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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,DC 20549**

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**FORM 10-K**

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**x**                ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

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**Forthe fiscal year ended December 31, 2008**

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**or**

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**o**                    TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

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**Forthe transition periodfrom             to             .**

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**Commissionfile number 000-52642**

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**SHERMEN WSC ACQUISITION CORP.**

(Exact name ofregistrant as specified in its charter)

 

| **Delaware**                                                    | ** ** | **20-4755936**                        |
|-----------------------------------------------------------------|------------|---------------------------------------|
| (State  or other jurisdiction of incorporation or organization) |       | (I.R.S.  employer identification no.) |
|                                                            |       |                                  |
| **c/o The Shermen Group**                                       | ** ** | ** **                            |
| **230 Park Avenue,  Suite 1000**                           | ** ** | ** **                            |
| **New York, NY**                                                | ** ** | **10169**                             |
| (Address  of principal executive offices)                       |       | (Zip  code)                           |

 

**(212)332 2858**(Registrant’s telephone number, including area code)

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Securities registeredpursuant to Section 12(b) of the Act: **None**

 

Securitiesregistered pursuant to Section 12(g) of the Act:

 

| **Title of each class**                                               | ** ** | **Name of  each exchange on which registered** |
|-----------------------------------------------------------------------|------------|------------------------------------------------|
| ** **                                                            | ** ** | ** **                                     |
| Common Stock, $0.0001  par value                                      |       | N/A                                            |
| Warrants, each  exercisable to purchase one share of Common Stock     |       | N/A                                            |
| Units, each consisting  of one share of Common Stock and two Warrants |       | N/A                                            |

 

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct. Yes o No x

 

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) ofthe Act. Yes o No x

 

Indicate by check mark whether the registrant: (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer, or asmaller reporting company.  . See thedefinition of “large accelerated filer,” “accelerated filer” and “smaller reportingcompany” in Rule 12b-2 of the Exchange Act.

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

 

Indicate by check mark whether the registrant is a shell company (asdefined in Exchange Rule Act 12b-2). Yes x No o

 

The aggregate market value of the voting and non-voting common equitystock held by non-affiliates of the registrant based upon the closing price ofthe issuer’s common stock, par value $0.0001 per share, on June 30, 2008,the last business day of the registrant’s most recently completed second fiscalquarter, was approximately $165,025,000.

 

Thenumber of shares of the registrant’s common stock, par value $0.0001 per share,outstanding as of March 2, 2009 was 28,750,000.

 

**DOCUMENTS INCORPORATED BY REFERENCE**

None.

 

 

 

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**TABLEOF CONTENTS**

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| **Special  Note Regarding Forward-Looking Statements**                                                                   | **2**  |
|--------------------------------------------------------------------------------------------------------------------------|--------|
| **PART I**                                                                                                          | **3**  |
| **Item 1. Business**                                                                                                     | **3**  |
| **Item 1A. Risk Factors**                                                                                                | **29** |
| **Item 1B.  Unresolved Staff Comments**                                                                                  | **60** |
| **Item 2.  Properties**                                                                                                  | **60** |
| **Item  3. Legal Proceedings**                                                                                           | **60** |
| **Item 4.  Submission of Matters to a Vote of Security Holders**                                                         | **61** |
| **PART II**                                                                                                         | **62** |
| **Item 5. Market  for Registrant’s Equity, Related Stockholder Matters and Issuer Purchases of  Equity Securities** | **62** |
| **Item 6. Selected  Financial Data**                                                                                     | **64** |
| **Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of  Operations**                 | **65** |
| **Item 7A.  Quantitative and Qualitative Disclosures about Market Risk**                                                 | **68** |
| **Item 8.  Financial Statements and Supplementary Data**                                                                 | **68** |
| **Item 9. Changes  In and Disagreements with Accounts on Accounting and Financial Disclosure**                           | **68** |
| **Item 9A. Controls  and Procedures**                                                                                    | **68** |
| **Item 9B. Other  Information**                                                                                          | **69** |
| **PART III**                                                                                                        | **70** |
| **Item 10.  Directors, Executive Officers and Corporate Governance**                                                     | **70** |
| **Item 11. Executive  Compensation**                                                                                     | **72** |
| **Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related  Stockholder Matters**            | **73** |
| **Item 13. Certain  Relationship and Related Transactions**                                                              | **75** |
| **Item 14.  Principal Accountant Fees and Services**                                                                     | **76** |
| **PART IV**                                                                                                         | **79** |
| **Item 15.  Exhibits and Financial Statement Schedules**                                                                 | **79** |
| **SIGNATURES**                                                                                                           | **80** |

 

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**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

 

This Annual Reporton Form 10-K includes statements reflecting assumptions, expectations,projections, intentions or beliefs about future events that are intended as “forward-lookingstatements.” The forward-looking statements are made within the meaning of Section 27Aof the Securities Act of 1933, as amended, and Section 21E of theSecurities Exchange Act of 1934, as amended. We intend the forward-lookingstatements in this Annual Report on Form 10-K or made by us elsewhere tobe covered by the safe harbor provisions for forward-looking statementscontained in the Private Securities Litigation Reform Act of 1995, and we areincluding this statement for purposes of complying with these safe harborprovisions. We have based these forward-looking statements on our currentexpectations and projections about future events, trends, uncertainties, andother factors that could cause, among other statements, the actual results andfinancial position of us to differ materially from those contemplated by thestatements. These forward-looking statements are not guarantees of futureperformance and are subject to risks, uncertainties and assumptions, including,among other things, the information discussed below. If any of the followingrisks or uncertainties develops into actual events, this could significantlyand adversely affect our business, prospects, financial condition or operatingresults. The risks and uncertainties described below are not the only ones thatwe face. Additional risks and uncertainties not presently known to us or thatwe currently believe to be immaterial also may adversely affect our business.In making these statements, we are not undertaking to address or update eachfactor in future filings or communications regarding our business or results.Our business is highly competitive with many different factors affectingresults.  Any or all of theforward-looking statements may turn out to be wrong, and actual results maydiffer materially from those expressed or implied by such forward-lookingstatements. They can be affected by inaccurate assumptions or by known orunknown risks, uncertainties and other factors, many of which are beyond ourcontrol, including those set forth in the section entitled “Risk Factors”included in Item I of this Annual Report on Form 10-K. We undertake noobligation to publicly update or revise any forward-looking statements, whetheras a result of new information, future events or otherwise.

 

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**PART I**

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**Item 1.  Business**

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Unlessthe context otherwise requires, when used in this Annual Report on Form 10-K,“Shermen,” “we” or “us” means Shermen WSC Acquisition Corp., together with itssubsidiaries.

 

**Overview**

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We area blank check 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 1,2006, in connection with our formation and initial capitalization, we issued toShermen WSC Holding LLC, which we refer to as our “sponsor,” and John E.Toffolon, Jr., Joseph F. Prochaska and Donald D. Pottinger, each of whomis a member of our board of directors, approximately 5.7 million shares ofour common stock (after giving effect to a 1.15 for 1 forward stock spliteffected immediately prior to the consummation of our initial public offering)for consideration of $0.005 per share. The members of our sponsor include a number of our current directors andofficers and their family members. Shermen Capital Partners, LLC is the managing member of oursponsor.  Francis P. Jenkins, Jr.,our chairman and chief executive officer, is the managing member of ShermenCapital Partners, LLC and may be deemed to beneficially own the sharesowned by our sponsor.  We sometimes referto our sponsor, the beneficial owners of our sponsor and Messrs. Toffolon,Prochaska and Pottinger as our “founders” in this Annual Report on Form 10-K.

 

On May 30,2007, we completed the issuance and sale of 23.0 million units, which werefer to as “units,” in our initial public offering, raising gross proceeds of$138.0 million, including proceeds from the exercise of the underwriters’over-allotment option.  Each unitconsists of one share of our common stock and two warrants, each exercisablefor one share of our common stock.  Ofthe gross proceeds: (i) approximately $133.2 million was depositedinto a trust account at JP Morgan Chase NY Bank, maintained by ContinentalStock Transfer & Trust Company as trustee, which we refer to as the “trustaccount,” which amount included approximately $5.5 million of deferredunderwriting fees; (ii) the underwriters received approximately$4.1 million as underwriting fees, excluding the deferred underwriting fees;and (iii) we retained $607,900 for offering expenses.  We sometimes refer to the holders of theshares of our common stock which were sold as part of the units in our initialpublic offering, including any of our founders to the extent that they purchasesuch shares, as the “public stockholders.”

 

Concurrentlywith the consummation of our initial public offering, we consummated a privatesale of approximately 5.2 million warrants to purchase shares of our commonstock (exercisable at $5.00 per share), which we refer to as the “founderwarrants,” to certain of our directors and officers through our sponsor,raising gross proceeds of approximately $3.7 million.  The founder warrants are identical to thewarrants except that (i) if we call the warrants for redemption, thefounder warrants will be exercisable on a cashless basis; (ii) the founderwarrants will not be transferable or salable by our sponsor or such directorsor officers or their respective affiliates until after we have completed ourinitial business combination, except our sponsor may distribute them to itsmembers; and (iii) the holders of the founder warrants and the commonstock underlying 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 founderwarrants, our sponsor distributed them to its members.  We also deposited the proceeds of the privatesale of the founder warrants into the trust account.

 

Thefunds held in trust are currently invested in U.S. “government securities,”defined as any Treasury Bill issued by the United States government having amaturity of one hundred and eighty days or less, or any open ended investmentcompany registered under the Investment Company Act of 1940 that holds itselfout as a money market fund and bears the highest credit rating issued by aUnited States nationally recognized rating agency.  Except for one half of the interest earned onthe trust account, net of taxes, up to a total of $1.5 million, that isreleased to us on a monthly basis to fund our working capital requirements andto cover the expenses incurred in connection with a business combination, theproceeds from our initial public offering that are held in the trust accountwill not be released to us until the earlier of (A) the completion of abusiness combination and (B) our liquidation, if we do not complete abusiness combination on or before May 30, 2009.  We intend to use substantially all of the netproceeds of our initial public offering and the private placement of thefounder warrants held in the trust account for a business combination.

 

Wewill continue to earn interest on the trust account prior to consummating abusiness combination, and will use interest to pay franchise tax and income taxand up to $1.5 million of such interest to fund our expenses related to 

 

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investigatingand selecting a target business and our other working capitalrequirements.  Any business we acquiremust have a fair market value equal to at least 80% of our net assets at thetime of acquisition, including the amount in the trust account.  We currently believe that we have sufficientavailable funds to effect a business combination on or prior to May 30,2009.  However, we cannot assure you thatthis will be the case.  Please refer toItem 1A of Part I of this Annual Report on Form 10-K under theheading “Risk Factors” for a detailed discussion of the many material risks towhich we are subject, a number of which (if they were to materialize) couldadversely impact our company and the value of our securities.

 

Asdisclosed in the prospectus for our initial public offering, prior to theconsummation of our initial public offering, we did not have any specificmerger, capital stock exchange, asset acquisition, stock purchase or othersimilar business combination under consideration and we had neither identifiednor been provided with the identity of any potential target businesses.  Prior to the consummation of our initialpublic offering, neither we, nor any representative acting on our behalf, hadany contacts or discussions, formal or otherwise, with any target businessregarding a business combination or took any direct or indirect measures tolocate or search for a target business.

 

Aftercompletion of our initial public offering, we began contacting investmentbankers, private equity firms and other business contacts to generate ideasabout a suitable business combination. We also received unsolicited inquiries from several investment bankingfirms, private equity firms and other business intermediaries. We informedthese contacts that we were seeking an operating business for our initialbusiness combination.  Criteria forsuitability included our management’s assessment of the competitive strengthsand weaknesses of the potential business targets, the strength of themanagement team, and the quality of the assets to be acquired.

 

**The Proposed BusinessCombination with ED&F Man Holdings Limited**

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***General—The Transaction Agreement***

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On November 25,2008, our board of directors approved a business combination with ED&F ManHoldings Limited, which we refer to as “ED&F Man,” and we entered into atransaction agreement with EDF&F Man, which we refer to as the “transactionagreement,” pursuant to which we will acquire ED&F Man’s bulk liquidstorage and liquid feed supplements business, which we refer to as “Westway” orthe “Westway business,” in exchange for our common and preferred stock andcash.  ED&F Man is a leading globalsupplier of a broad range of commodity products, including sugar, molasses,animal feed, tropical oils, biofuels and coffee to multi-national andindustrial consumers.

 

Underthe terms of the transaction agreement, our acquisition of the Westway, whichwe refer to as the “business combination,” will be effected by mergers betweenWestway Holdings Corporation, which we refer to as “ED&F Sub,” WestwayTerminal Company Inc. and Westway Feed Products, Inc., which arewholly-owned subsidiaries of ED&F Man, and us, which mergers will beimplemented by our wholly-owned subsidiaries, Terminal Merger Sub LLC and FeedMerger Sub LLC, and by our purchase of the equity securities of ED&F Man’sother subsidiaries that engage in the Westway business.  If the business combination is approved byour stockholders, all of the direct and indirect subsidiaries of ED&F Manthat currently engage in the Westway business will become our wholly-ownedsubsidiaries, ED&F Man and its affiliates will be our largest stockholder,owning 49.5% of our outstanding common stock and over 99% of our Series APreferred Stock, and we will change our name to “Westway Group, Inc.”

 

***Transaction Consideration***

*** ***

As part of theconsideration for the business combination, ED&F Man and its affiliateswill receive at the closing cash and securities valued at approximately$267.8 million, based on the $138.4 million in the trust account asof January 31, 2009 ($5.02 per share of common stock, based on the trustvalue of $6.02 per share (as of that date) for the shares of our common stockissued in our initial public offering, which we refer to as “IPO shares,” lessa special dividend of $1.00 per share to be paid to holders of the IPO sharesdescribed elsewhere in this Annual Report on Form 10-K). Specifically, asconsideration for the business combination, we will:

 

·                  pay to ED&F Man approximately$103.0 million in cash, subject to adjustments described below;

 

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·                  issue to ED&F Man approximately7.4 million newly-issued shares of our Series A Preferred Stock; and

 

·                  issue to ED&F Man up to24.3 million newly-issued shares of our common stock.

 

If,upon the closing, ED&F Man and its affiliates would otherwise own more than49.5% of the outstanding shares of our common stock as a result of theconversion of shares of our common stock into the right to receive a pro rataportion of the funds in the trust account, as described below, the number ofshares of our common stock to be issued to ED&F Man at the closing will bedecreased, with an increase in the number of shares of Series A PreferredStock to be issued to ED&F Man, based upon a set formula, so that ED&FMan and its affiliates would not own more than 49.5% of the outstanding sharesof our common stock.  If the holders of39.99% of the IPO shares elect to exercise their conversion rights, the totalvalue of the consideration to be paid in connection with the businesscombination would be $272.1 million (assuming the per share values set forthabove).  If the holders of 40% or more ofthe IPO shares vote against the transaction agreement and the transactionscontemplated by the transaction agreement and contemporaneously exercise theirconversion rights, we will be unable to consummate the business combination.

 

Theconsideration payable to ED&F Man described above will be subject to otherpre-closing and post-closing adjustments relating to targeted amounts for netindebtedness and net working capital and to aggregate capital expenditures ofWestway made prior to the closing.

 

Inaddition, upon the consummation of the business combination, we will bedelivering to an escrow agent for deposit into an escrow account approximately12.2 million shares of our Series A Preferred Stock, issued toED&F Man, as part of the consideration for the business combination.  These shares will be released to ED&F Manonly upon the achievement by the combined company of the earnings or shareprice targets described below.  Assumingthe release to ED&F Man of all of these escrowed shares, the value of theconsideration to be paid in connection with the business combination wouldincrease by $70.1 million, and would total $337.9 million assuming no exerciseof conversion rights by our stockholders or $342.2 million assuming thatholders of 39.99% of the IPO shares exercise their conversion rights.

 

***Performance Related Releases of Escrowed Shares***

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The escrowedshares of Series A Preferred Stock to be issued to ED&F Man describedabove, which we refer to as “ED&F Man’s escrowed shares,” will be releasedto ED&F Man in up to three increments if—and only if—the combined companyachieves the earnings or share price performance targets described below.  In addition, the 2.875 million shares ofour common stock that are owned by our sponsor, but that are to continue to beheld in the escrow account at the closing, which we refer to as the “sponsor’sescrowed shares,” will be released to our sponsor in up to three incrementsif—and only if—the combined company achieves these same targets.  The earnings targets are based on income(loss) before net interest (defined as the aggregate of interest expense andinterest income), income tax, and depreciation and amortization. We refer tothis measure of earnings as “EBITDA.”

 

*FirstRelease Targets.*  Ifthe closing share price of the combined company’s common stock on any fivetrading days within a seven trading day consecutive period has exceeded $6.50per share, or the combined company’s reported EBITDA has exceeded $52.0 millionfor any 12 month period, then, following receipt of an instruction letter,the escrow agent must release:

 

·                  to ED&F Man, one-third ofED&F Man’s escrowed shares, together with any new shares issued in respectof these released escrowed shares and any cash dividends accrued but not paidon these released escrowed shares and new shares, which we refer to as the “additionalescrow items,” but not before November 1, 2009, even if the EBITDA orshare price target were achieved prior to that date; and

 

·                  to our sponsor, one-third of thesponsor’s escrowed shares, and any additional escrow items attributable tothose released shares, but not before the date that is six months after theclosing, even if the EBITDA or share price target were achieved prior to thatdate.

 

*SecondRelease Targets.*  Ifthe closing share price of the combined company’s common stock on any fivetrading days within a seven trading day consecutive period has exceeded $7.00per share, or the combined company’s reported EBITDA has exceeded$57.0 million for any 12 month period, then, following receipt of aninstruction letter, the escrow agent must release and deliver:

 

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·                  to ED&F Man, that number ofED&F Man’s escrowed shares that, when added to the number, if any, ofED&F Man’s escrowed shares already released as a result of the combinedcompany having achieved the EBITDA or share price targets described above under“First Release Targets,” constitute two-thirds of ED&F Man’s escrowedshares, and any additional escrow items attributable to those released shares,but not before November 1, 2010, even if the EBITDA or share price targetwere achieved prior to that date; and

 

·                  to our sponsor, that number of thesponsor’s escrowed shares that, when added to the number, if any, of thesponsor’s escrowed shares already released as a result of the combined companyhaving achieved the EBITDA or share price targets described above under “FirstRelease Targets,” constitute two-thirds of the sponsor’s escrowed shares, andany additional escrow items attributable to those released shares, but notbefore the date that is six months after the closing, even if the EBITDA orshare price target were achieved prior to that date.

 

*ThirdRelease Targets.*  Ifthe closing share price of the combined company’s common stock on any fivetrading days within a seven trading day consecutive period has exceeded $7.50per share, or the combined company’s reported EBITDA has exceeded$62.0 million for any 12 month period, then, following receipt of aninstruction letter, the escrow agent must release and deliver:

 

·                  to ED&F Man, all of ED&F Man’sescrowed shares, if any, still held in the escrow account, and all additionalescrow items attributable to those released shares, but not before November 1,2011 even if the EBITDA or share price target were achieved prior to that date;and

 

·                  to our sponsor, all of the sponsor’sescrowed shares, if any, still held in the escrow account, and all additionalescrow items attributable to those released shares, but not before the datethat is six months after the closing, even if the EBITDA or share price targetwere achieved prior to that date.

 

Assuming therelease to ED&F Man of all of these escrowed shares, the value of theconsideration we would pay in connection with the business combination wouldincrease by $70.1 million, and would total $337.9 million assuming no exerciseof conversion rights by our stockholders or $342.2 million assuming the holdersof 39.99% of the IPO shares exercise their conversion rights.

 

***Certain Additional Transactions***

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In connection withthe business combination:

 

·                  we will pay to the holders of the IPOshares a special dividend of $1.00 per share immediately after the closing,which will not be payable with respect to IPO shares for which conversionrights have been exercised, to ED&F Man with respect to the shares itreceives on the closing date or to our sponsor, which has waived its right toreceive this dividend with respect to its shares of common stock;

 

·                  approximately 2.9 million sharesof our common stock owned by our sponsor, which would otherwise have beenreleased from an escrow account six months after the closing, will continue tobe held in escrow, and will be released only if the combined company achievesthose earnings or share price targets described above;

 

·                  we and our sponsor will enter into astock exchange agreement pursuant to which our sponsor will, concurrently withthe closing, exchange 1.1 million shares of our outstanding common stock,currently registered in our sponsor’s name, for (i) warrants to purchase1.0 million shares of our common stock, (ii) 60,000 newly-issuedshares of Series A Preferred Stock and (iii) 40,000 newly-issuedshares of our common stock; and

 

·                  we will establish a warrantrepurchase program to make open market purchases of our warrants from time totime following the closing with $15.0 million initially allocated for thispurpose.

 

***Conversion Rights***

*** ***

Pursuantto our certificate of incorporation, any of our stockholders who hold IPOshares and who vote against the transaction agreement proposal may, at the sametime, elect that we convert their shares into the right to receive a pro rataportion of the funds in the trust account, inclusive of interest thereon (netof taxes and amounts disbursed for working capital purposes and excluding theamount held in the trust account representing a portion of the underwriters’discount), calculated as of two business days prior to the consummation of thebusiness combination.  If properlyelected, upon the consummation 

 

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of thebusiness combination, we will convert each share of our common stock as towhich such election has been made into the right to receive a pro rata portion(based on the number of shares of our common stock issued in our initial publicoffering) of the funds in the trust account in which a substantial portion of thenet proceeds of our initial public offering are held, calculated as of twobusiness days prior to the consummation of the business combination.  Based on the amount of cash held in the trustaccount as of January 31, 2009, without taking into account any interestaccrued after such date, each holder of IPO shares will be entitled to electthat we convert each IPO share such holder holds into a right to receiveapproximately $6.02 per share.  If astockholder elects to have its IPO shares converted to cash, such stockholderwill still have the right to exercise the warrants received as part of theunits issued in our initial public offering. If the business combination is not consummated, we will return the IPOshares tendered by the stockholders who elected conversion.  Pursuant to our certificate of incorporation,if holders of 40% or more of the IPO shares exercise their conversion rights,we will not be able to consummate the business combination.

 

***The Annual Meeting of Stockholders; Other Proposals***

*** ***

Wehave agreed with ED&F Man to call and hold a meeting of our stockholders assoon as practicable in accordance with applicable law for the purpose ofseeking stockholder approval with respect to the business combination.  At the meeting of our stockholders, inaddition to the business combination, we will ask our stockholders to approve anumber of other matters, including (i) the amendment and restatement ofour certificate of incorporation, among other things, (A) to increase thenumber of authorized shares of our capital stock, (B) to set forth thepowers, preferences and rights of our common and preferred stock, (C) tochange our name to “Westway Group, Inc.” and (D) to amend, supplementand remove other provisions of our certificate of incorporation in connectionwith the consummation of the transactions contemplated by the transactionagreement; (ii) an election of the seven directors who will constitute ourboard of directors from and after the closing under the transaction agreement,until the 2010 annual meeting of stockholders or until their successors areelected and qualified; and (iii) the right to adjourn the annual meetingto a later date or dates, if necessary, to permit further solicitation and voteof proxies.  We refer to these othermatters as the “other proposals” in this Annual Report on Form 10-K.

 

***Approval of the Business Combination by Our Stockholders***

*** ***

Underthe requirements our certificate of incorporation, we will proceed with thebusiness combination only if (i) a majority of the shares of our commonstock voted by the public stockholders are voted in favor of the businesscombination and (ii) public stockholders owning less than 40% of the IPOshares both vote against the business combination and exercise their conversionrights.  In connection with the voterequired for the business combination, all of our founders have agreed to votethe shares of common stock then owned by them, including any shares of ourcommon stock purchased in or following our initial public offering, in accordancewith the majority of the shares of common stock voted by our publicstockholders other than our founders.

 

***Conditions to the Completion of the Business Combination***

*** ***

Theobligations of the parties to the transaction agreement are subject to thefulfillment or waiver of specified conditions before or at the closing,including the approval of the business combination by our stockholders asdescribed in the immediately preceding paragraph, including that the holders ofless than 40% of the IPO shares vote against the business combination andproperly exercised their conversion rights; the approval of the amendment andrestatement of our certificate of incorporation described above by ourstockholders; there being no law or legal requirement that makes theconsummation of the business combination illegal; a revolving credit facilityunder which we and/or one or more of our subsidiaries are the borrowers andhaving terms and conditions substantially similar to those previously disclosedto us in writing by ED&F Man being in full force and effect, with allconditions to funding satisfied; and the listing or quotation of our commonstock on the Over-the-Counter Bulletin Board or, if required by the lendersunder the credit facility to be entered into at the closing, on the NasdaqGlobal Market or the Nasdaq Capital Market, which we refer to as “Nasdaq,” orthe NYSE Alternext US LLC, and the absence of any action or proceeding pendingor threatened against us to prohibit or terminate that listing orquotation.  In addition, the obligationof each of the parties to the transaction agreement to consummate the businesscombination is subject to the fulfillment or waiver of a number of otherconditions as set forth in the transaction agreement.   If permitted under applicable law, theparties to the transaction agreement may waive conditions for the other parties’or their own benefit and consummate the business combination, even though oneor more of these conditions have not been met.

 

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***Termination***

*** ***

Thetransaction agreement may be terminated at any time prior to the closing of thebusiness combination: by mutual consent of the parties to the transactionagreement; if the business combination has not been completed by May 30,2009; and under certain other circumstances as set forth in the transactionagreement.

 

***Satisfaction of the 80% Test***

*** ***

Pursuantto our certificate of incorporation, among other things, it is a requirementthat any business we acquire have a fair market value equal to at least 80% ofour net assets at the time of acquisition, including the amount in the trustaccount.  Based on the financial analysisof Westway generally used to approve the business combination, including acomparison of comparable companies and a discounted cash flow analysis, ourboard of directors has determined that this requirement will be met by thebusiness combination.  After careful consideration,our board determined that the consideration being paid in the businesscombination, which was negotiated at arms-length, was fair to and in our bestinterest and our stockholders’ best interest and appropriately reflectedWestway’s value.  Notwithstanding this,prior to soliciting the vote of stockholders on the business combination, theboard sought and received an opinion from Oppenheimer & Co. Inc.,which we refer to as “Oppenheimer,” our financial advisor, to the effect that,as of November 24, 2008, the purchase price (as defined in the opinion)was fair, from a financial point of view, to us and that the fair market valueof Westway was equal to at least 80% of our net assets ($106.5 million as of November 10,2008).

 

***Recommendation of our Board of Directors***

*** ***

Ourboard of directors has unanimously determined that the transaction agreementand the transactions contemplated by the transaction agreement, including thebusiness combination, are fair to, and in the best interests of, Shermen andits stockholders.  Accordingly, our boardof directors has unanimously approved and declared advisable the businesscombination and the other proposals, and will unanimously recommend that our stockholdersvote or instruct their vote to be cast in favor of the approval of the businesscombination and the other proposals.

 

***No Assurance as to Completion of the Business Combination***

*** ***

Wecannot assure you that we will be able to complete the business combinationpursuant to the terms of the transaction agreement, or at all.  Further, if our stockholders do not approvethe business combination and the other proposals that will be voted on by ourstockholders at our upcoming annual meeting of stockholders, we will not beable to consummate the business combination. If we do not consummate the business combination or another qualifyingbusiness combination by May 30, 2009, we must dissolve and liquidate thetrust account.  If we dissolve andliquidate the trust account, the funds deposited in the trust account, plus anyinterest earned thereon, less claims requiring payment from the trust accountby creditors who have not waived their rights against the trust account, ifany, will be distributed pro rata to the holders of the IPO shares.  Our founders have waived any right to anyliquidation distribution with respect to the shares of common stock theyhold.  The per-share liquidationdistribution may be less than the initial public offering price of units becauseof the underwriting commissions and expenses related to our initial publicoffering, our general and administrative expenses and the costs of seeking abusiness combination.

