted.
Special rules may apply in these circumstances. U.S. Holders of warrants should
consult their own tax advisors regarding the treatment of the warrants under the
PFIC rules.





U.S.
Holders should consult their own tax advisors with respect to the PFIC issue and
its applicability to their particular tax situation. In addition, U.S. Holders
should consult with their own tax advisor regarding any special annual reporting
requirements that may apply to them by virtue of their ownership of stock of a
PFIC.





As
another alternative to the foregoing rules, a U.S. Holder of a PFIC may make a
“Mark-to-Market Election” to include in income each year as ordinary income an
amount equal to the increase in value of the ordinary shares for that year or to
claim a deduction for any decrease in value (but only to the extent of previous
mark-to-market gains).





However,
it is unclear whether our ordinary shares will qualify for the mark-to-market
election and prospective investors should not assume that our ordinary shares
will qualify for the mark-to-market election. Whether the ordinary shares will
so qualify will depend on the volume and regularity of the trading of such
ordinary shares and hence cannot be predicted at this time.


76





Backup
Withholding and Information Reporting





If you
are a non-corporate U.S. Holder, information reporting requirements, on Internal
Revenue Service Form 1099, generally will apply to:





·
            dividend
      payments or other taxable distributions made to you within the United
      States, and


·
            the
      payment of proceeds to you from the sale of ordinary shares effected at a
      United States office of a broker.





Additionally,
backup withholding may apply to such payments if you are a non-corporate U.S.
Holder that:





·
            fails
      to provide an accurate taxpayer identification number (generally on Form
      W-9), is notified by the Internal Revenue Service that you have failed to
      report all interest and dividends required to be shown on your federal
      income tax returns, or


·
            in
      certain circumstances, fails to comply with applicable certification
      requirements.





Payment
of the proceeds from the sale of ordinary shares or warrants effected at a
foreign office of a broker generally will not be subject to information
reporting or backup withholding. However, a sale of ordinary shares or warrants
that is effected at a foreign office of a broker will be subject to information
reporting and backup withholding if: the proceeds are transferred to an account
maintained by you in the United States; the payment of proceeds or the
confirmation of the sale is mailed to you at a United States address; or the
sale has some other specified connection with the United States as provided in
U.S. Treasury regulations, unless the broker does not have actual knowledge or
reason to know that you are a United States person and the documentation
requirements described above are met or you otherwise establish an
exemption.





You
generally may obtain a refund of any amounts withheld under the backup
withholding rules that exceed your income tax liability by filing a refund claim
with the United States Internal Revenue Service.





F.   Dividends
and Paying Agents





Not applicable.





G.   Statements
by Experts





The
financial statements included in this annual report for the year ended December
31, 2008 have been audited by Rothstein, Kass & Company, P.C., independent
registered certified public accounting firm, and for the period from March 22,
2007 (date of inception) through December 31, 2008 as set forth in their audit
report appearing elsewhere in this annual report. The financial statements are
included in reliance upon their report, which contains an explanatory paragraph
relating to substantial doubt about our ability to continue as a going concern
if the offering is not completed, given upon the authority of Rothstein, Kass
& Company, P.C. as experts in auditing and accounting.





H.   Documents
on Display





None.





I.   Subsidiary
Information





Not applicable.


77





ITEM
      11:
              Quantitative
      and Qualitative Disclosures about Market
Risk





Market
risk is the sensitivity of income to changes in interest rates, foreign
exchanges, commodity prices, equity prices, and other market-driven rates or
prices. We are not presently engaged in and, if a suitable business target is
not identified by us prior to the prescribed liquidation date of the trust
account, we may not engage in, any substantive commercial business. Accordingly,
we are not and, until such time as we consummate a business combination, we will
not be, exposed to risks associated with foreign exchange rates, commodity
prices, equity prices or other market-driven rates or prices. The net proceeds
of our initial public offering held in the trust account have been invested only
in US Treasury bills and money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act of 1940. Given our
limited risk in our exposure to US Treasury bills and money market funds, we do
not view the interest rate risk to be significant.




ITEM
      12:
              Description
      of Securities other than Equity
Securities





Not Applicable.





PART
II





ITEM
      13:
              Defaults,
      Dividend Arrearages and
Delinquencies





None.





ITEM
      14:
              Material
      Modifications to the Rights of Security Holders and Use of
      Proceeds





None.





ITEM
      15:
              Controls
      and Procedures





(a) Disclosure
Controls and Procedures





Evaluation of
Disclosure Controls and Procedures. Under the supervision and with the
participation of our Chief Executive Officer and Chief Financial Officer, we
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rule 13a-15(3) under the
Exchange Act as of December 31, 2008 (the “Evaluation Date”).  Based
on this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded as of the Evaluation Date that our disclosure controls and procedures
were effective such that the information relating to our company required to be
disclosed in our reports (i) is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms and (ii) is accumulated
and communicated to our management, including our principal executive officer
and principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure.





Our
management, including our Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls and procedures or our internal
controls will prevent all error and all fraud.  A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are
met.  Further, the design of a control system must reflect the fact
that there are resource constraints and the benefits of controls must be
considered relative to their costs.  Due to the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within our company have
been detected.


78





(b) Management’s Report on Internal
Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for our company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed to provide reasonable assurance regarding
the (i) effectiveness and efficiency of operations, (ii) reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, and (iii)
compliance with applicable laws and regulations. Our internal controls framework
is based on the criteria set forth in the Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management’s
assessment of the effectiveness of our internal control over financial reporting
is as of the year ended December 31, 2008. We believe that internal control over
financial reporting is effective.  We have not identified any material
weaknesses considering the nature and extent of our current operations or any
risks or errors in financial reporting under current operations.





(c)Attestation report of the registered
public accounting firm. This annual report does not include an
attestation of the Company’s registered public accounting firm regarding
internal control over financial reporting. Management’s report was not subject
to attestation by the Company’s registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permit the
Company to provide only management’s report in this annual report.




(d)    Changes in
internal control over financial reporting. During the year ended December
31, 2008, there were no changes in our internal control over financial reporting
identified in connection with the evaluation required by paragraph (d) of Rule
13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.




ITEM
      16:
              Reserved





A.   Audit
Committee Financial Expert





Our audit
committee consists of Messrs. Bos, Laslop and de Waal, with Mr. de Waal serving
as chairman of the audit committee. Each member of our audit committee is
financially literate under the current listing standards of the NYSE Alternext
US Exchange, and our board of directors has determined that each of the members
of the audit committee qualify as an “audit committee financial expert,” as such
term is defined by SEC and the NYSE Alternext rules.





B.   Code
of Ethics





We have adopted a Code of Ethics within
the meaning of Item 406(b) of Regulation S-K of the Securities Exchange Act of
1934, which is filed as Exhibit 99.1 to our Registration Statement on Form S-1
(File No. 333-145163), as filed with the Securities and Exchange Commission on
August 6, 2007. Our Code of Ethics applies to our chief executive officer and
our senior financial officers.





C.   Principal
Accountant Fees and Services





Appointment
of Auditors





Our board
of directors selected Tedder, James, Worden & Associates, P.A. as our
auditors for the period March 22, 2007 (inception) to September 24, 2007, the
date of their resignation. In addition, our board of directors selected
Rothstein, Kass & Company, P.C. as our auditors for the period September 24,
2007 to December 31, 2008.


79





Audit
Fees





Tedder,
James, Worden & Associates, P.A. billed us $14,645 in fees for audit
services for the period March 22, 2007 (inception) to September 24, 2007.
Rothstein, Kass & Company, P.C. billed us $92,000 in fees for audit services
for the period March 22, 2007 (inception) to December 31, 2008. Audit Fees
consist of fees billed for professional services rendered in connection with the
audit of our financial statements and review of the interim financial statements
reflecting quarterly results included in our Form 6-K. It also includes services
that are normally provided by Rothstein, Kass & Company, P.C. in connection
with statutory and regulatory filings or engagements.





Audit-Related
Fees





We did
not pay any fees to Tedder, James, Worden & Associates, P.A. for assurance
and related services that are not reported under Audit Fees above, for the
period March 22, 2007 (inception) to September 24, 2007. We paid $36,500 to
Rothstein, Kass & Company, P.C. for assurance and related services that are
not reported under Audit Fees above, for the period ended December 31,
2008.





Tax
and All Other Fees





We did
not pay any fees to Tedder, James, Worden & Associates, P.A. for tax
compliance, tax advice, tax planning or other work for the period March 22, 2007
(inception) to September 24, 2007. We did not pay any fees to Rothstein, Kass
& Company, P.C. for tax compliance, tax advice, tax planning or other work
for the period ended December 31, 2008.





Pre-Approval
Policies and Procedures





We have
implemented pre-approval policies and procedures related to the provision of
audit and non-audit services. Under these procedures, our audit committee
pre-approves all services to be provided by Rothstein, Kass & Company, P.C.
and the estimated fees related to these services.





With
respect to the audit of our financial statements as of December 31, 2008, and
for the year then ended, none of the hours expended by Rothstein, Kass &
Company, P.C.’s engagement to audit those financial statements were attributed
to work by persons other than Rothstein, Kass & Company, P.C., and its
full-time, permanent employees.





