|
|
|
|
|
|

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

| |     |                                                                                  
| | --- | ---------------------------------------------------------------------------------
| | [X] | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period endedDecember 31, 2007

| |     |                                                                
| | --- | ---------------------------------------------------------------
| | [ ] | Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from                                  to

Commission File Number001-33855

Global Brands Acquisition Corp.

(Exact Name of Issuer as Specified in Its Charter)

Delaware


26-0482599(State or other Jurisdiction of
Incorporation or Organization)


(I.R.S. Employer
Identification No.)


11 West 42ndStreet, 21stFloor, New York, New York 10036

(Address of Principal Executive Office)

(212) 201-8118

(Issuer’s Telephone Number, Including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes[ ]No[X]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer[ ]


Accelerated filer[ ]


Non-accelerated filer[X]


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

As of February 13, 2008, 35,937,500 shares of common stock, par value $.0001 per share, were issued and outstanding.

|
|
|
|
|
|

---



Global Brands Acquisition Corp.
(a Corporation in the Development Stage)

Table of Contents

PagePart I: Financial Information:Item 1 – Financial Statements:Condensed Balance Sheet as of December 31, 2007 (Unaudited)


3Condensed Statements of Operations for the Three Months Ended December 31, 2007 and the Period July 3, 2007 (inception) to December 31, 2007


4Condensed Statement of Stockholders’ Equity for the Period July 3, 2007 (inception) to December 31, 2007 (Unaudited)


5Condensed Statements of Cash Flows for the Period July 3, 2007 (inception) to December 31, 2007 (Unaudited)


6Notes to Unaudited Condensed Financial Statements


7Item 2 – Management’s Discussion and Analysis of Financial Condition And Results of Operations


13Item 4 – Controls and Procedures


14Part II. Other Information:Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds


16Item 6 – Exhibits


16Signatures


17Certifications


2

---



Part I:    Financial Information

Item 1 – Financial Statements (Unaudited)

Global Brands Acquisition Corp.
(a Corporation in the Development Stage)
Condensed Balance Sheet

December 31, 2007
(unaudited)AssetsCurrent assets:Cash



$
275,121Cash held in trust fund




286,645,166Prepaid expense




8,000Total current assets




286,928,287Deferred tax asset




22,017Total assets



$
286,950,304Liabilities and stockholders’ equityCurrent liabilities:Accrued expenses



$
91,000Income tax payable




242,735Accrued accounting fees payable




27,500Accrued filing fees payable




14,375,000Notes payable, stockholders




100,000Total current liabilities



$
14,836,235Common stock, subject to possible conversion, 8,624,999 shares at conversion value




85,837,490CommitmentsStockholders’ equity:Preferred stock; $.0001 par value; 1,000,000 shares authorized; none issuedCommon stock; $.0001 par value; authorized 90,000,000 shares; 35,937,500 (less 8,624,999 shares subject to possible conversion) shares issued and outstanding




2,732Additional paid-in capital




186,023,378Earnings accumulated during the development stage




250,469Total stockholders’ equity




186,276,579Total liabilities and stockholders’ equity



$
286,950,304


The accompanying notes are an integral part of these condensed financial statements (unaudited).

3

---



Global Brands Acquisition Corp.
(a Corporation in the Development Stage)
Condensed Statements of Operations
(unaudited)
For the Three Months ended December 31, 2007
and the Period July 3, 2007 (inception) to December 31, 2007

For the three
months ended
December 31, 2007


For the period
July 3, 2007
(inception) to
December 31, 2007Formation and operating costs



$
3,679




$
3,979Accounting fees




27,500





45,000Operating loss




(31,179
)




(48,979
)Interest income




520,166





520,166Income before income taxes




488,987





471,187Provision for income taxes




220,718





220,718Net income



$
268,269




$
250,469Weighted average number of common shares outstandingBasic




9,450,967





11,689,560Diluted




11,223,615





12,580,781Net income per common shareBasic



$
.03




$
.02Diluted



$
.02




$
.02


The accompanying notes are an integral part of these condensed financial statements (unaudited).