 

***About ED&F Man and Westway***

*** ***

***ED&FMan***

 

Originallyestablished in London in 1783, ED&F Man is a leading global supplier of abroad range of commodity products, including sugar, molasses, animal feed,tropical oils, biofuels and coffee to multi-national and industrialconsumers.  ED&F Man provides acomprehensive range of supply chain services in its chosen commodities, fromproduction, sourcing, storage and delivery to risk management and financialservices. ED&F Man is an employee-owned company, with approximately 4,900employees operating in 59 countries.  Inits last fiscal year through October 31, 2008, ED&F Man reportedrevenues of approximately $9.3 billion and total assets of approximately$3.4 billion.

 

ED&F Man’swholly-owned indirect subsidiaries, ED&F Sub, Westway TerminalCompany Inc. and Westway Feed Products, Inc. are parties to thetransaction agreement.  ED&F Sub isthe ED&F Man affiliate to which shares of our common and preferred stockare to be issued as consideration at the closing.  ED&F Sub will also be the legal entityentering into a number of the ancillary agreements being entered into inconnection with the business combination. For purposes of this Annual Report on Form 10-K, when describingthese issuances of shares or agreements between us and wholly-owned

 

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subsidiaries of ED&F Man, such as those involvingED&F Sub, we refer directly to ED&F Man, rather than its applicablesubsidiaries.

 

***Westway***

 

*Overview*

 

Westway is aleading provider of bulk liquid storage and related value-added services and aleading manufacturer and distributor of liquid animal feed supplements. Westwayoperates an extensive global network of 54 operating facilities providing284 million gallons of total bulk liquid storage capacity and producing1.7 million tons of liquid feed supplements annually. The bulk liquidstorage business is a global business with infrastructure that includes anetwork of 24 terminals offering storage to manufacturers and consumers ofagricultural and industrial liquids, located at key port and terminal locationsthroughout North America, Western Europe and Asia. The liquid feed supplementsbusiness produces liquid animal feed supplements that are sold directly to endusers, which we refer to as “ranchers,” and feed manufacturers, primarilysupplying the beef and dairy livestock industries. By using formulationprocesses that are tailored specifically to the needs of its customers, Westwayblends molasses and essential nutrients to form feed rations that help tomaximize the genetic potential of livestock. As a result of the relationshipbetween them, the bulk liquid storage and liquid feed supplements businessesbenefit from synergies including co-location of facilities, enhanced rawmaterial supply logistics for liquid feed supplements and increased operationalefficiency resulting from cross-business knowledge exchange.

 

Westway’s originsdate back to the 1940s when the Industrial Molasses Corporation, thepredecessor to Westway, commenced business as a family-owned trader ofmolasses. Since then, Westway has evolved from a molasses supplier in thenortheastern United States into a bulk liquid storage, liquid animal feed andliquid feed derivatives business in collaboration with its current owner,ED&F Man.

 

During its recenthistory, Westway has successfully expanded its geographic footprint by growingthe business organically and through acquisition. Following an initialstrategic partnership in the early 1990s, Westway came under the full ownershipof ED&F Man in 1995. Under the umbrella of ED&F Man, Westway followed apath of growth and diversification, making a number of strategic investments inbulk liquid storage capacity and liquid feed supplements including the acquisitionof the international liquid animal feed, molasses trading and storagebusinesses of Cargill, Incorporated, which we refer to as “Cargill,” in 1997and the acquisition of Tate & Lyle PLC’s United Molasses Companyin 2002. Westway continues to grow its business by investing in additionallocations and most recently signed a lease for terminal space in Gray’s Harbor,WA where Westway plans to construct a 13.4 million gallon state-of-the-artbulk liquid storage facility. As of December 31, 2008, Westway had 385employees.

 

Westway benefitssignificantly from the breadth of markets served by its businesses. The bulkliquid storage business has maintained a long-term presence in a number ofhighly strategic, deep water ports from which it can offer its internationalcustomer base access to storage and the highest level of service in thesecritical markets. Westway believes that the liquid feed supplements business isthe leading North American manufacturer of liquid feed and the only supplierwith a true national footprint.

 

Westway isheadquartered in New Orleans, LA, and has operations at the locations shownbelow:

 

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*Bulk Liquid Storage Business*

 

*Overview*

 

Westway’s bulkliquid storage business operates a network of facilities located in NorthAmerica, Western Europe and Asia, and provides storage and related services tomanufacturers and purchasers of bulk liquid products. Each facility is acritical link in the distribution chains of Westway’s customers. Westway coordinatesclosely with its customers’ technical services and product handling experts indesigning and adapting the customized product handling systems required foreach specific product. Westway believes that its customers, a diverse group ofmulti-national, national and regional corporations, welcome this involvement asthe customers view Westway’s facilities as an extension of their ownoperations. Westway’s value-added services are customer specific and includetransloading of bulk liquids and acting as regional distribution centers on anentirely outsourced basis. Underpinning all of its services is Westway’sforemost objective, which is to differentiate its service by providing thehighest level of customer satisfaction, through its proprietary systems andrapid execution and superior commodity management expertise, which has resultedin the cultivation of long-term customer relationships.

 

*Productsand Services*

 

Westway servesmany diverse markets, focusing on the provision of bulk liquid storage servicesfor a wide range of products that are best described using eight primaryproduct groupings, set out below. This diverse product portfolio helps toinsulate Westway from exposure to cost pressures in any one market. Westway isalso active in businesses related to bulk liquid storage, such as directtransloading (primarily from railcars to trucks), blending and dilutions.Westway’s terminals contain the features necessary to handle a broad spectrumof specialty products, including rail capacity, dedicated pipelines, on-scale,top-loading of trucks, heating capacity and multiple tank sizes, includingsmall capacity tanks.

 

The chart belowreflects the comparative volume, in gallons, of each product grouping stored byWestway as of December 31, 2008.

 

 

·                  *Molassesand Liquid Animal Feed Products. *Historically,storage of molasses for the liquid feed supplements and yeast productionindustries has comprised the largest single component of Westway’s bulk liquidstorage business. Westway is well positioned in this product category given itssignificant experience handling highly viscous liquids and specializedinfrastructure that includes large, positive displacement pumps and largediameter pipelines. Due to the ongoing, long-term relationship with ED&FMan, these products are expected to remain a key part of the Westway portfolio.

 

·                  *VegetableOils, Tallows and Greases. *Fordecades, Westway has handled customer requirements for storage andtransportation of vegetable oils, tallows and greases. These products are utilizedin the food, biofuels,

 

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industrial soaps,detergent and biochemical industries and require such specialized services asheated tankage and kosher certification.

 

·                  *LigninSulphonate, Calcium Chloride and Liquid Fertilizers. *Westway’s experience innon-hazardous bulk solutions such as calcium chloride, urea ammonium nitrateand lignin sulphonate is extensive. These products are tied to basic industriessuch as agriculture and paper production. Because these products are corrosive,specialized tank linings are required to maintain quality control and safehandling.

 

·                  *Petroleum,Petro-Chemicals, Waxes and Petroleum Oil. *Westway’s position in this category is primarily concentratedin storing niche products such as paraffin waxes and lubrication oils derivedfrom the petroleum refining process for the candle, coatings and automotivemarkets in addition to certain other heavy industries. The heat and viscosityrequirements of these products lend themselves to Westway’s high value-addedbusiness model. Generally, Westway does not handle petroleum fuels, gasoline ortraditional petro-chemicals (e.g. benzene, toluene).

 

·                  *Caustics. *Chloralkali products, includingsodium and potassium hydroxide, are stored on behalf of industrial useproducers and distributors and comprised the first product for which Westwaycommenced third-party storage in the 1970s. Specialized heated tank linings andpiping systems are utilized to protect product quality and ensure efficienthandling of products for, among others, municipalities and the sanitation andpaper production industries.

 

·                  *Esters(Bio-diesel). *Westway hasbeen handling esters since 2002 on behalf of producers and distributors.Westway’s employees are familiar with the unique properties of methyl estersand systems that exist to ensure that the Westway’s quality control and safehandling standards are maintained. These systems include standardized handlingprocesses and the use of specialized sealants to prevent moisture intrusion.ED&F Man’s trading of bio-fuels provides a base volume for Westway and isexpected to be an opportunity for significant growth.

 

·                  *Chemicals. *Since the mid 1990s, Westway hasexpanded its storage services into a more diverse range of chemical products,for producers and distributors serving manufacturing and industrial markets.Subsequent improvements in industry specific expertise have provided Westwaywith the experience necessary to handle these products. Westway conducts athorough risk analysis when evaluating all new chemical opportunities to ensureminimal safety or environmental risk.

 

·                  *Asphalts. *Westway handles asphalt productsused in roadways and in roofing applications. At the Baltimore, MD andSt. Paul, MN facilities, special systems have been constructed to handleasphalts. Boilers, hot oil systems, tank heating coils and insulated tanks andpipelines are required to keep these products flowing properly.

 

*Services*

 

Westway providesits customers with a broad range of value-added services across all stages ofthe bulk liquid storage value chain:

 
| **Receipt**       | ** ** | **Storage**           | ** ** | **Handling**       | ** ** | **Distribution**   | ** ** | **Other**           |
|-------------------|------------|-----------------------|------------|--------------------|------------|--------------------|------------|---------------------|
| Custom facilities |       | Carbon scrubbing      |       | Additive injection |       | Logistics planning |       | Audit               |
| Lab diagnostics   |       | Dry air treatment     |       | Blending services  |       | Rail scaling       |       | Documentation       |
|              |       | Foam systems          |       | Direct transfer    |       | Rail services      |       | FEMAS certification |
|              |       | Gauging               |       | Drumming           |       |               |       | Food grading        |
|              |       | Hot oil systems       |       | Filtration         |       |               |       | GMP certification   |
|              |       | Lined/stainless tanks |       | Heating            |       |               |       | ISO certification   |
|              |       | Nitrogen treatment    |       | Packaging          |       |               |       | Marketing           |
|              |       |                  |       | Piggable lines     |       |               |       |                |
|              |       |                  |       | Recirculation      |       |               |       |                |

 

Westway worksclosely with its customers to design service packages and contracts that meettheir specific storage requirements. This process results in a varying degreeof complexity across customer relationships and generates long-term,collaborative relationships. For example, some customers require only basic storageservices such as tank storage, product receipt and delivery services andoccasional transloading, whereas others have more complex requirements,including the

 

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provision of temperature regulation, blending ordiagnostic testing services. At the greatest degree of complexity, Westway isable to operate regional distribution centers, functioning on an entirely outsourcedbasis and providing a full complement of value-added services, such aslogistics planning and product marketing. Westway believes that the breadth ofservices and flexibility it provides to customers, differentiates it in themarketplace and provides management with a distinct advantage when competingfor new business.

 

*Customers*

 

Westway’scustomer-focused approach results in a number of long standing relationshipswith major customers, including, but not limited to, these listed below:

 
| Agrium                            |   | Exxon Mobil Corporation      |   | Occidental Petroleum  Corporation |
|-----------------------------------|--------|------------------------------|--------|-----------------------------------|
| Archer Daniels Midland  Company   |   | Growmark, Inc.          |   | Royal Dutch  Shell plc       |
| Basic Chemical  Solutions, L.L.C. |   | INEOS Group                  |   | Sanimax                           |
| Bayer AG                          |   | Lyondell Chemical  Company   |   | Stepan Company                    |
| Bunge Limited                     |   | Mitsubishi Companies         |   | The Sun Products Corp.            |
| Cargill                           |   | Motiva  Enterprises LLC |   | TETRA  Technologies, Inc.    |
| The Dow Chemical  Company         |   | Norfalco LLC            |   | Univar Group, PLC            |
| ED&F Man                      |   | Nynas AB                     |   | Yara International ASA            |
| Evonik Industries AG              |   | PPG Industries               |   |                              |

 

A large proportion of thebulk liquid storage business’s sales are derived from highly regardedmulti-national corporations, many of which are included in the Forbes Global2000 list of largest companies. Westway’s relationships with these customershave resulted in extended contracts, approximately 50% of which are two yearsor more in length and over one third of which are three years or longer as of December 31,2008. This is set out below in more detail:

 

**Lengthof Storage Contracts—Terminals Worldwide 2009**

 

 

*Propertyand Facilities*

 

Westway benefitsfrom a significant, long-term presence in many of the major coastal locationsinternationally. Typically, coastal operations comprise long-term storagelocations owned by Westway or on land leased under long-term arrangements withstate or city run port authorities in the United States or with port authoritiesin Europe. Each of the

 

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facilities that comprise international bulk liquidstorage locations is either Westway owner-occupied or is operated under leaseagreements with tightly mandated maintenance, building and usage control. Theleases normally provide for a fixed annual rent cost, based on quantifiableinflation ratchet arrangements, and significant lease periods, often in excessof ten years. For all properties, Westway attaches a high degree ofimportance to protecting and maintaining public land and the environment.

 

The largest bulkliquid storage locations sites by volume, both owned and leased by Westway, areas follows:

 
| **Global Bulk  Liquid Storage  Locations** | ** ** | **Acres** | ** ** | **Site  Capacity  (Million  Gallons)** | ** ** | **% Total  Business  Capacity(1)** | ** ** | **Ownership**                 | ** ** | **Minimum  Remaining  Contracted  Lease  Term** | ** ** | **Remaining  Lease Term  Assuming  Contracted  Renewals(2)** | ** ** | **Number of  Renewals  Contracted  & Renewal  Term(3)** | ** ** |
|------------------------------------------------------|------------|-----------|------------|----------------------------------------|------------|-----------------------------------------|------------|-------------------------------|------------|-------------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|
| Houston,*TX (No. 1)*                            |       | 17        |       | 52                                     |       | 18                                      | %          | Owned (80%) and leased  (20%) |       | 6 years, 7 months                     |       | 6 years, 7  months                                      |       | None                                                                  |       |
| Houston,*TX (No. 2)*                            |       | 8         |       | 33                                     |       | 12                                      | %          | Owned (19%) and leased  (81%) |       | 19 years,  6 months                   |       | 19 years,  6 months                                     |       | None                                                                  |       |
| Amsterdam, the  Netherlands                          |       | 7         |       | 29                                     |       | 10                                      | %          | Leased                        |       | 12 years 8 months                     |       | 37 years 8 months                                       |       | 1; 25 years                                                      |       |
| Philadelphia, PA                                     |       | 10        |       | 20                                     |       | 7                                       | %          | Leased                        |       | 8 years                                    |       | 28 years                                                     |       | 2; 10 year renewals                                              |       |
| Baltimore, MD                                        |       | 7         |       | 19                                     |       | 7                                       | %          | Leased                        |       | 13 years 5 months                     |       | 23 years 5 months                                       |       | 2; 5 yr options                                                       |       |
| Jacksonville, FL                                     |       | 10        |       | 17                                     |       | 6                                       | %          | Leased                        |       | 23 years 5 months                     |       | 23 years 5 months                                       |       | None                                                                  |       |
| Port Allen, LA                                       |       | 11        |       | 16                                     |       | 6                                       | %          | Leased                        |       | 18 years                                   |       | 18 years                                                     |       | None                                                                  |       |
| Hamilton, Canada                                     |       | 17        |       | 16                                     |       | 6                                       | %          | Leased                        |       | 19 years 4 months                     |       | 29 years 4 months                                       |       | 2; 5 yr options                                                       |       |
| St Paul, MN                                     |       | 16        |       | 14                                     |       | 5                                       | %          | Leased                        |       | 15 years 6 months                     |       | 15 years 6 months                                       |       | None                                                                  |       |
| Liverpool, United  Kingdom                           |       | 6         |       | 12                                     |       | 4                                       | %          | Leased                        |       | 9 years and  14 years(3) six months   |       | 9 years and 14 years(3)  six months                     |       | None                                                                  |       |
| Gdynia, Poland                                       |       | 5         |       | 7.6                                    |       | 3                                       | %          | Leased                        |       | 11 years                                   |       | 31 years                                                     |       | 1; 20 years                                                           |       |

 

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(1)                                  Capacitydetails are expressed as a function of the 284 million total gallons ofstorage currently available to Westway.

 

(2)                                  Notall leases automatically provide for renewal; where this is the case, theapplicable leases are noted. It is Westway’s expectation that where there iscurrently no contractual entitlement to renew the facility lease, renewal isanticipated subject to normal contractual negotiation and ongoing businessrequirements

 

(3)                                  TheLiverpool facility comprises two leases, of which the Sandhills lease iscurrently under negotiation. Based on the status of current negotiations on January 15,2009, it has been assumed that a 14.5-year term without renewal will benegotiated. This data is accurate as of January 15, 2009.

 

·                  *Houston,TX (No. 1). *The Houston No. 1facility is Westway’s largest terminal location internationally, comprisingapproximately 52 million gallons of capacity, excluding additional tankconstruction that is currently underway which is expected to add a further6.8 million gallons of capacity. This facility provides deep water accessthrough two docks on the Houston ship channel and is comprised of two tracts ofland leased from the port of Houston. Historically, this terminal hasrepresented a primary molasses hub for ED&F Man and now serves a broadrange of customers and industries. Houston is considered to be the single mostconcentrated bulk liquid storage location in the United States. Although thereis currently no contractual entitlement to renew the lease relating to theleased portions of the facility, renewal of that lease is anticipated subjectto normal contractual negotiation and ongoing business requirements.

 

·                  *Houston,TX (No. 2). *The Houston No. 2facility is located two miles from the No. 1 and is a two berth, deepwater terminal also located on the Houston ship channel. Storage capacitycomprises approximately 33 million gallons spread across contiguous lotsthat are owned by and leased from the port of Houston and another third-party.The facility serves the same markets as the Houston No. 1 facility andfuture lease renewal is anticipated once the current term has been completed.

 

·                  *Amsterdam,the Netherlands. *TheAmsterdam facility is Westway’s largest single storage capacity outside ofNorth America and is considered by Westway to be one of its significantstrategic investments. Due to its location within the key shipping area ofAmsterdam, Antwerp and Rotterdam, historic demand for storage has

 

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been consistentlyhigh. The facility currently provides capacity of approximately 29 milliongallons and Westway has an option to extend this lease by 25 years.

 

·                  *Philadelphia,PA. *The Philadelphia facilitycomprises a 10-acre deep water site on the Delaware River. The property isleased from Conrail Inc. and provides approximately 20 milliongallons of storage serving regional agriculture and oil refining markets. Otherspecialty products, including plasticizers, non-petroleum oils and constructionproducts are also stored in Philadelphia.

 

·                  *Baltimore,MD. *The Baltimore facilitycomprises 7 acres of deep water storage and is leased from the Maryland PortAdministration in Baltimore harbor. The facility has storage capacity ofapproximately 19 million gallons and serves large regional agriculture,construction materials, lubrication oils, bio-diesel and specialty chemicalsmarkets requiring storage for export and domestic use.

 

·                  *Jacksonville,FL. *The Jacksonville facilityprovides Westway with approximately 17 million gallons of bulk liquidstorage capacity using deep water property leased from the Jacksonville PortAuthority. The facility has traditionally served local agricultural markets andthe pulp and paper industry. More recently Westway has served the Puerto Ricanexport market alongside bio-diesel and ethanol industries. Although there iscurrently no contractual entitlement to renew the facility lease at the end ofthe remaining approximately 24 year lease term, renewal is anticipated.

 

·                  *PortAllen, LA. *The Port Allenfacility comprises an approximately 16 million gallon deep water terminallocated on the Mississippi River and leased from the Port of Baton Rouge. Thefacility is one of Westway’s largest molasses terminals and serves theLouisiana sugar industry. Although there is currently no contractualentitlement to renew the facility lease at the end of the current approximate18 year remaining lease term, renewal is anticipated.

 

·                  *Hamilton,Canada. *The Hamilton facilityprovides approximately 16 million gallons of capacity on a 17 acre site onthe Great Lakes leased from the Hamilton Port Authority. Westway has anagreement to lease an additional 10 acres of land adjacent to the site andWestway anticipates expanding onto this property in fiscal 2009. The facilityserves a large local rendering industry, as well as typical agriculturalmarkets. Westway also operates a feed plant at the Hamilton terminal.

 

·                  *St. Paul,MN. *The St. Paulfacility comprises two commonly managed but non-contiguous sites on theMississippi River with warehouses, on a 16 acre site. The facilities arebarge-served with a total capacity of approximately 14 million gallonsserving local agricultural markets with molasses and vegetable oils. Althoughthere is currently no contractual entitlement to renew the facility lease atthe end of the remaining lease term, renewal is anticipated.

 

·                  *Liverpool,United Kingdom. *The Liverpoolfacilities also comprise two commonly managed but non-contiguous locationsconsisting of six acres and acting as the central distribution hub for molassesand feed fats. From Liverpool, Westway serves the animal and feed fats businesslocated in the central and northern regions of England. In addition thefacility provides a dedicated phosphoric acid storage facility for Thermphos.The combined facilities currently provide approximately 12 million gallonsof capacity.

 

·                  *Gdynia,Poland. *The Gdynia facilitycomprises a 5 acre deep water site on the Indyjskie Quay at the Port of Gdynia.The property is leased from the Port of Gdynia and provides Westway withapproximately 8 million gallons of capacity, serving the growing economiesof Poland and providing access to Central and Eastern Europe. The facility iscapable of serving agricultural, chemical and fuel markets.

 

The vast majorityof Westway’s tanks are constructed from carbon steel and incorporate a varietyof internal lining systems that are used to protect the tank and to preservethe quality of the stored product. Westway stores a considerable number ofproducts requiring the application of heat to preserve the productcharacteristics—Westway utilizes a combination of internal steam coils,external heat exchangers and hot water circulating systems when storing theseheat-sensitive products. Facility upgrades required to meet the needs ofcertain stored chemicals are performed as necessary and include leak prevention,automated gauging and loading, vapor control and fire prevention.

 

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*Competition*

 

Globally, Westway’smarket position is a function of the interaction between its competitorsoccupying the local, regional, national and international markets in which thebusinesses operate. Within the bulk liquid storage business, Westway’s abilityto provide a breadth of service to customers in each of these local, regional,national and international markets is a key competitive advantage. Because itholds such a strong position, it is difficult to define Westway’s competition.Competitors include multi-national providers such as NuStar Energy L.P. inthe United States along with others including International-Matex TankTerminals (owned by Macquarie Infrastructure Company LLC) andTransMontaigne at a national level and a number of smaller, independent storagebusinesses operating in a number of countries served by Westway, such as SimonStorage Ltd. (owned by Interpipeline Fund). The breadth of serviceprovided also results in customer offerings that compete directly with LBCHoldings LLC (owned by Challenger Infrastructure Fund), RoyalVopak N.V. and Stolt-Nielsen S.A. for more tailored, complex andvalue added services. Across product groups, Westway’s bulk liquid storagebusiness competes with corporations having a primary focus in the storage ofspecific products, such as hydrocarbons and derivatives, as well as thosebusinesses providing a more broad range of services. At locations in Europe,such as Denmark and Poland, competition also derives from smaller independentstorage businesses and former state-owned installations.

 

*Liquid Feed Supplements*

 

*Overview*

 

Through its 27strategically located manufacturing facilities in North America, Westwayprovides liquid feed supplements to the lower 48 U.S. states, 5 Canadianprovinces and Northern Mexico. By using formulation processes that are tailoredspecifically to the needs of customers Westway blends molasses and essentialnutrients to form feed rations that help to maximize the genetic potential oflivestock. Typically, these supplements contain concentrated forms of protein,energy, minerals and vitamins, which normally comprise 5-10% of an animal’sdaily diet. Beef cattle, dairy cattle and horses consume the majority ofWestway’s liquid feed supplements, with a smaller percentage being utilized bysheep, goats, poultry and swine. The business invests in research into newproducts and manufacturing processes in order to maintain the strength of itscompetitive position. To date, Westway has capitalized on the value of itsintellectual property through a joint venture in Australia with Ridley and iscurrently analyzing similar opportunities in New Zealand and Mexico.

 

In the UnitedStates, the liquid feed supplements industry dates back to the first report ofa simple molasses-urea mix being fed to cattle in 1943, with the first commercialliquid supplement being introduced in 1951. Today, the industry has expandedinto a dynamic, growing market with new products blended into a wide variety ofliquids and other ingredients to meet the needs of multiple livestockindustries. Westway’s manufacturing and distribution locations allow Westway toprovide nutritional liquid feed supplements to the majority of the U.S.livestock markets. In addition, eight of Westway’s facilities are positioned atdeep water port locations, allowing the receipt of off-shore ingredients suchas molasses and condensed molasses solubles. These deep water port terminalsprovide a strategic barrier of entry to the North American liquid feedsupplements business, as approximately 40% of the molasses consumed for livestocksupplements is imported. The balance of Westway’s manufacturing locations areeither strategically located on navigable inland river systems or have directrailroad access.

 

*Productsand Services*

 

Westway’s productsfall into two primary classifications: (1) complex liquid/blocksupplements and (2) simple blends/basic ingredients, within which specificproduct categories are further described as follows:

 

*Complex Liquid/Block Supplements.*

 

Westway’s finishedproducts provide the necessary supplemental nutrients, which allow livestock toperform to their maximum genetic potential. Westway uses complex formulationsand specialized manufacturing of several raw basic ingredients, includingproteins, minerals and vitamins, to sell liquid supplements to livestock feedoperators, dry feed mills or distributors. Approximately 65% of Westway’sproduct volume, or 1,105,000 tons per annum for the year ended October 31,2008, fall into this category.

 

·                  *LiquidProtein Supplements. *Liquidprotein supplements are typically either a “free choice” in pastures or part ofa “complete ration” for either dairy or beef animals. Free choice applicationsnormally involve the use of a “lick wheel” feeder in pastures, where theanimals are consuming approximately 90-95% of their daily diet 

 

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from nativegrasses or improved pastures. These pastures are normally low in nutrients suchas protein, energy, phosphors and other minerals. Accordingly, the nutrientdense liquid feed supplements provide a way to balance the nutritionalrequirements of livestock, allowing them to reproduce or gain weight at anoptimum rate. The tanks associated with these lick wheels hold approximately3,000 lbs and normally require refilling every two weeks, depending on thenumber of cattle in a given pasture. Free choice consumption is normally consideredto average 2 lbs per animal, per day, and is controlled through the formulationof the liquid supplement.

 

In applicationswhere liquid protein supplements are part of a complete ration, the inclusionrate of the supplement depends on the nutrient profile of the other dry feedingredients. Nutrient profiles of the supplement can be adjusted to balance thenutrients of the dry feed ingredients. Livestock that consume the completeration form of liquid feed supplements are normally held in confinement ratherthan in open pasture.

 

Liquid proteinsupplements are utilized in virtually all regions of the United States andwestern Canada and are marketed through both distributor and dealer networksand sold directly from Westway to the end users. Liquid protein supplementscomprised approximately 14% of Westway’s annual production volume for the yearended October 31, 2008.

 

·                  *MillProducts. *Mill products arespecialized molasses-based products sold to dry feed milling companies andmixed with other dry feed ingredients. These specialized products are used intwo primary types of applications, in the dry feed milling industry, texturizedhorse feed and pelleted products fed to different classes of livestock. Westway’s“E-Z Glo” product is a mill product fortified with high quality vegetable oil,minerals and preservatives and is included in texturized horse feed as 5-15% ofoverall product content. Westway’s ‘Pellet Partner’ product is also a millproduct that utilizes liquid lignin, a by-product from the timber industry thatis used to bind dry feed ingredients to form pellets or cubes. Mill productsare utilized in dry feed mills throughout the United States and are mainly solddirect to the feed mills. Mill products comprised approximately 28% of Westway’sannual production volume for the year ended October 31, 2008.

 

·                  *LiquidSuspension Products. *Liquidsuspension products are the most complex liquid feed supplements that Westwaymanufactures. Thixatropic technology allows insoluble ingredients such ascalcium carbonate, potassium chloride, feathermeal and salt to be suspended ina liquid supplement that can “flow”. These supplements provide a wide range ofminerals, proteins and medications, which are mainly utilized in confined beeffeeding operations and large dairies. The largest concentration of customers ofWestway’s liquid suspension products are in the Texas panhandle and northernCalifornia. In Texas, such supplements are sold directly to the end user,whereas in northern California they are marketed through large distributors.Liquid suspension products comprised approximately 21% of Westway’s annualproduction volume for the year ended October 31, 2008.