D.   Exemptions
From the Listing Standards for Audit Committees





Not
Applicable.





E.   Purchases
of Equity Services by the Issuer and Affiliated Purchasers





None.





F.    Change
in Registrant’s Certifying Accountant





On
September 24, 2007, we were notified that certain partners of Tedder, James,
Worden & Associates, P.A., our independent registered certified public
accounting firm, had joined McGladrey & Pullen, LLP and that, as a result,
effective September 24, 2007, Tedder, James, Worden & Associates, P.A.
resigned as our independent registered certified public accounting firm. On
September 24, 2007, Rothstein, Kass & Company, P.C. was engaged as our
independent registered certified public accountant. Our decision to engage
Rothstein, Kass & Company, P.C. was approved by our board of directors on
September 24, 2007.





The audit
reports of Tedder, James, Worden & Associates, P.A. on our financial
statements from March 22, 2007 (inception) to April 9, 2007 did not contain an
adverse opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principles from March 22, 2007
(inception) to April 9, 2007, except that Tedder, James, Worden &
Associates, P.A.’s opinion in its audit report on our financial statements
included an emphasis paragraph relating to an uncertainty as to our ability to
continue as a going concern.


80





From
March 22, 2007 (inception) to April 9, 2007 through the date of resignation,
there were no reportable events as such term is described in Item 304(a)(1)(v)
of Regulation S-K.





From
March 22, 2007 (inception) to April 9, 2007 through the date of resignation,
there were no disagreements with Tedder, James, Worden & Associates, P.A. on
any matters of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which, if not resolved to the
satisfaction of Tedder, James, Worden & Associates, P.A., would have caused
it to make reference to the subject matter of the disagreements in connection
with its reports on these financial statements for such period.





We did
not consult with Rothstein, Kass & Company, P.C. regarding the application
of accounting principles to a specific transaction, either completed or
proposed, or the type of audit opinion that might be rendered on our financial
statements, and no written or oral advice was provided by Rothstein, Kass &
Company, P.C. that was a factor considered by us in reaching a decision as to
the accounting, auditing or financial reporting issues.


81


PART
III




ITEM
      17:
              Financial
      Statements





Asia
Special Situation Acquisition Corp.




(a
corporation in the development stage)





INDEX
      TO FINANCIAL STATEMENTSReport
      of Independent Registered Public Accounting Firm
                F-1Financial
      Statements:Balance
      Sheets as of December 31, 2008 and 2007
                F-2Statements
      of Operations for the year ended December 31, 2008 and the periods March
      22, 2007 (inception) to December 31, 2007 and 2008
                F-3Statements
      of Cash Flows for the year ended December 31, 2008 and the periods March
      22, 2007 (inception) to December 31, 2007 and 2008
                F-4Statements
      of Shareholders’ Equity for the period March 22, 2007 (inception) to
      December 31, 2008
                F-5Notes
      to Financial Statements
                F-6 -
      F-14


82


Report
of Independent Registered Public Accounting Firm




To the
Board of Directors and Shareholders of




Asia
Special Situation Acquisition Corp.




We have
audited the accompanying balance sheets of Asia Special Situation Acquisition
Corp. (a corporation in the development stage) (the “Company”) as of December
31, 2008 and 2007 and the related statements of operations, shareholders’
equity, and cash flows for the year ended December 31, 2008 and the periods from
March 22, 2007 (inception) to December 31, 2007 and from March 22, 2007
(inception) through December 31, 2008.  These financial statements are
the responsibility of the Company’s management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.




We
conducted our audits in accordance with the standards of the 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 audit 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.




The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company’s articles of association provides for mandatory
liquidation of the Company in the event that the Company does not consummate a
business combination (as defined) prior to July 16, 2009, or by January 16, 2010
if certain extension criteria have been satisfied. This condition raises
substantial doubt about its ability to continue as a going concern. Management’s
plans regarding those matters are described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Asia Special Situation Acquisition
Corp. (a corporation in the development stage) as of December 31, 2008 and 2007,
and the results of its operations and its cash flows for the year ended December
31, 2008 and the periods from March 22, 2007 (inception) to December 31, 2007
and from March 22, 2007 (inception) through December 31, 2008, in conformity
with accounting principles generally accepted in the United States of
America.




/s/Rothstein,
Kass & Company, P.C.




Roseland,
New Jersey


March 30,
2009


F-1




FINANCIAL
STATEMENTS




ASIA
SPECIAL SITUATION ACQUISITION CORP.


(a
corporation in the development stage)





BALANCE
SHEETS




December 31,2008
                    
                    
                    2007ASSETSCurrent
      assetsCash
      and cash equivalents
                    
                    $
                    96,000
                    
                    
                    $
                    194,000Prepaid
      expenses
                    
                    
                    120,000
                    
                    
                    
                    248,000Total
      current assets
                    
                    
                    216,000
                    
                    
                    
                    442,000Other
      assetsInvestment
      in Trust Account
                    
                    
                    115,000,000
                    
                    
                    
                    -Deferred
      finance costs, net
                    
                    
                    672,000
                    
                    
                    
                    -Deferred
      offering costs
                    
                    
                    -
                    
                    
                    
                    593,000Total
      other assets
                    
                    
                    115,672,000
                    
                    
                    
                    593,000$
                    115,888,000
                    
                    
                    $
                    1,035,000LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable and accrued expenses (including approximately $264,000 payable to
      the Company's former Chief Executive officer)
                    
                    $
                    524,000
                    
                    
                    $
                    513,000Note
      payable together with accrued interest
                    
                    
                    501,000
                    
                    
                    
                    -Line
      of credit, shareholder
                    
                    
                    -
                    
                    
                    
                    500,000Total
      current liabilities
                    
                    
                    1,025,000
                    
                    
                    
                    1,013,000Non-current liabilities,deferred underwriters' fee net of redemption
    forfeiture
                    
                    
                    3,450,000
                    
                    
                    
                    -Ordinary shares subject to
      redemption, 4,024,999 shares at redemption, approximately $10
      per share
                    
                    
                    40,250,000
                    
                    
                    
                    -Commitments
      and contingenciesShareholders'
      equityPreferred
      shares, $0.0001 par value; 1,000,000 shares authorized; none
      issuedOrdinary
      shares, $0.0001 par value; 50,000,000 shares authorized; 14,000,000 and
      2,500,000 shares issued and outstanding, respectively
                    
                    
                    1,000
                    
                    
                    
                    -Additional
      paid-in capital
                    
                    
                    71,036,000
                    
                    
                    
                    25,000Retained
      earnings (deficit) accumulated during the development
stage
                    
                    
                    126,000
                    
                    
                    
                    (3,000
                    )Total
      shareholders' equity
                    
                    
                    71,163,000
                    
                    
                    
                    22,000$
                    115,888,000
                    
                    
                    $
                    1,035,000




See
accompanying notes to financial statements


F-2




ASIA
SPECIAL SITUATION ACQUISITION CORP.


(a
corporation in the development stage)





STATEMENTS
OF OPERATIONS





March 22, 2007Year
                                          
                                          
                                          (date of inception)ended
                                          
                                          
                                          toDecember 31,
                                            2008
                                          
                                          
                                          December 31,
                                            2007
                                          
                                          
                                          December 31,
                                            2008Revenue
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          -Costs
      of acquisition not completed
                                          
                                          
                                          978,000
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          978,000Formation
      and operating costs
                                          
                                          
                                          924,000
                                          
                                          
                                          
                                          6,000
                                          
                                          
                                          
                                          930,000Loss
      from operations
                                          
                                          
                                          (1,902,000
                                          )
                                          
                                          
                                          (6,000
                                          )
                                          
                                          
                                          (1,908,000
                                          )Other
      income (expense):Interest
      income from Trust Account
                                          
                                          
                                          2,054,000
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          2,054,000Other
      interest income
                                          
                                          
                                          -
                                          
                                          
                                          
                                          3,000
                                          
                                          
                                          
                                          3,000Interest
      expense
                                          
                                          
                                          (23,000
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (23,000
                                          )Net
      income (loss) applicable to ordinary shareholders
                                          
                                          $
                                          129,000
                                          
                                          
                                          $
                                          (3,000
                                          )
                                          
                                          $
                                          126,000Weighted
      average number of ordinary shares outstanding, excluding ordinary shares
      subject to possible redemption:Basic
                                          
                                          
                                          9,506,000
                                          
                                          
                                          
                                          2,500,000
                                          
                                          
                                          
                                          6,434,000Diluted
                                          
                                          
                                          12,245,000
                                          
                                          
                                          
                                          2,500,000
                                          
                                          
                                          
                                          7,972,000Net
      income (loss) per ordinary share excluding shares subject to possible
      redemption:Basic
                                          
                                          $
                                          0.01
                                          
                                          
                                          $
                                          (0.00
                                          )
                                          
                                          $
                                          0.02Diluted
                                          
                                          $
                                          0.01
                                          
                                          
                                          $
                                          (0.00
                                          )
                                          
                                          $
                                          0.02Weighted
      average number of ordinary shares outstanding subject to possible
      redemption:
                                          
                                          
                                          3,772,000
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          2,118,000Net
      income per ordinary share for shares subject to possible
      redemption:
                                          
                                          $
                                          0.00
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          0.00




See
accompanying notes to financial statements


F-3




ASIA
SPECIAL SITUATION ACQUISITION CORP.


