UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549




FORM
10-K


ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE
SECURITIES EXCHANGE ACT OF 1934


FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2008


Commission
File Number 005-52459




POLARIS
ACQUISITION CORP.


(Exact
name of Registrant as specified in its charter)




Delaware
                      
                      26-0443717(State
      or other jurisdiction of
                        incorporation
      or organization)
                      
                      (I.R.S.
      Employer
                        Identification
      No.)





2200
      Fletcher Avenue, 4th Floor
                    Fort
      Lee, New Jersey 07024
                  
                  (201)
      242-3500(Address
      of Principal Executive
                    Offices
      including zip code)
                  
                  (Registrant’s
      telephone number
                    including
      area code)




Securities
registered pursuant to Section 12(b) of the Act:





Title
      of each class
                  
                  Name
      of exchange on which registeredUnits
      consisting of one share of Common Stock, par value
                    $.0001
      per share, and one Warrant
                    Common
      Stock, par value $.0001 per share
                    Warrants
      to purchase shares of Common Stock
                  
                  NYSE
      Amex





Securities
registered pursuant to Section 12(g) of the Act:  None


Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yeso Noþ
..


Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yeso Noþ
..


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.  Yesþ  Noo.


Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.o


Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.  (Check one):





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




Indicate
by check mark whether the registrant is a shell company (as defined in Exchange
Act Rule 12b-2).  Yesþ Noo.


The
aggregate market value of the voting and non-voting common equity held by
nonaffiliates of the registrant was approximately $138 million as of March
30, 2008 (based on the last reported sale price of such stock on the NYSE Amex
on such date of $9.20).


As of
March 27, 2009, there were 18,750,000 shares of the Registrant’s Common
Stock, par value $.0001 per share, outstanding.


Documents
incorporated by reference:  Portions of the definitive Proxy Statement
filed February 12, 2009 and Proxy Supplement filed March 20, 2009, which are
incorporated into Part I of this Form 10-K.









INDEX TO
ANNUAL REPORT ON FORM 10-K FILED WITH


THE
SECURITIES AND EXCHANGE COMMISSION


YEAR END
DECEMBER 31, 2008




TABLE
OF CONTENTS




PagePART
      I
                
                
                1Item
      1.
                Description
      of Business
                
                1Item
      1A.
                Risk
      Factors
                
                4Item
      1B.
                Unresolved
      Staff CommentsItem
      2.
                Properties
                
                15Item
      3.
                Legal
      Proceedings
                
                16Item
      4.
                Submission
      of Matters to a Vote of Security Holders
                
                16PART
      II
                
                
                16Item
      5.
                Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases
      of Equity Securities
                
                16Item
      6.
                Selected
      Financial Data
                
                19Item
      7.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                
                19Item
      7A.
                Quantitative
      and Qualitative Disclosures About Market Risk
                
                23Item
      8.
                Financial
      Statements and Supplementary Data
                
                24Item
      9.
                Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                
                24Item
      9A.
                Controls
      and Procedures
                
                24Item
      9B.
                Other
      Information
                
                25PART
      III
                
                
                19Item
      10.
                Directors,
      Executive Officers and Corporate Governance
                
                25Item
      11.
                Executive
      Compensation
                
                29Item
      12.
                Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                
                30Item
      13.
                Certain
      Relationships and Related Transactions, and Director
      Independence
                
                32Item
      14.
                Principal
      Accountant Fees and Services
                
                35PART
      IV
                
                
                36Item
      15.
                Exhibits
      and Financial Statement Schedules
                
                36Index
      to Financial Statements
                
                F-1









CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS




The
statements contained in this Annual Report on Form 10-K that are not purely
historical are forward-looking statements. Our forward-looking statements
include, but are not limited to, statements regarding our management’s
expectations, hopes, beliefs, intentions or strategies regarding the future. In
addition, any statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words “anticipates,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,”
“possible,” “potential,” “predicts,” “project,” “should,” “would” and similar
expressions may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking. Forward-looking
statements in this Annual Report on Form 10-K may include, for example,
statements about our:




·
            ability
      to complete a combination with a target
  business;


·
            success
      in retaining or recruiting, or changes required in, our officers, key
      employees or directors following a business
  combination;


·
            management
      team allocating their time to other businesses and potentially having
      conflicts of interest with our business or in approving a business
      combination, as a result of which they would then receive expense
      reimbursements;


·
            potential
      inability to obtain additional financing to complete a business
      combination;


·
            limited
      pool of prospective target
businesses;


·
            potential
      change in control if we acquire a target business for
    stock;


·
            potential
      difficulty to find an alternate target business if our currently planned
      business combination does not
occur;


·
            public
      securities’ limited liquidity and trading, as well as the current lack of
      a trading market;


·
            delisting
      of our securities from the NYSE Amex or inability to have our securities
      quoted on the NYSE Amex following a business
  combination;


·
            use
      of proceeds not in trust and our financial performance following our
      initial public offering;


·
            financial
      performance following our initial public offering;
  or


·
            performance
      following a business combination
offering.





The
forward-looking statements contained in this Annual Report on Form 10-K are
based on our current expectations and beliefs concerning future developments and
their potential effects on us. There can be no assurance that future
developments affecting us will be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of
which are beyond our control) or other assumptions that may cause actual results
or performance to be materially different from those expressed or implied by
these forward-looking statements. These risks and uncertainties include, but are
not limited to, those factors described under the heading “Risk Factors” in Item
1A below. Should one or more of these risks or uncertainties materialize, or
should any of our assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward-looking statements. We
undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
may be required under applicable securities laws and/or if and when management
knows or has a reasonable basis on which to conclude that previously disclosed
projections are no longer reasonably attainable.









PART
I




ITEM
      1.
            DESCRIPTION
      OF BUSINESS.




Polaris
Acquisition Corp. (“we,” “us,” “our” or the “Company”) was incorporated in
Delaware on June 18, 2007 for the purpose of effecting a merger, stock exchange,
asset acquisition, stock purchase, reorganization or other similar business
combination with an operating business.




The
registration statement for the Company’s initial public offering was declared
effective on January 14, 2008. The Company consummated the initial public
offering on January 17, 2008, and received gross proceeds of approximately
$154,500,000, including $4,500,000 of proceeds from the private placement (the
“Private Placement”) sale of 4,500,000 insider warrants to certain affiliates of
the Company. The net proceeds were approximately $143,381,000.




The Company’s management has broad
discretion with respect to the specific application of the net proceeds of its
initial public offering, although substantially all of the net proceeds of its
initial public offering are intended to be generally applied toward consummating
a business combination with an operating business. There is no assurance that
the Company will be able to successfully effect a business combination.
Following the closing of the initial public offering and Private Placement,
$150,000,000, including $6,750,000 of the underwriters’ discounts and
commissions, were deposited in a trust account and invested in either (i) United
States “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act of 1940 having a maturity of 180 days or fewer or (ii)
money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act of 1940. The funds will be maintained in the trust
account until the earlier of (i) the consummation of its first business
combination or (ii) liquidation of the Company. Additionally, up to an aggregate
of $1,800,000 of interest earned on the trust account balance may be released to
the Company to fund working capital requirements, and additional funds may be
released to fund tax obligations.




The
Company’s Certificate of Incorporation provides that the Company will continue
in existence only until 24 months from the date of the initial public offering,
or January 11, 2010. If the Company has not completed a business combination by
such date, its corporate existence will cease and it will dissolve and liquidate
for the purposes of winding up its affairs. In the event of liquidation, it is
likely that the per share value of the residual assets remaining available for
distribution (including trust account assets) will be less than the initial
public offering price per share in the initial public offering (assuming no
value is attributed to the Warrants contained in the Units to be offered in the
initial public offering).




Recent
Developments




On June
13, 2008, the Company entered into an Agreement and Plan of Merger pursuant to
which it agreed to merge (the “Merger”) with HUGHES Telematics, Inc. (“HUGHES
Telematics”). The Company and HUGHES Telematics amended and restated that
agreement on November 10, 2008 and again on March 12, 2009 (such agreement, as
amended and restated, the “Merger Agreement”).




On
February 12, 2009, we filed and mailed a definitive proxy statement with the SEC
with respect to this proposed Merger with HUGHES Telematics, and on March 20,
2009 we filed a supplemental proxy statement describing the Second Amended and
Restated Agreement and Plan of Merger of March 12, 2009, as well as certain
other developments relevant to our stockholders voting on the transaction. We
have summarized the terms of the Merger Agreement and related transactions
below. Investors are urged to review the definitive proxy statement, the proxy
supplement and any other filings relating thereto in their entirety. A special
meeting of stockholders to vote on the Merger and certain related transactions
is currently scheduled for March 30, 2009.









The
parties to the Merger Agreement are Polaris, HUGHES Telematics and
Communications Investors LLC, an affiliate of Apollo Management, L.P. (as escrow
representative). The Merger Agreement specifies that, at the closing of the
Merger, all the outstanding shares of HUGHES Telematics common stock shall be
converted into the right to receive, in the aggregate, approximately 20 million
shares of Polaris common stock. In addition, holders of HUGHES Telematics common
stock shall be entitled to receive an aggregate of approximately 59 million
“earn-out” shares (including approximately 2 million shares underlying options)
of Polaris common stock, in three tranches, which will be issued into escrow at
the closing of the Merger and released to HUGHES Telematics shareholders upon
the achievement of certain share price targets over the five-year period
following closing. Outstanding options exercisable for shares of HUGHES
Telematics common stock will roll over in the Merger to become options
exercisable for shares of Polaris common stock. In connection with the Merger
Agreement, the Company will amend and restate its certificate of incorporation
to, among other things, change its name to HUGHES Telematics, Inc., to increase
the number of authorized shares of both common and preferred stock, and to amend
certain other ministerial provisions of the certificate of incorporation
(including removal of certain provisions related to the company’s existence as a
special purpose acquisition company).




The
Merger Agreement also requires that the Company’s stockholders prior to the
initial public offering (the “Founders”) deposit 1.25 million shares of their
Polaris common stock into an escrow, to be released upon the achievement of the
first stock price target between the first and fifth anniversaries of
closing.




The
number of shares of Polaris common stock received by HUGHES Telematics
shareholders at the closing will be subject to possible adjustment for a cash
shortfall in the trust account of Polaris below an agreed upon threshold
amount.




The
obligations of HUGHES Telematics and Polaris to complete the Merger are subject
to the satisfaction or waiver by the other party at or prior to the closing date
of various customary conditions, including (i) the receipt of all required
regulatory approvals and consents, (ii) the approval of the Merger by Polaris
stockholders, (iii) subject to certain exceptions and materiality thresholds,
the accuracy of the representations and warranties of the other party and (iv)
compliance of the other party with its covenants, subject to specified
materiality thresholds.




Opportunity
for Stockholder Approval of Business Combination




The
Company, after signing a definitive agreement for a business combination,
including the existing Merger Agreement, is required to submit the transaction
for stockholder approval. In the event that stockholders owning 30% or more of
the shares sold in the initial public offering vote against the business
combination and exercise their conversion rights described below, the business
combination will not be consummated. All of the Founders have agreed to vote
their founding shares of common stock in accordance with the vote of the
majority of the shares voted by the stockholders who are not Founders (the
“Public Stockholders”) with respect to any business combination, including the
Merger. After consummation of a business combination, these voting safeguards
will no longer be applicable.




A special
meeting of Polaris stockholders to vote on the Merger with HUGHES Telematics and
certain related transactions is currently scheduled for March 30,
2009.




Conversion
Rights




With
respect to a business combination that is approved and consummated, Public
Stockholders who voted against the business combination may demand that the
Company convert their shares. The per share conversion value will equal the
amount in the trust account, calculated as of two business days prior to the
consummation of the proposed business combination, divided by the number of
shares of common stock held by Public Stockholders at the consummation of the
initial public offering. Under our Certificate of Incorporation, if Public
Stockholders holding more than 4,499,999 shares seek conversion of their shares
in the event of a business combination, such event would have the same effect as
if a majority of Public Stockholders voted against the business combination, and
therefore it would not be consummated. Public Stockholders who elect to convert
are entitled to receive their per-share interest in the trust account computed
without regard to the shares of common stock held by the Founders prior to the
consummation of the initial public offering. Accordingly, a portion of the net
proceeds from the initial public offering (29.99% of the amount held in trust
account, including the deferred portion of the underwriters’ discount and
commission) has been classified as common stock subject to possible conversion
on the accompanying December 31, 2008 balance sheet.




2




Liquidation
If No Business Combination




If we
have not consummated a business combination by January 11, 2010, our corporate
existence will cease by operation of law, and we will promptly distribute only
to our Public Stockholders the amount in our trust account (including any
accrued interest) plus any remaining net assets. The Founders have waived their
right to participate in any liquidation distribution with respect to their
shares. We expect that a significant part or all of the costs associated with
the implementation and completion of our plan of dissolution and liquidation
will be funded from our remaining assets outside of the trust account. If such
funds are insufficient, our Founders have agreed to advance us the funds
necessary to complete such liquidation (currently anticipated to be no more than
approximately $15,000) and have agreed not to seek repayment for such
expenses.




If we had
expended all of the interest available to us for working capital purposes and to
pay tax obligations, the per-share liquidation price as of December 31, 2008
would have been approximately $10.00. However, the proceeds deposited in the
trust account could become subject to the claims of our creditors, which could
be satisfied prior to the claims of our public stockholders. Two of the
Company’s affiliates have agreed that they will be liable under certain
circumstances to ensure that the proceeds in the trust account are not reduced
by the claims of target businesses or vendors, providers of financing, service
providers or other entities that are owed money by the Company for services
rendered to or contracted for or for products sold to the Company. We cannot
assure you, however, that they would be able to satisfy those
obligations.




Competition




If we
succeed in effecting the Merger with HUGHES Telematics, there will be intense
competition from competitors of HUGHES Telematics. For a more complete
discussion of the risks that will be applicable to us following the Merger with
HUGHES Telematics see our proxy statement dated February 12, 2009 and our
supplemental proxy statement dated March 20, 2009.




If we are
unable to effect the Merger with HUGHES Telematics, we will continue to pursue
opportunities for a business combination. In doing so we may encounter intense
competition from other entities having a business objective similar to ours.
There are numerous other blank check companies that have completed initial
public offerings in the United States 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 in the future. Additionally, we may be subject to competition from
entities other than blank check companies having a business objective similar to
ours, including venture capital firms, leverage buyout firms and operating
businesses looking to expand their operations through the acquisition of a
target business. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through
affiliates. Many of these competitors possess greater technical, human and other
resources than we do and our financial resources will be relatively limited when
contrasted with those of many of these competitors. While we believe there may
be numerous potential target businesses that we could acquire with the net
proceeds of this offering, our ability to compete in acquiring certain sizable
target businesses will be limited by our available financial
resources.




The
current state of United States’ public equity markets may give us a competitive
advantage over privately-held entities having a similar business objective as
ours in acquiring a target business with significant growth potential on
favorable terms as we may be able to effectuate a business combination without
substantial borrowing.




If we
succeed in effecting any other 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.




Employees




We have
four executive officers. These individuals are not obligated to devote any
specific number of hours to our matters and intend to devote only as much time
as they deem necessary to our affairs. We do not intend to have any full-time
employees prior to the consummation of a business combination with HUGHES
Telematics.




3




ITEM
      1A.
            RISK
      FACTORS




Risks
Associated With Our Business




In
addition to the other information set forth in this report, you should carefully
consider the factors discussed in the sections titled “Risk Factors” in our
Prospectus as filed with the Securities and Exchange Commission dated January
11, 2008, our Definitive Proxy Statement dated February 12, 2009, and our
Supplemental Proxy Statement dated March 20, 2009 which could materially affect
our business, financial condition or future results.




We
are a development stage 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
development stage company with no operating results to date. Our business
objective is to acquire an operating business; however, until such time as an
operating business is acquired you will have no basis of evaluating the value of
your investment. We will not generate any revenues until, at the earliest, after
the consummation of a business combination.




If
we are forced to liquidate before a business combination can be consummated and
distribute the trust account, our public stockholders will receive approximately
$10.00 per share, and our warrants will expire worthless.




If we are
unable to complete a business combination by January 11, 2010 and are forced to
liquidate our assets, the per-share liquidation distribution will be
approximately $10.00 because of the expenses of our initial public offering, our
general and administrative expenses, and the costs of seeking a business
combination. Furthermore, there will be no distribution with respect to our
outstanding warrants that will expire worthless if we liquidate before the
completion of a business combination.




If
we are unable to consummate a business combination, our Public Stockholders will
be forced to wait until January 11, 2010 before we commence
liquidation.




We have
24 months from the date of our initial public offering in which to complete a
business combination. We have no obligation to return funds to investors prior
to such date unless we consummate a business combination prior thereto and then
only in cases where investors have sought conversion of their shares. Only after
the expiration of this full time period will Public Stockholders be entitled to
liquidation distributions if we are unable to complete a business combination.
Accordingly, investors’ funds may be unavailable to them until such
date.




If
we are forced to dissolve and liquidate, payments from the trust account to our
Public Stockholders may be delayed.




If we
neither consummate the Merger with HUGHES Telematics nor consummate any other
business combination by January 11, 2010, we anticipate notifying the trustee of
the trust account to begin liquidating such assets promptly after such date and
anticipate it will take no more than 10 business days to effectuate such
distribution.




We
currently expect that the costs associated with the implementation and
completion of the plan of dissolution and liquidation will be no more than
approximately $15,000. We will pay the costs of liquidation from our remaining
assets outside of the trust fund. If such funds are insufficient, Marc V. Byron
and Lowell D. Kraff have agreed to advance us the funds necessary to complete
such dissolution and/or liquidation and have agreed not to seek repayment of
such expenses; however, there is no guarantee that the assets of Messrs. Byron
and Kraft will be sufficient to satisfy our dissolution and/or liquidation
expenses.




4




You
are not entitled to protections normally afforded to investors of blank check
companies.




Since the
net proceeds of our initial public offering were intended to be used to complete
a business combination with a target business, we have been deemed to be a
“blank check” company under the United States securities laws. However, since we
have net tangible assets in excess of $5,000,000 and have filed a Current Report
on Form 8-K, 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 under the Securities Act. Accordingly, investors
will not be afforded the benefits or protections of those rules. Because we are
not subject to Rule 419 under the Securities Act, we have a longer period of
time to complete a business combination than we would if we were subject to such
rule.




A
decline in interest rates could limit the amount available to fund our search
for a target business or businesses and complete a business combination, since
we will depend on interest earned on the trust account to fund our search, to
pay our tax obligations and to complete our initial business
combination.




Of the
net proceeds of our initial public offering, only approximately $100,000 was
available to us initially outside the trust account to fund our working capital
requirements. We depend on sufficient interest being earned on the proceeds held
in the trust account to provide us with additional working capital. We have
incurred costs relating to identifying target businesses and completing our
initial business combination, as well as tax obligations. While we are entitled
to have released to us for such purposes certain interest earned on the funds in
the trust account, a substantial decline in interest rates may result in our
having insufficient funds available to complete the steps necessary to complete
the Merger with HUGHES Telematics or any other business combination. In such
event, we would need to borrow funds from our Founders to operate or may be
forced to liquidate. Our Founders are under no obligation to advance funds in
such circumstances.