 

·                  *Blocks/Tubs. *Blocks, or tubs as they aresometimes referred to, are a solid feed supplement that is fed as a free choiceprotein supplement to cattle on pasture or improved pastures. The primarypackage size is 200 lbs and is marketed through a series of distributors andlocal farm stores. As with liquid feed supplements and dried molasses, theseproducts make up a small portion of the animals’ daily diet. Unlike liquid feedsupplements and dried molasses, these products are only fed free choice and notmixed further with other feed ingredients. The majority of Westway’s blocks aretoll manufactured for other feed companies and sold through their respectivelabels and fed primarily to beef cattle, dairy cattle and horses with someproducts sold for sheep/goats and wild game. Block or tub volumes comprisedapproximately 2% of annual production volume of Westway for the year ended October 31,2008.

 

*SimpleBlends/Basic Ingredients.*

 

Westway alsoproduces products that are less complex and utilized more specifically as aningredient in livestock feeds, which enhance the appearance, preserve theproduct, improve the palatability or act as a binding agent for other dry feedingredients. Specialized least-cost formulation programs allow Westway tomaximize margins while providing the best performing product for the customer.Dried molasses, which falls into this category, is a resulting product ofmixing finely ground soybean or sunflower hulls with liquid molasses and dryingit through a rotating drum drier. Approximately 35% of Westway’s production, or595,000 tons annually, fall into this category.

 

·                  *Blends. *Blends are the simplest form ofvalue added products. Typically blends include molasses that are blended withone or more of the following ingredients: corn steep liquor, condensed molassessolubles, whey permeate, distillers’ solubles, lignin sulphonate and/orglycerine. Blends are normally utilized in complete feed rations to reduce thedust and improve the palatability of the ration. Virtually all blends are fedin confined

 

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feeding operationsand are incorporated into livestock rations that do not use a proteinsupplement or a suspension. Westway uses distribution and direct supply formatsfor the sale of blends. Blend products comprised approximately 28% of Westway’sannual production volume for the year ended October 31, 2008.

 

·                  *WheyPermeate. *Whey permeate issold directly to dairy and beef operations to replace a portion of the energytypically derived from a grain source. Whey permeate products comprisedapproximately 5% of Westway’s annual production volume for the year ended October 31,2008.

 

·                  *DriedMolasses. *Dried molassesresults from mixing ground soybean hulls and sunflower hulls with cane molassesand drying it through a rotating drum drier. Dried molasses is typically usedas either a sweetener to dry feed rations or as binding agent for other dryfeed ingredients in the manufacture of solid feed supplements known as “blocks.”Target customers include small confined feeding operators that use it as asweetener and specialty small block manufacturers that use it as a binder andsweetener. Package sizes include 50 lb paper bags, 1 ton measures and truckload bulk. All dried molasses marketing to confined feeding operators is donethrough a series of distributors. The majority of Westway’s dried molasses isconsumed by beef and dairy cattle with little consumed by sheep or goats,horses, poultry or swine. Dried molasses comprised approximately 2% of theannual production volume of Westway for the year ended October 31, 2008.

 

*Customers*

 

Westway haslongstanding relationships with major customers including, but not limited to,these listed below:

 
| A.L. Gilbert Co.     |   | Cargill Animal  Nutrition |   | Land O’Lakes, Inc. |
|---------------------------|--------|---------------------------|--------|------------------------------|
| Associated Feed           |   | Fosters Commodities       |   | Southern States  Cooperative |
| Barrett-Crofoot Inc. |   | Hi-Pro Feeds              |   | Tractor Supply Co.      |
| Cactus Feeders            |   |                      |   |                         |

 

*Propertyand Facilities*

 

Westway’smanufacturing locations are strategically located throughout the continentalUnited States and western Canada, allowing Westway to provide nutritionallivestock supplements to the majority of the livestock marketplace. The liquidfeed supplements business is built around a number of geographical marketscategorized by the livestock operations and products that are typical to each.The functionality of each location is dependent on the demographics of thelivestock industry in the various geographical areas. Ten of Westway’smanufacturing facilities produce suspension supplements, which are the mostcomplex liquid feed supplements, and are located in the densely confinedlivestock feeding areas such as the northern Texas panhandle and north-centralCalifornia. Plants supplying free choice protein supplements (liquid or block)are located in areas of large free-grazing ranches or smaller hobby farm/ranchoperations. Other products, such as fortified molasses for the dry feed millingindustry or general-purpose molasses blends, are manufactured at all of Westway’splant locations. Each plant is unique as it relates to the storage capacity ofraw feed ingredients, manufacturing capability/capacity and geographical areaserved, whereas all plants can take full advantage of Westway’s proprietaryleast-cost “Brill” product blending and formulation program. This programallows maximum utilization of the various ingredients, while maintaining thenutrient specifications of the liquid feed supplements, thereby generating thehighest gross margin for the finished product.

 

Typically, Westway’sleases are with major port authorities and railroad companies of the UnitedStates, although a small number are with private individuals or leasingcompanies (such as office buildings and toll mill sites). Port leases typicallycontain a ten year primary period, normally with two five year renewals atWestway’s option and exercise of a renewal requires formal notification fromWestway. The majority of Westway’s leases are more than 15 years in lengthwith a small number that are only one year in duration but subject to annualrollover. All railroad leases are currently annual leases with evergreenprovisions incorporating annual inflation increases. All leases includeprovisions for removing equipment and returning the site to the conditionsprior to execution of the original lease, together with provisions for regulartesting and remediation of soil quality.

 

The largest liquidfeed supplements storage locations by short ton capacity, both owned and leasedby Westway, are as follows:

 

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| **Liquid Supplement  Plant Location** | ** ** | **Owned/  Leased** | ** ** | **Products  Manufactured** | ** ** | **Total  Production  Volume  (tons)*** | ** ** | **% of  total** | ** ** | **Minimum  Remaining  Contracted  Lease Term** | ** ** | **Remaining  Lease Term  Assuming  Contracted  Renewals** | ** ** | **Number of  Renewals  Contracted  & Renewal  Term** | ** ** |
|-------------------------------------------------|------------|--------------------|------------|----------------------------|------------|----------------------------------------|------------|----------------------|------------|-----------------------------------------------------|------------|----------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|
| Stockton, CA                                    |       | Owned              |       | LPS, MP, BL, S             |       | 263,000                                |       | 15                   | %          | —                                              |       | —                                                         |       | —                                                             |       |
| Hereford, TX                                    |       | Leased             |       | LPS, MP, BL, S             |       | 170,000                                |       | 10                   | %          | 1 year                                         |       | Annual rollover                                                |       | —                                                             |       |
| Dimmitt, TX                                     |       | Owned              |       | LPC, MP, BL, S             |       | 160,000                                |       | 9                    | %          | —                                              |       | —                                                         |       | —                                                             |       |
| Houston, TX                                     |       | Owned              |       | LPS, MP, BL                |       | 120,000                                |       | 7                    | %          | —                                              |       | —                                                         |       | —                                                             |       |
| Baltimore, MD                                   |       | Leased             |       | LPS, MP, BL                |       | 116,000                                |       | 7                    | %          | 14 years                                       |       | 24 years                                                  |       | 2; 5 years                                                    |       |
| Clovis, NM                                      |       | Owned              |       | W                          |       | 91,000                                 |       | 5                    | %          | —                                              |       | —                                                         |       | —                                                             |       |
| Clewiston, FL                                   |       | Leased             |       | LPS, MP, BL                |       | 67,000                                 |       | 4                    | %          | 9 years                                        |       | 19 years                                                  |       | 2; 5 years                                                    |       |
| Albany, NY                                      |       | Leased             |       | LPS, MP, BL                |       | 63,000                                 |       | 4                    | %          | 16 years                                       |       | 16 years                                                  |       | —                                                             |       |
| Cincinatti, OH                                  |       | Leased             |       | LPS, MP, BL, S             |       | 58,000                                 |       | 3                    | %          | 5 years                                        |       | 15 years                                                  |       | 2, 5 years                                                    |       |
| Seattle, WA                                     |       | Leased             |       | LPS, MP, BL                |       | 50,000                                 |       | 3                    | %          | 10 years                                       |       | 20 years                                                  |       | 1, 10 year                                                    |       |
| Omaha, NE                                       |       | Owned              |       | LPC, MP, BL, S             |       | 52,000                                 |       | 3                    | %          | —                                              |       | —                                                         |       | —                                                             |       |
| Catoosa, OK                                     |       | Leased             |       | LPS, MP, BL, S             |       | 42,000                                 |       | 2                    | %          | 1 year                                         |       | Annual rollover                                                |       | —                                                             |       |

 

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*                                         Basedon total production of 1.7 million short tons, each ton comprising 2000lbs in weight. Data accurate as of October 31, 2008.

 

LPS—Liquid ProteinSupplements

MP—Mill Products(products for the dry feed mills)

BL—Blends (molasses plusone or two other ingredients)

W—Whey Permeate

S—Suspensions

 

Westway’s liquidfeed supplements facilities can be classified into four broad groupings:suspension plants, liquid feed supplements plants, dehydrated molasses plantsand block plants. Common infrastructure at all sites includes relatively large,steel liquid ingredient storage tanks that are typically designed to storeviscous liquid products that are heated and have an air agitation system.Typical customer purchases utilize truck transportation of approximately 24tons each and require a finished feed tank capacity of approximately 5,000–6,000gallons. Westway has systems in place to manage “traceability” of all finishedproduct shipments for the benefit of Westway’s customers.

 

*SuspensionPlants.*  Suspensionplants require specific dry ingredient storage infrastructure and mixingsystems. Suspension formulations normally contain up to 30% insoluble feedingredients such as calcium carbonate, potassium chloride and protein meals.These dry feed ingredients are finely ground and suspended in various liquidingredients. Ten of Westway’s plants have the ability to manufacture suspensionproducts.

 

*LiquidSupplement Plants.* Liquid supplement plants typically manufacture protein supplements, feedmill products or simple blends. 24 of Westway’s plants have the ability tomanufacture liquid protein supplements.

 

*DehydratedMolasses Plants.* Dehydration molasses plants have a substantial dry feed ingredientinfrastructure. Unlike typical suspension or liquid supplement plants, driedmolasses plants require large warehouses to store finished products. Two ofWestway’s plants manufacture dried molasses.

 

*BlockPlants.*  Block plantsutilize a substantial amount of dry feed ingredient infrastructure.Formulations require a liquid premix, which is normally manufactured at one ofWestway’s liquid feed supplement plants and transferred to the block plant.Block plants require a substantial amount of warehouse space to store finishedproducts. Westway’s blocks are manufactured at two wholly-owned facilities andone joint venture site (Southern States Cooperative, Park City, KY).

 

*ChampionLiquid Feeds Pty Ltd*

 

In addition to theterritories served in North America, Westway also has a presence in theAustralian feed markets through its 50% interest in Champion. Champion wasformed in 2001 by Westway and Ridley for the purpose of manufacturing anddistributing liquid feed supplements in Australia. Prior to the formation ofthe joint venture, Ridley, the largest dry feed distributor in Australia, ownedand operated one liquid feed supplement plant in southern Queensland, which wasproducing approximately 28,000 tons of liquid feed supplements per year. Byleveraging Westway’s existing intellectual property, Westway gained access to asignificant new agricultural market for liquid feed supplements. In the yearended 

 

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June 30, 2008,Champion produced 42,000 tons of liquid feed supplements and an additional42,000 tons of unprocessed molasses for the livestock industry and in December 2008,commissioned two new liquid suspension plants in central Queensland andVictoria. In the future, Westway expects that Champion will be able to supply acomplete range of liquid feed supplements to Victoria, New South Wales andQueensland. Currently the following markets are served: Beef Feedlot (26%);Beef Pasture (20%); Dairy (14%) and Feed Mills (40%).

 

*Competition*

 

In liquid feedsupplements, Westway’s competition falls into three categories in NorthAmerica: direct molasses based products, the dry feed industry and the group of“pasture” livestock producers who provide little or no supplemental proteincomponent of feed. In the direct molasses based markets, Westway is the largestproducer of liquid feed supplements in North America and is the only liquidfeed supplements business in North America capable of supplying all of thecontinental United States, northern Mexico and the western Canadian provinces.Regionally, Westway competes against a number of liquid animal feed companiesthat have been able to establish a customer base through ingredient supplycontracts or integration into their customers’ businesses. Westway competes withMidwest Protein Molasses Supplements which is a primary supplier of suspensionsto the beef feedlot area in Kansas, Nebraska, Oklahoma and Colorado and QualityLiquid Feeds, which we refer to as “QLF,” based in Dodgeville, Wisconsin. QLFcompetes heavily with Westway in all areas of the United States with theexception of the west coast and the southeast but does not compete in Canada orMexico. Land O’Lakes Purina Feed LLC is considered to be the remaining keycompetitor.

 

In dry feedmarkets, Westway competes with the five largest companies in the market,considered to be: Land O’Lakes Purina Feed LLC, Cargill Animal Nutrition,ADM Alliance Nutrition, Inc., J.D. Heiskell & Company and KentFeeds.

 

In the liquidsupplemental nutrient markets Westway considers QLF the primary source ofcompetition.

 

*Westway’sRelationship with the ED&F Man Group*

 

The relationshipbetween Westway and ED&F Man and its direct and indirect subsidiaries,which we collectively refer to as the “ED&F Man group,” provides both businesseswith a number of benefits. For Westway in particular, the benefits of being thepreferred supplier of bulk liquid storage to ED&F Man combined withsecurity over the quality and quantity of molasses supply to the liquid feedsupplements business provide the group with a degree of certainty regarding theongoing operational characteristics of the business and the group’s ability toservice its livestock customers in the future. In tandem with the furtherinvestment opportunities made possible by the business combination, it isanticipated that the relationship provides Westway with a robust platform fromwhich growth will be generated in the future.

 

*PreferredSupplier Arrangements*

 

Westway’slong-term relationship as a preferred supplier of bulk liquid storage toED&F Man’s various trading divisions is a major part of Westway’s successand growth strategy. The contractual relationships with ED&F Man furthersecure a relationship that has been in place for 20 years. Westwaybelieves that ED&F Man provides global expansion opportunities and as apreferred supplier, expects to secure the de-minimis load volume that willsupport both existing and new locations. This is exemplified by the recentexpansion of Westway’s facilities in Houston through the provision of servicesto ED&F Man’s molasses, tallow and yellow grease businesses and ED&FMan’s acquisition of the molasses and feed business of PM Ag, Inc. in2002, which resulted in Westway adding the Houston No. 2 facility to itsnetwork. ED&F Man’s further acquisition of Gardiner Smith’s U.S. fats andoils business has also provided significant revenue streams in Houston.

 

Westway believesthat the significant and consistent revenue stream generated through itsrelationship with ED&F Man has provided base capacity sufficient to allowWestway to modernize and expand its Houston operations. In recent years, theHouston No. 1 terminal has doubled its capacity and revenue and, as aresult of this new expansion, has generated increased storage rates. ED&FMan has participated in this new expansion as well by taking on additionalspace through its bio-fuels business. The Houston No. 2 terminal has beencompletely renovated with new docks, pipe systems and automation. In addition,the site’s capacity has expanded and many older tanks have been replaced.ED&F Man’s trading divisions not only rent space directly at this terminalbut also actively trade and create volume from numerous other site customers.

 

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*MolassesSupply Contract*

 

Molasses, as aningredient, comprises approximately 44% of the total ingredients utilized inWestway’s formulations, of which approximately 50-55% is typically procuredfrom offshore locations. Historically, Westway has relied upon ED&F Man tosource and provide the logistics for this basic ingredient. Westway andED&F Man have established a long-term molasses supply agreement, pursuantto which ED&F Man will be the primary supplier of offshore cane molasses,with a pricing mechanism very close to historical practices at arm’s length.Westway will continue to source all domestic beet molasses and beet molassesby-products.

 

*SharedServices*

 

Historically,Westway has been supported by ED&F Man, which has provided a number ofcorporate and back office functions and services. Following the businesscombination, ED&F Man will be contracted to provide Westway with sharedservices under transitional arrangements that allow Westway to ensure anorderly adjustment to operate as a fully independent business as soon aspractical or as is most appropriate for the business. The basis for thistransitional arrangement is set out in the shared services agreement underwhich, in summary, ED&F Man will continue to provide certain humanresources, information technology, accounting administration and invoicing andother services for a period of one year as a minimum following the separation.Following this contracted period, transitional arrangements exist to facilitatethe final separation of activities, function by function at the mutualagreement of both parties. During that period, Westway will continue to becharged on the same basis as it has been historically, subject to contractednormal increases for inflation.

 

Historically,arrangements have existed to ensure that services are provided on a basis thatis reflective of normal volumes, market prices and typical business practice.Contract rates and services are negotiated at arms length and on the basis ofprevailing market rates for similar storage and services, or rates that thebusiness is able to obtain from third parties.

 

**Business Strategy**

** **

We were formed forthe purpose of acquiring, through a merger, capital stock exchange, assetacquisition, stock purchase or other similar business combination, an operatingbusiness in the agriculture industry. Our management intends to focus its efforts on a business combination inthe United States, but if an attractive foreign business opportunity presentsitself, however, our management intends to pursue it.

 

**Effecting a BusinessCombination**

** **

***General***

*** ***

Weintend to structure the business combination as described above under theheading “The Proposed Business Combination with ED&F Man HoldingsLimited—General—The Transaction Agreement,” and the payment of the transactionconsideration as described above under the heading “The Proposed BusinessCombination with Integrated Drilling Equipment Company—TransactionConsideration.”  However, we cannotassure you that we will be able to complete the business pursuant to the termsof the transaction agreement, or at all. If we are unable to complete the business combination, because ourstockholders fail to approve the business combination or for any other reason,it is unlikely that we will have enough time to negotiate and consummateanother business combination and would, therefore, be forced to dissolve andliquidate the trust account.

 

Althoughwe have sought, and continue to seek, to have all vendors, prospective targetbusinesses and other entities with whom we engage in business enter intoagreements with us waiving any right, title, interest or claim of any kind inor to any monies held in the trust account for the benefit of our publicstockholders, there is no guarantee that they will enter into such agreements.Nor is there any guarantee that such entities will agree to waive any claimsthey may have in the future as a result of, or arising out of, anynegotiations, contracts or agreements with us and will not seek recourseagainst the trust account for any reason. Accordingly, the proceeds held in thetrust account could be subject to claims that could take priority over theclaims of our public stockholders.  Ourfounders, 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, suchfounders will not have any personal liability as to any claimed amounts owed toa third party who executed a waiver (including a prospective acquisitiontarget) or the underwriters in our initial public offering. We cannot assureyou that such founders will be able to satisfy those obligations or that the 

 

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proceeds in the trust account will not be reduced bysuch claims. Further, such founders will not have any personal liability as toany claimed amounts owed to a third party that executed a waiver (including aprospective acquisition target) or the underwriters in our initial publicoffering.

 

Subjectto the requirement that our initial business combination must be with anoperating business in the agriculture industry that has a fair market valueequal to at least 80% of our net assets at the time of the acquisition, ourmanagement had virtually unrestricted flexibility in identifying and selectinga prospective acquisition candidate.

 

Otherthan the factors described below, we have not established any specificattributes or criteria for prospective target businesses.  Although our management has endeavored (and,if we do not complete the business combination, our management will continue toendeavor) to evaluate the risks inherent in a particular target business,including Westway, we cannot assure you that we will properly ascertain orassess all significant risk factors.

 

***Sourcesof Target Businesses; Selection of a Target Business and Structuring of aBusiness Combination***

*** ***

After completionof our initial public offering, we began contacting investment bankers, privateequity firms and other business contacts to generate ideas about a suitablebusiness combination. We did not contact ED&F Man or any of its affiliatesas part of our initial search.  We alsoreceived unsolicited inquiries from several investment banking firms, privateequity firms and other business intermediaries. We informed these contacts thatwe were seeking an operating business for our initial business combination.Criteria for suitability included our management’s assessment of thecompetitive strengths and weaknesses of the potential business targets, thestrength of the management team, and the quality of the assets to be acquired.As disclosed in the prospectus for our initial public offering, in evaluating aprospective target business, our management team considered one or more of thefollowing factors:

 

·                  financial condition and results ofoperations;

 

·                  both long-term and short-term growthpotential;

 

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

 

·                  earnings before interest, taxes, depreciationand amortization charges;

 

·                  consistent operating margins;

 

·                  nature of the customers andcontracts;

 

·                  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 therelevant industry sector;

 

·                  potential growth in governmentspending in the segment in which the target company operates;

 

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

 

·                  costs associated with effecting thebusiness combination.

 

On a quarterlybasis, our board of directors was updated on the status of the businesscombination search, both in general and as to any significant prospects.

 

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Our sourcingefforts resulted in a number of potential targets. These opportunities wereevaluated based on our stated criteria. Many did not fit our criteria, whilesome were eliminated due to too small an enterprise value or indications thatthe sellers’ valuation expectations were too high. The screening process wasrepeated multiple times, and we remained in continual dialogue with oursourcing network of investment and commercial bankers and other businesscontacts.

 

We declined tomove forward on some opportunities because we did not believe the financialcharacteristics, industry profile and position, management teams, attainablevaluations and/or deal structures were suitable. There were also companies thatwere not interested in pursuing a deal with us based on our publicly-tradedstatus, capital structure or ability to close with sufficient certainty. Othercompanies decided to accept competitive bids from other acquirers or not tosell themselves.

 

Non-disclosureagreements (and trust waivers) were signed with the potential targets andpreliminary discussions were initiated with such potential targets. From thisuniverse of potential targets, we decided to pursue twelve companies based ontheir willingness to pursue a deal with us at that time. With these twelvetargets, we had substantive discussions, conducted extensive due diligence andengaged the potential seller in a negotiation process.

 

The followingtable highlights the target businesses on which we advanced to the negotiationstage, but which were ultimately dismissed as a business combination candidatein favor of the business combination with Westway:

 
| **Target Company Business**                  | ** ** | **Activity Period**                        | ** ** | **Reason not Pursued**                                                  |
|----------------------------------------------|------------|--------------------------------------------|------------|-------------------------------------------------------------------------|
| Generic Chemical Company                     |       | May 2007 to  January 2008        |       | Outbid                                                                  |
| Grain Storage Company                        |       | August 2007 to  May 2008         |       | Seller decided not to  sell                                             |
| Fertilizer Producer                          |       | September 2007 to  January 2008  |       | Outbid                                                                  |
| Agricultural Chemical  Business              |       | September 2007 to  December 2008 |       | Did not agree on  valuation                                             |
| Agricultural Chemical  Company               |       | October 2007                          |       | Industry weakness                                                       |
| Household Fertilizer  and Pesticide business |       | December 2007 to  January 2008   |       | Did not agree on  valuation                                             |
| Seed Manufacturer                            |       | February 2008 to  March 2008     |       | Outbid                                                                  |
| Retail Agricultural  Company                 |       | March 2008 to  April 2008        |       | Lacked adequate  financials                                             |
| Generic Chemical  Company                    |       | June 2008 to  November 2008      |       | Negotiations terminated  upon our entering in the transaction agreement |
| Agricultural Retailer                        |       | April 2008 to  November 2008     |       | Negotiations terminated  upon our entering in the transaction agreement |

 

In June 2007,Mr. Francis Jenkins, Jr. by chance encountered Perk Hixon of LazardFrères & Co., which we refer to as “Lazard.” Mr. Hixon and Mr. FrancisJenkins, Jr. had been colleagues at The First Boston Corporation.  Mr. Francis Jenkins, Jr. mentionedhis work with Shermen and its desire to find an acquisition target. After thisinitial conversation, Mr. Hixon indicated to Mr. Francis Jenkins, Jr.that Lazard’s client, ED&F Man, was exploring various financingalternatives for certain businesses within the ED&F Man group, including,but not limited to, a potential business combination or refinancing involvingits bulk liquid storage business. Between June 2007 and December 2007, Mr. Francis Jenkins, Jr.and Mr. Hixon remained in contact regarding our possible interest in abusiness combination involving the bulk liquid storage business.  In December, 2007, our representatives metwith representatives of ED&F Man in London to discuss a potential businesstransaction. Following extensive meetings and negotiations, on July 24,2008, we and ED&F Man executed an exclusivity agreement, providing that,among other things, from such date through September 8, 2008, we would notdirectly or indirectly, solicit, initiate, knowingly facilitate or encourage,engage in discussions or negotiations with any other person, reach anyagreement or understanding concerning, or furnish to any other person anyinformation concerning a potential business combination with us and ED&FMan would not do any of the foregoing with respect to the businessescontemplated to be included in the transaction with us.  Between August 2008 and November 2008,representatives of Shermen and ED&F Man, and our respective counsel,negotiated the terms of the business combination and the agreements relating tothe proposed transaction.  On November 25,2008, our board of directors approved the proposed business combination withED&F Man, the transaction agreement and related agreements, subject tonegotiation of the final terms by management. On November 25, 2008, the parties executed the transactionagreement. Prior to the opening of the U.S. financial markets on November 26,2008, we issued a press release announcing the business combination, theprincipal terms of which are described above under the headings “The ProposedBusiness Combination with ED&F Man—General—The Transaction Agreement” and “TheProposed Business Combination with ED&F Man—Transaction Consideration”.

 

We believe it isunlikely that we will have sufficient funds available to us in the trustaccount to pay the costs associated with identifying and evaluating anothertarget business and completing a business combination with another targetbusiness, if we are unable to complete the business combination.

 

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***FairMarket Value of Target Business***

*** ***

Theinitial target business that we acquire must have a fair market value equal toat least 80% of our net assets at the time of such acquisition. The fair marketvalue of such business will be determined by our board of directors based uponstandards generally accepted by the financial community, such as actual andpotential sales, earnings and cash flow and book value. Our board of directorsobtained from Oppenheimer a written opinion, dated November 24, 2008, tothe effect that, as of the date of that opinion and based on and subject to thefactors, assumptions and limitations described in that opinion, (i) thepurchase price (as defined in the opinion) was fair, from a financial point ofview, to us and (ii) the fair market value of Westway was equal to atleast 80% of our net assets.  Such opinionwill be included in the proxy solicitation materials furnished to ourstockholders in connection with the business combination.  Based on such opinion and the evaluation ofWestway’s business and prospects by our board of direcvtors, our board ofdirectors determined that this 80% requirement was met.

 

***Limited Ability to Evaluate the Target Business’ Management***

*** ***

Althoughwe closely scrutinized the management of Westway, we cannot assure you that ourassessment of Westway’s management will prove to be correct, or that the futuremanagement will have the necessary skills, qualifications or abilities tosuccessfully manage our company or its business.

 

Followinga business combination, we may seek to recruit additional managers tosupplement the incumbent management of Westway. We cannot assure you that we will have the ability to recruit additionalmanagers, or that any such additional managers we do recruit will have therequisite skills, knowledge or experience necessary to enhance Westway’smanagement.

 

***Conversion Rights***

*** ***

At thetime we seek stockholder approval of any business combination, including theproposed business combination with ED&F Man, we will offer each publicstockholder (other than our founders) the right to have such stockholder’sshares of common stock converted into cash if the stockholder votes against thebusiness combination and the business combination is approved and completed.Our founders 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 the publicstockholders (other than our founders). The actual per-share conversion pricewill be equal to the amount in the trust account, including the amount held inthe trust account representing the deferred portion of the underwriters’ fee,and all accrued interest (net of taxes payable) not made available to us forworking capital requirements as of two business days prior to the consummationof the business combination, divided by the number of units sold in our initialpublic offering. Based on the amount of cash held in the trust account as of January 31,2009, without taking into account any interest accrued after such date, eachholder of IPO shares will be entitled to elect that we convert each IPO sharesuch holder holds into a right to receive approximately $6.02 per share. Theremay be a disincentive for public stockholders to exercise their conversionrights due to the fact that the amount available to such stockholders is likelyto be less than the purchase price paid for the unit in our initial publicoffering.  Voting against the businesscombination alone will not result in an election to exercise a stockholder’sconversion rights. A stockholder must also affirmatively exercise suchconversion rights prior to the time the business combination is voted upon bythe stockholders. To exercise such conversion rights, a stockholder must havesuch stockholder’s broker electronically tender such stockholder’s shares tothe transfer agent using the facilities of the Depositary Trust Company (or, inthe event that such stockholder had previously requested and received aphysical certificate, surrender such physical certificate to the transferagent), 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 a meeting held forthat purpose. However, the request will not be granted unless the stockholdervotes against the business combination and the business combination is approvedand completed. Any request for conversion, once made, may be withdrawn at anytime up to the date of the meeting.