(a
corporation in the development stage)





STATEMENTS
OF CASH FLOWS




March 22, 2007(date of inception)Year ended
                
                
                toDecember 31,
                  2008
                
                
                December 31,
                  2007
                
                
                December 31,
                  2008Cash
      flows from operating activitiesNet
      income (loss)
                
                $
                129,000
                
                
                $
                (3,000
                )
                
                $
                126,000Adjustments
      to reconcile net income (loss) to net cash provided by operating
      activities:Amortization
      of deferred finance costs
                
                
                9,000
                
                
                
                
                
                
                
                9,000Increase
      (decrease) in cash attributable to change in current assets and
      liabilities:Prepaid
      expenses
                
                
                128,000
                
                
                
                (248,000
                )
                
                
                (120,000
                )Accounts
      payable and accrued expenses and other
                
                
                272,000
                
                
                
                253,000
                
                
                
                525,000Net
      cash provided by operating activities
                
                
                538,000
                
                
                
                2,000
                
                
                
                540,000Cash flows used in investing
      activities: Change in investment in Trust account
                
                
                (115,000,000
                )
                
                
                -
                
                
                
                (115,000,000
                )Cash
      flows from financing activitiesProceeds
      from line of credit, shareholder
                
                
                -
                
                
                
                500,000
                
                
                
                500,000Proceeds
      from offering of 11,500,000 Units in initial public
    offering
                
                
                115,000,000
                
                
                
                -
                
                
                
                115,000,000Proceeds
      from sale of warrants to purchase 5,725,000 ordinary shares to
      founders
                
                
                5,725,000
                
                
                
                -
                
                
                
                5,725,000Payments
      of offering costs
                
                
                (6,345,000
                )
                
                
                (333,000
                )
                
                
                (6,678,000
                )Payment
      of line of credit, shareholder
                
                
                (500,000
                )
                
                
                -
                
                
                
                (500,000
                )Proceeds
      from note payable
                
                
                690,000
                
                
                
                -
                
                
                
                690,000Payment
      of notes payable
                
                
                (190,000
                )
                
                
                -
                
                
                
                (190,000
                )Payment
      of financing costs
                
                
                (16,000
                )
                
                
                -
                
                
                
                (16,000
                )Proceeds
      from issuance of ordinary shares to founders
                
                
                -
                
                
                
                25,000
                
                
                
                25,000Net
      cash provided by financing activities
                
                
                114,364,000
                
                
                
                192,000
                
                
                
                114,556,000Net
      increase (decrease) in cash and cash equivalents
                
                
                (98,000
                )
                
                
                194,000
                
                
                
                96,000Cash
      and cash equivalents, beginning of period
                
                
                194,000
                
                
                
                -
                
                
                
                -Cash
      and cash equivalents, end of period
                
                $
                96,000
                
                
                $
                194,000
                
                
                $
                96,000Supplemental
      schedule of non-cash financing activity:Accrued
      offering costs
                
                $
                -
                
                
                $
                260,000
                
                
                $
                24,000Deferred
      underwriters' fee
                
                $
                3,450,000
                
                
                $
                -
                
                
                $
                3,450,000Shares
      assigned in connection with debt financing
                
                $
                665,000
                
                
                $
                -
                
                
                $
                665,000Supplemental
      disclosure of cash flow information:Cash
      paid for interest
                
                $
                2,000
                
                
                $
                -
                
                
                $
                2,000




See
accompanying notes to financial statements




F-4




ASIA
SPECIAL SITUATION ACQUISITION CORP.


(a
corporation in the development stage)





STATEMENTS
OF SHAREHOLDERS' EQUITY


For the
period March 22. 2007 (date of inception) to December 31, 2008




Retained Earnings/(Deficit)AccumulatedAdditional
                
                
                During
                
                
                TotalOrdinary Shares
                
                
                Paid-in
                
                
                Development
                
                
                Shareholders'Shares
                
                
                Amount
                
                
                Capital
                
                
                Stage
                
                
                EquityOrdinary
      shares issued to founders at $0.01 per share on March 23,
    2007
                
                
                2,500,000
                
                
                $
                -
                
                
                $
                25,000
                
                
                $
                -
                
                
                $
                25,000Net
      loss for the period
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (3,000
                )
                
                
                (3,000
                )Balances,
      at December 31, 2007
                
                
                2,500,000
                
                
                
                -
                
                
                
                25,000
                
                
                
                (3,000
                )
                
                
                22,000Sale
      of 10,000,000 units on January 23, 2008 at a price of $10 per unit in the
      public offering (each unit consists of one ordinary share and one warrant
      to purchase one ordinary share) (including 3,499,999 shares subject to
      possible redemption)
                
                
                10,000,000
                
                
                
                1,000
                
                
                
                99,999,000
                
                
                
                -
                
                
                
                100,000,000Sale
      of 1,500,000 units in underwriters overallotment option on January 30,
      2008 at a price of $10 per unit in the public offering (each unit consists
      of one ordinary share and one warrant to purchase one ordinary share)
      (including 525,000 shares subject to possible redemption)
                
                
                1,500,000
                
                
                
                -
                
                
                
                15,000,000
                
                
                
                -
                
                
                
                15,000,000Underwriter's
      discount and offering costs related to the public offering (includes
      $3,450,000 payable upon a business combination)
                
                
                -
                
                
                
                -
                
                
                
                (10,128,000
                )
                
                
                -
                
                
                
                (10,128,000
                )Sale
      of warrants to purchase 5,725,000 ordinary shares at $1 per warrant on
      January 23, 2008 to a founding shareholder
                
                
                
                
                
                
                
                
                
                
                5,725,000
                
                
                
                -
                
                
                
                5,725,000-
                
                
                
                -Ordinary
      shares sold in the public offering subject to redemption (4,024,999 shares
      at redemption value)
                
                
                -
                
                
                
                -
                
                
                
                (40,250,000
                )
                
                
                -
                
                
                
                (40,250,000
                )Shares
      assigned in connection with debt financing
                
                
                -
                
                
                
                -
                
                
                
                665,000
                
                
                
                
                
                
                
                665,000Net
      income for the period
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                129,000
                
                
                
                129,000Balances,
      at December 31, 2008
                
                
                14,000,000
                
                
                $
                1,000
                
                
                $
                71,036,000
                
                
                $
                126,000
                
                
                $
                71,163,000




See
accompanying notes to financial statements


F-5


ASIA
SPECIAL SITUATION ACQUISITION CORP.


(a
corporation in the development stage)





Notes to
Financial Statements




NOTE
1—BASIS OF PRESENTATION, DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND
GOING CONCERN




Asia
Special Situation Acquisition Corp. (a corporation in the development stage)
(the “Company”) was formed under the laws of the Cayman Islands for the purpose
of acquiring, engaging in a capital stock exchange with, purchasing all or
substantially all of the assets of, or obtaining a majority interest through
contractual arrangements, of one or more unidentified operating
businesses.  The Company intends to acquire all or a controlling
interest in the equity of such operating business or businesses. In addition,
the Company will only acquire a business or businesses that, upon completion of
the Company’s initial business combination, will be its majority-owned
subsidiaries and will be neither investment companies nor companies excluded
from the definition of investment company by Sections 3(c)(1) or 3(c)(7) of the
Investment Company Act of 1940.  If the Company’s initial business
combination involves a transaction in which it acquires less than a 100%
interest in the target company, the value of that interest that the Company
acquires will be equal to at least 80% of the balance in the trust account
(excluding deferred underwriting discounts and commissions).  In all
instances, the Company would control the target company.  The Company
is considered to be in the development stage as defined in Statement of
Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting By
Development Stage Enterprises,” and is subject to the risks associated with
activities of development stage companies.




At
December 31, 2008, the Company had not commenced any operations or generated
revenue.  All activity through December 31, 2008 relates to the
Company’s formation, capital raising, the initial public offering (the
“Offering”) described below and efforts to locate a suitable acquisition
target.  Following the Offering, the Company has not and will not
generate any operating revenues until after completion of its initial business
combination, at the earliest.  The Company generates non-operating
income in the form of interest income on investments held in a trust account, as
described below, from the proceeds of the Offering.




The
Company’s intent has been to identify prospective acquisitions that are located
in or providing products or services to customers located in
Asia.  The Company’s efforts to identify a prospective target business
will not be limited to a particular industry or area in Asia, although the
Company initially intends to focus efforts on acquiring an operating business in
the leisure and hospitality and financial services industries, that is located
in or providing products or services to consumers in China.  In
evaluating a prospective target business, the Company will consider, among other
factors, the financial condition and results of operations; growth potential;
experience and skill of management; availability of additional personnel;
capital requirements; competitive position; barriers to entry into other
industries; 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.  These 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 the Company in
effecting a business combination consistent with its business
objective.  The Company’s operations, if a business combination is
consummated outside the United States, will be subject to local government
regulations and to the uncertainties of the economic and political conditions of
those areas.