If
third parties bring claims against us, the proceeds held in trust could be
reduced and the per-share liquidation price received by stockholders will 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 seek to have all vendors, prospective target businesses
or other entities that 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, there is no guarantee that all vendors, prospective target businesses
or other entities that we engage will execute such agreements or, if executed,
that this will prevent potential contracted parties from making claims against
the trust account or that a court would not conclude that such agreements are
not legally enforceable. Nor is there any guarantee that such entities will
agree to waive any claims they may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with us and will not seek
recourse against the trust account for any reason. Accordingly, the proceeds
held in trust may be subject to claims that would take priority over the claims
of our Public Stockholders and, as a result, the per-share liquidation price
could be less than $10.00 due to claims of such creditors.




5




Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them.




Our
Amended and Restated Certificate of Incorporation provides that we will continue
in existence only until 24 months from the date of our prospectus in connection
with our initial public offering, or January 11, 2010. If we have not completed
a business combination by such date and amended this provision in connection
therewith, pursuant to the Delaware General Corporation Law, our corporate
existence will cease except for the purposes of winding up our affairs and
liquidating. Under Sections 280 through 282 of the Delaware General Corporation
Law, stockholders may be held liable for claims by third parties against a
corporation to the extent of distributions received by them in a dissolution. If
the corporation complies with certain procedures set forth in Section 280 of the
Delaware General Corporation Law intended to ensure that it makes reasonable
provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day
period during which the corporation may reject any claims brought, and an
additional 150-day waiting period before any liquidating distributions are made
to stockholders, any liability of stockholders with respect to a liquidating
distribution is limited to the lesser of such stockholder’s pro rata share of
the claim or the amount distributed to the stockholder, and any liability of the
stockholder would be barred after the third anniversary of the dissolution.
However, it is our intention to make liquidating distributions to our
stockholders as soon as reasonably possible after the expiration of the 24-month
period and, therefore, we do not intend to comply with those procedures. Because
we will not be complying with those procedures, we are required, pursuant to
Section 281 of the Delaware General Corporation Law, to adopt a plan that will
provide for our payment, based on facts known to us at such time, of (i) all
existing claims, (ii) all pending claims and (iii) all claims that may be
potentially brought against us within the subsequent 10 years. Accordingly, we
would be required to provide for any creditors known to us at that time or those
claims that we believe could be potentially brought against us within the
subsequent 10 years prior to distributing the funds held in the trust to
stockholders. We cannot assure you that we will properly assess all claims that
potentially may be brought against us. As such, our stockholders potentially
could be liable for any claims to the extent of distributions received by them
(but no more) and any liability of our stockholders may extend well beyond the
third anniversary of such date. Accordingly, we cannot assure you that third
parties will not seek to recover from our stockholders amounts owed to them by
us.




If we are
forced to file a bankruptcy case, or an involuntary bankruptcy case is filed
against us that is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our stockholders.
Furthermore, because we intend to distribute the proceeds held in the trust
account to our Public Stockholders promptly after January 11, 2010, this may be
viewed or interpreted as giving preference to our Public Stockholders over any
potential creditors with respect to access to or distributions from our assets.
Furthermore, our board may be viewed as having breached its fiduciary duties to
our creditors and/or having acted in bad faith, and thereby exposed itself and
our company to claims of punitive damages, by paying Public Stockholders from
the trust account prior to addressing the claims of creditors. We cannot assure
you that claims will not be brought against us for these reasons.




An
effective registration statement may not be in place when an investor desires to
exercise warrants, thus precluding such investor from being able to exercise
his, her or its warrants and causing such warrants to be practically
worthless.




No
warrant held by Public Stockholders will be exercisable, and we will not be
obligated to issue shares of common stock, unless at the time such holder seeks
to exercise such warrant, a prospectus relating to the common stock issuable
upon exercise of the warrant is current and the common stock has been registered
or qualified or deemed to be exempt under the securities laws of the state of
residence of the holder of the warrants. Under the terms of the warrant
agreement, we have agreed to use our best efforts to meet these conditions and
to maintain a current prospectus relating to the common stock issuable upon
exercise of the warrants until the expiration of the warrants. However, we
cannot assure you that we will be able to do so, and if we do not maintain a
current prospectus related to the common stock issuable upon exercise of the
warrants, holders will be unable to exercise their warrants, and we will not be
required to settle any such warrant exercise. If the prospectus relating to the
common stock issuable upon the exercise of the warrants is not current, or if
the common stock is not qualified or exempt from qualification in the
jurisdictions in which the holders of the warrants reside, the warrants held by
public stockholders may have no value, the market for such warrants may be
limited and such warrants may expire worthless. Notwithstanding the foregoing,
the insider warrants may be exercisable for unregistered shares of common stock
even if the prospectus relating to the common stock issuable upon exercise of
the warrants is not current.




6




An
investor will only be able to exercise a warrant if the issuance of common stock
upon such exercise has been registered or qualified or is deemed exempt under
the securities laws of the state of residence of the holder of the
warrants.




No
warrants will be exercisable and we will not be obligated to issue shares of
common stock unless the common stock issuable upon such exercise has been
registered or qualified or deemed to be exempt under the securities laws of the
state of residence of the holder of the warrants. Because the exemptions from
qualification in certain states for resales of warrants and for issuances of
common stock by the issuer upon exercise of a warrant may be different, a
warrant may be held by a holder in a state where an exemption is not available
for issuance of common stock upon an exercise, and the holder will be precluded
from exercise of the warrant. At the time that the warrants become exercisable
(following our completion of a business combination), we expect either to be
listed on a national securities exchange, which would provide an exemption from
registration in every state, or to register the warrants in every state (or seek
another exemption from registration in such states). Accordingly, we believe
holders in every state will be able to exercise their warrants as long as our
prospectus relating to the common stock issuable upon exercise of the warrants
is current. However, we cannot assure you of this fact. As a result, the
warrants may be deprived of any value, the market for the warrants may be
limited and the holders of warrants may not be able to exercise their warrants
if the common stock issuable upon such exercise is not qualified or exempt from
qualification in the jurisdictions in which the holders of the warrants
reside.




We
may issue shares of our capital stock or debt securities to complete a business
combination, which would reduce the equity interest of our stockholders and
likely cause a change in control of our ownership.




Our
Amended and Restated Certificate of Incorporation authorizes the issuance of up
to 55,000,000 shares of common stock, par value $.0001 per share, and 1,000,000
shares of preferred stock, par value $.0001 per share. There are currently
16,750,000 authorized but unissued shares of our common stock available for
issuance (after appropriate reservation for the issuance of the shares upon full
exercise of our outstanding warrants). All of the 1,000,000 shares of preferred
stock are available for issuance.




The
issuance of additional shares of our common stock or our preferred
stock:




·
            may
      significantly reduce the equity interest of investors in our initial
      public offering;




·
            may
      subordinate the rights of holders of common stock if we issue preferred
      stock with rights senior to those afforded to our common
      stock;




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




·
            may
      adversely affect prevailing market prices for our common
      stock.




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




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




·
            acceleration
      of our obligations to repay the indebtedness (even if we make all
      principal and interest payments when due) if we breach certain covenants
      that require the maintenance of certain financial ratios or reserves
      without a waiver or renegotiation of that
  covenant;




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




·
            our
      inability to obtain necessary additional financing if the debt security
      contains covenants restricting our ability to obtain such financing while
      the debt security is outstanding.




7




Our
ability to successfully effect a business combination and to be successful
thereafter will be totally dependent upon the efforts of our key personnel, only
some of whom may join us following a business combination.




Our
ability to successfully effect a business combination is dependent upon the
efforts of our key personnel. The role of our key personnel in any target
business, however, cannot presently be ascertained. Although our key personnel
may remain with a target business in senior management or advisory positions
following a business combination, it is likely that some or all of the
management of a target business will remain in place. While we intend to closely
scrutinize any individuals we engage after a business combination, we cannot
assure you that our assessment of these individuals will prove to be correct.
These individuals may be unfamiliar with the requirements of operating a public
company, which could cause us to have to expend time and resources helping them
become familiar with such requirements. This could be expensive and
time-consuming and could lead to various regulatory issues that may adversely
affect our operations.




Our
key personnel may negotiate employment or consulting agreements with a target
business in connection with a particular business combination. These agreements
may provide for them to receive compensation in connection with a business
combination and, as a result, may cause them to have conflicts of interest in
determining whether a particular business combination is the most advantageous
to us.




Our key
personnel may provide consultant or advisory services to a potential target
before or after a business combination, and will be able to remain with the
target company after the consummation of a business combination only if they are
able to negotiate employment or consulting agreements in connection with the
business combination. Such negotiations would take place before or
simultaneously with the negotiation of the business combination and could
provide for such individuals to receive compensation in the form of cash
payments and/or our securities for services they would render to the target
company before or after the consummation of the business combination. Certain of
our directors and officers affiliated with Trivergance LLC (“Trivergance”) have
entered into an advisory engagement with HUGHES Telematics, pursuant to which
they will receive certain cash and securities from HUGHES Telematics. The
personal and financial interests of such individuals may influence their
motivation in identifying and selecting a target business. However, we believe
the ability of such individuals to receive such compensation and/or to remain
with the targetcompany
after the consummation of a business combination will not be the determining
factor in our decision as to whether or not we will proceed with any potential
business combination.




Our
officers and directors will 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 conflict of interest could have a negative impact on
our ability to consummate a business combination.




Our
officers and directors are not required to commit their full time to our
affairs, which could create a conflict of interest when allocating their time
between our operations and their other commitments. We do not intend to have any
full-time employees prior to the consummation of a business combination. All of
our executive officers are engaged in several other business endeavors and are
not obligated to devote any specific number of hours to our affairs. If our
officers’ and directors’ 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
consummate a business combination. We cannot assure you that these conflicts
will be resolved in our favor.




Marc
V. Byron, our chairman of the board and chief executive officer, is party to an
agreement that may restrict our ability to consummate a business combination
with a target business in a certain line of business.




Marc V.
Byron and Trivergance are parties to an operating agreement with MG, LLC, d/b/a
Tranzact and certain other related entities. Tranzact provides end-to-end
technology-driven customer acquisition solutions to the financial services and
media and telecommunications sectors. The operating agreement contains a
non-competition clause that generally provides that Mr. Byron, Trivergance and
any of their affiliates (which would include a number of our officers and
directors) will not, during the term of the operating agreement, engage,
directly or indirectly, in a business that is directly engaged in:




·
            designing,
      managing and executing direct marketing and order management programs and
      systems as a service provider (a “covered business”);
  or




8




·
            providing
      any lead generation business that is not incidental to such person’s
      primary business (also a “covered business”);
or




·
            any
      activities that are otherwise competitive with a material portion of the
      service provider business of Tranzact as then conducted, or that Tranzact,
      or its subsidiaries, has taken material steps toward
      conducting.




Additionally,
if Mr. Byron, Trivergance or their affiliates were to try to acquire a covered
business, they would be obligated to simultaneously offer both Tranzact and
certain entities related to Veronis Suhler Stevenson the right to acquire such
covered business first. The foregoing may hinder our ability to complete a
business combination with a covered business or in the same line of business in
which Tranzact operates.




All
of our officers and directors own shares of our common stock issued prior to our
initial public offering and warrants purchased after our initial public
offering. These securities will not participate in liquidation distributions.
Therefore, our officers and directors may have a conflict of interest in
determining whether a particular target business is appropriate for a business
combination.




All of
our officers and directors own shares of our common stock that were issued prior
to our initial public offering and purchased insider warrants upon consummation
of our initial public offering. Such individuals have waived their right to
receive distributions with respect to their initial shares upon our liquidation
if we are unable to consummate a business combination. The shares acquired prior
to our initial public offering, the insider warrants and any warrants purchased
by our officers or directors in our initial public offering or in the
aftermarket will be worthless if we do not consummate a business combination.
The personal and financial interests of our directors and officers may influence
their motivation in timely identifying and selecting a target business and
completing a business combination. Consequently, our directors’ and officers’
discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing
of a particular business combination are appropriate and in our stockholders’
best interest.




If
our common stock becomes 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 $5,000,000 or less and our common stock has
a market price per share of less than $5.00, transactions in our common stock
may be subject to the “penny stock” rules promulgated under the Securities
Exchange Act of 1934. 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 the transaction prior to
      sale;




·
            provide
      the purchaser with risk disclosure documents that identify certain risks
      associated with investing in “penny stocks” and that 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
common stock becomes 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.




9




After
our business combination, we may be solely dependent on a single business and a
limited number of products or services.




Our
business combination must be with a business with a fair market value of at
least 80% of our net assets at the time of such business combination, which may
also entail simultaneous business combinations with several operating
businesses. By consummating a business combination with only a single entity,
our lack of diversification may subject us to numerous economic, competitive and
regulatory developments. Further, we would not be able to diversify our
operations or benefit from the possible spreading of risks or offsetting of
losses, unlike other entities that may have the resources to complete several
business combinations in different industries or different areas of a single
industry. Accordingly, the prospects for our success may be:




·
            solely
      dependent upon the performance of a single business;
  or




·
            dependent
      upon the development or market acceptance of a single or limited number of
      products, processes or services.




Alternatively,
if we determine to simultaneously acquire several businesses and such businesses
are owned by different sellers, we will need for each of such sellers to agree
that our purchase of its business is contingent on the simultaneous closings of
the other business combinations, which may make it more difficult for us, and
delay our ability, to complete the business combination. With multiple business
combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks
associated with the subsequent assimilation of the operations and services or
products of the acquired companies into a single operating
business.




The
ability of our stockholders to exercise their conversion rights may not allow us
to effectuate the most desirable business combination or optimize our capital
structure.




When we
seek stockholder approval of any business combination, we will offer each public
stockholder (but not our Founders) the right to have his, her or its shares of
common stock converted to cash if the stockholder votes against the business
combination and the business combination is approved and completed. We will
proceed with a business combination only if Public Stockholders owning less than
30% of the shares sold in our initial public offering exercise their conversion
rights. Such holder must both vote against such business combination and then
properly exercise his, her or its conversion rights to receive a pro rata
portion of the trust account. 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 stockholders may exercise such conversion rights, we may
either need to reserve part of the trust account for possible payment upon such
conversion, or we may need to arrange third-party financing to help fund our
business combination in case a larger percentage of stockholders exercise their
conversion rights than we expect. 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. Furthermore, we could structure a
business combination that would require us to pay the seller of the target
business substantially all of the cash we have in the trust account. We could
also negotiate a business combination with a target business that insisted on
having access to almost all of the cash in our trust account as a condition of
closing. With either of these two structures, we would have to lower the maximum
conversion percentage in order to insure that there was sufficient cash
available at the closing of the transaction. As a result, we would not be able
to consummate such a business combination even if stockholders owning
substantially less than 20% of the shares sold in our initial public offering
exercise their conversion rights. This may limit our ability to effectuate the
most attractive business combination available to us.




10




Because
of our limited resources and structure, we may not be able to consummate an
attractive business combination.




If the
Merger is not completed for any reason, we expect to encounter intense
competition from entities other than blank check companies having a business
objective similar to ours, including venture capital funds, leveraged buyout
funds and operating businesses competing for business combinations. Many of
these entities are well established and have extensive experience in identifying
and effecting business combinations directly or through affiliates. Many of
these competitors possess greater technical, human and other resources than we
do, and our financial resources will be relatively limited when contrasted with
those of many of these competitors. While we believe that there are numerous
potential target businesses that we could acquire with the net proceeds of our
initial public offering, our ability to compete in acquiring certain sizable
target businesses will be limited by our available financial resources. This
inherent competitive limitation gives others an advantage in pursuing the
business combination of certain target businesses. Furthermore, the obligation
we have to seek stockholder approval of a business combination may delay the
consummation of a transaction. Additionally, our outstanding warrants, and the
future dilution they potentially represent, may not be viewed favorably by
certain target businesses. Any of these obligations may place us at a
competitive disadvantage in successfully negotiating a business combination.
Because a significant number of blank check companies have gone public in the
United States since September 2003, of which relatively few have either
consummated a business combination or entered into a definitive agreement for a
business combination, it may indicate that there are fewer attractive target
businesses available to entities such as our company 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. If we are unable to
consummate a business combination with a target business within the prescribed
time periods, we will be forced to liquidate.




We
may be unable to obtain additional financing, if required, to complete a
business combination or to fund the operations and growth of the target
business, which could compel us to restructure or abandon a particular business
combination.




Although
we believe that the net proceeds of our initial public offering will be
sufficient to allow us to consummate a business combination, we cannot ascertain
the capital requirements for any particular transaction. If the net proceeds of
our initial public offering prove to be insufficient, either because of the size
of the business combination, the depletion of the available net proceeds in
search of a target business, or the obligation to convert into cash a
significant number of shares from dissenting stockholders, we will be required
to seek additional financing. We cannot assure you that such financing will be
available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable when needed to consummate a particular
business combination, we would be compelled to either restructure the
transaction or abandon that particular business combination and seek an
alternative target business candidate. In addition, if we consummate a business
combination, we may require additional financing to fund the operations or
growth of the target business. The failure to secure additional financing could
have a material adverse effect on the continued development or growth of the
target business. None of our officers, directors or stockholders is required to
provide any financing to us in connection with or after a business
combination.




We
expect to incur significant costs associated with the Merger with HUGHES
Telematics or any other business combination we may undertake, whether or not
such a business combination is completed, which will reduce the amount of cash
otherwise available for other corporate purposes.




We expect
to incur significant costs associated with the Merger with HUGHES Telematics or
any other business combination we may undertake, whether or not the Merger is
completed. These costs will reduce the amount of cash otherwise available for
other corporate purposes. There is no assurance that the actual costs will not
exceed our estimates. There is no assurance that the significant costs
associated with the Merger will prove to be justified in light of the benefit
ultimately realized.




Failure
to complete the Merger with HUGHES Telematics could negatively impact the market
price of Polaris common stock and may make it more difficult for Polaris to
attract another acquisition candidate, resulting, ultimately, in the
disbursement of the trust proceeds, causing investors to experience a loss on
their investment.




If the
Merger is not completed for any reason, Polaris may be subject to a number of
material risks, including:




11




·
            the
      market price of Polaris common stock may substantially decline to the
      extent that the current market price of its common stock reflects a market
      assumption that the Merger will be
consummated;




·
            costs
      related to the Merger, such as legal and accounting fees and certain costs
      related to the fairness opinion, must be paid even if the Merger is not
      completed; and




·
            charges
      will be made against earnings for transaction-related expenses, which
      could be higher than expected.