 

Traditionally,blank check companies have allowed converting stockholders to tender theirshares after the stockholders meeting held to vote on a business combination.This procedure created uncertainty in determining whether the number ofconverting stockholders would result in a business combination failing. Toavoid this uncertainty, we have instituted the requirement of tendering sharesby converting stockholders prior to the time a business combination is votedupon by our stockholders by instructing their brokers to electronically tendertheir shares to the transfer agent using the facilities of the Depositary TrustCompany (or, in the event that such stockholders had previously requested andreceived physical certificates, to surrender such physical certificates to thetransfer agent). Public stockholders eligible to convert their shares who failto comply with the procedures above by 5:00 P.M., Eastern Standard Time,on the business day immediately preceding the date of the stockholders meetingheld to vote on a business combination will forfeit their right to receive the 

 

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conversion price. We intend to remind our public stockholdersof our conversion procedures in the proxy statement used in connection with thesolicitation of the stockholder vote for a business combination. If a businesscombination is not consummated, we will return the shares tendered by thestockholders who elected conversion by returning such stockholders’ shareselectronically through the facilities of the Depositary Trust Company (or, inthe event that such stockholders had surrendered physical certificates, byreturning such certificates by overnight mail), and will seek anotheracquisition target.

 

Wewill, upon confirmation that the shares which have been converted have beenelectronically tendered (or the physical certificates for such shares have beensurrendered) to our transfer agent, accompanied by a letter of instruction, andcompliance with 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 the trust account payable in respect of the sharesso tendered and covered by such letter of instruction (after giving effect toany required tax withholdings) to the person to whom payment thereof isdirected in such letter of instruction.

 

Weintend to distribute the funds to eligible stockholders who elect conversionpromptly after completion of the business combination. 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 ourinitial public offering (other than our founders) both vote against a businesscombination and exercise their conversion rights. If a business combination isnot consummated, we will return the shares tendered by the stockholders whoelected conversion either by returning physical certificates or byelectronically through the facilities of the Depositary Trust Company (or, inthe event that such stockholders had surrendered their physical certificates,by returning such physical certificates by overnight mail), and will seekanother acquisition target.

 

If ourbusiness combination requires us to use substantially all of our cash to paythe purchase 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 stock usedas consideration, or we may need to arrange for third party financing, ifavailable.

 

Ifholders of no more than approximately 39.99% of the shares sold in our initialpublic offering vote against a proposed business combination and seek toexercise their conversion rights and such business combination is consummated,our founders have agreed to forfeit and return to us for cancellation a numberof shares so that they will collectively own no more than 23.0% of ouroutstanding common stock upon consummation of such business combination(without giving effect to any shares that may be issued in the businesscombination). If we are unable to effect a business combination and liquidate,none of our founders will receive any portion of the liquidation proceeds withrespect to common stock owned by them immediately before our initial publicoffering.

 

***Planof Dissolution and Liquidation if No Business Combination***

*** ***

If wedo not complete a business combination within 18 months after the consummationof our initial public offering, 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, which we refer to as the “DGCL,” we will dissolve anddistribute to all of our public stockholders, in proportion to their respectiveequity interests, an aggregate sum equal to the amount in the trust account,including the amount representing the deferred portion of the underwriters’fees, plus any interest (net of taxes payable) not made available to fund ourworking capital requirements, plus any remaining net assets. 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 certificate ofincorporation, our board of directors has agreed to dissolve after the expiryof those time periods (assuming that there has been no business combinationconsummated), and furthermore, our powers following the expiration of thepermitted time periods for consummating a business combination willautomatically thereafter be limited to acts and activities relating to dissolvingand winding up our affairs, including liquidation. The funds held in the trustaccount may not be distributed except upon our dissolution and, unless anduntil such approval is obtained from our stockholders, the funds held in thetrust account will not be released. Consequently, holders of a majority of ouroutstanding stock must approve our 

 

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dissolution in order to receive the funds held in thetrust account and the funds will not be available for any other corporatepurpose. Upon the approval by our stockholders of our plan of dissolution anddistribution, we will liquidate the trust account to our public stockholders.Our founders have agreed to waive their respective rights to participate in anyliquidation distribution occurring upon our failure to consummate a businesscombination, but only with respect to those shares of common stock owned bythem prior to our initial public offering; they will participate in anyliquidation distribution with respect to any shares of common stock acquired inconnection with or following our initial public offering. There will be nodistribution from the trust account with respect to the warrants and all rightswith respect to the warrants will effectively terminate upon our liquidation.

 

Basedon the amount of cash held in the trust account as of January 31, 2009,without taking into account any interest accrued after such date, each holderof IPO shares will be entitled to elect that we convert each IPO share suchholder holds into a right to receive approximately $6.02 per share. We cannotassure you that the actual per-share liquidation value of the trust account willnot be less than approximately $6.02, plus interest (net of taxes payable), dueto claims of creditors. Our founders, other than Messrs. Pottinger,Prochaska and Jenkins, III, have agreed, subject to certain exceptions,that they will be personally liable, on a joint and several basis, to coverclaims made by such third parties, but only if, and to the extent, the claimsreduce the amounts in the trust account available for payment to ourstockholders in the event of a liquidation and the claims are made by a vendoror service provider for services rendered, or products sold, to us or by aprospective acquisition target. Based on representations made to us by theseexisting 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 such founders will be able to satisfythose obligations or that the proceeds in the trust account will not be reducedby such claims. Further, such founders will not have any personal liability asto any claimed amounts owed to a third party who executed a waiver (including aprospective acquisition target) or the underwriters in our initial publicoffering. The indemnification is set forth in the insider letter agreementsdated as of May 24, 2007, which are exhibits to the registration statementfor our initial public offering. 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 (including costs andexpenses incurred in connection with our plan of dissolution and liquidationcurrently estimated at approximately $50,000 to $75,000).

 

However,the per-share liquidation price received by our public stockholders could beless than approximately $6.02 per share because we cannot predict withcertainty: (i) potential claims or lawsuits that may be brought againstus; (ii) what waiver agreements, if any, we will be able to obtain fromvendors, prospective target businesses and/or other entities with whom weengage in business; (iii) the amount of additional expenses that we mayincur that exceeds the amount of the funds held outside of the trust account;and (iv) the ability of our founders, other than Messrs. Pottinger,Prochaska and Jenkins, III, to ensure that the funds held in the trustaccount are not reduced by claims of vendors, prospective target businessesand/or other entities with whom we engage in business and who have not executeda waiver.

 

Additionally,if we are forced to file a bankruptcy case or an involuntary bankruptcy case isfiled against us which is not dismissed, the funds held in our 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 our publicstockholders the liquidation amounts due them.

 

Wehave sought, and will continue to seek, prior to completion of a businesscombination, to have all vendors, a prospective target business or otherentities with whom we engage in business enter into agreements with us waivingany right, title, interest or claim of any kind in or to any monies held in thetrust account for the benefit of our public stockholders. In the event that avendor, prospective target business or other entity were to refuse to enterinto such a waiver, our decision to engage such vendor or other entity or toenter into discussions with such target business would be based on ourmanagement’s determination that we would be unable to obtain, on a reasonablebasis, substantially similar services or opportunities from another entitywilling to enter into such a waiver.

 

If weenter into either a letter of intent, an agreement in principle or a definitiveagreement to complete a business combination prior to the expiration of 18months after the consummation of our initial public offering, but are unable tocomplete the business combination within the 18-month period, then we will havean additional six months in which to complete the business combinationcontemplated by the letter of intent, agreement in principle or definitiveagreement. If we are unable to do so by the expiration of the 24-month periodfrom the consummation of our initial public offering, we will then liquidate.Upon notice from us, the trustee of the trust account will commence liquidatingthe investments constituting the trust account and will turn over the proceedsto our transfer agent for distribution to our public stockholders as part ofour plan of dissolution and distribution. We will promptly instruct the trusteeto commence liquidating the investments 

 

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constituting the trust account after the expiration ofthe applicable 18-month or 24-month period and upon the approval by ourstockholders of our plan of dissolution and distribution.

 

Underthe DGCL, 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 set forth in Section 280of the DGCL intended to ensure that it makes reasonable provision for allclaims against it, including a 60-day notice period during which anythird-party claims can be brought against the corporation, a 90-day periodduring which the corporation may reject any claims brought, and an additional150-day waiting period before any liquidating distributions are made to stockholders,any liability of stockholders with respect to a liquidating distribution islimited to the lesser of such stockholder’s pro rata share of the claim or theamount distributed to the stockholder, and any liability of the stockholderwould be barred with respect to any suit not instituted prior to the thirdanniversary of the dissolution. Although we will make liquidating distributionsto our stockholders as soon as reasonably possible as part of our plan ofdissolution, we do not intend to comply with those procedures. As such, ourstockholders 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. Becausewe will not be complying with Section 280, we will seek stockholderapproval to comply with Section 281(b) of the DGCL, requiring us toadopt a plan of dissolution that will provide for our payment, based on factsknown to us at such time, of (i) all existing claims, (ii) allpending claims and (iii) all claims that may be potentially broughtagainst us within the subsequent 10 years. However, because we are a blankcheck company, rather than an operating company, and our operations will belimited to searching for prospective target businesses to acquire, the onlylikely claims to arise would be from our vendors (such as accountants, lawyers,investment bankers, etc.) or potential target businesses. As described above,we are obligated to have all vendors, service providers and prospective targetbusinesses execute agreements with us waiving any right, title, interest orclaim of any kind they may have in or to any monies held in the trust account.Moreover, because we are obligated to obtain the waiver agreements describedabove, the funds held in trust should be excluded from the claims of anycreditors who executed such agreements in connection with any bankruptcyproceeding.

 

We maynot be able to return to our public stockholders the liquidation amounts duethem because we cannot predict with certainty: (i) potential claims orlawsuits that may be brought against us; (ii) what waiver agreements, ifany, we will be able to obtain from vendors, prospective target businessesand/or other entities with whom we engage in business; (iii) the amount ofadditional expenses that we may incur that exceeds the amount of the funds heldoutside of the trust account; and (iv) the ability of our founders, otherthan Messrs. Pottinger, Prochaska and Jenkins, III, to ensure thatthe funds held in the trust account are not reduced by claims of vendors,prospective target businesses and/or other entities with whom we engage inbusiness and who have not executed a waiver.

 

Weexpect that all costs associated with the implementation and completion of ourdissolution and distribution, which currently estimate to be approximately$50,000 to $75,000, will be funded by any funds not held in our trust account,although we cannot assure you that there will be sufficient funds for suchpurpose.

 

Wecurrently believe that any plan of dissolution and distribution subsequent tothe expiration of the 18 and 24 month deadlines would proceed in the followingmanner:

 

·                  our board of directors will,consistent with its obligations described in our 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 thepreliminary proxy statement with the SEC;

 

·                  if the SEC does not review thepreliminary proxy statement, then 10 days following the passing of suchdeadline, we will mail the proxy statements to our stockholders, and 30 daysfollowing the passing of such deadline we will convene a meeting of ourstockholders at which they will either approve or reject our plan ofdissolution and distribution; and

 

·                  if the SEC does review the preliminary proxy statement, we currentlyestimate that we will receive their comments 30 days following the passing ofsuch deadline. We will mail the proxy statements to our stockholders followingthe conclusion of the comment and review process (the length of which we cannotpredict with any certainty), and we will convene a meeting of our stockholdersat which they will either approve of reject our plan of dissolution anddistribution.

 

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In theevent we seek stockholder approval for a plan of dissolution and distributionand do not obtain such approval, we will nonetheless continue to pursuestockholder approval for our dissolution. Pursuant to the terms of ourcertificate 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 stockholder voted against and that is actuallycompleted by us, the funds held in our trust account may not be distributedexcept upon our dissolution and, unless and until such approval is obtainedfrom our stockholders, the funds held in our trust account will not bereleased. In addition, if we seek approval from our stockholders to consummatea business combination within 90 days of the expiration of 24 months (assumingthat the 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 our initial public offering, the proxy statement related tosuch a business combination will also seek stockholder approval for our boardof directors’ recommended plan of distribution and dissolution, in the eventour stockholders do not approve such a business combination. If no proxystatement seeking the approval of our stockholders for a business combinationhas been filed 30 days prior to the date which is 24 months from the date ofthis offering, our board of directors 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 stockholder approvalfor such plan. Upon the approval by our stockholders of our plan of dissolutionand distribution, we will liquidate our trust account to our publicstockholders. In accordance with this, we have included in our preliminaryproxy statement filed with the SEC with respect to the Business Combination aproposal to approve a plan of liquidation.

 

**Competition**

** **

Wehave encountered intense competition in identifying, evaluating and pursuing atarget business 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. Based on publicly available information, manysimilarly-structured companies that have gone public since August 2003have not actually consummated a business combination or announced that theyhave entered into a definitive agreement for a business combination.  The fact that only a few of such companieshave either completed a business combination or have entered into a definitiveagreement for a business combination may be an indication that there are only alimited number of attractive target businesses available to such entities orthat may privately-held target businesses may not be inclined to enter into abusiness combination with publicly held blank check companies like us. If thebusiness combination is not completed, we cannot assure you that we will beable to successfully compete for an attractive business combination.  Additionally because of this competition, ifour stockholders do not approve the business combination, we cannot assure youthat we will be able to effectuate a business combination within the requiredtime periods.  If we are unable to find asuitable target business within such time periods, we will be forced toliquidate.  Further, the following maynot have been viewed favorably by certain target businesses:

 

·                  our obligation to seek stockholderapproval of a business combination may delay or threaten the completion of atransaction;

 

·                  the length of time that may berequired to complete a business combination as a result of an extensive reviewprocess by the SEC;

 

·                  our obligation to convert into cashshares of common stock held by our public stockholders to such holders thatboth vote against the business combination and exercise their conversion rightsmay reduce the resources available to us for a business combination; and

 

·                  the outstanding warrants, and thepotential future dilution they represent.

 

Any ofthese factors may place us at a competitive disadvantage in consummating abusiness combination. 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 wesucceed in effecting the proposed business combination with ED&F Man, therewill, in all likelihood, be intense competition from competitors of Westway. Wecannot assure you that, subsequent to the business combination, we will havethe resources to compete effectively.

 

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**Facilities**

** **

We donot own any real estate or other physical properties. Our headquarters arelocated at c/o The Shermen Group, 230 Park Avenue, Suite 1000, New York,NY 10169. The cost of this space is included in the $9,950 per month feeShermen Capital Partners, LLC charges us for general and administrative servicepursuant to a letter agreement between us and Shermen Capital Partners, LLC. Webelieve that our office facilities are suitable and adequate for our businessas it is presently conducted. Francis P. Jenkins, Jr., our chairman andchief executive officer, is the managing member of Shermen Capital Partners,LLC.

 

**Employees**

** **

Wecurrently have four officers, three of whom are also members of our board ofdirectors. We have no other employees. These individuals are not obligated todevote any specific number of hours to our matters and intend to devote only asmuch time as they deem necessary to our affairs. We do not intend to have anyfull time employees prior to the consummation of a business combination.

 

**Periodic Reporting andFinancial Information**

** **

Wehave registered our units, common stock and warrants under the SecuritiesExchange Act of 1934, as amended, and have reporting obligations thereunder,including the requirement that we file annual and quarterly reports with theSEC.  In accordance with the requirementsof the Securities Exchange Act of 1934, amended, this Annual Report on Form 10-Kcontains financial statements audited and reported on by our independent publicaccounting firm.

 

Wewill provide our stockholders with audited financial statements of Westway aspart of the proxy solicitation materials sent to stockholders to assist them inassessing Westway and soliciting their vote on the business combination and theother proposals.  We urge you to readthese financial statements and proxy solicitation materials in their entirety.

 

We arerequired to comply with the internal control requirements of the Sarbanes-OxleyAct for the fiscal year ended December 31, 2008.  A target company may not be in compliancewith the provisions of the Sarbanes-Oxley Act regarding adequacy of theirinternal controls.  The development ofthe internal controls of any such entity to achieve compliance with theSarbanes-Oxley Act may increase the time and costs necessary to complete anysuch acquisition.

 

Youwill be able to read and copy any materials we file with the SEC, including,without limitation, the proxy solicitation materials relating to the businesscombination and the other proposals, at the SEC’s Public Reference Room at100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room bycalling the SEC at 1-800-SEC-0330.  TheSEC maintains an Internet site that contains reports, proxy and informationstatements, and other information regarding issuers that file electronicallywith the SEC at http://www.sec.gov. While we do not have a website with available filings, we will provide,at no additional charge, copies of these reports, proxy and informationstatements upon request to our address at c/o The Shermen Group, 230 ParkAvenue, Suite 1000, New York, NY 10169, Attention: Corporate Secretary, orby telephone to (212) 332-2858.

 

**Item 1A.  Risk Factors**

** **

Youshould consider the following factors in evaluating our business and prospects,including the business combination, in addition to the other informationincluded in this Annual Report on Form 10-K.  Because we have entered into the transactionagreement to effect the business combination, we have presented these riskfactors under three separate sub-headings: (i) Risks Related to Shermen, (ii) Risks Related to Our Businessand Operations Following the Business Combination and (iii) Risks Relatedto the Business Combination.

 

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**RisksRelating to Shermen**

 

**We may have insufficientresources to cover our operating expenses and the expenses of consummating abusiness combination.**

 

We reserved approximately$115,000 from the proceeds of our initial public offering and the privateplacement of the founder warrants and receive one half of the interest earnedon the trust account, net of taxes, up to a total of $1,500,000 to cover ouroperating expenses until May 30, 2009 and to cover the expenses incurredin connection with a business combination. These amounts are based on ourmanagement’s estimate of the amount needed to fund our operations through May 30,2009, to consummate a business combination and to fund our working capitalrequirements. This estimate may prove inaccurate, especially if we expend asignificant portion of the available funds in pursuit of a business combinationthat is not consummated. Additionally, although we have no present intention todo so, it is possible that we will in the future find it necessary or desirableto use a portion of these funds to make a down payment or deposit or fund alock-up or “no-shop” provision, with respect to a potential businesscombination. If so, any such amount would be based on the terms of the specifictransaction and the amount of available funds at the time. If we use asignificant portion of our funds for such a purpose and we are required toforfeit such funds (whether as a result of our breach of the agreement relatingto the original payment or otherwise), we could, if such payment was largeenough and we had already used some or all of the funds allocated to duediligence and related expenses in connection with the aborted transaction, beleft with insufficient funds to continue searching for, or to conduct duediligence with respect to, other potential target businesses. In that event, wemay be required to liquidate before the completion of a business combination.If we do not have sufficient proceeds available to fund our expenses, we may beforced to obtain additional financing, either from our founders, directors andofficers or from third parties. We may not be able to obtain additionalfinancing, and our founders, directors and officers are not obligated toprovide any additional financing to us. If we do not have sufficient funds andare unable to obtain additional financing, we may be forced to liquidate priorto consummating a business combination.

 

**Under Delaware law, therequirements and restrictions relating to our initial public offering containedin our certificate of incorporation may be amended, which could reduce oreliminate the protection afforded to our stockholders by such requirements andrestrictions.**

 

Our certificate ofincorporation contains certain requirements and restrictions relating to ourinitial public offering that apply to us until the consummation of a businesscombination. Specifically, our certificate of incorporation provides, amongother things, that:

 

·                 inthe event we do not consummate a business combination by the later of 18 monthsafter the consummation of our initial public offering or 24 months after the 

 

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consummation ofour initial public offering in the event that either a letter of intent, anagreement in principle or a definitive agreement to complete a businesscombination was executed, our purpose and powers will be limited to dissolving,liquidating and winding up; provided, however, that we will reserve our rightsunder Section 278 of the Delaware General Corporation Law to bring ordefend any action, suit or proceeding brought by or against us;

 

·                 ourmanagement will take all actions necessary to liquidate the trust account aspart of any plan of dissolution and distribution in the event we do notconsummate a business combination by the later of 18 months after theconsummation of our initial public offering or 24 months after the consummationof our initial public offering 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 month period;

 

·                 Aportion of our initial public offering proceeds (approximately $119,400,000)that has been placed into the trust account may not be disbursed from the trustaccount except in connection with, or following, a business combination, uponour liquidation or as otherwise permitted in our certificate of incorporation;

 

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

 

·                 wemay consummate the business combination only if approved by a majority of ourstockholders and our public stockholders owning less than 40% of the IPO sharesexercise their conversion rights;

 

·                 ifa business combination is approved and consummated, our public stockholders whovoted against the business combination and exercised their conversion rightswill receive their pro rata share (based on the number of units sold in ourinitial public offering) of the trust account;

 

·                 ifa business combination is not consummated or a letter of intent, an agreementin principle or a definitive agreement is not signed within the time periodsspecified above, then we will be dissolved and distribute to all of our publicstockholders their pro rata share (based on the number of units sold in ourinitial public offering) of the trust account and any remaining net assetspursuant to a plan of dissolution and distribution adopted as provided therein;and

 

·                 wemay not consummate any other merger, acquisition, stock purchase, assetpurchase or similar transaction other than a business combination that meetsthe conditions specified above, including the requirement that the businesscombination be with an operating business in the agriculture industry whosefair market value is equal to at least 80% of our net assets at the time ofsuch 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, 

 

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at which the holders of amajority of our common stock vote in favor of such amendment. Any suchamendment could reduce or eliminate the protection afforded to our stockholdersby such requirements and restrictions. However, we view these provisions asobligations to our stockholders, and neither we nor our board of directors willpropose, or seek stockholder approval of, any amendment of these provisions.

 

**Our certificate of incorporationand by-laws contain certain provisions that may make it more difficult,expensive or otherwise discourage, a tender offer or a change in control ortakeover attempt by a third party, even if such a transaction would bebeneficial to our stockholders.**

 

The existence of certainprovisions in our certificate of incorporation and by-laws may have a negativeimpact on the price of our common stock by discouraging a third party frompurchasing our common stock. These provisions could also have the effect ofdiscouraging a third party from pursuing a non-negotiated takeover of Shermenand preventing certain changes of control. In addition to our staggered board,our by-laws require that, subject to certain exceptions, any stockholderdesiring to propose business or nominate a person to the board of directors ata stockholders meeting must give notice of any proposals or nominations withina specified time frame. Our by-laws also limit the ability of stockholders toremove directors, call stockholders meetings and act by written consent andprovide that vacancies of the board of directors may only be filled by amajority of the remaining directors.

 

**If third parties bring claimsagainst us, the funds held in the trust account could be reduced and theper-share liquidation price received by our public stockholders could be lessthan approximately $6.02 per share.**

 

Placing the funds in thetrust account may not protect those funds from third-party claims against us.Although we will seek to have all vendors, prospective target businesses andother entities with whom we engage in business enter into agreements with uswaiving 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 our initial public offering and theprivate placement of the founder warrants held in the trust account could besubject to claims that could take priority over the claims of our publicstockholders and the per-share liquidation price could be less than approximately$6.02, plus interest (net of taxes payable), due to claims of such creditors orother entities. Our founders, other than Messrs. Pottinger, Prochaska andJenkins, III, have agreed, subject to certain exceptions, that they willbe personally liable, on a joint and several basis, to cover claims made bythird parties, but only if, and to the extent, the claims reduce the amounts inthe trust account available for payment to our stockholders in the event of aliquidation and the claims are made by a vendor or service provider forservices rendered, or products sold, by us or a prospective acquisition target.However, these stockholders will not have any personal liability as to anyclaimed amounts owed 

 

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to a third party whoexecuted a waiver (including a prospective acquisition target) or theunderwriters. Based on representations made to us by these 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 these stockholders will be able to satisfy those obligations or that theproceeds in the trust account will not be reduced by such claims. Further,these stockholders will not have any personal liability as to any claimedamounts owed to a third party that executed a waiver (including a prospectiveacquisition target) or the underwriters. The indemnification is set forth inthe insider letter agreements, dated as of May 24, 2007, signed by thesestockholders which are exhibits to the registration statement for our initialpublic offering. We also will have access to any funds available outside thetrust account or released to us to fund working capital requirements with whichto pay any such potential claims. However, the per-share liquidation price received by our public stockholderscould be less than approximately $6.02 per share because we cannot predict withcertainty: (i) potential claims or lawsuits that may be brought againstus; (ii) what waiver agreements, if any, we will be able to obtain fromvendors, prospective target businesses and/or other entities with whom weengage in business; (iii) the amount of additional expenses that we mayincur that exceeds the amount of the funds held outside of the trust account;and (iv) the ability of our founders, other than Messrs. Pottinger,Prochaska and Jenkins, III, to ensure that the funds held in the trustaccount are not reduced by claims of vendors, prospective target businessesand/or other entities with whom we engage in business and who have not executeda waiver. Additionally, if we are forced to file a bankruptcy case or aninvoluntary bankruptcy case is filed against us which is not dismissed, thefunds held in the trust account could be subject to applicable bankruptcy law,and may be included in our bankruptcy estate and subject to the claims of thirdparties with priority over the claims of our stockholders. To the extent anybankruptcy claims deplete the trust account, we cannot assure you we will beable to return to our stockholders the liquidation amounts otherwise due them.

 

**Our stockholders may be heldliable for claims by third parties against us to the extent of distributionsreceived by them in a dissolution.**

 

If we do not complete abusiness combination within 18 months after the consummation of our initialpublic offering (or within 24 months after the consummation of our initialpublic offering if a letter of intent, agreement in principle or definitiveagreement is executed within 18 months after the consummation of our initialpublic offering and the business combination relating thereto is notconsummated within such 18-month period), we will dissolve. Under Sections 280through 282 of the Delaware General Corporation Law, stockholders may be heldliable for claims by third parties against a corporation to the extent ofdistributions received by them in a dissolution. If the corporation complieswith certain procedures intended to ensure that it makes reasonable provisionfor all claims against it, including a 60-day notice period during which anythird-party claims can be brought against the corporation, a 90-day periodduring which the corporation may reject any claims brought, and an additional150-day waiting period before any liquidating distributions are made tostockholders, any liability of stockholders with respect to a liquidatingdistribution is limited to the lesser of such stockholder’s pro rata share of 

 

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the claim or the amountdistributed to the stockholder, and any liability of the stockholder would bebarred with respect to any suit not instituted prior to the third anniversaryof the dissolution. Although we will seek stockholder approval to liquidate thetrust account to our public stockholders as part of our plan of dissolution anddistribution, we do not intend to comply with those procedures. In the eventthat our board recommends and our stockholders approve a plan of dissolutionand distribution where it is subsequently determined that the reserve forclaims and liabilities was insufficient, stockholders who received a return offunds could be liable for claims made by creditors. As such, our stockholderscould potentially be liable for any claims to the extent of distributionsreceived by them in a dissolution and any liability of our stockholders mayextend beyond the third anniversary of such dissolution. Accordingly, we cannotassure you that third parties will not seek to recover from our stockholdersamounts owed to them by us.

 

**Unlike most other blank checkcompanies, we allow up to approximately 39.99% of our public stockholders toexercise their conversion rights. This higher threshold will make it easier forus to consummate a business combination with which you may not agree.**

 

When we seek stockholderapproval of a business combination, we will offer each public stockholder(other than our founders) the right to have his, her or its shares of ourcommon stock converted to cash if such public stockholder votes against thebusiness combination and the business combination is approved and consummated.We will consummate the initial business combination only if the following twoconditions are met: (i) a majority of the shares of our common stock votedby our public stockholders are voted in favor of the business combination and (ii) ourpublic stockholders owning 40% or more of the IPO shares do not vote againstthe business combination and exercise their conversion rights. Most other blankcheck companies have a conversion threshold of 20%, which makes it moredifficult for such companies to consummate their initial business combination.Thus, because we permit a larger number of stockholders to exercise theirconversion rights, it will be easier for us to consummate an initial businesscombination with a target business which you may believe is not suitable forus, and you may not receive the full amount of your original investment uponexercise of your conversion rights.

