**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

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**FORM 10-K**

 

**ANNUAL REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

** **

**For the year ended December 31,2007**

 

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**Commission File Number: 000-52642**

 

**SHERMENWSC ACQUISITION CORP.**

(Exact name of registrant as specified in its charter)

 

| **Delaware**                      | ** ** | **20-4755936**      |
|-----------------------------------|------------|---------------------|
| (State or other jurisdiction      |       | (I.R.S. Employer    |
| of incorporation or organization) |       | Identification No.) |

 

**c/o The Shermen Group1251 Avenue of the Americas, Suite 900New York, NY  10020**

(Address of principal executive office)

 

**(212) 300-0020**

(Registrant’s telephone number, including area code)

 

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

 

Common Stock, $0.0001 par value

(Title of Class)

 

Common Stock Purchase Warrants

(Title of Class)

 

Securities registered pursuant to Section 12(g) of theAct:  **None**

 

Indicateby check mark whether the registrant is a well-known seasoned issuer, asdefined in Rule 405 of the securities act.  Yes  o    No  x.

 

Indicateby check mark whether the registrant is not required to file reports pursuantto Section 13 or 15(d) of the act.  Yes  o    No  x.

 

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90days.    Yes  x No  o.

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. o

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of “acceleratedfiler” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.(Check one):

 
| Large  accelerated filer o |   | Accelerated filer o |   | Non-accelerated filer x |   | SS Smaller reporting company o |
|----------------------------|--------|---------------------|--------|-------------------------|--------|--------------------------------|

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act).   Yes  x    No  o.

 

Theaggregate market value of the voting and non-voting common equity stock held bynon-affiliates of the registrant based upon the closing price of the issuer’scommon stock, par value $0.0001 per share, on June 29, 2007, the lastbusiness day of the registrant’s most recently completed second fiscal quarter,was approximately $161,287,500.00.

 

As of March 28, 2008, there were 28,750,000 shares of theissuer’s common stock, par value $0.0001 per share, outstanding.

 

 

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**ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2007**

 

**Table of Contents**

 
| Safe  Harbor Statement | 1                                                                                                                   |
|------------------------|---------------------------------------------------------------------------------------------------------------------|
|                   |                                                                                                                |   |
| **PART I**        |                                                                                                                |   |
|                   |                                                                                                                |   |
| ITEM 1.                | Business                                                                                                            | 2 |
|                   |                                                                                                                |   |
| ITEM 1A.               | Risk  Factors                                                                                                       | 14 |
|                   |                                                                                                                |   |
| ITEM 1B.               | Unresolved  Staff Comments                                                                                          | 29 |
|                   |                                                                                                                |   |
| ITEM 2.                | Properties                                                                                                          | 29 |
|                   |                                                                                                                |   |
| ITEM 3.                | Legal  Proceedings                                                                                                  | 29 |
|                   |                                                                                                                |   |
| ITEM 4.                | Submission  of Matters to a Vote of Security Holders                                                                | 29 |
|                   |                                                                                                                |   |
| **PART II**       |                                                                                                                |   |
|                   |                                                                                                                |   |
| ITEM 5.                | Market for  Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases  of Equity Securities | 30 |
|                   |                                                                                                                |   |
| ITEM 6.                | Selected Financial  Data                                                                                            | 31 |
|                   |                                                                                                                |   |
| ITEM 7.                | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                         | 33 |
|                   |                                                                                                                |   |
| ITEM 7A                | Quantitative  and Qualitative Disclosures about Market Risk                                                         |   |
|                   | 36                                                                                                                  |
| ITEM 8.                | Financial  Statements and Supplementary Data                                                                        | 36 |
|                   |                                                                                                                |   |
| ITEM 9.                | Changes in  and Disagreements with Accountants on Accounting and Financial Disclosure                               | 36 |
|                   |                                                                                                                |   |
| ITEM  9A(T).           | Controls  and Procedures                                                                                            |   |
|                   |                                                                                                                |   |
| ITEM 9B.               | Other  Information                                                                                                  | 37 |
|                   |                                                                                                                |   |
| **PART III**      |                                                                                                                |   |
|                   |                                                                                                                |   |
| ITEM 10.               | Directors,  Executive Officers and Corporate Governance                                                             | 37 |
|                   |                                                                                                                |   |
| ITEM 11.               | Executive  Compensation                                                                                             | 40 |
|                   |                                                                                                                |   |
| ITEM 12.               | Security Ownership  of Certain Beneficial Owners and Management and Related Stockholder Matters                     | 40 |
|                   |                                                                                                                |   |
| ITEM 13.               | Certain  Relationships and Related Transactions                                                                     | 43 |
|                   |                                                                                                                |   |
| ITEM 14.               | Principal  Accountant Fees and Services                                                                             | 44 |
|                   |                                                                                                                |   |
| **PART IV**       |                                                                                                                |   |
|                   |                                                                                                                |   |
| ITEM 15.               | Exhibits and  Financial Statement Schedules                                                                         | 46 |
|                   |                                                                                                                |   |
| SIGNATURES             | 47                                                                                                                  |
|                        |                                                                                                                     |  |  |  |

 

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**SAFE HARBOR STATEMENT**

 

This Annual Reporton Form 10-K contains statements relating to future results of Shermen WSCAcquisition Corp. (including certain projections and business trends) that are “forward-lookingstatements” within the meaning of Section 27A of the Securities Act of1933, as amended, and Section 21E of the Securities Exchange Act of 1934,as amended, and are subject to the “safe harbor” created by those sections.Forward-looking statements frequently are identifiable by the use of words suchas “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,”“estimate,” “continue,” or the negative of such terms and other similarexpressions. Our actual results may differ materially from those projected as aresult of certain risks and uncertainties. These risks and uncertaintiesinclude, but are not limited to, those set forth in Item 1A. Risk Factors andelsewhere in this Annual Report on Form 10-K and those detailed from timeto time in our other filings with the Securities and Exchange Commission (the “SEC”).These forward-looking statements are made only as of the date hereof, and weundertake no obligation to update or revise the forward-looking statements,whether as a result of new information, future events or otherwise.

 

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**PART I**

 

**ITEM 1.****    ****BUSINESS**

 

**Generaldevelopment of the business**

 

References to “we,” “us,” “our” or the “Company” are to Shermen WSCAcquisition Corp.  Unless otherwiseindicated, the term “Founding Stockholders” refers to the stockholders who heldshares of Common Stock (as defined below) prior to the IPO (as defined below),and the term “Public Stockholders” refers to the stockholders who purchasedUnits in the IPO and their transferees.

 

We are a blankcheck company organized under the laws of the State of Delaware on April 18,2006 for the purpose of acquiring, through a merger, capital stock exchange,asset acquisition, stock purchase or other similar business combination, anoperating business in the agriculture industry. On May 30, 2007, we completed our initial public offering (“IPO”)of 23,000,000 units (“Units”). Each Unit consists of one share of our commonstock, $0.0001 par value per share (“Common Stock”), and two warrants (“Warrants”),each to purchase one share of Common Stock at $5.00 per share. The publicoffering price of each Unit was $6.00, and we generated gross proceeds of$138,000,000 in the IPO (including proceeds from the exercise of theunderwriters’ over-allotment option). Of the gross proceeds: (i) wedeposited $133,210,000 into a Trust Account (the “Trust Account”) at JP MorganChase NY Bank, maintained by Continental Stock Transfer & TrustCompany as trustee, which included $5,520,000 of deferred underwriting fees; (ii) theunderwriters received $4,140,000 as underwriting fees (excluding the deferredunderwriting fees); and (iii) we retained $607,900 for offering expenses.In addition, we deposited into the Trust Account $3,650,000.20 that we receivedfrom the issuance and sale of 5,214,286 warrants (the “Founder Warrants”) toShermen WSC Holding LLC, whose managing member is Shermen Capital Partners,LLC, an entity controlled by Francis P. Jenkins, Jr., our chairman andchief executive officer, on May 30, 2007.

 

After completionof the IPO, we began contacting investment bankers, private equity firms andother business contacts in order to generate ideas about a suitable businesscombination. We also received unsolicited inquiries from several investmentbanking firms, private equity firms and other business intermediaries. Weinformed these contacts that we were seeking an operating business for ourinitial business combination.  We did notretain an investment banking firm or fairness or valuation advisor to conduct aformal search for a business combination. Criteria for suitability included ourmanagement’s assessment of the competitive strengths and weaknesses of thepotential business targets, the strength of the management team, and thequality of the assets to be acquired. Certain targets were considered by management to have too great a levelof business risk due to poor asset quality or poor or erratic financialresults.

 

**Agriculture Industry**

 

The agricultureindustry is one of the largest segments of the United States’ economy withgross cash income of in 2004 of $271.7 billion dollars or approximately 2.3% ofU.S. gross domestic product or GDP.(1) Growth in the U.S. agriculture industryis driven by worldwide demand for agricultural products, which is primarilydriven by population and economic growth, dietary trends, alternative fueldevelopment and consumption and governments’ actions. According to the UnitedStates Department of Agriculture, or USDA, the global population is anticipatedto grow at a rate of 1.1% per annum between 2006 and 2015, which will be aprimary driver in the global demand for agricultural products, and by extensionthe U.S. agriculture industry. The Food and Agricultural Organization of theUnited Nations estimates global demand in agricultural products will grow at arate of 1.6% per annum through 2015.(2) Based on trends in global population and demand for agriculturalproducts, the USDA, forecasts that U.S. gross agriculture cash income willincrease from $271.7 billion in 2004 to $312.5 billion by 2015, representing acompound annual growth rate, or CAGR, of approximately 1.3%.

 

Our management intends tofocus its efforts on a business combination in the United States. If anattractive foreign business opportunity presents itself, however, ourmanagement intends to pursue it.

** **

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(1) All numbers andstatistics in this paragraph are based on the USDA Agricultural BaselineProjections to 2015 Report, except the U.S. GDP number which is based on theBureau of Economic Analyses, a division of the U.S. Department of Commerce, asof April 28, 2006, and except as otherwise indicated.

(2) World Agriculture:Toward 2015/2030 Summary Report.

 

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**Market Opportunities**

 

Based on theexperience of our management and directors, there are numerous marketcharacteristics and trends associated with the agriculture industry that makeit an attractive industry for targeting a business combination.(3)

 

·                  **Large Target Market.** According to the USDA, in 2004,aggregate farm cash expenditures, which represent the value of goods andservices purchased by farmers in the United States, totaled approximately$186.2 billion. These aggregate farm cash expenditures are expected to increasefrom $186.2 billion in 2004 to $196.7 billion in 2005, representing a year-over-yearincrease of approximately 5.6%. In addition, the USDA forecasts that aggregatefarm cash expenditures will increase from $186.2 billion in 2004 to $250billion by 2015, representing a CAGR of approximately 2.7%. Continued growth inaggregate farm cash expenditures could increase further as **demand**for field crops, primarily corn, used in the production of alternative fuelsincreases due to mandates included in the Energy Policy Act of 2005, whichrequires a minimum of 7.5 billion gallons of renewable fuel use in gasoline(with credits for biodiesel) by 2012 (which is nearly double the capacityavailable in 2005).

 

·                  **Highly Fragmented Industry.** The agriculture industry is highlyfragmented. According to Hoover’s Inc., as of May 2, 2006, there were atleast 583 companies, comprised of 142 and 429 public and private companies,respectively, engaged in businesses operating within the agriculture industry.Aggregating smaller companies may offer the potential to create economies ofscale, including expanded distribution capabilities, corporate efficiency andgreater capital resources.

 

·                  **Rapidly EvolvingIndustry.** Within thelast several years, several factors have transformed the agriculture industry.We anticipate that these changes will create opportunities for new entrantsinto the industry and expansion of existing agriculture-related companies. Webelieve, based on the experience of our management, that the agricultureindustry will continue to be driven by the following key trends which maycreate business combination opportunities:

 

·                  **Focus on Value-AddedProducts and Services**—Based on the current demographic of U.S. farmers, our managementbelieves that as older farmers approach retirement, the transition of theexisting farm base will result in a stratified farm acreage landscape characterizedby three distinct types of farmers: large commodity growers, specialty growersand small single-crop growers. Our management believes that the impact of thisstratification will be a shift toward outsourcing of an increasing amount ofthe day-to-day maintenance of crops. The move towards outsourcing cropmaintenance should create a number of opportunities for companies to providevalue-added products and services that have resonated less with previousgenerations of farmers.

 

·                  **Requirement ofTechnological Advancement**—The total planted acreage for the eight major field crops (corn,sorghum, barley, oats, wheat, rice, cotton and soybeans) is projected to beapproximately 245 million acres per year every year from 2006 through 2015.It is likely that crop yields will need to increase in order to meet theincreasing demand for agricultural products over that same time period.Technological improvements in crop protection chemicals and geneticallymodified seeds will be the primary drivers of enhancement crop yields. Since2000, the percentage of soybeans and cotton (two crops with geneticallymodified seeds with crop protection traits) planted have increased from 54% to87% and 61% to 79%, respectively, demonstrating the increasing demand forenhanced productivity from a relatively stable planted acreage base.

 

·                  **Demand for Alternative Fuels**—In recent years, dramatic increases inthe price of crude oil have generated increased demand for alternative fuels.In particular, The Energy Policy Act of 2005 mandates a minimum of7.5 billion gallons of renewable fuels be used in gasoline by 2012, whichis almost double the production capacity in 2005. In order to meet thealternative fuel mandates, there will be increased demand for field cropsincluding corn, canola and sugar cane, which are the primary feedstock of manyalternative fuels. The increased demand for these technical crops will alsocause demand for other agricultural products such as fertilizer, seed, and cropprotection chemicals, as well as the equipment and related services required toproduce the necessary crop yields.

 

Although we may considera target business in any segment of the agriculture industry, we anticipatethat our initial business combination may be a company engaged in one or moreof the following businesses:

 

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(3) World Agriculture:Toward 2015/2030 Summary Report.

 

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·                  Agricultural Commodities Trading—*tradingand brokering of physical agricultural products in bulk such as fertilizer,chemicals, and seed.*

 

·                  Agricultural Equipment—*manufacturingor selling of agricultural equipment.*

 

·                  Agricultural Financing—*providing securedfinancing to farmers and other market participants.*

 

·                  Agricultural Product Manufacturing—*manufacturing,distribution or sale of agricultural nutrients and chemicals such asfertilizers, crop protection chemicals and seeds.*

 

·                  Alternative Fuels—*manufacturing,distribution or sale of agricultural-based alternative fuels such as ethanoland bio fuels*.

 

·                  Distribution—*providing logisticsservices, transportation and storage of agricultural products such as molasses,vegetable oils, palm oils and bio-fuels or agricultural related products suchas fertilizer, crop protection chemicals and seeds.*

 

·                  Farm & Crop Management—*owningand managing farmland.*

 

·                  Golf Course and Lawn & Garden Maintenance—*manufacturing and/or distributing agriculturalproducts such as fertilizers and seed to these specialized industries.*

 

·                  Livestock Feed & Animal Health Products—*manufacturing or selling of specialty products forthis industry.*

 

·                  Agricultural Industry Support Services—*providingservices that support or help consolidate back office functions for farmers andagriculture-related companies.*

 

**Effecting a Business Combination**

 

*General*

 

We are not presentlyengaged in, and we will not engage in, any substantive commercial business foran indefinite period of time. We intend to use cash derived from the proceedsof the IPO and the sale of the Founder Warrants in a private placement, ourcapital stock, debt or any combination thereof to effect a business combinationinvolving an operating business in the agriculture industry. A businesscombination may involve the acquisition of, or merger with, an operatingbusiness that does not need substantial additional capital but desires toestablish a public trading market for its shares, while avoiding what it maydeem to be adverse consequences of undertaking a public offering itself. Webelieve these consequences include certain time delays, significant expense,loss of voting control and compliance with various federal and state securitieslaws. In the alternative, a business combination may involve a company that maybe financially unstable or in the early stages of development or growth or weakmanagement, but, in our belief, possesses long-term growth potential.

 

*Establisheddeal sourcing network and sources of target businesses*

 

Webelieve that our management and directors have strong reputations within theinvestment community developed over their years in the agribusiness investmentbanking, leveraged buyout and hedge fund industries. Through the experience ofour management and directors, we believe that we have extensive contacts andsources from which to generate acquisition opportunities in the agricultureindustry. Target business candidates have been and will be brought to ourattention from various unaffiliated sources, including investment bankers,venture capital funds, private equity funds, leveraged buyout funds, managementbuyout funds, securities broker dealers, attorneys and accountants and othermembers of the financial community, who may present solicited or unsolicitedproposals. Our directors and officers as well as their affiliates have brought,and we expect will continue to bring, to our attention target businesscandidates that they become aware of through their business contacts. In noevent, however, will any of our Founding Stockholders, directors or officers orany entity with which they are affiliated be paid any finder’s fee, consultingfee or other compensation prior to, or for any services they render in order toeffectuate, the consummation of a business combination. However, our FoundingStockholders, directors and officers will also receive reimbursement for anyreasonable out-of-pocket expenses incurred by them in connection withactivities on our behalf, such identifying a potential target operating businessand performing due diligence on a suitable business combination.

 

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Whilewe do not presently anticipate engaging the services of professional firms orother individuals that specialized in business acquisitions on any formalbasis, we may engage these firms or other individuals in the future, in whichevent we may pay a finder’s fee or other compensation to be determined in anarm’s length negotiation based on the terms of the transaction.

 

*Selection of target business andstructuring of a business combination*

 

Subject to therequirement that our initial business combination must be with an operatingbusiness in the agriculture industry that has a fair market value equal to atleast 80% of our net assets at the time of such transaction, our management hasvirtually unrestricted flexibility in identifying and selecting prospectivetarget business. Our management diligently reviews all of the proposals wereceive with respect to a prospective target business. In evaluating aprospective target business, our management team considers one or more of thefollowing factors:

 

·                  financial condition and results of operations;

 

·                  both long-term and short-term growth potential;

 

·                  experience and skill of the target’smanagement and availability of additional personnel;

 

·                  earnings before interest, taxes,depreciation and amortization charges;

 

·                  consistent operating margins;

 

·                  nature of the customers and contracts;

 

·                  stability and continuity in customerrelationships;

 

·                  capital requirements;

 

·                  competitive position;

 

·                  barriers to entry in the relevantagriculture industry sector;

 

·                  degree of current or potential marketacceptance of the services, processes or products;

 

·                  proprietary features and degree ofintellectual property or other protection of the services, processes orproducts;

 

·                  regulatory environment of the relevant industrysector;

 

·                  potential growth in government spendingin the segment in which the target company operates;

 

·                  stage of development of services,processes or products; and

 

·                  costs associated with effecting thebusiness combination.

 

These criteria are notintended to be exhaustive. Any evaluation relating to the merits of aparticular business combination with an operating business is based on theabove factors as well as other considerations deemed relevant by our managementteam in effecting a business combination consistent with our businessobjective. In evaluating a prospective target business, we conduct an extensivedue diligence review of the target business that encompasses, among otherthings, meetings with incumbent management and inspection of facilities, aswell as review of financial and other information that will be made availableto us.

 

Francis P. Jenkins, Jr.,our chairman and chief executive officer, and G. Kenneth Moshenek, ourpresident and chief operating officer, served as chief executive officer, andpresident and chief operating officer, respectively, of Royster-Clark, Inc.under employment agreements that contain a non-competition provision. Theseagreements prohibit Messrs. Jenkins and Moshenek from directly orindirectly, as an employee, partner, stockholder, director, consultant, jointventurer, investor or in any other capacity, engaging in, or owning, managing,operating or controlling, or participating in the ownership, management,operation or control of any business or entity that engages in a substantiallysimilar business or line of business as those conducted by Royster-Clark, Inc.until July 22, 2010. According to publicly filed documents, Royster-Clarkengages in the retail and wholesale distribution of mixed fertilizer,fertilizer materials, seed, crop protection products and agronomic services tofarmers, primarily in the Southeast and Midwest regions of the United States.Although Messrs. Jenkins and Moshenek are not currently in breach of thenon-competition provision because at this time our purpose is to acquire anoperating business in the agriculture industry, to the extent that an entity weidentify as a potential target may have operations that are similar to those ofRoyster-Clark, Inc., such potential target might need to dispose of suchoperations as part of a 

 

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business combination withus, which could be time-consuming or might not be economically feasible withoutrendering such potential target less economically viable after the businesscombination. If this occurred, it would make us a less attractive buyer for theentity and adversely impact our position among competing acquirers. Further, wecannot be certain that the acquisition of a target business will not bechallenged as being “substantially similar” to those of Royster-Clark, Inc.Such a challenge, if one occurred, could be costly and time-consuming, makingsuch target business less attractive, given our limited time and resources forour initial business combination.

 

In addition to thenon-competition provision described above, the employment agreements Messrs. Jenkinsand Moshenek had with Royster-Clark, Inc. prevent them from utilizingconfidential information of and soliciting for employment any current employeeor contractors of Royster-Clark, Inc. with certain exceptions. We believethat there are qualified individuals with expertise in the agriculture industrywe can employ in the future, and thus we do not believe that these confidentialinformation and non-solicitation provisions have any significant impact uponour ability to locate attractive target businesses or the structure of apossible business combination.

 

We will endeavorto structure a business combination so as to achieve the most favorable taxtreatment to us, the target business and their stockholders, as well as our ownstockholders. We cannot assure you, however, that the Internal Revenue Serviceor appropriate state tax authority will agree with our tax treatment of the businesscombination.

 

The time and costsrequired to select and evaluate a target business and to structure and completethe business combination cannot presently be ascertained with any degree ofcertainty. Any costs incurred with respect to the identification and evaluationof a prospective target business with which a business combination is notultimately completed will result in a loss to us and reduce the amount ofcapital available to otherwise complete a business combination. While we do notpay any finders or consulting fees to our Founding Stockholders, directors,officers or special advisors, or any of their respective affiliates, forservices rendered in connection with a business combination, we reimburse themfor any reasonable out-of-pocket expenses incurred by them in connection withactivities on our behalf.

 

*Fairmarket value of target business*

 

The initial targetbusiness that we acquire must have a fair market value equal to at least 80% ofour net assets at the time of such acquisition. To the extent we acquire lessthan 100% of a business, we calculate 80% of our net assets based on the valueof the portion of the business we acquired. In addition, in case of a shareexchange, the 80% threshold would be determined by the resulting interest wewould receive in the aggregate following consummation of the transaction. Wewill not acquire less than a controlling interest in a business, by which wemean that after the business combination either (i) if we acquiresecurities of the target or the target is merged with one of our subsidiaries,we will own a percentage of the voting securities of the target sufficient toelect a majority of the board of directors of the target; or (ii) if weacquire assets of the target or the target is merged with us, the business andaffairs of the target will be managed by or under the direction of our board ofdirectors or the board of directors of one of our subsidiaries. The fair marketvalue of such business is determined by our board of directors based upon standardsgenerally accepted by the financial community, such as actual and potentialsales, earnings and cash flow and book value. If our board is not able toindependently determine that the target business has a sufficient fair marketvalue or if a conflict of interest exists with respect to such determination,we will obtain an opinion from an unaffiliated, independent investment bankingfirm which is a member of the NASD with respect to the satisfaction of suchcriteria. We expect that any such opinion will be included in the proxysolicitation materials furnished to our stockholders in connection with abusiness combination, and that such independent investment banking firm will bea consenting expert. However, we are not required to obtain an opinion from aninvestment banking firm as to the fair market value if our board of directorsindependently determines that the target business has a sufficient fair marketvalue and no conflict of interest exists.

 

*Probablelack of business diversification*

 

Our initialbusiness combination must be with an operating business in the agricultureindustry whose fair market value is equal to at least 80% of our net assets atthe time of such acquisition. As a result, we are likely to complete a businesscombination with only a single operating business, which may have only alimited number of products or services. The resulting lack of diversificationmay:

 

·                  result in our dependency upon the performance of asingle operating business;

 

·                  result in our dependency upon the development ormarket acceptance of a single or limited number of products, processes orservices; and

 

·                  subject us to numerous economic, competitive andregulatory developments, any or all of which may have a substantial adverseimpact upon the particular industry in which we may operate subsequent to abusiness 

 

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combination. We may not be able to diversify ouroperations or benefit from the possible spreading of risks or offsetting oflosses, unlike other entities which may have the resources to complete severalbusiness combinations in different industries or different areas of a singleindustry so as to diversify risks and offset losses. Further, the prospects forour success may be entirely dependent upon the future performance of theinitial target business we acquire.

 

*Limitedability to evaluate the target business’ management*

 

Although we intend toclosely scrutinize the management of prospective target businesses whenevaluating the desirability of effecting a business combination, we cannotassure you that our assessment of the target business’ management will prove tobe correct. In addition, we cannot assure you that the target business’management will have the necessary skills, qualifications or abilities tomanage a public company. Furthermore, although our directors and officersintend to remain associated with us after the consummations of our initialbusiness combination, the future role, if any, of our directors and officers inthe target business cannot presently be stated with any certainty since wecannot predict the structure of the business combination or the operations ofthe target company we will pursue. For example, Messrs. Jenkins andMoshenek may be required to resign from our board of directors if we consummatea business combination with an acquisition candidate in the United States thatengages in a substantially similar business or line of businesses as thoseconducted by Royster-Clark, Inc. According to publicly filed documents,Royster-Clark, Inc. engages in the retail and wholesale distribution ofmixed fertilizer, fertilizer materials, seed, crop protection products andagronomic services to farmers, primarily in the Southeast and Midwest regionsof the United States. Although we expect one or more members of our managementto serve on our board of directors following a business combination, subject tocontinued election by the stockholders, it is unlikely that any of our officersor directors will devote their full efforts to our affairs subsequent to abusiness combination. We may request continued representation of our managementon the board of directors in our negotiation with a target company. We willconsider a target company’s response to this request in determining whether theacquisition is in the best interest of our shareholders. Moreover, we cannotassure you that our directors and officers will have significant experience orknowledge relating to the operations of the particular target businessacquired. For example, if we were to acquire a target business with diverseoperations or a division of a company that has a specialized operation, we mayhave to hire additional management personnel for our post-business combinationoperations.

 

Following abusiness combination, we may seek to recruit additional managers to supplementthe incumbent management of the target business. We cannot assure you that wewill have the ability to recruit additional managers, or that additionalmanagers will have the requisite skills, knowledge or experience necessary toenhance the incumbent management of the target business.