The
registration statement for the Company’s Offering (as described in Note 7) was
declared effective on January 16, 2008 and the Company consummated the Offering
on January 23, 2008.  Preceding the consummation of the Offering, an
affiliate of the Company’s sponsor, which is an entity co-managed and jointly
owned by Angela Ho, the Company’s former chief executive officer and chairman,
and Noble Investment Fund Limited, purchased warrants to purchase 5,725,000
ordinary shares at $1 per warrant in a private placement (the “Private
Placement”) (see Note 8).




Upon the
closing of the Offering and overallotment, $114,250,000 of the proceeds from the
Offering and the private placement have been placed in a trust account (the
“Trust Account”) pursuant to an agreement with the underwriters.  Of
this amount, up to $110,800,000 may be used for the purpose of effecting a
business combination, and up to $3,450,000 will be paid to the underwriters if a
business combination is consummated, but will be forfeited by the underwriters
if a business combination is not consummated.  These funds will not be
released until the earlier of the completion of a business combination or
automatic dissolution and liquidation; provided, however, that the Company plans
to draw the following amounts from the interest accrued on the trust account
prior to, or upon the consummation of, a business combination or the Company’s
liquidation: (i) taxes payable on interest earned and (ii) up to $2,000,000 of
interest income to fund working capital.  Prior to the release of
interest income to fund working capital, the first $750,000 in interest earned
on the amount held in the trust account has been used to cover the shortfall
between the required amount to be held in trust, $115,000,000 ($10.00 per
share), and the amount actually deposited upon the exercise of the underwriters
overallotment, $114,250,000 ($9.93 per share).


F-6


The
Company's first business combination must be with a business or combination of
businesses with a fair market value of at least 80% of the amount in the
Company's trust account, less deferred offering costs of $3,450,000 at the time
of acquisition.  In the event that shareholders owning 35% or more of
the outstanding stock excluding, for this purpose, those persons who were
shareholders prior to the Offering, vote against the business combination and
request their redemption right as described below, the business combination will
not be consummated.  In the event that more than 20%, but less than
35% of the shares owned by the Company’s public shareholders vote against a
proposed business combination and exercise their redemption rights, the Company
is still required to complete a business combination whose fair market value is
equal to at least 80% of the amount in the trust account at the time of such
acquisition, and as a result of any such redemptions may have to issue debt or
additional equity securities to consummate the business combination or otherwise
may be forced to dissolve and liquidate the Company.  All of the
Company's shareholders prior to the Offering, including all of the officers and
directors of the Company (the “Initial Shareholders”), have agreed to vote their
2,500,000 founding ordinary shares in accordance with the vote of the majority
in interest of all other shareholders of the Company (the “Public Shareholders”)
with respect to any business combination.  Additionally, in the event
that any of the Initial Shareholders acquire shares of the Company in connection
with the initial public offering, or in the aftermarket, they have each agreed
to vote in favor of any business combination.




With
respect to the first business combination which is approved and consummated, any
Public Shareholder who voted against the business combination may demand that
the Company redeem his or her shares.  The per share redemption price
will equal the amount in the trust account as of the record date for
determination of shareholders entitled to vote on the business combination
divided by the number of ordinary shares held by Public Shareholders at the
consummation of the Offering. Accordingly, Public Shareholders holding one share
less than 35% of the aggregate number of ordinary shares owned by all Public
Shareholders may seek redemption of their shares in the event of a business
combination. Such Public Shareholders are entitled to receive their per share
interest in the trust account computed without regard to the shares held by
Initial Shareholders.




Without
the prior written consent of at least 95% of the Company’s outstanding ordinary
shares, the Company’s Amended and Restated Memorandum and Articles of
Association provides for mandatory liquidation of the Company, without
shareholder approval, in the event that the Company does not consummate a
business combination by July 16, 2009, or by January 16, 2010 if certain
extension criteria have been satisfied.




The
shares owned by the Initial Shareholders are being held in an escrow account
maintained by the trustee, acting as escrow agent, for up to three
years.




NOTE
2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis
of presentation:




The
accompanying financial statements are presented in U.S. dollars and have been
prepared in accordance with accounting principles generally accepted in the
United States of America and pursuant to the rules and regulations of the U.S.
Securities and Exchange Commission (the “SEC”).





Development stage
company:





The
Company complies with the reporting requirements of SFAS No. 7, "Accounting
and Reporting by Development Stage Enterprises."





Cash
and cash equivalents:





For
the purpose of the statements of cash flows, the Company considers money market
and mutual fund accounts as well as all highly liquid debt instruments purchased
with maturities of three months or less to be cash equivalents.





Net
loss (loss) per ordinary share:




The
Company complies with the accounting and disclosure requirements of SFAS No.
128, “Earnings Per Share.”  Net income (loss) per ordinary share is
computed by dividing net income (loss) by the weighted average number of
ordinary shares outstanding for the period.  Net income (loss) per
ordinary share, assuming dilution, reflects the maximum potential dilution that
could occur if securities or other contracts to issue ordinary shares were
exercised or converted into ordinary shares and would then share in the earnings
of the Company except where the result would be antidilutive.  For the
year ended December 31, 2008 and for the period from March 22, 2007 (date of
inception) to December 31, 2008, the effect of the 17,225,000 warrants
outstanding (including 5,725,000 warrants issued in connection with the Private
Placement) have been considered in the calculation of fully diluted income per
share under the treasury stock method.  The effect of the 475,000
units issued to the underwriters (see Note 7) were excluded from the calculation
as the effect would be anti-dilutive.  For the period from March 22,
2007 (inception) to December 31, 2007, the Company did not have any dilutive
securities, therefore diluted loss per ordinary share is equal to basic loss per
ordinary share for the period.


F-7





The
Company’s statement of operations includes a presentation of net income per
share for ordinary shares subject to possible conversion in a manner similar to
the two-class method of net income per share.  Net income per ordinary
share, basic and diluted amount for the maximum number of shares subject to
possible conversion is calculated by dividing the interest income, net of
applicable income taxes, attributable to ordinary shares subject to conversion
(nil for the year ended December 31, 2008 and for the period from March 22, 2007
(inception) to December 31, 2007 and 2008) by the weighted average number of
ordinary shares subject to possible conversion.





Fair value of financial
instruments:





The
carrying amounts of the Company's assets and liabilities, which qualify as
financial instruments under SFAS No. 107, "Disclosure About Fair Value of
Financial Instruments," approximates their fair value represented in the
accompanying balance sheet, due to their short-term maturities.





Concentration of credit
risk:





Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of a cash account in a financial institution, which at times, may
exceed the Federal depository insurance coverage of $250,000, and investments
held in a trust account with a financial institution. The Company has not
experienced losses on these accounts and management believes the Company is not
exposed to significant risks on such accounts.





Use of
estimates:





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.





Preferred
shares





The
Company is authorized to issue 1,000,000 preferred shares with such
designations, voting and other rights and preferences as may be determined from
time to time by the Board of Directors.





Redeemable
ordinary shares:





If the
Company’s initial Business Combination is approved, Public Shareholders voting
against the Business Combination will be entitled to convert their ordinary
shares into a pro rata share of the aggregate amount then on deposit in the
trust account, including their pro rata portion of the deferred underwriting
discount and any interest income earned on the trust account, net of (1) income
taxes payable on the interest income on the trust account and (2) up to
$2,000,000 of interest earned on the trust account balance which will be
available to the Company, net of income taxes payable on this amount, to fund
working capital requirements. The per share conversion price was $10.00 at
December 31, 2008.





The
Company accounts for redeemable ordinary shares in accordance with Emerging
Issue Task Force D-98 “Classification and Measurement of Redeemable
Securities.”  Securities that are redeemable for cash or other assets
are classified outside of permanent equity if they are redeemable at the option
of the holder. The Company recognizes changes in the redemption value
immediately as they occur and will adjust the carrying value of the redeemable
ordinary shares to equal its redemption value at the end of each reporting
period.





Deferred
finance costs:





Deferred
financing costs include amounts paid to lenders and others to obtain
financing,  Such costs are capitalized and amortized using the
straight-line method over the term of the related loan, which approximately the
effective interest rate method.  Amortization of deferred financing
costs is included in interest expense in our accompanying statements of
operations.


F-8





Income
taxes:





In
accordance with SFAS 109, “Accounting for Income Taxes”, the Company follows the
asset and liability method of accounting for income taxes. Deferred tax assets
and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that included the
enactment date.  Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount to be realized.





Under
current Cayman Islands laws, the Company is not subject to income taxes or
capital gains, and there is no Cayman Islands withholding tax imposed upon
payments of dividends by the Company to its shareholders.  In the
future, the Company's tax rate will be impacted by acquisitions of
non-Cayman subsidiaries governed by the respective local income tax
laws.  Accordingly, no provision for income taxes has been made in the
accompanying financial statements.