Such
decreased market price and added costs and charges of the failed Merger,
together with the history of failure in consummating a business combination, may
make it more difficult for Polaris to attract another target business,
resulting, ultimately, in the disbursement of the trust proceeds, causing
investors to experience a loss on their investment.




If
the Merger with HUGHES Telematics is not completed, we may have insufficient
time or funds to complete an alternate business combination and may be forced to
liquidate. Holders of our common stock and warrants may incur
losses.




Pursuant
to our Certificate of Incorporation, among other things, we must complete a
business combination with a target business having a fair market value of at
least 80% of our net assets at the time of acquisition (less the deferred
underwriting discount and commissions of approximately $6.8 million and taxes
payable) by January 11, 2010. If we fail to consummate a business combination
within the required time frame, we will, in accordance with our Certificate of
Incorporation, dissolve, liquidate and wind up. If the Merger proposal is not
approved by our stockholders or if 30% or more of the holders of Polaris common
stock issued in our initial public offering vote against the Merger and properly
exercise their conversion rights, we will not complete the Merger and may not be
able to consummate an alternate business combination within the required time
frame, either due to insufficient time or insufficient operating funds. In any
liquidation the amount held in the trust account, inclusive of any interest,
plus any remaining net assets (subject to our obligations under Delaware law to
provide for claims of creditors as described above), will be distributed on a
pro rata basis to the holders of Polaris common stock issued in our initial
public offering. Our initial stockholders have waived their rights to
participate in any liquidation distribution with respect to their initial
shares. There will be no distribution from the trust account with respect to our
warrants.




If we
dissolve and liquidate before we consummate a business combination and
distribute the trust account, our Public Stockholders will receive less than the
unit offering price in our initial public offering of $10.00 and our warrants
will expire and become worthless.




Our
founding stockholders, including our officers and directors, control a
substantial interest in us and thus may influence certain actions requiring a
stockholder vote.




Our
Founders (including all of our officers and directors) collectively own 20% of
our issued and outstanding shares of common stock. Our board of directors is
divided into three classes, each of which will generally serve for a term of
three years, with only one class of directors being elected in each year. It is
unlikely that there will be an annual meeting of stockholders to elect new
directors prior to the consummation of a business combination, in which case all
of the current directors will continue in office until at least the consummation
of the business combination. If there is an annual meeting, as a consequence of
our “staggered” board of directors, only a minority of the board of directors
will be considered for election and our Founders, because of their ownership
position, will have considerable influence regarding the outcome. Accordingly,
our Founders will continue to exert control at least until the consummation of a
business combination.




12




Our
outstanding warrants and options may have an adverse effect on the market price
of our common stock and make it more difficult to effect a business
combination.




We issued
warrants to purchase 15,000,000 shares of common stock as part of the units
offered in our initial public offering and the insider warrants to purchase
4,500,000 shares of common stock. To the extent we issue shares of common stock
to effect a business combination, the potential for the issuance of a
substantial number of additional shares upon exercise of these warrants and
option could make us a less attractive acquisition vehicle in the eyes of a
target business. Such securities, when exercised, will increase the number of
issued and outstanding shares of our common stock and reduce the value of the
shares issued to complete the business combination. Accordingly, our warrants
and option may make it more difficult to effectuate a business combination or
increase the cost of acquiring a target business. Additionally, the sale, or
even the possibility of sale, of the shares underlying the warrants and option
could have an adverse effect on the market price for our securities or on our
ability to obtain future financing. If and to the extent these warrants and
option are exercised, you may experience dilution to your holdings.




Our
management’s ability to require holders of our warrants to exercise such
warrants on a cashless basis will cause holders to receive fewer shares of
common stock upon their exercise of the warrants than they would have received
had they been able to exercise their warrants for cash.




If we
call our warrants for redemption after the redemption criteria described in our
prospectus have been satisfied, our management will have the option to require
any holder that wishes to exercise his warrant to do so on a “cashless basis.”
If our management chooses to require holders to exercise their warrants on a
cashless basis, the number of shares of common stock received by a holder upon
exercise will be fewer than it would have been had such holder exercised his
warrant for cash. This will have the effect of reducing the potential “upside”
of the holder’s investment in our company.




If
the Merger does not occur, and if our Founders or the purchasers of the insider
warrants exercise their existing registration rights with respect to their
initial shares or insider warrants and underlying securities, it may have an
adverse effect on the market price of our common stock, and the existence of
these rights may make it more difficult to effect a different business
combination.




If the
Merger, which would alter these rights, did not occur, our founding stockholders
would be entitled to demand that we register the resale of their initial shares
at any time commencing three months prior to the date on which their shares are
released from escrow. Additionally, the purchasers of the insider warrants would
be entitled to demand that we register the resale of their insider warrants and
underlying shares of common stock at any time after we consummate a business
combination. If such individuals exercise their registration rights with respect
to all of their securities, then there will be an additional 3,750,000 shares of
common stock and 4,500,000 warrants (as well as 4,500,000 shares of common stock
underlying the warrants) eligible for trading in the public market. The presence
of these additional securities trading in the public market may have an adverse
effect on the market price of our common stock. In addition, the existence of
these rights may make it more difficult to effectuate an alternate business
combination or increase the cost of acquiring the target business, as the
stockholders of the target business may be discouraged from entering into a
business combination with us or will request a higher price for their securities
because of the potential effect the exercise of such rights may have on the
trading market for our common stock.




Our
directors may not be considered “independent” under the policies of the North
American Securities Administrators Association, Inc.




No salary
or other compensation will be paid to our directors for services rendered by
them on our behalf prior to or in connection with a business combination.
Accordingly, we believe our non-executive directors would be considered
“independent” as that term is commonly used by the Nasdaq Stock Market, Inc. and
the NYSE Amex. Such exchanges define “independent” as a person, other than an
officer or employee of the company or any parent or subsidiary, having no
relationship that would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. Equity ownership of
non-executive directors is not relevant to the definition of independence.
However, under the policies of the North American Securities Administrators
Association, Inc., an international organization devoted to investor protection,
because each of our directors own shares of our securities and may receive
reimbursement for out-of-pocket expenses incurred by them in connection with
activities on our behalf (such as identifying potential target businesses and
performing due diligence on suitable business combinations), state securities
administrators could argue that all such individuals are not “independent.” If
this were the case, they would take the position that we would not have the
benefit of any independent directors examining the propriety of expenses
incurred on our behalf and subject to reimbursement. Additionally, there is no
limit on the amount of out-of-pocket expenses that could be incurred, and there
will be no review of the reasonableness of the expenses by anyone other than our
board of directors, which would include persons who may seek reimbursement, or a
court of competent jurisdiction if such reimbursement is challenged. Although we
believe that all actions taken by our directors on our behalf will be in our
best interests, whether or not they are deemed to be “independent,” we cannot
assure you that this will actually be the case. If actions are taken, or
expenses are incurred that are actually not in our best interests, it could have
a material adverse effect on our business and operations, and a material adverse
effect on the prices of our securities held by public stockholders.




13




Risks
Related to Our Organization and Structure Following the Merger


with
HUGHES Telematics




If
we consummate the planned Merger with HUGHES Telematics, a substantial number of
shares of Polaris common stock will be issued both at the closing of the Merger
and in the future, and those shares will become eligible for future resale in
the public market after the Merger, which will result in substantial dilution
and could have an adverse effect on the market price of those
shares.




We
currently expect that 77,102,149 shares of Polaris common stock, including
57,248,131 shares of Polaris common stock issued into escrow and released to the
HUGHES Telematics stockholders as Merger consideration in three tranches
contingent upon Polaris common stock meeting specified price targets over the
five-year period following the closing of the Merger (the “earn-out shares”),
and options exercisable for 2,274,952 shares of Polaris common stock, including
options exercisable for an aggregate of 1,751,871 shares of Polaris common
stock, which will be divided into three tranches of the same proportions as the
escrowed earn-out shares and will be exercisable contingent upon Polaris common
stock meeting specified the same price targets as the escrowed earn-out shares
over the five-year period following the closing of the Merger (the “earn-out
options”), will be issued upon the closing of the Merger to HUGHES Telematics
securityholders.




Our
Founders will place an aggregate of 1,250,000 shares of their Polaris common
stock into escrow (the “sponsor earn-out shares”), to be released back to them
if the price target for the first tranche of earn-out shares is achieved between
the first and fifth anniversaries of closing. During such time as the sponsor
earn-out shares are in escrow, the initial stockholders may vote the shares
without restriction.




There are
currently 18,750,000 shares of Polaris common stock issued and outstanding. As a
result of the dilutive effect of the issuance of our stock in the Merger, for
purposes of illustration, a stockholder who owned 5.0% of the outstanding shares
of Polaris common stock on March 27, 2009, would own approximately 1.0% of the
outstanding shares of Polaris common stock immediately following the closing of
the Merger (including all earn-out and indemnity shares issued into escrow),
assuming no exercise of outstanding Polaris warrants and no issuance of
additional shares because of a working capital shortfall or additional equity
raised by HUGHES Telematics.




The
shares issued to certain HUGHES Telematics stockholders will be restricted and
cannot be sold publicly until the expiration of the restricted period under the
shareholders’ agreement (generally continuing until two years from the closing
of the Merger), under Rule 144 promulgated under the Securities Act of 1933 (the
“Securities Act”) (unless registered under the Securities Act pursuant to the
shareholders’ agreement) and, in the case of the escrowed indemnity shares and
escrowed earn-out shares, until the expiration of the applicable escrow period.
The presence of these additional shares eligible for trading in the public
market after the expiration of the restricted period, registration pursuant to
the shareholders’ agreement or the expiration of the applicable escrow period
could adversely affect the market price of Polaris common stock and warrants.
Upon expiration of the restricted period, registration pursuant to the
shareholders’ agreement or the expiration of the applicable escrow period, sales
of substantial numbers of shares of common stock in the public market could also
adversely affect the market price of Polaris common stock and
warrants.




Additionally,
after completion of the Merger through the issuance of shares of Polaris common
stock to HUGHES Telematics stockholders, our public stockholders will incur
immediate dilution in the net tangible book value of common stock held
immediately prior to the Merger.




14




In
order to complete the Merger with HUGHES Telematics, both HUGHES Telematics and
we may engage in substantial purchases of our stock from our holders who evince
an intention to vote against the Merger, having the effect of further reducing
our working capital and further concentrating the ownership of our shares in the
hands of HUGHES Telematics stockholders, with a majority of the voting power
beneficially owned by Apollo.




In order
to receive the vote necessary to consummate the Merger, we and HUGHES Telematics
intend to pursue purchases of shares of Polaris common stock in separate
privately negotiated transactions that will be conditioned on the closing
of the Merger. We currently expect that we and HUGHES Telematics will enter into
agreements to purchase shares of Polaris common stock for up to $72.7 million,
in the aggregate, in these transactions. The shares of Polaris common stock
purchased pursuant to these private transactions and the shares elected to be
converted into cash in connection with the Merger will be retired. Assuming that
stockholders holding 29.99% of our common shares elect to convert their shares
into cash upon consummation of the Merger and that we and HUGHES Telematics
effect the maximum amount of share repurchases permitted by the Merger
agreement, there will be approximately 84,084,650 shares of our common stock
outstanding upon consummation of the Merger (including 57,248,131 escrowed
earn-out shares and 1,250,000 sponsor earn-out shares), and warrants and options
outstanding to purchase an additional 21,774,935 shares of Polaris common stock
(including escrowed earn-out options in respect of 1,751,859
shares).




Immediately
after giving effect to the Merger, assuming maximum conversion elections and
share repurchases and including the escrowed earn-out shares and earn-out
options, HUGHES Telematics stockholders will, collectively, control
approximately 92% of the voting power of the combined company, and approximately
72% will be controlled by Apollo and its affiliates. Existing Polaris
stockholders will continue to control approximately 8% of the voting power of
the combined company. Investment advisory clients of Wellington Management
currently hold approximately 15% of Polaris’ voting power, and
assuming they do not transfer or convert any of their shares, they will hold
approximately 11% upon the closing of the Merger, which amount includes shares
issuable to them in the Merger in exchange for their shares of HUGHES Telematics
Series B preferred stock. Upon the closing of the Merger and excluding all
escrowed earn-out shares and sponsor earn-out shares, HUGHES Telematics
stockholders will own approximately 78% of the outstanding Polaris common stock
and Polaris’ existing stockholders will own 22%.




To the
extent the number of shares of Polaris common stock subject to forward purchase
agreements is less than the amount referenced above or the holders of less than
29.99% of our shares elect to exercise their conversion option, the number of
shares outstanding following the Merger will be proportionately increased and
the concentration of ownership and voting power by Apollo and its affiliates and
the Wellington Management clients will be proportionately reduced.




We
will be a “controlled company” within the meaning of both the NYSE Amex and
NASDAQ corporate governance standards, and, as a result, will rely on exemptions
from certain corporate governance requirements that provide protection to
stockholders of other companies.




After the
completion of the Merger, Apollo will beneficially own more than 50% of the
total voting power of our common stock, and we will be a “controlled company”
under both the NYSE Amex and NASDAQ corporate governance standards. As a
controlled company, certain exemptions under both the NYSE Amex and NASDAQ
standards will free us from the obligation to comply with certain NYSE Amex and
NASDAQ corporate governance requirements, respectively, including the
requirement to maintain a majority of independent directors on our board of
directors and the requirements regarding the determination of compensation of
executive officers and the nomination of directors by independent directors. As
a result of our use of the “controlled company” exemptions, you will not have
the same protection afforded to stockholders of companies that are subject to
all of the NYSE Amex and NASDAQ corporate governance requirements.




ITEM
      2.
            PROPERTIES




We
maintain our principal executive offices at 2200 Fletcher Avenue, 4th Floor,
Fort Lee, New Jersey 07024 pursuant to an agreement with Trivergance, an
affiliate of Messrs. Byron, Kraff, Palmer and Stone, our executive officers. We
pay Trivergance a monthly fee of $7,500 for providing us with office space and
general and administrative services. We believe, based on rents and fees for
similar services in the New York City metropolitan area, that the fee charged by
Trivergance, LLC is at least as favorable as we could have obtained from an
unaffiliated person. We consider our current office space, combined with the
other office space otherwise available to our executive officers, adequate for
our current operations.




15




ITEM
      3.
            LEGAL
      PROCEEDINGS




None.




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




None.




PART
II




ITEM
      5.
            MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER
  MATTERS




Price
Range of Polaris Securities




Our
equity securities trade on the NYSE Amex. Each of our units consists of one
share of common stock and one warrant and trades on the NYSE Amex under the
symbol “TKP.U.” On January 28, 2008, the warrants and common stock underlying
our units began to trade separately on the NYSE Amex under the symbols “TKP.WS”
and “TKP,” respectively. Each warrant entitles the holder to purchase one share
of Polaris common stock at a price of $7.00 commencing on the later of our
consummation of a business combination and January 11, 2009, or earlier upon
redemption, provided in each case that there is an effective registration
statement covering the shares of Polaris common stock underlying the warrants in
effect. The warrants expire on January 10, 2012, unless earlier
redeemed.




The
following table sets forth the high and low sales price of our units, common
stock and warrants as reported on the NYSE Amex since Polaris’s initial public
offering on January 14, 2008. Prior to January 14, 2008, there was no
established public trading market for our securities.




Quarter
      Ended
              
              Units
              
              
              Common
      Stock
              
              
              WarrantsHigh
              
              
              Low
              
              
              High
              
              
              Low
              
              
              High
              
              
              LowFirst
      Quarter (from January 14, 2008)
              
              $
              10.05
              
              
              $
              9.45
              
              
              $
              9.15
              
              
              $
              9.02
              
              
              $
              0.85
              
              
              $
              .45Second
      Quarter
              
              $
              10.40
              
              
              $
              9.55
              
              
              $
              9.62
              
              
              $
              9.07
              
              
              $
              0.82
              
              
              $
              .40Third
      Quarter
              
              $
              10.30
              
              
              $
              9.41
              
              
              $
              9.55
              
              
              $
              9.20
              
              
              $
              0.75
              
              
              $
              .21Fourth
      Quarter
              
              $
              9.41
              
              
              $
              8.10
              
              
              $
              9.15
              
              
              $
              8.15
              
              
              $
              0.51
              
              
              $
              .01





Holders
of Common Equity




On
December 31, 2008, there was one holder of record of our units, approximately
ten holders of record of our warrants and approximately 12 holders of record of
our common stock. Such numbers do not include beneficial owners holding shares,
warrants or units through nominee names.




Dividends




Except
for the 0.2-for-1 stock dividend that was effected on November 8, 2007, we have
not paid any dividends on our common stock to date and we do not intend to pay
cash dividends prior to the consummation of a business combination. After we
complete our initial business combination, the payment of dividends will depend
on our revenues and earnings, if any, capital requirements and general financial
condition. The payment of dividends after a business combination will be within
the discretion of our then board of directors.




16




Performance




The graph
below compares the cumulative total return of our common stock from January 28,
2008, the date that our common stock first became tradable separately, through
December 31, 2008 with the comparable cumulative return of companies comprising
the S&P 500 Index and a peer group selected by us. The graph plots the
change in value of an initial investment of $100 in each of our common stock,
the S&P 500 Index and a peer group selected by us over the indicated time
periods and assumes reinvestment of all dividends, if any, paid on the
securities. We have not paid any cash dividends and, therefore, the cumulative
total return calculation for us is based solely upon stock price appreciation
and not upon reinvestment of cash dividends. The stock price performance shown
on the graph is not necessarily indicative of future price
performance.




The line
representing the peer group plots the market capitalization-weighted return of a
group of special purpose acquisition companies comprising Asia Special Situation
Acquisition Corp., China Holdings Acquisition Corp., Enterprise Acquisition
Corp., Hicks Acquisition Corp. and InterAmerican Acquisition Group. The peer
group was chosen because, similarly to us, they all had initial public offerings
in the second half of 2007 and all have announced a business
transaction.









Recent
Sales of Unregistered Securities




During
the period covered by this Annual Report on Form 10-K, there were no sales of
unregistered securities.




Uses
of Proceeds from our Initial Public Offering




The
registration statement for the Company’s initial public offering (as described
in Note 2 of the accompanying financial statements) was declared effective on
January 14, 2008. The Company consummated the initial public offering on January
17, 2008, and received gross proceeds of approximately $154,500,000, including
$4,500,000 of proceeds from the private placement sale of 4,500,000 insider
warrants to certain affiliates of the Company. The net proceeds were
approximately $143,381,000.




17




Initial
Public Offering




On
January 17, 2008 the Company sold 15,000,000 units in its initial public
offering at a price of $10 per unit. Each unit comprises one share of the
Company’s common stock and one redeemable common stock purchase warrant. Each
warrant will entitle the holder to purchase from the Company one share of common
stock at an exercise price of $7.00 commencing at the later of the completion of
a business combination and January 11, 2009, and expiring on January 10, 2012,
four years from the effective date of the initial public offering. The Company
may redeem all of the warrants, at a price of $0.01 per warrant upon 30-days’
notice while the warrants are exercisable, only in the event that the last sale
price of the Company’s common stock is equal to or exceeds $14.25 per share for
any 20 trading days within a 30 trading day period ending three business days
prior to the date on which notice of redemption is given. In accordance with the
warrant agreement relating to the warrants to be sold and issued in the initial
public offering, the Company is required to use its best efforts to maintain the
effectiveness of the registration statement covering the warrants.