 

*Opportunityfor stockholder approval of a business combination*

 

Prior to the completion of a business combination, we will submit thetransaction to our stockholders for approval, even if the structure of thebusiness combination is such that it would not ordinarily require stockholderapproval under applicable state law. In connection with seeking stockholderapproval of a business combination, we will furnish our stockholders with proxysolicitation materials prepared in accordance with the Securities Exchange Actof 1934, as amended, which, among other matters, will include a description ofthe operations of the target business and certain required financial informationregarding the target business.

 

Inconnection with any vote required for our initial business combination, all ofour Founding Stockholders, directors and officers have agreed to vote theshares of Common Stock then owned by them, including any shares of Common Stockpurchased following the IPO, in accordance with the majority of the shares ofCommon Stock voted by our Public Stockholders. As a result, our FoundingStockholders, directors and officers will not have any conversion rightsattributable to their shares in the event that a business combinationtransaction is approved by a majority of our Public Stockholders. We willproceed with the initial business combination only if both a majority of theshares of Common Stock voted by Public Stockholders are voted in favor of thebusiness combination and our Public Stockholders owning less than 40% of theshares sold in the IPO exercise their conversion rights.

 

*Conversionrights*

 

At the time we seekstockholder approval of any business combination, we will offer each PublicStockholder the right to have such Public Stockholder’s shares of Common Stockconverted into cash if such Public Stockholder votes against the businesscombination and the business combination is approved and completed.  Our Founding Stockholders, directors andofficers will not have this right with respect to the shares owned by thembecause they have agreed to vote their shares of Common Stock in accordancewith the majority of the shares of Common Stock voted by our Public Stockholders.The actual 

 

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per-share conversionprice will be equal to the amount in the Trust Account, including the amountheld in the Trust Account representing the deferred portion of the underwriters’fee for the IPO, and all accrued interest (net of taxes payable) not madeavailable to us for working capital requirements as of two business days priorto the consummation of the business combination, divided by the number of Unitssold in the IPO. Voting against the business combination alone will not resultin an election to exercise a stockholder’s conversion rights. A stockholdermust also affirmatively exercise such conversion rights prior to the time thebusiness combination is voted upon by the stockholders. To exercise suchconversion rights, a stockholder must have such stockholder’s brokerelectronically tender such stockholder’s shares to the transfer agent using thefacilities of the Depositary Trust Company (or, in the event that suchstockholder had previously requested and received a physical certificate,surrender such physical certificate to the transfer agent), accompanied by aletter of instruction and must comply with such other procedures as we mayreasonably establish, by 5:00 P.M., Eastern Standard Time, on the businessday immediately preceding the date of a meeting held for that purpose. However,the request will not be granted unless the stockholder votes against thebusiness combination and the business combination is approved and completed.Any request for conversion, once made, may be withdrawn at any time up to thedate of the meeting.

 

Traditionally, blankcheck companies have allowed converting stockholders to tender their sharesafter the stockholders meeting held to vote on a business combination. Thisprocedure created uncertainty in determining whether the number of convertingstockholders would result in a business combination failing. To avoid thisuncertainty, we have instituted the requirement of tendering shares by convertingstockholders prior to the time a business combination is voted upon by ourstockholders by instructing their brokers to electronically tender their sharesto the transfer agent using the facilities of the Depositary Trust Company (or,in the event that such stockholders had previously requested and receivedphysical certificates, to surrender such physical certificates to the transferagent). The Public Stockholders eligible to convert their shares, but fail tocomply with the procedures above by 5:00 P.M., Eastern Standard Time, onthe business day immediately preceding the date of the stockholders meetingheld to vote on a business combination, will forfeit their right to receive theconversion price. We intend to remind our stockholders of our conversionprocedures in the proxy statement used in connection with the solicitation ofthe stockholder vote for a business combination. If a business combination isnot consummated, we will return the shares tendered by the stockholders whoelected conversion by returning such stockholders’ shares electronicallythrough the facilities of the Depositary Trust Company (or, in the event thatsuch stockholders had surrendered physical certificates, by returning suchcertificates by overnight mail), and will seek another acquisition target.

 

We will, uponconfirmation that the shares which have been converted have been electronicallytendered (or the physical certificates for such shares have been surrendered)to our transfer agent, accompanied by a letter of instruction, and compliancewith such other procedures as we may reasonably establish by 5:00 P.M.,Eastern Standard Time, on the business day immediately preceding the date ofthe stockholders meeting held to vote on a business combination, pay or causethe Trust Account to pay in accordance with the letter of instruction, theaggregate *pro rata* share of theTrust Account payable in respect of the shares so tendered and covered by suchletter of instruction (after giving effect to any required tax withholdings) tothe person to whom payment thereof is directed in such letter of instruction.

 

We intend todistribute the funds to eligible Public Stockholders who elect conversionpromptly after completion of the business combination. The Public Stockholderseligible to convert their shares who fail to comply with the procedures aboveby 5:00 P.M., Eastern Standard Time on the business day immediatelypreceding the date of the stockholders meeting held to vote on a businesscombination will forfeit their right to receive the conversion price.

 

PublicStockholders who convert their stock into their share of the Trust Accountretain their Warrants. We will not complete any proposed business combinationfor which our Public Stockholders owning 40% or more of the shares sold in theIPO, other than our Founding Stockholders, directors and officers, both voteagainst a business combination and exercise their conversion rights. If abusiness combination is not consummated, we will return the shares tendered bythe Public Stockholders who elected conversion either by returning physicalcertificates or by electronically through the facilities of the DepositaryTrust Company (or, in the event that such Public Stockholders had surrenderedtheir physical certificates, by returning such physical certificates byovernight mail), and will seek another acquisition target.

 

If our businesscombination requires us to use substantially all of our cash to pay thepurchase price, because we will not know how many stockholders may exercisetheir conversion rights, we may either need to reserve part of the TrustAccount for possible payment upon such conversion, or we may need to arrangethird party financing to help fund our business combination in case a largerpercentage of stockholders exercise their conversion rights than we expect.Therefore, we may not be able to consummate a business combination thatrequires us to use all of the funds held in the Trust Account as part of thepurchase price, or we may end up having to adjust the ratio of cash to stockused as consideration, or we may need to arrange for third party financing, ifavailable.

 

If holders of nomore than approximately 39.99% of the shares sold in the IPO vote against aproposed business combination and seek to exercise their conversion rights andsuch business combination is consummated, our Founding

 

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Stockholders have agreedto forfeit and return to us for cancellation a number of shares so that theywill collectively own no more than 23.0% of outstanding Common Stock uponconsummation of such business combination (without giving effect to any shares thatmay be issued in the business combination). If we are unable to effect abusiness combination and liquidate, none of our Founding Stockholders willreceive any portion of the liquidation proceeds with respect to Common Stockowned by them immediately before the IPO.

 

*Plan ofdissolution and liquidation if no business combination*

 

Ifwe do not complete a business combination within 18 months after theconsummation of the IPO, or within 24 months if the extension criteriadescribed below have been satisfied, as part of any plan of dissolution anddistribution in accordance with the applicable provisions of the DelawareGeneral Corporation Law, we will dissolve and distribute to all of our PublicStockholders, in proportion to their respective equity interests, an aggregatesum equal to the amount in the Trust Account, including the amount representingthe deferred portion of the underwriters’ fees for the IPO, plus any interest(net of taxes payable) not made available to fund our working capital requirements,plus any remaining net assets. In the event we seek stockholder approval for aplan of dissolution and distribution and do not obtain such approval, we willnonetheless continue to pursue stockholder approval for our dissolution.Pursuant to the terms of our amended and restated certificate of incorporation,our board has agreed to dissolve after the expiry of those time periods(assuming that there has been no business combination consummated), andfurthermore, our powers following the expiration of the permitted time periodsfor consummating a business combination will automatically thereafter belimited to acts and activities relating to dissolving and winding up ouraffairs, including liquidation. The funds held in the Trust Account may not bedistributed except upon our dissolution and, unless and until such approval isobtained from our stockholders, the funds held in the Trust Account will not bereleased. Consequently, holders of a majority of outstanding Common Stock mustapprove our dissolution in order to receive the funds held in the Trust Accountand the funds will not be available for any other corporate purpose. Upon theapproval by our stockholders of our plan of dissolution and distribution, wewill liquidate the Trust Account to our Public Stockholders. Our FoundingStockholders, directors and officers have agreed to waive their respectiverights to participate in any liquidation distribution occurring upon ourfailure to consummate a business combination, but only with respect to those sharesof Common Stock owned by them prior to the IPO; they will participate in anyliquidation distribution with respect to any shares of Common Stock acquiredfollowing the IPO. There will be no distribution from the Trust Account withrespect to the Warrants and all rights with respect to the Warrants willeffectively terminate upon our liquidation.

 

Our FoundingStockholders, other than Messrs. Pottinger, Prochaska and Jenkins, III,have agreed, subject to certain exceptions, that they will be personallyliable, on a joint and several basis, to cover claims made by such thirdparties, but only if, and to the extent, the claims reduce the amounts in theTrust Account available for payment to our Public Stockholders in the event ofa liquidation and the claims are made by a vendor or service provider forservices rendered, or products sold, to us or by a prospective acquisitiontarget. Based on representations made to us by such Founding Stockholders, wecurrently believe that they are capable of funding a shortfall in the TrustAccount to satisfy their foreseeable indemnification obligations. However, wehave not asked them to reserve for such an eventuality. We cannot assure youthat such Founding Stockholders will be able to satisfy those obligations or thatthe proceeds in the Trust Account will not be reduced by such claims. Further,such Founding Stockholders will not have any personal liability as to anyclaimed amounts owed to a third party who executed a waiver (including aprospective acquisition target). The indemnification is set forth in theinsider letter agreements dated as of May 24, 2007, which are exhibits tothe registration statement for the IPO. We also will have access to any fundsavailable outside the Trust Account or released to us to fund working capitalrequirements with which to pay any such potential claims.

 

Additionally, ifwe are forced to file a bankruptcy case or an involuntary bankruptcy caseis filed against us which is not dismissed, the funds held in the Trust Accountwill be subject to applicable bankruptcy law, and may be included in ourbankruptcy estate and subject to the claims of third parties with priority overthe claims of our stockholders. To the extent any bankruptcy claims deplete theTrust Account we cannot assure you we will be able to return to ourstockholders the liquidation amounts due them.

 

Prior tocompletion of a business combination, we will seek to have all vendors, aprospective target business or other entities with whom we engage in businessenter into agreements with us waiving any right, title, interest or claim ofany kind in or to any monies held in the Trust Account for the benefit of ourFounding Stockholders. In the event that a vendor, prospective target businessor other entity were to refuse to enter into such a waiver, our decision toengage such vendor or other entity or to enter into discussions with suchtarget business would be based on our management’s determination that we wouldbe unable to obtain, on a reasonable basis, substantially similar services oropportunities from another entity willing to enter into such a waiver.

 

If we enter intoeither a letter of intent, an agreement in principle or a definitive agreementto complete a business combination prior to the expiration of 18 monthsafter the consummation of the IPO, but are unable to complete the business 

 

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combination within the18-month period, then we will have an additional six months in which tocomplete the business combination contemplated by the letter of intent,agreement in principle or definitive agreement. If we are unable to do so by May 24,2009, we will then liquidate. Upon notice from us, the trustee of the TrustAccount will commence liquidating the investments constituting the TrustAccount and will turn over the proceeds to our transfer agent for distributionto our Public Stockholders as part of our plan of dissolution and distribution.We will promptly instruct the trustee to commence liquidating the investmentsconstituting the Trust Account after May 24, 2009 and upon the approval byour stockholders of our plan of dissolution and distribution.

 

Under the DelawareGeneral Corporation Law, stockholders may be held liable for claims by thirdparties against a corporation to the extent of distributions received by themin a dissolution. If the corporation complies with certain procedures set forthin Section 280 of the Delaware General Corporation Law intended to ensurethat it makes reasonable provision for all claims against it, including a60-day notice period during which any third-party claims can be brought againstthe corporation, a 90-day period during which the corporation may reject anyclaims brought, and an additional 150-day waiting period before any liquidatingdistributions are made to stockholders, any liability of stockholders withrespect to a liquidating distribution is limited to the lesser of suchstockholder’s *pro rata* share ofthe claim or the amount distributed to the stockholder, and any liability ofthe stockholder would be barred with respect to any suit not instituted priorto the third anniversary of the dissolution. Although we will make liquidatingdistributions to our Public Stockholders as soon as reasonably possible as partof our plan of dissolution, we do not intend to comply with those procedures.As such, our stockholders could potentially be liable for any claims to theextent of distributions received by them in a dissolution and any liability ofour stockholders may extend beyond the third anniversary of such dissolution.Because we will not be complying with Section 280, we will seekstockholder approval to comply with Section 281(b) of the DelawareGeneral Corporation Law, requiring us to adopt a plan of dissolution that willprovide for our payment, based on facts known to us at such time, of (i) allexisting claims, (ii) all pending claims and (iii) all claims thatmay be potentially brought against us within the subsequent 10 years.However, because we are a blank check company, rather than an operatingcompany, and our operations will be limited to searching for prospective targetbusinesses to acquire, the only likely claims to arise would be from ourvendors (such as accountants, lawyers, investment bankers, etc.) or potentialtarget businesses. As described above, we are obligated to have all vendors,service providers and prospective target businesses execute agreements with uswaiving any right, title, interest or claim of any kind they may have in or toany monies held in the Trust Account. Moreover, because we are obligated toobtain the waiver agreements described above, the funds held in trust should beexcluded from the claims of any creditors who executed such agreements inconnection with any bankruptcy proceeding.

 

We may not be ableto return to our Public Stockholders the liquidation amounts due them becausewe cannot predict with certainty: (i) potential claims or lawsuits thatmay be brought against us; (ii) what waiver agreements, if any, we will beable to obtain from vendors, prospective target businesses and/or otherentities with whom we engage in business; (iii) the amount of additionalexpenses that we may incur that exceeds the amount of the funds held outside ofthe Trust Account; and (iv) the ability of our Founding Stockholders,other than Messrs. Pottinger, Prochaska and Jenkins, III, to ensurethat the funds held in the Trust Account are not reduced by claims of vendors,prospective target businesses and/or other entities with whom we engage in businessand who have not executed a waiver.

 

We currentlybelieve that any plan of dissolution and distribution subsequent to theexpiration of the 18 and 24 month deadlines would proceed in the followingmanner:

 

·                  our board of directors will, consistent with itsobligations described in our amended and restated certificate of incorporationto dissolve, prior to the passing of such deadline, convene and adopt aspecific plan of dissolution and distribution, which it will then vote torecommend to our stockholders; at such time it will also cause to be prepared apreliminary proxy statement setting out such plan of dissolution anddistribution and the board’s recommendation of such plan;

 

·                  upon such deadline, we would file the preliminaryproxy statement with the SEC;

 

·                  if the SEC does not review the preliminary proxystatement, then 10 days following the passing of such deadline, we willmail the proxy statements to our stockholders, and 30 days following thepassing of such deadline we will convene a meeting of our stockholders at whichthey will either approve or reject our plan of dissolution and distribution;and

 

·                  if the SEC does review thepreliminary proxy statement, we currently estimate that we will receive theircomments 30 days following the passing of such deadline. We will mail theproxy statements to our stockholders following the conclusion of the commentand review process (the length of which we cannot predict with any certainty),and we will convene a meeting of our stockholders at which they will eitherapprove of reject our plan of dissolution and distribution.

 

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In the event weseek stockholder approval for a plan of dissolution and distribution and do notobtain such approval, we will nonetheless continue to pursue stockholderapproval for our dissolution. Pursuant to the terms of our amended and restatedcertificate of incorporation, our powers following the expiration of thepermitted time periods for consummating a business combination willautomatically thereafter be limited to acts and activities relating todissolving and winding up our affairs, including liquidation. Other than in theevent of a Public Stockholder seeking to convert its shares into cash upon abusiness combination that such Public Stockholder voted against and that isactually completed by us, the funds held in the Trust Account may not bedistributed except upon our dissolution and, unless and until such approval isobtained from our stockholders, the funds held in the Trust Account will not bereleased. In addition, if we seek approval from our stockholders to consummatea business combination within 90 days of May 24, 2009 (assuming thatthe period in which we need to consummate a business combination has beenextended, as provided in our amended and restated certificate of incorporation)from the date of the IPO, the proxy statement related to such a businesscombination will also seek stockholder approval for our board’s recommendedplan of distribution and dissolution, in the event our stockholders do notapprove such a business combination. If no proxy statement seeking the approvalof our stockholders for a business combination has been filed 30 daysprior to May 24, 2009, our board will, prior to such date, convene, adoptand recommend to our stockholders a plan of dissolution and distribution, andon such date file a proxy statement with the SEC seeking stockholderapproval for such plan. Upon the approval by our stockholders of our plan ofdissolution and distribution, we will liquidate our Trust Account to our PublicStockholders.

 

**Amendedand Restated Certificate of Incorporation**

 

Our amended andrestated certificate of incorporation sets forth certain requirements andrestrictions relating to the IPO that apply to us until the consummation of abusiness combination. Specifically, our amended and restated certificate ofincorporation provides, among other things, that:

 

·                  in the event we do not consummate a business combinationby the later of 18 months after the consummation of the IPO or24 months after the consummation of the IPO in the event that either aletter of intent, an agreement in principle or a definitive agreement tocomplete a business combination was executed, our purpose and powers will belimited to dissolving, liquidating and winding up; provided, however, that wewill reserve our rights under Section 278 of the Delaware GeneralCorporation Law to bring or defend any action, suit or proceeding brought by oragainst us;

 

·                  our management will take all actions necessary toliquidate the Trust Account as part of any plan of dissolution and distributionin the event we do not consummate a business combination by the later of18 months after the consummation of the IPO or 24 months after theconsummation of the IPO in the event that either a letter of intent, anagreement in principle or a definitive agreement to complete a businesscombination was executed but was not consummated within such 18 monthperiod;

 

·                  A portion of the proceeds of the IPO and the privateplacement of the Founder Warrants (approximately $119,400,000) that has beenplaced into the Trust Account may not be disbursed from the Trust Accountexcept in connection with, or following, a business combination, upon ourliquidation or as otherwise permitted in our amended and restated certificateof incorporation;

 

·                  prior to the consummation of a business combination,we will submit such business combination to our stockholders for approval;

 

·                  we may consummate the business combination only ifapproved by a majority of our stockholders and our Public Stockholders owningless than 40% of the shares sold in the IPO exercise their conversion rights;

 

·                  if a business combination is approved and consummated,our Public Stockholders who voted against the business combination andexercised their conversion rights will receive their *pro rata* share (based on the number of units sold in theIPO) of the Trust Account;

 

·                  if a business combination is not consummated or aletter of intent, an agreement in principle or a definitive agreement is notsigned within the time periods specified above, then we will be dissolved anddistribute to all of our Public Stockholders their *pro rata* share (based on the number of units sold in theIPO) of the Trust Account and any remaining net assets pursuant to a plan ofdissolution and distribution adopted as provided therein; and

 

·                  we may not consummate any other merger, acquisition,stock purchase, asset purchase or similar transaction other than a businesscombination that meets the conditions specified above, including therequirement that the business combination be with an operating business in theagriculture industry whose fair market value is equal to at least 80% of ournet assets at the time of such business combination.

 

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UnderDelaware law, the foregoing provisions may be amended if our board of directorsadopts a resolution declaring the advisability of an amendment and calls ashareholders meeting, at which the holders of a majority of outstanding CommonStock vote in favor of such amendment. Any such amendment could reduce oreliminate the protection afforded to our stockholders by such requirements andrestrictions. However, we view these provisions as obligations to ourstockholders, and neither we nor our board of directors will propose, or seekshareholder approval of, any amendment of these provisions.

 

Neitherwe, nor our board of directors, have any present intention to propose, or seekstockholder approval of, any amendment of these provisions. However, our boardof directors determined that an 80% super-majority vote, rather than theunanimous vote required by many other blank check companies, was an appropriatepercentage for approval of any amendment to these provisions of our amended andrestated certificate of incorporation because our directors believe that it isin the best interests of our stockholders for the directors to have an abilityto revise the procedures for consummating a business combination. In addition,the directors believe that they would not be able to appropriately fulfilltheir fiduciary duties if they were prevented by our certificate ofincorporation from proposing an amendment that they determine would be in thebest interests of our stockholders. For example, if we enter into a definitiveagreement with a target for a business combination, but are unable to completethe business combination transaction within 24 months from the date of theIPO, our board of directors could determine that it is in the best interests ofour stockholders to amend our amended and restated certificate of incorporationto extend the deadline to complete the business combination.

 

However,in no event will we amend, nor will our board of directors propose to amend,any of these provisions of our amended and restated certificate ofincorporation without including a provision that would permit all of theholders of the shares sold in the IPO who vote against the proposal to converttheir shares into their *pro rata*share of the Trust Account without taking into account interest earned on theproceeds of the IPO and the private placement of the Founder Warrants held inthe Trust Account (net of taxes payable), if the amendment is approved. Unlessthe amendment is approved by 80% of outstanding Common Stock, the proposal toamend our amended and restated certificate of incorporation will not pass. Ifthe proposed amendment is approved by 80% or more of outstanding Common Stock,stockholders who both vote against the amendment and elect to have their sharesconverted would receive their *pro rata*share of the Trust Account.

 

**Competition**

 

In identifying,evaluating and pursuing a target business, we may encounter intense competitionfrom other entities having a business objective similar to ours, includingventure capital funds, leveraged buyout funds, operating businesses and otherentities and individuals, both foreign and domestic, competing foracquisitions. Many of these entities are well established and have extensiveexperience identifying and effecting business combinations directly or throughaffiliates. Many of these competitors possess greater financial, marketing,technical, human and other resources than us, and our financial resources isrelatively limited when contrasted with those of many of these competitors.While we believe there are numerous potential target businesses that we couldacquire with the net proceeds of the IPO, our ability to compete in acquiring asizable target business is limited by our available financial resources. Thisinherent competitive limitation gives certain others an advantage in pursuingthe acquisition of a target business. Further:

 

·                  our obligation to seek stockholder approval of abusiness combination may impede or delay the completion of a transaction;

 

·                  our obligation to convert shares of Common Stock intocash in certain instances may reduce the resources available to effect abusiness combination; and

 

·                  outstanding Warrants and the future dilution theypotentially represent may not be viewed favorably by a target business.

 

Any of thesefactors may place us at a competitive disadvantage in consummating a businesscombination. Our management believes, however, that our status as a publicentity and potential access to the United States public equity markets may giveus a competitive advantage over privately-held entities having a similarbusiness objective as ours in acquiring a target business on favorable terms.

 

If we succeed ineffecting a business combination, there will, in all likelihood, be intensecompetition from competitors of the target business. The degree of competitioncharacterizing the industry of any prospective target business cannot presentlybe ascertained. We cannot assure you that, subsequent to a businesscombination, we will have the resources to compete effectively, especially tothe extent that the target business is in a high-growth industry.

 

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**Employees**

 

We currently havefour officers, three of whom are also members of our board of directors. Wehave no other employees. These individuals are not obligated to devote anyspecific number of hours to our matters and intend to devote only as much timeas they deem necessary to our affairs. We do not intend to have any full timeemployees prior to the consummation of a business combination.

 

**AvailableInformation**

 

We are required tofile Annual Reports on Form 10-K and Quarterly Reports on Form 10-Qwith the SEC on a regular basis, and are required to disclose certain materialevents (e.g., changes in corporate control; acquisitions or dispositions of asignificant amount of assets other than in the ordinary course of business andbankruptcy) in a Current Report on Form 8-K.  The public may read and copy any materials wefile with the SEC at the Public Reference Room at 100 F Street N.E.,Washington, D.C. 20549. The public may obtain information on the operation ofthe Public Reference Room by calling the SEC at 1-800-SEC-0330. The SECalso maintains an Internet website that contains reports, proxy and informationstatements and other information regarding issuers that file electronicallywith the SEC. The SEC’s Internet website is located at http://www.sec.gov.

 

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**ITEM1A.  RISK FACTORS**

 

*Aninvestment in our securities involves a high degree of risk. You shouldconsider carefully all of the material risks described below, together with theother information contained in this Annual Report on Form 10-K, beforemaking a decision to invest in our securities. If any of the following risksoccur, our business, financial condition and results of operations may beadversely affected. In that event, the trading price of our securities coulddecline, and you could lose all or a part of your investment.*

 

**Risks Relating to the Company**

 

***We are a development stage company with no operating historyand, accordingly, you will have no basis upon which to evaluate our ability toachieve our business objective.***

 

We are a recentlyincorporated development stage company with no operating results to date. Sincewe do not have an operating history, there is a limited basis upon which to evaluate our ability to achieveour business objective, which is to acquire an operating business in theagriculture industry. We will not generate any revenues (other than interestincome on the proceeds of the IPO held in the Trust Account) until, at theearliest (if at all), after the consummation of a business combination. Wecannot assure you as to when, or if, a business combination will occur.

 

***We may not be able to consummate a business combinationwithin the required time frame, in which case we will be forced to liquidate.***

 

We must complete abusiness combination with a fair market value equal to at least 80% of our netassets at the time of the acquisition within 18 months after the consummationof the IPO (or within 24 months after the consummation of the IPO if aletter of intent, agreement in principle or a definitive agreement has beenexecuted within 18 months after the consummation of the IPO and thebusiness combination relating thereto has not yet been consummated within such18-month period). If we fail to consummate a business combination within therequired time frame, we will be forced to liquidate our assets. We may not beable to find a suitable target business within the required time frame. Inaddition, our negotiating position and our ability to conduct adequate duediligence on any potential target may be reduced as we approach the deadlinefor the consummation of a business combination.

 

***Because there are numerous companies with a business plansimilar to ours seeking to effectuate a business combination, it may be moredifficult for us to do so.***

 

Based on publiclyavailable information, since August 2003, approximately 153 similarlystructured blank check companies have completed initial public offerings andnumerous others have filed registration statements. Of these companies, only 47companies have consummated a business combination, while 24 other companieshave announced that they have entered into definitive agreements or letters ofintent with respect to potential business combinations, but have not yetconsummated such business combinations. Additionally, some of these companieshave announced that they will dissolve and distribute their assets toshareholders. Accordingly, as of March 25, 2008, there are approximately98 blank check companies with more than $16.0 billion in trust seeking toenter into a business combination. While some of these companies have specificindustries in which they must identify a potential target business, a number ofthese companies may consummate a business combination in any industry theychoose. As a result, we may be subject to competition from these and othercompanies seeking to consummate a business combination within the agriculture industry,which, in turn, will result in an increased demand for privately-held companiesin these industries. Because of this competition, we cannot assure you that wewill be able to effectuate a business combination within the required timeperiod. Further, because only 71 of such companies have either consummated abusiness combination or entered into a definitive agreement for a businesscombination, it may indicate that there are fewer attractive target businessesavailable to such entities or that many privately-held target businesses arenot inclined to enter into these types of transactions with publicly-held blankcheck companies like ours. We cannot assure you that we will be able tosuccessfully compete for an attractive business combination. Additionally,because of this competition, we cannot assure you that we will be able toeffectuate a business combination within the prescribed time period. If we areunable to consummate a business combination within the prescribed time period,we will be forced to liquidate.