 

**Unlike most other blank checkcompanies, we allow up to approximately 39.99% of our public stockholders toexercise their conversion rights. The ability of a larger number of ourstockholders to exercise their conversion rights may not allow us to consummatethe most desirable business combination or optimize our capital structure.**

 

When we seek stockholderapproval of a business combination, we will offer each public stockholder(other than our founders) the right to have his, her or its shares of ourcommon stock converted to cash if the stockholder votes against the businesscombination and the business combination is approved and consummated.  Such holder must both vote against suchbusiness combination and then exercise his, her or its conversion rights toreceive a pro rata share of the trust account. Unlike most other blank checkcompanies which have a 20% threshold, we allow up to approximately 39.99% ofour public stockholders to exercise their conversion rights. Accordingly, ifour business combination requires us to use substantially all of our cash topay 

 

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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 of stockholdersexercise their conversion rights than we expect. In the event that theacquisition involves the issuance of our common stock as consideration, we maybe required to issue a higher percentage of our 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 voteagainst a business combination will forfeit their conversion rights if they donot comply with the required conversion procedures in a timely manner.**

 

In order to convert ourcommon stock into a pro rata share (based on the number of units sold in ourinitial public offering) of the amount held in the trust account, our publicstockholders, in addition to voting against the business combination, must alsoaffirmatively exercise their conversion rights prior to the time the businesscombination is voted upon by our stockholders. To exercise such conversionrights, such a stockholder must instruct such stockholder’s broker toelectronically 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, tosurrender 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 the stockholders meeting held to vote ona business combination. Our public stockholders eligible to convert theirshares who fail to comply with the required conversion procedures will forfeittheir right to receive the conversion price. We intend to remind ourstockholders of our conversion procedures in the proxy statement used inconnection with the solicitation of the stockholder vote for a businesscombination. The proxy statement used in connection with the stockholdersmeeting for a business combination will be delivered personally or will bemailed to our stockholders not less than ten (10) days before the date ofsuch meeting, and accordingly, our public stockholders who elect conversionwill have to comply with the required conversion procedures in a timely manner.

 

**We may issue notes or other debtsecurities, or obtain bank financing, to complete a business combination, whichmay adversely affect our leverage and financial condition.**

 

Although we currentlyhave no commitments to incur any debt, we may choose to incur a substantialamount of debt to finance a business combination. The incurrence of debt may:

 

·                 leadto default and foreclosure on our assets if our operating revenues after abusiness combination are insufficient to pay our debt obligations;

 

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·                 causean acceleration of our obligation to repay the debt, even if we make allprincipal and interest payments when due, if we breach the covenants containedin the terms of any debt;

 

·                 requireus to execute documents that contain covenants such as ones that require themaintenance of certain financial ratios or reserves, without a waiver orrenegotiation of such covenants;

 

·                 createan obligation to immediately repay all principal and accrued interest, if any,upon demand to the extent any debt securities are payable on demand;

 

·                 hinderour ability to obtain additional financing, if necessary, to the extent anydebt securities contain covenants restricting our ability to obtain additionalfinancing while such security is outstanding, or to the extent our existingleverage discourages other potential investors;

 

·                 limitour flexibility in planning for and reacting to changes in our business and inthe industry in which we operate;

 

·                 makeus more vulnerable to adverse changes in general economic, industry andcompetitive conditions and adverse changes in government regulation;

 

·                 limitour ability to borrow additional amounts for working capital, capitalexpenditures, acquisitions, debt service requirements, execution of ourstrategy, or other purposes; and

 

·                 placeus at a disadvantage compared to our competitors who have less debt.

 

**Because certain of our directorsand officers own shares of our securities that will not participate inliquidation distributions, they may have a conflict of interest in determiningwhether a particular target business is appropriate for a business combination.**

 

Certain of our directorsand officers own shares of our common stock through our sponsor, but have, withrespect to shares of our common stock owned by them through our sponsorimmediately prior to our initial public offering, waived their right to receivedistributions upon our liquidation in the event we fail to complete a businesscombination. Certain of our directors and officers purchased 5,214,286 founderwarrants through our sponsor in a private placement, concurrently with ourinitial public offering. The shares of our common stock and founder warrantsowned by such directors and officers and their affiliates through our sponsorwill be worthless if we do not consummate a business combination. The personaland financial interests of our directors and officers may influence theirmotivation in identifying and selecting a target business and completing abusiness combination in a timely manner. Consequently, our directors’ andofficers’ discretion in identifying and selecting a suitable target businessmay result in a conflict of interest when determining whether the terms,conditions and timing of a particular business combination are appropriate andin our stockholders’ best interest.

 

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**Our directors’ and officers’interests in obtaining reimbursement for any reasonable out-of-pocket expensesincurred by them may lead to a conflict of interest in determining whether aparticular target business is appropriate for a business combination and in ourstockholders’ best interest.**

 

Our founders, directorsand officers will not receive reimbursement for any out-of-pocket expensesincurred by them to the extent that such expenses exceed the amount ofavailable proceeds not deposited in the trust account 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 months followingthe consummation of our initial public offering and consummate a businesscombination. This estimate may prove to be inaccurate, especially if a portionof the available funds in the trust account and the interest on the trustaccount available for working capital purposes is used to make a down paymentin connection with a business combination or pay exclusivity or similar fees orif we 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 businesscombination with a target business that has a relationship with entities thatmay be affiliated with certain stockholders and our directors and officers,which may raise potential conflicts of interest.**

 

In light of theinvolvement of our founders, directors and officers with other agriculturecompanies and our intent to consummate a business combination with an operatingbusiness in that same sector, we may decide to acquire a business affiliatedwith such stockholders, our officers or our directors. Despite our agreement toobtain an opinion from an independent investment banking firm regarding thefairness to our stockholders from a financial point of view of a businesscombination with a business affiliated with such stockholders, our officers orour directors, potential conflicts of interest may still exist and, as aresult, the terms of the business combination may not be as advantageous to ourstockholders as they would be absent any conflicts of interest.

 

**If our common stock becomessubject to the SEC’s penny stock rules, broker-dealers may experiencedifficulty in completing customer transactions and trading activity in oursecurities may be adversely affected.**

 

If at any time we havenet tangible assets of $5,000,000 or less and our common stock has a marketprice per share of less than $5.00, transactions in our common stock may besubject to the “penny stock” rules promulgated under the SecuritiesExchange Act of 1934, as amended. Under these rules, broker-dealers whorecommend such securities to persons other than institutional accreditedinvestors must:

 

·                 makea special written suitability determination for the purchaser;

 

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·                 receivethe purchaser’s written agreement to a transaction prior to sale;

 

·                 providethe purchaser with risk disclosure documents that identify certain risks associatedwith investing in “penny stocks” and that describe the market for these “pennystocks,” as well as a purchaser’s legal remedies; and

 

·                 obtaina signed and dated acknowledgment from the purchaser demonstrating that thepurchaser has actually received the required risk disclosure document before atransaction in “penny stock” can be completed.

 

If our 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 onebusiness combination, which may cause us to be solely dependent on a single businessand a limited number of products or services.**

 

To complete a businesscombination, we may use approximately $115,000 of the net proceeds of ourinitial public offering and the sale of the founder warrants, and the intereston the trust account, net of taxes, up to a total of $1,500,000 that will beavailable for working capital purposes. Our initial business combination mustbe with an operating business with a fair market value of at least 80% of ournet assets at the time of such business combination. It is probable that thecompany we acquire in our initial business combination will have only a limitednumber of services or products. The resulting lack of diversification:

 

·                 willresult in our dependency upon the performance of a single or small number ofoperating businesses;

 

·                 mayresult in our dependency upon the development or market acceptance of a singleor limited number of products, processes or services; and

 

·                 maysubject us to numerous economic, competitive and regulatory developments, anyor all of which may have a substantial adverse impact upon the particularindustry in which we may operate subsequent to a business combination.

 

In this case, we will notbe able to diversify our operations or benefit from the possible spreading ofrisks or offsetting of losses, unlike other entities that may have theresources to complete several business combinations in different industries ordifferent 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.

 

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**Because of our limited resourcesand the significant competition for business combination opportunities, we maynot be able to consummate an attractive business combination**.

 

We may encounter intensecompetition from other entities having a business objective similar to ours,including venture capital funds, leveraged buyout funds, operating businessesand other entities and individuals, both foreign and domestic, competing foracquisitions. Many of these entities are well established and have extensiveexperience in identifying and effecting business combinations directly orthrough affiliates. Many of these competitors possess greater technical, humanand other resources than we do and our financial resources are relativelylimited when contrasted with those of many of these competitors. Therefore, ourability to compete in acquiring certain sizable target businesses may belimited by our available financial resources. This inherent competitivelimitation gives others an advantage in pursuing the acquisition of certaintarget businesses. Further:

 

·                  ourobligation to seek stockholder approval of a business combination may delay theconsummation of a transaction;

 

·                  ourobligation to convert our shares of our common stock into cash in certaininstances may reduce the resources available for a business combination; and

 

·                  outstandingwarrants (including the founder warrants) and the future dilution theypotentially represent may not be viewed favorably by certain target businesses.

 

Any of these factors mayplace us at a competitive disadvantage in successfully negotiating a businesscombination.

 

**We may be unable to obtainadditional financing, if required, to complete a business combination or tofund the operations and growth of the target business, which could compel us torestructure or abandon a particular business combination.**

 

Although we believe thata certain portion of the net proceeds of our initial public offering and thesale of the founder warrants and the interest on the trust account availablefor working capital purposes will be sufficient to allow us to consummate abusiness combination, in as much as we have not yet selected any prospectivetarget businesses, we cannot ascertain the capital requirements for anyparticular business combination. If the net proceeds of our initial publicoffering and the sale of the Founder warrants and the interest on the trustaccount available for working capital purposes prove to be insufficient, eitherbecause of the size of the business combination or the depletion of theavailable net proceeds in search of a target business, or because we becomeobligated to convert into cash a significant number of shares from dissentingstockholders as a result of the exercise of conversion rights, we will berequired to seek additional financing through the issuance of equity or debtsecurities or other financing arrangements. We cannot assure you that suchfinancing would be available on acceptable terms, if at all. To the extent thatadditional financing proves to be unavailable when needed to consummate aparticular business combination, we would be compelled to re-negotiate orabandon that particular business combination and seek an alternative targetbusiness candidate. In addition, if we consummate a business combination, wemay require additional financing to fund the operations or growth of the targetbusiness. The failure to secure additional financing could adversely affect thecontinued development or growth of the target business or our 

 

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combined business orbusinesses. None of our officers, directors or stockholders is required toprovide any financing to us in connection with or after the consummation of abusiness combination.

 

**Our founders, directors andofficers control a substantial interest in us and thus may influence certainactions requiring stockholder vote.**

 

Our founders, directorsand officers collectively own approximately 20% of the issued and outstandingshares of our common stock. In addition, certain of our directors and officerspurchased through our sponsor 5,214,286 Founder warrants from us in a privateplacement concurrently with our initial public offering. Any exercise of thesefounder warrants by our directors and officers would increase their ownershippercentage. These holdings could allow our founders, directors and officers toinfluence the outcome of matters requiring stockholder approval, including theelection of directors and approval of significant corporate transactions aftercompletion of our initial business combination.

 

Our board of directors isdivided into three classes, each of which generally serves for a term of threeyears with only one class of directors being elected in each year. It isunlikely that there will be an annual meeting of stockholders to elect newdirectors prior to the consummation of a business combination, in which caseall of the current directors will continue in office at least until theconsummation of the business combination. If there is an annual meeting, as aconsequence of our “staggered” board of directors, only a minority of the boardof directors will be considered for election and our founders, directors andofficers, because of their ownership position, will have considerable influenceregarding the outcome. Accordingly, our founders, directors and officers willcontinue to exert control at least until the consummation of a businesscombination and may continue to exercise substantial control after a businesscombination due to their significant ownership. In connection with the voterequired for our initial business combination, all of our founders, directorsand officers, have agreed to vote the shares of our common stock then owned bythem in accordance with the majority of the shares of our common stock voted byour stockholders other than our founders, directors and officers. However, theaffiliates and relatives of our founders, directors and officers are notprohibited from purchasing shares in the aftermarket, and they will have fullvoting rights with respect to any shares of our common stock they may acquirein subsequent market transactions. If they do, we cannot assure you that ourfounders, directors and officers, through their affiliates and relatives, willnot have considerable influence upon the vote in connection with a businesscombination.

 

**Our outstanding warrants may havean adverse effect on the market price of our common stock and make it moredifficult to effect a business combination.**

 

In connection with ourinitial public offering, as part of the units, we issued 40,000,000 warrants.We sold a total of 5,214,286 founder warrants to certain of our directors andofficers through our sponsor in a private placement concurrently with ourinitial public offering. To the extent we issue shares of our common stock toeffect a business combination, the potential for the issuance of substantialnumbers of additional shares upon exercise of these warrants and 

 

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founder warrants couldmake us a less attractive acquisition vehicle in the eyes of a target businessas such securities, when exercised, will increase the number of issued andoutstanding shares of our common stock and reduce the value of the shares issuedto complete the business combination. Accordingly, warrants and founderwarrants may make it more difficult to effectuate a business combination orincrease the acquisition cost of a target business. Additionally, the sale, oreven the possibility of sale, of the shares underlying these warrants andfounder warrants could have an adverse effect on the market price for oursecurities or on our ability to obtain future public financing. If and to theextent these warrants are exercised, you may experience dilution to yourholdings.

 

**If our founders and theunderwriters for our initial public offering exercise their registrationrights, it may have an adverse effect on the market price of our common stockand the existence of these rights may make it more difficult to effect abusiness combination.**

 

The majority of ourfounders are entitled to make up to two demands that we register the resale oftheir shares of our common stock, and the representatives of the underwritersfor our initial public offering have customary “piggy back” registration rightswith respect to up to 700,000 units in the aggregate (350,000 units for eachrepresentative) it has an option to purchase. If the majority of suchstockholders and such underwriters exercise their registration rights, thenthere could be additional shares of our common stock eligible for trading inthe public market. The increase in the number of shares of our common stockeligible for trading in the public market may have an adverse effect on themarket price of our common stock. In addition, the existence of these rightsmay make it more difficult to effect a business combination or increase theacquisition cost of a target business, as the stockholders of a particulartarget business may be discouraged from entering into a business combinationwith us or will request a higher price for their securities as a result ofthese registration rights and the potential future effect their exercise mayhave on the trading market for our common stock.

 

**The founder warrants have asuperior exercise right to Warrants received in our initial public offering.**

 

The founder warrants soldto certain of our directors and officers through our sponsor concurrently withour initial public offering may be exercised pursuant to an exemption to therequirement 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 our initial public offering mayonly be exercised if a current registration statement is in place. We arerequired only to use our best efforts to maintain a current registrationstatement; therefore, the warrants issued in our initial public offering mayexpire worthless.

 

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**We may redeem your unexpiredwarrants prior to their exercise at a time that is disadvantageous to you orwhile a prospectus is not current, thereby making your warrants worthless.**

 

We have the ability toredeem outstanding warrants at any time after they become exercisable and priorto their expiration, at a price of $.01 per warrant, provided that the lastreported sales price of our common stock equals or exceeds $8.50 per share forany 20 trading days within a 30 trading-day period ending on the third businessday prior to proper notice of such redemption. Redemption of the outstandingwarrants could force you (i) to exercise your warrants and pay theexercise price therefor at a time when it may be disadvantageous for you to doso, (ii) to sell your warrants at the then current market price when youmight otherwise wish to hold your warrants or (iii) to accept the nominalredemption price which, at the time the outstanding warrants are called forredemption, is likely to be substantially less than the market value of yourwarrants. Moreover, redemption of the outstanding warrants can and may occurwhile a prospectus is not current and therefore the warrants are notexercisable. If this occurs, your warrants would be worthless.

 

**If the private placement of thefounders warrants was not conducted in compliance with applicable law, thedirectors and officers may have the right to rescind their purchases of thefounder warrants. The rescission rights, if any, may require us to refund anaggregate of $3,650,000 to our directors and officers, thereby reducing theamount 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.**

 

Although we believe thatwe conducted the private placement in accordance with applicable law, there isa risk that the founder warrants, and the shares of our common stock underlyingthe founder warrants, should have been registered under the Securities Act of1933, as amended, and applicable blue sky laws. Although the directors andofficers have waived their respective rights, if any, to rescind theirpurchases of the founder warrants as a remedy to our failure to register thesesecurities, their waiver may not be enforceable in light of the public policyunderlying Federal and state securities laws. In addition, Section 14 ofthe Securities Act of 1933, as amended, states that any condition, stipulation,or provision binding any person acquiring any security to waive any provisionof the Securities Act of 1933, as amended, or rules and regulations of theSEC shall be void. If the directors and officers bring a claim against us andsuccessfully assert rescission rights, we may be required to refund anaggregate of $3,650,000, plus interest, to them, thereby reducing the amount inthe trust account available to us to consummate a business combination, or, inthe event we do not complete a business combination within the required period,the amount available to our stockholders upon our liquidation.

 

**Our securities are quoted on theOTC Bulletin Board, which may limit the liquidity and price of our securitiesmore than if our securities were quoted or listed on Nasdaq or a nationalsecurities exchange.**

 

Our securities are tradedin the over-the-counter market and are quoted on the OTC Bulletin Board, aninter-dealer automated quotation system for equity securities sponsored andoperated by the National Association of Securities Dealers, Inc., or NASD,but not included in Nasdaq. 

 

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Quotation of oursecurities on the OTC Bulletin Board may limit the liquidity and price of oursecurities more than if our securities were quoted or listed on Nasdaq 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 aninvestment company, we may be required to institute burdensome compliancerequirements and our activities may be restricted, which may make it difficultfor us to complete a business combination.**

 

If we are deemed to be aninvestment company under the Investment Company Act of 1940, as amended, ouractivities may be restricted, including:

 

·                  restrictionson the nature of our investments; and

 

·                  restrictionson the issuance of securities, each of which may make it difficult for us tocomplete a business combination.

 

In addition, we may haveburdensome requirements imposed upon us, including:

 

·                  registrationas an investment company;

 

·                  adoptionof a specific form of corporate structure; and

 

·                  reporting,record keeping, voting, proxy and disclosure requirements and other rules andregulations.

 

We do not believe thatprincipal activities will subject us to the Investment Company Act of 1940, asamended. To this end, the funds held in the trust account may only be investedby the trustee in U.S. “government securities,” defined as any Treasury Billissued by the United States government having a maturity of one hundred andeighty days or less, or any open ended investment company registered under theInvestment Company Act of 1940, as amended, that holds itself out as a moneymarket fund and bears the highest credit rating issued by a United Statesnationally recognized rating agency. By restricting the investment of the fundsin the trust account to these instruments, we intend to meet the requirementsfor the exemption provided in Rule 3a-1 promulgated under the InvestmentCompany Act of 1940, as amended. If we were deemed to be subject to the act,compliance with these additional regulatory burdens would require additionalexpense that we have not accounted for.

 

**Our directors may not beconsidered “independent” under the policies of the North American SecuritiesAdministrators Association, Inc. and, therefore, may take actions or incurexpenses that are not deemed to be independently approved or independentlydetermined to be in our best interest.**

 

Under the policies of theNorth 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 

 

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incurred by them inconnection with our organization, our initial public offering and activities onour behalf such as identifying a potential target business and performing duediligence on a suitable business combination, state securities administratorscould take the position that such individuals are not “independent.” If thiswere the case, they would take the position that we would not have the benefitof independent directors examining the propriety of expenses incurred on ourbehalf and subject to reimbursement. Additionally, there is no limit on theamount of reasonable out-of-pocket expenses that could be incurred and therewill be no review of the reasonableness of the expenses by anyone other thanour board of directors, which would include persons who may seek reimbursement,or a court of competent jurisdiction if such reimbursement is challenged. Tothe extent such reasonable out-of-pocket expenses exceed the available proceedsnot deposited in the trust account and the interest on the trust accountavailable for working capital purposes, such out-of-pocket expenses would notbe reimbursed by us unless we consummate a business combination. Although webelieve that all actions taken by our directors on our behalf will be in ourbest interests, whether or not they are deemed to be “independent,” we cannotassure you that this will actually be the case. If actions are taken, orexpenses are incurred that are actually not in our best interests, it couldadversely affect our business and operations and the price of Common Stock heldby our stockholders.

 

**RisksRelated to Our Business and Operations**

**Following the Business Combination**

 

**In connection with the business combination, thecombined company will be entering into new credit facilities. The indebtednessassociated with these facilities may restrict the combined company’s operatingflexibility, could adversely affect its financial health and could prevent itfrom fulfilling certain financial obligations.**

 

In connection with thebusiness combination, the combined company will enter into one or more creditfacilities. The borrowings under these facilities will be used primarily toassist the combined company in funding capital expenditures

 

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and working capital ofthe combined company. The indebtedness associated with these facilities couldsignificantly affect the combined company’s financial health and its ability tofulfill certain financial obligations. For example, a high level ofindebtedness could:

 

·                  make it more difficult to satisfycurrent and future debt obligations;

 

·                  make it more difficult to obtainadditional financing for working capital, capital expenditures, acquisitions orgeneral corporate purposes;

 

·                  require the combined company to dedicatea substantial portion of cash flows from operating activities to the payment ofprincipal and interest on the indebtedness, thereby reducing the fundsavailable for operations and other purposes, including investments in researchand development, capital spending and acquisitions;

 

·                  place the combined company at acompetitive disadvantage to competitors who are not as leveraged; and

 

·                  make the combined company vulnerableto interest rate fluctuations, if any indebtedness that bears interest atvariable rates is incurred.

 

**Any acquisition strategy and expansion programsrequire access to new capital. Tightened credit markets or more expensivecapital could impair the combined company’s ability to grow.**

 

Westway’s businessstrategies include acquiring additional terminal, transportation and storagefacilities and the expansion of its existing liquid storage capacity.Additional funds would be required to grow the business and implement thesestrategies. Any equity or debt financing used to raise such additional funds,if available at all, may not be on favorable terms. An inability to access thecapital markets may result in a substantial increase in leverage and have adetrimental impact on the combined company’s creditworthiness. If adequatefinancing cannot be obtained, these business strategies may not be able to befully implemented, and the combined company’s financial condition and resultsof operations could be adversely affected.

 

**Westway’s business is highly dependent on theED&F Man group.**

 

Westway’s liquidfeed supplements business relies to a significant extent on the ED&F Mangroup as a supplier of the raw materials used as components of Westway’sproducts and we intend that the combined company will continue sourcing asubstantial proportion of these raw materials from them in the future. In theevent that the combined company is unable to purchase these raw materials onfavorable terms from the ED&F Man group, it may be unable to find suitablealternatives to meet its raw material needs, which could adversely affect itsfinancial condition and results of operations.

 

The ED&F Mangroup is also an important customer of Westway’s bulk liquid storage business,and we expect that the combined company will derive a substantial portion ofits revenue from this relationship for the foreseeable future. Events thatadversely affect the business operations of the ED&F Man group couldadversely affect the combined company’s financial condition or results ofoperations. Therefore, the combined company will be indirectly subject to thebusiness risks of the ED&F Man group, which are not always similar to thebusiness risks the combined company will face. For example, a material increasein the price of petroleum, a material decline in demand for molasses, or asignificant decrease in the ED&F Man group’s ability to negotiate marketingcontracts on favorable terms, could result in a material decline in the use ofthe combined company’s liquid storage capacity at its bulk liquid storagefacilities, which could cause the combined company’s revenue and results ofoperations to decline. In addition, if the ED&F Man group is unable to meetits contractual commitments to the combined company for any reason, then thecombined company’s revenue and cash flow could decline.

 

**Westway’s business involves many hazards andoperational risks, including adverse weather conditions, which could result insubstantial liabilities and increased operating costs.**

 

Westway’soperations are subject to the many hazards inherent in the storage of liquidproducts, including, but not limited to:

 

·                  leaks or accidental releases ofproducts or other materials into the environment, whether as a result of humanerror or otherwise;

 

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·                  extreme weather conditions, such ashurricanes, tropical storms, and rough seas, which are common along the GulfCoast;

 

·                  explosions, fires, accidents,mechanical malfunctions, faulty measurement and other operating errors; and

 

·                  acts of terrorism or vandalism.

 

If any of theseevents were to occur, substantial losses could be incurred as a result ofpersonal injury or loss of life, severe damage to and destruction of storagetanks, processing facilities and related property and equipment, and pollutionor other environmental damage resulting in curtailment or suspension of relatedoperations and potentially substantial unanticipated costs for the repair orreplacement of property and environmental cleanup. In addition, if there areaccidental releases or spills of products at the liquid storage facilities, thecombined company could be faced with material third-party costs andliabilities, including those relating to claims for damages to property andpersons. Furthermore, events like hurricanes can affect large geographicalareas which could cause us to suffer additional costs and delays in connectionwith subsequent repairs and operations, because contractors and other resourcesare not available or are only available at substantially increased costsfollowing widespread catastrophes.

 

**The obligations of several of Westway’s keycustomers under their liquid storage services agreements with Westway may bereduced or suspended in some circumstances, which could adversely affect thecombined company’s financial condition and results of operations.**

 

Westway’sagreements with several of its significant customers provide that, if any of anumber of events, referred to as events of force majeure, occur and the eventrenders performance impossible with respect to a facility, usually for aspecified minimum period of days, customer obligations would be temporarilysuspended with respect to that facility. In that case, a significant customer’sminimum revenue commitment may be reduced or the contract may be subject totermination. As a result, the combined company’s revenue and results ofoperations could be adversely affected.

 

**The completion of the business combination couldresult in disruptions to the combined company’s business, loss of customers orcontracts or other adverse effects.**

 

The completion ofthe business combination could cause disruptions, including potential loss ofcustomers and other business partners, and have adverse effects on the combinedcompany’s business and operations. It is possible that Westway’s existingcustomers and other business partners, in response to the completion of thebusiness combination, could adversely change or terminate their relationshipswith the combined company following the business combination, which could havean adverse effect on the combined company’s business. Prior to the completionof the business combination, ED&F Man and Westway will seek to obtain orcause to be obtained consents, authorizations or approvals relating tocontracts from parties thereto in connection with port leases and commercialcontracts, but there can be no assurance that they will be able to receive allsuch consents. The failure to obtain any such consents, authorizations orapprovals could have an adverse effect on the combined company’s financialcondition and results of operations.

 

**If one or more of Westway’s significant customersdo not continue to engage it to provide services after the expiration of thosecustomers’ current liquid storage services agreements with Westway and we areunable to secure comparable alternative arrangements, the combined company’sfinancial condition and results of operations could be adversely affected.**

 

Westway’s liquidstorage services agreements with its customers ordinarily provide for terms ofbetween 12 and 36 months. After the expiration of each of these liquid storageservices agreements, the customers may elect not to continue to engage Westwayto provide services. In addition, even if a significant customer does engageWestway, the terms of any renegotiated agreement may be less favorable than theagreement it replaces. In either case, the combined company may not be able togenerate sufficient additional revenue from third parties to replace anyshortfall in revenue or increase in costs. Additionally, substantial costs maybe incurred if modifications to liquid storage facilities are required in orderto attract substitute customers or provide alternative services. To the extenta significant customer does not extend or renew its liquid storage servicesagreement, if we extend or renew the liquid storage services agreement on lessfavorable terms or if substantial costs are incurred to attract substitutecustomers, the combined company’s financial condition and results of operationscould be adversely affected.

 

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**Competition from other businesses providing liquidstorage that are able to supply Westway’s significant customers with liquidstorage capacity at a lower price could adversely affect the combined company’sfinancial condition and results of operations.**

 

Westway facescompetition from other liquid storage facilities that may be able to supplysignificant customers with integrated liquid storage services on a morecompetitive basis. Westway competes with multi-national, national and regionalliquid storage companies, of widely varying sizes, financial resources andexperience. The combined company’s ability to compete could be harmed byfactors beyond its control, including, but not limited to:

 

·                  price competition from liquid storageand transportation companies, some of which are substantially larger thanWestway and have greater financial resources and control substantially greaterproduct storage capacity;

 

·                  the perception that another companymay provide better service; and

 

·                  the availability of alternativesupply points or supply points located closer to customers’ operations.

 

If the combinedcompany is unable to compete with services offered by other enterprises, itsfinancial condition and results of operations could be adversely affected.