We are
not be obligated to deliver securities, and there are no contractual penalties
for failure to deliver securities, if a registration statement is not effective.
Additionally, in the event that a registration statement is not effective, the
warrantholders are not entitled to exercise their warrants, and in no event
(whether in the case of a registration statement not being effective or
otherwise) will we be required to net cash settle the warrant exercise.
Consequently, the warrants may expire unexercised and unredeemed.




In
connection with the initial public offering, we entered into an agreement with
the underwriters of that offering (the “Underwriting Agreement”). The
Underwriting Agreement requires that we pay 2.5% of the gross proceeds of the
initial public offering as an underwriting discount plus an additional 4.5% of
the gross proceeds of the initial public offering only upon consummation of a
business combination. The Company paid an underwriting discount of 2.5% of the
gross proceeds of the initial public offering ($3,750,000) in connection with
the consummation of the initial public offering and has placed 4.5% of the gross
proceeds of the initial public offering ($6,750,000) in the trust account. We
did not have to pay any discount related to the insider warrants sold on a
private basis. The underwriters have waived their right to receive payment of
the 4.5% of the gross proceeds for the initial public offering upon our
liquidation if the Company is unable to complete a business
combination.




Pursuant
to purchase agreements, certain of our Founders have purchased from the Company,
in the aggregate, 4,500,000 warrants for $4,500,000 (the insider warrants). The
purchase and issuance of the insider warrants occurred simultaneously with the
consummation of the initial public offering on a private placement basis. All of
the proceeds we received from these purchases were placed in the trust account.
The insider warrants are identical to the warrants included in the units that
were offered in the initial public offering except that if the Company calls the
warrants for redemption, the insider warrants will be exercisable on a cashless
basis so long as such warrants are held by the initial purchasers or their
affiliates. The insider warrants may not be sold or transferred until 45 days
after the consummation of a business combination. The purchase price of the
insider warrants has been determined to be the fair value of such warrants as of
the purchase date.




18




PART
III




ITEM
      6.
            SELECTED
      FINANCIAL DATA




The
following table summarizes the relevant financial data for our business and
should be read in conjunction with our financial statements, and the notes and
schedules related thereto, which are included in this annual
report.




Income
      Statement Data:
              
              For the year
                ended
                December 31,
                2008
              
              
              For
      the period from
                June 18,
      2007
                (inception)
      to
                December 31,
      2007
              
              
              For
      the period from
                June 18,
      2007
                (inception)
      to
                December 31,
      2008Revenue
              
              $
              —
              
              
              $
              —
              
              
              $
              —Interest
      income
              
              
              2,558,161
              
              
              
              389
              
              
              
              2,558,550Net
      income (loss)
              
              
              605,853
              
              
              
              (673
              )
              
              
              605,180Basic
      and diluted net income per share
              
              $
              0.03
              
              
              $
              —
              
              
              $
              0.04





Balance
      Sheet Data:
                                    
                                    As
      of
                                      December
      31,
                                      2008
                                    
                                    
                                    As
      of
                                      December
      31,
                                      2007Cash
                                    
                                    $
                                    5,056
                                    
                                    
                                    $
                                    12,801Trust
      account, restricted
                                    
                                    $
                                    150,796,461
                                    
                                    
                                    $
                                    —Total
      assets
                                    
                                    $
                                    151,307,752
                                    
                                    
                                    $
                                    188,603Total
      liabilities
                                    
                                    $
                                    7,296,881
                                    
                                    
                                    $
                                    164,276Common
      stock subject to conversion ($10 per share)
                                    
                                    $
                                    44,999,990
                                    
                                    
                                    $
                                    —Stockholders’
      equity
                                    
                                    $
                                    99,010,881
                                    
                                    
                                    $
                                    24,327


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




The
following discussion should be read in conjunction with our Financial Statements
and related Notes thereto included elsewhere in this report.




Overview




We were
formed on June 18, 2007 as a blank check company for the purpose of acquiring,
through a merger, stock exchange, asset acquisition, reorganization or similar
business combination, one or more operating businesses. We intend to use cash
derived from the net proceeds of our initial public offering, together with any
additional financing arrangements that we undertake, to effect a business
combination.




On
January 17, 2008, the Company sold 15,000,000 units at an offering price of
$10.00 per unit. Each unit comprises one share of our common stock, $0.0001 par
value, and one redeemable common stock purchase warrant. Each warrant will
entitle the holder to purchase from the Company one share of common stock at an
exercise price of $7.00 commencing on the later of (a) January 11, 2009 and
expiring January 10, 2012 or (b) the consummation of an initial business
combination with a target business.




As of
December 31, 2008, approximately $150,800,000 was held in trust, and we had
approximately $5,000 of unrestricted cash available to us for our activities in
connection with identifying and conducting due diligence of a suitable business
combination and for general corporate matters.




19




Through
December 31, 2008, our efforts have been limited to organizational activities,
activities relating to our initial public offering, activities relating to
identifying, evaluating and negotiating with prospective acquisition candidates,
and activities relating to general corporate matters; we have neither engaged in
any operations nor generated any revenues, other than interest income earned on
the proceeds of our private placement and initial public offering. For the year
ended December 31, 2008, we earned approximately $2,558,000 in interest
income.




The
following table shows the total funds held in the trust account as of December
31, 2008:




Net
      proceeds from our initial public offering and private placement of
      warrants placed in trust
                  
                  $
                  143,250,000Deferred
      underwriters’ discounts and commissions
                  
                  
                  6,750,000Total
      interest received through December 31, 2008
                  
                  
                  2,555,818Withdrawals
      for operating expense through December 31, 2008
                  
                  
                  (1,000,000
                  )Withdrawals
      for tax obligations through December 31, 2008
                  
                  
                  (759,357
                  )Total
      funds held in trust account as of December 31, 2008
                  
                  $
                  150,796,461





Results
of Operations




For
The Year Ended December 31, 2008




Net
income of $605,853 reported for the year ended December 31, 2008 consisted of
investment income primarily on the trust account of $2,558,161 offset by
$177,519 of expense for professional fees, $88,633 of expense for director and
officer liability insurance, $90,000 of expense for a monthly administrative
services agreement, $113,223 of expense for travel and entertainment, $113,430
for franchise tax, $696,885 for due diligence costs, $136,856 for other expenses
and $535,762 for income taxes. At December 31, 2008, we had cash outside of the
trust fund of $5,056, prepaid expenses of $64,723, accounts payable and accrued
costs of $329,835, and income taxes payable of $217,046. Until we enter into a
business combination, we will not have revenues other than interest income, and
will continue to incur expenses relating to identifying a target business to
acquire.




Period
From June 18, 2007(Inception) to December 31, 2007




Net loss
of $673 reported for the period from June 18, 2007 (inception) to December 31,
2007 consisted of interest income of $389 and formation costs of
$1,062.




Period
From June 18, 2007(Inception) to December 31, 2008




Net
income of $605,180 reported for the period from June 18, 2007 (inception) to
December 31, 2008 consisted of investment income primarily on the trust account
of $2,558,550 offset by $1,062 of expense for formation costs, $177,519 of
expense for professional fees, $88,633 of expense for director and officer
liability insurance, $90,000 of expense for a monthly administrative services
agreement, $113,223 of expense for travel and entertainment, $113,430 for
franchise tax, $696,885 for due diligence costs, $136,856 for other expenses and
$535,762 for income taxes.




We
presently occupy office space provided by Trivergance, an affiliate of our
initial stockholders. Trivergance has agreed that, until the earlier of when (i)
we consummate the acquisition of a target business or (ii) liquidate, it will
make such office space, as well as certain office and secretarial services,
available to us, as we may require from time to time. We have agreed to pay
Trivergance $7,500 per month for such services commencing on January 1, 2008.
The statement of operations for the period ended December 31, 2008 includes
$90,000 related to this agreement.




20




Liquidity
and Capital Resources




As of
December 31, 2008, we had cash in our operating account of $5,056 and an
additional $796,461 in our trust account which is available for working capital
and taxes. Until our initial public offering, as described above, our only
source of liquidity was the proceeds from the initial private sale of our stock.
Since our initial public offering, our only source of revenue has been from the
interest and dividends earned on our cash accounts. The proceeds from our
initial public offering that were placed in a trust account were invested in
either (i) United States “government securities” within the meaning of Section
2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or
fewer or (ii) money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act of 1940. As of December 31, 2008
the funds placed in trust are earning interest at the rate of approximately
0.42%.




Subject
to our stockholders’ approval of the proposed business combination with HUGHES
Telematics, we will use substantially all of the net proceeds of our initial
public offering in connection with the proposed business combination with HUGHES
Telematics, including structuring, negotiating and consummating the Merger. To
the extent we use our capital stock, in whole or in part, as consideration for
the Merger, the proceeds held in the trust account (less amounts paid to any
public stockholders who exercise their conversion rights and deferred
underwriting discounts and commissions paid to the underwriters) as well as any
other net proceeds not expended prior to that time will be used to finance the
operations of HUGHES Telematics. If the Merger with HUGHES Telematics is not
consummated, the proceeds held in trust could then be used as consideration for
a different business combination. The funds in the trust account could also be
used to repay any operating expenses or finders’ fees which we had incurred
prior to the completion of our initial business combination if the funds
available to us outside of the trust account were insufficient to cover such
expenses.




Assuming
the release of the full amount of the interest we are entitled to receive from
the trust account, we believe we will have sufficient available funds outside of
the trust account to operate through January 11, 2010, assuming that a business
combination is not consummated during that time. We do not believe we will need
to raise additional funds in order to meet the expenditures required for
operating our business. However, if our estimate of the costs of completing an
initial business combination is less than the actual amount necessary to do so,
or if interest payments are not available to fund the expenses at the time we
incur them, we may be required to raise additional capital, the amount,
availability and cost of which is currently unascertainable. Moreover, we may
need to obtain additional financing either to consummate our initial business
combination or because we become obligated to convert into cash a significant
number of shares of public stockholders voting against our initial business
combination, in which case, we may issue additional securities or incur debt in
connection with such business combination. Additionally, following the Merger
with HUGHES Telematics or an alternate business combination, if our cash on hand
is insufficient, we may need to obtain additional financing in order to meet our
obligations.




As of
December 31, 2008, we had withdrawn $1,759,357 of the interest and dividends
earned on the funds held in our trust account. Pursuant to the terms of our
trust agreement governing our trust account, we are entitled to use up to
$1,800,000 of the earnings for working capital (other than for our tax
obligations); provided, however, that the aggregate amount of all such
distributions of working capital and income shall not exceed the total earnings.
Up to $800,000 (excluding amounts required to cover any tax obligations owned by
Polaris) is still to be remitted, for working capital purposes, to our operating
account which had a balance of $5,056 as of December 31, 2008. Once the $800,000
is distributed, only distributions to pay tax liabilities will be
allowed.




Our
liabilities are all related to costs associated with operating as a public
company, searching for an acquisition target, our due diligence review and
negotiation of agreements related to the proposed business combination and
activities relating to the consummation of the proposed business combination. We
believe our working capital will continue to be sufficient to fund our
operations until a target is acquired.




21




Off-Balance
Sheet Arrangements




Warrants
issued in conjunction with our initial public offering are equity linked
derivatives and accordingly represent off-balance sheet arrangements. The
warrants meet the scope exception in paragraph 11(a) of Financial Accounting
Standards (“FAS”) 133 and are accordingly not accounted for as derivatives for
purposes of FAS 133, but instead are accounted for as equity.




Contractual
Obligations




We do not
have any long-term debt, capital lease obligations, operating lease obligations
or long-term liabilities.




Critical
Accounting Policies




Our
financial statements and the notes to our financial statements contain
information that is pertinent to management’s discussion and analysis. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities. Management bases its estimates
on historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. On a continual basis, management
reviews its estimates utilizing currently available information, changes in
facts and circumstances, historical experience and reasonable assumptions. After
such reviews, and if deemed appropriate, those estimates are adjusted
accordingly. Actual results may vary from these estimates and assumptions under
different and/or future circumstances. Management considers an accounting
estimate to be critical if:




a.
            it
      requires assumptions to be made that were uncertain at the time the
      estimate was made; and




b.
            changes
      in the estimate, or the use of different estimating methods that could
      have been selected, could have a material impact on the Company’s results
      of operations or financial
condition.




The
following critical accounting policies have been identified that affect the more
significant judgments and estimates used in the preparation of the financial
statements. We believe that the following are some of the more critical judgment
areas in the application of our accounting policies that affect our financial
condition and results of operations. We have discussed the application of these
critical accounting policies with our Audit Committee. The following critical
accounting policies are not intended to be a comprehensive list of all of the
Company’s accounting policies or estimates.




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,
liabilities and disclosures 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





Deferred
income taxes reflect the net tax effects of operating losses and other temporary
differences between carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. In assessing
the realizability of deferred tax assets, management considers whether it is
more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which
temporary differences representing net future deductible amounts become
deductible. Statement of Financial Accounting Standards No. 109 requires that a
valuation allowance be established when it is “more likely than not” that all or
a portion of deferred tax assets will not be realized. A review of all available
positive and negative evidence needs to be considered, including a company’s
performance, the market environment in which the company operates, the length of
carryback and carryforward periods, and expectations of future
profits.




22




New
Accounting Pronouncements




In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157,Fair Value
Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
and expands disclosures about fair value measurements. SFAS 157 also emphasizes
that fair value is a market-based measurement, not an entity-specific
measurement, and sets out a fair value hierarchy with the highest priority being
quoted prices in active markets. Under SFAS 157, fair value measurements are
disclosed by level within that hierarchy. In February 2008, the FASB issued FASB
Staff Position No. 157-2,Effective Date of FASB Statement No. 157, which permits a one-year
deferral for the implementation of SFAS 157 with regard to nonfinancial assets
and liabilities that are not recognized or disclosed at fair value in the
financial statements on a recurring basis. The Company adopted SFAS 157 for the
fiscal year beginning January 1, 2008, except for the nonfinancial assets and
nonfinancial liabilities for which delayed application is permitted until our
fiscal year beginning January 1, 2009. The adoption of the remaining provisions
of SFAS 157 is not expected to have a material impact on the Company’s financial
position, results of operations or cash flows.




In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial
Assets and Financial Liabilities — Including an Amendment of FASB No. 115
(“SFAS 159”). SFAS 159 allows a company to irrevocably elect fair value as the
initial and subsequent measurement attribute for certain financial assets and
financial liabilities on a contract-by-contract basis, with changes in fair
value recognized in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007 and will be applied prospectively. The
adoption of SFAS 159 did not have a significant impact on the Company’s
financial statements.




In
December 2007, the FASB issued SFAS No. 141(R),Business Combinations (“SFAS
141R”) which establishes principles and requirements for how the acquirer of a
business recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed and any noncontrolling interest in the
acquiree. SFAS 141R also provides guidance for recognizing and measuring the
goodwill acquired in the business combination and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS 141R will have an impact on
the Company for any acquisitions consummated on or after January 1,
2009.




In
December 2007, the FASB released SFAS No. 160,Noncontrolling Interests in
Consolidated Financial Statements an amendment of ARB No. 51 (“SFAS
160”), which establishes accounting and reporting standards for ownership
interests in subsidiaries held by parties other than the parent and for the
deconsolidation of a subsidiary. SFAS 160 also establishes disclosure
requirements that clearly identify and distinguish between the interest of the
parent and the interests of the noncontrolling owners. SFAS 160 is effective for
financial statements issued for fiscal years beginning after December 15, 2008.
SFAS 160 may have a material impact on the Company with respect to any
acquisitions consummated on or after January 1, 2009.




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.




ITEM
      7A.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK




As of
December 31, 2008, our efforts were limited to organizational activities,
activities relating to our initial public offering and consummating a business
combination. We had neither engaged in any operations nor generated any
revenue.




23




Market
risk is a broad term for the risk of economic loss due to adverse changes in the
fair value of a financial instrument. These changes may be the result of various
factors, including interest rates, foreign exchange rates, commodity prices
and/or equity prices. As of December 31, 2008, there was approximately $150
million restricted capital in the trust account. All $150 million must be
invested in by the trustee in either (i) United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940
having a maturity of 180 days or fewer or (ii) money market funds meeting
certain conditions under Rule 2a-7 promulgated under the Investment Company Act
of 1940. Thus, we are currently subject to market risk primarily through the
effect of changes in interest rates on short-term government securities and
other highly rated money-market instruments. Management cannot provide any
assurance about the actual effect of changes in interest rates on net interest
income.




ITEM
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA




This
information appears under Item 15 of this Report and is included herein by
reference.




ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




None.




ITEM
      9A.
            CONTROLS
      AND PROCEDURES




Evaluation
of Disclosure Controls and Procedures




Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Exchange Act is accumulated and communicated to management,
including our chief executive officer and treasurer, as appropriate to allow
timely decisions regarding required disclosure.




As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief executive
officer and chief financial officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2008. Based upon their evaluation, they concluded
that our disclosure controls and procedures were effective.




Our
internal control over financial reporting is a process designed by, or under the
supervision of, our chief executive officer and chief financial officer and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of our financial reporting and
the preparation of our financial statements for external purposes in accordance
with generally accepted accounting principles. Internal control over financial
reporting includes policies and procedures that pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets; provide reasonable assurance that transactions
are recorded as necessary to permit preparation of our financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with the authorization of our
board of directors and management; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on our financial
statements.




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




Change
in Internal Control Over Financial Reporting




During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.




24




ITEM
      9B.
            OTHER
      INFORMATION




None.




ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, CORPORATE
  GOVERNANCE




Name
              
              Age
              
              PositionMarc
      V. Byron
              
              45
              
              Chairman
      of the Board and Chief Executive OfficerLowell
      D. Kraff
              
              47
              
              President
      and DirectorDavid
      F. Palmer
              
              46
              
              Vice
      PresidentJerry
      Stone
              
              50
              
              Vice
      PresidentBrian
      B. Boorstein
              
              48
              
              DirectorStuart
      I. Oran
              
              58
              
              DirectorDavid
      L. Moore
              
              50
              
              Director





Marc V.
Byron has served as our chairman of the board and chief executive officer
since our inception. Mr. Byron cofounded Trivergance, LLC, a middle market
merchant banking and investment firm, in June 2006, and has served as a Managing
Member since its formation. Trivergance acted as a strategic and financial
advisor in the $750 million transaction in which Sunterra Corporation went
private. Since May 2003, Mr. Byron has also served as chairman of MG, LLC, d/b/a
Tranzact, a marketing services firm that helps companies acquire customers and
manage complex transactions by combining expertise in developing customer
acquisition strategies with experience in applying technology. He has also
served as an advisor to Apollo Management on large marketing and media related
transactions, including the acquisition of Affinion, the Marketing Services
Division of Cendant Corporation, in October 2005 and the acquisition of
SourceCorp. Inc. in July 2006, a consultant and partner to Halyard Capital on
midsize media and marketing transactions, and an investor in and advisor to
Sonostar Capital related to smaller media and marketing transactions. In 1997,
Mr. Byron founded Paradigm Direct and served as its chief executive officer
until its sale to Mosaic Group, Inc., a Canadian marketing services firm. After
the sale, Paradigm Direct changed its name to Mosaic Performance Solutions North
America and Mr. Byron served as its chief executive officer until December 2001.
From January 2002 to June 2003, Mr. Byron served as chief executive officer for
Mosaic Group, Inc. At the time Mr. Byron became chief executive officer of
Mosaic Group, Mosaic Group was highly leveraged and was ultimately required to
file for restructuring under the Companies’ Creditors Arrangement Act, or CCAA,
in Canada in December 2002. From 1992 to 1996, Mr. Byron served as president of
National Market Share Inc., an outbound telemarketing firm. Mr. Byron’s
experience includes marketing consultation at the senior-most levels in
corporate America, creation and execution of nationwide direct marketing efforts
on behalf of Fortune 100 companies, as well as the effective management of rapid
corporate growth. He has strategic and tactical experience in brand extensions,
data aggregation, direct marketing, packaging and promotion, telecommunications
and many other consumer-focused marketing services businesses. Mr. Byron
received a B.A. from Emory University.




Lowell D.
Kraff has served as our president and a member of our board of directors
since our inception. Mr. Kraff has spent his career in the private equity,
merchant banking and investment banking fields. He has been a principal equity
investor for over 13 years participating in leveraged buyouts, growth equity,
and early stage venture capital transactions. Mr. Kraff co-founded Trivergance,
LLC in June 2006, and has served as a managing member since its formation.
Trivergance acted as a strategic and financial advisor in the $750 million
transaction in which Sunterra Corporation went private. From July 2001 to June
2006, Mr. Kraff was a founding principal of Connecting Capital & Partners,
LLC, a merchant banking company organized to make principal investments in
alternative assets and provide limited strategic investment banking advice.
During that time period, Connecting Capital & Partners participated in and
provided strategic investment banking advice for transactions aggregating
approximately $2.5 billion, including the acquisition of Creekstone Farms
Premium Beef by an affiliate of Sun Capital Partners in March 2005, the
acquisition of Affinion, the Marketing Services Division of Cendant Corporation
by an affiliate of Apollo Management, L.P. in October 2005 and the acquisition
of SourceCorp Inc. by an affiliate of Apollo Management, L.P. in July 2006. From
June 1996 to July 2001, Mr. Kraff was founding principal of Vision Capital
Partners, an early stage venture capital/private equity business. At Vision
Capital, Mr. Kraff and his partners sourced proprietary deals and invested in
several early stage and growth capital opportunities. He currently is a member
of the Board of Directors of Smart Pack Solutions, LLC, an internet-based retail
sales firm. Mr. Kraff received a B.S. from The Wharton School, University of
Pennsylvania and an M.B.A. from the University of Chicago.




25




David F.
Palmer has served as our vice president since our inception. Mr. Palmer
has served as a managing director at Trivergance since its formation in June
2006. Mr. Palmer has also been a member of the board of directors and executive
vice-president of finance of Sunterra Corporation, one of the largest global
vacation ownership companies with 99 resorts in 13 countries, since April 2007.
From September 2002 to December 2006, he served as a partner of Onyx Capital
Ventures, LLC, a private equity firm that specializes in investing in minority
business enterprises. From 1996 to 2002, he was a principal of Vision Capital
Partners, LLC, and was a founder of Velocity Capital, LLC, both merchant banking
partnerships focused on early stage venture capital and private equity
investments. From 1989 to 1999, Mr. Palmer served as vice president of corporate
development for Farley Industries, Inc., a diversified holding company with
interests in the automotive, industrial and apparel industries. He recently
completed his service as Chairman of the board of directors of CiDRA
Corporation. Mr. Palmer received an A.B. in physical chemistry from Hamilton
College and an M.B.A. from the J.L. Kellogg Graduate School of Management at
Northwestern University.




Jerry
Stone has served as our vice-president since our inception. Mr. Stone is
a highly seasoned senior operating executive with a deep and diverse 25-year
background in advertising, direct marketing and business operations. Since its
inception in June 2006, Mr. Stone has also served as a managing director of
Trivergance. From June 1998 to April 2002, Mr. Stone served as chief information
officer and president of Intergies, the Internet Division of Paradigm Direct. He
also oversaw the design and implementation of the entire IT infrastructure,
including all marketing, sales and fulfillment tracking. From May 2002 to
November 2003, Mr. Stone served as managing director of Mosaic Group UK where he
was involved in the roll-up of 5 separate marketing entities with over 1,200
employees. From 1985 to 1991, Mr. Stone was partner and creative director of
Christopher Stone Advertising, SFS Advertising and Downey Stone, advertising
agencies that Mr. Stone formed.




Brian B.
Boorstein has served as a member of our board of directors since our
inception. Since May 2005, Mr. Boorstein has served as the managing partner of
Granite Creek Partners, L.L.C. (formerly Gordian Investment Partners, LLC), a
private equity investment fund that Mr. Boorstein co-founded that makes equity
and debt investments in middle-market companies. From June 2003 to May 2005, Mr.
Boorstein served as a principal of Montana Street Holdings, L.L.C., a private
holding company formed to invest in leveraged buyouts and growth equity
investments in industrial and business services companies and to actively
participate in the operations of such investments. From July 2001 to June 2003,
Mr. Boorstein served as managing member of Connecting Capital & Partners,
L.L.C., a merchant banking company organized to make principal investments in
alternative assets and provide limited strategic investment banking advice. In
January 1995, Mr. Boorstein founded Dakota Capital Partners, L.L.C., a private
equity firm focused on leveraged buyouts and growth equity investments in the
industrial and business service industries, and acted as its principal until
July 2001. From 1988 to 1995, Mr. Boorstein served as a principal of Heller
Equity Capital Corporation, a subsidiary of Heller Financial, Inc. As a founding
member of this Small Business Investment Company, he was responsible for
overseeing the entire portfolio of investments. Prior to this, he was an
investment banking associate with Merrill Lynch Capital Markets from 1987 to
1988, an associate with Golder, Thoma & Cressey from 1986 to 1987 and a
consultant with Arthur Andersen & Co. from 1982 to 1985. Mr. Boorstein
received a B.S. from Stanford University and a M.B.A. from the Graduate School
of Business of the University of Chicago.




Stuart I.
Oran has been a member of our board of directors since our inception.
Since April 2002, Mr. Oran has been the founder and managing member of Roxbury
Capital Group LLC, a merchant banking firm engaged in advisory and private
equity investment activities relating to acquisitions, capital formation,
corporate restructurings and oversight of portfolio companies. In addition, Mr.
Oran has served as an operating advisor to Pegasus Investors, a consultant to
Perry Capital, a member of the Board of Advisors of Oaktree Capital Principal
Opportunities Funds, and an advisor to and director of Spirit Airlines. From
July 1994 to March 2002, Mr. Oran held a number of senior executive positions at
UAL Corporation and its operating subsidiary, United Airlines, including
executive vice-president—corporate affairs, senior vice president—international
(responsibility for all of United’s business and operations outside the United
States and Canada), and president and chief executive officer of Avolar, a
UAL-owned brand and service driven “ultra-luxury” business aviation business,
for which he led the conceptualization, development and operation. On December
9, 2002, UAL Corporation and its subsidiaries, including United Airlines, filed
a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. Prior to
joining UAL and United, Mr. Oran was a corporate partner at the law firm of
Paul, Weiss, Rifkind, Wharton and Garrison LLP from 1974 to 1994, where he
specialized in private equity transactions. From 2006 until 2008, Mr. Oran was a
member of the board of directors of Wendy’s International, Inc. (NYSE:WEN), the
fast-food chain operating, developing and franchising a system of distinctive
quick-service restaurants serving high quality food. Mr. Oran received a B.S.
from Cornell University and a J.D. from the University of Chicago Law
School.




26




David L.
Moore has been a member of our board of directors since our inception.
Mr. Moore is an experienced senior operating executive and transactional
entrepreneur with a strong background in direct marketing and service
businesses. He has been the chairman of Moore Holdings, LLC, a holding company
he founded which owns six businesses and has over 200 employees, since January
2005. He has also been chairman of Garden State Brickface, one of the largest
remodeling firms in the United States, since 1992. From June 2005 to November
2006 he served as chief executive officer of Register.com (NASDAQ: RCOM), a
business services company with 500 employees and one million small business
customers. From 1997 to June 2005, he was also chairman of Sonostar Ventures,
LLC, a private equity/venture capital firm he co-founded. From November 2001 to
January 2004, he was on the board of Marquis Jet, Inc., serving as its
vice-chairman during 2003 and 2004. He is the president of the City Parks
Foundation (managing programs for 600,000 New Yorkers in over 700 parks
throughout New York City), and serves on the boards of Young Presidents’
Organization, Central Synagogue and the Eldridge Street Project. He is also the
co-chair of Amherst College’s Annual Fund. Mr. Moore received a B.A. in
Economics, magna cum
laude, from Amherst College and an MBA from Harvard
University.




Number
and Terms of Office of Directors




Our board
has five directors and is currently divided into three classes with only one
class of directors being elected in each year and each class serving a
three-year term. The term of office of the first class of directors, consisting
of David L. Moore, will expire at our first annual meeting of stockholders. The
term of office of the second class of directors, consisting of Stuart I. Oran
and Brian B. Boorstein, will expire at the second annual meeting. The term of
office of the third class of directors, consisting of Marc V. Byron and Lowell
D. Kraff, will expire at the third annual meeting. Upon consummation of a
business combination, this classified board feature will terminate and we will
then have only one class of directors, with each director elected
annually.




Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Exchange Act requires our officers, directors and persons who own
more than 10% of a registered class of our equity securities to file reports of
ownership and changes in ownership with the SEC. Officers, directors and
10%shareholders are
required by regulation to furnish us with copies of all Section 16(a) forms they
file. Based solely on the reports received by us and on the written
representations of the reporting persons, we believe that no director, executive
officer or greater than 10% shareholder failed to file on a timely basis the
reports required by Section 16(a) of the Exchange Act.




Independence
of Directors




As we are
listed on the NYSE Amex, we adhere to the rules of NYSE Amex in determining
whether a director is independent. Our board of directors also consults with our
counsel to ensure that the board’s determinations are consistent with those
rules and all relevant securities and other laws and regulations regarding the
independence of directors. The NYSE Amex standards define an “independent
director” generally as a person other than an executive officer or employee of
the company. No director qualifies as independent unless the issuer’s board of
directors affirmatively determines that the director does not have a
relationship that would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director.




27




Committees




Audit
Committee




Polaris
has established an audit committee of the board of directors, consisting of
Messrs. Moore, Boorstein and Oran. Mr. Moore serves as the chairman of our audit
committee. The independent directors we appointed to our audit committee are
independent members of our board of directors, as defined by Rule 10A-3 of the
Exchange Act and the listing standards of the NYSE Amex. The audit committee’s
duties, which are specified in our audit committee charter, include, but are not
limited to:




·
            reviewing
      and discussing with management and the independent auditor the annual
      audited financial statements, and recommending to the board whether the
      audited financial statements should be included in our Form
      10-K;




·
            discussing
      with management and the independent auditor significant financial
      reporting issues and judgments made in connection with the preparation of
      our financial statements;




·
            discussing
      with management major risk assessment and risk management
      policies;




·
            monitoring
      the independence of the independent
auditor;




·
            verifying
      the rotation of the lead (or coordinating) audit partner having primary
      responsibility for the audit and the audit partner responsible for
      reviewing the audit as required by
law;




·
            inquiring
      and discussing with management our compliance with applicable laws and
      regulations;




·
            pre-approving
      all audit services and permitted non-audit services to be performed by our
      independent auditor, including the fees and terms of the services to be
      performed;




·
            appointing
      or replacing the independent
auditor;




·
            determining
      the compensation and oversight of the work of the independent auditor
      (including resolution of disagreements between management and the
      independent auditor regarding financial reporting) for the purpose of
      preparing or issuing an audit report or related work;
  and




·
            establishing
      procedures for the receipt, retention and treatment of complaints received
      by us regarding accounting, internal accounting controls or reports that
      raise material issues regarding our financial statements or accounting
      policies.




The audit
committee will at all times be composed exclusively of “independent directors”
who, as required by the NYSE Amex, are able to read and understand fundamental
financial statements, including a company’s balance sheet, income statement and
cash flow statement. The board of directors has determined that Mr. Moore
satisfies this requirement.




Nominating
Committee




Polaris
has established a nominating committee of the board of directors, consisting of
Messrs. Boorstein and Moore. Each of Messrs. Boorstein and Moore is an
independent director as defined by the listing standards of the NYSE Amex. Mr.
Boorstein serves as the chairman of our nominating committee. The nominating
committee is responsible for overseeing the selection of persons to be nominated
to serve on our board of directors. The nominating committee considers persons
identified by its members, management, stockholders, investment bankers and
others. Our nominating committee did not meet in fiscal 2008.




The
guidelines for selecting nominees, which are specified in the Nominating
Committee Charter, generally provide that persons to be nominated:




28




·
            should
      have demonstrated notable or significant achievements in business,
      education or public service;




·
            should
      possess the requisite intelligence, education and experience to make a
      significant contribution to the board of directors and bring a range of
      skills, diverse perspectives and backgrounds to its deliberations;
      and




·
            should
      have the highest ethical standards, a strong sense of professionalism and
      intense dedication to serving the interests of the
      stockholders.




The
Nominating Committee will consider a number of qualifications relating to
management and leadership experience, background and integrity and
professionalism in evaluating a person’s candidacy for membership on the board
of directors. The nominating committee may require certain skills or attributes,
such as, financial or accounting experience, to meet specific board needs that
arise from time to time. The nominating committee does not distinguish among
nominees recommended by stockholders and other persons. We currently do not have
a formal means by which stockholders can nominate a director for election.
Stockholders may communicate nominee suggestions directly to any of the board
members, accompanied by biographical details and a statement of support for the
nominees. The suggested nominees must also provide a statement of consent to
being considered for nomination.




Compensation
Committee




Polaris
does not currently have a compensation committee. The board of directors does
not believe that any marked efficiencies or enhancements would presently be
achieved by the creation of a separate compensation committee because it does
not pay any of its executive officers a regular salary. The duties and
responsibilities typically delegated to a compensation committee are included in
the responsibilities of the entire board of directors.




Code
of Ethics and Committee Charters




Polaris
has approved a code of ethics that applies to our officers and directors. We
have filed copies of our code of ethics and our board committee charters as
exhibits to the registration statement in connection with our initial public
offering. You may review these documents by accessing Polaris’ public filings at
the SEC’s web site at www.sec.gov. In addition, a
copy of the code of ethics will be provided without charge upon request to
Polaris in writing at 2200 Fletcher Avenue, 4th Floor,
Fort Lee, New Jersey 07024 or by telephone at (201) 242-3500.




ITEM
      11.
            EXECUTIVE
      COMPENSATION




No
executive officer has received any cash compensation for services rendered to
us. Commencing on January 1, 2008 and through the acquisition of a target
business or our liquidation, we will pay Trivergance, an affiliate of Messrs.
Byron, Kraff, Palmer and Stone, our principal executive officers, a fee of
$7,500 per month for providing us with office space and certain office and
secretarial services. However, this arrangement is solely for our benefit and is
not intended to provide compensation in lieu of a salary. Other than the $7,500
per month administrative fee, no compensation of any kind, including finders’,
consulting or other similar fees, will be paid to any of our existing
stockholders, including our directors, or any of their respective affiliates,
prior to, or for any services they render in order to effectuate, the
consummation of a business combination. However, such 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. Because of the foregoing, we
will generally not have the benefit of independent directors examining the
propriety of expenses incurred on our behalf and subject to
reimbursement.




29




Compensation
Committee Interlocks and Insider Participation




None.




Compensation
Discussion and Analysis




We have
not included a compensation discussion and analysis because members of our
management team have not received any cash or other compensation for services
rendered to us during the years ended December 31, 2008 and 2007.




ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS




The table
below sets forth the beneficial ownership as of March 27, 2009 of our common
stock by the following individuals or entities based on 18,750,000 shares of our
common stock outstanding:




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




·
            each
      of our officers and directors; and




·
            all
      of our officers and directors as a
group.




Beneficial
ownership is determined in accordance with the rules of the SEC. Except as
otherwise indicated, each person or entity named in the tables is expected to
have sole voting and investment power with respect to all shares of our capital
stock shown as beneficially owned, subject to applicable community property
laws.




Name
      of Beneficial Owner(1)
                
                Amount and Nature of
                  Beneficial Ownership
                
                
                Percentage
      of
                  Outstanding
                  Common
      StockWellington
      Management Company, LLP(2)
                
                
                2,697,426
                
                
                
                14.4%Israel
      Englander(3)
                
                
                1,813,400
                
                
                
                9.7%Philip
      Goldstein(4)
                
                
                1,354,900
                
                
                
                7.2%HBK
      Investments L.P.(5)
                
                
                1,264,100
                
                
                
                6.7%Platinum
      Partners Value Arbitrage Fund LP(6)
                
                
                960,843
                
                
                
                5.1%Loeb
      Arbitrage Management, LLC(7)
                
                
                950,100
                
                
                
                5.1%Marc
      V. Byron(8)
                
                
                999,078
                
                
                
                5.3%Lowell
      D. Kraff(9)
                
                
                999,078
                
                
                
                5.3%David
      L. Moore(10)
                
                
                238,531
                
                
                
                1.3%David
      F. Palmer
                
                
                174,758
                
                
                
                0.9%Jerry
      Stone(11)
                
                
                174,758
                
                
                
                0.9%Brian
      B. Boorstein(12)
                
                
                61,565
                
                
                
                0.3%Stuart
      I. Oran(13)
                
                
                43,565
                
                
                
                0.2%All
      current directors and executive officers as a group (7
      individuals)
                
                
                2,691,333
                
                
                
                14.4%





(1)
            Unless
      otherwise indicated, the business address of the individuals who are our
      current officers and directors is 2200 Fletcher Avenue, 4thFloor, Fort Lee, NJ 07024.




(2)
            According
      to the Schedule 13D filed with the SEC on March 17, 2009, the business
      address of Wellington Management Company, LLP is 75 State Street, Boston,
      MA 02109. Wellington Management is an investment advisor registered under
      the Investment Advisors Act of 1940, as amended. Wellington Management, in
      such capacity, may be deemed to share beneficial ownership over the shares
      held by its client accounts.