4

---



Global Brands Acquisition Corp.
(a Corporation in the Development Stage)
Condensed Statement of Stockholders’ Equity
(unaudited)
For the Period July 3, 2007 (inception) to December 31, 2007

Common Stock


Additional
paid-in
capital


Earnings
accumulated
during
development
stage


Total
stockholders’
equityShares


AmountCommon shares issued at inception




7,187,500




$
719




$
24,281




$
—




$
25,000Sale of 28,750,000 units, net of underwriters’ discount and offering expenses (includes 8,624,999 shares subject to possible conversion)




28,750,000





2,875





266,835,725





—





266,838,600Proceeds subject to possible conversion of 8,624,999 shares










(862
)




(85,836,628
)




—





(85,837,490
)Proceeds from issuance of founders’ warrants










—





5,000,000





—





5,000,000Net income










—





—





250,469





250,469Balances, at December 31, 2007




35,937,500




$
2,732




$
186,023,378




$
250,469




$
186,276,579


The accompanying notes are an integral part of these condensed financial statements (unaudited).

5

---



Global Brands Acquisition Corp.
(a Corporation in the Development Stage)
Condensed Statements of Cash Flows
(unaudited)
For the Period July 3, 2007 (inception) to December 31, 2007

For the period
July 3, 2007
(inception) to
December 31, 2007Cash flows from operating activitiesNet income



$
250,469Adjustment to reconcile net income to net cash provided by operating activities:Change in operating assets and liabilities:Deferred tax asset




(22,017
)Accrued expenses




29,500Income tax payable




242,735Net cash provided by operating activities




500,687Cash flows from investing activitiesCash held in trust fund




(286,645,166
)Cash flows from financing activitiesGross proceeds from initial public offering




287,500,000Proceeds from notes payable, stockholders




100,000Proceeds from issuance of common stock




25,000Proceeds from issuance of founders’ warrants




5,000,000Payment of offering costs




(6,205,400
)Net cash provided by financing activities




286,419,600Net increase in cash




275,121Cash, beginning of period




—Cash, end of period



$
275,121


The accompanying notes are an integral part of these condensed financial statements (unaudited).

6

---



Global Brands Acquisition Corp.
(a Corporation in the Development Stage)

Notes to Financial Statements

A.    Description of Organization and Business Operations

Global Brands Acquisition Corp. (a corporation in the development stage) (the Company) was incorporated in Delaware on July 3, 2007. The Company was formed to acquire an operating business or asset or several operating businesses or assets (a Business Combination) through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination. All activity through December 31, 2007 relates to the formation of the Company and its initial public offering described below in Note E. The Company has neither engaged in any operations nor generated revenue to date and will not until completion of its business combination. The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, Accounting and Reporting By Development Stage Enterprises,and is subject to the risks associated with activities of development stage companies. The Company has selected March 31stas its fiscal year end.

The registration statement for the Company’s initial public offering of Units (as defined in Note E below) (Offering) was declared effective December 6, 2007. The Company consummated the Offering on December 12, 2007 and received net proceeds of $281.2 million (see Note E). An amount of $286.1 million of the net proceeds from the Offering, including $14.4 million of deferred underwriting discounts and commissions and the $5 million of proceeds relating to the private placement of the sponsor’s warrants (see Note F), was placed in a trust account (Trust Account) and invested in either 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 initial Business Combination or (ii) the liquidation of the Company as described below. The remaining proceeds may be used to pay for business, legal and accounting due diligence on prospective target businesses and continuing general and administrative expenses.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering, although substantially all of the net proceeds of the Offering are intended to be generally applied toward consummating a Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. The Company, after signing a definitive agreement for the acquisition of a target business, will submit such transaction for stockholder approval. In the event that stockholders owing 30% or more of the shares of common stock sold in the Offering vote against the Business Combination and exercise their conversion rights described below, the Business Combination will not be consummated. If the Company’s initial Business Combination is approved and completed, public stockholders voting against the initial Business Combination will be entitled to convert their shares of common stock into a pro rata share of the aggregate amount then on deposit in the Trust Account, before payment of deferred underwriting discounts and commissions and including interest earned on their pro rata portion of the trust account, net of interest income on the Trust Account balance previously released to the Company to pay our tax obligations and net of interest income of up to $2.9 million on the ‘‘Trust Account’’ balance previously released to the Company to fund its working capital requirements.