 

***We may have insufficient resources to cover our operatingexpenses and the expenses of consummating a business combination.***

 

We reservedapproximately $115,000 from the proceeds of the IPO and the private placementof the Founder Warrants and receive one half of the interest earned on theTrust Account, net of taxes, up to a total of $1,500,000 to cover 

 

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our operating expenses May 24,2009 and to cover the expenses incurred in connection with a businesscombination. These amounts are based on our management’s estimate of the amountneeded to fund our operations through May 24, 2009, to consummate abusiness combination and to fund our working capital requirements. Thisestimate may prove inaccurate, especially if we expend a significant portion ofthe available funds in pursuit of a business combination that is notconsummated. Additionally, although we have no present intention to do so, itis possible that we will in the future find it necessary or desirable to use aportion of these funds to make a down payment or deposit or fund a lock-up or “no-shop”provision, with respect to a potential business combination. If so, any suchamount would be based on the terms of the specific transaction and the amountof available funds at the time. If we use a significant portion of our fundsfor such a purpose and we are required to forfeit such funds (whether as aresult of our breach of the agreement relating to the original payment orotherwise), we could, if such payment was large enough and we had already usedsome or all of the funds allocated to due diligence and related expenses inconnection with the aborted transaction, be left with insufficient funds tocontinue searching for, or to conduct due diligence with respect to, otherpotential target businesses. In that event, we may be required to liquidatebefore the completion of a business combination. If we do not have sufficientproceeds available to fund our expenses, we may be forced to obtain additionalfinancing, either from our Founding Stockholders, directors and officers orfrom third parties. We may not be able to obtain additional financing, and ourFounding Stockholders, directors and officers are not obligated to provide anyadditional financing to us. If we do not have sufficient funds and are unableto obtain additional financing, we may be forced to liquidate prior toconsummating a business combination.

 

***You will not be entitled to protections normally afforded toinvestors of blank check companies under federal securities laws.***

 

Since the netproceeds of the IPO are intended to be used to complete a business combinationwith an operating business that has not been identified, we may be deemed to bea blank check company under federal securities laws. However, since we willhave net tangible assets in excess of $5,000,000 upon the successfulconsummation of the IPO and subsequently will file a Current Report on Form 8-Kwith the SEC, including an audited balance sheet demonstrating this fact, webelieve that we are exempt from the rules promulgated by the SEC toprotect investors in blank check companies, such as Rule 419. Accordingly,investors will not be afforded the benefits or protections of those rules.Because we do not believe we are subject to Rule 419, the Units will beimmediately tradable and we will have a longer period of time within which tocomplete a business combination in certain circumstances.

 

***Under Delaware law, the requirements and restrictionsrelating to the IPO contained in our amended and restated certificate ofincorporation may be amended, which could reduce or eliminate the protectionafforded to our stockholders by such requirements and restrictions.***

 

Our amended andrestated certificate of incorporation contains certain requirements andrestrictions relating to the IPO that apply to us until the consummation of abusiness combination. Specifically, our amended and restated certificate ofincorporation provides, among other things, that:

 

·                  in the event we do not consummate a businesscombination by the later of 18 months after the consummation of the IPO or24 months after the consummation of the IPO in the event that either aletter of intent, an agreement in principle or a definitive agreement to completea business combination was executed, our purpose and powers will be limited todissolving, liquidating and winding up; provided, however, that we will reserveour rights under Section 278 of the Delaware General Corporation Law tobring or defend any action, suit or proceeding brought by or against us;

 

·                  our management will take all actions necessary toliquidate the Trust Account as part of any plan of dissolution and distributionin the event we do not consummate a business combination by the later of18 months after the consummation of the IPO or 24 months after theconsummation of the IPO in the event that either a letter of intent, anagreement in principle or a definitive agreement to complete a businesscombination was executed but was not consummated within such 18 monthperiod;

 

·                  A portion of the IPO proceeds (approximately$119,400,000) that has been placed into the Trust Account may not be disbursedfrom the Trust Account except in connection with, or following, a businesscombination, upon our liquidation or as otherwise permitted in our amended andrestated certificate of incorporation;

 

·                  prior to the consummation of a business combination,we will submit such business combination to our stockholders for approval;

 

·                  we may consummate the business combination only ifapproved by a majority of our stockholders and our Public Stockholders owningless than 40% of the shares sold in the IPO exercise their conversion rights;

 

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·                  if a business combination is approved and consummated,our Public Stockholders who voted against the business combination andexercised their conversion rights will receive their *pro rata* share (based on the number of units sold in theIPO) of the Trust Account;

 

·                  if a business combination is not consummated or aletter of intent, an agreement in principle or a definitive agreement is notsigned within the time periods specified above, then we will be dissolved anddistribute to all of our Public Stockholders their *pro rata* share (based on the number of units sold in theIPO) of the Trust Account and any remaining net assets pursuant to a plan ofdissolution and distribution adopted as provided therein; and

 

·                  we may not consummate any other merger,acquisition, stock purchase, asset purchase or similar transaction other than abusiness combination that meets the conditions specified above, including therequirement that the business combination be with an operating business in theagriculture industry whose fair market value is equal to at least 80% of ournet assets at the time of such business combination.

 

Under Delaware law, theforegoing provisions may be amended if our board of directors adopts a resolutiondeclaring the advisability of an amendment and calls a shareholders meeting, atwhich the holders of a majority of Common Stock vote in favor of suchamendment. Any such amendment could reduce or eliminate the protection affordedto our stockholders by such requirements and restrictions. However, we viewthese provisions as obligations to our stockholders, and neither we nor ourboard of directors will propose, or seek stockholder approval of, any amendmentof these provisions.

 

***Our amended and restated certificate of incorporation andby-laws contain certain provisions that may make it more difficult, expensiveor otherwise discourage, a tender offer or a change in control or takeoverattempt by a third party, even if such a transaction would be beneficial to ourstockholders.***

 

The existence ofcertain provisions in our amended and restated certificate of incorporation andby-laws may have a negative impact on the price of Common Stock by discouraginga third party from purchasing Common Stock. These provisions could also havethe effect of discouraging a third party from pursuing a non-negotiatedtakeover of the Company and preventing certain changes of control. In additionto our staggered board, our by-laws require that, subject to certain exceptions,any stockholder desiring to propose business or nominate a person to the boardof directors at a stockholders meeting must give notice of any proposals ornominations within a specified time frame. Our by-laws also limit the abilityof stockholders to remove directors, call stockholders meetings and act bywritten consent and provide that vacancies of the board of directors may onlybe filled by a majority of the remaining directors.

 

***If third parties bring claims against us, the funds held intrust could be reduced and the per-share liquidation price received by ourPublic Stockholders could be less than approximately $5.95 per share.***

 

Placing the fundsin a Trust Account may not protect those funds from third-party claims againstus. Although we will seek to have all vendors, prospective target businessesand other entities with whom we engage in business enter into agreements withus waiving any right, title, interest or claim of any kind in or to any moniesheld in the Trust Account for the benefit of our Public Stockholders, there isno guarantee that they will enter into such agreements. Nor is there anyguarantee that such entities will agree to waive any claims they may have inthe future as a result of, or arising out of, any negotiations, contracts oragreements with us and will not seek recourse against the Trust Account for anyreason. Accordingly, the proceeds of the IPO and the private placement of theFounder Warrants held in trust could be subject to claims that could takepriority over the claims of our Public Stockholders and the per-shareliquidation price could be less than approximately $5.95, plus interest (net oftaxes payable), due to claims of such creditors or other entities. Our FoundingStockholders, other than Messrs. Pottinger, Prochaska and Jenkins, III,have agreed, subject to certain exceptions, that they will be personallyliable, on a joint and several basis, to cover claims made by third parties,but only if, and to the extent, the claims reduce the amounts in the TrustAccount available for payment to our stockholders in the event of a liquidationand the claims are made by a vendor or service provider for services rendered,or products sold, by us or a prospective acquisition target. However, thesestockholders will not have any personal liability as to any claimed amountsowed to a third party who executed a waiver (including a prospectiveacquisition target) or the underwriters. Based on representations made to us bythese stockholders, we currently believe that they are capable of funding ashortfall in our Trust Account to satisfy their foreseeable indemnificationobligations. However, we have not asked them to reserve for such aneventuality. We cannot assure you that these stockholders will be able tosatisfy those obligations or that the proceeds in the Trust Account will not bereduced by such claims. Further, these stockholders will not have any personalliability as to any claimed amounts owed to a third party that executed awaiver (including a prospective acquisition target) or the underwriters. Theindemnification is set forth in the insider letter agreements, dated as of May 24,2007, signed by these stockholders which are exhibits to the registrationstatement for the IPO. We also will have access to any funds available outsidethe Trust Account or released to us to fund working capital requirements withwhich to pay any such potential claims.

 

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However, theper-share liquidation price received by our Public Stockholders could be lessthan approximately $5.95 per share because we cannot predict with certainty: (i) potentialclaims or lawsuits that may be brought against us; (ii) what waiveragreements, if any, we will be able to obtain from vendors, prospective targetbusinesses and/or other entities with whom we engage in business; (iii) theamount of additional expenses that we may incur that exceeds the amount of thefunds held outside of the Trust Account; and (iv) the ability of ourFounding Stockholders, other than Messrs. Pottinger, Prochaska and Jenkins, III,to ensure that the funds held in the Trust Account are not reduced by claims ofvendors, prospective target businesses and/or other entities with whom weengage in business and who have not executed a waiver.

 

Additionally, ifwe are forced to file a bankruptcy case or an involuntary bankruptcy caseis filed against us which is not dismissed, the funds held in the Trust Accountcould be subject to applicable bankruptcy law, and may be included in our bankruptcyestate and subject to the claims of third parties with priority over the claimsof our stockholders. To the extent any bankruptcy claims deplete the TrustAccount, we cannot assure you we will be able to return to our stockholders theliquidation amounts otherwise due them.

 

***Our stockholders may be held liable for claims by thirdparties against us to the extent of distributions received by them in adissolution.***

 

If we do notcomplete a business combination within 18 months after the consummation ofthe IPO (or within 24 months after the consummation of the IPO if a letterof intent, agreement in principle or definitive agreement is executed within18 months after the consummation of the IPO and the business combinationrelating thereto is not consummated within such 18-month period), we willdissolve. Under Sections 280 through 282 of the Delaware General CorporationLaw, stockholders may be held liable for claims by third parties against acorporation to the extent of distributions received by them in a dissolution.If the corporation complies with certain procedures intended to ensure that itmakes reasonable provision for all claims against it, including a 60-day noticeperiod during which any third-party claims can be brought against thecorporation, a 90-day period during which the corporation may reject any claimsbrought, and an additional 150-day waiting period before any liquidatingdistributions are made to stockholders, any liability of stockholders withrespect to a liquidating distribution is limited to the lesser of suchstockholder’s *pro rata* share ofthe claim or the amount distributed to the stockholder, and any liability ofthe stockholder would be barred with respect to any suit not instituted priorto the third anniversary of the dissolution. Although we will seek stockholderapproval to liquidate the Trust Account to our Public Stockholders as part ofour plan of dissolution and distribution, we do not intend to comply with thoseprocedures. In the event that our board recommends and our stockholders approvea plan of dissolution and distribution where it is subsequently determined thatthe reserve for claims and liabilities was insufficient, stockholders whoreceived a return of funds could be liable for claims made by creditors. As such,our stockholders could potentially be liable for any claims to the extent ofdistributions received by them in a dissolution and any liability of ourstockholders may extend beyond the third anniversary of such dissolution.Accordingly, we cannot assure you that third parties will not seek to recoverfrom our stockholders amounts owed to them by us.

 

***If we do not consummate a business combination and dissolve,payments from the Trust Account to our stockholders may be delayed.***

 

We currentlybelieve that any plan of dissolution and distribution subsequent to theexpiration of the 18 and 24 month deadlines would proceed in approximatelythe following manner:

 

·                  our board of directors will, consistent with itsobligations described in our amended and restated certificate of incorporationto dissolve, prior to the passing of such deadline, convene and adopt aspecific plan of dissolution and distribution, which it will then vote torecommend to our stockholders; at such time it will also cause to be prepared apreliminary proxy statement setting out such plan of dissolution anddistribution and the board’s recommendation of such plan;

 

·                  upon such deadline, we would file the preliminaryproxy statement with the SEC;

 

·                  if the SEC does not review the preliminary proxystatement, then 10 days following the passing of such deadline, we willmail the proxy statements to our stockholders, and 30 days following thepassing of such deadline we will convene a meeting of our stockholders at whichthey will either approve or reject our plan of dissolution and distribution;and

 

if the SEC does review the preliminary proxy statement, we currentlyestimate that we will receive their comments 30 days following the passingof such deadline. We will mail the proxy statements to our stockholdersfollowing the conclusion of the comment and review process (the length of whichwe cannot predict with any certainty), and we will convene a meeting of ourstockholders at which they will either approve of reject our plan ofdissolution and distribution.

 

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In the event weseek stockholder approval for a plan of dissolution and distribution and do notobtain such approval, we will nonetheless continue to pursue stockholderapproval for our dissolution. Pursuant to the terms of our amended and restatedcertificate of incorporation, our powers following the expiration of thepermitted time periods for consummating a business combination willautomatically thereafter be limited to acts and activities relating todissolving and winding up our affairs, including liquidation. The funds held inthe Trust Account may not be distributed except upon our dissolution and,unless and until such approval is obtained from our stockholders, the fundsheld in the Trust Account will not be released. Consequently, holders of amajority of outstanding Common Stock must approve our dissolution in order toreceive the funds held in the Trust Account and the funds will not be availablefor any other corporate purpose.

 

These procedures,or a vote to reject any plan of dissolution and distribution by ourstockholders, may result in substantial delays in the liquidation of the TrustAccount to our stockholders as part of our plan of dissolution anddistribution.

 

***Since we have not selected any prospective targetbusinesses, you will be unable to ascertain the merits or risks of anyparticular target business’ operations.***

 

Since we have notyet selected any prospective target businesses with respect to a businesscombination, there is no basis to evaluate the possible merits or risks of anyparticular target business’ operations, financial condition or prospects. Tothe extent we complete a business combination, we may be affected by numerousrisks inherent in the business operations of the acquired company or companies.Although our management will endeavor to evaluate the risks inherent in aparticular target business, we cannot assure you that we will properlyascertain or assess all of the significant risk factors, or that we will haveadequate time to complete due diligence. We also cannot assure you that aninvestment in our securities will not ultimately prove to be less favorable toour investors than a direct investment, if an opportunity were available, inany particular target business.

 

***A significant portion of working capital could be expendedin pursuing acquisitions that are not consummated.***

 

It is anticipatedthat the investigation of each specific target business and the negotiation,drafting, and execution of relevant agreements, disclosure documents, and otherinstruments will require substantial time and attention and substantial costsfor accountants, attorneys and others. In addition, we may opt to make downpayments or pay exclusivity or similar fees in connection with structuring andnegotiating a business combination. If a decision is made not to complete aspecific business combination, the costs incurred up to that point inconnection with the abandoned transaction, potentially including down paymentsor exclusivity or similar fees, would not be recoverable. Furthermore, even ifan agreement is reached relating to a specific target business, we may fail toconsummate the transaction for any number of reasons, including those beyondour control such as that more than approximately 39.99% of our PublicStockholders vote against the transaction even though a majority of suchstockholders approve the transaction. Any such event will result in a loss tous of the related costs incurred, which could adversely affect subsequentattempts to locate and acquire or merge with another business.

 

***We may issue additional shares of our capital stock,including through convertible debt securities, to complete a businesscombination, which would reduce the equity interest of our stockholders and maycause a change in control of our ownership.***

 

Our amended andrestated certificate of incorporation authorizes the issuance of up to100,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, parvalue $0.0001 per share.  There arecurrently 27,685,714 authorized but unissued shares of Common Stock availablefor issuance (after appropriate reservation of shares issuable upon fullexercise of the outstanding Warrants, including the Founder Warrants) and allof the 1,000,000 shares of preferred stock available for issuance. Although wecurrently have no commitments to issue any additional securities, we may issuea substantial number of additional shares of Common Stock or preferred stock,or a combination of both, including through convertible debt securities, tocomplete a business combination. The issuance of additional shares of CommonStock or any number of shares of preferred stock, including upon conversion ofany debt securities:

 

·                  may significantly reduce the equity interest ofinvestors in the IPO;

 

·                  will likely cause a change in control if a substantialnumber of shares of Common Stock or our voting preferred stock are issued,which may affect, among other things, our ability to use our net operating losscarryforwards, if any, and most likely also result in the resignation orremoval of our present directors and officers; and

 

·                  may adversely affect prevailing market prices forCommon Stock and Warrants.

 

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** **

***Unlike most other blank check companies, we allow up to approximately39.99% of our Public Stockholders to exercise their conversion rights. Thishigher threshold will make it easier for us to consummate a businesscombination with which you may not agree.***

 

When we seekstockholder approval of a business combination, we will offer each PublicStockholder (other than our Founding Stockholders) the right to have his, heror its shares of Common Stock converted to cash if such Public Stockholdervotes against the business combination and the business combination is approvedand consummated. We will consummate the initial business combination only ifthe following two conditions are met: (i) a majority of the shares ofCommon Stock voted by our Public Stockholders are voted in favor of thebusiness combination and (ii) our Public Stockholders owning 40% or moreof the shares sold in the IPO do not vote against the business combination andexercise their conversion rights. Most other blank check companies have a conversionthreshold of 20%, which makes it more difficult for such companies toconsummate their initial business combination. Thus, because we permit a largernumber of stockholders to exercise their conversion rights, it will be easierfor us to consummate an initial business combination with a target businesswhich you may believe is not suitable for us, and you may not receive the fullamount of your original investment upon exercise of your conversion rights.

 

***Unlike most other blank check companies, we allow up toapproximately 39.99% of our Public Stockholders to exercise their conversionrights. The ability of a larger number of our stockholders to exercise theirconversion rights may not allow us to consummate the most desirable businesscombination or optimize our capital structure.***

 

When we seekstockholder approval of a business combination, we will offer each PublicStockholder (other than our Founding Stockholders) the right to have his, heror its shares of Common stock converted to cash if the stockholder votesagainst the business combination and the business combination is approved andconsummated.  Such holder must both voteagainst such business combination and then exercise his, her or its conversionrights to receive a *pro rata*share of the Trust Account. Unlike most other blank check companies which havea 20% threshold, we allow up to approximately 39.99% of our Public Stockholdersto exercise their conversion rights. Accordingly, if our business combinationrequires us to use substantially all of our cash to pay the purchase price,because we will not know how many stockholders may exercise such conversionrights, we may either need to reserve part of the Trust Account for possiblepayment upon such conversion, or we may need to arrange third party financingto help fund our business combination in case a larger percentage ofstockholders exercise their conversion rights than we expect. In the event thatthe acquisition involves the issuance of Common Stock as consideration, we maybe required to issue a higher percentage of Common Stock to make up for ashortfall in funds. Raising additional funds to cover any shortfall may involvedilutive equity financing or incurring indebtedness at higher than desirablelevels. This may limit our ability to effectuate the most attractive businesscombination available to us.

 

***Public Stockholders who vote against a business combinationwill forfeit their conversion rights if they do not comply with the requiredconversion procedures in a timely manner.***

 

In order toconvert Common Stock into a *pro rata*share (based on the number of Units sold in the IPO) of the amount held in theTrust Account, our Public Stockholders, in addition to voting against thebusiness combination, must also affirmatively exercise their conversion rightsprior to the time the business combination is voted upon by our stockholders.To exercise such conversion rights, such a stockholder must instruct suchstockholder’s broker to electronically tender such stockholder’s shares to thetransfer agent using the facilities of the Depositary Trust Company (or, in theevent that such stockholder had previously requested and received a physicalcertificate, to surrender such physical certificate to the transfer agent),accompanied by a letter of instruction, and must comply with such otherprocedures as we may reasonably establish, by 5:00 P.M., Eastern StandardTime, on the business day immediately preceding the date of the stockholdersmeeting held to vote on a business combination. Our Public Stockholderseligible to convert their shares who fail to comply with the requiredconversion procedures will forfeit their right to receive the conversion price.We intend to remind our stockholders of our conversion procedures in the proxystatement used in connection with the solicitation of the stockholder vote fora business combination. The proxy statement used in connection with thestockholders meeting for a business combination will be delivered personally orwill be mailed to our stockholders not less than ten (10) days before thedate of such meeting, and accordingly, our Public Stockholders who electconversion will have to comply with the required conversion procedures in atimely manner.

 

***We may issue notes or other debt securities, or obtain bankfinancing, to complete a business combination, which may adversely affect ourleverage and financial condition.***

 

Although wecurrently  have no commitments to incurany debt, we may choose to incur a substantial amount of debt to finance abusiness combination. The incurrence of debt may:

 

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·                  lead to default and foreclosure on our assets if ouroperating revenues after a business combination are insufficient to pay ourdebt obligations;

 

·                  cause an acceleration of our obligation to repay thedebt, even if we make all principal and interest payments when due, if webreach the covenants contained in the terms of any debt;

 

·                  require us to execute documents that contain covenantssuch as ones that require the maintenance of certain financial ratios orreserves, without a waiver or renegotiation of such covenants;

 

·                  create an obligation to immediately repay allprincipal and accrued interest, if any, upon demand to the extent any debtsecurities are payable on demand;

 

·                  hinder our ability to obtain additional financing, ifnecessary, to the extent any debt securities contain covenants restricting ourability to obtain additional financing while such security is outstanding, orto the extent our existing leverage discourages other potential investors;

 

·                  limit our flexibility in planning for and reacting tochanges in our business and in the industry in which we operate;

 

·                  make us more vulnerable to adverse changes in generaleconomic, industry and competitive conditions and adverse changes in governmentregulation;

 

·                  limit our ability to borrow additional amounts forworking capital, capital expenditures, acquisitions, debt service requirements,execution of our strategy, or other purposes; and

 

·                  place us at a disadvantage compared to our competitorswho have less debt.

 

***Some or all of our current directors and officers may resignupon consummation of a business combination and we will have only limitedability to evaluate the management of the target business.***

 

Our ability to besuccessful following a business combination will depend upon the efforts of ourkey personnel. The future role of our key personnel following a businesscombination, however, cannot presently be fully ascertained. In making thedetermination whether current management should remain with us following thebusiness combination, management will analyze the experience and skill set ofthe target business’ management and negotiate as part of the businesscombination that certain members of current management remain if it is believedthat doing so is in the best interests of the combined company post-businesscombination. We cannot assure you that our assessment of these individuals willprove to be correct.

 

***The loss of key directors and officers could adverselyaffect our ability to consummate a business combination.***

 

Our operations aredependent upon a relatively small group of key directors and officersconsisting of Francis P. Jenkins, Jr., our chairman, chief executiveofficer and director, G. Kenneth Moshenek, our president, chief operatingofficer and director, John E. Toffolon, Jr., our chief financial officerand director, Joseph F. Prochaska and Donald D. Pottinger, each of whom is ourdirector. We believe that our success depends on the continued service of ourkey directors and officers. We cannot assure you that such individuals willremain with us for the immediate or foreseeable future. We do not haveemployment contracts with any of our current officers. The unexpected loss ofthe services of one or more of these key officers or directors could adverselyaffect our ability to consummate a business combination.

 

***Certain employment agreements to which Mr. Jenkins, ourchairman and chief executive officer, and G. Kenneth Moshenek, our presidentand chief operating officer, were parties may limit the types of companies wecan target for a business combination and may make us a less attractive buyerto certain target companies.***

 

Francis P. Jenkins, Jr.,our chairman and chief executive officer, and G. Kenneth Moshenek, ourpresident and chief operating officer, served as chief executive officer, andpresident and chief operating officer, respectively, of Royster-Clark, Inc.under employment agreements that contain a non-competition provision. Theseagreements, which were terminated on February 9, 2006 and March 15,2006, respectively, prohibit Messrs. Jenkins and Moshenek until July 22,2010, which is the last date they may receive compensation from Royster-Clark, Inc.,from participation, without the prior written consent of Royster-Clark, Inc.,in any business or entity in the United States which engages in a substantiallysimilar business or line of businesses as those conducted by Royster-Clark, Inc.According to publicly filed documents, Royster-Clark, Inc. engages in theretail and wholesale distribution of mixed fertilizer, fertilizer materials,seed, crop protection products and agronomic services to farmers, primarily inthe Southeast and Midwest regions of the United States. To the extent that anentity we identify as a potential target may have operations that are similarto those of Royster-Clark, Inc., such potential target might need todispose of such operations as part of a business combination with us, whichcould be 

 

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time-consuming or mightnot be economically feasible without rendering such potential target lesseconomically viable after the business combination. If this occurred, it wouldmake us a less attractive buyer for the entity and adversely impact ourposition among competing acquirers. Further, we cannot assure you that theacquisition of a target business will not be challenged as being “substantiallysimilar” to those of Royster-Clark, Inc. Such a challenge, if oneoccurred, could be costly and time-consuming, making such target business lessattractive, given our limited time and resources for our initial businesscombination.

 

Since thenon-competition provisions are limited to certain segments of the agricultureindustry, we believe that there are potential target acquisition candidates inthe United States and globally that will not be subject to a challenge byRoyster-Clark, Inc. In the event that we have a choice between potentialtarget businesses that may be affected by such non-competition provision andpotential target businesses that will not be affected by such non-competitionprovision, we intend to proceed with those that will not be affected by suchnon-competition provision.