30




(3)
            Represents
      1,813,400 shares of common stock held by Integrated Core Strategies (US)
      LLC. Millennium Management LLC is the general partner of Integrated
      Holding Group LP, which is the managing member of Integrated Core
      Strategies and consequently may be deemed to have shared voting control
      and investment discretion over securities owned by Integrated Core
      Strategies. Israel A. Englander is the management member of Millennium
      Management LLC and may be deemed to have shared voting control and
      investment discretion over securities deemed to be beneficially owned by
      Millennium Management LLC. Does not include 3,601,525 shares of common
      stock issuable upon exercise of warrants held by Integrated Core
      Strategies that are not currently exercisable and may not become
      exercisable within 60 days of March 27, 2009. This information was derived
      from the Schedule 13G/A filed with the SEC on November 3, 2008. The
      business address of Israel Englander is c/o Millennium Management LLC, 666
      Fifth Avenue, New York, NY 10103.




(4)
            Based
      on information derived from the Schedule 13G filed with the SEC on
      February 18, 2009, the shares of common stock are held by Bulldog
      Investors, Philip Goldstein and Andrew Dakos. According to the Schedule
      13G filed with the SEC on February 18, 2009, the business address of
      Philip Goldstein is Park 80 West, Plaza Two, Saddle Brook, NJ
      07663.




(5)
            Based
      upon information contained in the Schedule 13G filed with the SEC on
      January 30, 2009, by HBK Investments L.P. (“HBK Investments”), by HBK
      Services LLC, a Delaware limited liability company (“HBK Services”), by
      HBK Partners II L.P., a Delaware limited partnership (“HBK Partners”), by
      HBK Management LLC, a Delaware limited liability company (“HBK
      Management”), by HBK New York LLC, a Delaware limited liability company,
      by HBK Special Opportunity Fund I L.P., a Cayman Islands limited
      partnership, and by HBK Master Fund L.P., a Cayman Islands limited
      partnership (“HBK Master Fund”). HBK Investments has delegated discretion
      to vote and dispose of the securities to HBK Services. HBK Services may,
      from time to time, delegate discretion to vote and dispose of certain of
      the Securities to HBK New York LLC, HBK Virginia LLC, a Delaware limited
      liability company, HBK Europe Management LLP, a limited liability
      partnership organized under the laws of the United Kingdom, and/or HBK
      Hong Kong Ltd., a corporation organized under the laws of Hong Kong
      (collectively, the “Subadvisors”). Each of HBK Services and the
      Subadvisors is under common control with HBK Investments L.P. The
      Subadvisors expressly declared in the 13G filed with the SEC on November
      25, 2008 that such filing 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. According to the
      Schedule 13G filed with the SEC on November 25, 2008, the business address
      of HBK Investments L.P. is 2101 Cedar Springs Road, Suite 700, Dallas, TX
      75201.




(6)
            This
      information was derived from the Schedule 13G filed with the SEC on
      October 30, 2008. Does not include 183,800 shares of common stock issuable
      upon exercise of warrants held by Platinum Partners Value Arbitrage Fund
      LP that are not currently exercisable and may not become exercisable
      within 60 days of March 27, 2009. According to the Schedule 13G filed with
      the SEC on October 30, 2008, the business address of Platinum Partners
      Value Arbitrage Fund LP is 152 West 57th Street, New York, NY
      10019.




(7)
            Represents
      shares held by Loeb Partners Corporation, Loeb Arbitrage Fund, Loeb
      Arbitrage Management, LLC, Loeb Offshore Fund Ltd., Loeb Marathon Fund LP,
      Loeb Marathon Offshore Fund, Ltd., Loeb Arbitrage B Fund LP and Loeb
      Offshore Fund Ltd. Share amounts listed are derived from Loeb Partners
      Corporation’s Schedule 13D filing with the SEC on January 14, 2009.
      According to the Schedule 13D filed with the SEC on January 14, 2009, the
      business address of Loeb Arbitrage Management, LLC is 61 Broadway, New
      York, NY 10006.




(8)
            Represents
      shares held by Byron Business Ventures XX, LLC, an entity controlled by
      Mr. Byron. Does not include 900,000 shares of common stock issuable upon
      exercise of insider warrants held by Mr. Byron that are not currently
      exercisable and may not become exercisable within 60 days of March 27,
      2009.




31




(9)
            Represents
      shares held by Praesumo Partners, LLC, an entity controlled by Mr. Kraff.
      Does not include 900,000 shares of common stock issuable upon exercise of
      insider warrants held by Mr. Kraff that are not currently exercisable and
      may not become exercisable within 60 days of March 27,
    2009.





(10)
            Represents
      shares held by Moore Holdings, LLC, an entity controlled by Mr. Moore.
      Does not include 360,000 shares of common stock issuable upon exercise of
      insider warrants held by Mr. Moore that are not currently exercisable and
      may not become exercisable within 60 days of March 27,
    2009.





(11)
            Represents
      shares held by Vinco Vincere Vici Victum LLC, an entity controlled by Mr.
      Stone.





(12)
            Represents
      shares held by Granite Creek Partners, L.L.C., an entity controlled by Mr.
      Boorstein. Does not include 108,000 shares of common stock issuable upon
      exercise of insider warrants held by Mr. Boorstein that are not currently
      exercisable and may not become exercisable within 60 days of March 27,
      2009.





(13)
            Represents
      shares held by Roxbury Capital Group LLC Incentive Savings Plan, of which
      Mr. Oran is sole trustee and beneficiary. Does not include 54,000 shares
      of common stock issuable upon exercise of insider warrants held by Mr.
      Oran that are not currently exercisable and may not become exercisable
      within 27 days of March 27, 2009.







ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
      INDEPENDENCE




In June
2007, we issued 4,312,500 shares of our common stock to the individuals set
forth below for an aggregate of $25,000 in cash, for a purchase price of
approximately $0.006 per share, as follows:




Number of Shares
                
                Relationship to UsByron
      Business Ventures XX, LLC (1)
                
                
                1,488,700
                
                StockholderPraesumo
      Partners, LLC (2)
                
                
                1,488,700
                
                StockholderMoore
      Holdings, LLC (3)
                
                
                349,916
                
                StockholderVinco
      Vincere Vici Victum LLC (4)
                
                
                257,175
                
                StockholderDavid
      F. Palmer
                
                
                257,175
                
                Vice
      PresidentMeritage
      Farms LLC
                
                
                194,792
                
                StockholderCloobeck
      Companies, LLC
                
                
                119,792
                
                StockholderGranite
      Creek Partners, L.L.C. (5)
                
                
                92,500
                
                StockholderRoxbury
      Capital Group LLC Incentive Savings Plan (6)
                
                
                63,750
                
                Stockholder





(1)
            This
      entity is controlled by Marc V. Byron, our chairman of the board and chief
      executive officer.




(2)
            This
      entity is controlled by Lowell D. Kraff, our president and a director of
      ours.




(3)
            This
      entity is controlled by David L. Moore, a director of
  ours.




(4)
            This
      entity is controlled by Jerry Stone, a vice president of
    ours.




(5)
            This
      entity is controlled by Brian B. Boorstein, a director of
      ours.




(6)
            Stuart
      I. Oran, a director of ours, is sole trustee and beneficiary of this
      entity.




On
November 8, 2007, our board of directors authorized a stock dividend of 0.2
shares of Polaris common stock for each outstanding share of Polaris common
stock, effectively lowering the purchase price to approximately $0.005 per
share. Thereafter, our initial stockholders transferred an aggregate of
1,190,540 shares to Hartz Capital Investments, LLC (f/k/a Alerion Equities, LLC)
and 211,617 shares to Odessa, LLC. On January 11, 2008, our initial stockholders
contributed back to our capital, at no cost to us, an aggregate of 862,500
shares of common stock.




32




Our
initial stockholders forfeited 562,500 shares of Polaris common stock to us in
April 2008 in order to maintain their 20% ownership of outstanding Polaris
common stock after our initial public offering because the underwriters did not
exercise their over-allotment option.




Assuming
that the Merger, which would modify these rights, does not occur, the holders of
the majority of these shares will be entitled to make up to two demands that we
register these shares pursuant to an agreement signed January 11, 2008. The
holders of the majority of these shares may elect to exercise these registration
rights at any time commencing three months prior to the date on which these
shares of common stock are released from escrow. In addition, these stockholders
have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the date on which these shares of common stock
are released from escrow. We will bear the expenses incurred in connection with
the filing of any such registration statements. Our initial stockholders,
pursuant to written subscription agreements with us and Lazard Capital Markets,
purchased 4.5 million insider warrants (for a total purchase price of $4.5
million) from us. These purchases took place on a private placement basis
simultaneously with the consummation of our initial public offering. Graubard
Miller, our counsel in connection with the initial public offering, deposited
the purchase price into the trust fund simultaneously with the consummation of
our initial public offering. The insider warrants are identical to the warrants
underlying the units offered by us in our initial public offering except that if
we call the warrants for redemption, the insider warrants will be exercisable on
a cashless basis so long as such warrants are held by the purchasers or their
affiliates. If the holders take advantage of this option, they would pay the
exercise price by surrendering their insider warrants for that number of shares
of common stock equal to the quotient obtained by dividing (x) the product of
the number of shares of common stock underlying the insider warrants, multiplied
by the difference between the exercise price of the warrants and the “fair
market value” (defined below) by (y) the fair market value. The “fair market
value” shall mean the average reported last sale price of the common stock for
the 10 trading days ending on the third trading day prior to the date on which
the notice of redemption is sent to holders of warrants.




The
purchasers have agreed that the insider warrants will not be sold or transferred
by them until 45 days after we have completed a business combination.
Accordingly, the insider warrants will be placed in escrow and will not be
released until 45 days after the completion of a business
combination.




Assuming
that the Merger, which would modify these rights, does not occur, the holders of
the majority of these insider warrants (or underlying shares) will be entitled
to demand that we register these securities pursuant to an agreement to be
signed on January 11, 2008. The holders of the majority of these securities may
elect to exercise these registration rights at any time after we consummate a
business combination. In addition, these holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to
such date. We will bear the expenses incurred in connection with the filing of
any such registration statements. Trivergance, an affiliate of Messrs. Byron,
Kraff, Palmer and Stone, has agreed that, until the earlier of (i) when we
consummate the acquisition of a target business and (ii) our liquidation, it
will make available to us a small amount of office space, and certain office and
secretarial services, as we may require from time to time. We have agreed to pay
Trivergance $7,500 per month for these services. Messrs. Byron, Kraff, Palmer
and Stone are the partner, partner, managing director and managing director of
Trivergance and, as a result, will benefit from the transaction to the extent of
their interest in Trivergance. However, this arrangement is solely for our
benefit and is not intended to provide Messrs. Byron, Kraff, Palmer or Stone
compensation in lieu of a salary. Based on rents and fees for similar services
in the New Jersey metropolitan area, we believe that the fee charged by
Trivergance is at least as favorable as we could have obtained from an
unaffiliated person.




We issued
an aggregate $100,000 unsecured promissory note to Trivergance on July 12, 2007.
The note was non-interest bearing and was payable on the earlier of the
consummation of our initial public offering or July 12, 2008. The note was
repaid from the net proceeds of our initial public offering.




Trivergance
advanced $12,911 to us. No formal repayment arrangement was in place and no
interest was due on the advance. The advance was repaid.




33




Pursuant
to letter agreements that the initial stockholders have entered into with us and
the underwriters, the initial stockholders have waived their right to receive
distributions with respect to their initial shares upon our
liquidation.




We will
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 out-of-pocket expenses
reimbursable by us, which will be reviewed only by our board or a court of
competent jurisdiction if such reimbursement is challenged.




Other
than the $7,500 per-month administrative fee and any reimbursable out-of-pocket
expenses payable to our officers and directors, no compensation or fees of any
kind, including finders’ fees, consulting fees or other similar compensation,
will be paid to any of our initial stockholders, officers or directors who owned
our common stock prior to our initial public offering, or to any of their
respective affiliates, prior to or with respect to the business combination
(regardless of the type of transaction that it is).




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 to us than are available
from unaffiliated third parties. Such transactions or loans, including any
forgiveness of loans, will require prior approval by a majority of our
disinterested “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. We will not enter into
any such transaction unless our disinterested “independent” 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.




Certain
of our officers and directors also have had interests in HUGHES Telematics
transaction as described below.




Granite
Creek Partners, L.L.C., an entity affiliated with Brian B. Boorstein, one of our
directors, purchased from HUGHES Telematics on July 8, 2008, for aggregate
consideration of $5.0 million, senior secured term indebtedness issued under
HUGHES Telematics’ credit facility with a principal amount of $5.0 million and a
warrant to purchase 6,611 shares of HUGHES Telematics common stock at an
exercise price of $0.01 per share. As of July 8, 2008, HUGHES Telematics had
outstanding senior secured term indebtedness under the credit facility with an
aggregate principal balance of $55.0 million. The proceeds from the issuance of
senior secured term indebtedness have been used for HUGHES Telematics’ general
corporate purposes and to pay fees and expenses related to the issuance of the
term indebtedness. The term indebtedness is guaranteed by all of HUGHES
Telematics’ existing and future domestic subsidiaries and is secured by all of
its tangible and intangible assets. While the credit facility bears interest at
a variable rate equal to 11% plus the greater of the LIBOR or 3%, as Granite
Creek Partners, L.L.C. is a Small Business Investment Company under the U.S.
Small Business Administration, the parties agreed to fix the interest rate for
the $5.0 million note held by Granite Creek Partners, L.L.C. at 14% for the term
of the credit facility in order to comply with U.S. Small Business
Administration rules. HUGHES Telematics may elect to pay the interest accrued on
the senior secured term indebtedness until March 31, 2010 in kind (i.e., with
such accrued interest being added to the outstanding principal balance of the
term indebtedness). After March 31, 2010 and until the March 31, 2013 maturity
date of the senior secured term indebtedness, the accrued interest will be paid
in cash in arrears. HUGHES Telematics may voluntarily prepay amounts outstanding
under the credit facility any time after March 31, 2010 at a redemption price
starting at 103% of the outstanding principal amount of the term indebtedness
and declining to par after March 31, 2012.




The
warrants issued to Granite Creek Partners, L.L.C. in connection with the
purchase of the term indebtedness are exercisable upon the earlier to occur of
(i) the repayment of the term indebtedness, (ii) a change of control as defined
in the warrant agreement, (iii) a transaction or event causing or allowing the
holders to sell the shares of common stock issuable upon exercise of the
warrants pursuant to the co-sale agreement, dated March 31, 2008, as amended, by
and among HUGHES Telematics, affiliates of Apollo Management, L.P. and the
holders of the warrants. If not exercised prior to the earlier of (i) the date
on which HUGHES Telematics becomes subject to the requirement to file reports
under Section 13(a) or Section 15(d) of the Exchange Act or (ii) March 31, 2013,
the warrants will be automatically exercised on such date with no action
required on the part of the holders (except the payment of the aggregate
exercise price). In the event that the term indebtedness is prepaid in full
prior to March 31, 2010, the number of shares for which the warrant issued to
Granite Creek Partners, L.L.C. is exercisable shall be reduced by 1,240
shares.




34




Trivergance
Business Resources (“TBR”), an affiliate of our initial stockholders, entered
into a Services Agreement & Statement of Work with HUGHES Telematics on
September 26, 2008. Pursuant to this agreement, TBR began providing a marketing
assessment and other research for HUGHES Telematics to aid in creating a
world-class marketing and retention platform. HUGHES Telematics paid TBR a fee
of $150,000 and reimbursed TBR for travel and certain other expenses incurred in
connection with the engagement. Additionally, TBR entered into a letter
agreement with HUGHES Telematics on November 4, 2008 to provide additional
marketing services. Under the terms of the letter agreement, TBR agreed to
provide the services in exchange for a $125,000 monthly draw against a per
subscriber fee payable on certain subscribers acquired beginning in November
2008 and continuing through December 2010. A portion of the monthly draw will be
deferred until a HUGHES Telematics financing event.




HUGHES
Telematics entered into an engagement letter agreement with Trivergance,
pursuant to which Trivergance was engaged as a consultant, financial advisor,
and marketing agent to HUGHES Telematics in connection with a sale of equity of
HUGHES Telematics. Trivergance is an affiliate of Marc V. Byron, our chairman of
the board and chief executive officer, Lowell D. Kraff, our president and a
director, David Palmer and Jerry Stone, each a vice president of ours, and David
Moore, our director. In connection with the sale of the Series B preferred
stock, Trivergance received from HUGHES Telematics compensation of approximately
$1.3 million in cash and warrants to purchase 5,153 shares of HUGHES Telematics
common stock at an exercise price of $10.19 per share of HUGHES Telematics
common stock (the equivalent of approximately $0.167 per share of Polaris common
stock based on the anticipated exchange ratio and assuming the earn-out is
achieved). These warrants will be exercised automatically immediately prior to
the Merger. Based on the anticipated exchange ratio, the holders of these
warrants will receive an aggregate of approximately 314,117 shares of Polaris
common stock in the Merger for an aggregate exercise price of $52,509. All of
such shares will be subject to the same lock-up provision as shares of Polaris
common stock held by the Founders. The engagement letter between Trivergance and
HUGHES Telematics specifies that the directors of Polaris who are affiliated
with Trivergance will continue to participate in Polaris’ evaluation of the
Merger with HUGHES Telematics and that nothing in the letter agreement will
limit, modify or otherwise restrict the exercise by such Polaris directors of
their legal (including fiduciary) duties to Polaris. The disinterested members
of the board of directors of Polaris evaluated the potential conflict of
interest of those officers and directors affiliated with Trivergance and
approved the execution of the engagement letter between Trivergance and HUGHES
Telematics.




ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES




As
previously disclosed in our Current Report on Form 8-K dated February 1, 2008,
certain of the partners of Goldstein Golub Kessler LLP (“GGK”) became partners
of McGladrey & Pullen, LLP (M&P”). As a result, GGK resigned as auditors
of the Company effective January 31, 2008 and M&P was appointed as our
independent registered public accounting firm in connection with the company’s
annual financial statements for the year ended December 31, 2008.




GGK had a
continuing relationship with RSM McGladrey, Inc. (“RSM”), from which it leased
auditing staff who were full time, permanent employees of RSM and through which
its partners provided non-audit services. GGK had no full time employees and
therefore, none of the audit services performed were provided by permanent full
time employees of GGK. GGK managed and supervised the audit staff, and is
exclusively responsible for the opinion rendered in connection with its
examination.




The
following table sets forth the fees billed or expected to be billed for
professional services rendered by M&P, RSM and GGK for the fiscal years
ended December 31, 2008 and 2007:




35




Fiscal Year Ended
              
              
              Fiscal Year EndedDecember 31, 2008
              
              
              December 31, 2007Audit
      Fees - M&P
              
              $
              127,771
              
              
              $Audit
      Fees - GGK
              
              
              
              
              
              
              55,000Audit-Related
      FeesTax
      Fees
              
              
              7,000
              
              
              
              1,946All
      Other FeesTotal
              
              $
              134,771
              
              
              $
              56,946





Audit
Fees




Audit
fees for 2008 consist of fees for the audit of our 2008 year end financial
statements included in reports on form 10-K, for the reviews of the interim
quarterly financial statements included in our quarterly reports on Form 10-Q
and services rendered in connection with our registration statements and proxy
filings. Audit fees for 2007 consist of fees related to our initial public
offering and related audits.