However, voting against the Business Combination alone will not result in an election to exercise a stockholder’s conversion rights. A stockholder must also affirmatively exercise such conversion rights at or prior to the time the Business Combination is voted upon by the stockholders. All of the Company’s stockholders prior to the Offering, including all of the officers and directors of the Company have agreed to vote all of the shares of common stock held by them in accordance with the vote of the majority in interest of all other stockholders of the Company.

7

---



In the event that the Company does not consummate a Business Combination within 24 months from the date of the final prospectus relating to the Offering, the corporate existence of the Company will cease except for purposes of winding up and liquidating. The amounts held in the Trust Account will be distributed to the Company’s public stockholders, excluding the existing stockholders to the extent of their initial stock holdings.

In the event of such distribution, 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 Unit in the Offering (assuming no value is attributed to the warrants contained in the Units sold in the Offering discussed in Note E).

B.    Summary of Significant Accounting Policies

Development Stage Company

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

Net Income per Common Share

Income per common share is based on the weighted average number of common shares outstanding. The Company complies with SFAS No. 128,Earnings Per Share,which requires dual presentation of basic and diluted earnings per share on the face of the statements of operations, which the Company has adopted. Basic loss per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if convertible debentures, options and warrants were to be exercised or converted or otherwise resulted in the issuance of common stock that then shared in the earnings of the entity.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, exceeds the Federal depository insurance coverage of $100,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Fair Value of Financial Instruments

The fair value of the company’s assets and liabilities, which qualify as financial instruments under SFAS No. 107,Disclosure About Pair Value of Financial Instruments,approximates the carrying amounts represented in the balance sheet.

Use of Estimates

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

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Deferred Offering Costs

Deferred offering costs of $14.4 million consist of underwriting discounts that are payable upon the Company’s consummation of a Business Combination. This amount has been recorded as a reduction of additional paid in capital.

8

---



Income Tax

The Company complies with SFAS 109,Accounting for Income Taxeswhich requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (‘‘FASB’’) issued Statement of Financial Accounting Standard (‘‘SFAS’’) No. 157,Fair Value Measurements. SFAS No. 157 defines fair value, provides a framework for measuring fair value under current standards in GAAP, and requires additional disclosure about fair value measurements. In accordance with the Statement, the definition of fair value retains the exchange price notion, and exchange price is defined as the price in an orderly transaction between market participants to sell an asset or transfer a liability. If there is a principal market for the asset or liability, the fair value measurement should reflect that price, whether that price is directly observable or otherwise used in a valuation technique. Depending on the asset or liability being valued, the inputs used to determine fair value can range from observable inputs (i.e. prices based on market data independent from the entity) and unobservable inputs (i.e. entity’s own assumptions about the assumptions that market participants would use). The Statement applies to other accounting pronouncements that require or permit fair value measurements and will be effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company is currently evaluating the provisions of SFAS No. 157 to determine the potential impact, if any, the adoption will have on the Company’s financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to voluntarily choose to measure many financial assets and financial liabilities at fair value. The election is made on an instrument-by-instrument basis and is irrevocable. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the provisions of SFAS No. 159 to determine the potential impact, if any, the adoption will have on the Company’s financial statements.

On December 4, 2007, the FASB issued SFAS No. 141 (R),Business Combinations, and SFAS No. 160,Noncontrolling interests in Consolidated Financial Statements, an amendment of ARB No. 51. The new standards requires that a noncontrolling interest in a consolidated subsidiary be displayed in the consolidated statement of financial position as a separate component of equity. The new standards also indicate gains and losses should not be recognized on sales of noncontrolling interests in subsidiaries but that differences between sale proceeds and the consolidated basis of accounting should be accounted for as charges or credits to consolidated additional paid-in-capital. However, in a sale of a subsidiary’s shares that results in the deconsolidation of the subsidiary, a gain or loss would be recognized for the difference between the proceeds of that sale and the carrying amount of the interest sold. Also, a new fair value in any remaining noncontrolling ownership interest is established. These statements are effective for the first annual reporting period on or after December 15, 2008. The Company is currently evaluating the provisions of SFAS 141 (R) and SFAS 160 and does not expect there to be an impact to the Company’s financial statements.