Foreign
Currency Translation




In
accordance with SFAS 52, “Foreign Currency Translation”, foreign currency
balance sheet items will be translated using the end of period exchange rates,
and statement of operations items will be translated at the transaction date at
the average exchange rates for each period.  The resulting translation
adjustments to the balance sheet will be recorded in accumulated other
comprehensive income (loss) within shareholders’ equity.





Foreign
currency transaction gains and losses will be included in the statement of
operations as they occur.





As of
December 31, 2008 and 2007, there were no local currency financial statements
and, therefore, no such gains or losses were recognized in the statement of
operations and no translation adjustments were recognized in shareholders’
equity.





NOTE
3 - FAIR VALUE MEASUREMENTS





Effective
January 1, 2008, the Company implemented SFAS No. 157, Fair Value Measurement, or
SFAS 157, for its financial assets and liabilities that are re-measured and
reported at fair value at each reporting period, and non-financial assets and
liabilities that are re-measured and reported at fair value at least
annually.  In accordance with the provisions of FSP No. FAS 157-2,
Effective Date of FASB
Statement No. 157,the Company has elected to defer implementation of
SFAS 157 as it relates to its non-financial assets and non-financial liabilities
that are recognized and disclosed at fair value in the financial statements on a
nonrecurring basis until January 1, 2009.  The Company is evaluating
the impact, if any, this standard will have on its non-financial assets and
liabilities.





The
adoption of SFAS 157 to the Company’s financial assets and liabilities that are
re-measured and reported at fair value at least annually did not have an impact
on the Company’s financial results.





The
following table presents information about the Company’s assets and liabilities
that are measured at fair value on a recurring basis as of December 31, 2008,
and indicates the fair value hierarchy of the valuation techniques the Company
utilized to determine such fair value.  In general, fair values
determined by Level 1 inputs utilize quoted prices (unadjusted) in active
markets for identical assets or liabilities.  Fair values determined
by Level 2 inputs utilize data points that are observable such as quoted prices,
interest rates and yield curves.  Fair values determined by Level 3
inputs are unobservable data points for the asset or liability, and includes
situations where there is little, if any, market activity for the asset or
liability:


F-9





Description
                        
                        December 31,
                          2008
                        
                        
                        Quoted Prices in
                          Active Markets
                          (Level 1)
                        
                        
                        Significant Other
                          Observable Inputs
                          (Level 2)
                        
                        
                        Significant
                          Unobservable
                          Inputs
                          (Level 3)Investment
      in Trust Account
                        
                        $
                        115,000,000
                        
                        
                        $
                        115,000,000
                        
                        
                        $
                        —
                        
                        
                        $
                        —Cash
      equivalent
                        
                        
                        96,000
                        
                        
                        
                        96,000
                        
                        
                        
                        —
                        
                        
                        
                        —Total
                        
                        $
                        115,096,000
                        
                        
                        $
                        115,096,000
                        
                        
                        $
                        —
                        
                        
                        $
                        —





The fair
values of the Company’s cash equivalent and investments held in the Trust
Account are determined through market, observable and corroborated
sources.





NOTE
4 – INVESTMENT IN TRUST ACCOUNT; MARKETABLE SECURITIES





The
Company periodically invests in United States Treasury bills and classifies such
bills as held-to-maturity securities in accordance with SFAS No. 115,
“Accounting for Certain Debt and Equity Securities.”  Held-to-maturity
securities are those securities which the Company has the ability and intent to
hold until maturity.  Held-to-maturity treasury securities are
recorded at amortized cost and adjusted for the amortization or accretion of
premiums or discounts.  During portions of 2008, investment securities
in the Company’s trust account consisted of a US dollar denominated
Institutional Money Market Fund whose objective is to provide investors with as
high a level of current income in U.S. dollars as is consistent with the
preservation of capital and liquidity by investing in a diversified portfolio of
high quality U.S. dollar denominated short-term money market
instruments.  During 2008, investments also included repurchase
agreements, time deposits, commercial paper, certificates of deposit, medium
term notes and floating rate notes rated A-1/P-1 or better with a maximum
weighted average maturity of 60 days.





Investment
securities in the Company’s Trust Account at December 31, 2008 consist of an
investment in a Municipal Obligations mutual fund account (approximately
$115,000,000 at December 31, 2008) which is recorded at cost, which approximates
fair value, and adjusted for income distributions which occur
monthly.





During
the year ended December 31, 2008 and for the period from March 22, 2007
(inception) to December 31, 2008 approximately $60,000 was deducted from the
Trust Account for withholding of taxes which are not likely to be
recovered.  As such, this amount was charged to formation and
operating costs during the year ended December 31, 2008.  Through
December 31, 2008, the first $750,000 of trust income was retained (see Note 1)
and approximately $1,244,000 of trust income had been transferred to fund
working capital of the Company.





NOTE
5 – ACQUISITION ACTIVITY AND COST OF ACQUISITION NOT COMPLETED





White
Energy -





On
December 17, 2008, the Company entered into an Acquisition Framework Agreement
(the “Framework Agreement”) with White Energy Company Limited (“White Energy”)
and Binderless Coal Briquetting Company Pty Limited, a wholly owned subsidiary
of White Energy (“BCBC”). Under the terms of the Framework Agreement, the
Company agreed to acquire, through an exchange of shares, White Energy’s
South-East Asian business operated by its indirect wholly owned subsidiary, BCBC
Singapore Pte Ltd. (“BCBC Singapore”).  Upon completion of the
transaction, it is anticipated that BCBC will issue to the Company 100% of the
issued and outstanding share capital of BCBC Singapore (the “BCBC Singapore
Exchange Shares”) in exchange for the Company’s issuance to BCBC of its ordinary
shares (the “Company Exchange Shares”), to represent an estimated 56% of the
issued and outstanding ordinary shares of the Company after giving effect to the
share exchange (the “Share Exchange”).  The Company’s existing
shareholders will retain the remaining ordinary shares, representing an
estimated 44% of the issued and outstanding shares of the Company, subject to
adjustment.


F-10





On March
12, 2009, the Company entered into a Share Exchange Agreement (the “Share
Exchange”) with White Energy and White Energy Technology Company Limited
(“WET”). Based in Sydney, Australia, White Energy, an Australian corporation, is
a public company traded on the Australian Stock Exchange.  WET is a
wholly-owned subsidiary of White Energy.  As used herein, all dollar
amounts are reflected in United States dollars.  The agreed upon
exchange rate in the Agreement is (AUS) $1.00 equals (USD) $0.66.





Under the
terms of the Share Exchange, the Company has agreed to acquire from White
Energy, through an exchange of shares, 100% of the share capital of WET (the
“WET Shares”) and the equity shares of the direct and indirect subsidiaries of
WET (with WET, the “Constituent Corporations”).  Upon completion of
the transaction, it is anticipated that, in exchange for the WET Shares, the
Company will issue to White Energy a percentage of the aggregate number of
ordinary shares of the Company to be issued and outstanding after giving effect
to the share exchange, as shall be determined by the amount by which the “White
Energy Market Value” (as defined) bears to the “Transaction Value” (as
defined).  The White Energy Market Value has been calculated at
approximately $157.0 million, representing the product of the White Energy
Diluted Shares (as defined) as at March 12, 2009 and the $0.9905 volume-weighted
average price (expressed in U.S. dollars) of White Energy common shares, as
traded on the ASX for the 20 trading days prior to March 12,
2009.  The Transaction Value is defined as the sum of the White Energy
Market Value and the Adjusted Funds.  The term “Adjusted Funds” is
defined as the total cash available to the Company and the Constituent
Corporations as at the closing date of the transaction (including net proceeds
of any additional securities sold by the Company or any of the Constituent
Corporations between March 12, 2009 and the closing date), less the sum of (i)
transaction expenses, (ii) amounts paid or payable in respect of share
redemptions that are requested on a timely basis by any of the Company’s public
shareholders, and (iii) the amount of debt securities, if any, issued by the
Company or any of the Constituent Corporations between March 12, 2009 and the
closing date.  Such additional securities (including debt securities)
may only be issued on terms mutually agreed to by the Company and White
Energy.  Accordingly, assuming that the Adjusted Funds at closing are
$105.0 million, the Transaction Value at closing would be approximately $263.0
million and White Energy would be entitled to receive in the share exchange an
aggregate of approximately 60% of the total Company shares to be outstanding,
and the Company’s existing shareholders will retain the remaining 40% of the
total Company shares to be outstanding.  If, in the above example,
there remain 14,000,000 ordinary shares of the Company that are issued and
outstanding at the closing, White Energy would be entitled to receive a total of
approximately 20,930,140 Company shares.  However, irrespective of the
final calculations of White Energy Market Value, Transaction Value or Adjusted
Funds, White Energy will not receive more than 72.5% of the fully diluted
ordinary shares of the Company after giving effect to the
acquisition.





In
addition, upon consummation of the Share Exchange, the Company will assume the
liabilities of the Constituent Corporations (other than obligations to White
Energy) and assume or guaranty approximately $30.0 million of net indebtedness
of White Energy.