Audit-Related
Fees




We did
not incur audit-related fees during the periods ended December 31, 2008 and
2007.




Tax
Fees




We
incurred tax-related fees from RSM for the preparation of state and federal tax
returns for the periods ended December 31, 2008 and 2007.




All
Other Fees




We did
not incur any other fees during the periods ended December 31, 2008 and
2007.




Audit
Committee Approval




The Audit Committee Charter requires
Audit Committee pre-approval for all audit and permissible non-audit services
provided by our independent auditors. Where feasible, the Audit Committee
considers and, when appropriate, pre-approves services at regularly scheduled
meetings after disclosure by management and the auditors of the nature of the
proposed services, the estimated fees (when available), and their opinions that
the services will not impair the auditors’ independence. The Audit Committee
also may consider and pre-approve any such services in between
meetings.





PART
IV




ITEM
      15.
            EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES




(1)
            Financial
      Statements





Financial
Statements and Supplementary Data.





(2)
            Financial Statement
      Schedules





All
supplemental schedules have been omitted because the required information is not
present in amounts sufficient to require submission of the schedule, or because
the required information is included in the consolidated financial statements or
notes thereto.





(3)
            Exhibits





See
Exhibit Index.




36




SIGNATURES





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




POLARIS
      ACQUISITION
                CORP.March
      30, 2009/s/ Marc ByronMarc
      ByronChairman
      and Chief
                Executive
      Officer(Principal
      Executive Officer
                and
      Principal Accounting and
                Financial
      Officer)




37




EXHIBIT
INDEX





ExhibitNumber2.1
              
              Second
      Amended and Restated Agreement and Plan of Merger by and Between Polaris
      and HUGHES Telematics dated as of March 12, 2009 (incorporated by
      reference to exhibit 10.1 to the Current Report on Form 8-K filed March
      12, 2009).3.1
              
              Certificate
      of Incorporation (incorporated by reference to exhibits of the same number
      filed with the Registrant’s Registration Statement on Form S-1 or
      amendments thereto (File No. 333-145759)).3.2
              
              Bylaws
      (incorporated by reference to exhibits of the same number filed with the
      Registrant’s Registration Statement on Form S-1 or amendments thereto
      (File No. 333-145759)).3.3
              
              Form
      of Amended and Restated Certificate of Incorporation (incorporated by
      reference to exhibits of the same number filed with the Registrant’s
      Registration Statement on Form S-1 or amendments thereto (File No.
      333-145759)).4.1
              
              Specimen
      Unit Certificate (incorporated by reference to exhibits of the same number
      filed with the Registrant’s Registration Statement on Form S-1 or
      amendments thereto (File No. 333-145759)).4.2
              
              Specimen
      Common Stock Certificate (incorporated by reference to exhibits of the
      same number filed with the Registrant’s Registration Statement on Form S-1
      or amendments thereto (File No. 333-145759)).4.3
              
              Form
      of Warrant Certificate (incorporated by reference to exhibits of the same
      number filed with the Registrant’s Registration Statement on Form S-1 or
      amendments thereto (File No. 333-145759)).4.4
              
              Form
      of Warrant Agreement between the Registrant and Continental Stock Transfer
      & Trust Company (incorporated by reference to exhibits of the same
      number filed with the Registrant’s Registration Statement on Form S-1 or
      amendments thereto (File No. 333-145759)).31.1
              
              Certification
      of Chief Executive / Chief Financial Officer Pursuant to SEC Rules
      13a-14(a)/15d-14(a).*32.1
              
              Certification
      of Chief Executive Officer / Chief Financial Officer Pursuant to 18 U.S.C.
      §1350.*99.1
              
              Definitive
      Proxy Statement on Schedule 14A filed March (incorporated by reference the
      DEF 14A filed February 12, 2009).99.2
              
              Proxy
      Supplement (incorporated by reference the DEFA 14A filed March 20,
      2009).





*
            Filed
      herewith.




38


FINANCIAL
STATEMENTS


TABLE
OF CONTENTS




PagePolaris
      Acquisition Corp. Financial StatementsReports
      of Independent Registered Public Accounting Firms
                
                
                F-2Balance
      Sheet — as of December 31, 2008 and 2007
                
                
                F-4Statements
      of Operations — for the Year Ended December 31, 2008, the Period
      from June 18, 2007 (Inception) to December 31, 2007 and the Period from
      June 18, 2007 (Inception) to December 31, 2008
                
                
                F-5Statement
      of Stockholders’ Equity — for the Period from June 18, 2007
      (Inception) to December 31, 2008
                
                
                F-6Statements
      of Cash Flows — for the Year Ended December 31, 2008, the Period
      from June 18, 2007 (Inception) to December 31, 2007 and the Period from
      June 18, 2007 (Inception) to December 31, 2008
                
                
                F-7Notes
      to Financial Statements
                
                
                F-8


F-1




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Board of Directors and Stockholders


Polaris
Acquisition Corp.




We have
audited the accompanying balance sheet of Polaris Acquisition Corp. (a
corporation in the development stage) as of December 31, 2008, and the related
statements of operations, stockholders’ equity, and cash flows for the year then
ended, and the amounts included in the cumulative columns in the statement of
operations and cash flows for the period from June 18, 2007 (inception) to
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 audit.




We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Polaris Acquisition Corp. as of
December 31, 2008 and the results of its operations and its cash flows for the
year then ended, and the amounts included in the cumulative columns in the
statement of operations and cash flows for the period from June 18, 2007
(inception) to December 31, 2008, in conformity with U.S. generally accepted
accounting principles.




/s/
McGladrey & Pullen, LLP




McGladrey
& Pullen, LLP




New York,
New York


March 19,
2009


F-2




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the
Board of Directors and Stockholders


Polaris
Acquisition Corp.




We have
audited the accompanying balance sheet of Polaris Acquisition Corp. (a
corporation in the development stage) as of December 31, 2007, and the related
statements of operations, stockholders’ equity, and cash flows for the period
from June 18, 2007 (inception) to December 31, 2007. These financial statements
are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our
audit.




We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Polaris Acquisition Corp. as of
December 31, 2007 and the results of its operations and its cash flows for the
period from June 18, 2007 (inception) to December 31, 2007, in conformity with
United States generally accepted accounting principles.




The
accompanying financial statements have been prepared assuming Polaris
Acquisition Corp. will continue as a going concern. The Company has a net loss,
working capital deficiency, and has no operations. This raises substantial doubt
about the Company’s ability to continue as a going concern. As discussed in Note
2, the Company is in the process of raising capital through a Proposed Offering.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.




/s/
Goldstein Golub Kessler LLP




Goldstein
Golub Kessler LLP




New York,
New York


January
7, 2008


F-3




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





BALANCE
SHEET


December
      31,
                                    2008
                                  
                                  December31,
                                    2007ASSETSCurrent
      Assets:Cash
                                  
                                  $
                                  5,056
                                  
                                  
                                  $
                                  12,801Investments
      Held in Trust
                                  
                                  
                                  150,796,461
                                  
                                  
                                  
                                  —Prepaid
      Expenses
                                  
                                  
                                  64,723
                                  
                                  
                                  
                                  —Total
      Current Assets
                                  
                                  
                                  150,866,240
                                  
                                  
                                  
                                  12,801Deferred
      Tax Asset
                                  
                                  
                                  441,512
                                  
                                  
                                  
                                  —Deferred
      Offering Costs
                                  
                                  
                                  —
                                  
                                  
                                  
                                  175,802Total
      Assets
                                  
                                  $
                                  151,307,752
                                  
                                  
                                  $
                                  188,603LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      Liabilities:Accrued
      Operating Expenses
                                  
                                  $
                                  329,835
                                  
                                  
                                  $
                                  —Income
      Taxes Payable
                                  
                                  
                                  217,046
                                  
                                  
                                  
                                  —Accrued
      Offering Costs
                                  
                                  
                                  —
                                  
                                  
                                  
                                  51,365Due
      to Affiliate
                                  
                                  
                                  —
                                  
                                  
                                  
                                  12,911Note
      Payable to Affiliate
                                  
                                  
                                  —
                                  
                                  
                                  
                                  100,000Deferred
      Underwriting Fee
                                  
                                  
                                  6,750,000
                                  
                                  
                                  
                                  —Total
      Liabilities
                                  
                                  
                                  7,296,881
                                  
                                  
                                  
                                  164,276Common
      Stock, subject to possible conversion of 4,499,999 shares at conversion
      value
                                  
                                  
                                  44,999,990
                                  
                                  
                                  
                                  —Commitments
      (Note 4)Stockholders’
      EquityPreferred
      stock, $.0001 par value Authorized 1,000,000 shares; none issued and
      outstanding
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —Common
      stock, $.0001 par value Authorized 55,000,000 shares; Issued and
      outstanding 18,750,000 shares (which includes 4,499,999 shares subject to
      possible conversion) and 5,175,000 shares
                                  
                                  
                                  1,875
                                  
                                  
                                  
                                  518Additional
      Paid in Capital
                                  
                                  
                                  98,403,826
                                  
                                  
                                  
                                  24,482Income/(Deficit)
      Accumulated During the Development Stage
                                  
                                  
                                  605,180
                                  
                                  
                                  
                                  (673
                                  )Total
      Stockholders’ Equity
                                  
                                  
                                  99,010,881
                                  
                                  
                                  
                                  24,327Total
      Liabilities and Stockholders’ Equity
                                  
                                  $
                                  151,307,752
                                  
                                  
                                  $
                                  188,603





See
Notes to Financial Statements.


F-4




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





STATEMENT
OF OPERATIONS


Year Ended
                              December 31,
                              2008
                            
                            Period from
                              June 18, 2007
                              (Inception) to
                              December 31,
                              2007
                            
                            Period from
                              June 18, 2007
                              (Inception) to
                              December 31,
                              2008Formation Costs
                            
                            $
                            —
                            
                            
                            $
                            1,062
                            
                            
                            $
                            1,062Trustee
      Fees
                            
                            
                            16,319
                            
                            
                            
                            —
                            
                            
                            
                            16,319Administrative
      Fees
                            
                            
                            90,000
                            
                            
                            
                            —
                            
                            
                            
                            90,000Professional
      Fees
                            
                            
                            177,519
                            
                            
                            
                            —
                            
                            
                            
                            177,519Operating
      Costs
                            
                            
                            322,393
                            
                            
                            
                            —
                            
                            
                            
                            322,393Due
      Diligence Costs
                            
                            
                            696,885
                            
                            
                            
                            —
                            
                            
                            
                            696,885Delaware
      Franchise Taxes
                            
                            
                            113,430
                            
                            
                            
                            —
                            
                            
                            
                            113,430Operating
      Expenses
                            
                            
                            (1,416,546
                            )
                            
                            
                            (1,062
                            )
                            
                            
                            (1,417,608
                            )Interest
      Income
                            
                            
                            2,558,161
                            
                            
                            
                            389
                            
                            
                            
                            2,558,550Income
      (Loss) Before Provision For Income Taxes
                            
                            
                            1,141,615
                            
                            
                            
                            (673
                            )
                            
                            
                            1,140,942Provision
      For Income Taxes
                            
                            
                            535,762
                            
                            
                            
                            —
                            
                            
                            
                            535,762Net
      Income (Loss)
                            
                            $
                            605,853
                            
                            
                            $
                            (673
                            )
                            
                            $
                            605,180Weighted
      average shares outstanding, basic and diluted
                            
                            
                            18,257,684
                            
                            
                            
                            5,175,000
                            
                            
                            
                            13,679,907Basic
      and diluted net income per share
                            
                            $
                            0.03
                            
                            
                            $
                            —
                            
                            
                            $
                            0.04





See
Notes to Financial Statements.


F-5




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





STATEMENT
OF STOCKHOLDERS’ EQUITY


For
the Period from June 18, 2007 (Inception) to December 31, 2008




Income/(Deficit)AccumulatedAdditional
                            
                            
                            During the
                            
                            
                            TotalCommon Stock
                            
                            
                            Paid-in
                            
                            
                            Development
                            
                            
                            Stockholders’Shares
                            
                            
                            Amount
                            
                            
                            Capital
                            
                            
                            Stage
                            
                            
                            EquityIssuance
      of common stock to Founders on June 18, 2007 at approximately $0.005 per
      share
                            
                            
                            5,175,000
                            
                            
                            $
                            518
                            
                            
                            $
                            24,482
                            
                            
                            $
                            —
                            
                            
                            $
                            25,000Net
      Loss
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (673
                            )
                            
                            
                            (673
                            )Balance
      at December 31, 2007
                            
                            
                            5,175,000
                            
                            
                            
                            518
                            
                            
                            
                            24,482
                            
                            
                            
                            (673
                            )
                            
                            
                            24,327Contribution
      of shares to capital on January 11, 2008
                            
                            
                            (862,500
                            )
                            
                            
                            (87
                            )
                            
                            
                            87
                            
                            
                            
                            —
                            
                            
                            
                            —Sale
      of 4,500,000 Private Placement Warrants at $1 per warrant
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            4,500,000
                            
                            
                            
                            —
                            
                            
                            
                            4,500,000Sale
      of 15,000,000 units on January 17, 2008 at $10 per unit through public
      offering (net of underwriter’s discount and offering expenses) including
      4,499,999 shares subject to possible conversion
                            
                            
                            15,000,000
                            
                            
                            
                            1,500
                            
                            
                            
                            138,879,191
                            
                            
                            
                            —
                            
                            
                            
                            138,880,691Proceeds
      subject to possible conversion
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            (44,999,990
                            )
                            
                            
                            —
                            
                            
                            
                            (44,999,990
                            )Forfeited
      Founders shares on April 23, 2008
                            
                            
                            (562,500
                            )
                            
                            
                            (56
                            )
                            
                            
                            56
                            
                            
                            
                            —
                            
                            
                            
                            —Net
      Income
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            605,853
                            
                            
                            
                            605,853Balance
      at December 31, 2008
                            
                            
                            18,750,000
                            
                            
                            $
                            1,875
                            
                            
                            $
                            98,403,826
                            
                            
                            $
                            605,180
                            
                            
                            $
                            99,010,881





See
Notes to Financial Statements.


F-6




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





STATEMENT
OF CASH FLOWS


Year Ended
                                      December 31,
                                      2008
                                    
                                    Period from
                                      June 18, 2007
                                      (Inception) to
                                      December31,
                                      2007
                                    
                                    Period from
                                      June 18, 2007
                                      (Inception) to
                                      December 31,
                                      2008Cash Flows
      from Operating ActivitiesNet
      Income (Loss)
                                    
                                    $
                                    605,853
                                    
                                    
                                    $
                                    (673
                                    )
                                    
                                    $
                                    605,180Adjustments
      to reconcile net income (loss) to net cash used in operating
      activitiesIncrease
      in accrued operating expenses
                                    
                                    
                                    329,835
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    329,835Increase
      in income taxes payables
                                    
                                    
                                    217,046
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    217,046Increase
      in prepaid expenses
                                    
                                    
                                    (64,723
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (64,723
                                    )Interest
      earned on trust
                                    
                                    
                                    (2,555,818
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (2,555,818
                                    )Increase
      in deferred tax asset
                                    
                                    
                                    (441,512
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (441,512
                                    )Net
      Cash Used in Operating Activities
                                    
                                    
                                    (1,909,319
                                    )
                                    
                                    
                                    (673
                                    )
                                    
                                    
                                    (1,909,992
                                    )Cash
      Flows from Investing ActivitiesInvestments
      placed in trust
                                    
                                    
                                    (150,000,000
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (150,000,000
                                    )Disbursements
      from trust
                                    
                                    
                                    1,759,357
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    1,759,357Net
      Cash Used in Investing Activities
                                    
                                    
                                    (148,240,643
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (148,240,643
                                    )Cash
      Flows from Financing ActivitiesProceeds
      from sale of units to public
                                    
                                    
                                    150,000,000
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    150,000,000Proceeds
      from private placement of warrants
                                    
                                    
                                    4,500,000
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    4,500,000Proceeds
      from sale of units to Founders
                                    
                                    
                                    —
                                    
                                    
                                    
                                    25,000
                                    
                                    
                                    
                                    25,000Proceeds
      from notes payable to affiliates
                                    
                                    
                                    —
                                    
                                    
                                    
                                    100,000
                                    
                                    
                                    
                                    100,000Payment
      of notes payable to affiliates
                                    
                                    
                                    (100,000
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (100,000
                                    )Proceeds
      from due to affiliates
                                    
                                    
                                    —
                                    
                                    
                                    
                                    12,911
                                    
                                    
                                    
                                    12,911Payment
      of due to affiliates
                                    
                                    
                                    (12,911
                                    )
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (12,911
                                    )Payment
      of offering costs
                                    
                                    
                                    (4,244,872
                                    )
                                    
                                    
                                    (124,437
                                    )
                                    
                                    
                                    (4,369,309
                                    )Net
      Cash Provided by Financing Activities
                                    
                                    
                                    150,142,217
                                    
                                    
                                    
                                    13,474
                                    
                                    
                                    
                                    150,155,691Net
      Increase (Decrease) in Cash
                                    
                                    
                                    (7,745
                                    )
                                    
                                    
                                    12,801
                                    
                                    
                                    
                                    5,056Cash
      at Beginning of Period
                                    
                                    
                                    12,801
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    —Cash
      at End of Period
                                    
                                    $
                                    5,056
                                    
                                    
                                    $
                                    12,801
                                    
                                    
                                    $
                                    5,056Supplemental
      Disclosure of Noncash Financing ActivitiesAccrual
      of deferred offering costs
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    51,365
                                    
                                    
                                    $
                                    —Accrual
      of deferred underwriting fee
                                    
                                    $
                                    6,750,000
                                    
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    6,750,000





See
Notes to Financial Statements.


F-7




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS




Note
1. Organization and Significant Accounting Policies




Polaris
Acquisition Corp. (the “Company”) was incorporated in Delaware on June 18, 2007
for the purpose of effecting a merger, stock exchange, asset acquisition, stock
purchase, reorganization or other similar business combination with an operating
business.




The
registration statement for the Company’s Offering (as described in Note 2) was
declared effective on January 14, 2008. The Company consummated the Offering on
January 17, 2008, and received gross proceeds of approximately $154,500,000,
including $4,500,000 of proceeds from the private placement (the “Private
Placement”) sale of 4,500,000 sponsors’ warrants to certain affiliates of the
Company. The net proceeds were approximately $143,381,000.