 

***Our directors and officers will allocate their time to otherbusinesses, thereby causing conflicts of interest in their determination as tohow much time to devote to our affairs. This could have a negative impact onour ability to consummate a business combination.***

 

Our directors andofficers are not required to, and will not, commit their full time to ouraffairs, which may result in a conflict of interest in allocating their timebetween our operations and other businesses. We do not intend to have anyfull-time employees prior to the consummation of a business combination. Eachof our officers are engaged in several other business endeavors and are notobligated to contribute any specific number of hours per week to our affairs.If our officers’ and directors’ other business affairs require them to devotesubstantial amounts of time to such affairs, it could limit their ability todevote time to our affairs and could have a negative impact on our ability toconsummate a business combination.

 

***Our directors and officers are and may in the future becomeaffiliated with other businesses in, or investing in, the agriculture industryand, accordingly, may have conflicts of interest in determining to which entitya particular business opportunity should be presented.***

 

Until weconsummate a business combination, we intend to engage in the business ofidentifying and acquiring a potential target business in the agricultureindustry. Our directors and officers are, and may in the future, becomeaffiliated with entities, including other blank check companies, that areengaged in a similar business. Further, certain of our directors and officersare currently involved in other businesses in, or investing in, the agricultureindustry. Our directors and officers may become aware of business opportunitiesthat may be appropriate for presentation to us as well as the other entitieswith which they are or may be affiliated. Due to these existing and potentialfuture affiliations with these and other entities, they may have fiduciary obligationsto present potential business opportunities to those entities prior topresenting them to us, which could cause additional conflicts of interest. Wecannot assure you that these conflicts will be resolved in our favor. At thistime, none of our officers or directors are or have been affiliated withanother blank check company.

 

***Because certain of our directors and officers own shares ofour securities that will not participate in liquidation distributions, they mayhave a conflict of interest in determining whether a particular target businessis appropriate for a business combination.***

 

Certain of ourdirectors and officers own shares of Common Stock through Shermen WSC HoldingLLC, but have, with respect to shares of Common Stock owned by them throughShermen WSC Holding LLC immediately prior to the IPO, waived their right toreceive distributions upon our liquidation in the event we fail to complete abusiness combination. Certain of our directors and officers purchased 5,214,286Founder Warrants through Shermen WSC Holding LLC in a private placement,concurrently with the IPO. The shares of Common Stock and Founder Warrantsowned by such directors and officers and their affiliates through Shermen WSCHolding LLC will be worthless if we do not consummate a business combination.The personal and financial interests of our directors and officers mayinfluence their motivation in identifying and selecting a target business andcompleting a business combination in a timely manner. Consequently, our directors’and officers’ discretion in identifying and selecting a suitable targetbusiness may result in a conflict of interest when determining whether theterms, conditions and timing of a particular business combination areappropriate and in our stockholders’ best interest.

 

***Our directors’ and officers’ interests in obtainingreimbursement for any reasonable out-of-pocket expenses incurred by them maylead to a conflict of interest in determining whether a particular targetbusiness is appropriate for a business combination and in our stockholders’best interest.***

 

Our FoundingStockholders, directors and officers will not receive reimbursement for anyout-of-pocket expenses incurred by them to the extent that such expenses exceedthe amount of available proceeds not deposited in the Trust Account

 

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and one-half of theinterest earned on the Trust Account, net of taxes, up to a total of$1,500,000, unless the business combination is consummated. The amounts ofavailable proceeds and the interest on the Trust Account available to us tofund our working capital requirements are based on our management’s estimate ofthe amount needed to fund our operations for a period of 24 monthsfollowing the consummation of the IPO and consummate a business combination.This estimate may prove to be inaccurate, especially if a portion of theavailable funds in the Trust Account and the interest on the Trust Accountavailable for working capital purposes is used to make a down payment inconnection with a business combination or pay exclusivity or similar fees or ifwe expend a significant portion in pursuit of an acquisition that is notconsummated. The financial interest of our directors and officers couldinfluence their motivation in selecting a target business, and thus there maybe a conflict of interest when determining whether a particular businesscombination is in the best interest of our Public Stockholders.

 

***We may engage in a business combination with a targetbusiness that has a relationship with entities that may be affiliated withcertain stockholders and our directors and officers, which may raise potentialconflicts of interest.***

 

In light of theinvolvement of our Founding Stockholders, directors and officers with otheragriculture companies and our intent to consummate a business combination withan operating business in that same sector, we may decide to acquire a businessaffiliated with such stockholders, our officers or our directors. Despite ouragreement to obtain an opinion from an independent investment banking firmregarding the fairness to our stockholders from a financial point of view of abusiness combination with a business affiliated with such stockholders, ourofficers or our directors, potential conflicts of interest may still exist and,as a result, the terms of the business combination may not be as advantageousto our stockholders as they would be absent any conflicts of interest.

 

***If Common Stock becomes subject to the SEC’s penny stockrules, broker-dealers may experience difficulty in completing customertransactions and trading activity in our securities may be adversely affected.***

 

If at any time wehave net tangible assets of $5,000,000 or less and Common Stock has a marketprice per share of less than $5.00, transactions in Common Stock may be subjectto the “penny stock” rules promulgated under the Securities Exchange Actof 1934, as amended. Under these rules, broker-dealers who recommend suchsecurities to persons other than institutional accredited investors must:

 

·                  make a special written suitability determination forthe purchaser;

 

·                  receive the purchaser’s written agreement to atransaction prior to sale;

 

·                  provide the purchaser with risk disclosure documentsthat identify certain risks associated with investing in “penny stocks” andthat describe the market for these “penny stocks,” as well as a purchaser’slegal remedies; and

 

·                  obtain a signed and dated acknowledgment from thepurchaser demonstrating that the purchaser has actually received the requiredrisk disclosure document before a transaction in “penny stock” can becompleted.

 

If Common Stockbecomes subject to these rules, broker-dealers may find it difficult to effectcustomer transactions and trading activity in our securities may be adverselyaffected. As a result, the market price of our securities may be depressed, andyou may find it more difficult to sell our securities.

 

***We will complete only one business combination, which maycause us to be solely dependent on a single business and a limited number ofproducts or services.***

 

To complete abusiness combination, we may use approximately $115,000 of the net proceeds ofthe IPO and the sale of the Founder Warrants, and the interest on the TrustAccount, net of taxes, up to a total of $1,500,000 that will be available forworking capital purposes. Our initial business combination must be with anoperating business with a fair market value of at least 80% of our net assetsat the time of such business combination. It is probable that the company we acquirein our initial business combination will have only a limited number of servicesor products. The resulting lack of diversification:

 

·                  will result in ourdependency upon the performance of a single or small number of operatingbusinesses;

 

·                  may result in our dependency upon the development ormarket acceptance of a single or limited number of products, processes orservices; and

 

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·                  may subject us to numerous economic, competitive andregulatory developments, any or all of which may have a substantial adverseimpact upon the particular industry in which we may operate subsequent to abusiness combination.

 

In this case, wewill not be able to diversify our operations or benefit from the possiblespreading of risks or offsetting of losses, unlike other entities that may havethe resources to complete several business combinations in different industriesor different areas of a single industry so as to diversify risks and offsetlosses. Further, the prospects for our success may be entirely dependent uponthe future performance of the initial target business we acquire, if any.

 

***Because of our limited resources and the significantcompetition for business combination opportunities, we may not be able to consummatean attractive business combination.***

 

We may encounterintense competition from other entities having a business objective similar toours, including venture capital funds, leveraged buyout funds, operatingbusinesses and other entities and individuals, both foreign and domestic,competing for acquisitions. Many of these entities are well established andhave extensive experience in identifying and effecting business combinationsdirectly or through affiliates. Many of these competitors possess greatertechnical, human and other resources than we do and our financial resources arerelatively limited when contrasted with those of many of these competitors.Therefore, our ability to compete in acquiring certain sizable targetbusinesses may be limited by our available financial resources. This inherentcompetitive limitation gives others an advantage in pursuing the acquisition ofcertain target businesses. Further:

 

·                  our obligation to seek stockholder approval of abusiness combination may delay the consummation of a transaction;

 

·                  our obligation to convert our shares of Common Stockinto cash in certain instances may reduce the resources available for abusiness combination; and

 

·                  outstanding Warrants (including the Founder Warrants)and the future dilution they potentially represent may not be viewed favorablyby certain target businesses.

 

Any of thesefactors may place us at a competitive disadvantage in successfully negotiatinga business combination.

 

***We may be unable to obtain additional financing, ifrequired, to complete a business combination or to fund the operations andgrowth of the target business, which could compel us to restructure or abandona particular business combination.***

 

Although webelieve that a certain portion of the net proceeds of the IPO and the sale ofthe Founder Warrants and the interest on the Trust Account available forworking capital purposes will be sufficient to allow us to consummate abusiness combination, in as much as we have not yet selected any prospective targetbusinesses, we cannot ascertain the capital requirements for any particularbusiness combination. If the net proceeds of the IPO and the sale of theFounder Warrants and the interest on the Trust Account available for workingcapital purposes prove to be insufficient, either because of the size of thebusiness combination or the depletion of the available net proceeds in searchof a target business, or because we become obligated to convert into cash asignificant number of shares from dissenting stockholders as a result of theexercise of conversion rights, we will be required to seek additional financingthrough the issuance of equity or debt securities or other financingarrangements. We cannot assure you that such financing would be available on acceptableterms, if at all. To the extent that additional financing proves to beunavailable when needed to consummate a particular business combination, wewould be compelled to re-negotiate or abandon that particular businesscombination and seek an alternative target business candidate. In addition, ifwe consummate a business combination, we may require additional financing tofund the operations or growth of the target business. The failure to secureadditional financing could adversely affect the continued development or growthof the target business or our combined business or businesses. None of ourofficers, directors or stockholders is required to provide any financing to usin connection with or after the consummation of a business combination.

 

***Our Founding Stockholders, directors and officers control asubstantial interest in us and thus may influence certain actions requiringstockholder vote.***

 

Our FoundingStockholders, directors and officers collectively own approximately 20% of theissued and outstanding shares of Common Stock. In addition, certain of ourdirectors and officers purchased through Shermen WSC Holding LLC 5,214,286Founder Warrants from us in a private placement concurrently with the IPO. Anyexercise of these Founder Warrants by our directors and officers would increasetheir ownership percentage. These holdings could allow our FoundingStockholders, directors and officers to influence the outcome of mattersrequiring stockholder approval, including 

 

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the election of directorsand approval of significant corporate transactions after completion of ourinitial business combination.

 

Our board ofdirectors is divided into three classes, each of which generally serves for aterm of three years with only one class of directors being elected in eachyear. It is unlikely that there will be an annual meeting of stockholders toelect new directors prior to the consummation of a business combination, inwhich case all of the current directors will continue in office at least untilthe consummation of the business combination. If there is an annual meeting, asa consequence of our “staggered” board of directors, only a minority of theboard of directors will be considered for election and our FoundingStockholders, directors and officers, because of their ownership position, willhave considerable influence regarding the outcome. Accordingly, our FoundingStockholders, directors and officers will continue to exert control at leastuntil the consummation of a business combination and may continue to exercisesubstantial control after a business combination due to their significantownership. In connection with the vote required for our initial businesscombination, all of our Founding Stockholders, directors and officers, haveagreed to vote the shares of Common Stock then owned by them in accordance withthe majority of the shares of Common Stock voted by our stockholders other thanour Founding Stockholders, directors and officers. However, the affiliates andrelatives of our Founding Stockholders, directors and officers are notprohibited from purchasing shares in the aftermarket, and they will have fullvoting rights with respect to any shares of Common Stock they may acquire insubsequent market transactions. If they do, we cannot assure you that ourFounding Stockholders, directors and officers, through their affiliates andrelatives, will not have considerable influence upon the vote in connectionwith a business combination.

 

***Our outstanding warrants may have an adverse effect on themarket price of Common Stock and make it more difficult to effect a businesscombination.***

 

In connection withthe IPO, as part of the Units, we issued 40,000,000 Warrants. We sold a totalof 5,214,286 Founder Warrants to certain of our directors and officers throughShermen WSC Holding LLC in a private placement concurrently with the IPO. Tothe extent we issue shares of Common Stock to effect a business combination,the potential for the issuance of substantial numbers of additional shares uponexercise of these Warrants and Founder Warrants could make us a less attractiveacquisition vehicle in the eyes of a target business as such securities, whenexercised, will increase the number of issued and outstanding shares of CommonStock and reduce the value of the shares issued to complete the businesscombination. Accordingly, Warrants and Founder Warrants may make it moredifficult to effectuate a business combination or increase the acquisition costof a target business. Additionally, the sale, or even the possibility of sale,of the shares underlying these Warrants and Founder Warrants could have anadverse effect on the market price for our securities or on our ability toobtain future public financing. If and to the extent these warrants areexercised, you may experience dilution to your holdings.

 

***If our Founding Stockholders and the underwriters for theIPO exercise their registration rights, it may have an adverse effect on themarket price of Common Stock and the existence of these rights may make it moredifficult to effect a business combination.***

 

The majority ofour Founding Stockholders are entitled to make up to two demands that weregister the resale of their shares of Common Stock, and the representatives ofthe underwriters for the IPO have customary “piggy back” registration rightswith respect to up to 700,000 Units in the aggregate (350,000 Units foreach representative) it has an option to purchase. If the majority of suchstockholders and such underwriters exercise their registration rights, thenthere could be additional shares of Common Stock eligible for trading in thepublic market. The increase in the number of shares of Common Stock eligiblefor trading in the public market may have an adverse effect on the market priceof Common Stock. In addition, the existence of these rights may make it moredifficult to effect a business combination or increase the acquisition cost ofa target business, as the stockholders of a particular target business may bediscouraged from entering into a business combination with us or will request ahigher price for their securities as a result of these registration rights andthe potential future effect their exercise may have on the trading market forCommon Stock.

 

***The ability of our stockholders to exercise their conversionrights may not allow us to consummate the most desirable business combinationor optimize our capital structure.***

 

When we seekstockholder approval of our initial business combination, we will offer eachPublic Stockholder (other than our Founding Stockholders) the right to havehis, her or its shares of Common Stock converted to cash if the stockholdervotes against our initial business combination and our initial businesscombination is approved and consummated. Such holder must both vote againstsuch business combination and then exercise his, her or its conversion rightsto receive a *pro rata*share ofthe Trust Account. Our maximum conversion percentage of 40% is greater than themaximum conversion percentage of similarly structured development stagecompanies, the majority of which provide for a maximum conversion percentage of20%. If our Public Stockholders holding the maximum number of shares which maybe 

 

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converted, an aggregateof approximately 9,199,999 shares, properly exercise their conversionrights, the Trust Account would be required to disburse to them an aggregate ofapproximately $54,743,994, at a conversion price of approximately $5.95 (beforetaking into account interest earned on proceeds of the IPO and the sale of theFounder Warrants held in the Trust Account, taxes payable on such interest andrights of creditors to funds held in the Trust Account, if any). Accordingly,if our business combination requires us to use substantially all of our cash topay the purchase price, because we will not know how many stockholders mayexercise such conversion rights, we may either need to reserve part of theTrust Account for possible payment upon such conversion, or we may need toarrange third party financing to help fund our business combination in case alarger percentage of stockholders exercise their conversion rights than weexpect. Therefore, we may not be able to consummate a business combination thatrequires us to use all of the funds held in the Trust Account as part of thepurchase price, or we may end up having to incur an amount of leverage that isnot optimal for our business combination. This may limit our ability to effectuatethe most attractive business combination available to us.

 

***The Founder Warrants have a superior exercise right toWarrants received in the IPO.***

 

The FounderWarrants sold to certain of our directors and officers through Shermen WSCHolding LLC concurrently with the IPO may be exercised pursuant to an exemptionto the requirement that the Common Stock underlying such Founder Warrants beregistered pursuant to an effective registration statement. Therefore, theFounder Warrants may be exercised whether or not a current registrationstatement is in place. The Warrants received in the IPO may only be exercisedif a current registration statement is in place. We are required only to useour best efforts to maintain a current registration statement; therefore, theWarrants issued in the IPO may expire worthless.

 

***We may redeem your unexpired Warrants prior to theirexercise at a time that is disadvantageous to you or while a prospectus is notcurrent, thereby making your Warrants worthless.***

 

We have theability to redeem outstanding Warrants at any time after they becomeexercisable and prior to their expiration, at a price of $.01 per warrant,provided that the last reported sales price of Common Stock equals or exceeds$8.50 per share for any 20 trading days within a 30 trading-day period endingon the third business day prior to proper notice of such redemption. Redemptionof the outstanding Warrants could force you (i) to exercise your Warrantsand pay the exercise price therefor at a time when it may be disadvantageousfor you to do so, (ii) to sell your Warrants at the then current marketprice when you might otherwise wish to hold your Warrants or (iii) toaccept the nominal redemption price which, at the time the outstanding Warrantsare called for redemption, is likely to be substantially less than the marketvalue of your Warrants. Moreover, redemption of the outstanding Warrants canand may occur while a prospectus is not current and therefore the Warrants arenot exercisable. If this occurs, your Warrants would be worthless.

 

***If the private placement of the Founders Warrants was notconducted in compliance with applicable law, the directors and officers mayhave the right to rescind their purchases of the Founder Warrants. Therescission rights, if any, may require us to refund an aggregate of $3,650,000to our directors and officers, thereby reducing the amount in the Trust Accountavailable to us to consummate a business combination, or, in the event we donot complete a business combination within the required period, the amountavailable to our stockholders upon our liquidation.***

 

Although webelieve that we conducted the private placement in accordance with applicablelaw, there is a risk that the Founder Warrants, and the shares of Common Stockunderlying the Founder Warrants, should have been registered under theSecurities Act of 1933, as amended, and applicable blue sky laws. Although thedirectors and officers have waived their respective rights, if any, to rescindtheir purchases of the Founder Warrants as a remedy to our failure to registerthese securities, their waiver may not be enforceable in light of the publicpolicy underlying Federal and state securities laws. In addition, Section 14of the Securities Act of 1933, as amended, states that any condition,stipulation, or provision binding any person acquiring any security to waiveany provision of the Securities Act of 1933, as amended, or rules andregulations of the SEC shall be void. If the directors and officers bring aclaim against us and successfully assert rescission rights, we may be requiredto refund an aggregate of $3,650,000, plus interest, to them, thereby reducingthe amount in the Trust Account available to us to consummate a businesscombination, or, in the event we do not complete a business combination withinthe required period, the amount available to our stockholders upon ourliquidation.

 

***Our securities are quoted on the OTC Bulletin Board, whichmay limit the liquidity and price of our securities more than if our securitieswere quoted or listed on The Nasdaq Stock Market or a national securitiesexchange.***

 

Our securities aretraded in the over-the-counter market and are quoted on the OTC Bulletin Board,an inter-dealer automated quotation system for equity securities sponsored andoperated by the National Association of Securities Dealers, Inc., or NASD,but not included in The Nasdaq Stock Market. Quotation of our securities on theOTC Bulletin Board may limit the liquidity and price of our securities morethan if our securities were quoted or listed on The Nasdaq 

 

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Stock Market or anational securities exchange. Lack of liquidity may adversely affect the priceat which you may be able to sell our securities or your ability to sell oursecurities at all.

 

***If we are deemed to be an investment company, we may berequired to institute burdensome compliance requirements and our activities maybe restricted, which may make it difficult for us to complete a businesscombination.***

 

If we are deemedto be an investment company under the Investment Company Act of 1940, asamended, our activities may be restricted, including:

 

·                  restrictions on the nature of our investments; and

 

·                  restrictions on the issuance of securities, each of whichmay make it difficult for us to complete a business combination.

 

In addition, wemay have burdensome requirements imposed upon us, including:

 

·                  registration as an investment company;

 

·                  adoption of a specific form of corporate structure;and

 

·                  reporting, record keeping, voting, proxy anddisclosure requirements and other rules and regulations.

 

We do not believe that principal activities will subject us to theInvestment Company Act of 1940, as amended. To this end, the funds held in theTrust Account may only be invested by the trustee in U.S. “governmentsecurities,” defined as any Treasury Bill issued by the United Statesgovernment having a maturity of one hundred and eighty days or less, or anyopen ended investment company registered under the Investment Company Act of1940, as amended, that holds itself out as a money market fund and bears thehighest credit rating issued by a United States nationally recognized ratingagency. By restricting the investment of the funds in the Trust Account to theseinstruments, we intend to meet the requirements for the exemption provided in Rule 3a-1promulgated under the Investment Company Act of 1940, as amended. If we weredeemed to be subject to the act, compliance with these additional regulatoryburdens would require additional expense that we have not accounted for.

 

***Our directors may not be considered “independent” under thepolicies of the North American Securities Administrators Association, Inc.and, therefore, may take actions or incur expenses that are not deemed to beindependently approved or independently determined to be in our best interest.***

 

Under the policiesof the North American Securities Administrators Association, Inc., aninternational organization devoted to investor protection, because each of ourdirectors owns shares of our securities and may receive reimbursement forreasonable out-of-pocket expenses incurred by them in connection with ourorganization, the IPO and activities on our behalf such as identifying apotential target business and performing due diligence on a suitable businesscombination, state securities administrators could take the position that suchindividuals are not “independent.” If this were the case, they would take theposition that we would not have the benefit of independent directors examiningthe propriety of expenses incurred on our behalf and subject to reimbursement.Additionally, there is no limit on the amount of reasonable out-of-pocketexpenses that could be incurred and there will be no review of the reasonablenessof the expenses by anyone other than our board of directors, which wouldinclude persons who may seek reimbursement, or a court of competentjurisdiction if such reimbursement is challenged. To the extent such reasonableout-of-pocket expenses exceed the available proceeds not deposited in the TrustAccount and the interest on the Trust Account available for working capitalpurposes, such out-of-pocket expenses would not be reimbursed by us unless weconsummate a business combination. Although we believe that all actions takenby our directors on our behalf will be in our best interests, whether or notthey are deemed to be “independent,” we cannot assure you that this willactually be the case. If actions are taken, or expenses are incurred that areactually not in our best interests, it could adversely affect our business andoperations and the price of Common Stock held by our stockholders.

 

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**Risks Associated with the Industry**

 

Even if we acquiredomestic or international assets or operations, about which no assurances canbe given, our business will be subject to numerous risks, including thefollowing:

 

***The agriculture industry is highly competitive and anycompany operating in the agriculture industry may not withstand competition.***

 

Agriculturalproducts are global commodities and are subject to intense price and quantitycompetition from both domestic and foreign sources. Agricultural customers basetheir purchasing decisions principally on the delivered price and availabilityof agricultural products. We may have to compete with larger national andinternational companies that have greater financial and other resources thanus. Thus, we may not withstand price and quantity competition and may fail todeliver a new product to market due to our lack of financial, research anddevelopment, and marketing resources compared to larger companies.

 

In addition, wemay have to compete with a number of U.S. companies and companies in othercountries that are state-owned or government-subsidized entities. The U.S., theEuropean Commission and other jurisdictions have trade regulatory measures ineffect which are designed to address this type of unfair trade. Changes inthese measures could have an adverse impact on our sales and profitability.

 

***Many companies in the agriculture industry are dependent ona limited number of key executives who may not be adequately replaced in theevent of their departure.***

 

The number ofindividuals with expertise in the agriculture industry is limited. Manycompanies operating in the agriculture industry depend on their key executivesfor the success of their business strategy and their ability to operateprofitably. The loss of the services of our key executives could have amaterial adverse effect on us since their replacements may be hard to find dueto a limited pool of qualified candidates.

 

***Changes in government (domestic and foreign) farm programsand policies may adversely affect certain agricultural products.***

 

Many countrieshave government programs that provide financial support to agriculturalcustomers—farmers, in particular. For example, in the U.S., there aregovernment legislation and policies such as the 2007 Farm Bill that providefinancial support to certain agricultural sectors that produce certainagricultural products. Any changes in these government programs, which may notbe foreseen or predicted, can cause shifts in demand for and supply of ourproducts, which, in turn, might adversely affect our operating results.

 

***The agriculture industry is highly seasonal, and seasonalfluctuations significantly impact results of operations and cash flows ofbusinesses operating in the agriculture industry.***

 

The agricultureindustry is highly seasonal, which causes the quarterly results and availablecash flows of the companies in the industry to fluctuate during the year. Manyagricultural products such as seed, fertilizers and agricultural equipment arebased upon the planting, growing and harvesting cycles. For example, fertilizerinventories must be accumulated in the months prior to the spring and fallplanting seasons, requiring significant storage capacity, and farmers purchaseagricultural equipment in the spring and fall in conjunction with the majorplanting and harvesting seasons. Failure to accurately anticipate and preparefor the demands of agricultural customers, which often may be difficult to do,may reduce sales or increase the risk of product obsolescence.

 

***Weather conditions significantly impact the agricultureindustry.***

 

Weather conditionshave significant impact on the agriculture industry and, consequently, on theoperating results of companies servicing the agriculture industry. For example,weather patterns such as flood, drought or frost, some of which are highlyunpredictable, can cause crop failures that in turn affect the supply of feedand seed and the demand for fertilizer, marketing of grain products, as well asthe demand for crop protectants, seeds and other agronomic supplies. Further, weatherconditions that delay or intermittently disrupt field work during the plantingand growing seasons may cause agricultural customers to use less agriculturalproducts such as fertilizers and agricultural equipment and weather conditionsfollowing harvest may delay, reduce or eliminate opportunities for agriculturalcustomers to utilize certain agricultural products. An adverse effect ofcertain weather conditions on crop yields which lowers the income of growersand may impair their ability 

 

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to pay for agriculturalproduct, can also adversely affect the operating results of companies in theagriculture industry by reducing their revenues.

 

Weather conditionsmay also directly affect certain companies operating in the agricultureindustry. For instance, the operations of companies that engage in themanufacture of certain agricultural products such as nitrogen fertilizer may besubject to significant operational interruption if one or more their facilitieswere to experience a major accident caused by or were damaged by severe weatherconditions or other natural disaster. In addition to causing severe damage toor destruction of property and equipment of such companies, some of thosehazards may cause personal injury, loss of life and environmental damage, andmay result in the imposition of civil or criminal penalties on such companies.

 

***Price volatility of raw materials can increase costs anddecrease sales of agricultural products, thereby adversely affecting theresults of operations of companies operating in the agriculture industry.***

 

Many companiesproducing agricultural products purchase production inputs from third parties,and fluctuations in the price of raw materials for agricultural products causefluctuations in the operating results of the companies that produce them. Forexample, most companies that sell seed purchase their seed inventories fromproduction growers at market prices and retain in the seed in inventory untilit is sold. Companies that produce fertilizers and other crop protectants, inparticular, are heavily dependent upon third parties for their productioninputs such as nitrogen. The price of raw materials for many agriculturalproducts are affected by factors such as weather conditions, global imbalancesof supply and demand, and general economic conditions which are beyond thecontrol of the companies that produce such agricultural products. Suchcompanies may use hedging strategies to mitigate the risk of short-term changesin the price of their production inputs, but they may not be able to avoid therisk of medium- and long-term changes. Accordingly, increases in the price ofraw materials may negatively impact the cost of agricultural products sold orcause the companies that produce agricultural products to increase the saleprices of their products which could adversely affect their revenues withreduced sales.