C.    Common Stock, Subject to Possible Conversion

The Company is required to convert to cash up to 8,624,999 of the shares of common stock sold in the Offering should those shareholders vote against the initial Business Combination and convert their shares of common stock into a pro rata share of the aggregate amount then on deposit in the Trust Account. An amount of $85.8 million has been classified as common stock, subject to possible conversion representing the initial per-share conversion price.

9

---



D.    Stockholders’ Equity

The Company’s capital stock consists of common stock and preferred stock. The Company is authorized to issue 90,000,000 shares of common stock, of which 35,937,500 (including 8,624,999 shares subject to possible conversion) are outstanding as of December 31, 2007. 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.

E.    Initial Public Offering

On December 12, 2007, the Company sold 28,750,000 units (Units) to the public at a price of $10.00 per unit. Each Unit consists of one share of the Company’s common stock, $0.0001 par value, and one redeemable common stock purchase warrant (Warrant). Each Warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $7.00 commencing on the later of (i) one year from the date of the final prospectus for the Offering or (ii) the completion of a Business Combination with a target business, and will expire five years from the date of the prospectus, unless earlier redeemed. The Warrants will be redeemable, in whole and not in part, at a price of $0.01 per Warrant upon 30 days prior written notice of redemption, only in the event that the last sales price of the common stock is at least $14.25 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is sent to the holders of Warrants. The Warrants may not be redeemed unless an effective and current registration statement covering the shares of common stock issuable upon exercise of the Warrants is available throughout the redemption period.

The Company paid an underwriting discount of 2.0% of the public unit offering price to the underwriters at the closing of the Initial Public Offering, with an additional 5.0% fee of the gross offering proceeds payable upon the Company’s consummation of a Business Combination. The additional 5% fee, amounting to $14.4 million, has been placed in the Trust Account.

F.    Related Party Transactions

JLJ Partners, LLC (JLJ Partners) and the Company’s independent directors have purchased an aggregate of 7,187,500 of the Company’s founders’ units for an aggregate price of $25,000 in a private placement. Each of the founders has agreed to vote its founders’ common stock in the same manner as holders of a majority of the shares of the Company’s common stock voted by the public stockholders at the special or annual meeting called for the purpose of approving the Company’s initial Business Combination. As a result, none of the founders will be able to exercise conversion rights with respect to the founders’ common stock. In addition, the founders have agreed to waive their rights to participate in any liquidation distribution with respect to the founders’ common stock if the Company fails to consummate an initial Business Combination. All of the founders’ units will be placed in escrow. Subject to limited exceptions, the founders’ common stock will be held in escrow until 180 days after the consummation of the Company’s initial Business Combination and the founders’ warrants will remain in escrow until they become exercisable.

In addition, JLJ Partners purchased an aggregate of 5,000,000 warrants from the Company at a price of $1.00 per Warrant ($5 million in the aggregate) in a private placement that occurred simultaneously with the consummation of the Offering. The $5 million was placed in the Trust Account until a successful completion of an initial Business Combination. If the Company does not complete an initial Business Combination, the $5 million will be part of the liquidating distribution to the public stockholders, and the sponsor’s warrants will expire worthless. The sponsor’s warrants will not be transferable or salable by JLJ Partners (subject to limited exceptions) until after the Company completes an initial Business Combination, and will be exercisable on a cashless basis and will be non-redeemable by the Company, in each case, so long as they are held by JLJ Partners or its permitted transferees. In addition, commencing 30 days after the consummation of the initial business combination, the sponsor’s warrants and the underlying shares of common stock are entitled to registration rights under an agreement to be signed on or before the date of the prospectus. With the exception of the terms noted above, the sponsor’s warrants have terms and provisions that are

10

---



identical to those of the warrants being sold as part of the units in the initial public offering. The Company believes the purchase price of these Warrants approximates the fair value of such Warrants. The founders’ common stock and founders’ warrants included in the founders’ units will be released from escrow earlier than as described above if, subsequent to the Company’s consummation of its initial Business Combination, (A) the last sales price of the Company’s common stock equals or exceeds $14.25 per share for any 20 trading clays within a 30 trading day period beginning 90 days after such Business Combination or (B) the Company consummates a subsequent liquidation, merger, stock exchange, or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities, or other property.