Following
the closing date, White Energy management will become the management of the
Company and its subsidiaries and the current executive officers of the Company
will resign.  In addition, after the closing date White Energy will
have the right to appoint four directors (including a Chairman) to the board of
the Company and the existing shareholders of the Company will have the right to
appoint two directors to the board of the Company.  Moreover,
immediately following the closing date the Company will change its corporate
name to “White Energy Coal Technology Corporation” or such other name as shall
be acceptable to White Energy.





The Share
Exchange also provides for certain Company Management Performance Shares, to
represent up to 10% of the total Company shares to be outstanding at closing
after giving effect to the share exchange, that may be issued to members of the
management of the Constituent Corporations in relation to achieved target
production levels of the Company and its subsidiaries of up to 20,000,000 annual
tons of upgraded coal production by December 31, 2012 from facilities using the
Binderless Coal Briquetting technology described below.





ChinaTel -





On July
8, 2008, the Company entered into a Stock Purchase Agreement (the “Stock
Purchase Agreement”) with ChinaTel Group, Inc. (“ChinaTel”) and Trussnet USA,
Inc. (“Trussnet”).   The Stock Purchase Agreement provided for the
investment by the Company into ChinaTel of between $201,675,000 and $270,000,000
at a price of $2.25 per share.   All of the proceeds from the
sale of the ChinaTel securities would have gone to ChinaTel, and no shareholders
of ChinaTel would have sold their shares.




On August
6, 2008, the Company, ChinaTel, Trussnet and George Alvarez amended and restated
the Stock Purchase Agreement in its entirety, by executing an Amended and
Restated Stock Purchase Agreement dated as of July 31, 2008 (the “Amended Stock
Purchase Agreement”).  In addition to the Amended Stock Purchase
Agreement, on August 6, 2008 the Company entered into an Agreement and Plan of
Merger dated as of July 31, 2008 (the “Merger Agreement”) with ChinaTel, CHTL
Acquisition Corp., a wholly owned subsidiary of the Company which was
subsequently dissolved (“CHTL Acquisition”), George Alvarez, and the other
principal shareholders of ChinaTel.  Under the Merger Agreement, at the
effective time of the merger, CHTL Acquisition was to be merged into ChinaTel,
with ChinaTel as the surviving corporation of the merger (the “Merger”), as a
result of which, ChinaTel would have become a wholly-owned subsidiary of the
Company.


F-11





On
November 3, 2008, pursuant to a Termination and Mutual Release Agreement (the
“Termination Agreement”) with ChinaTel, the Company and ChinaTel agreed to
terminate the Stock Purchase Agreement, the Amended and Restated Stock Purchase
Agreement and the Merger Agreement (collectively, the “ChinaTel Agreements”) in
their entirety.  In addition, the parties agreed to release each
other, and their respective officers, directors, employees, agents,
shareholders, representatives and affiliates against any and all rights, claims,
liabilities, demands, actions, proceedings and causes of action, in law or in
equity, by reason of any matter, event, cause or thing whatsoever, including,
but not limited to, the obligations of the parties under the ChinaTel
Agreements.  The Company elected to terminate the ChinaTel Agreements
primarily due to the fact that the Company believed there were a number of
unresolved regulatory due diligence issues in the People’s Republic of China
relating to the proposed transaction.





At
December 31, 2008, the Company has incurred approximately $978,000 of costs
associated with the ChinaTel and White Energy Agreements, which costs have been
charged to expense in the year ended December 31, 2008.





NOTE
6 – NOTES PAYABLE





On
December 16, 2008, the Company consummated a Funding Agreement (the “Agreement”)
with a placement agent calling for loans of up to $1,250,000 pursuant to
promissory notes (the “Notes”) that call for interest at 12% per year and mature
on the earlier of (a) January 16, 2010 or (b) the consummation of a business
combination satisfactory to the lender.  The Notes are non-recourse to
the amounts in Trust in favor of the Public Shareholders and are secured by the
assignment of 100,000 shares of the Company’s stock that are owned by certain
Initial Shareholders.  Pursuant to the Agreement, $500,000 was
borrowed under the Notes on December 26, 2008.  The notes are secured
by the interest earned in the Trust account up to $2,000,000.  In
connection with the financing, as an inducement, certain of the Company’s
ordinary shares held by certain initial investors were assigned to the lenders
and will be conveyed upon release from escrow.  The value of these
shares, $665,000 was treated as a capital contribution and the related financing
costs will be amortized over the term of the loan.  Pursuant to the
Agreement, the Company is obliged to pay approximately $40,000 of costs
associated with the agreement, proportionally with each draw down against the
total.  Such costs are included in deferred financing costs and
amortized over the term of the loan.





On
February 28, 2008, the Company consummated a Loan and Security Agreement (the
“Agreement”) with a bank pursuant to which it issued a $500,000 promissory note
to the bank in exchange for a line of credit to be used for working capital and
general corporate purposes.  On March 28, 2008, the Company drew down
$190,000, and on June 8, 2008 the Company repaid $50,000, under the note payable
and on July 3, 2008 the remaining $140,000 principal amount, plus interest, was
repaid.  Borrowings under the promissory note bore interest at the
bank’s prime rate (the “Interest Rate”) or, upon the occurrence of a default by
the Company, at a default rate equal to the Interest Rate plus 2%, and were
secured by certain assets of the Company.   No amounts were
outstanding at December 31, 2008 under this arrangement.





NOTE
7—INITIAL PUBLIC OFFERING





On
January 23, 2008, the Company consummated the sale of 10,000,000 units (“Units”)
at a price of $10.00 per unit.  Each Unit consists of one of the
Company's $.0001 par value ordinary shares and one Redeemable Ordinary Share
Purchase Warrant (“Warrant”).   On January 30, 2008, an
additional 1,500,000 Units were sold pursuant to a 45-day option granted to the
underwriters to cover any over-allotments.  Each Warrant entitles the
holder to purchase from the Company one ordinary share at an exercise price of
$7.50 commencing on the later of: (i) the completion of business combination
with a target, or (ii) January 16, 2009, and expiring on January 16,
2012.  The Warrants may be redeemed by the Company, at a price of
$0.01 per Warrant, upon thirty (30) days notice after the Warrants become
exercisable, only in the event that the average sale price of the ordinary share
is at least $14.25 per share for any twenty (20) trading days within a thirty
(30) trading-day period ending on the third day prior to date on which notice of
redemption is given.  If the Company is unable to deliver registered
ordinary shares to the holder upon exercise of warrants during the exercise
period, there will be no cash settlement of the warrants and the warrants will
expire worthless.




In
connection with the Offering, the Company paid an underwriting discount of
$4,600,000 (4.0%) and a non-accountable corporate finance fee of $1,150,000
(1%).  An additional fee of $3,450,000 (3.0%) is payable upon the
Company's consummation of a business combination.  The underwriters
are not entitled to any interest accrued on the deferred fee and have agreed to
forfeit their share of the deferred fee due them to the extent of shares
redeemed by Public Shareholders.


F-12




In
connection with the Offering, the Company has also sold to the underwriter, for
$100 as additional compensation, an option to purchase up to a total of 475,000
units at a price of $12.50 per unit.  The 475,000 units to be issued
upon exercise of these options are identical to those sold in the Company's
Offering.  The Company has accounted for this purchase option as a
cost of raising capital and has included the instrument as equity in its
financial statements. Accordingly, there is no net impact on the Company’s
financial position or results of operations, except for the recording of the
$100 proceeds from the sale.





The
Company has estimated, based upon a Black Scholes model, that the fair value of
the purchase option on the date of sale is approximately $0.78 per unit (a total
value of $368,525), using an expected life of five years, volatility of 9.45%
and a risk-free rate of 4.17%.  The volatility calculation is based on
the average volatility of 16 business combination companies that have completed
their public offerings in amounts ranging from $75,000,000 to $150,000,000, but
have not yet announced an acquisition, during the period from January 1, 2002 to
September 26, 2007.  Because the Company does not have a trading
history, it needed to estimate the potential volatility of the unit price, which
will depend on a number of factors which could not be ascertained at the
time.  The Company used these companies because management believes
that the volatility of these companies is a reasonable benchmark to use in
estimating the expected volatility for the Company’s units.  Although
an expected life of five years was used in the calculation, if the Company does
not consummate a business combination within the prescribed time period and the
Company is liquidated, the option will become worthless.





NOTE
8—RELATED PARTY TRANSACTIONS





At
December 31, 2008, we were obligated to our former chief executive officer for
approximately $264,000 consisting of amounts advanced to pay certain costs on
behalf of the Company in February 2008, together with approximately $12,000 of
accrued interest at 5% per year as approved by the Board of
Directors.




On March
23, 2007, the Company sold 2,500,000 ordinary shares to the Initial Shareholders
for proceeds of $25,000.




On March
23, 2007, the Company entered into an unsecured $500,000 line of credit (the
“Line”) with the majority shareholder of the Company, which is an entity whose
chief executive officer is a director of the Company.  The Line bore
no interest and was due, and paid in full, on the closing date of the
Offering.