 

***The agriculture industry is subject to extensiveenvironmental, safety and health laws and regulations, and compliance with, orfailure to comply with, existing or future laws and regulations could adverselyaffect companies operating in the agriculture industry.***

 

The agricultureindustry is subject to increasingly stringent environmental, safety and healthlaws and regulations. In the United States alone, agricultural operations aresubject to a comprehensive federal and state regulatory regime, including thefederal Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act,Emergency Planning and Community Right-to-Know Act, Toxic Control Act and theirstate analogs. In addition to possible civil and criminal penalties imposedupon companies operating in the agriculture industry for violating therequirements of applicable laws and regulations, companies that use hazardousand other regulated materials, in particular, may face increased capitalexpenses to modify their facilities, equipment and products to comply withthese laws and regulations. The laws and regulations applicable to theagriculture industry may also directly or indirectly influence factors affectagricultural business, such as the number of acres planted, the mix of cropsplanted, crop prices, the level of agricultural product inventories and theamounts of and locations where fertilizer may be applied. One cannot predictthe direction of future laws and regulations affecting the agriculture industrymay take, and this may introduce unpredictability and volatility in theoperating results of companies in the agriculture industry.

 

***Companies that specialize in the manufacture of ethanol andother energy-related products with certain agricultural products face risks inaddition to those other companies operating in the agriculture industry.***

 

Driven byenvironmental and health concerns, there has been increasing legislation,especially in the U.S., that either encourages or requires use of alternativefuel sources such as ethanol that are produced by processing corn and otherbiomass. For example, in the U.S. the federal Clean Air Act Amendments of 1990established two major oxygenated gasoline programs to reduce carbon dioxide andsmog in certain urban areas by requiring the use of oxygenated fuels such asethanol. Correspondingly, companies that specialize in the manufacture ofalternative fuel sources such as ethanol produced by processing certainagricultural products have been increasing.

 

If we engage inthe production of ethanol and other energy-related products produced withcertain agricultural products, we may face additional risks that may not beshared by other companies in the agriculture industry. For example, althoughethanol production has grown significantly and rapidly in recent years with acorresponding increase in the number of ethanol producers, there is noguarantee that the demand for ethanol will similarly continue to increase. Thedemand for ethanol is dependent upon numerous factors such as governmentalregulations, governmental incentives, whether the phase out or restrictions onthe use of traditional energy products continues and the development of othertechnologies or products that may compete with ethanol and ultimately makeethanol obsolete.

 

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*** ***

***If we engage in international operations, we will be subjectto additional risks associated with international business operations.***

 

If we engage ininternational operations, our business will be subject to special risks anduncertainties associated with international business, including difficultiesand costs associated with complying with a wide variety of complex laws,treaties and regulations; unexpected changes in regulatory environments;changes in local political or economic conditions; currency fluctuations; taxrates that may exceed those in the United States; earnings that may be subjectto withholding requirements; and the imposition of tariffs, exchange controlsor other restrictions. Acts of terror or war may impair our ability to operatein particular countries or regions, and may impede the flow of goods andservices between countries. Customers in weakened economies may be unable topurchase our products, or it could become more expensive for them to purchaseimported products in their local currency, and we may be unable to collectreceivables from such customers. Further, changes in exchange rates may affectour net income, the book value of our assets outside the United States, and ourstockholder’s equity.

 

**ITEM1B.  UNRESOLVED STAFF COMMENTS**

 

Not applicable.

 

**ITEM 2.  PROPERTIES**

 

                Wemaintain our principal executive offices at c/o The Shermen Group, 1251 Avenueof the Americas, Suite 900, New York, NY 10020.  The cost for this space is included in the$9,950 per-month fee Shermen Capital Partners, LLC, the managing member ofwhich is Francis P.Jenkins, Jr., our chairman and chief executive officer, charges us for general and administrative services pursuant to anagreement between us and Shermen Capital Partners, LLC. We consider our currentoffice space adequate for our current operations.

 

**ITEM 3.  LEGAL PROCEEDINGS**

 

None.

 

**ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS**

 

No matters weresubmitted to a vote of stockholders during the fourth quarter of 2007.

 

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**PART II**

 

**ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY;RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**

 

**Price Range of Common Stock**

 

The Units, Common Stock and Warrants have been traded onthe Over-the-Counter Bulletin Board under the symbols “SACQU,” “SACQ” and “SACQW,”respectively since May 30, 2007, June 18, 2007 and June 18,2007, respectively.  The following tablesets forth the high and low bid information for our securities from the commencementof trading through December 31, 2007 as reported by the Over-the-CounterBulletin Board. The Over-the-Counter Bulletin Board quotations reflectinter-dealer prices, are without retail markup, markdowns or commissions, andmay not represent actual transactions.

 
| ** **                                      | ** ** | **Common Stock** | ** ** | **Warrants** | ** ** | **Units** | ** ** |
|-------------------------------------------------|------------|-----------------------|------------|--------------|------------|-----------|------------|
| ** **                                      | ** ** | **High**              | ** ** | **Low**      | ** ** | **High**  | ** ** | **Low** | ** ** | **High** | ** ** | **Low** | ** ** |
| First Quarter*                                  |       |                  |       |         |       |      |       |   |   |   |   |   |   |
| Second Quarter* (April – May 29) |       |                  |       |         |       |      |       |   |   |   |   |   |   |
| Second Quarter (May 30-June 30)       |       | $                     | 5.62       |         | $          | 5.56      |       | $ | 0.39 |   | $ | 0.37 |   | $ | 6.34 |   | $ | 6.11 |   |
| Third Quarter                                   |       | $                     | 5.69       |         | $          | 5.50      |       | $ | 0.38 |   | $ | 0.25 |   | $ | 6.40 |   | $ | 6.04 |   |
| Fourth Quarter                                  |       | $                     | 5.63       |         | $          | 5.58      |       | $ | 0.40 |   | $ | 0.235 |   | $ | 6.38 |   | $ | 6.05 |   |

 

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*No figures are included as the Units commencedtrading on May 30, 2007, and Common Stock and Warrants commenced tradingon June 18, 2007.

 

The closing price per share of Common Stock on December 31,2007, the last trading day of the Company’s fiscal year, was $5.59.

 

**Holders**

 

On March 27, 2008,there were approximately 5 holders of record of outstanding Common Stock,approximately 1 holder of record of outstanding Units and approximately 5holders of record of outstanding Warrants. We believe theactual number of holders is substantially more than indicated.

 

**DividendPolicy**

 

We have not paid any dividends on Common Stock to date and do notintend to pay dividends prior to the completion of a business combination. Thepayment of dividends in the future will be contingent upon our revenues andearnings, if any, capital requirements and general financial conditionsubsequent to completion of a business combination. The payment of anydividends subsequent to a business combination will be within the discretion ofour board of directors. It is the present intention of our board of directorsto retain all earnings, if any, for use in our business operations and,accordingly, our board does not anticipate declaring any dividends in theforeseeable future.

 

**Recent Sales of UnregisteredSecurities**

 

(a) During the pastthree years, we sold the following shares of Common Stock without registrationunder the Securities Act of 1933, as amended, after giving effect to a 1.15 for1 forward stock split effected immediately prior to the consummation of theIPO:

 
| **Name**                   | ** ** | **Number of Shares** | ** ** |
|----------------------------|------------|--------------------------------|------------|
| Shermen WSC Holding LLC(1) |       | 5,663,750                      |       |
| John E. Toffolon, Jr. |       | 28,750                         |       |
| Joseph F. Prochaska        |       | 28,750                         |       |
| Donald D. Pottinger        |       | 28,750                         |       |

 

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(1) The members ofShermen WSC Holding LLC are our officers and certain of their family members.Shermen Capital 

 

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Partners, LLC is themanaging member of Shermen WSC Holding LLC. Mr. Jenkins, Jr., ourchairman and chief executive officer, is the managing member of Shermen CapitalPartners, LLC and may be deemed to beneficially own the shares owned by ShermenWSC Holding LLC.

 

On May 1, 2006, weissued an aggregate of 5,000,000 shares to the individuals and the entitylisted above.  All of such shares wereissued in connection with our organization pursuant to the exemption fromregistration contained in Section 4(2) of the Securities Act of 1933,as amended, as they were sold to sophisticated, wealthy individuals who wereeach “accredited investors,” as defined in Rule 501(a) of theSecurities Act of 1933, as amended. At the time of issuance of such shares all membersof Shermen WSC Holding LLC were sophisticated, wealthy individuals whowere each “accredited investors,” as defined in Rule 501(a) of theSecurities Act of 1933, as amended. The shares issued to the individuals andentities above were sold for an aggregate offering price of $25,000 at anpurchase price of $0.005 per share. No underwriting discounts or commissionswere paid, nor was there any general solicitation, with respect to such sales.

 

We consider Mr. Jenkins, Jr.to be our promoter as such term is defined within the rules promulgated bythe SEC under the Securities Act of 10933, as amended.

 

(b) Concurrentlywith the consummation of the IPO, on May 30, 2007, we consummated aprivate sale of the Founder Warrants at a purchase price of $0.70 per FounderWarrant, generating total proceeds of $3,650,000.20.  The Founder Warrantswere purchased by certain of our directors and officers through Shermen WSCHolding LLC whose managing member is Shermen Capital Partners, LLC, an entitycontrolled by Francis P. Jenkins, Jr., our chairman and chief executiveofficer.  The Founder Warrants are identical to the Warrants except that (i) ifwe call the Warrants for redemption, the Founder Warrants will be exercisableon a cashless basis; (ii) the Founder Warrants will not be transferable orsalable by Shermen WSC Holding LLC or such directors or officers or theirrespective affiliates until after we have completed our initial businesscombination, except Sherman WSC Holding LLC may distribute them to its members;and (iii) the holders of the Founder Warrants and the Common Stockunderlying such Founder Warrants are entitled to registration rights withrespect to such securities under an agreement signed on May 30,2007.  Immediately after the purchase of the Founder Warrants, Shermen WSCHolding LLC distributed them to its members.

 

**Use ofProceeds**

 

On May 30,2007, we completed the IPO of 23,000,000. The public offering price of eachUnit sold in the IPO was $6.00, and we generated gross proceeds of $138,000,000in the IPO (including proceeds from the exercise of the underwriters’over-allotment option). Of the gross proceeds: (i) we deposited$133,210,000 into the Trust Account, which included $5,520,000 of deferredunderwriting fees; (ii) the underwriters received $4,140,000 asunderwriting fees (excluding the deferred underwriting fees); and (iii) weretained $607,900 for offering expenses. In addition, we deposited into theTrust Account $3,650,000.20 that we received from the sale of 5,214,286 FounderWarrants on May 30, 2007.

 

No expenses of the IPOwere paid to any of our officers and directors or any of their respectiveaffiliates. On September 27, 2007, we repaid $75,000 of the $150,000unsecured promissory note, which is non-interest bearing, we issued to astockholder, Shermen Capital Partners, LLC, on April 20, 2006, and repaidthe final balance $75,000 on October 23, 2007.  All the funds held in the Trust Account havebeen invested in either Treasury Bills or Money Market Accounts.

 

**ITEM 6.  SELECTED FINANCIAL DATA**

 

The selected financial data presented belowsummarizes certain financial data which has been derived from and should beread in conjunction with our financial statements and notes thereto included inthe section beginning on page F-1. See also “Item 7. Management’s Discussion and Analysis of FinancialCondition and Results of Operations.”

 

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| ** **                                                                 | ** ** | **Year Ended  December 31, 2007** | ** ** | **Period from  April 18, 2006  (inception) to  December 31, 2006** | ** ** | **Period from  April 18, 2006  (inception) to  December 31, 2007** | ** ** |
|----------------------------------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|
|                                                                       |       |                                             |       |                                                                                             |       |                                                                                             |       |
| **Statement of Operations Data**                                           |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Revenues                                                                   |       | $                                                | —     |                                                                                             | $          | —                                                                                           |       | $ | — |   |
| Formation and operating costs                                              |       | 870,520                                          |       | 16,031                                                                                           |       | 886,551                                                                                          |       |
| Loss from operations                                                       |       | (870,520                                         | )          | (16,031                                                                                          | )          | (886,551                                                                                         | )          |
| Interest income                                                            |       | 2,988,057                                        |       | —                                                                                           |       | 2,988,057                                                                                        |       |
| Income (loss) before provision for income taxes                            |       | 2,117,537                                        |       | (16,031                                                                                          | )          | 2,101,506                                                                                        |       |
| Provision for income taxes                                                 |       | 951,311                                          |       | —                                                                                           |       | 951,311                                                                                          |       |
| Net income (loss)                                                          |       | 1,166,226                                        |       | (16,031                                                                                          | )          | 1,150,195                                                                                        |       |
|                                                                       |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Earnings (loss) per share                                                  |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Basic                                                                      |       | $                                                | 0.06       |                                                                                             | $          | (0.01                                                                                            | )          | $ | 0.07 |   |
| Diluted                                                                    |       | $                                                | 0.04       |                                                                                             | $          | (0.01                                                                                            | )          | $ | 0.05 |   |
|                                                                       |       |                                             |       |                                                                                             |       |                                                                                             |       |
| **Balance Sheet Data (at period end)**                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Cash and cash equivalents                                                  |       | $                                                | 160,949    |                                                                                             | $          | 21,354                                                                                           |       | $ | 160,949 |   |
| Cash held in trust fund                                                    |       | 138,589,757                                      |       | —                                                                                           |       | 138,589,757                                                                                      |       |
| Deferred taxes                                                             |       | 401,120                                          |       | —                                                                                           |       | 401,120                                                                                          |       |
| Prepaid expenses                                                           |       | 30,286                                           |       | —                                                                                           |       | 30,286                                                                                           |       |
| Deferred offering costs                                                    |       | —                                           |       | 457,410                                                                                          |       | —                                                                                           |       |
| Total Assets                                                               |       | 139,182,112                                      |       | 478,764                                                                                          |       | 139,182,112                                                                                      |       |
|                                                                       |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Accounts payable and accrued expenses                                      |       | 86,817                                           |       | 1,795                                                                                            |       | 86,817                                                                                           |       |
| Accrued offering costs                                                     |       | —                                           |       | 318,000                                                                                          |       | —                                                                                           |       |
| Income tax payable                                                         |       | 945,000                                          |       | —                                                                                           |       | 945,000                                                                                          |       |
| Notes payable, founding stockholders                                       |       | —                                           |       | 150,000                                                                                          |       | —                                                                                           |       |
| Deferred underwriter’s fee                                            |       | 3,312,000                                        |       | —                                                                                           |       | 3,312,000                                                                                        |       |
| Total Liabilities                                                          |       | 4,343,817                                        |       | —                                                                                           |       | 4,343,817                                                                                        |       |
| Common stock, subject to possible redemption                               |       | 54,743,994                                       |       | —                                                                                           |       | 54,743,994                                                                                       |       |
| Deferred interest related to common stock, subject to possible  redemption |       | 352,985                                          |       | —                                                                                           |       | 352,985                                                                                          |       |
| Total Stockholders’ equity                                            |       | 79,741,316                                       |       | 8,969                                                                                            |       | 79,741,316                                                                                       |       |
| Total Liabilities and Stockholders’ Equity                            |       | 139,182,112                                      |       | 478,764                                                                                          |       | 139,182,112                                                                                      |       |

 

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**ITEM7.  MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*Youshould read the following discussion and analysis of our financial conditionand results of operations together with “Selected Consolidated Financial Data”and our consolidated financial statements and notes thereto that appearelsewhere in this Annual Report on Form 10-K. This discussion and analysiscontains forward-looking statements that involve risks, uncertainties, andassumptions. Actual results may differ materially from those anticipated inthese forward-looking statements as a result of various factors, including, butnot limited to, those presented under “Risks related to our business” includedin Item 1A and elsewhere in this Annual Report on Form 10-K.*

 

**Overview**

 

We were formed on April 18, 2006 for the purposeof acquiring, through a merger, capital stock exchange, asset acquisition,stock purchase or other similar business combination, an operating business inthe agriculture industry.

 

On May 30, 2007, we completed the IPO.  Each Unit sold in the IPO consists of oneshare of Common Stock, and two Warrants. The public offering price of each Unit was $6.00, and we generated grossproceeds of $138,000,000 in the IPO (including proceeds from the exercise ofthe underwriters’ over-allotment option). Of the gross proceeds: (i) we deposited $133,210,000 into the TrustAccount, which included $5,520,000 of deferred underwriting fees; (ii) theunderwriters received $4,140,000 as underwriting fees (excluding the deferredunderwriting fees); and (iii) we retained $607,900 for offeringexpenses.  In addition, we deposited intothe Trust Account $3,650,000.20 that we received from the issuance and sale of5,214,286 Founder Warrants to Shermen WSC Holding LLC, whose managing member isShermen Capital Partners, LLC, an entity controlled by Francis P. Jenkins, Jr.,our chairman and chief executive officer, on May 30, 2007.

 

We intend to utilize cash derived from the proceeds ofthe IPO, our capital stock, debt or a combination of such cash, capital stockand debt, in effecting a business combination. The issuance of additional shares of our capital stock:

 

·                                          maysignificantly reduce the equity interest of our stockholders;

 

·                                          maysubordinate the rights of holders of Common Stock if we issue preferred stockwith rights senior to those afforded to Common Stock;

 

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

 

·                                          mayadversely affect prevailing market prices for Common Stock.

 

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

 

·                                          defaultand foreclosure on our assets if our operating revenues after a businesscombination are insufficient to pay our debt obligations;

 

·                                          accelerationof our obligations to repay the indebtedness even if we have made all principaland interest payments when due if the debt security contains covenants thatrequired the maintenance of certain financial ratios or reserves and we breachany such covenant without a waiver or renegotiation of that covenant;

 

·                                          ourimmediate payment of all principal and accrued interest, if any, if the debtsecurity is payable on demand; and

 

·                                          ourinability to obtain additional financing, if necessary, if the debt securitycontains covenants restricting our ability to obtain additional financing whilesuch security is outstanding.

 

Weintend to use substantially all of the net proceeds of the IPO and the issuanceand sale of the Founder Warrants, including the funds held in the Trust Account(excluding deferred underwriting discounts and commissions), to acquire atarget business.  To the extent that ourcapital stock is used in whole or in part as consideration to effect a business

 

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combination, the remaining proceeds held in the TrustAccount as well as any other net proceeds not expended will be used as workingcapital to finance the operations of the target business.  Such working capital funds could be used in avariety of ways including continuing or expanding the target businessoperations, for strategic acquisitions and for marketing, research anddevelopment of existing or new products. Such funds could also be used to repay any operating expenses or finders’fees which we had incurred prior to the completion of our business combinationif the funds available to us outside of the trust fund were insufficient tocover such expenses.

 

**Liquidity and CapitalResources**

** **

ThroughDecember, 2007, our efforts have been limited to organizational activities,activities relating to the IPO, activities relating to identifying andevaluating prospective acquisition candidates, and activities relating togeneral corporate matters; we have neither engaged in any operations norgenerated any revenues, other than interest income earned on the proceeds ofour private placement and initial public offering.

 

Netincome (loss) totaled $(16,031), $1,166,226 and $1,150,195 for the period frominception to December 31, 2006, year ended December 31, 2007, and forthe period from inception to December 31, 2007, respectively. The increasein net income (loss) in the year ended December 31, 2007 primarily relatesto interest earned on the funds held in the Trust Account.

 

Ourformation and operating expenses totaled $16,031, $870,520 and $886,551 for theperiod from inception to December 31, 2006, year ended December 31,2007, and for the period from inception to December 31, 2007,respectively. The increase in operating expenses in the year ended December 31,2007 is attributable to our beginning to incur significant expenses after theclosing of the IPO.

 

We hadnet interest income earned on marketable securities and held in the TrustAccount of $-0-, $2,988,057 and $2,988,057 for the period from inception (April 17,2006) to December 31, 2006, year ended December 31, 2007, and for theperiod from inception to December 31, 2007, respectively.  Interest income, after up to $1,500,000 whichmay be released to us on a monthly basis, excludes earnings on funds held inthe Trust Account associated with Common Stock subject to possible conversion,and, except for amounts equal to any taxes payable by us relating to suchinterest earned, will not be released to us from the Trust Account until theearlier of the completion of a business combination or the expiration of thetime period during which we may complete a business combination.

 

Wehave provided for only an effective tax rate of slightly over 34% on a year andinception-to-date basis primarily because substantially all of the fundsdeposited in the Trust Account are exempt from federal, state and localtaxes.  As of December 31, 2007,there is a liability of $945,000 of which estimated payments have been paidtotaling $407,000.

 

Weissued a $150,000 unsecured promissory note to one of our stockholders, ShermenCapital Partners, LLC, an entity controlled by Francis P. Jenkins, Jr.,our chairman and chief executive officer, on April 30, 2006, and we repaid$75,000 of the principal amount of such unsecured promissory note on September 27,2007 and repaid the final balance $75,000 on October 23, 2007 with theportion of our working capital for fiscal year 2007 that was greater than ourexpenses for such period.

 

As of December 31,2007, we had approximately $160,949 of unrestricted cash available to us forour activities in connection with identifying and conducting due diligence of asuitable business combination, and for general corporate matters.  The following table shows the total fundsheld in the Trust Account through December 31, 2007:

 
| Net proceeds from the IPO and private placement of the Founder  Warrants placed in trust |   | $         | 136,860,000     |   |
|------------------------------------------------------------------------------------------|--------|-----------|-----------------|--------|
| Total interest received to date                                                          |   | 2,988,057 |            |
| Less: total interest disbursed to us for working capital through December 31,  2007 |   | 1,258,161 |            |
| Less: total taxes paid through December 31, 2007                                    |   | $         | 407,000         |   |
| Total funds held in trust through December 31, 2007                                 |   | $         | **138,589,757** |   |

 

Webelieve that we will have sufficient funds to allow us to operate through May 24,2009, assuming that a business combination is not consummated during thattime.  Approximately $1,500,000 ofworking capital over this time period will be funded from the interest earnedfrom the funds held in the Trust Account. Over this time period, we anticipate incurring expenses for thefollowing purposes:

 

·                                          paymentof premiums associated with our director’s and officer’s insurance;

 

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·                                          paymentof estimated taxes incurred as a result of interest income earned on fundscurrently held in the Trust Account;

 

·                                          duediligence and investigation of prospective target businesses;

 

·                                          legaland accounting fees relating to our SEC reporting obligations and generalcorporate matters;

 

·                                          prepaymentof the remaining $75,000 loan from Shermen Capital Partners, LLC, whosemanaging member is Francis P. Jenkins, Jr., our chairman and chiefexecutive officer;

 

·                                          structuringand negotiating a business combination, including the making of a down payment orthe payment of exclusivity or similar fees and expenses; and

 

·                                          othermiscellaneous expenses including the $9,950 per month to Shermen CapitalPartners, LLC.

 

**Off-Balance Sheet Arrangements, Commitments, Guarantees and ContractualObligations**

 

We sold therepresentatives of the underwriters for the IPO, for $100, an option topurchase up to a total of 700,000 Units in the aggregate (350,000 Units foreach representative) at $7.50 per unit, commencing on the later of theconsummation of the business combination and May 24, 2008 and expiring on May 24,2011. The Warrants underlying the such Units have terms that are identical tothose issued in the IPO, except that each such Warrant entitles the holder topurchase one share of Common Stock at a price of $6.25.

 

Inconnection with the IPO, the underwriters agreed to defer payment of theremaining 3% of the gross proceeds (approximately $5,520,000) until completionof a business combination.  Until abusiness combination is complete, these funds will remain in the TrustAccount.  If we do not complete abusiness combination by May 24, 2009, then the 3% deferred fee will becomepart of the funds returned to our Founding Stockholders.

 

**Critical Accounting Policies and Accounting Estimates**

 

                The preparation of financial statements and relateddisclosures in conformity with accounting principles generally accepted in theUnited States of America requires management to make estimates and assumptionsthat affect the reported amounts of assets and liabilities, disclosure ofcontingent assets and liabilities at the date of the financial statements, andrevenues and expenses during the periods reported. Actual results couldmaterially differ from those estimates. We have determined that we currentlyare not subject to any critical accounting policies.

 

**Impact of Recently Issued Accounting Pronouncements**

 

**     **Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and the reported amounts ofexpenses during the reporting period. Actual results could differ from thoseestimates,

 

In December 2007,the Financial Accounting Standards Board, or FASB, issued Statement ofFinancial Accounting Standards No. 141 (revised 2007), “BusinessCombinations” or FAS 141R. FAS 141R replaces Statement of Financial AccountingStandards No. 141, “Business Combinations” or FAS 141, although it retainsthe fundamental requirement in FAS 141 that the acquisition method ofaccounting be used for all business combinations. FAS 141R establishesprinciples and requirements for how the acquirer in a business combination (a) recognizesand measures the assets acquired, liabilities assumed and any non-controllinginterest in the acquiree, (b) recognizes and measures the goodwillacquired in a business combination or a gain from a bargain purchase and (e) determineswhat information to disclose regarding the business combination. FAS 141Rapplies prospectively to business combinations for which the acquisition dateis on or after the beginning of our 2009 fiscal year. We are currentlyassessing the potential effect of FAS 141R on our financial statements.

 

In June 2006, theFASB issued Interpretation No. 48, “Accounting for Uncertainty in IncomeTaxes — An Interpretation of SFAS No. 109” or FIN 48. FIN 48 clarifies theaccounting for uncertainty in tax positions recognized in a company’s financialstatements in accordance with SFAS No. 109, “Accounting for Income Taxes.”FIN 48 prescribes a recognition threshold and measurement attribute for thefinancial statement recognition and measurement of the tax position taken orexpected to be taken in a tax return. The Company adopted FIN 48. The adoptionof FIN 48 did not have any impact on the accompanying financial statementssince we have not identified any uncertain tax positions as defined by FIN 48.

 

Management does notbelieve that any other recently issued, but not yet effective, accountingstandards if currently 

 

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adopted would have amaterial effect on the accompanying financial statements.