In addition, JLJ Partners and Sportswear Holdings Limited, an affiliate of the Company’s Chairman of the Board, have agreed to purchase 2,500,000 Units at a price of $10 per Unit (an aggregate price of $25,000,000) from the Company in a private placement that may occur immediately prior to the Company’s consummation of a Business Combination. These private placement units will be identical to the Units sold in the Offering, except that, subject to certain exceptions, these Units and underlying securities will not be sold, assigned or transferred for a period of 180 days from the date of the consummation of the Business Combination.

The Company issued a $100,000 unsecured promissory note to JLJ Partners. The loan evidenced thereby is non-interest bearing, unsecured and is due upon the earlier of (1) August 8, 2008 or (2) the consummation of the Offering. This loan will be repaid out of working capital.

The Company presently occupies office space provided by JLJ Partners. JLJ Partners has agreed that, until the acquisition of a target business by the Company, it will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company has agreed to pay JLJ Partners $10,000 per month for such services.

G.    Income Taxes

The Company is subject to U.S. Federal, state and local income taxes. The components of the Company’s income tax provision by taxing jurisdiction for the period ended December 31, 2007 are as follows:

Current:
Federal



$
152,088State & Local




90,647Current provision for income taxes



$
242,735Deferred:
Federal



$
(16,653
)State & Local




(5,364
)Current benefit for income taxes



$
(22,017
)Total provision for income taxes



$
220,718


The Company’s effective tax rate of 46.84% differs from the federal statutory rate of 34.0% mainly due to certain differences including state and local income taxes and amortization of organizational costs.

The Company adopted the provisions of FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109(‘‘FIN 48’’). FIN 48 provides recognition criteria and a related measurement model for tax positions taken by companies. In accordance with FIN 48, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions shall be recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position will be sustained upon examination.

11

---



Tax positions that meet the more likely than not threshold should be measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. The Company adopted FIN 48, which had no effect on the Company’s financial positions and results of operations at this time given its limited operations and activities.

H.    Subsequent Event

In July 2007, JLJ Partners advanced an aggregate of $100,000 to the Company for payment of offering expenses. This loan will was repaid in January 2008.

On January 8, 2008, the Company withdrew $450,000 from the trust account for working capital.

12

---



|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Condensed Financial Statements and footnotes thereto contained in this report.

Forward Looking Statements

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements under ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Form 10-Q, words such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘intend’’ and similar expressions, as they relate to us or our management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward looking statements as a result of certain factors detailed in our filings with the Securities and Exchange Commission. All subsequent written or oral forward looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

Overview

We were formed on July 3, 2007, to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses or assets. Our efforts in identifying a prospective target business will not be limited to a particular industry, although we initially intend to focus our search on U.S. as well as foreign companies in the branded consumer sector, including apparel, specialty retail, footwear and accessories. We will also explore opportunities in other consumer-focused and other sectors that are attractive to us. We intend to utilize cash derived from the proceeds of our recently completed public offering, our capital stock, debt or a combination of cash, capital stock and debt, in effecting a business combination.

Results of Operations

For the three months ended December 31, 2007, we had a net income of $268,269 consisting of $520,166 of interest income offset by $31,179 of general, selling and administrative expenses and $220,718 of provision for income taxes.

For the period from July 3, 2007 (inception) to December 31, 2007, we had a net income of $250,469 consisting of $520,166 of interest income offset by $48,979 of general, selling and administrative expenses and $220,718 of provision for income taxes.

Financial Condition and Liquidity

We consummated our initial public offering of 28,750,000 units, including 3,750,000 units subject to the underwriters’ over-allotment option, on December 12, 2007. Gross proceeds from our initial public offering were $287,500,000. We paid a total of $5,750,000 in underwriting discounts and commissions (not including deferred underwriting discounts and commissions of $14,375,000, which have been placed in our trust account and will be released to the underwriters only upon completion of our initial business combination) and $359,142 for other costs and expenses related to the offering and the over-allotment option. After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds, including $5,000,000 from the private sale of warrants (the ‘‘Sponsor’s Warrants’’) to JLJ Partners, LLC (‘‘JLJ Partners’’), an entity beneficially owned approximately one-third each by Joel J. Horowitz, our chief executive officer, treasurer and director, Lawrence S. Stroll, our chairman of the board, and John D. Idol, our president, secretary and director, either directly or through entities of which they or their family members are owners and beneficiaries,

13

---



from the offering were $286,390,858, of which $286,125,000 was deposited into the trust account. We intend to use substantially all of the net proceeds of this offering to effect a business combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust account as well as any other net proceeds not expended will be used to finance the operations of the target business. We believe we will have sufficient available funds outside of the trust fund to operate through December 6, 2009, assuming that a business combination is not consummated during that time.