 

**Some of Westway’s liquid storage facilities havebeen in service for many years, potentially resulting in increased maintenanceor remediation expenditures, which could adversely affect the combined company’sresults of operations.**

 

Westway’s liquidstorage assets are generally long-lived assets. As a result, some of theseassets have been in service for many years. The age and condition of theseassets could result in increased maintenance or remediation expenditures. Anysignificant increase in these expenditures could adversely affect the combinedcompany’s financial condition, results of operations and cash flows.

 

**The impact of environmental regulation on thecombined company’s liquid storage facilities could adversely affect its levelof cash flow.**

 

Environmentalregulation could result in increased operating and capital costs. Westway’sbusiness operations are subject to federal, state and local, and some foreignlaws and regulations relating to environmental protection. For example, if anaccidental leak, release or spill of chemicals or other products occurs fromWestway’s liquid storage facilities, the combined company could experiencesignificant operational disruptions and may have to pay a significant amount toclean up the leak, release or spill or pay for government penalties, addressnatural resource damage, compensate for human exposure or property damage, or acombination of these measures. The resulting costs and liabilities couldnegatively affect the combined company’s level of cash flow. The impact of U.S.Environmental Protection Agency standards or future environmental measurescould increase costs significantly if environmental laws and regulations becomestricter.

 

**The availability, demand for and price ofagricultural commodities and agricultural commodity products can be affected byweather, disease and other factors beyond our control.**

 

Weather conditionshave historically caused volatility in the agricultural commodity industry andconsequently in that segment of Westway’s operating results related to liquidfeed supplements, by causing crop failures or significantly reduced harvests,which can adversely affect the supply and pricing of the agriculturalcommodities that Westway sells and uses in its business, such as molasses, andnegatively affect the creditworthiness of its customers and suppliers. Theavailability and price of agricultural commodities are also subject to otherunpredictable factors, such as plantings, government farm programs andpolicies, demand from the biofuels industry, price volatility as a result ofincreased participation by non-commercial market participants in commoditymarkets and changes in global demand resulting from population growth andchanges in standards of living. In addition, the supply and price ofagricultural commodities can be affected by factors such as plant disease.Demand for liquid feed supplements can also be adversely affected by theoutbreak of disease in livestock and poultry, as further described below under “—Westwayis subject to animal feed industry risks.” These factors could cause volatilityin the agricultural commodity industry and, consequently, in the combinedcompany’s financial condition and results of operations.

 

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**Westway is subject to animal feed industry risks.**

 

Westway is subjectto animal feed industry risks which include, but are not limited to, productspoilage or contamination, government regulation of the animal feed industry,including processing and labeling regulations, shifting customer preferencesand concerns, including concerns regarding genetically modified organisms aswell as other environmental concerns, and potential product liability claims.These matters could adversely affect the combined company’s financial conditionand results of operations.

 

Westway’s liquidfeed supplements are used as ingredients in livestock and poultry feed, and assuch, the combined company will be subject to demand risks associated with theoutbreak of disease in livestock and poultry, including, but not limited to,mad-cow disease and avian influenza. The outbreak of disease could adverselyaffect demand for liquid feed supplements used in livestock and poultry feed. Adecrease in demand for these liquid feed supplements could adversely affect thecombined company’s revenues and results of operation.

 

**Westway’s liquid feed supplements business isvulnerable to cyclicality in the agricultural commodities industry, highlydependent on agricultural commodity prices and susceptible to changes in rawmaterial prices, which are subject to significant volatility and uncertainty.**

 

Westway’s liquidfeed supplements business is affected by variations in supply and processingcapacity for the liquid feed supplements that it sells and the raw materialsthat it uses. These variations have resulted in cyclical fluctuations in theliquid feed supplements business’ profitability. The price of liquid feedsupplements is influenced by market demand, factors affecting crop yields,farmer planting and husbandry decisions and general economic, market andregulatory factors. The significance and relative effect of these factors onthe price of liquid feed supplements is difficult to predict. Any factor thattends to negatively affect the demand for livestock and poultry, such asincreased supply and cost, could decrease the price for liquid feed supplementsand potentially harm the combined company’s business. In addition, the combinedcompany could also have difficulty, from time to time, in physically sourcingthe raw materials for liquid feed supplements on economical terms due to supplyshortages. Such a shortage could require the combined company to suspendoperations until such raw materials are available at favorable economicalterms, which could have an adverse effect on the combined company’s business,financial condition and results of operations.

 

**Government policies and regulations affecting theagricultural sector and related industries could adversely affect the combinedcompany’s financial condition and results of operations.**

 

Agriculturalproduction and trade flows are significantly affected by government policiesand regulations. Governmental policies affecting the agricultural industry,such as taxes, tariffs, duties, subsidies and import and export restrictions onagricultural commodities and commodity products, can influence industryprofitability, the planting of certain crops, or grazing of certain types oflivestock, versus other uses of agricultural resources, whether unprocessed orprocessed commodity products are traded and the volume and types of imports andexports. In addition, international trade disputes can adversely affectagricultural commodity trade flows by limiting or disrupting trade betweencountries or regions. Future government policies could adversely affect thesupply, demand for and prices of the combined company’s products, restrict theability to do business in existing and target markets and could cause adeterioration in the combined company’s financial condition and results ofoperations.

 

**The combined company will be required to complywith Section 404 of the Sarbanes-Oxley Act of 2002 in a relatively shorttime frame.**

 

Westway, as partof a private company, has not been required to prepare or file periodic andother reports with the SEC under applicable federal securities laws, in orderto comply with the requirements of the federal securities laws applicable topublic companies, or to document and assess the effectiveness of its internalcontrol procedures in order to satisfy the requirements of Section 404 ofthe Sarbanes-Oxley Act of 2002. Although we have maintained disclosure controlsand procedures and internal control over financial reporting as required underthe federal securities laws with respect to our activities, we have not beenrequired to establish and maintain such disclosure controls and procedures andinternal controls over financial reporting as will be required of us after thebusiness combination as a result of our becoming a public company that conductssubstantial operations.

 

Section 404of the Sarbanes-Oxley Act of 2002 will require the combined company to documentand test the effectiveness of our internal controls over financial reporting inaccordance with an established control framework and to report on ourmanagement’s conclusion as to the effectiveness of these internal controls overfinancial reporting with respect 

 

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to the Westway businessbeginning with the fiscal year ending December 31, 2010. The combinedcompany also must have an independent registered public accounting firm testthe internal controls over financial reporting and report on the effectivenessof such controls. Any delays or difficulty in satisfying these requirementscould adversely affect the combined company’s future results of operations andour share price. The combined company could incur significant costs to complywith these requirements.

 

We could in thefuture discover areas of internal control over financial reporting that needimprovement. Further, we and our auditors may experience greater difficulty inestablishing a system of internal control over financial reporting once we arean operating company. There can be no assurance that remedial measures willresult in adequate internal control over financial reporting in the future. Anyfailure to implement the required new or improved controls, or difficultiesencountered in their implementation, could materially adversely affect ourresults of operations or could cause us to fail to meet its reportingobligations. If the combined company is unable to conclude that it has effectiveinternal control over financial reporting, or if its auditors are unable toprovide an unqualified report regarding the effectiveness of internal controlover financial reporting as required by Section 404, investors could loseconfidence in the reliability of its financial statements, which could resultin a decrease in the value of its share price. In addition, failure to complywith Section 404 could potentially subject the combined company tosanctions or investigation by the SEC or other regulatory authorities.

 

**Westway’s business depends, in part, upon certainindividuals who may not necessarily continue to be affiliated with us.**

 

The combinedcompany will be dependent, in part, on the efforts of Westway’s managementteam, including Messrs. Harding, Driggers and Shoemaker and the loss ofservices of one or more members of this team, each of whom has substantialexperience in the bulk liquid storage and liquid feed supplements businesses,as applicable, could have an adverse effect on our business strategies and thegrowth and development of its business. If one or more members of thismanagement team were no longer affiliated with the combined company, or if thecombined company ceased to receive advisory services from them, its inabilityto recruit other employees of equivalent talent could have an adverse effect onits financial condition and results of operations. The combined company willnot have employment contracts with any members of Westway’s management teamimmediately following the business combination.

 

**RisksRelated to the Business Combination**

 

**If the business combination is not completed, wemay have insufficient time or funds to complete an alternate qualifyingbusiness combination and may be forced to liquidate. Holders of our commonstock and warrants may incur losses.**

 

Pursuant to ourcertificate of incorporation, among other things, we must complete a businesscombination with a target business having a fair market value equal to at least80% of our net assets at the time of acquisition within 18 months afterthe consummation of our initial public offering or within 24 months afterthe consummation of our initial public offering if a letter of intent,agreement in principle or a definitive agreement has been executed within18 months of the consummation of our initial public offering and thebusiness combination relating thereto has not yet been consummated within such18-month period. Because we entered into the transaction agreement within the18-month period, we have 24 months from the consummation of our initialpublic offering to complete a business transaction. The 24-month period expireson May 30, 2009. If we fail to consummate a qualifying businesscombination prior to that date, our officers will, in accordance with our certificateof incorporation, take all action necessary to dissolve Shermen and liquidatethe trust account as soon as reasonably possible in accordance with a plan ofliquidation described above under the heading “Effecting a BusinessCombination—Plan of Dissolution and Liquidation if No Business” in Item I ofthis Annual Report on Form 10-K. In any dissolution and liquidation, theamount held in the trust account, inclusive of any interest, plus any remainingnet assets (subject to our obligations under Delaware law to provide for claimsof creditors as described below), will be distributed on a pro rata basis tothe holders of our common stock issued in our initial public offering. Certainof our officers and directors have waived their rights to participate in anyliquidation distribution with respect to the shares that they acquired prior toour initial public offering.

 

Neither we nor ourboard of directors have any present intention to propose, or seek stockholderapproval of, any amendment or removal of the provisions in our certificate ofincorporation that would require us to dissolve Shermen and liquidate the trustaccount if we do not consummate a business combination before May 30,2009.  However, our certificate ofincorporation provides that we could amend these provisions if we were toobtain the approval of such amendments by the holders of at least 80% of ouroutstanding shares of common stock and the amendments specifically provide thatstockholders 

 

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who both vote against theamendment and elect to exercise their conversion rights would receive their prorata share of the funds in the trust account upon the effectiveness of suchamendment.

 

**If holders of 40% or more of the IPO sharesexercise their conversion rights, we may be forced to liquidate the trustaccount, stockholders may receive less than $6.00 per share and the warrantsmay expire and be worthless.**

 

Pursuant to ourcertificate of incorporation, if holders of 40% or more of the IPO sharesexercise their conversion rights, we will not be able to consummate thebusiness combination and may be forced to dissolve and liquidate the trustaccount. While we may pursue a business combination with another qualifiedtarget business, if we cannot consummate a business combination by May 30,2009, we will be forced to dissolve and liquidate the trust account.

 

**If we are forced to dissolve and liquidate the trustaccount, our stockholders could receive less than the per unit offering priceof $6.00 in the initial public offering, and our warrants will expire andbecome worthless.**

 

If we are forcedto dissolve and liquidate the trust account, our public stockholders couldreceive less than the per-unit offering price in our initial public offering of$6.00 and our warrants will expire and become worthless. In any dissolution andliquidation of the trust account, the net proceeds of our initial publicoffering held in the trust account, plus any interest earned thereon, minus$1,442,494 of interest which has been drawn for working capital purposes andtaxes, will be distributed on a pro rata basis to the holders of the IPOshares. As of January 31, 2009, there was approximately $6.02 per share inthe trust account, after accounting for taxes owing and our working capitaldraw.

 

In addition, upondissolution, third parties may bring claims against us. Although we haveobtained waiver agreements from a number of vendors and service providers wehave engaged and owe money to and prospective target businesses, whereby suchparties have waived any right, title, interest or claim of any kind they mayhave in or to any funds held in the trust account, there is no guarantee thatthey or other vendors who did not execute such waivers will not seek recourseagainst the trust account notwithstanding such agreements. Furthermore, thereis no guarantee that a court will uphold the validity of these agreements.Accordingly, the proceeds of our initial public offering and the privateplacement of warrants with our sponsor held in trust could be subject to claimsthat could take priority over the claims of our public stockholders and theper-share liquidation price could be less than $6.00, plus interest (net oftaxes payable), due to claims of such creditors or other entities.

 

Upon ourdissolution and liquidation of the trust account there would be no distributionwith respect to our outstanding warrants and, accordingly, the warrants wouldexpire and be worthless.

 

**If the business combination, the other proposalsare not approved by our stockholders, and we do not consummate a businesscombination by May 30, 2009, and are therefore required to dissolve andliquidate the trust account, payments from the trust account to ourstockholders could be delayed in the event that the dissolution proposal is notapproved.**

 

In the event thatwe present the dissolution proposal to our stockholders and it is not approved,we would nonetheless continue to pursue stockholder approval for ourdissolution. Pursuant to the terms of our certificate of incorporation, ourpowers following the expiration of the permitted time periods for consummatinga business combination will automatically thereafter be limited to acts andactivities relating to dissolving and winding up our affairs, includingliquidation of the trust account. The funds held in the trust account could notbe distributed except upon our dissolution and, unless and until such approvalwere obtained from our stockholders, the funds held in the trust account wouldnot be released. Consequently, holders of a majority of our outstanding commonstock must approve our dissolution in order to receive the funds held in thetrust account, and the funds would not be available for any other corporatepurpose.

 

These procedures,or a vote to reject this or any other plan of liquidation, could result insubstantial delays in the liquidation of the trust account and pro ratadistribution of the funds held in the trust account plus any of our remainingnet assets to our stockholders as part of our plan of liquidation.

 

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

 

If we do notcomplete a qualifying business combination by May 30, 2009 and ourstockholders have approved the dissolution proposal, we will proceed with ourproposed plan of liquidation.  UnderSections 280 through 282 of the DGCL, stockholders may be held liable forclaims by third parties against a corporation to the extent of distributionsreceived by 

 

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them in a dissolution andliquidation of the trust account. If we comply with procedures intended toensure that we make reasonable provision for all claims against us, including a60-day notice period during which any third-party claims can be brought againstus, a 90-day period during which we may reject any claims brought, and anadditional 150-day waiting period before any liquidating distributions are madeto stockholders, any liability of stockholders with respect to a liquidatingdistribution is limited to the lesser of such stockholder’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 are seekingstockholder approval to liquidate the trust account and distribute a pro rataamount of the funds held therein plus any of our remaining net assets toholders of the IPO shares as part of our plan of liquidation, we do not intendto comply with those procedures. In the event that our stockholders approve theplan of liquidation and it is subsequently determined that the reserve forclaims and liabilities is insufficient, stockholders who received a return offunds could be liable for claims made by creditors. Those stockholders couldpotentially be liable for any claims to the extent of distributions received bythem in a dissolution and any liability of our stockholders could extend beyondthe third anniversary of such dissolution. Accordingly, we cannot assure youthat third parties will not seek to recover from our stockholders amounts owedto those third parties by us.

 

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

 

We reservedapproximately $115,000 from the proceeds of our initial public offering and theprivate placement of warrants with our sponsor, and receive one half of theinterest earned on the trust account, net of taxes, up to a total of$1.5 million to cover our operating expenses until May 30, 2009, andto cover the expenses incurred in connection with a business combination.  We expect to spend approximately$7.5 million on fees and expenses in connection with the businesscombination, most of which are contingent upon the consummation of the businesscombination.  These estimates may proveinaccurate.  Currently we do not have anycash available to us outside of the trust account.  If we do not have sufficient proceedsavailable to fund our expenses, we may be forced to obtain additionalfinancing, either from our initial stockholders, our sponsor, our directors andofficers or from third parties. We may not be able to obtain additionalfinancing, and our initial stockholders, our sponsor, our directors andofficers are not obligated to provide any additional financing to us. If we donot have sufficient funds and are unable to obtain additional financing, we maybe forced to liquidate the trust account prior to consummating the businesscombination.

 

**Public stockholders who vote against the businesscombination will forfeit their conversion rights if they do not comply with therequired conversion procedures in a timely manner.**

 

In order toconvert shares of our common stock into the right to receive a pro rata portion(based on the number of IPO shares) of the funds in the trust account, ourpublic stockholders, in addition to voting against the business combination,must also affirmatively exercise their conversion rights prior to the time the businesscombination is voted upon by our stockholders. To exercise these conversionrights, stockholders must instruct their brokers to electronically tender theirshares to our transfer agent using the facilities of the Depositary TrustCompany (or, in the case of a stockholder that previously requested andreceived a physical certificate, to surrender such physical certificate to thetransfer agent), accompanied by a letter of instruction, and must comply withsuch 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 the business combination. Our publicstockholders eligible to convert their shares who fail to comply with the requiredconversion procedures will forfeit their right to receive the conversion price.

 

**We expect to incur significant costs associatedwith the business combination, whether or not the business combination iscompleted, which will reduce the amount of cash otherwise available for othercorporate purposes.**

 

We expect to incursignificant costs associated with the business combination, whether or not thebusiness combination is completed. These costs will reduce the amount of cashotherwise available for other corporate purposes. We expect to spendapproximately $7.5 million on fees and expenses in connection with thebusiness combination, most of which are contingent upon the consummation of thebusiness combination. There is no assurance that the actual costs will bewithin our estimates. There is no assurance that the significant costsassociated with the business combination will prove to be justified in light ofthe benefit ultimately realized.

 

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**Our available funds will be reduced to the extentholders of the IPO shares exercise their conversion rights. A reduction inthese funds could adversely affect the combined company’s business and futureoperations.**

 

Pursuant to ourcertificate of incorporation, holders of IPO shares may demand that we converttheir shares into the right to receive a pro rata portion (based on the numberof IPO shares) of the funds held in the trust account, calculated as of twobusiness days prior to the anticipated consummation of the businesscombination. We cannot consummate the business combination if holders of 40% ormore of the IPO shares exercise these conversion rights. Based upon the amountof the funds in the trust account as of January 31, 2009, if none of ourstockholders elect to convert their IPO shares, the trust account will containapproximately $138.4 million at the closing.  If any of our stockholders elect to exercisetheir conversion rights, this amount will be reduced by the amount of anydisbursements made to those stockholders. For instance, if the holders of 39.99% of the IPO shares exercise theirconversion rights, we would be required to disburse approximately $55.4 millionto those stockholders, and the trust account would contain approximately $83.1million at the closing (based on the amount of the funds in the trust accountas of January 31, 2009). In such an event, we would have fewer fundsavailable for our business and future operations, and would need to draw on ourfinancing to pay a portion of the purchase price to ED&F Man, which couldadversely affect the combined company’s business and future operations.

 

**Our initial stockholders are liable if proceeds ofthe trust account are reduced by claims in the event the business combinationis not consummated. This liability may have influenced their decision toapprove the business combination.**

 

Our founders,other than Messrs. Pottinger, Prochaska and Francis P. Jenkins, III,have agreed, subject to limited 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 dissolutionand liquidation of the trust account and the claims are made by a vendor orservice provider for services rendered, or products sold, by us or aprospective acquisition target. However, these stockholders will not have anypersonal liability as to any claimed amounts owed to a third-party who executeda waiver (including a prospective acquisition target). If we consummate abusiness combination, on the other hand, these stockholders will not be liablefor all such claims. The personal and financial interests of our initialstockholders may influence their motivations in consummating the businesscombination.

 

**Our current directors either directly orbeneficially own shares of common stock and warrants and have other interestsin the business combination that are different from and in addition to yours.**

 

In our initialpublic offering in May 2007, our public stockholders purchased23.0 million units, each unit consisting of one share of our common stockand two warrants, each to acquire one share of our common stock at an exerciseprice of $5.00 each, for an aggregate purchase price of $138.0 million,including proceeds from the exercise of the underwriters’ over-allotmentoption.

 

In a privateplacement concurrent with our initial public offering, our sponsor purchased anaggregate of approximately 5.2 million founder warrants at a purchaseprice of $0.70 per warrant (for a purchase price of approximately$3.7 million in the aggregate) which were distributed to its members,including some of our current directors. In light of the amount ofconsideration paid, the members of our board of directors will likely benefitfrom the consummation of the business combination, even if the businesscombination causes the market price of our securities to significantlydecrease.

 

Furthermore, theapproximately $3.7 million purchase price for the approximately5.2 million founder warrants, many of which are beneficially owned by anumber of our executive officers and directors, will be included in the fundsthat are distributed to our public stockholders in the event of our dissolutionand liquidation of the trust account. This may influence their motivation forpromoting the business combination and/or soliciting proxies for the approvalof the transaction agreement proposal. These securities are subject to lock-upagreements and, subject to limited exceptions, the common stock may not besold, assigned or transferred until at least six months after we consummate a businesscombination. In addition, our initial stockholders have waived any rights toreceive any liquidation proceeds that may be distributed upon our dissolutionand the liquidation of the trust account in respect of shares they acquiredprior to our initial public offering. Therefore, if the business combination isnot approved and we are required to commence proceedings to dissolve andliquidate the trust account, the shares and warrants held directly orbeneficially by our initial stockholders will be worthless.

 

In particular, youshould also be aware that if the business combination is not approved and wefail to consummate a business combination with another qualified targetbusiness within the time allotted, the shares of common stock issued prior to ourinitial public offering and warrants held by our founders will be worthlessbecause our directors are not entitled to 

 

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receive any of the netproceeds of our initial public offering that may be distributed upon ourdissolution and the liquidation of the trust account (except with respect toshares purchased in the open market). Our founders acquired our shares ofcommon stock prior to our initial public offering at a price per share of$0.005. Our founders will therefore also benefit if the business combination isapproved.

 

**Activities taken by our founders or ED&F Manand its affiliates to increase the likelihood of approval of the businesscombination and other proposals could decrease the number of IPO shares held bydisinterested stockholders and have a depressive effect on the value of ourcommon stock.**

 

At any time priorto the annual meeting of our stockholders to approve the business combinationand the other proposals, during a period when they are not then aware of anymaterial non-public information regarding us or our securities, our foundersand/or their respective affiliates may purchase shares from institutional andother investors, or execute agreements to purchase such shares from them in thefuture, or they may enter into transactions with such persons and others toprovide them with incentives to acquire shares of our common stock and vote theacquired shares in favor of the business combination. In addition, whileED&F Man has agreed that it and its affiliates will not engage in purchasesof our common stock, individuals or business partners connected with ED&FMan may engage in such activities. The purpose of such share purchases andother transactions would be to increase the likelihood of satisfaction of therequirements that holders of a majority of the IPO shares voting at the annualmeeting vote in favor of the transaction agreement proposal and that holders ofless than 40% of the IPO shares exercise their conversion rights where itappears that such requirements would otherwise not be met. Entering into anysuch arrangements may decrease the number of IPO shares held by disinterestedstockholders, thereby effectively decreasing the number of such shares that caninfluence the approval of the business combination.  In addition, such arrangements may have adepressive effect on the value of our common stock.

 

**Investors evaluating the business combination andthe other proposals described in Annual Report on Form 10-K will not have,prior to the annual meeting of our stockholders to approve the businesscombination and the other proposals, complete information relating tocompensation arrangements for the officers, directors and employees of thecombined company**.

 

Significantcompensation decisions will be made by our board of directors and compensationcommittee after the business combination. While it is generally anticipatedthat Westway’s current officers and employees will continue in the same orsubstantially the same capacities with the combined company after the businesscombination, none of them has entered into or is entering into an employmentagreement in connection with the business combination. Accordingly, theircompensation arrangements will be subject to review and change from time totime, including in the near term, by our board of directors and itscompensation committee following the business combination. Although the board ofdirectors and compensation committee will have a fiduciary duty to make fairand reasonable compensation decisions, future compensation arrangements cannotbe currently quantified and, therefore, investors must recognize the presentlyindeterminate nature of this factor in their economic analysis of the businesscombination and the related proposals discussed in this proxy statement.

 

**Our issuance of preferred stock could adverselyaffect our common stockholders.**

 

If the amendmentand restatement of our certificate of incorporation described in this AnnualReport on Form 10-K is approved at the annual meeting of our stockholders,our certificate of incorporation will be amended and restated to authorize theissuance of additional shares of preferred stock with such designations,preferences and relative, participating, optional or special rights and suchqualifications, limitations or restrictions as may be determined from time totime by our board of directors. Accordingly, our board of directors will beempowered, without stockholder approval (other than the approval rights ofED&F Man and its affiliates), to issue greater amounts of preferred stockwith dividends, liquidation, conversion, voting or other rights that couldadversely affect the relative voting power or other rights of the holders ofour common stock. In the event of issuance, the preferred stock could be usedas a method of discouraging, delaying or preventing a change in control of thecombined company, which could have the effect of discouraging bids for thecombined company and thereby potentially prevent stockholders from receivingthe maximum value for their shares. Our board of directors is currentlyauthorized to issue 1,000,000 shares of preferred stock. If the amendment andrestatement of our certificate of incorporation is approved at the annualmeeting, 30,000,000 shares of preferred stock will be designated as Series APreferred Stock, which we refer to as the “Series A Preferred Stock”, andthere will be an additional 10,000,000 shares of preferred stock available fordesignation.

 

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**Our outstanding warrants may be exercised in thefuture, which would increase the number of shares of our common stock eligiblefor future resale in the public market and result in dilution to ourstockholders.**

 

In connection withour initial public offering, we issued 46.0 million warrants as componentsof the units. We also sold a total of approximately 5.2 million founderwarrants to a number of our directors and officers through our sponsor in aprivate placement concurrently with our initial public offering. These warrantslikely will be exercised only if the exercise price is below the market priceof our common stock. To the extent such warrants are exercised, additionalshares of our common stock will be issued, which will result in dilution to ourstockholders and will increase the number of shares of common stock eligiblefor resale in the public market. Sales of such shares of common stock in thepublic market could adversely affect the market price of our common stock.

 

**A substantial number of shares of our common stockand preferred stock, which will be convertible into shares of our common stock,will be issued in connection with the business combination. If these shares aresubsequently registered and become eligible for future resale in the publicmarket after the business combination such action may result in substantialdilution and could have an adverse effect on the market price of our commonstock.**

 

At the closing, wewill issue up to approximately 24.3 million shares of our common stock and7.4 million shares of our Series A Preferred Stock (which will beconvertible into shares of our common stock), excluding those shares depositedinto escrow, and excluding those shares of our sponsor to be held in escrow, ineach case pending the combined company’s achievement of the earnings or shareprice targets described elsewhere in this Annual Report on Form 10-K. Uponconsummation of the business combination, there will be 49,138,614 shares ofour common stock outstanding, excluding those shares of our sponsor held inescrow and subject to performance targets, assuming no exercise of conversionrights by our public stockholders, and warrants outstanding to purchase anadditional 52,214,286 of our shares of common stock. Immediately after givingeffect to the business combination, and excluding shares issuable upon theexercise of outstanding warrants, ED&F Man and its affiliates will,collectively, own 49.5% of our outstanding common stock and our existingstockholders will own 50.5% of our outstanding common stock.

 

In addition, uponconsummation of the business combination, we will be delivering to an escrowagent for deposit into an escrow account approximately 12.2 million sharesof our Series A Preferred Stock, issued to ED&F Man, as part of theconsideration for the business combination. These escrowed shares will bereleased to ED&F Man only upon the achievement by the combined company ofthe earnings or share price targets described elsewhere in this Annual Reporton Form 10-K. Subject to conditions set forth in our proposed amended andrestated certificate of incorporation, these shares of Series A PreferredStock will be convertible into shares of our common stock.

 

Six months afterthe closing, 1,815,000 shares of common stock, warrants to purchase1.0 million shares of our common stock and 60,000 shares of Series APreferred Stock will be released to our sponsor. In addition, up to 2,875,000shares of our common stock purchased by our sponsor prior to our initial publicoffering, but held in escrow, will be released to our sponsor from escrow ifthe combined company achieves the earnings or share price performance targetsreferred to above.