 

**ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISK.**

 

Market risk is thesensitivity of income to changes in interest rates, foreign exchanges,commodity prices, equity prices, and other market-driven rates or prices. Weare not presently engaged in and, if we do not consummate a suitable businesscombination prior to the prescribed liquidation date of the trust fund, we maynot engage in, any substantive commercial business. Accordingly, we are notand, until such time as we consummate a business combination, we will not be,exposed to risks associated with foreign exchange rates, commodity prices,equity prices or other market-driven rates or prices. The net proceeds of ourinitial public offering held in the trust fund may be and have been invested bythe trustee only in United States “government securities” within the meaning ofSection 2(a)(16) of the Investment Company Act of 1940 having a maturityof 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7promulgated under the Investment Company Act of 1940. Given our limited risk inour exposure to government securities and money market funds, we do not viewthe interest rate risk to be significant.

 

**ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

 

Reference is made to our financial statements beginning on page F-1of this Annual Report on Form 10-K.

 

**ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTSON ACCOUNTING AND FINANCIAL DISCLOSURE**

 

None.

 

**ITEM 9A(T).**

 

**DisclosureControls and Procedures**

 

We maintain disclosure controls and procedures thatare designed to ensure that information required to be disclosed in its reportsfiled pursuant to the Securities Exchange Act of 1934, as amended, is recorded,processed, summarized, and reported within the time periods specified in theSEC’s rules and forms, and that such information is accumulated andcommunicated to our management, including our Chief Executive Officer and ourChief Financial Officer (who is also the principal financial officer) asappropriate, to allow timely decisions regarding required disclosure. Indesigning and evaluating the disclosure controls and procedures, managementrecognized that any controls and procedures, no matter how well designed andoperated, can provide only reasonable assurance of achieving the desired controlobjectives, and management necessarily was required to apply its judgment inevaluating the cost-benefit relationship of possible controls and procedures.

 

We carried out an evaluation, under the supervisionand with the participation of its management, including our Chief ExecutiveOfficer and our Chief Financial Officer (who is also the principal financialofficer), of the effectiveness of the design and operation of the Company’sdisclosure control and procedures. Based on the foregoing, the Company’s ChiefExecutive Officer and Chief Financial Officer (who is also the principalfinancial officer) concluded that the Company’s disclosure controls andprocedures (as defined in Rules 13a-15(e) and 15d-15(e) underthe Securities Exchange Act of 1934, as amended) were effective as of the endof the year ended December 31, 2007.

 

There have been nochanges in our internal control over financial reporting during the year ended December 31,2007 that have materially affected, or are reasonably likely to materiallyaffect our internal control over financial reporting.

 

**Management’sReport on Internal Control over Financial Reporting**

 

Ourmanagement is responsible for establishing and maintaining adequate internalcontrol over financial reporting. As defined in Rule 13a-15 under theSecurities Exchange Act of 1934, as amended, internal control over financialreporting is a process designed by, or under the supervision of, our principalexecutive officer and principal financial or accounting officer and effected byour board of directors, management and other personnel, to provide reasonableassurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generallyaccepted accounting principles.

 

Underthe supervision and with the participation of our management, including ourChief Executive Officer and our Chief Financial Officer (who also serves as ourprincipal financial officer), we carried our an evaluation of the effectiveness

 

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of our internal controlover financial reporting as of December 31, 2007 based on the criteria in “InternalControl–Integrated Framework” issued by the Committee of SponsoringOrganizations of the Treadway Commission (“COSO”).  Based upon this evaluation, our managementconcluded that our internal control over financial reporting was effective asof December 31, 2007.

 

Thisannual report does not include an attestation report of the Company’sregistered public accounting firm regarding internal control over financialreporting.  Management’s report was notsubject to attestation by the Company’s registered public accounting firmpursuant to temporary rules of the SEC that permit the Company to provideonly management’s report in this annual report.

 

**Changes in Internal Control over Financial Reporting**

 

No change in our internal control over financialreporting occurred during the quarter ended December 31, 2007 that hasmaterially affected, or is likely to materially affect, our internal controlover financial reporting.

 

**ITEM 9B. OTHER INFORMATION**

 

None.

 

**PART III**

 

**ITEM10.  DIRECTORS, EXECUTIVE OFFICERS ANDCORPORATE GOVERNANCE**

 

The following table sets forth the names, ages andpositions of our current directors and executive officers.

** **
| **Name**                   | ** ** | **Age** | ** ** | **Position**                                    |
|----------------------------|------------|---------|------------|-------------------------------------------------|
| Francis P. Jenkins         |       | 66      |       | Chairman, Chief Executive Officer and Director  |
| G. Kenneth Moshenek        |       | 56      |       | President, Chief Operating Officer and Director |
| John E. Toffolon, Jr. |       | 57      |       | Chief Financial Officer and Director            |
| Gregory St. Clair          |       | 50      |       | Vice President                                  |
| Michiel C. McCarty         |       | 56      |       | Director                                        |
| Donald D. Pottinger        |       | 65      |       | Director                                        |
| Joseph F. Prochaska        |       | 62      |       | Director                                        |

 

*FRANCISP. JENKINS, JR.*hasserved as our Chairman, Chief Executive Officer and director since ourinception. Mr. Jenkins served as the Chairman of the Board and ChiefExecutive Officer of Royster-Clark, Inc., a retailer and wholesaledistributor of mixed fertilizer, fertilizer materials, seed, crop protectionproducts and agronomic services to farmers, from January 1994 to 2006.From 1988 until 1994, Mr. Jenkins served in various capacities on theboard of directors for Royster-Clark, Inc. From 1988 to 1992, he served asChairman of the Board of Royster-Clark, Inc. From 1979 to 1988, Mr. Jenkinswas employed by The First Boston Corporation where he was one of the fourmembers of the Executive Committee, co-managed First Boston’s Equity CapitalInvestments and was the Principal Financial Officer. Prior to that position, hehad responsibility for all security sales, trading and research, as well asholding positions as a Managing Director and a member of the ManagementCommittee. Mr. Jenkins currently serves on the Board of Trustees of BabsonCollege, as the Chairman of its Alumni and Development Committee and as a memberof the Executive Committee of the Board.

 

*G.KENNETH MOSHENEK*hasserved as our President, Chief Operating Officer and director since ourinception. Mr. Moshenek served as the President and Chief OperatingOfficer of Royster-Clark, Inc., a retailer and wholesale distributor ofmixed fertilizer, fertilizer materials, seed, crop protection products andagronomic services to farmers, from December 1997 to 2006. Mr. Moshenekhas served as Chief Operating Officer since 1995 and was a director from August 1997until April 1999 of Royster-Clark, Inc. From August 1997 until April 1999he served as Chief Investment Officer of Royster-Clark, Inc. Prior to thathe held several positions during his tenure with Royster-Clark, Inc.including Senior Vice President of Sales and Marketing, from September 1994until July 1995, Vice President and Divisional Sales Manager from 1992until September 1994 and a Division Manager from 1990 to 1992. Mr. Moshenekjoined W.S. Clark & Sons, Inc. in 1981. Mr. Moshenek hasbeen involved in the fertilizer industry since 1976. Mr. Moshenek formerlyserved on the Board of Directors of The Fertilizer Institute and was a memberof the Board’s Executive Committee and served as chairman of the distributorscouncil. He also formerly served on the Board of Directors of the AgriculturalRetailers Association the Foundation of Agronomic Research and the FertilizerRoundtable.

 

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*JOHN E.TOFFOLON, JR.*hasserved as our director since our inception and as our Chief Financial Officersince August 3, 2006. Mr. Toffolon has been an active independentinvestor and consultant since his resignation from Nomura Holdings a holdingcompany in 2001. He served as Chief Administrative Officer and had senior managementresponsibility for all of our non-revenue producing areas. He started hiscareer in 1973 as a member in the Management Training Program of the FederalReserve Bank of New York, as the Bank Supervisor function rotating throughvarious analyst positions. In 1978, Mr. Toffolon joined the investmentbanking firm of Blyth Eastman Dillon as a Vice President in its Capital Marketssubsidiary, Blyth Capital Markets Inc. Shortly after the company’sacquisition by Paine-Webber. In 1979, Mr. Toffolon accepted an offer tojoin The First Boston Corporation to manage its Fixed-Income Credit Department.Mr. Toffolon served as Managing Director of The First Boston Corporationsince 1986 and subsequently served as its Chief Financial Officer until 1990.In November 1992, Mr. Toffolon joined Nomura HoldingAmerica Inc. (holding company), and Nomura Securities International(broker-dealer) as Executive Managing Director and Chief Financial Officer. Hewas also a member of the Board of Directors of both companies. Mr. Toffolonhas served as the Lead Independent Director of The Cowen Group Inc. whichtogether with its subsidiaries operates as investment bank since September 14,2006, and in that capacity serves as Chairman of the Audit Committee of theBoard and a member of its Compensation Committee.

 

*GREGORYST. CLAIR*has served as our Vice President since February 2007. Mr. St. Clairserved as Managing Director of Royster-Clark, Inc., a retailer andwholesale distributor of mixed fertilizer, fertilizer materials, seed, cropprotection products and agronomic services to farmers, from April 1999 to April 2006.Prior to joining Royster-Clark, Inc., Mr. St. Clair served asDirector of Research/Operations Manager Vigoro Seed at IMCAgriBusiness Inc. from May 1988 to April 1999. From April 1984to April 1988, Mr. St. Clair served as Regional Agronomist atDekalb-Pfizer Genetics, Inc. (now known as Dekalb Genetics Corporation),and as District Sales Manager at Robinson Hybrids from March 1980 to April 1984.Mr. St. Clair formerly served on the Board of Directors IndustryRepresentative of the Ohio Wheat Growers Association, the Board of Directors ofthe Independent Corn Breeders Association and the Board of Directors of theIndependent Professional Seedsman Association. Mr. St. Clair was alsoa member of the Monsanto/Corn States Advisory Board and the Southern AdvisoryBoard of the Ohio Seed Improvement Association. Mr. St. Clair holds aB.S. degree in agronomy from Ohio State University.

 

*MICHIELC. McCARTY* hasserved as our director since September 13, 2006. Since December 2003,Mr. McCarty has been a Managing Director and the Head of InvestmentBanking division of CRT Capital Group LLC. Prior to joining CRT Capital GroupLLC in December 2003, Mr. McCarty served as a Managing Director atGleacher Partners LLC from January 1996 to December 2003. Prior tojoining Gleacher Partners LLC, Mr. McCarty served as Head of U.S. andLatin America Investment Banking and Global Head of the Telecom and Technologypractices at SG Warburg Limited from August 1991 to December 1995.Prior to joining SG Warburg Limited, Mr. McCarty was a partner at DillonRead & Co. Inc. from June 1979 to August 1991. AtDillon Read & Co. Inc., Mr. McCarty also headed the Telecomand Technology practice. From June 1975 to June 1979, Mr. McCartyworked in the mergers and acquisitions area of Citicorp N.A. Mr. McCartysits on the Investment Committee of the Board of Trust of VanderbiltUniversity. Mr. McCarty holds an M.B.A. degree from the Wharton GraduateSchool of Business, University of Pennsylvania and a B.A. degree in physics,with honors, from Vanderbilt University.

 

*DONALDD. POTTINGER*hasserved as our director since our inception. Mr. Pottinger has been in theagribusiness sector for more than 30 years. Since 2001 he has been VicePresident of Major Accounts Global Partner Relations with the AGCO Corporation,a designer, manufacturer, marketer and distributor of agricultural equipment, inDuluth, Georgia. From 1996 to 2001, he was President of Ag-Chem Equipment inMinnetonka MN. He was also the President of Hickson Kerley Company from 1994 to1996 and President of the Minerals and Chemical Group for JR Simplot from 1991to 1994. Mr. Pottinger has sat on the board of numerous organizations andis still a current member of the board for the Fluid Fertilizer Foundation,Ag-Retailers Association, and the Canadian Association of Ag-Retailers.

 

*JOSEPHF. PROCHASKA*hasserved as our director since our inception. Mr. Prochaska has been activeas a manager, advisor and writer in U.S. and international agribusiness formore than 30 years. His business, Prochaska & Co., Inc.,which was founded in 2001, provides advice on managing change through strategicplanning and innovation. Clients include manufacturers, distributors, tradeassociations and buying groups across all agricultural and specialty segmentsof the U.S. plant life industry. The company, through its Stratogy® group,publishes annual strategic market assessments of the leading sectors of thisindustry that are purchased by the top tier of companies. Mr. Prochaska’sprevious experience includes president of AgriSciences, Inc. from 1997 to2001, president of Willmar Manufacturing, a Cargill company, from 1993 to 1997and Director of New Products at Ciba Crop Protection, now Syngenta, from 1983to 1993. He writes the monthly Business Management series for *Ag Professional*magazine. Hegraduated with an M.A. in management from the Peter F. Drucker school ofmanagement in Claremont, California and subsequently met with Peter Drucker foreach of the next 25 years. He received a B.Sc. from Michigan StateUniversity and an MBA from Capital University in Columbus, Ohio. Joe remainsactively involved with the Center for Creative Leadership in Greensboro, NCwhere he has been an invited member of the Center’s innovation forum since1989.

 

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**Our Board of Directors**

 

Ourboard of directors has six directors and is divided into three classes withonly one class of directors being elected in each year and each class serving athree-year term. The term of office of the first class of directors, consistingof John E. Toffolon, Jr. and Michiel C. McCarty will expire at ourfirst annual meeting of stockholders. The term of office of the second class ofdirectors, consisting of Joseph F. Prochaska and Donald D. Pottinger,will expire at the second annual meeting. The term of office of the third classof directors, consisting of Francis P. Jenkins, Jr. andG. Kenneth Moshenek, will expire at the third annual meeting. Ourdirectors are expected to attend all board of directors and stockholders’meetings and meetings for any committee to which they have been appointed.

 

**Audit Committee**

 

Ourboard of directors has designated an audit committee consisting ofJoseph F. Prochaska and Donald D. Pottinger. The current members ofthe audit committee are independent as that term is used in Section 10A(m)(3) ofthe Securities Exchange Act of 1934, as amended. Our board of directorscommittee has not yet designated any individual as the audit committee’sfinancial expert.

 

Theoversight functions of the Audit Committee include, among other things:

 

·                  appointing our independent auditor;

 

·                  reviewing the external audit plan and theresults of the auditing engagement;

 

·                  reviewing the internal audit plan and theresults of the internal audits;

 

·                  ensuring that management has maintained thereliability and integrity of our accounting policies and our financialreporting and disclosure practices;

 

·                  reviewing the independence and performance ofour internal audit function and independent registered public accounting firm;and

 

·                  reviewing the adequacy of our system ofinternal control and compliance with all applicable laws, regulations andcorporate policies.

 

**Compensation Committee**

 

Sincewe are a blank check company and our directors and officers will not receiveany compensation prior to the consummation of our initial business combinationother than reimbursement of reasonable out-of-pocket expenses incurred by themin connection with our organization, the IPO and certain activities on ourbehalf, such as identifying and investigating possible targets for our initialbusiness combination, we do not feel it is necessary to establish acompensation committee prior to a business combination.

 

**Director Independence**

 

Ourboard of directors evaluates the independence of our directors in light of therequirements of “independent director” within the meaning of Marketplace Rule 4200(a)(15)of the NASD. Marketplace Rule 4200(a)(15) provides that an independentdirector is a person other than an officer or employee of the company or itssubsidiaries or any other individual having a relationship that, in the opinionof the company’s board of directors, would interfere with the exercise ofindependent judgment in carrying out the responsibilities of a director. Ourboard of directors has determined that Joseph F. Prochaska and Donald D.Pottinger meet the requirements of “independent director” within the meaning ofMarketplace Rule 4200(a)(15). Our independent directors will meet inexecutive session as often as necessary to fulfill their duties.

 

**Section 16(a) Beneficial Ownership Reporting Compliance**

 

Section 16(a) of the Exchange Act requires our directors andexecutive officers, and persons who own more than 10% of a registered class ofour equity securities, to file with the SEC initial reports of ownership andreports of changes in ownership of Common Stock and other equitysecurities.  Such persons are alsorequired to provide us with copies of all such reports filed with the SEC.  Based solely upon the information supplied tous by these persons, we are required to report any known failure to file thesereports within the specified period.  Toour knowledge, based solely upon a review of the Section 16(a) reportsfurnished to us and the written representations of these reporting persons,these persons complied with all filing

 

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requirements in a timely fashion for fiscal year 2007.

 

**Code of Ethics**

 

We currently do not have a formalized code ofethics.  Upon consummation of a businesscombination, we intend to adopt a code of ethics that would apply to ourprincipal executive officer, principal financial officer, principal accountingofficer or controller or persons performing similar functions.

 

**ITEM 11.  EXECUTIVE COMPENSATION**

 

No executive officer has received any cash compensation for servicesrendered. No compensation of any kind, including finder’s and consulting fees,is paid to any of our directors and officers, or any of their respectiveaffiliates, for services rendered prior to or in connection with a businesscombination. However, our directors and officers receive reimbursement for anyreasonable out-of-pocket expenses incurred by them in connection withactivities on our behalf such as identifying a potential target business andperforming due diligence on a suitable business combination. There is no limiton the amount of these reasonable out-of-pocket expenses and there is no reviewof the reasonableness of the expenses by anyone other than our board ofdirectors, which includes persons who may seek reimbursement, or a court ofcompetent jurisdiction if such reimbursement is challenged. If none of ourdirectors are deemed “independent,” we will not have the benefit of independentdirectors examining the propriety of expenses incurred on our behalf andsubject to reimbursement. We have not reserved any specific amount for suchpayments, which may have the effect of reducing the available proceeds notdeposited in the Trust Account for payment of our ongoing expenses andreimbursement of out-of-pocket expenses incurred on our behalf. In addition,since the role of present management after a business combination is uncertain,we have no ability to determine what remuneration, if any, will be paid tothose persons after a business combination.

 

Wehave agreed to pay a monthly fee of $9,950 for general and administrativeservices including office space, utilities and secretarial support. We believe,based on rents and fees for similar services in the New York, New Yorkmetropolitan area, that the fee charged by Shermen Capital Partners, LLCis at least as favorable as we could have obtained from an unaffiliated thirdparty. Francis P. Jenkins, Jr., our chairman and chief executiveofficer, is the managing member of Shermen Capital Partners, LLC.

 

**ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIALOWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

 

The following table sets forth the beneficial ownership of Common Stockas of March 28, 2008 by each of our directors and named executiveofficers, by all our directors and executive officers as a group, and of eachbeneficial owner, who is not our director or officer, of more than 5% of CommonStock as of March 28, 2008.

 

The amounts and percentages of Common Stock beneficially owned arereported on the basis of regulations of the SEC governing the determination ofbeneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a beneficialowner of a security if that person has or shares voting power, which includesthe power to vote or to direct the voting of such security, or investmentpower, which includes the power to dispose of or to direct the disposition ofsuch security.  Unless otherwiseindicated below, each beneficial owner named in the table below has sole votingand sole investment power with respect to all shares beneficially owned.  The following table is based on 28,750,000shares of Common Stock outstanding as of March 28, 2008:

 

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| ** **                                                   | ** ** | **Amount and** | ** ** |                   | ** ** |
|--------------------------------------------------------------|------------|---------------------|------------|------------------------|------------|
| ** **                                                   | ** ** | **Nature of**  | ** ** | **Percentage of** | ** ** |
| ** **                                                   | ** ** | **Beneficial**      | ** ** | **Outstanding**        | ** ** |
| **Name and Address(1)**                            | ** ** | **Ownership(2)**    | ** ** | **Common Stock**  | ** ** |
| Francis P. Jenkins, Jr.(3)                                   |       | 5,663,750           |       | 19.7                   | %          |
| G. Kenneth Moshenek(4)                                       |       | 1,437,500           |       | 5.0                    | %          |
| John E. Toffolon, Jr. (5)                                    |       | 316,250             |       | 1.1                    | %          |
| Gregory St. Clair(6)                                         |       | 115,000             |       | 0.4                    | %          |
| %Joseph F. Prochaska                                         |       | 28,750              |       | 0.1                    | %          |
| Donald D. Pottinger                                          |       | 28,750              |       | 0.0                    | %          |
| Michiel C. McCarty                                           |       | 0                   |       | 0.0                    | %          |
| HBK Investments L.P.(7)                                      |       | 2,485,000           |       | 8.6                    | %          |
| Jonathan M. Glaser, et al.(8)                                |       | 2,217,800           |       | 7.7                    | %          |
| MFC Global Investment Management (U.S.),  LLC(9)             |       | 2,159,234           |       | 7.5                    | %          |
| QVT Financial LP(10)                                         |       | 1,709,029           |       | 5.94                   | %          |
| Andrew M. Weiss(11)                                          |       | 1,672,500           |       | 5.8                    | %          |
| Daniel S. Loeb(12)                                           |       | 1,620,000           |       | 5.6                    | %          |
| Polar Securities Inc.(13)                                    |       | 1.620,000           |       | 5.6                    | %          |
| Fir Tree, Inc. (14)                                          |       | 1,516,500           |       | 5.3                    | %          |
| All directors and executive officers as a  group (7 persons) |       | 5,750,000           |       | 20.0                   | %          |

 

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(1)Unless otherwise noted, the business address of each of the following is c/oThe Shermen Group, 1251 Avenue of the Americas, Suite 900, New York, NY 10020.

 

(2)Assumes only the sale of 23,000,000 Units in the IPO, but not the exercise of46,000,000 Warrants comprising such Units and 5,214,286 Founder Warrants.

 

(3)Includes 5,663,750 shares held by Shermen WSC Holding LLC, over which Mr.Jenkins, Jr. has sole voting and dispositive power.

 

(4)These shares represent the portion of the shares owned by Shermen WSC HoldingLLC that are allocated to Mr. Moshenek’s capital account. Mr. Moshenek is amember of Shermen WSC Holding LLC, but does not have the right to vote ordispose of such shares. Accordingly, Mr. Moshenek disclaims beneficialownership of such shares. Under certain circumstances, Mr. Moshenek may berequired to sell his interest in Shermen WSC Holding LLC to Shermen WSC HoldingLLC at cost.

 

(5)These shares represent the 28,750 shares that Mr. Toffolon directly owns andthe portion of the shares owned by Shermen WSC Holding LLC that are allocatedto Mr. Toffolon’s capital account. Mr. Toffolon is a member of Shermen WSCHolding LLC, but does not have the right to vote or dispose of the portion ofthe shares owned by Sherman WSC Holding LLC that are allocated to his capitalaccount. Accordingly, Mr. Toffolon disclaims beneficial ownership of suchshares. Under certain circumstances, Mr. Toffolon may be required to sell hisinterest in Shermen WSC Holding LLC to Shermen WSC Holding LLC at cost. 

 

(6)These shares represent the portion of the shares owned by Shermen WSC HoldingLLC that are allocated to Mr. St. Clair’s capital account. Mr. St. Clair is amember of Shermen WSC Holding LLC, but does not have the right to vote ordispose of such shares. Accordingly, Mr. St. Clair disclaims beneficialownership of such shares. Under certain circumstances, Mr. St. Clair may berequired to sell his interest in Shermen WSC Holding LLC to Shermen WSC HoldingLLC at cost.

 

(7)Based on a Schedule 13G/A filed by HBK Investments L.P., HBK Services LLC, HBKPartners II L.P., HBK Management LLC and HBK Master Fund L.P. on February 8,2008.  The business address of HBKInvestments L.P.

 

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is300 Crescent Court, Suite 700, Dallas, Texas 75201.  HBK Investments L.P. hasdelegated discretion to vote and dispose of beneficially owned by it, HBKServices LLC, HBK Partners II L.P., HBK Management LLC and HBK Master Fund L.P.(such shares, the “Securities”) to HBK Services LLC (“Services”).  Services may, from time to time, delegatediscretion to vote and dispose of certain of the Securities to HBK New YorkLLC, HBK Virginia LLC, HBK Europe Management LLP and/or HBK Hong Kong Ltd.(collectively, the “Subadvisors”).  Eachof Services and the Subadvisors is under common control with HBK InvestmentsL.P.

 

(8)Based on a Schedule 13G/A filed by Jonathan M. Glaser, JMG Capital Management,Inc. (“JMG Inc.”), JMG Capital Management, LLC (“JMG LLC”), Daniel AlbertDavid, Roger Richter, David Rubinstein, Pacific Assets Management, LLC (“PAM”),Pacific Capital Management, Inc. (“PCM”) and JMG Triton Offshore Fund, Ltd.(the “Fund”) on February 14, 2008.  Thebusiness address of Mr. Glaser is 11601 Wilshire Boulevard, Suite 2180, LosAngeles, CA  90025.  PAM and JMG LLC are investment advisers whoseclients have the right to receive or the power to direct the receipt ofdividends from, or the proceeds from the sale of, the shares of Common Stockthey beneficially own.  No Client otherthan the Fund holds more than 5% of the outstanding shares of Common Stock. PAMis the investment adviser of the Fund. JMG LLC is the general partner and investment adviser of an investmentlimited partnership.  PCM is a member ofPAM and JMG Inc. is a member of JMG LLC. Messrs. Glaser, David and Richter are control persons of PCM andPAM.  Mr. Glaser is the control person ofJMG Inc. and JMG LLC.  Mr. Rubinstein isa portfolio manager of the Fund.  Each ofMr. Glaser, Mr. David, Mr. Richter, Mr. Rubinstein, JMG Inc., JMG LLC, PCM andPAM disclaims beneficial ownership of any shares of Common Stock, except to theextent of that person’s or that entity’s, as applicable, pecuniary interesttherein.

 

(9)Based on a Schedule 13G filed by Manulife Financial Corporation (“MFC”) and MFCGlobal Investment Management (U.S.), LLC (“MFC Global (U.S.)”) on February 8,2008.  The business address of MFC Global(U.S.) is 101 Huntington Avenue, Boston, Massachusetts  02199. MFC Global (U.S.) has beneficial ownership of 2,159,234 shares of CommonStock. Through its parent-subsidiary relationship to MFC Global (U.S.), MFC maybe deemed to have beneficial ownership of these same shares.