We expect our primary liquidity requirements during this period to include approximately $1,000,000 for expenses for the due diligence and investigation of a target business or businesses; approximately $1,000,000 for legal, accounting and other expenses associated with structuring, negotiating and documenting an initial business combination; an aggregate of $240,000 for office space, administrative services and support payable to JLJ Partners representing $10,000 per month for up to 24 months; $150,000 for legal and accounting fees relating to our SEC reporting obligations; and approximately $535,000 for general working capital that will be used for miscellaneous expenses and reserves. We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, we may need to raise additional funds through a private offering of debt or equity securities if such funds are required to consummate a business combination that is presented to us. We would only consummate such a financing simultaneously with the consummation of a business combination.

Commencing on December 6, 2007 and ending upon the consummation of a business combination or our liquidation, we began incurring a fee from JLJ Partners of $10,000 per month for providing us with office space and certain general and administrative services. In addition, in July 2007, JLJ Partners advanced an aggregate of $100,000 to us for payment on our behalf of offering expenses. This loan was repaid in January 2008.

ITEM 4.    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 treasurer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2007. Based upon his evaluation, he 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 president and treasurer 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 (United States). 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 (United States), 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.

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.

14

---



Limitations on the Effectiveness of Controls

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.

15

---



PART II

OTHER INFORMATION

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On December 12, 2007, we closed our initial public offering of 28,750,000 units, including 3,750,000 units subject to the underwriters’ over-allotment option, with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock at an exercise price of $7.00 per share. The units from the initial public offering (including the over-allotment option) were sold at an offering price of $10.00 per unit, generating total gross proceeds of $287,500,000. Citigroup Global Markets Inc. acted as the sole bookrunning manager and Ladenburg Thalmann & Co. Inc. and I-Bankers Securities, Inc. acted as co-managers of the initial public offering. The securities sold in the offering were registered under the Securities Act of 1933 on a registration statement on Form S-1 (No. 333-145684). The Securities and Exchange Commission declared the registration statement effective on December 6, 2007.

We paid a total of $5,750,000 in underwriting discounts and commissions (not including deferred underwriting discounts and commissions of $14,375,000, which have been placed in our trust account and will be released to the underwriters only upon completion of our initial business combination) and $359,142 for other costs and expenses related to the offering and the over-allotment option.

We also consummated the simultaneous private sale of 5,000,000 Sponsor’s Warrants at a price of $1.00 per warrant, generating total proceeds of $5,000,000. The Sponsor’s Warrants were purchased by JLJ Partners. The Sponsor’s Warrants are identical to the warrants included in the units sold in the initial public offering except that the Sponsor’s Warrants are exercisable on a cashless basis and if we call the warrants for redemption, the Sponsor’s Warrants will not be redeemable by us so long as they are held by JLJ Partners or its permitted transferees. JLJ Partners has agreed that the warrants will not be transferred, assigned or sold by it until after we have completed a business combination.

After deducting the underwriting discounts and commissions and the offering expenses, including the $5,000,000 from the Sponsor’s Warrants and the $14,375,000 of deferred underwriting discounts and commissions, the total net proceeds to us from the offering and the private sale of Sponsor’s Warrants were $286,390,858, of which $286,125,000 was deposited into the trust account.

For a description of the use of the proceeds generated in our initial public offering, see Part I, Item 2 of this Form 10-Q.

ITEM 6.    EXHIBITS

(a)    Exhibits:

31



Section 302 Certification by Chief Executive Officer and Treasurer32



Section 906 Certification by Chief Executive Officer and Treasurer


16

---



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.

GLOBAL BRANDS ACQUISITION CORP.Dated: February 13, 2008


/s/ Joel J. HorowitzChief Executive Officer and Treasurer
(Principal Executive Officer and Principal
Financial and Accounting Officer)


17

---