 

As of the date ofthis proxy statement, there were 28,750,000 shares of our common stock issuedand outstanding. As a result of the dilutive effect of the issuance of ourcommon stock and preferred stock in the business combination, for purposes ofillustration, a stockholder who owned 10% of our outstanding shares of commonstock on December 31, 2008, would own approximately:

 

·                  5.1% of the outstanding shares of ourcommon stock immediately following the closing, assuming no exercise by theholders of the IPO shares of their conversion rights in connection with thebusiness combination, and excluding those shares of our common and preferredstock held in escrow;

 

·                  4.0% of the outstanding shares of ourcommon stock immediately following the closing, assuming no exercise by theholders of the IPO shares of their conversion rights in connection with thebusiness combination, and including those shares of our common and preferredstock held in escrow;

 

·                  6.1% of the outstanding shares of ourcommon stock immediately following the closing, assuming the exercise by theholders of 39.99% of the IPO shares of their conversion rights in connectionwith the business combination, and excluding those shares of our common andpreferred stock held in escrow; and

 

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·                  4.6% of the outstanding shares of ourcommon stock immediately following the closing, assuming the exercise by theholders of 39.99% of the IPO shares of their conversion rights in connectionwith the business combination, and including those shares of our common andpreferred stock held in escrow.

 

The abovecalculations assume full conversion of any shares of preferred stock issued toED&F, including, as applicable, any shares of preferred stock held inescrow, and also assume no exercise of our outstanding warrants and no issuanceof additional shares.

 

The shares issuedto ED&F Man will be restricted and ED&F Man will not be able totransfer any of its shares of Series A Preferred Stock until18 months after the closing and, in the case of the shares of Series APreferred Stock held in escrow, until such shares are released to ED&F Manupon the achievement by the combined company of the earnings or share pricetargets described elsewhere in this Annual Report on Form 10-K. Inaddition, because ED&F Man’s shares of common stock and Series APreferred Stock will constitute “restricted stock,” they will be unable to beresold in the public market unless they are registered with the SEC, or aresold under an exemption from the SEC’s registration requirements.

 

However, aregistration rights agreement to be entered into as a condition to theconsummation of the business combination will provide for registration rightswith respect to those of our equity securities held by ED&F Man. From andafter the date that is 18 months after the closing date, ED&F Man will havethe right to demand that we register the public sale by ED&F Man of all ora portion of the shares of our common stock owned by ED&F Man and shares ofour common stock into which shares of Series A Preferred Stock owned byED&F Man are convertible, subject to customary limitations. ED&F Manmay demand up to four long-form registrations and an unlimited number ofshort-form registrations. The minimum amount of the securities required to beregistered must equal at least 10% of our issued and outstanding common stock(calculated on an as-converted basis) for both long- and short-formregistrations, subject to customary limitations.

 

Additionally,whenever we propose to register any of our securities under the Securities Actof 1933, as amended, and the method we select would permit the registration ofregistrable securities, ED&F Man will have the right to request theinclusion of its registrable securities in that registration. The sale of theseshares of common stock in the public market upon exercise of the registrationrights described above could adversely affect the market price of the combinedcompany’s common stock or impact the combined company’s ability to raiseadditional equity capital.

 

In addition, whileED&F Man will be prohibited from converting shares of Series APreferred Stock into shares of common stock if and to the extent that suchconversion would result in ED&F Man and its affiliates collectively owningmore than 49.5% of our outstanding common stock, this prohibition will notapply to any unaffiliated entity that purchases shares of Series APreferred Stock from ED&F Man or its affiliates.

 

Additionally, uponconsummation of the business combination and the issuance of shares of our commonstock to ED&F Man in connection with the business combination, our publicstockholders will incur immediate dilution in the net tangible book value ofcommon stock held immediately prior to the business combination.

 

**Following the business combination, we may issueadditional equity securities which may dilute your interest in the combinedcompany.**

 

In order to expandthe combined company’s business, we may consider offering and issuingadditional equity-linked securities. Holders of the combined company’ssecurities may experience a dilution in the net tangible book value per shareheld by them if this occurs. The number of shares that we may issue for cashwithout stockholder approval will be limited by the rules of the exchangeon which our securities are listed. However, there are generally exceptionswhich allow companies to issue a limited number of equity securities whichcould dilute your ownership.

 

**An active market for our common stock may notdevelop.**

 

Our common stockis currently listed on the Over-the-Counter Bulletin Board and trades under thesymbol “SACQ.” In connection with the business combination, we intend to applyfor listing of our shares on Nasdaq. However, we cannot assure you a regulartrading market of our shares will develop on Nasdaq or elsewhere or, ifdeveloped, that any market will be sustained. Accordingly, we cannot assure youof the likelihood that an active trading market for our shares will develop orbe maintained, the liquidity of any trading market, your ability to sell yourshares when desired, or at all, or the prices that you may obtain for yourshares.

 

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**The value of our common stock and warrants may beadversely affected by market volatility.**

 

Even if an activetrading market develops, the market price of our shares may be highly volatileand could be subject to wide fluctuations. In addition, the trading volume inour shares may fluctuate and cause significant price variations to occur. Ifthe market price of our shares declines significantly, you may be unable toresell your shares at or above your purchase price, if at all. We cannot assureyou that the market price of our shares will not fluctuate or declinesignificantly in the future. Some of the factors that could adversely affectthe market price of our shares or result in fluctuations in the price ortrading volume of our shares include:

 

·                  variations in our quarterly operatingresults or dividends;

 

·                  failure to meet analysts’ earningsestimates or failure to meet, or the lowering of, our own earnings guidance;

 

·                  publication of research reports aboutus or the agriculture industry or the failure of securities analysts to coverour shares following the consummation the business combination;

 

·                  departures of key Westway personnel;

 

·                  adverse market reaction to anyindebtedness we may incur or securities we may issue in the future;

 

·                  actions by stockholders;

 

·                  changes in market valuations ofsimilar companies;

 

·                  speculation in the press orinvestment community;

 

·                  changes or proposed changes in lawsor regulations or differing interpretations thereof affecting our business orenforcement of these laws and regulations, or announcements relating to thesematters;

 

·                  adverse publicity about theagriculture industry generally or individual scandals, specifically;

 

·                  fluctuations for reasons unrelated tothe agriculture business or our results of operations (for example, we believesome investors closely link the performance of commodity-related stocks withthe stocks of agriculture-related companies); and

 

·                  general market and economicconditions.

 

**If our application for the listing of our Class ACommon Stock, which our existing common stock will be designated as inconnection with the Business Combination, on Nasdaq is not approved, or if wesubsequently list our shares on Nasdaq and Nasdaq delists our securities fromquotation on its exchange, our investors’ ability to make transactions in oursecurities could be limited and we may be subject to additional tradingrestrictions.**

 

We may not be ableto meet Nasdaq’s initial listing requirements. Even if our application isaccepted and our common stock is so listed, we may be unable to maintain thelisting of our shares in the future.

 

Nasdaq’s listingstandards will require us to have, at a minimum:

 

·                  stockholders’equity of at least $4.0 million;

 

·                  a market valueof publicly held shares of at least $5.0 million;

 

·                  net income fromcontinuing operations of at least $750,000 in the combined company’s mostrecently completed fiscal year or in two of the last three most recentlycompleted fiscal years;

 

·                  at least 1.0million publicly held shares;

 

·                  a minimum bidprice of $4 per share;

 

·                  at least 300round lot stockholders;

 

·                  at least threemarket makers; and

 

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·                  sufficientcorporate governance functions.

 

We currentlyanticipate that we will meet each of these listing standards upon theconsummation of the business combination, except for the requirement that washave at least 300 round lot stockholders.

 

If our applicationfor the listing of our Class A Common Stock is not approved, or if Nasdaqwere to delist our securities from trading on its exchange, we could facesignificant material adverse consequences, including:

 

·                  a limited availability of market quotationsfor our securities;

 

·                  reduced liquidity with respect to oursecurities;

 

·                  a limited amount of news and analystcoverage for the combined company; and

 

·                  a decreased ability for us to issueadditional securities or obtain additional financing in the future.

 

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

 

No warrant will beexercisable and we will not be obligated to issue shares of common stock unlessat the time a holder seeks to exercise such warrant, we have a registrationstatement under the Securities Act of 1933, as amended, relating to the common stockissuable upon exercise of the warrant and a current prospectus relating to thatcommon stock, and the common stock has been registered or qualified or deemedto be exempt under the securities laws of the state of residence of the holderof the warrants. Under the terms of the warrant agreement governing the termsof our warrants, we have agreed to use our best efforts to meet theseconditions and to maintain a current prospectus relating to the common stockissuable upon exercise of the warrants until the expiration of the warrants.However, we cannot assure you that we will be able to do so, and if we do notmaintain a current prospectus related to the common stock issuable uponexercise of the warrants, holders will be unable to exercise their warrants andwe will not be required to settle any such warrant exercise, whether by netcash settlement or otherwise. If the prospectus relating to the common stockissuable upon the exercise of the warrants is not current or if the commonstock is not qualified or exempt from qualification in the jurisdictions inwhich the holders of the warrants reside, the warrants may have no value, themarket for the warrants may be limited and the warrants may expire worthless.Notwithstanding the foregoing, the insider warrants purchased by our initialstockholders simultaneously with the consummation of our initial publicoffering may be exercisable for unregistered shares of common stock even if theprospectus relating to the common stock issuable upon exercise of the warrantsis not current.

 

**Our stock ownership after the business combinationwill be highly concentrated, with ED&F Man and its affiliates owning 49.5%of our outstanding common stock. This level of ownership, combined with otherrights being granted to ED&F Man at the closing, will allow it tosignificantly influence our affairs going forward.**

 

Immediately afterthe business combination is consummated, ED&F Man will own 49.5% of ourcommon stock. In addition, ED&F Man will initially be entitled to electthree of the seven members of our board of directors, allowing it to have asignificant impact on the determination of our corporate and managementpolicies, including any potential acquisitions, asset sales and othersignificant corporate transactions. We will also enter into a stockholder’sagreement with ED&F Man, which will provide ED&F Man, so long as it andits affiliates collectively own more than a specified percentage of ouroutstanding common stock (assuming conversion of the Series A PreferredStock held by ED&F Man and its affiliates into shares of our common stock),informational and veto rights regarding our operations and activities.

 

As a result,ED&F Man will have the voting power to significantly influence ourpolicies, business and affairs and will also have the ability to influence theoutcome of any corporate transaction or other matter, including mergers,consolidations and the sale of all or substantially all of our assets. Thisconcentration in control may decrease the ability of our other stockholders toinfluence our affairs, and may have the effect of delaying, deterring orpreventing a change of control that otherwise could result in a premium in theprice of our common stock.

 

The interests ofED&F Man may not coincide with the interests of other holders of our commonstock. The ED&F Man group is the largest supplier to the liquid feedsupplements business and the largest customer of the bulk liquid storagebusiness. While the proposed amended and restated certificate of incorporationcontains provisions on interested transactions 

 

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designed to minimizeconflicts, ED&F Man may have a view on our strategies and policies that isdifferent from that of our other stockholders.

 

**The proposed amended and restated certificate ofincorporation, which will set forth the respective rights, preferences andlimitations of the shares of our common and preferred stock following thebusiness combination, would grant the holders of our Series A PreferredStock rights, which could limit our ability to take specified actions,including the payment of dividends to holders of our common stock.**

 

Following thebusiness combination, the respective rights, preferences and limitations of thedifferent classes of our common and preferred stock will be governed by theproposed amended and restated certificate of incorporation. Certain of therights to be granted to the holders of our Series A Preferred Stock couldlimit our ability to take specified corporate actions. For instance, in theevent that holders of shares of Series A Preferred Stock have not receiveda quarterly dividend owed on these shares, we would be prohibited fromdeclaring or paying dividends to the holders of our common stock, until suchquarterly dividend is paid.

 

In addition, whilethe holders of Series A Preferred Stock are not generally entitled to voteon matters submitted to a vote of holders of shares of our common stock, suchholders, voting as a single and separate class, will have the right to approve,among other things, our ability to:

 

·                  amend, alter or repeal any provisionof our certificate of incorporation or by-laws (by any means, including bymerger, consolidation, reclassification or otherwise) so as to, or in a mannerthat would, adversely affect the preferences, rights, privileges or powers ofthe holders of our Series A Preferred Stock or in a manner inconsistentwith the stockholder’s agreement to be entered into at closing by us andED&F Man;

 

·                  reclassify any common stock or anyother security junior to the Series A Preferred Stock into shares or othersecurities having any preference or priority as to payment of dividends, or thedistribution of assets or profits superior to, or on parity with, any suchpreference or priority of the shares of our Series A Preferred Stock;

 

·                  create, increase the number ofauthorized shares of or issue, or obligate ourselves to issue, any class ofequity securities or series of preferred stock, including any securityconvertible into or exchangeable or exercisable for any equity security, havingany preference or priority superior to or on parity with the Series APreferred Stock;

 

·                  increase the number of authorizedshares of preferred stock or Series A Preferred Stock;

 

·                  conduct an offer to repurchase sharesof our common stock, other than the repurchase or redemption of warrants topurchase shares of Class A Common Stock (other than from our sponsor orany our officers or directors) for an aggregate purchase price not greater than$15.0 million; or

 

·                  sell, convey, or otherwise dispose ofor encumber all, or substantially all, of our assets, or enter into atransaction resulting in our acquisition by another person (except for any suchtransaction after which our stockholders would own more than half of the votingsecurities of the surviving entity or its parent and that would not entail achange in our certificate of incorporation or bylaws subject that would requirethe consent of the holders of the Series A Preferred Stock).

 

**Following the consummation of the businesscombination, certain of our directors and executive officers will ownsecurities of ED&F Man or one or more of ED&F Man’s affiliates. As aresult, these directors and executive officers may have interests that aredifferent from, and in addition to, the interests of our other stockholders.**

 

Following theconsummation of the business combination, certain of our directors andexecutive officers will own securities of ED&F Man or one or more ofED&F Man’s affiliates. Messrs. Harding, Driggers and Shoemakeracquired shares in ED&F Man through ED&F Man’s employee equityincentive plans. Messrs. Howell and James Jenkins will hold securities ofED&F Man as well. The ownership of such securities, in connection with thepossibility that the interests of ED&F Man may not coincide with theinterests of our other stockholders, may provide these directors and executiveofficers with interests that are different from our non-ED&F Man associatedstockholders.

 

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**Shares of our common stock issued to our founderswill continue to remain, and shares of our Series A Preferred Stockdeposited on behalf of ED&F Man will be held, in escrow following theconsummation of the business combination. Because the release of these sharesis to be conditioned upon the achievement by the combined company of theearnings or share price targets described elsewhere in this Annual Report on Form 10-K,officers and directors associated with ED&F Man and our founders may havethe incentive to take actions intended to cause the achievement of thesetargets, even if such actions would not be in our best interests.**

 

At the closing, wewill be delivering to an escrow agent for deposit into an escrow accountapproximately 12.2 million shares of our Series A Preferred Stock,issued to ED&F Man, as part of the consideration for the businesscombination. These shares will be released to ED&F Man only upon theachievement by the combined company of the earnings or share price targetsdescribed elsewhere in this Annual Report on Form 10-K. Our sponsor hasalso agreed that 2,875,000 shares of our common stock, which would otherwise bereleased to our sponsor six months after the closing, will remain in escrowsubject to the satisfaction of the same earnings or share price targets.

 

Because a numberof our directors and officers following the closing will have interests in, orbe affiliated with, either ED&F Man or our sponsor, such directors andofficers may have the incentive to direct the combined company to take actionsintended to cause it to achieve such targets, even if such actions are not inthe combined company’s long-term interest. For instance, such officers anddirectors may have an additional incentive to have the combined company acquireadditional lines of business, which could increase the likelihood that it wouldsatisfy the applicable earnings targets.

 

**Our stockholders may not receive dividends becauseof restrictions contained in any new credit facilities, or our proposed amendedand restated certificate of incorporation, or pursuant to Delaware law or stateregulatory requirements.**

 

Our ability to paydividends may be restricted by any new credit facilities we become party to, aswell as Delaware law and state regulatory requirements. Under Delaware law, ourboard of directors may not authorize payment of a dividend unless it is eitherpaid out of our capital surplus, as calculated in accordance with the DGCL, or,if we do not have a surplus, it is paid out of our net profits for the fiscalyear in which the dividend is declared and/or the preceding fiscal year. To theextent we do not have adequate surplus or net profits, we will be prohibitedfrom paying dividends. In addition, the proposed amended and restatedcertificate of incorporation would prohibit distributions to holders of ourcommon stock in the event we have not complied with our obligation to payquarterly dividends on the outstanding shares of our Series A PreferredStock.

 

**If our common stock becomes subject to the SEC’spenny stock rules, broker-dealers may experience difficulty in completingcustomer transactions and trading activity in our common stock could beadversely affected.**

 

If at any time wehave net tangible assets of $5.0 million or less and our common stock hasa market price per share of less than $5.00, transactions in our common stockcould be subject to the “penny stock” rules promulgated under theSecurities Exchange Act of 1934, as amended. Under these rules, broker-dealerswho recommend such securities to persons other than institutional accreditedinvestors must:

 

·                  make a special written suitabilitydetermination for the purchaser;

 

·                  receive the purchaser’s writtenagreement to a transaction prior to sale;

 

·                  provide the purchaser with riskdisclosure documents that identify certain risks associated with investing in “pennystocks” and that describe the market for these “penny stocks,” as well as apurchaser’s legal remedies; and

 

·                  obtain a signed and datedacknowledgment from the purchaser demonstrating that the purchaser has actuallyreceived the required risk disclosure document before a transaction in “pennystock” can be completed.

 

If our commonstock becomes subject to these rules, broker-dealers could find it difficult toeffect customer transactions and trading activity in our securities could beadversely affected. As a result, the market price of our common stock may bedepressed, and you could find it more difficult to sell our securities.

 

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**If an insufficient number of votes is obtained toapprove the transaction agreement or the proposal regarding the amendment andrestatement of our certificate of incorporation, and the proposal regardingadjournment is not approved at the annual meeting of our stockholders, ourboard of directors will not have the ability to adjourn the annual meeting to alater date in order to solicit further votes, and, therefore, the businesscombination will not be approved and we may be required to dissolve andliquidate the trust account.**

 

Our board ofdirectors will seek approval to adjourn the annual meeting to a later date ordates if, at the annual meeting, based upon the tabulated votes, there areinsufficient votes to approve the consummation of the business combination. Ifthe adjournment proposal is not approved, our board of directors will not havethe ability to adjourn the annual meeting to a later date and, therefore, willnot have more time to solicit additional votes to approve the consummation ofthe business combination. In that event, the business combination would not becompleted and we would be required to dissolve and liquidate the trust accountif we do not consummate another qualified business combination by May 30,2009.

 

**Our financial advisor could have a potentialconflict of interest.**

 

We engaged Oppenheimer as our financialadvisor in connection with the business combination.  As our financial advisor Oppenheimer wasinvolved in due diligence with respect to the business combination,participated in negotiations and rendered a fairness opinion to our board ofdirectors.

 

Oppenheimer couldhave a potential conflict of interest in connection with the businesscombination because we have agreed to pay Oppenheimer for its financialadvisory services in connection with the business combination a fee of $2.5million, of which $500,000 was payable upon delivery of Oppenheimer’s opinionand the balance of which is contingent upon consummation of the businesscombination. Shermen also has agreed to reimburse Oppenheimer for itsreasonable expenses, including reasonable fees and expenses of its legalcounsel, and to indemnify Oppenheimer and related parties against liabilities,including liabilities under the federal securities laws, relating to, orarising out of, its engagement.

 

Oppenheimer couldalso have a potential conflict of interest because CIBC World Markets Corp.,which we refer to as “CIBC,” served as an underwriter in our initial publicoffering.  Since our initial publicoffering and as publicly announced, Oppenheimer acquired certain of the assetsof CIBC including certain of CIBC’s investment banking and corporate financeoperations in the United States, the United Kingdom, Israel and Hong Kong.  As a result, Oppenheimer is now entitled (i) toreceive deferred cash compensation of approximately $2.5 million for servicesoriginally rendered by CIBC in our initial public offering and (ii) topurchase 350,000 shares of our common stock and 700,000 of our warrants, ineach case upon consummation of certain transactions involving us, including thebusiness combination.  Oppenheimerinformed our board of directors regarding Oppenheimer’s roles, including itsstatus as the successor to CIBC, and the contingent component of theunderwriting fee in connection with our initial public offering.  In considering Oppenheimer’s financialadvice, our board of directors took into account and evaluated such matters.

 

**Item 1B.  Unresolved Staff Comments**

** **

Notapplicable.

 

**Item 2.  Properties**

** **

Wemaintain our principal executive offices at c/o The Shermen Group, 230 ParkAvenue, Suite 1000, New York, NY 10169. The cost for this space is included in the $9,950 per-month fee ShermenCapital Partners, LLC, the managing member of which is Francis P. Jenkins, Jr.,our chairman and chief executive officer, charges us for general andadministrative services pursuant to an agreement between us and Shermen CapitalPartners, LLC. We consider our current office space adequate for our currentoperations

** **

**Item 3.  Legal Proceedings**

** **

We arecurrently not subject to any legal proceedings, nor, to our knowledge, is anymaterial legal proceeding threatened against us.  From time to time, we may be a party tocertain legal proceedings incidental to the normal course of our business.  While the outcome of these legal proceedingscannot be predicted with certainty, we do not expect that these proceedingswill have a material effect upon our financial condition or results ofoperation.

 

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**Item 4.  Submission of Matters to a Vote of SecurityHolders**

** **

Nomatters were submitted to a vote of our shareholders during the three monthsended December 31, 2008.

 

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**PART II**

** **

**Item 5.  Market for Registrant’s Equity, RelatedStockholder Matters and Issuer Purchases of Equity Securities**

** **

**Price Range of Common Stock**

 

Our units, common stockand warrants have been traded on the Over-the-Counter Bulletin Board under thesymbols “SACQU,” “SACQ” and “SACQW,” respectively, since May 30, 2007, June 18,2007 and June 18, 2007, respectively. The following table sets forth the high and low bid information for oursecurities from the commencement of trading through December 31, 2008 asreported by the Over-the-Counter Bulletin Board. The Over-the-Counter BulletinBoard quotations reflect inter-dealer prices, are without retail markup,markdowns or commissions, and may not represent actual transactions.

 
| ** **                                       | ** ** | **Common Stock** | ** ** | **Warrants** | ** ** | **Units** | ** ** |
|--------------------------------------------------|------------|-----------------------|------------|--------------|------------|-----------|------------|
| ** **                                       | ** ** | **High**              | ** ** | **Low**      | ** ** | **High**  | ** ** | **Low** | ** ** | **High** | ** ** | **Low** | ** ** |
| **Year  Ended December 31, 2007**           |       |                  |       |         |       |      |       |   |   |   |   |   |   |
| 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 |   |
|                                             |       |                  |       |         |       |      |       |   |   |   |   |   |   |
| **Year  Ended December 31, 2008**           |       |                  |       |         |       |      |       |   |   |   |   |   |   |
| First Quarter                                    |       | $                     | 5.65       |         | $          | 5.58      |       | $ | 0.32 |   | $ | 0.10 |   | $ | 6.37 |   | $ | 5.85 |   |
| Second Quarter                                   |       | $                     | 5.77       |         | $          | 5.595     |       | $ | 0.17 |   | $ | 0.12 |   | $ | 6.07 |   | $ | 5.08 |   |
| Third Quarter                                    |       | $                     | 5.78       |         | $          | 5.67      |       | $ | 0.15 |   | $ | 0.06 |   | $ | 6.00 |   | $ | 5.84 |   |
| Fourth Quarter                                   |       | $                     | 5.75       |         | $          | 5.29      |       | $ | 0.10 |   | $ | 0.01 |   | $ | 5.84 |   | $ | 5.20 |   |

 

----

*No figures are includedas the Units commenced trading on May 30, 2007, and Common Stock andWarrants commenced trading on June 18, 2007.

 

The closing price per share of common stock on December 31,2008, the last trading day of the Company’s fiscal year, was $5.75.

 

**Holders**

 

On March 4, 2009,there were approximately 5 holders of record of our outstanding common stock,approximately 1 holder of record of our outstanding units and approximately 5holders of record of our outstanding warrants. We believe the actual number of holders is substantially more thanindicated.

 

**Dividend Policy**

 

We have not paid anydividends on our common stock to date and do not intend to pay dividends priorto the completion of a business combination. The payment of dividends in thefuture will be contingent upon our revenues and earnings, if any, capital requirementsand general financial condition subsequent to completion of a businesscombination. The payment of any dividends subsequent to a business combinationwill be within the discretion of our board of directors. It is the presentintention of our board of directors to retain all earnings, if any, for use inour business operations and, accordingly, our board does not anticipatedeclaring any dividends in the foreseeable future.

** **

**Performance Graph**

** **

Thefollowing graph compares the cumulative total return for our common stock from May 30,2007, the date our common stock started trading separately, through December 31,2008 with the comparable cumulative return of two indices, the NASDAQ CompositeIndex and the NASDAQ Non-Financial Index. The graph assumes $100 invested on June 18, 2007 in our commonstock and $100 invested at that same time in each of the two listedindices.   The stock price performanceshown on the graph is not necessarily indicative of future price performance.

 

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**Recent Sales ofUnregistered Securities**

** **

(a) Duringthe past three 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 ourinitial public offering:

 
| **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                         |       |

 

----

(1) The members ofShermen WSC Holding LLC are our officers and certain of their family members.Shermen Capital Partners, LLC is the managing member of Shermen WSC HoldingLLC. Mr. Jenkins, Jr., our chairman and chief executive officer, isthe managing member of Shermen Capital Partners, LLC and may be deemed tobeneficially own the shares owned by Shermen WSC Holding LLC.

 

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On May 1, 2006, weissued approximately 5.7 million shares (after giving effect to a 1.15 for 1forward stock split effected immediately prior to the consummation of ourinitial public offering)to the individuals and the entity listed above.  All of such shares were issued in connectionwith our organization pursuant to the exemption from registration contained in Section 4(2) ofthe Securities Act of 1933, as amended, as they were sold to sophisticated,wealthy individuals who were each “accredited investors,” as defined in Rule 501(a) ofthe Securities Act of 1933, as amended. At the time of issuance of such sharesall members of Shermen WSC Holding LLC were sophisticated, wealthyindividuals who were each “accredited investors,” as defined in Rule 501(a) ofthe Securities Act of 1933, as amended. The shares issued to the individualsand entities above were sold for an aggregate offering price of $25,000 at apurchase 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 1933, as amended.

 

(b) Concurrentlywith the consummation of our initial public offering, on May 30, 2007, weconsummated a private sale of the founder warrants at a purchase price of $0.70per founder warrant, generating total proceeds of approximately $3.7million.  The founder warrants were purchased by certain of our directorsand officers through our sponsor whose managing member is Shermen CapitalPartners, LLC, an entity controlled by Francis P. Jenkins, Jr., our chairmanand chief executive officer.  The founder warrants are identical to thewarrants except that (i) if we call the warrants for redemption, thefounder warrants will be exercisable on a cashless basis; (ii) the founderwarrants will not be transferable or salable by our sponsor or such directorsor officers or their respective affiliates until after we have completed ourinitial business combination, except our sponsor may distribute them to itsmembers; and (iii) the holders of the founder warrants and the commonstock underlying 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, our sponsordistributed them to its members.

 

**Use of Proceeds**

** **

On May 30,2007, we completed the issuance and sale of 23.0 million units in ourinitial public offering, raising gross proceeds of $138.0 million,including proceeds from the exercise of the underwriters’ over-allotmentoption.  Each unit consists of one shareof our common stock and two warrants, each exercisable for one share of ourcommon stock.  Of the gross proceeds: (i) approximately$133.2 million was deposited into trust account which amount includedapproximately $5.5 million of deferred underwriting fees; (ii) theunderwriters received approximately $4.1 million as underwriting fees,excluding the deferred underwriting fees; and (iii) we retained $607,900for offering expenses.