On
January 16, 2008, immediately prior to the Offering, the Company’s sponsor, Ho
Capital Management, LLC, an entity co-managed and jointly owned by Angela Ho,
the Company’s former chief executive officer and chairman, and Noble Investment
Fund Limited, purchased an aggregate of 5,725,000 warrants, or “insider
warrants,” at a price of $1.00 per warrant in a Private Placement. Ho Capital
Management LLC and Noble Investment Fund Limited will each have a 50% beneficial
ownership interest in the insider warrants.  So long as the insider
warrants are owned by Ho Capital Management LLC, Noble Investment Fund Limited
or Angela Ho, the insider warrants may be exercised on a cashless basis and will
not be subject to redemption.  The insider warrants may not be sold,
assigned or transferred by Ho Capital Management LLC (nor may the members
interest in Ho Capital Management LLC be sold, assigned or transferred) until
the Company has consummated a business combination or (if the Company fails to
consummate such business combination ) liquidates.  The insider
warrants transfer restriction expires on the earlier of (i) a business
combination or (ii) the Company’s liquidation.





The sale
of the warrants to the Company’s sponsor did not result in the recognition of
any stock-based compensation expense because they were sold above fair market
value. The Company has granted the holders of such warrants demand and “piggy
back” registration rights with respect to the 5,725,000 warrants and the
5,725,000 shares of ordinary shares underlying the warrants at any time
commencing on the date the Company announces that it has entered into a letter
of intent with respect to a proposed business combination, provided, however,
any such registration shall not become effective until the business combination
has been completed.  The demand registration may be exercised by the
holders of a majority of such warrants.  Insider warrants will not be
subject to redemption if held by the initial holder thereof or its permitted
assigns.  Permitted assigns include transfers to Nobel Investment Fund
Limited, as partial consideration for the $5,725,000 loan provided to Ho Capital
Management LLC by Noble to purchase the insider warrants immediately prior to
the Offering, or to Angela Ho, a member of Ho Capital Management LLC; provided
that, the insider warrants may not be sold, assigned or transferred until the
Company consummates a business combination.  The Company will bear the
expenses incurred in connection with the filing of any such registration
statements.  If the Company does not complete a business combination,
then the $5,725,000 proceeds will be part of the liquidating distribution to
Public Shareholders and the warrants issued under the transaction will expire
worthless.


F-13





The
holders of the Company’s initial 2,500,000 issued and outstanding ordinary
shares are entitled to registration rights pursuant to an
agreement.  The holders of the majority of these shares are entitled
to make up to two demands that the Company register these shares.  The
holders of the majority of these shares can elect to exercise these registration
rights at any time after the date on which these ordinary shares are released
from escrow.  In addition, these shareholders have certain
“piggy-back” registration rights on registration statements filed subsequent to
the date on which these ordinary shares are released from escrow.  The
Company will bear the expenses incurred in connection with the filing of any
such registration statements.  The holders of the Company’s initial
2,500,000 issued and outstanding ordinary shares at the time of the Offering
placed their initial shares purchased by them into an escrow account maintained
by Continental Transfer and Trust Company, acting as escrow
agent.  The initial shares will not be released from escrow until
three years from the date of the Offering, except that following the
consummation of a business combination, such shares and members interests may be
transferred to family members and trusts of permitted assignees for estate
planning purposes, or upon the death of any such person, to an estate or
beneficiaries or permitted assignees; in each case, such transferee will be
subject to the same transfer restrictions as the Company’s Initial Shareholders
until after the shares and members interests are released from
escrow.





NOTE
9 – COMMITMENTS





In
December 2008, the Company entered into an investment banking agreement
(“Banking Agreement”) with two banks calling for financial advisory and
investment banking services for a period ending with the completion of a
transaction or January 23, 2010.  The Banking Agreement calls for a
monthly fee of $50,000 commencing on December 15, 2008 plus a success fee as
defined in the Banking Agreement of 3% of transaction consideration and a
financing fee of 6% of any financing of the Company or the acquisition target in
connection with an acquisition or merger transaction.  In addition, if
the Company becomes entitled to any break up fee in connection with a proposed
transaction, then the investment bankers would be entitled to receive 10% of any
such fee or payment received by the Company.   In addition, the
Banking Agreement calls for the issuance of five year warrants for 10% of the
amount of the Company or target shares or securities at a per share price of
110% of the offering price in the financing.   The investment
banks are entitled to reimbursement of their reasonable expenses under the
Banking Agreement subject to prior approval of amounts individually or
aggregating in excess of $50,000.





NOTE
10 – NEW ACCOUNTING PRONOUNCEMENTS





In
December 2007, the FASB issued SFAS No 141R, “Business Combinations” (“SFAS
141R”). SFAS 141R replaces SFAS 141 and establishes principles and requirements
for how an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any non controlling
interest in the acquiree and the goodwill acquired. SFAS 141R also establishes
disclosure requirements which will enable users to evaluate the nature and
financial effects of the business combination. Acquisition costs associated with
the business combination will generally be expensed as incurred. SFAS 141R is
effective for business combinations occurring in fiscal years beginning after
December 15, 2008, which will require the Company to adopt these provisions for
business combinations occurring in fiscal 2009 and thereafter.  The
adoption of SFAS 141R will not have a material impact on the Company’s financial
statements; however, it could impact future transactions entered into by the
Company.





In
December 2007, the FASB issued SFAS 160, Noncontrolling Interests in
Consolidated Financial Statements - an amendment of ARB No. 51.SFAS 160 requires that
ownership interests in subsidiaries held by parties other than the parent, and
the amount of consolidated net income, be clearly identified, labeled and
presented in the consolidated financial statements. It also requires once a
subsidiary is deconsolidated, any retained noncontrolling equity investment in
the former subsidiary be initially measured at fair value. Sufficient
disclosures are required to clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling owners. It is
effective for fiscal years beginning after December 15, 2008, and requires
retroactive adoption of the presentation and disclosure requirements for
existing minority interests. All other requirements are applied prospectively.
The Company cannot determine whether SFAS 160 will have any impact until it
completes its first business combination.





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


F-14




ITEM
      18:
              Financial
      Statements




See Item
17. (A.) - Financial Statements.




ITEM
      19:
              Exhibits




The
exhibits listed below are filed or incorporated by reference as part of this
Annual Report on Form 20-F.





Exhibit
                    No.
                  
                  Description1.1
                  
                  Underwriting
      Agreement (incorporated herein by reference to Exhibit 10.1 to the
      Registrant’s Current Report on Form 8-K (File No. 001-33916), as filed
      with the Securities and Exchange Commission on January 25,
      2008).3.1
                  
                  Amended
      and Restated Memorandum and Articles of Association (incorporated herein
      by reference to Exhibit 3.1 to Amendment No. 2 to the Registrant’s
      Registration Statement on Form S-1 (File
      No. 333-145163), as filed with the Securities and Exchange Commission on
      November 2, 2007).4.1
                  
                  Specimen
      Unit Certificate (incorporated herein by reference to Exhibit 4.1 to
      Amendment No. 1 to the Registrant’s Registration Statement on Form S-1
      (File No. 333-145163), as filed with the Securities and Exchange
      Commission on October 1, 2007).4.2
                  
                  Specimen
      Ordinary Share Certificate (incorporated herein by reference to Exhibit
      4.2 to Amendment No. 1 to the Registrant’s Registration Statement on Form
      S-1 (File No. 333-145163), as filed with the Securities and Exchange
      Commission on October 1, 2007).4.3
                  
                  Specimen
      Warrant Certificate (incorporated herein by reference to Exhibit 4.3 to
      Amendment No. 1 to the Registrant’s Registration Statement on Form
      S-1 (File No. 333-145163), as filed with the Securities and Exchange
      Commission on October 1, 2007).4.4
                  
                  Warrant
      Agreement between Continental Stock Transfer & Trust Company and the
      Registrant. (incorporated herein by reference to Exhibit 4.1 to the
      Registrant’s Current Report on Form 8-K (File No. 001-33916), as filed
      with the Securities and Exchange Commission on January 25,
      2008).4.5
                  
                  Unit
      Purchase Option in favor of Maxim Partners LLC (incorporated herein by
      reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K
      (File No. 001-33916), as filed with the Securities and Exchange Commission
      on January 25, 2008).4.6
                  
                  Unit
      Purchase Option in favor of CRT Capital Group LLC (incorporated herein by
      reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K
      (File No. 001-33916), as filed with the Securities and Exchange Commission
      on January 25, 2008).10.1
                  
                  Form
      of Letter Agreement by Insiders of the Registrant to Maxim Group LLC and
      the Registrant (incorporated herein by reference to Exhibit 10.1 to
      Amendment No. 4 to the Registrant’s Registration Statement on Form
      S-1 (File No. 333-145163), as filed with the Securities and Exchange
      Commission on December 17, 2007).10.2
                  
                  Investment
      Management Trust Agreement between Continental Stock Transfer & Trust
      Company and the Registrant (incorporated herein by reference to Exhibit
      10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-33916),
      as filed with the Securities and Exchange Commission on January 25,
      2008).