 

(10)Based on a Schedule 13G/A filed by QVT Financial LP (“QVT Financial”), QVTFinancial GP LLC, QVT Fund LP (the “Fund”) and QVT Associates GP LLC on January9, 2008.  The business address of QVTFinancial is 1177 Avenue of the Americas, 9th Floor, New York, NY  10036. QVT Financial is the investment manager for the Fund, which beneficiallyowns 1,459,740 shares of Common Stock, and for Quintessence Fund L.P. (“Quintessence),which beneficially owns 159,557 shares of Common Stock. QVT Financial is alsothe investment manager for a separate discretionary account managed forDeutsche Bank AG (the “Separate Account”), which holds 89,732 shares of CommonStock. QVT Financial has the power to direct the vote and disposition of theCommon Stock held by the Fund, Quintessence and the Separate Account.Accordingly, QVT Financial may be deemed to be the beneficial owner of anaggregate amount of 1,709,029 shares of Common Stock, consisting of the sharesowned by the Fund and Quintessence and the shares held in the Separate Account.  QVT Financial GP LLC, as General Partner ofQVT Financial, may be deemed to beneficially own the same number of shares ofCommon Stock reported by QVT Financial. QVT Associates GP LLC, as General Partner of the Fund and Quintessence,may be deemed to beneficially own the aggregate number of shares of CommonStock owned by the Fund and Quintessence, and accordingly, QVT Associates GPLLC may be deemed to be the beneficial owner of an aggregate amount of1,619,297 shares of Common Stock.  Eachof QVT Financial and QVT Financial GP LLC disclaims beneficial ownership of theshares of Common Stock owned by the Fund and Quintessence and held in theSeparate Account. QVT Associates GP LLC disclaims beneficial ownership of allshares of Common Stock owned by the Fund and Quintessence, except to the extentof its pecuniary interest therein.  TheFund acquired beneficial ownership of more than 5% of the outstanding shares ofCommon Stock as of January 7, 2008.  

 

(11)Based on a Schedule 13G filed by Weiss Asset Management, LLC (“Weiss AssetManagement”), Weiss Capital, LLC (“Weiss Capital”) and Andrew Weiss on March24, 2008.  The business address of Dr.Weiss is 29 Commonwealth Avenue, 10th Floor, Boston, Massachusetts  02116. The shares of Common Stock reported for Dr. Weiss include sharesbeneficially owned by a private investment partnership of which Weiss AssetManagement is the sole general partner and which may be deemed to be controlledby Dr. Weiss, who is the Managing Member of Weiss Asset Management, and alsoincludes shares held by a private investment corporation which may be deemed

 

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tobe controlled by Dr. Weiss, who is the managing member of Weiss Capital, theInvestment Manager of such private investment corporation.  Dr. Weiss disclaims beneficial ownership ofthe shares of Common Stock reported for him as beneficially owned by him exceptto the extent of his pecuniary interest therein.

 

(12)Based on a Schedule 13G filed by Third Point LLC and Daniel S. Loeb on February14, 2008.  The business address of Mr.Loeb is 390 Park Avenue, New York, NY 10022.  Third Point LLC (the “ManagementCompany”) serves as investment manager or adviser to a variety of hedge fundsand managed accounts (such funds and accounts, collectively, the “Funds”) withrespect to the shares of Common Stock directly owned by the Funds, and Mr.Loeb, who is the Chief Executive Officer of the Management Company, controlsthe business activities of the Management Company, with respect to such sharesof Common Stock.  Each of the ManagementCompany and Mr. Loeb may be deemed to be the beneficial owner of such shares ofCommon Stock.

 

(13)Based on a Schedule 13G filed by Polar Securities Inc. (“Polar Securities”) andNorth Pole Capital Master Fund (“North Pole”) on March 3, 2008.  The business address of Polar Securities is372 Bay Street, 21st Floor, Toronto, Ontario M5H 2W9, Canada.  Polar Securities serves as the investmentmanager to North Pole and a number of discretionary accounts with respect towhich it has voting and dispositive authority over the shares of Common StockNorth Pole and such discretionary accounts beneficially own.  Each of Polar Securities and North Poledisclaims any beneficial ownership of such shares of Common Stock.

 

(14)Based on a Schedule 13G/A filed by Fir Tree, Inc., Sapling, LLC and Fir TreeCapital Opportunity Master Fund, L.P. on February 14, 2008.  The business address of Fir Tree, Inc. is 505Fifth Avenue, 23rd Floor, New York, NY 10017.  Sapling, LLC and Fir TreeCapital Opportunity Master Fund, L.P. are the beneficial owners of 1,338,086shares of Common Stock and 178,414 shares of Common Stock, respectively.  Fir Tree, Inc. may be deemed to beneficiallyown the shares of Common Stock held by Sapling, LLC and Fir Tree CapitalOpportunity Master Fund, L.P. as a result of being the investment manager ofSapling, LLC and Fir Tree Capital Opportunity Master Fund, L.P.  Fir Tree, Inc. has been granted investmentdiscretion over the Common Stock held by Sapling, LLC and Fir Tree CapitalOpportunity Master Fund, L.P.

 

**ITEM 13.  CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS**

 

On May 1, 2006, we issued to the following directors and executiveofficers (or their affiliates) the number of shares of Common Stock (aftergiving effect to a 1.15 for 1 forward stock split effected immediately prior tothe consummation of the IPO) set forth opposite their names for considerationof $0.005 per share.

 

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| **Name**                   | ** ** | **Number of Shares** | ** ** |
|----------------------------|------------|--------------------------------|------------|
|                       |       |                           |       |
| Shermen WSC Holding LLC(1) |       | 5,663,750                      |       |
|                       |       |                           |       |
| John E. Toffolon, Jr. |       | 28,750                         |       |
|                       |       |                           |       |
| Joseph F. Prochaska        |       | 28,750                         |       |
|                       |       |                           |       |
| Donald D. Pottinger        |       | 28,750                         |       |

 

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(1) The members of Shermen WSC Holding LLC are our officers andcertain of their family members. Shermen Capital Partners, LLC is the managingmember of Shermen WSC Holding LLC. Mr. Jenkins, Jr., our chairman andchief executive officer, is the managing member of Shermen Capital Partners,LLC and may be deemed to beneficially own the shares owned by Shermen WSC HoldingLLC.

 

Theholders of the majority of these shares will be entitled to make up to twodemands that we register these shares pursuant to an agreement to signed on May 24,2007. The holders of the majority of these shares can elect to exercise theseregistration rights at any time after the date on which the lock-up periodexpires. In addition, these stockholders have certain “piggy-back” registrationrights on registration statements filed subsequent to such date. We will bearthe expenses incurred in connection with the filing of any such registrationstatements.

 

Concurrentlywith the consummation of the IPO, on May 30, 2007, we consummated aprivate sale of the Founder Warrants at a purchase price of $0.70 per FounderWarrant, generating total proceeds of $3,650,000.20.  The Founder Warrantswere purchased by certain of our directors and officers through Shermen WSCHolding LLC whose managing member is Shermen Capital Partners, LLC, an entitycontrolled by Francis P. Jenkins, Jr., our chairman and chief executiveofficer.  The Founder Warrants are identical to the Warrants except that (i) ifwe call the Warrants for redemption, the Founder Warrants will be exercisableon a cashless basis; (ii) the Founder Warrants will not be transferable orsalable by Shermen WSC Holding LLC or such directors or officers or theirrespective affiliates until after we have completed our initial businesscombination, except Sherman WSC Holding LLC may distribute them to its members;and (iii) the holders of the Founder Warrants and the Common Stockunderlying such Founder Warrants are entitled to registration rights withrespect to such securities under an agreement signed on May 30,2007.  Immediately after the purchase of the Founder Warrants, Shermen WSCHolding LLC distributed them to its members.

 

Wehave agreed to pay a monthly fee of $9,950 for general and administrativeservices including office space, utilities and secretarial support.

 

We issued a $150,000 unsecured promissory note to a stockholder,Shermen Capital Partners, LLC, on April 30, 2006 of which $75,000 wasrepaid on September 27, 2007 and the final balance, $75,000, ofwhich was repaid on October 23, 2007.

 

Eachof our directors owns shares of our securities may receive reimbursement forreasonable out-of-pocket expenses incurred by them in connection withactivities on our behalf such as identifying a potential target business andperforming due diligence on a suitable business combination.  Additionally, there is no limit on the amountof reasonable out-of-pocket expenses that could be incurred and there will beno review of the reasonableness of the expenses by anyone other than our boardof directors, which would include persons who may seek reimbursement, or acourt of competent jurisdiction if such reimbursement is challenged. To theextent such reasonable out-of-pocket expenses exceed the available proceeds notdeposited in the trust account and the interest on the Trust Account availablefor working capital purposes, such out-of-pocket expenses would not bereimbursed by us unless we consummate a business combination.

 

Alltransactions between us and any member of our management team or theirrespective affiliates were on terms believed by us at that time, based uponother similar arrangements known to us, to be no less favorable than areavailable from unaffiliated third parties.

 

**ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES**

 

During the fiscal year ended December 31, 2007, our principalindependent auditor was Rothstein, Kass & Company, P.C., the servicesof which were provided in the following categories and amount:

 

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**Audit Fees**

 

The aggregate fees billed by Rothstein, Kass & Company, P.C.for professional services rendered for the audit of the Company’s balance sheetat May 30, 2007 included in our Current Report on Form 8-K, for theaudit of our annual financial statements for the fiscal year ended December 31,2007, for the review of the financial statements included in our QuarterlyReports on Form 10-Q for the periods ended June 30, 2007 and September 30,2007 and for services performed in connection with our registration statementon Form S-1 filed in 2007, were $67,500.

 

**Audit Related Fees**

 

Other than the fees described under the caption “Audit Fees” above,Rothstein, Kass & Company, P.C. did not bill any fees for servicesrendered to us during fiscal year 2007 for assurance and related services inconnection with the audit or review of our financial statements.

 

**Tax Fees**

 

There were no fees billed by Rothstein, Kass & Company, P.C.for professional services rendered during the fiscal year ended December 31,2007 for tax compliance, tax advice, and tax planning.

 

**All Other Fees**

 

There were no fees billed by Rothstein, Kass & Company, P.C.for other professional services rendered during the fiscal year ended December 31,2007.

 

**Audit Committee Approval**

 

Ouraudit committee did pre-approve all of the foregoing services although anyservices rendered prior to the formation of our audit committee were approvedby our board of directors. However, in accordance with Section 10A(i) ofthe Securities Exchange Act of 1934, as amended, before we engage ourindependent accountant to render audit or non-audit services on a going-forwardbasis, the engagement will be approved by our audit committee.

 

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**PART IV**

 

**ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

 

**1.****              FinancialStatements**

 

See Item 8. Financial Statements andSupplemental Data.

 

**2.****              FinancialStatement Schedules**

 

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

 

**3.****              Exhibits**

** **
| **Exhibit  Number** | ** ** | **Exhibit Description**                                                                                           |
|---------------------|------------|------------------------------------------------------------------------------------------------------------------------|
| 1.1                 |       | Underwriting  Agreement*                                                                                               |
| 3.1                 |       | Amended  and Restated Certificate of Incorporation*                                                                    |
| 3.2                 |       | By-laws*                                                                                                               |
| 4.1                 |       | Specimen Unit Certificate*                                                                                             |
| 4.2                 |       | Specimen Common Stock Certificate*                                                                                     |
| 4.3                 |       | Specimen Warrant Certificate*                                                                                          |
| 4.4                 |       | Specimen Founder Warrant Certificate*                                                                                  |
| 4.5                 |       | Warrant Agreement between Continental Stock Transfer & Trust  Company and the Registrant*                     |
| 4.6                 |       | Founder Agreement between Continental Stock Transfer & Trust  Company and the Registrant*                     |
| 4.7                 |       | Underwriter Purchase Option of CIBC World Markets Corp.*                                                               |
| 4.8                 |       | Underwriter Purchase Option of CRt Capital Group LLC*                                                                  |
| 10.1                |       | Letter Agreement between the Registrant and Shermen WSC Holding LLC*                                                   |
| 10.2                |       | Letter Agreement between the Registrant and Francis P.  Jenkins, Jr.*                                             |
| 10.3                |       | Letter Agreement between the Registrant and G. Kenneth Moshenek*                                                       |
| 10.4                |       | Letter Agreement between the Registrant and John E.  Toffolon, Jr.*                                               |
| 10.5                |       | Letter Agreement between the Registrant and Joseph F. Prochaska*                                                       |
| 10.6                |       | Letter Agreement between the Registrant and Donald D. Pottinger*                                                       |
| 10.7                |       | Letter Agreement between the Registrant and Francis P.  Jenkins, III*                                             |
| 10.8                |       | Stock Escrow Agreement between Continental Stock Transfer &  Trust Company and Certain Stockholders*          |
| 10.9                |       | Investment Management Trust Agreement between Continental Stock  Transfer & Trust Company and the Registrant* |
| 10.10               |       | Amended and Restated Limited Recourse Promissory Note issued by the  Registrant to Shermen Capital Partners, LLC*      |
| 10.11               |       | Registration Rights Agreement among the Registrant and Certain  Stockholders*                                          |
| 10.12               |       | Founder Warrant Purchase Agreement between the Registrant and Shermen  WSC Holding LLC*                                |
| 10.13               |       | Office Services Agreement between the Registrant and Shermen Capital  Partners, LLC*                                   |
| 23.1                |       | Consent of Independent Registered Public Accounting Firm.                                                              |
| 31.1                |       | Certification of Chief Executive Officer, pursuant to  Section 302 of the Sarbanes-Oxley Act.                     |
| 31.2                |       | Certification of Chief Financial Officer, pursuant to  Section 302 of the Sarbanes-Oxley Act.                     |
| 32.1                |       | Certification of Chief Executive Officer, pursuant to  Section 906 of the Sarbanes-Oxley Act.                     |
| 32.2                |       | Certification of Chief Financial Officer, pursuant to  Section 906 of the Sarbanes-Oxley Act.                     |

 

----

*              Incorporated byreference to our Registration Statement on Form S-1 (File No. 333-133869)

 

46

----

 

**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) theSecurities Exchange Act of 1934, the registrant has duly caused this report tobe signed on its behalf by the undersigned thereunto duly authorized.

 
|                       |   | SHERMEN WSC  ACQUISITION CORP.                             |
|----------------------------|--------|------------------------------------------------------------|
|                       |   |                                                       |
|                       |   | /s/ Francis  P. Jenkins, Jr.                          |
|                       |   | Name:  Francis P. Jenkins, Jr.                        |
|                       |   | Title:  Chairman and Chief Executive Officer          |
|                       |   | (Signing in  his capacity as a duly authorized officer and |
|                       |   | as principal  executive officer of the registrant)         |
|                       |   |                                                       |
| Date:  March 28, 2008 |   |                                                       |

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934,this report has been signed by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.

 

 
| **Signature**                    | ** ** | **Title**                                       | ** ** | **Date**            |
|----------------------------------|------------|-------------------------------------------------|------------|---------------------|
|                             |       |                                            |       |                |
| /s/ Francis P. Jenkins, Jr. |       | Chairman, Chief Executive Officer and President |       | March 28, 2008 |
| Francis P. Jenkins, Jr.     |       |                                            |       |                |
|                             |       |                                            |       |                |
| /s/ G. Kenneth Moshenek          |       | President, Chief Operating Officer and Director |       | March 31, 2008 |
| G. Kenneth Moshenek              |       |                                            |       |                |
|                             |       |                                            |       |                |
| /s/ John E. Toffolon, Jr.   |       | Chief Financial Officer and Director            |       | March 28, 2008 |
| John E. Toffolon, Jr.       |       | (Principal Financial and Accounting  Officer)   |       |                |
|                             |       |                                            |       |                |
| /s/ Joseph F. Prochaska          |       | Director                                        |       | March 29, 2008 |
| Joseph F. Prochaska              |       |                                            |       |                |
|                             |       |                                            |       |                |
| /s/ Donald D. Pottinger          |       | Director                                        |       | March 31, 2008 |
| Donald D. Pottinger              |       |                                            |       |                |
|                             |       |                                            |       |                |
| /s/ Michiel C. McCarty           |       | Director                                        |       | March 31, 2008 |
| Michiel C. McCarty               |       |                                            |       |                |

 

47

----

 

**SHERMEN WSC ACQUISITION CORP.**

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

** **

**FINANCIAL STATEMENTS**

 
| ** **                                              | **Page** |
|---------------------------------------------------------|----------|
|                                                    |     |
| Report of Independent Registered Public Accounting Firm | F-2      |
|                                                    |     |
| Balance  Sheets                                         | F-3      |
|                                                    |     |
| Statements  of Operations                               | F-4      |
|                                                    |     |
| Statements of Stockholders’ Equity                 | F-5      |
|                                                    |     |
| Statements of Cash Flows                                | F-6      |
|                                                    |     |
| Notes to Financial Statements                           | F-7      |

 

F-1

----

 

**REPORT OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

** **

Tothe Board of Directors and Stockholders of

ShermenWSC Acquisition Corp.

 

Wehave audited the accompanying balance sheets of Shermen WSC Acquisition Corp.(a corporation in the development stage)(the “Company”) as of December 31,2007 and 2006, and the related statements of operations, stockholders’ equity,and cash flows for the year ended December 31, 2007, the period from April 18,2006 (date of inception) to December 31, 2006 and for the period April 18,2006 (date of inception) to December 31, 2007.  These financial statements are theresponsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audit in accordance with the standards of the Public CompanyAccounting Oversight Board (United States).  Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement.  The Company isnot required to have, nor were we engaged to perform, an audit of its internalcontrol over financial reporting. Our audit included consideration of internalcontrol over financial reporting as a basis for designing audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control over financialreporting. Accordingly, we express no such opinion.  An audit alsoincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing the accounting principlesused and significant estimates made by management, as well as evaluating theoverall financial statement presentation.  We believe that our auditprovides a reasonable basis for our opinion.

 

Inour opinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of the Company as of December 31, 2007 and 2006, and theresults of its operations and its cash flows for the year ended December 31,2007, the period from April 18, 2006 (date of inception) to December 31,2006 and for the period from April 18, 2006 (date of inception) to December 31,2007, in conformity with accounting principles generally accepted in the UnitedStates of America.

 

 
| /s/  ROTHSTEIN, KASS & COMPANY, P.C. |   |
|-----------------------------------------------|--------|
| Rothstein,  Kass & Company, P.C.     |

 

 

Roseland,New Jersey

March 31, 2008

 

F-2

----

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**BALANCESHEETS**

** **
| ** **                                                                                                                                                                                                                                                                      | ** ** | **December 31, 2007** | ** **  | **December 31, 2006** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------|-------------|---------------------------------|------------|
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **ASSETS**                                                                                                                                                                                                                                                                      |       |                            |        |                            |       |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **Current assets**                                                                                                                                                                                                                                                              |       |                            |        |                            |       |
| Cash                                                                                                                                                                                                                                                                            |       | $                               | 160,949     |                            | $          | 21,354 |   |
| Prepaid expenses                                                                                                                                                                                                                                                                |       | 30,286                          |        |                            |       |
| **Total current assets**                                                                                                                                                                                                                                                        |       | 191,235                         |        | 21,354                          |       |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **Other assets**                                                                                                                                                                                                                                                                |       |                            |        |                            |       |
| Deferred offering costs                                                                                                                                                                                                                                                         |       |                            |        | 457,410                         |       |
| Deferred tax assets                                                                                                                                                                                                                                                             |       | 401,120                         |        |                            |       |
| Cash held in Trust Fund                                                                                                                                                                                                                                                         |       | 138,589,757                     |        |                            |       |
| Total Assets                                                                                                                                                                                                                                                                    |       | $                               | 139,182,112 |                            | $          | 478,764 |   |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                  |       |                            |        |                            |       |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **Current liabilities**                                                                                                                                                                                                                                                         |       |                            |        |                            |       |
| Accounts payable and accrued expenses                                                                                                                                                                                                                                           |       | $                               | 86,817      |                            | $          | 1,795 |   |
| Accrued offering costs                                                                                                                                                                                                                                                          |       |                            |        | 318,000                         |       |
| Income tax payable                                                                                                                                                                                                                                                              |       | 945,000                         |        |                            |       |
| Notes payable, founding stockholders                                                                                                                                                                                                                                            |       |                            |        | 150,000                         |       |
| **Total current liabilities**                                                                                                                                                                                                                                                   |       | 1,031,817                       |        | 469,795                         |       |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **Long-term liabilities**                                                                                                                                                                                                                                                       |       |                            |        |                            |       |
| Deferred underwriters’ fee                                                                                                                                                                                                                                                 |       | 3,312,000                       |        |                            |       |
| **Total liabilities**                                                                                                                                                                                                                                                           |       | 4,343,817                       |        | 469,795                         |       |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **Commitments**                                                                                                                                                                                                                                                                 |       |                            |        |                            |       |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **Common stock subject to redemption,**9,199,999  shares at redemption value                                                                                                                                                                                                    |       | 54,743,994                      |        |                            |       |
| **Deferred interest related to common stock  subject to possible redemption, net of taxes**                                                                                                                                                                                     |       | 352,985                         |        |                            |       |
|                                                                                                                                                                                                                                                                            |       |                            |        |                            |       |
| **Stockholders’ equity**                                                                                                                                                                                                                                                   |       |                            |        |                            |       |
| Preferred stock, $.0001 par value;  1,000,000 shares authorized; none issued                                                                                                                                                                                                    |       |                            |        |                            |       |
| Common stock, $.0001 par value; 100,000,000  shares authorized; 28,750,000 shares issued and outstanding as of  December 31, 2007 (including 9,199,999 shares subject to possible  redemption) and 5,000,000 shares issued and outstanding at  December 31, 2006 |       | 2,875                           |        | 500                             |       |
| Additional paid-in capital                                                                                                                                                                                                                                                      |       | 78,941,231                      |        | 24,500                          |       |
| Earnings (deficit) accumulated during the  development stage                                                                                                                                                                                                                    |       | 797,210                         |        | (16,031                         | )          |
| Total Stockholder’s equity                                                                                                                                                                                                                                                 |       | 79,741,316                      |        | 8,969                           |       |
| Total Liabilities and Stockholder’s equity                                                                                                                                                                                                                                 |       | $                               | 139,182,112 |                            | $          | 478,764 |   |

 

Seeaccompanying notes to the financial statements.

 

F-3

----

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**STATEMENTSOF OPERATIONS**

 
| ** **                                                                                               | ** ** | **Year Ended  December 31, 2007** | ** ** | **Period from  April 18, 2006  (inception) to  December 31, 2006** | ** ** | **Period from  April 18, 2006  (inception) to  December 31, 2007** | ** ** |
|----------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Revenue                                                                                                  |       | $                                                | —     |                                                                                             | $          | —                                                                                           |       | $ | — |   |
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Formation and operating costs                                                                            |       | 870,520                                          |       | 16,031                                                                                           |       | 886,551                                                                                          |       |
| Loss from operations                                                                                     |       | (870,520                                         | )          | (16,031                                                                                          | )          | (886,551                                                                                         | )          |
| Interest income                                                                                          |       | 2,988,057                                        |       |                                                                                             |       | 2,988,057                                                                                        |       |
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Income before provision for income tax                                                                   |       | 2,117,537                                        |       | (16,031                                                                                          | )          | 2,101,506                                                                                        |       |
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Provision for income taxes                                                                               |       | (951,311                                         | )          |                                                                                             |       | (951,311                                                                                         | )          |
| Net income (loss) applicable to common  stockholder                                                      |       | $                                                | 1,166,226  |                                                                                             | $          | (16,031                                                                                          | )          | $ | 1,150,195 |   |
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Maximum number of shares subject to  possible redemption:                                                |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Approximate weighted average number of  common shares, basic and diluted, subject to possible redemption |       | 5,444,000                                        |       |                                                                                             |       | 3,190,000                                                                                        |       |
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Income per common share amount, basic and  diluted, subject to possible redemption                       |       | $                                                | 0.06       |                                                                                             | $          |                                                                                             |       | $ | 0.11 |   |
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Approximate weighted average number of  common shares outstanding:                                       |       |                                             |       |                                                                                             |       |                                                                                             |       |
| (not subject to possible redemption), basic                                                              |       | 14,360,000                                       |       | 5000,000                                                                                         |       | 10.795.000                                                                                       |       |
| Income (loss) per common share, basic                                                                    |       | $                                                | 0.06       |                                                                                             | $          | (0.01                                                                                            | )          | $ | 0.07 |   |
| Approximate weighted average number of  common shares outstanding:                                       |       |                                             |       |                                                                                             |       |                                                                                             |       |
| (not subject to possible redemption),  diluted                                                           |       | 17,963,000                                       |       | 500,000                                                                                          |       | 14,413,000                                                                                       |       |
|                                                                                                     |       |                                             |       |                                                                                             |       |                                                                                             |       |
| Income (loss) per common share, diluted                                                                  |       | $                                                | 0.04       |                                                                                             | $          | (0.01                                                                                            | )          | $ | 0.05 |   |

 

See accompanying notes to the financial statements.

 

F-4

----

 

**SHERMEN WSC ACQUISITION CORP**

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

 

**STATEMENTS OFSTOCKHOLDERS’ EQUITY**

** **

**For the period from April 18, 2006 (date ofinception) to December 31, 2007**

 
| ** **                                                                                                                 | ** ** | **Common  Shares** | ** ** | **Amount** | ** ** | **Additional  Paid-in  Capital** | ** ** | **Earnings  (Deficit)  Accumulated  During the  Development  Stage** | ** ** | **Total  Stockholders’  Equity** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|------------|------------|----------------------------------|------------|---------------------------------------------------------------------------|------------|---------------------------------------|------------|
| Balances at April 18, 2006                                                                                            |       | —             |       | $          | —     |                             | $          | —                                                                    |       | $                                     | —     |   | $ | — |   |
| Sale of units issued to Founders on  May 1, 2006 at $0.004 per unit                                                   |       | 5,750,000          |       | 575        |       | 24,425                           |       |                                                                      |       | 25,000                                |       |
| Net loss applicable to common stockholders                                                                                 |       |               |       |       |       |                             |       | (16,031                                                                   | )          | (16,031                               | )          |
| Balances as of December 31, 2006                                                                                      |       | 5,750,000          |       | 575        |       | 24,425,                          |       | (16,031                                                                   | )-         | 8,969                                 |       |
| Issuance of 23,000,000 units on  May 30, 2007 at $6 per unit in the public offering                                   |       | 23,000,000         |       | 2,300      |       | 137,997,700                      |       |                                                                      |       | 138,000,000                           |       |
| Warrants issued to Founders on May 30,  2007 at $0.70 per warrant                                                     |       |               |       |       |       | 3,650,000                        |       |                                                                      |       | 3,650,000                             |       |
| Underwriting and offering fees and expenses                                                                                |       |               |       |       |       | (4,790,000                       | )          |                                                                      |       | (4,790,000                            | )          |
|                                                                                                                       |       |               |       |       |       |                             |       |                                                                      |       |                                  |       |
| Proceeds from public offering subject to  possible redemption (9,199,999 shares common stock at redemption value)          |       |               |       |       |       | (54,743,994                      | )          |                                                                      |       | (54,743,994                           | )          |
|                                                                                                                       |       |               |       |       |       |                             |       |                                                                      |       |                                  |       |
| Underwriters’ discount and offering costs  related to public offering and over-allotment option                       |       |               |       |       |       | (3,196,900                       | )          |                                                                      |       | (3,196,900                            | )          |
|                                                                                                                       |       |               |       |       |       |                             |       |                                                                      |       |                                  |       |
| Accretion of trust account relating to  common stock subject to possible redemption, net of tax of approximately  $289,000 |       |               |       |       |       |                             |       | (352,985                                                                  | )          | (352,985                              | )          |
|                                                                                                                       |       |               |       |       |       |                             |       |                                                                      |       |                                  |       |
| Net income applicable to common stockholder                                                                                |       |               |       |       |       |                             |       | 1,166,226                                                                 |       | 1,166,626                             |       |
|                                                                                                                       |       |               |       |       |       |                             |       |                                                                      |       |                                  |       |
| Balances, at December 31, 2007                                                                                        |       | 28,750,000         |       | $          | 2,875      |                             | $          | 78,941,231                                                                |       | $                                     | 797,210    |   | $ | 79,741,316 |   |

 

See accompanying notes to the financial statements.