The
Company’s management has broad discretion with respect to the specific
application of the net proceeds of this Offering, although substantially all of
the net proceeds of this Offering are intended to be generally applied toward
consummating a business combination with an operating business (“Business
Combination”). There is no assurance that the Company will be able to
successfully effect a Business Combination. See Note 4 for the Company’s current
merger plan. Upon the closing of the Offering and Private Placement,
$150,000,000, including $6,750,000 of the underwriters’ discounts and
commissions (as described in Note 2), is being held in a trust account (“Trust
Account”) and may be invested in United States “government securities” within
the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a
maturity of 180 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act of 1940 until the
earlier of (i) the consummation of its first Business Combination and (ii)
liquidation of the Company.




The
Placing of funds in the Trust Account may not protect those funds from third
party claims against the Company. Although the Company will seek to have all
vendors, providers of financing, prospect target businesses or other entities it
engages, execute agreements with the Company waiving any right, title, interest
or claim of any kind in or to any monies held in the Trust Account, there is no
guarantee that they will execute such agreements or that such agreements, if
executed, will insure that no claims are filed against the Trust. Two of the
Company’s affiliates have agreed that they will be liable under certain
circumstances to ensure that the proceeds in the Trust Account are not reduced
by the claims of target businesses or vendors, providers of financing, service
providers or other entities that are owed money by the Company for services
rendered to or contracted for or products sold to the Company. There can be no
assurance that they will be able to satisfy those obligations. The net proceeds
not held in the Trust Account may be used to pay for business, legal and
accounting due diligence on prospective acquisitions and continuing general and
administrative expenses.




Additionally,
up to an aggregate of $1,800,000 of interest earned on the Trust Account balance
may be released to the Company to fund working capital requirements and
additional funds may be released to fund tax obligations.




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


F-8




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS




Note
1. Organization and Significant Accounting Policies
 – (continued)




With
respect to a Business Combination which is approved and consummated, any Public
Stockholder who voted against the Business Combination may demand that the
Company convert his or her shares. The per share conversion price will equal the
amount in the Trust Account, calculated as of two business days prior to the
consummation of the proposed Business Combination, divided by the number of
shares of common stock held by Public Stockholders at the consummation of the
Offering. Accordingly, Public Stockholders holding 4,499,999 shares sold in the
Offering may seek conversion of their shares in the event of a Business
Combination. Such Public Stockholders are entitled to receive their per share
interest in the Trust Account computed without regard to the shares of common
stock held by the Founders prior to the consummation of the Offering.
Accordingly, a portion of the net proceeds from the Offering (29.99% of the
amount held in Trust Fund, including the deferred portion of the underwriters’
discount and commission) has been classified as common stock subject to possible
conversion on the accompanying December 31, 2008 balance sheet.




The
Company’s Certificate of Incorporation provides that the Company will continue
in existence only until 24 months from the Effective Date of the Offering. If
the Company has not completed a Business Combination by such date, its corporate
existence will cease and it will dissolve and liquidate for the purposes of
winding up its affairs. In the event of liquidation, it is likely that the per
share value of the residual assets remaining available for distribution
(including Trust Fund assets) will be less than the initial public offering
price per share in the Offering (assuming no value is attributed to the Warrants
contained in the Units to be offered in the Offering discussed in Note
2).




Concentration
of Credit Risk




The
Company maintains cash in a bank deposit account which, at times, exceeds
federally insured (FDIC) limits. The Company has not experienced any losses on
this account.




Income
Taxes




Deferred
income taxes are provided using the liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of the changes in tax laws and rates of the date of
enactment.




When tax
returns are filed, it is highly certain that some positions taken would be
sustained upon examination by the taxing authorities, while others are subject
to uncertainty about the merits of the position taken or the amount of the
position that would be ultimately sustained. The benefit of a tax position is
recognized in the financial statements in the period during which, based on all
available evidence, management believes it is more likely than not that the
position will be sustained upon examination, including the resolution of appeals
or litigation processes, if any. Tax positions taken are not offset or
aggregated with other positions. Tax positions that meet the
more-likely-than-not recognition threshold are measured as the largest amount of
tax benefit that is more than 50% likely of being realized upon settlement with
the applicable taxing authority. The portion of the benefits associated with tax
positions taken that exceeds the amount measured as described above is reflected
as a liability for unrecognized tax benefits in the accompanying balance sheet
along with any associated interest and penalties that would be payable to the
taxing authorities upon examination.




Interest
and penalties associated with unrecognized tax benefits, if any, will be
classified as additional income taxes in the statement of
operations.


F-9




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS




Note
1. Organization and Significant Accounting Policies
 – (continued)




Income
per Common Share




Income
per share is computed by dividing net income by the weighted-average number of
shares of common stock outstanding during the period. The effect of the
15,000,000 outstanding warrants issued in connection with the Offering and the
4,500,000 outstanding warrants issued in connection with the Private Placement
has not been considered in diluted income per share calculations since the
warrants cannot be exercised until the later of the Company’s initial business
combination or January 11, 2009.




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 at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates.




Fair
Value of Financial Instruments




The fair
values of the Company’s assets and liabilities that qualify as financial
instruments under SFAS No. 107 “Disclosures about Fair Value of Financial
Instrument,” approximate their carrying amounts presented in the balance sheet
at December 31, 2008.




The
Company accounts for derivative instruments, if any, in accordance with SFAS No.
133 “Accounting for Derivative Instruments and Hedging Activities” as amended
(“SFAS 133”), which establishes accounting and reporting standards of derivative
instruments.




Recent
Accounting Pronouncements




In July
2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” an
interpretation of FASB Statement No. 109 (“FIN 48”), which provides criteria for
the recognition, measurement, presentation and disclosure of uncertain tax
position. A tax benefit from an uncertain position may be recognized only if it
is “more likely than not” that the position is sustainable based on its
technical merits. The provisions of FIN 48 are effective for fiscal years
beginning after December 15, 2006. The adoption of FIN 48 did not have a
material effect on the Company’s financial condition or results of
operations.




In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations (FAS
141(R)). This Statement provides greater consistency in the accounting and
financial reporting of business combinations. It requires the acquiring entity
in a business combination to recognize all assets acquired and liabilities
assumed in the transaction, establishes the acquisition-date fair value as the
measurement objective for all assets acquired and liabilities assumed, and
requires the acquirer to disclose the nature and financial effect of the
business combination. FAS 141(R) is effective for fiscal years beginning after
December 15, 2008. We will adopt FAS 141(R) no later than the first quarter of
fiscal 2009 and are currently assessing the impact the adoption will have on our
financial position and results of operations.




In
December 2007, the FASB issued SFAS No. 160. Noncontrolling Interests in
Consolidated Financial Statements (FAS 160). This Statement amends Accounting
Research Bulletin No. 51, Consolidated Financial Statements, to establish
accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective for
fiscal years beginning after December 15, 2008. We will adopt FAS 160 no later
than the first quarter of fiscal 2009 and are currently assessing the impact the
adoption will have on our financial position and results of
operations.


F-10




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS




Note
1. Organization and Significant Accounting Policies
 – (continued)




In June
2008, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 07-5,
“Determining Whether an Instrument (or Embedded Feature) is Indexed to an
Entity’s Own Stock” (“EITF 07-5”). EITF 07-5 mandates a two-step process for
evaluating whether an equity-linked financial instrument or embedded feature is
indexed to the entity’s own stock. It is effective for fiscal years beginning
after December 15, 2008 and interim periods within those fiscal years, which is
our first quarter of 2009. Any outstanding instrument at the date of adoption
will require a retrospective application of the accounting through a cumulative
effect adjustment to retained earnings upon adoption. The Company is currently
evaluating the impact that adoption of EITF 07-5 will have on its financial
statements.




In
September 2006 the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards No. 157, Fair Value Measurements(SFAS
No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring
fair value, and expands disclosures about fair value measurement. SFAS No. 157
also emphasizes that fair value is a market-based measurement, not an
entity-specific measurement, and sets out a fair value hierarchy with the
highest priority being quoted prices in active markets. Under SFAS No. 157, fair
value measurements are disclosed by level within that hierarchy. In February
2008, the FASB issued FASB Staff Position No. 157-2, Effective Date of FASB Statement No.
157, which permits a one-year deferral for the implementation of SFAS No.
157 with regard to nonfinancial assets and liabilities that are not recognized
or disclosed at fair value in the financial statements on a recurring basis. The
Company adopted SFAS No. 157 for the fiscal year beginning January 1, 2008,
except for nonfinancial assets and nonfinancial liabilities that are recognized
or disclosed at fair value in the financial statements on a nonrecurring basis
for which delayed application is permitted until our fiscal year beginning
January 1, 2009. The adoption of the remaining provisions of SFAS No. 157 is not
expected to have a material impact on the Company’s financial position, results
of operations or cash flows.




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




Note
2. Initial Public Offering




On
January 17, 2008 the Company sold 15,000,000 units (“Units”) in the Offering at
a price of $10 per Unit. Each Unit consists of one share of the Company’s common
stock and one Redeemable Common Stock Purchase Warrant (“Warrants”). Each
Warrant will entitle the holder to purchase from the Company one share of common
stock at an exercise price of $7.00 commencing at the later of the completion of
a Business Combination and January 11, 2009, and expiring on January 10, 2012,
four years from the effective date of the Offering. The Company may redeem all
of the Warrants, at a price of $.01 per Warrant upon 30 days’ notice while the
Warrants are exercisable, only in the event that the last sale price of the
Company’s common stock equals or exceeds $14.25 per share for any 20 trading
days within a 30 trading day period ending three business days prior to the date
on which notice of redemption is given. In accordance with the warrant agreement
relating to the Warrants to be sold and issued in the Offering, the Company is
required to use its best efforts to maintain the effectiveness of the
registration statement covering the Warrants.




The
Company will not be obligated to deliver securities, and there are no
contractual penalties for failure to deliver securities, if a registration
statement is not effective. Additionally, in the event that a registration
statement is not effective, the Warrant holders shall not be entitled to
exercise their Warrants and in no event (whether in the case of a registration
statement not being effective or otherwise) will the Company be required to net
cash settle the warrant exercise. Consequently, the Warrants may expire
unexercised and unredeemed.


F-11




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS




Note
2. Initial Public Offering  – (continued)




proceeds
of the Offering ($3,750,000) in connection with the consummation of the Offering
and has placed 4.5% of the gross proceeds of the Offering ($6,750,000) in the
Trust Account. The Company did not have to pay any discount related to the
Sponsors’ Warrants sold on a private basis. The underwriters have waived their
right to receive payment of the 4.5% of the gross proceeds for the Offering upon
the Company’s liquidation if the Company is unable to complete a Business
Combination.




Pursuant
to purchase agreements, certain of the Initial Stockholders have purchased from
the Company, in the aggregate, 4,500,000 warrants for $4,500,000 (the Sponsors’
Warrants). The purchase and issuance of the Sponsors’ Warrants occurred
simultaneously with the consummation of the Offering on a private placement
basis. All of the proceeds the Company received from these purchases were placed
in the Trust Account. The Sponsors’ Warrants are identical to the Warrants
included in the Units being offered in the Offering except that if the Company
calls the warrants for redemption, the Sponsors’ Warrants will be exercisable on
a cashless basis so long as such warrants are held by the initial purchasers or
their affiliates. The Sponsors’ Warrants may not be sold or transferred until 45
days after the consummation of a Business Combination. The purchase price of the
Sponsors’ Warrants has been determined to be the fair value of such warrants as
of the purchase date.




Note
3. Note Payable to Affiliate and Related Party Transactions




The
Company issued an aggregate $100,000 unsecured promissory note to an affiliated
company on July 12, 2007. The note was non-interest bearing and was payable on
the earlier of the consummation of the Offering by the Company or July 12, 2008.
The note was repaid from the net proceeds of the Offering.




An
affiliated company advanced $12,911. No formal repayment arrangement was in
place and no interest was due on the advance. The advance was
repaid.




The
Company has entered into an administrative service agreement with an affiliated
company as more fully described in Note 4 below.




Trivergance
Business Resources (“TBR”), an affiliate of certain of the Company’s Founders,
entered into a Services Agreement & Statement of Work with HUGHES
Telematics, Inc. (“HTI”) on September 26, 2008. Pursuant to this agreement, TBR
began providing a marketing assessment and other research for HTI to aid in
creating a marketing and retention platform. HTI has agreed to pay TBR fees of
$362,500 through December 31, 2008 (toward which HTI has paid $150,000 on
account), plus reasonable and customary travel expenses and certain other
expenses incurred in connection with the engagement.




In
connection with a $50 million private placement completed by HTI on March 12,
2009, Trivergance, LLC, an affiliate of certain of the Company’s Founders,
received from HTI compensation of approximately $1.3 million in cash and
warrants to purchase 5,153 shares of HTI common stock at an exercise price of
$10.19.




Note
4. Commitments




Plan
of Merger




On June
13, 2008, the Company entered into an Agreement and Plan of Merger pursuant to
which it has agreed to merge (the “Merger”) with HUGHES Telematics, Inc.
(“HTI”). The Company and HTI amended and restated that agreement on November 10,
2008 and again on March 12, 2009 (such agreement, as amended and restated, the
“Merger Agreement”).




F-12




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS




Note
4. Commitments  – (continued)




issued
into escrow at the closing of the Merger and released to HTI shareholders upon
the achievement of certain share price targets over the five-year period
following closing. Outstanding options exercisable for shares of HTI common
stock will roll over in the Merger to become options exercisable for shares of
Polaris common stock. In connection with the Merger Agreement the company will
amend and restate its certificate of incorporation to increase the number of
authorized shares of common stock to 155,000,000 and the number of authorized
shares of preferred stock to 10,000,000.




The
Merger Agreement also requires that the Founders deposit 1.25 million shares of
their Polaris common stock into an escrow, to be released upon the achievement
of the first stock price target between the first and fifth anniversaries of
closing.




The
number of shares of Polaris common stock received by HTI shareholders at the
closing is subject to increase for a cash shortfall in the trust account of
Polaris below an agreed upon amount.




The
obligations of HTI and Polaris to complete the Merger are subject to the
satisfaction or waiver by the other party at or prior to the closing date of
various customary conditions, including (i) the receipt of all required
regulatory approvals and consents, (ii) the approval of the Merger by Polaris’
stockholders, (iii) subject to certain exceptions and materiality thresholds,
the accuracy of the representations and warranties of the other party and (iv)
compliance of the other party with its covenants, subject to specified
materiality thresholds.




Other
Commitments




The
Company has agreed to pay up to $7,500 a month in total for office space and
general and administrative services to an affiliated company. Services will
commence on the effective date of the offering and will terminate upon the
earlier of (i) the completion of the Business Combination, or (ii) the Company’s
liquidation. The Company has incurred $90,000 related to this agreement which is
included in Administrative Fees.




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




The
Company currently expects to pay legal fees in the range of $2,250,000 upon the
successful completion of the Merger. In the event the Merger is not consummated,
the Company expects to pay a substantially lower amount.




Note
5. Preferred Stock




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




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




Note
6. Common Stock




On June
18, 2007, 4,312,500 shares of common stock were issued to nine (9) stockholders
(initial stockholders). Such shares were purchased at an average purchase price
of approximately $0.006 per share. Effective November 8, 2007, the Company’s
Board of Directors authorized a stock dividend of 0.2 share of common stock for
each outstanding share of common stock. All references in the accompanying
financial statements to the number of shares of stock have been retroactively
restated to reflect this transaction. In January, 2008, the initial stockholders
contributed an aggregate of 862,500 shares back to capital. The over-allotment
option was not exercised and the initial stockholders forfeited 562,500 shares
on April 23, 2008 to maintain a 20% ownership of the common shares after the
offering.


F-13




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS


Note
7. Income Taxes




The
provision for income taxes for the year ended December 31, 2008 consists of the
following:




Current:Federal
                            
                            $
                            757,248State
                            
                            
                            220,026Total
      Current
                            
                            
                            977,274Deferred:Federal
                            
                            
                            (441,512
                            )State
                            
                            
                            —Total
      Deferred
                            
                            
                            (441,512
                            )$
                            535,762




As of
December 31, 2008, the tax effect of temporary differences that give rise to the
net deferred tax asset is as follows:




Expense
      deferred for income tax purposes
                      
                      $
                      520,236Valuation
      allowance
                      
                      
                      (78,724
                      )$
                      441,512




The
Company has recorded a valuation allowance against the state deferred tax asset
since it cannot determine realizability for tax purposes and therefore cannot
conclude that the deferred tax asset is more likely than not recoverable at this
time.




A
reconciliation of income taxes at the statutory federal income tax rate to net
income taxes included in the accompanying statements of operations for the year
ended December 31, 2008 is as follows:




Statutory
      U.S. federal rate
                      
                      
                      34.00
                      %State
      income taxes, net of federal effect
                      
                      
                      5.96
                      %Valuation
      allowance
                      
                      
                      6.97
                      %Effective
      Tax Rate
                      
                      
                      46.93
                      %




The
Company paid $760,228 in cash payments related to income taxes during the year
ended December 31, 2008.




Note
8. Fair Value of Financial Instruments




Effective
January 1, 2008 the Company adopted Statement No. 157, Fair Value Measurements.Statement No. 157 applies to all assets and liabilities that are being
measured and reported on a fair value basis. Statement No. 157 requires new
disclosure that establishes a framework for measuring fair value in GAAP, and
expands disclosure about fair value measurements. This statement enables the
reader of the financial statements to assess the inputs used to develop those
measurements by establishing a hierarchy for ranking the quality and reliability
of the information used to determine fair values. The statement requires that
assets and liabilities carried at fair value will be classified and disclosed in
one of the following three categories:




Level
1:  Quoted market prices in active markets for identical assets or
liabilities.




Level
2:  Observable market based inputs or unobservable inputs that are
corroborated by market data.




Level
3:  Unobservable inputs that are not corroborated by market
data.


F-14




POLARIS
ACQUISITION CORP.


(A
Corporation in the Development Stage)





NOTES
TO FINANCIAL STATEMENTS




Note
8. Fair Value of Financial Instruments  – (continued)




In
determining the appropriate levels, the Company performs a detailed analysis of
the assets and liabilities that are subject to Statement No. 157. At each
reporting period, all assets and liabilities for which the fair value
measurement is based on significant unobservable inputs are classified as Level
3.




The table
below presents the balances of assets and liabilities measured at fair value on
a recurring basis by level within the hierarchy.




Total
                                      
                                      
                                      Level
      1
                                      
                                      
                                      Level
      2
                                      
                                      
                                      Level
      3Investments
      Held in Trust
                                      
                                      $
                                      150,796,461
                                      
                                      
                                      $
                                      150,796,461
                                      
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —Total
      Assets Held in Trust
                                      
                                      $
                                      150,796,461
                                      
                                      
                                      $
                                      150,796,461
                                      
                                      
                                      $
                                      —
                                      
                                      
                                      $
                                      —




The
Company’s investments held in trust include money market securities that are
considered to be highly liquid and easily tradable. These securities are valued
using inputs observable in active markets for identical securities and therefore
are classified as level 1 within the fair value hierarchy.


F-15