83




10.3
              
              Stock
      Escrow Agreement between the Registrant, Continental Stock Transfer &
      Trust Company and the Initial Shareholders (incorporated herein by
      reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K
      (File No. 001-33916), as filed with the Securities and Exchange Commission
      on January 25, 2008).10.4
              
              Registration
      Rights Agreement among the Registrant and the Initial Shareholders
      (incorporated herein by reference to Exhibit 10.4 to the Registrant’s
      Current Report on Form 8-K (File No. 001-33916), as filed with the
      Securities and Exchange Commission on January 25,
2008).10.5
              
              Subscription
      Agreement between the Registrant and certain officers and directors of the
      Registrant (incorporated herein by reference to Exhibit 10.5 to the
      Registrant’s Current Report on Form 8-K (File No. 001-33916), as filed
      with the Securities and Exchange Commission on January 25,
      2008).10.6
              
              Promissory
      Note in the amount of up to $500,000 issued to Ho Capital Management LLC
      (incorporated herein by reference to Exhibit 10.8 to the Registrant’s
      Registration Statement on Form S-1 (File No. 333-145163), as filed with
      the Securities and Exchange Commission on August 6,
  2007).10.7
              
              Promissory
      Note in the amount of up to $500,000 issued by Ho Capital Management LLC
      to Noble Investment Fund Limited (incorporated herein by reference to
      Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1 (File
      No. 333-145163), as filed with the Securities and Exchange Commission on
      August 6, 2007).10.8
              
              Letter
      Agreement among Noble Investment Fund Limited, Ho Capital Management LLC
      and Allius Ltd. (incorporated herein by reference to Exhibit 10.10 to the
      Registrant’s Registration Statement on Form S-1 (File No. 333-145163), as
      filed with the Securities and Exchange Commission on August 6,
      2007).10.9
              
              Form
      of Promissory Note in the amount of $5,725,000 issued by Ho Capital
      Management LLC to Noble Investment Fund Limited (incorporated herein by
      reference to Exhibit 10.9 to Amendment No. 3 to the Registrant’s
      Registration Statement on Form S-1 (File No. 333-145163), as filed with
      the Securities and Exchange Commission on November 26,
    2007).10.10
              
              Form
      of Pledge Agreement between Ho Capital Management LLC, Noble Investment
      Fund Limited and Hodgson Russ LLP (incorporated herein by reference to
      Exhibit 10.10 to Amendment No. 4 to the Registrant’s Registration
      Statement on Form S-1 (File No. 333-145163), as filed with the
      Securities and Exchange Commission on December 17,
  2007).10.11
              
              Form
      of Operating Agreement of Ho Capital Management LLC (incorporated herein
      by reference to Exhibit 10.11 to Amendment No. 4 to the Registrant’s
      Registration Statement on Form S-1 (File No. 333-145163), as filed
      with the Securities and Exchange Commission on December 17,
      2007).10.12
              
              Form
      of Letter Agreement by affiliated entities of the Registrant’s officers,
      directors and initial shareholders to Maxim Group LLC and the Registrant
      (incorporated herein by reference to Exhibit 10.12 to Amendment No. 2 to
      the Registrant’s Registration Statement on Form S-1 (File
      No. 333-145163), as filed with the Securities and Exchange Commission on
      November 2, 2007).10.13
              
              Loan
      and Security Agreement dated as of February 28, 2008 by and between Asia
      Special Situation Acquisition Corp. and Wachovia Bank, National
      Association (incorporated herein by reference to Exhibit 10.1 to the
      Registrant’s Current Report on Form 8-K (File No. 001-33916), as filed
      with the Securities and Exchange Commission on March 3,
    2008).10.14
              
              $500,000
      Promissory Note of Asia Special Situation Acquisition Corp. dated as of
      February 28, 2008 in favor of Wachovia Bank, National Association
      (incorporated herein by reference to Exhibit 10.2 to the Registrant’s
      Current Report on Form 8-K (File No. 001-33916), as filed with the
      Securities and Exchange Commission on March 3,
  2008).


84




10.15
              
              Stock
      Purchase Agreement dated as of July 8, 2008 by and among Asia Special
      Situation Acquisition Corp., China Tel Group, Inc. and Trussnet USA, Inc.
      (incorporated herein by reference to Exhibit 10.1 to the Registrant’s
      Report on Form 6-K (File No. 001-33916), as filed with the Securities and
      Exchange Commission on July 10, 2008).10.16
              
              Letter
      from Angela Ho to certain shareholders of Asia Special Situation
      Acquisition Corp. (incorporated herein by reference to Exhibit 10.2 to the
      Registrant’s Report on Form 6-K (File No. 001-33916), as filed with the
      Securities and Exchange Commission on July 10, 2008).10.17
              
              Amended
      and Restated Stock Purchase Agreement dated as of July 31, 2008 by and
      among Asia Special Situation Acquisition Corp., ChinaTel Group, Inc.,
      Trussnet USA, Inc. and George Alvarez (incorporated herein by reference to
      Exhibit 10.1 to the Registrant’s Report on Form 6-K (File No. 001-33916),
      as filed with the Securities and Exchange Commission on August 11,
      2008).10.18
              
              Agreement
      and Plan of Merger dated as of August 4, 2008 by and among Asia Special
      Situation Acquisition Corp., ChinaTel Group, Inc., CHTL Acquisition Corp.,
      George Alvarez, and the other principal shareholders of ChinaTel Group,
      Inc. (incorporated herein by reference to Exhibit 10.2 to the Registrant’s
      Report on Form 6-K (File No. 001-33916), as filed with the Securities and
      Exchange Commission on August 11, 2008).10.19
              
              Form
      of Pledge Agreement by and among Asia Special Situation Acquisition Corp.,
      ChinaTel Group, Inc. and Horwitz, Cron & Jasper, P.L.C., as collateral
      agent (incorporated herein by reference to Exhibit 10.3 to the
      Registrant’s Report on Form 6-K (File No. 001-33916), as filed with the
      Securities and Exchange Commission on August 11, 2008).10.20
              
              Form
      of Promissory Note of Asia Special Situation Acquisition Corp. to be
      issued to ChinaTel Group, Inc. (incorporated herein by reference to
      Exhibit 10.4 to the Registrant’s Report on Form 6-K (File No. 001-33916),
      as filed with the Securities and Exchange Commission on August 11,
      2008).10.21
              
              Termination
      and Mutual Release Agreement dated as of November 3, 2008 by and between
      Asia Special Situation Acquisition Corp. and ChinaTel Group, Inc.
      (incorporated herein by reference to Exhibit 10.1 to the Registrant’s
      Report on Form 6-K (File No. 001-33916), as filed with the Securities and
      Exchange Commission on November 7, 2008).10.22
              
              Acquisition
      Framework Agreement as of December 17, 2008 by and among Asia Special
      Situation Acquisition Corp., White Energy Company Limited and Binderless
      Coal Briquetting Company Pty Limited (incorporated herein by reference to
      Exhibit 10.1 to the Registrant’s Report on Form 6-K (File No. 001-33916),
      as filed with the Securities and Exchange Commission on December 19,
      2008).10.23
              
              Share
      Exchange Agreement as of March 12, 2009 by and among Asia Special
      Situation Acquisition Corp., White Energy Company Limited and White Energy
      Technology Company Limited (incorporated herein by reference to Exhibit
      10.1 to the Registrant’s Report on Form 6-K (File No. 001-33916), as filed
      with the Securities and Exchange Commission on March 16,
      2009).12.A
              
              Certification
      by Chief Executive Officer pursuant to Sarbanes Oxley Section
      302.*12.B
              
              Certification
      by Chief Financial Officer pursuant to Sarbanes Oxley Section
      302.*13.A
              
              Certification
      by Chief Executive Officer pursuant to 18 U.S.C. Section
      1350.*13.B
              
              Certification
      by Chief Financial Officer pursuant to 18 U.S.C. Section
      1350.*


85




16.1
              
              Letter
      from Tedder, James, Worden & Associates, P.A. (incorporated herein by
      reference to Exhibit 16.1 to Amendment No. 1 to the Registrant’s
      Registration Statement on Form S-1 (File No. 333-145163), as filed
      with the Securities and Exchange Commission on October 1,
      2007).99.1
              
              Code
      of Ethics (incorporated herein by reference to Exhibit 99.1 to the
      Registrant’s Registration Statement on Form S-1 (File No. 333-145163), as
      filed with the Securities and Exchange Commission on August 6,
      2007).99.2
              
              Letter
      of Resignation of Angela Ho and Peter Kjaer dated as of August 11, 2008
      (incorporated herein by reference to Exhibit 99.1 to the Registrant’s
      Report on Form 6-K (File No. 001-33916), as filed with the Securities and
      Exchange Commission on August 14,
2008).





*
Filed herewith.


86


SIGNATURES





The
Registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F and that is has duly caused and authorized the undersigned to sign
this annual report on its behalf.





ASIA
      SPECIAL SITUATION ACQUISITION
                  CORP.April
      1, 2009
                By:/s/
      Geoffrey W. HolmesGeoffrey
      W. HolmesChief
      Executive Officer (Principal Executive
                  Officer)


87