 

F-5

----

** **

**SHERMEN WSC ACQUISITION CORP**

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

 

**STATEMENTSOF CASH FLOWS**

 
| ** **                                                                                          | ** ** | **Year  Ended  December 31, 2007** | ** ** | **April 18, 2006  (date of inception)  through  December 31, 2006** | ** ** | **April 18, 2006  (date of inception)  through  December 31, 2007** | ** ** |
|-----------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|---------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------|------------|
| ** **                                                                                          | ** ** | ** **                                   | ** ** | ** **                                                                                        | ** ** | ** **                                                                                        | ** ** |
| **Cash flows from operating activities:**                                                           |       |                                         | * *   | * *                                                                                          |       |                                                                                              |       |
| Net income (loss)                                                                                   |       | $                                            | 1,166,126  |                                                                                              | $          | (16,031                                                                                           | )          | $ | 1,150,195 |   |
| Adjustments to reconcile net income (loss)  to net cash provided by (used in) operating activities: |       |                                         |       |                                                                                              |       |                                                                                              |       |
| Deferred tax benefit                                                                                |       | (401,120                                     | )          |                                                                                              |       | (401,120                                                                                          | )          |
| **Changes in operating assets and  liabilities:**                                                   |       |                                         |       |                                                                                              |       |                                                                                              |       |
| Prepaid expenses                                                                                    |       | (30,286                                      | )          |                                                                                              |       | (30,286                                                                                           | )          |
| Accounts payable and accrued expenses                                                               |       | 85,022                                       |       | 1,785                                                                                             |       | 86,817                                                                                            |       |
| Income tax payable                                                                                  |       | 945,000                                      |       |                                                                                              |       | 945,000                                                                                           |       |
| **Cash provided by (used in) operating  activities**                                                |       | 1,764,842                                    |       | (14,236                                                                                           | )          | 1,750,606                                                                                         |       |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
| **Cash used in investing activities:**                                                              | ** ** | ** **                                   |       |                                                                                              | ** ** | ** **                                                                                        | ** ** |
| Cash held in Trust Fund                                                                             |       | (138,589,757                                 | )          |                                                                                              |       | (138,589,757                                                                                      | )          |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
| **Cash flows from financing activities:**                                                           | ** ** | ** **                                   | ** ** | ** **                                                                                        | ** ** | ** **                                                                                        | ** ** |
| Proceeds from note payable, stockholder                                                             |       |                                         |       | 150,000                                                                                           |       | 150,000                                                                                           |       |
| Payments for note payable, stockholder                                                              |       | (150,000                                     | )          |                                                                                              |       | (150,000                                                                                          | )          |
| Payments of offering costs                                                                          |       | (4,535,590                                   | )          | (139,410                                                                                          | )          | (4,675,000                                                                                        | )          |
| Proceeds from sale of stock options                                                                 |       | 100                                          |       |                                                                                              |       | 100                                                                                               |       |
| Proceeds from issuance of common stock from  the Offering                                           |       | 141,650,000                                  |       | 25,000                                                                                            |       | 141,675,000                                                                                       |       |
| **Net cash provided by financing activities**                                                       |       | 136,964,510                                  |       | 35,590                                                                                            |       | 137,000,100                                                                                       |       |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
| **Net increase in cash**                                                                            |       | 139,595                                      |       | 21,354                                                                                            |       | 160,949                                                                                           |       |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
| **Cash,**beginning of  the period                                                                   |       | 21,354                                       |       |                                                                                              |       |                                                                                              |       |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
| **Cash,**end of the  period                                                                         |       | $                                            | 160,949    |                                                                                              | $          | 21,354                                                                                            |       | $ | 160,949 |   |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
| **Supplemental schedule of non-cash investing  and financing activities:**                          |       |                                         |       |                                                                                              |       |                                                                                              |       |
| Deferred underwriters’ fees                                                                    |       | $                                            | 3,312,000  |                                                                                              | $          | —8886                                                                                        |       | $ | 3,312,000 |   |
|                                                                                                |       |                                         |       |                                                                                              |       |                                                                                              |       |
| Accrual of offering costs                                                                           |       | $                                            | —     |                                                                                              | $          | 318,000                                                                                           |       | 318,000 |   |

 

See accompanying notes to the financial statements.

 

F-6

----

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTESTO FINANCIAL STATEMENTS**

 

**NOTE A—DESCRIPTION OFORGANIZATION AND BUSINESS OPERATIONS**

** **

ShermenWSC Acquisition Corp. (a corporation in the development stage) (the “Company”)was incorporated in Delaware on April 18, 2006. The Company was formed toacquire an operating business in the agriculture industry through a merger,capital stock exchange, asset acquisition, stock purchase or other similarbusiness combination. The Company has neither engaged in any operations norgenerated revenue to date with the exception of interest income earned on cashheld in trust account, as described below. The Company is considered to be inthe 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 stagecompanies. The Company has selected December 31st as its fiscal year end.

 

TheCompany’s management has broad discretion with respect to the specificapplication of the net proceeds of the initial public offering of Units (asdefined in Note C below) (the “Offering”), although substantially all of thenet proceeds of the Offering are intended to be generally applied towardconsummating a business combination with (or acquisition of) an operating businessin the agriculture industry (“Business Combination”). Furthermore, there is noassurance that the Company will be able to successfully affect a BusinessCombination. Since the closing of the Offering, at least 99.5% of the grossproceeds, after the payment of certain amounts to the underwriters for theOffering, is held in a trust account (“Trust Account”) and invested in U.S. “governmentdebt securities,” defined as any Treasury Bill issued by the United Statesgovernment having a maturity of one hundred and eighty  (180) days or less or any open endedinvestment company registered under the Investment Company Act of 1940 thatholds itself out as a money market fund and bears the highest credit ratingissued by a United States nationally recognized rating agency, until theearlier of (i) the consummation of its first Business Combination or (ii) thedistribution of the Trust Account as described below. The remaining proceedswill be used to pay for business, legal and accounting due diligence onprospective acquisitions and continuing general and administrative expenses.The Company, after signing a definitive agreement for the acquisition of atarget business, will submit such transaction for stockholder approval. In theevent that 40% or more of the outstanding common stock of the Company(excluding, for this purpose, those shares of common stock of the Companyissued prior to the Offering) vote against the Business Combination andexercise their conversion rights described below, the Business Combination willnot be consummated. The stockholders who purchased Units in the Offering (the “PublicStockholders”) and vote against a Business Combination will be entitled toconvert their common stock into a pro rata share of the Trust Account(including the additional 4% fee of the gross proceeds of the Offering payableto the underwriters for the Offering upon the Company’s consummation of aBusiness Combination), including any interest earned (net of taxes payable andthe amount distributed to the Company to fund its working capital requirements)on their pro rata share, if the Business Combination is approved andconsummated. However, voting against the Business Combination alone will notresult in an election to exercise a Public Stockholder’s conversion rights. APublic Stockholder must also affirmatively exercise such conversion rights ator prior to the time the Business Combination is voted upon by thestockholders.   If holders of no morethan approximately 39.99% of the shares sold in the Offering vote against aBusiness Combination and seek to exercise their conversion rights and suchBusiness Combination is consummated, the stockholders who held shares of commonstock of the Company (the “Founding Stockholders”) have agreed to forfeit andreturn to the Company for cancellation a number of shares so that they will collectivelyown no more than 23% of the Company’s outstanding common stock uponconsummation of such Business Combination (without giving effect to any sharesthat may be issued in such Business Combination).  If the Company is unable to effect a BusinessCombination and liquidates, none of the Founding Stockholders will receive anyportion of the proceeds of the Offering held in the Trust Account to be distributedto the Company’s stockholders with respect to common stock owned by themimmediately before the Offering. All of the Founding Stockholders, includingall of the directors and officers of the Company, have agreed to vote all ofthe shares of common stock of the Company held by them in accordance with thevote of the majority in interest of all other stockholders of the Company.

 

Inthe event that the Company does not consummate a Business Combination within 18months from the date of the consummation of the Offering, or 24 months from theconsummation of the Offering if certain extension criteria have been satisfied,the proceeds held in the Trust Account will be distributed to the PublicStockholders, excluding the Founding Stockholders to the extent of theirinitial stock holdings. In the event of such distribution, it is likely

 

F-7

----

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTE A—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued)**

 

thatthe per share value of the residual assets remaining available for distribution(including Trust Account assets) will be less than the initial public offeringprice per Unit in the Offering (assuming no value is attributed to the Warrantscontained in the Units offered in the Offering discussed in Note C).

 

**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

** **

**Basis of presentation:**

 

Theaccompanying financial statements are presented in U.S. dollars and have beenprepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”) and pursuant to the rules and regulations of the SecuritiesExchange Commission (the “SEC”).

 

**Development stage company:**

 

TheCompany complies with the reporting requirements of SFAS No. 7, “Accountingand Reporting by Development Stage Enterprises.”

 

**Earnings (loss) per share:**

 

The Company complies with the accounting anddisclosure provision of SFAS No. 128, “Earnings Per Share.” SFAS No. 128requires dual presentation of basic and diluted income (loss) per common sharefor all periods presented. Basic income per share excludes dilution and iscomputed by dividing net income (loss) applicable to common stockholders by theweighted average number of common shares outstanding for the period. Dilutedincome per share reflects the potential dilution that could occur if securitiesor other contracts to issue common stock were exercised or converted intocommon stock or resulted in the issuance of common stock that then share in theincome of the Company. The difference between the number of shares used tocompute basic income per share and diluted income per share relates toadditional incremental shares to be issued upon the assumed exercise of stockoptions and warrants, net of shares hypothetically repurchased at the averagemarket price with the proceeds of exercise. The Company used treasury stockmethod to calculate the diluted earnings per share based on the outstandingwarrants issued in the private placement, the initial public offering and theover allotment. As a result, the Company added 3,603,080 and 3,617,897 shares as of the year ended December 31,2007 and the period from April 18, 2006 (date of inception) to December 31,2007, respectively to its basic weighted average number of shares to arrive atthe diluted shares used in its calculation of weighted average diluted earningsper share.

 

The Company’s statement of operations includesa presentation of earnings per share for common stock subject to possible redemptionin a manner similar to the two-class method of earnings per share.  Basic and diluted net loss per share amountfor the maximum number of shares subject to possible conversion is calculatedby dividing the net interest attributable to common shares subject toredemption by the weighted average number of common shares subject to possibleredemption.  Basic and diluted net lossper share amount for the common shares outstanding not subject to possibleredemption is calculated by dividing the net loss exclusive of the net interestincome attributable to common shares subject to redemption by the weightedaverage number of common shares not subject to possible redemption.

 

**Concentration ofcredit risk:**

** **

Financialinstruments that potentially subject the Company to concentrations of creditrisk consist of cash accounts in a financial institutions, which at times, mayexceed the Federal depository insurance coverage of $100,000.  The Company has not experienced losses onthese accounts and management believes the Company is not exposed tosignificant risks on such accounts.

 

**Use of estimates:**

** **

Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe

 

F-8

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTE B – SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES (continued)**

** **

financialstatements and the reported amounts of revenues and expenses during thereporting period. Actual results could differ from those estimates.

 

**Fair value offinancial instruments:**

** **

Thefair value of the Company’s assets and liabilities, which qualify as financialinstruments under SFAS No. 107, “Disclosure About Fair Value of FinancialInstruments,” approximates the carrying amounts represented in the accompanyingbalance sheets.

 

**Income taxes:**

** **

TheCompany complies with SFAS 109, “Accounting for Income Taxes,” which requiresan asset and liability approach to financial accounting and reporting forincome taxes. Deferred income tax assets and liabilities are computed fordifferences between the financial statement and tax bases of assets andliabilities that will result in future taxable or deductible amounts, based onenacted tax laws and rates applicable to the periods in which the differencesare expected to affect taxable income. Valuation allowances are established,when necessary, to reduce deferred tax assets to the amount expected to berealized.

 

EffectiveJanuary 1, 2007, the Company adopted the provisions of the FinancialAccounting Standards Board (“FASB”) Interpretation No. 48, “Accounting forUncertainty in Income Taxes – an interpretation of FASB Statement No. 109”(“FIN 48”).  There were no unrecognizedtax benefits as of January 1, 2007 and as of December 31, 2007.  FIN 48 prescribes a recognition threshold anda measurement attribute for the financial statement recognition and measurementof tax positions taken or expected to be taken in a tax return.  For those benefits to be recognized, a taxposition must be more-likely-than-not to be sustained upon examination bytaxing authorities.  The Companyrecognizes accrued interest and penalties related to unrecognized tax benefitsas income tax expense.  No amounts wereaccrued for the payment of interest and penalties at January 1, 2007.  There was no change to this balance at December 31,2007.  Management is currently unaware ofany issues under review that could result in significant payments, accruals ormaterial deviation from its position. The adoption of the provisions of FIN 48 did not have a material impacton the Company’s financial statements.

 

***Redeemable common stock:***

 

TheCompany accounts for redeemable common stock in accordance with Emerging IssueTask Force D-98 “*Classification andMeasurement of Redeemable Securities*”. Securities that areredeemable for cash or other assets are classified outside of permanent equityif they are redeemable at the option of the holder. In addition, if theredemption causes a liquidation event, the redeemable securities should not beclassified outside of permanent equity. As discussed in Note A, the BusinessCombination will only be consummated if a majority of the shares of commonstock voted by the Public Stockholders are voted in favor of the BusinessCombination and Public Stockholders holding less than 40% (9,200,000) of sharessold in the Offering exercise their redemption rights. As further discussed inNote A, if a Business Combination is not consummated by November 2008, or May 2009under certain conditions, the Company will liquidate. Accordingly, 9,1999,999shares of common stock of the Company have been classified outside of permanentequity at redemption value. The Company recognizes changes in the redemptionvalue immediately as they occur and adjusts the carrying value of theredeemable common stock to equal its redemption value at the end of eachreporting period.

 

**Recently Issued Accounting Pronouncements:**

 

In September 2006,the FASB issued SFAS No. 157, *“FairValue Measurements,”* which defines fair value, established aframework for measuring fair value in generally accepted accounting principles,expands disclosure about fair value measurements, and applies under otheraccounting pronouncements that require or permit fair value

 

F-9

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

 

measurements,SFAS No. 157 does not require any new fair value measurements.  However, the FASB anticipates that for someentities, the application of SFAS No. 157 will change currentpractice.  SFAS No. 157 is effectivefor financial statements issued for fiscal years beginning after November 15,2007, which for the Company would be its fiscal year beginning January 1,2008.  The Company is currentlyevaluating the impact of SFAS No 157 but does not expect that it will have amaterial impact on its condensed interim financial statements.

 

     In February 2007, the FASB issued SFAS159, “The Fair Value Option forFinancial Assets and Financial Liabilities.” This statement permitsentities to choose to measure many financial instruments at fair value.Unrealized gains and losses on items for which option has been elected are reportedin earnings.  SFAS No. 159 iseffective for fiscal years beginning after November 15, 2007.  The Company is currently assessing impact ofSFAS 159 on its condensed interim financial statements.

 

 InDecember 2007, the FASB issued SFAS 141(R), “*BusinessCombinations*”. SFAS 141(R) provides companies with principlesand requirements on how an acquirer recognizes and measures in its financialstatements the identifiable assets acquired, liabilities assumed, and anynoncontrolling interest in the acquiree as well as the recognition andmeasurement of goodwill acquired in a business combination. SFAS 141(R) alsorequires certain disclosures to enable users of the financial statements toevaluate the nature and financial effects of the business combination. Acquisitioncosts associated with the business combination will generally be expensed asincurred. SFAS 141(R) is effective for business combinations occurring infiscal years beginning after December 15, 2008, which will require theCompany to adopt these provisions for business combinations occurring in fiscal2009 and thereafter. Early adoption of SFAS 141(R) is not permitted.

 

Managementdoes not believe that any other recently issued, but not yet effective,accounting pronouncements, if currently adopted, would have a material effecton the Company’s financial statements.

 

**NOTE C—OFFERING ANDOVER-ALLOTMENT**

** **

TheCompany offered 20,000,000 units (“Units”) for public sale. Each Unit consistsof one share of the Company’s common stock, $0.0001 par value (“Common Stock”),and two redeemable common stock purchase warrants (“Warrants”). Each Warrantentitles the holder to purchase from the Company one share of Common Stock atan exercise price of $5.00 commencing on the later of (a) one year fromthe date of the final prospectus for the Offering or (b) the completion ofa Business Combination with a target business or the distribution of the TrustAccount, and will expire four years from the date of the prospectus. TheWarrants will be redeemable at a price of $0.01 per Warrant upon 30 days priornotice after the Warrants become exercisable, only in the event that the lastsale price of Common Stock is at least $8.50 per share for any 20 trading dayswithin a 30 trading day period ending on the third business day prior to thedate on which notice of redemption is given.

 

No Warrants will be exercisable and the Company will not be obligatedto issue shares of Common Stock unless at the time a holder seeks to exercisesuch Warrant, a prospectus relating to Common Stock issuable upon exercise ofthe Warrants is current and Common Stock has been registered or qualified ordeemed to be exempt under the securities laws of the state of residence of theholder of the Warrants.  Under the termsof the warrant agreement, the Company has agreed to use its best efforts tomeet these conditions and to maintain a current prospectus relating to CommonStock issuable upon exercise of the Warrants until the expiration of theWarrants.  However, if the Company doesnot maintain a current prospectus relating to Common Stock issuable uponexercise of the Warrants, holders will be unable to exercise theirWarrants.  In no circumstance will theCompany be required to settle any such Warrant exercise for cash.  If the prospectus relating to Common Stockissuable upon the exercise of the Warrants is not current or if Common Stock isnot qualified or exempt from qualification in the jurisdiction in which theholders of the Warrants reside, the Warrants may have no value, the market forthe Warrants may be limited and the Warrants may expire worthless.

 

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**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTE C–OFFERING AND OVER-ALLOTMENT (continued)**

 

ShermenWSC Holding LLC (“Shermen WSC Holding”) has purchased 5,214,286 Warrants (“FounderWarrants”) at $0.70 per Warrant (for an aggregate purchase price ofapproximately $3,650,000) in a private placement from the Company. Thesepurchases took place simultaneously with the consummation of the Offering. Allof the proceeds received from these purchases were placed in the Trust Account.The Founder Warrants purchased by Shermen WSC Holding are identical to theWarrants underlying the Units being offered in the Offering except that (i) theCompany has no obligation to register the sale of the Warrants and theunderlying shares of Common Stock and their exercise is not limited by theabsence of an effective registration statement and current prospectus relatingto the resale of the underlying shares and (ii) the Founder Warrants maybe exercisable on a “cashless basis” if the Company calls the Warrants forredemption. Shermen WSC Holding has also agreed that the Founder Warrants willnot be transferable or  alable by it orsuch directors or officers or their respective affiliates until after theCompany has completed a Business Combination, except it may distribute them toits members.  Immediately after thepurchase of the Founder Warrants, Shermen WSC Holding LLC distributed them toits members.

 

Allshares of Common Stock owned by the Founding Stockholders prior to the closingof the Offering (the “Initial Shares”) were placed into an escrow accountmaintained by Continental Stock Transfer & Trust Company, acting asescrow agent.  The Initial Shares willnot be released from escrow until twelve months following the consummation of aBusiness Combination.

 

Theforegoing restriction is subject to certain limited exceptions such astransfers to family members and trusts for estate planning purposes, upon deathof an escrow depositor, transfers to an estate or beneficiaries, or otherspecified transfers.  Even if transferredunder these circumstances, the Initial Shares will remain in the escrowaccount.

 

On May 30,2007, the underwriters for the Offering exercised the full over-allotment of3,000,000 units.  As a result, thedeferred underwriters’ fee was increased approximately $432,000.

 

**NOTE D – COMMON STOCK**

 

On May 23,2007, the Company affected a 1.15 for 1 forward stock split of the InitialShares and issued 750,000 shares of Common Stock to the Founding stockholdersprior to the closing of both the Offering and the over-allotment. Alltransaction and disclosures in the financial statements relating to CommonStock, have been adjusted to reflect the effects of the stock split.

 

**NOTE E—RELATED PARTY TRANSACTIONS**

 

TheCompany issued a $150,000 unsecured promissory note to a stockholder, ShermenCapital Partners, LLC, on April 30, 2006 of which $75,000 was repaid on September 27,2007 and the final balance, $75,000, was repaid on October 23, 2007.

 

TheCompany presently occupies office space provided by an affiliate of a certainstockholder of the Company. Such affiliate has agreed that, until the BusinessCombination is effected, it will make such office space, as well as certainoffice and secretarial services, available to the Company, as may be requiredby the Company from time to time. The Company has agreed to pay such affiliate$9,950 per month for such services.

 

Certain of the directors and officers of the Companyhave purchased through Shermen WSC Holding LLC, in a private placement,5,214,286 Founder Warrants immediately prior to the Offering at a price of$0.70 per warrant (an aggregate purchase price of approximately $3,650,000)from the Company and not as part of the Offering. They

 

F-11

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTE E—RELATED PARTY TRANSACTIONS (continued)**

 

have also agreed that the Found Warrants purchased bythem will not be sold or transferred until completion of a BusinessCombination.

 

**NOTE F—INCOME TAXES**

 

The Company’sprovision for income taxes reflects the application of federal, state and citystatutory rates to the Company’s income before taxes. The Company’s effectivetax rate was 45% for the year ended December 31, 2007 and for the periodfrom April 18, 2006 (date of inception) to December 31, 2007.

 

Componentsof the provision for income taxes are as follows:

 
| Current                    |   |      |    |
|----------------------------|--------|-----------|---------|
| Federal                    |   | $         | 852,389 |   |
| State                      |   | 235,048   |    |
| City                       |   | 264,443   |    |
| Total Current              |   | 1,351,880 |    |
|                       |   |      |    |
| Deferred                   |   |      |    |
| Federal                    |   | (249,854  | )       |
| State                      |   | (70,925   | )       |
| City                       |   | (79,790   | )       |
| Total Deferred             |   | (400,569  | )       |
| Total income tax provision |   | $         | 951,311 |   |

 

Thebasic component of deferred tax asset are the formation and operational expenses which are not deductible for theincome tax purposes as corporation is still a development stage corporation. Theeffective income tax rate differs from the federal statutory rate of 34%principally due to the effect of state and city income taxes.

 

**NOTEG—COMMITMENTS**

 

TheCompany is committed to paying an underwriting discount of 4% of the publicoffering price of the Unit to the underwriters for the Offering (less $0.21 foreach share of common stock converted to cash in connection with a BusinessCombination) payable upon the Company’s consummation of a Business Combination.

 

TheCompany has sold to the underwriters for the Offering, for $100, as additionalcompensation, an option to purchase up to a total of 700,000 Units in theaggregate (350,000 Units to each underwriter) at a per-unit price of$7.50.  The Units issuable upon exerciseof this option are also identical to those offered in the Offering, except thateach Warrant underlying such Units entitles the holder to purchase one share ofCommon Stock at a price of $6.25.  In nocircumstance will the Company be required to settle any such option exercisefor cash.

 

Thesale of this option was accounted for as an equity transaction.  Accordingly, there will be no net impact onthe Company’s financial position or results of operations, except for therecording of the $100 proceeds from the sale of such option.

 

TheCompany has determined, based upon a Black-Scholes model, that the fair valueof this option on the date of sale would be approximately $0.60 per unit, or$420,000 in total, using an expected life of four years, volatility of 52.13%and a risk-free interest rate of 4.92%.

 

F-12

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**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTEG—COMMITMENTS****(continued)**

 

Thevolatility calculation of 52.13% is based on the average 90-day Bloombergvolatility of a portfolio of nine publicly traded U.S. agricultural companieswith market capitalizations between $50,000,000 and $500,000,000.  Because the Company does not have a tradinghistory, the Company needed to estimate the potential volatility of its CommonStock price, which will depend on a number of factors which cannot beascertained at this time.  The Companyreferred to the Index because management believes that the average volatility isa reasonable benchmark to use in estimating the expected volatility of CommonStock post-business combination. Although an expected life of four years was taken into account forpurposes of assigning a fair value to the option, if the Company does not consummatea Business Combination within the prescribed time period and liquidates, thisoption would become worthless.  Althoughthis option and its underlying securities have been registered under theregistration statement of which the prospectus forms a part of, this optionwill provide for registration rights that will permit the holder of this optionto demand that a registration statement will be filed with respect to all orany part of the securities underlying this option within five years of thecompletion of the Offering.  Further, theholders of this option will be entitled to piggy-back registration rights inthe event we undertake a subsequent registered offering within seven years ofthe completion of the Offering.

 

**NOTE H—PREFERRED STOCK**

** **

TheCompany is authorized to issue 1,000,000 shares of preferred stock with suchdesignations, voting and other rights and preferences as may be determined fromtime to time by the Board of Directors.  Asof December 31, 2007, the Company had not issued shares of preferred stock. TheCompany’s certificate of incorporation prohibits it, prior to a BusinessCombination, from issuing preferred stock which participates in the proceeds ofthe Trust Account or which votes as a class with the Common Stock on a BusinessCombination.

 

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