 

Noexpenses of our initial public offering were paid to any of our officers anddirectors or any of their respective affiliates. On September 27, 2007, werepaid $75,000 of the $150,000 unsecured promissory note, which is non-interestbearing, we issued to a stockholder, Shermen Capital Partners, LLC, on April 20,2006, and repaid the 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 financialdata presented below summarizes certain financial data which has been derivedfrom and should be read in conjunction with our financial statements and notesthereto included in the section beginning on page F-1.  See also “Item 7. Management’s Discussion andAnalysis of Financial Condition and Results of Operations.”

 
| ** **                                | ** ** | **Year Ended  December 31, 2008** | ** ** | **Year Ended  December 31, 2007** | ** ** | **Period from  April 18, 2006  (date of inception)  to  December 31, 2008** | ** ** |
|-------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------|------------|
|                                      |       |                                             |       |                                             |       |                                                                                                           |       |
| **Statement  of Operations Data**         |       |                                             |       |                                             |       |                                                                                                           |       |
| Revenues                                  |       | $                                                | —     |                                             | $          | —                                                                                                         |       | $ | — |   |
| Formation and  operating costs            |       | 869,030                                          |       | 870,520                                          |       | 1,755,581                                                                                                      |       |
| Loss from  operations                     |       | (869,030                                         | )          | (870,520                                         | )          | (1,755,581                                                                                                     | )          |
| Interest income                           |       | 2,396,262                                        |       | 2,988,057                                        |       | 5,384,319                                                                                                      |       |
| Income before  provision for income taxes |       | 1,527,232                                        |       | 2,117,537                                        |       | 3,628,738                                                                                                      |       |
| Provision for  income taxes               |       | 786,155                                          |       | 951,311                                          |       | 1,737,466                                                                                                      |       |
| Net income                                |       | 741,077                                          |       | 1,166,226                                        |       | 1,891,272                                                                                                      |       |
|                                      |       |                                             |       |                                             |       |                                                                                                           |       |
| Earnings per  share                       |       |                                             |       |                                             |       |                                                                                                           |       |
| Basic                                     |       | $                                                | 0.04       |                                             | $          | 0.06                                                                                                           |       | $ | 0.14 |   |
| Diluted                                   |       | $                                                | 0.03       |                                             | $          | 0.04                                                                                                           |       | $ | 0.12 |   |

 

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| ** **                                                                 | ** ** | **December 31, 2008** | ** **  | **December 31, 2007** | ** ** | ** **  | ** ** |
|----------------------------------------------------------------------------|------------|-----------------------|-------------|-----------------------|------------|-------------|------------|
| **Balance  Sheet Data (at period end)**                                    |       |                  |        |                  |       |        |       |
| Cash and cash  equivalents                                                 |       | $                     | 190,455     |                  | $          | 160,949     |       |   |   |
| Cash held in  trust fund                                                   |       | 138,445,809           |        | 138,589,757           |       |        |       |
| Deferred taxes                                                             |       | 712,000               |        | 401,120               |       |        |       |
| Prepaid expenses                                                           |       | 28,767                |        | 30,286                |       |        |       |
| Deferred  offering costs                                                   |       | —                |        | —                |       |        |       |
| Total Assets                                                               |       | 139,377,031           |        | 139,182,112           |       |        |       |
|                                                                       |       |                  |        |                  |       |        |       |
| Accounts payable  and accrued expenses                                     |       | 199,659               |        | 86,817                |       |        |       |
| Accrued offering  costs                                                    |       | —                |        | —                |       |        |       |
| Income tax  payable                                                        |       | 286,000               |        | 945,000               |       |        |       |
| Notes payable,  founding stockholders                                      |       | —                |        | —                |       |        |       |
| Deferred  underwriter’s fee                                           |       | 3,312,000             |        | 3,312,000             |       |        |       |
| Total Liabilities                                                          |       | 3,797,659             |        | 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 |       | 323,305               |        | 352,985               |       |        |       |
| Total  Stockholders’ equity                                           |       | 80,512,073            |        | 79,741,316            |       |        |       |
| Total  Liabilities and Stockholders’ Equity                           |       | $                     | 139,377,031 |                  | $          | 139,182,112 |       |   |   |
|                                                                            |            |                       |             |                       |            |             |            |  |  |  |  |

 

**Item 7.  Management’s Discussion and Analysis ofFinancial Condition and Results of Operations**

** **

*You should read the following discussion and analysis of ourfinancial condition and results of operations together with our financialstatements and notes thereto that appear elsewhere in this Annual Report on Form 10-K.This discussion and analysis contains forward-looking statements that involverisks, uncertainties, and assumptions. Actual results may differ materiallyfrom those anticipated in these forward-looking statements as a result ofvarious factors, including, but not limited to, those presented under “RiskFactors” included in Item 1A and elsewhere in this Annual Report on Form 10-K.*

 

***Overview***

*** ***

We were formed 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. Each unit sold in the initialpublic offering consists of one share of our common stock, and two warrants topurchase shares of our common stock.  Thepublic offering price of each unit was $6.00, and we generated gross proceedsof $138 million in the offering (including proceeds from the exercise ofthe underwriters’ over-allotment option). Of the gross proceeds: (i) wedeposited approximately $133.2 million into the trust account, whichincluded approximately $5.5 million of deferred underwriting fees; (ii) theunderwriters received approximately $4.1 million as underwriting fees(excluding the deferred underwriting fees); and (iii) we retained $607,900for offering expenses. In addition, we deposited into the trust accountapproximately $3.7 million that we received from the issuance and sale ofapproximately 5.2 million founder warrants to our sponsor, whose managingmember is Shermen Capital Partners, LLC, an entity controlled by FrancisP. Jenkins, Jr., our chairman and chief executive officer, on May 30,2007.

 

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We intend to use substantially all of the net proceedsof our initial public offering and the issuance and sale of the founderwarrants, including the funds held in the trust account (excluding deferredunderwriting discounts and commissions), to consummate the businesscombination. To the extent that our capital stock is used in whole or in partas consideration to effect the business combination, the remaining proceedsheld in the trust account as well as any other net proceeds not expended willbe used as working capital to finance the operations of Westway. Such workingcapital funds could be used in a variety of ways including continuing orexpanding Westway’s operations, for strategic acquisitions and for marketing,research and development of existing or new products. Such funds could also beused to repay any operating expenses or finders’ fees which we had incurredprior to the completion of the business combination if the funds available tous outside of the trust fund were insufficient to cover such expenses.

 

***Resultsof Operations, Financial Condition and Liquidity***

*** ***

ThroughDecember 31, 2008, our efforts have been limited to organizationalactivities, activities relating to our initial public offering, activitiesrelating to identifying and evaluating prospective acquisition candidates, andactivities relating to general corporate matters; we have neither engaged inany operations nor generated any revenues, other than interest income earned onthe proceeds of our initial public offering and our private placement of thefounder warrants.

 

Netincome totaled $741,077, which consisted of $2,396,262 of interest income fromthe trust account offset by $869,030 of formation and operating expenses and$786,155 of provision for income taxes, for the fiscal year ended December 31,2008.  Net income totaled $1,166,226,which consisted of $2,988,057 of interest income from the trust account offsetby $870,520 of formation and operating expenses and $951,311 of provision forincome taxes, for the fiscal year ended December 31, 2007.  From inception, net income totaled$1,891,272, which consisted of $5,384,319 of interest income from the trustaccount offset by $1,755,581 of formation and operating expenses and $1,737,466of provision for income taxes.

 

Interestincome from the trust account excludes earnings on funds held in the trustaccount associated with our common stock subject to possible conversion, and,except for amounts equal to any taxes payable by us relating to such interestearned and one half of such interest earned, net of taxes, up to $1,500,000which may be released to us on a monthly basis to cover our operating expenses,will not be released to us from the trust account until the earlier of thecompletion of a business combination or the expiration of the time periodduring which we may complete a business combination.

 

As of December 31,2008, we had approximately no unrestricted cash available to us for ouractivities 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, 2008:

 
| Gross proceeds  from our initial public offering of common stock and financing transaction                                                                                                                            |       | $           | 138,000,000     |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|-----------------|------------|
| Gross proceeds  from private placement warrant holders                                                                                                                                                                |       | 3,650,000   |            |
| Underwriters’  fee                                                                                                                                                                                               |       | (4,140,000  | )               |
| Blue Sky fees                                                                                                                                                                                                         |       | (25,000     | )               |
| Custodial fees                                                                                                                                                                                                        |       | (17,100     | )               |
| Funds not placed  in trust                                                                                                                                                                                            |       | (607,900    | )               |
|                                                                                                                                                                                                                  |       |        |            |
| Cash placed in  trust on May 31, 2007                                                                                                                                                                            |       | 136,860,000 |            |
| Total investment  income earned on assets held in trust, May 31, 2007 through  December 31, 2008                                                                                                            |       | 5,384,319   |            |
| Subtotal                                                                                                                                                                                                              |       | 142,244,319 |            |
|                                                                                                                                                                                                                  |       |        |            |
| Withdrawals from  the trust during the period May 31, 2007 through December 31, 2008:                                                                                                                       |       |        |            |
| Payments for  income taxes                                                                                                                                                                                            |       | (2,163,466  | )               |
| Transfers to the  Company’s operating account for payment of additional offering costs, general  and administrative expenses and for working capital purposes (latter being  limited to a maximum of $1,500,000) |       | (1,444,239  | )               |
| Unspent monies  in checking                                                                                                                                                                                           |       | (190,455    | )               |
| Custodial transfer  fees                                                                                                                                                                                              |       | (350        | )               |
| Total transfers  from custodial accounting to checking                                                                                                                                                                |       | (3,798,510  | )               |
| Total assets  held in trust account as of December 31, 2008                                                                                                                                                      | ** ** | **$**       | **138,445,809** | ** ** |

 

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Webelieve that we will have sufficient funds to allow us to operate through May 30,2009, assuming that a business combination is not consummated during thattime.  Approximately $1,500,000 of workingcapital over this time period will be funded from the interest earned from thefunds held in the trust account.  Overthis time period, we anticipate incurring expenses for the following purposes:

 

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

 

·                                          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;

 

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

 

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

 

***Off-BalanceSheet Arrangements, Commitments, Guarantees and Contractual Obligations***

*** ***

We sold therepresentatives of the underwriters for our initial public offering, for $100,an option to purchase up to a total of 700,000 units in the aggregate (350,000units for each representative) at $7.50 per unit, commencing on the later ofthe consummation of the business combination and expiring on May 24, 2011.The warrants underlying such units have terms that are identical to thoseissued in our initial public offering, except that each such warrant entitlesthe holder to purchase one share of common stock at a price of $6.25.

 

In connection withour initial public offering, the underwriters agreed to defer payment of theremaining 3% of the gross proceeds (approximately $5,520,000) until completionof a business combination. Until a business combination is complete, thesefunds will remain in the trust account. If we do not complete a businesscombination by May 30, 2009, then the 3% deferred fee will become part ofthe funds returned to our initial stockholders.

 

**Impactof Recently Issued Accounting Pronouncements**

 

The preparation offinancial statements in conformity with U.S. GAAP requires management tomake estimates 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 FinancialAccounting Standards No. 141, “Business Combinations” or FAS 141,although it retains the fundamental requirement in FAS 141 that theacquisition method of accounting be used for all business combinations.FAS 141R establishes principles and requirements for how the acquirer in abusiness combination (a) recognizes and measures the assets acquired,liabilities assumed and any non-controlling interest in the acquiree, (b) recognizesand measures the goodwill acquired in a business combination or a gain from abargain purchase and (e) determines what information to disclose regardingthe business combination. FAS 141R applies prospectively to businesscombinations for which the acquisition date is on or after the beginning of our2009 fiscal year. We are currently assessing the potential effect of FAS 141Ron our financial statements.

 

In June 2006,the FASB issued Interpretation No. 48, “Accounting for Uncertainty inIncome Taxes—An Interpretation of SFAS No. 109” or FIN 48.FIN 48 clarifies the accounting for uncertainty in tax positionsrecognized in a company’s financial statements in accordance with SFAS No. 109,“Accounting for Income Taxes.” FIN 48 prescribes a recognition thresholdand measurement attribute for the financial statement recognition andmeasurement of the tax position taken or expected to be taken in a tax return.The Company adopted FIN 48. The adoption of FIN 48 did not have anyimpact on the accompanying financial statements since we have not identifiedany uncertain tax positions as defined by FIN 48.

 

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

 

**Item 7A.  Quantitative and Qualitative Disclosuresabout Market Risk**

** **

Marketrisk is the sensitivity of income to changes in interest rates, foreignexchanges, commodity prices, equity prices, and other market-driven rates orprices. We are not presently engaged in and, if we do not consummate a suitablebusiness combination prior to the prescribed liquidation date of the trustaccount, we may not engage in, any substantive commercial business. Accordingly,we are not and, until such time as we consummate a business combination, wewill not be, exposed to risks associated with foreign exchange rates, commodityprices, equity prices or other market-driven rates or prices. The net proceedsof our initial public offering held in the trust account may be and have beeninvested by the trustee only in United States “government securities” withinthe meaning of Section 2(a)(16) of the Investment Company Act of 1940having a maturity of 180 days or less, or in money market funds meeting certainconditions under Rule 2a-7 promulgated under the Investment Company Act of1940. Given our limited risk in our exposure to government securities and moneymarket funds, we do not view the interest rate risk to be significant.

 

**Item 8.  Financial Statements and Supplementary Data**

** **

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

 

**Item 9.  Changes In and Disagreements with Accounts onAccounting and Financial Disclosure**

** **

None.

 

**Item 9A.  Controls and Procedures**

** **

**Disclosure Controls andProcedures**

 

Wemaintain disclosure controls and procedures that are designed to ensure thatinformation required to be disclosed in its reports filed pursuant to theSecurities Exchange Act of 1934, as amended, is recorded, processed,summarized, and reported within the time periods specified in the SEC’s rules andforms, and that such information is accumulated and communicated to ourmanagement, including our chief executive officer and our chief financialofficer (who is also the principal financial officer) as appropriate, to allowtimely decisions regarding required disclosure.

 

Our disclosure controlsand procedures are designed to provide reasonable assurance of achieving theirobjectives.  We carried out anevaluation, under the supervision and with the participation of our management,including our chief executive officer and our chief financial officer (who isalso the principal financial officer), of the effectiveness of the design andoperation of our disclosure control and procedures. Our chief executive officerand our chief financial officer (who is also the principal financial officer)concluded that our disclosure controls and procedures are effective at suchreasonable assurance level as of the end of the year ended December 31,2008.

 

There have been nochanges in our internal control over financial reporting during the year ended December 31,2008 that have materially affected, or are reasonably likely to materiallyaffect our internal control over financial reporting.

 

**Management’s Report on InternalControl 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 effectivenessof our internal control over financial reporting as of December 31, 2007based on the criteria in “Internal Control–Integrated Framework” issued by theCommittee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based upon this evaluation, our managementconcluded that our internal control over financial reporting was effective asof December 31, 2008.

 

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**Report ofIndependent Registered Public Accounting Firm**

 

The report called for byItem 308(b) of Regulation S-K is incorporated by reference to Report ofIndependent Registered Public Accounting Firm on internal control overfinancial reporting, included in Part II, “Item 8. Financial Statementsand Supplementary Data,” of this Annual Report on Form 10-K.

 

**Changesin Internal Control over Financial Reporting**

 

No change in our internal control over financialreporting occurred during the quarter ended December 31, 2008 that hasmaterially affected, or is likely to materially affect, our internal controlover financial reporting.

 

**Item 9B.  Other Information**

** **

None.

 

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**PART III**

** **

**Item 10.  Directors, Executive Officers and CorporateGovernance**

** **

The following table setsforth the names, ages and positions of our current directors and executiveofficers.

** **
| **Name**                    | ** ** | **Age** | ** ** | **Position**                                     |
|-----------------------------|------------|---------|------------|--------------------------------------------------|
| Francis P. Jenkins          |       | 66      |       | Chairman, Chief  Executive Officer and Director  |
| G. Kenneth Moshenek         |       | 57      |       | President, Chief  Operating Officer and Director |
| John E.  Toffolon, Jr. |       | 58      |       | Chief Financial Officer  and Director            |
| Gregory St. Clair           |       | 51      |       | Vice President                                   |
| Michiel C. McCarty          |       | 57      |       | Director                                         |
| Donald D. Pottinger         |       | 66      |       | Director                                         |
| Joseph F. Prochaska         |       | 63      |       | 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 amember of 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 of UnityEnvirotech LLC, a company servicing the commercial fertilizer andmunicipal wastewater markets, from October 2007 to December of 2007. Mr. Moshenekserved as the President and Chief Operating Officer of Royster-Clark, Inc.,a retailer and wholesale distributor of mixed fertilizer, fertilizer materials,seed, crop protection products and agronomic services to farmers, from December 1997to February 2006. Mr. Moshenek has served as Chief Operating Officersince 1995 and was a director from August 1997 until April 1999 ofRoyster-Clark, Inc. From August 1997 until April 1999 he servedas Chief Investment Officer of Royster-Clark, Inc. Prior to that he heldseveral positions during his tenure with Royster-Clark, Inc. includingSenior Vice President of Sales and Marketing, from September 1994 until July 1995,Vice President and Divisional Sales Manager from 1992 until September 1994and a Division Manager from 1990 to 1992. Mr. Moshenek joined W.S. Clark &Sons, Inc. in 1981. Mr. Moshenek has been involved in the fertilizerindustry since 1976. Mr. Moshenek formerly served on the Board ofDirectors of The Fertilizer Institute and was a member of the Board’s ExecutiveCommittee and served as chairman of the distributors council. He also formerlyserved on the Board of Directors of the Agricultural Retailers Association theFoundation of Agronomic Research and the Fertilizer Roundtable.

 

*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 seniormanagement responsibility for all of our non-revenue producing areas. Hestarted his career in 1973 as a member in the Management Training Program ofthe Federal Reserve Bank of New York, as the Bank Supervisor function rotatingthrough various analyst positions. In 1978, Mr. Toffolon joined theinvestment banking firm of Blyth Eastman Dillon as a Vice President in itsCapital Markets subsidiary, Blyth Capital Markets Inc. Shortly after thecompany’s acquisition by Paine-Webber. In 1979, Mr. Toffolon accepted anoffer to join The First Boston Corporation to manage its Fixed-Income CreditDepartment. Mr. Toffolon served as Managing Director of The First BostonCorporation since 1986 and subsequently served as its Chief Financial Officeruntil 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. Mr. Toffolon, Jr. hasserved as Chairman of the Board of Cowen Group Inc. since July 15, 2008.

 

*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., 

 

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Mr. St. Clairserved as Director 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,in Duluth, 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.

 

**Our Board of Directors**

 

Our board of directorshas six directors and is divided into three classes with only one class of directorsbeing elected in each year and each class serving a three-year term. The termof office of the first class of directors, consisting of John E. Toffolon, Jr.and Michiel C. McCarty will expire at our first annual meeting of stockholders.The term of office of the second class of directors, consisting ofJoseph F. Prochaska and Donald D. Pottinger, will expire at thesecond annual meeting. The term of office of the third class of directors,consisting of Francis P. Jenkins, Jr. and G. Kenneth Moshenek,will expire at the third annual meeting. Our directors are expected to attendall board of directors and stockholders’ meetings and meetings for anycommittee to which they have been appointed.

 

**Audit Committee**

 

Our board of directorshas designated an audit committee consisting of Joseph F. Prochaska andDonald D. Pottinger. The current members of the audit committee areindependent as that term is used in Section 10A(m)(3) of theSecurities Exchange Act of 1934, as amended. Our board of directors has not yetdesignated any individual as the audit committee’s financial expert.

 

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The oversight functionsof the Audit Committee include, among other things:

 

·                 appointing our independent auditor;

 

·                 reviewing the external audit plan andthe results of the auditing engagement;

 

·                 reviewing the internal audit plan andthe results of the internal audits;

 

·                 ensuring that management hasmaintained the reliability and integrity of our accounting policies and ourfinancial reporting and disclosure practices;

 

·                 reviewing the independence andperformance of our internal audit function and independent registered publicaccounting firm; and

 

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

 

**Compensation Committee**

 

Since we are a blank check company and our directorsand officers will not receive any compensation prior to the consummation of ourinitial business combination other than reimbursement of reasonableout-of-pocket expenses incurred by them in connection with our organization,the IPO and certain activities on our behalf, such as identifying andinvestigating possible targets for our initial business combination, we do notfeel it is necessary to establish a compensation committee prior to a businesscombination.

 

**Director Independence**

 

Our board of directorsevaluates the independence of our directors in light of the requirements of “independentdirector” within the meaning of Marketplace Rule 4200(a)(15) of the NASD.Marketplace Rule 4200(a)(15) provides that an independent director is aperson other than an officer or employee of the company or its subsidiaries orany other individual having a relationship that, in the opinion of the company’sboard of directors, would interfere with the exercise of independent judgmentin carrying out the responsibilities of a director. Our board of directors hasdetermined that Joseph F. Prochaska and Donald D. Pottinger meet therequirements of “independent director” within the meaning of Marketplace Rule 4200(a)(15).Our independent directors will meet in executive session as often as necessaryto fulfill their duties.

 

**Section 16(a) BeneficialOwnership Reporting Compliance**

 

Section 16(a) ofthe Securities Exchange Act of 1934, as amended, requires our executiveofficers and directors, and persons who own more than ten percent of aregistered class of our equity securities, to file with the SEC reports ofownership of our securities and changes in reported ownership. Executiveofficers, directors and greater than ten percent stockholders are required bySEC rules to furnish us with copies of all Section 16(a) reportsthey file.

 

To our knowledge, basedsolely on a review of the copies of such reports furnished to us, or writtenrepresentations from the reporting persons that other reports were required, webelieve that, during our fiscal year ended December 31, 2008, all Section 16(a) filingrequirements applicable to our executive officers, directors, and greater thanten percent beneficial owners were met on a timely basis.

 

**Code of Ethics**

 

We currently do not havea formalized code of ethics.  Uponconsummation of a business combination, we intend to adopt a code of ethicsthat would apply to our principal executive officer, principal financialofficer, principal accounting officer or controller or persons performingsimilar functions.

 

**Item 11.  Executive Compensation**

** **

None of our executive officershas received any cash compensation for services rendered to us. As of December 31,2008, we have paid Shermen Capital Partners, LLC fees and expenses of $189,050for providing us with administrative services. However, this arrangement issolely for our benefit and is not intended to provide compensation in lieu of asalary for any person. Other than this administrative fee, no compensation ofany kind, including finders, consulting or other similar

 

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fees, is paid to any ofour founders, including our directors, or any of their respective affiliates,prior to, or for any services they render in order to effectuate theconsummation of a business combination.

 

**Item 12.  Security Ownership of Certain BeneficialOwners and Management and Related Stockholder Matters**

** **

**Ownershipof Common Stock by Certain Beneficial Owners of Shermen WSC Acquisition Corp.**

 

The followingtable indicates the stockholders who have reported beneficial ownership of morethan 5% of our outstanding shares of common stock as of February 28, 2009(other than our officers or directors). The information below is based upon themost recent Schedules 13D and 13G filed with the SEC, except as otherwiseknown by us. 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 personis determined to be a beneficial owner of a security if that person has orshares voting power, which includes the power to vote or to direct the votingof such security, or investment power, which includes the power to dispose ofor to direct the disposition of such security. Unless otherwise indicatedbelow, each beneficial owner named in the table below has sole voting and soleinvestment power with respect to all shares beneficially owned.

 
| **Name and Address of Beneficial Owner**                                       | ** ** | **Amount and  Nature  of Beneficial  Ownership of  Shermen Common  Stock** | ** ** | **Percent of  Class(1)** | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------|------------|-------------------------------|------------|
| HBK  Investments L.P.(2)  2101 Cedar Springs Road, Suite 700, Dallas, TX 75201           |       | 2,874,900                                                                                      |       | 9.9                           | %          |
| Israel A.  Englander(3)  666 Fifth Avenue, New York, NY 10103                                      |       | 2,063,243                                                                                      |       | 7.2                           | %          |
| QVT  Financial LP(4)  1177 Avenue of the Americas, 9th Floor, New York, NY 10036         |       | 1,808,329                                                                                      |       | 6.3                           | %          |
| Daniel S.  Loeb(5)  390 Park Avenue, New York, NY 10022                                            |       | 1,619,000                                                                                      |       | 5.6                           | %          |
| Poplar  Securities Inc.(6)  372 Bay Street, 21st Floor, Toronto, Ontario M5H 2W9, Canada |       | 1,620,000                                                                                      |       | 5.6                           | %          |
| Fir Tree SPAC  Holdings 2, LLC(7)  505 Fifth Avenue, 23rd Floor, New York, NY 10017      |       | 1,516,500                                                                                      |       | 5.3                           | %          |

 

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(1)                                  Thepercentage of ownership is based on 28,750,000 shares of our common stockoutstanding as of February 28, 2009.

 

(2)                                  Basedon a Schedule 13G/A filed by HBK Investments L.P., HBKServices LLC, HBK New York LLC, HBK Partners II L.P., HBKManagement LLC, HBK Master Fund L.P. and HBK Special Opportunity FundI L.P. on February 3, 2009. HBK Investments L.P. has delegateddiscretion to vote and dispose of the shares of common stock beneficially ownedby it  (such shares, the “Securities”) toHBK Services LLC (“Services”). Services may, from time to time, delegatediscretion to vote and dispose of certain of the Securities to HBK NewYork LLC, HBK Virginia LLC and/or HBK Europe Management LLP(collectively, the “Subadvisors”). Each of Services and the Subadvisors isunder common control with HBK Investments L.P.

 

(3)                                  Basedon a Schedule 13G/A filed by Integrated Core Strategies (US) LLC (“IntegratedCore Strategies”), Millenco LLC (“Millenco”), CognizantHoldings, Ltd. (“Cognizant Holdings”), Millennium InternationalManagement LP (“Millennium International Management”), MillenniumInternational Management GP LLC (“Millennium InternationalManagement GP”), Millennium Management LLC (“Millennium Management”)and Israel A. Englander on February 12, 2009. Integrated Core Strategiesis the beneficial owner of 1,141,999 shares of common stock, Millenco is thebeneficial owner of 429,500 shares of common stock and Cognizant Holdings isthe beneficial owner of 491,744 shares of common stock. Millenium InternationalManagement is the investment manager to Cognizant Holdings, and may be deemedto have shared voting control and investment discretion over common stock ownedby Cognizant Holdings. Millennium International Management GP is the generalpartner of Millennium International Management, and may be deemed to haveshared voting control and investment discretion over common stock owned byCognizant Holdings.  MillenniumManagement is the general partner of the managing member of Integrated CoreStrategies, and may be deemed to have shared voting control and investmentdiscretion over common stock owned by Integrated Core Strategies. MillenniumManagement is also the manager of Millenco,

 

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and maybe deemed to haveshared voting control and investment discretion over securities owned byMillenco. Millennium Management is also the general partner of the 100%shareholder of Cognizant Holdings, and may be deemed to have shared votingcontrol and investment discretion over securities owned by Cognizant Holdings.Israel A. Englander (“Mr. Englander”) is the managing member of MillenniumManagement and of Millennium International Management GP. Consequently, Mr. Englandermay be deemed to be the beneficial owner of any securities owned by IntegratedCore Strategies, Millenco and/or Cognizant Holdings, as the case may be.

 

(4)                                  Basedon a Schedule 13G/A filed by QVT Financial LP (“QVT Financial”), QVTFinancial GP LLC, QVT Fund LP (the “Fund”) and QVTAssociates GP LLC on February 4, 2009. QVT Financial is theinvestment manager for the Fund, which beneficially owns 1,548,907 shares ofcommon stock, and for Quintessence Fund L.P. (“Quintessence), whichbeneficially owns 169,690 shares of common stock. QVT Financial is also theinvestment manager for a separate discretionary account managed for a thirdparty (the “Separate Account”), which holds 89,732 shares of common stock. QVTFinancial has the power to direct the vote and disposition of the common stockheld by the Fund, Quintessence and the Separate Account. Accordingly, QVTFinancial may be deemed to be the beneficial owner of an aggregate amount of1,808,329 shares of common stock, consisting of the shares owned by the Fundand Quintessence and the shares held in the Separate Account. QVTFinancial GP LLC, as General Partner of QVT Financial, may be deemedto beneficially own the same number of shares of common stock reported by QVTFinancial. QVT Associates GP LLC, as General Partner of the Fund andQuintessence, may be deemed to beneficially own the aggregate number of sharesof common stock owned by the Fund and Quintessence, and accordingly, QVTAssociates GP LLC may be deemed to be the beneficial owner of anaggregate amount of 1,718,597 shares of common stock. Each of QVT Financial andQVT Financial GP LLC disclaims beneficial ownership of the shares ofcommon stock owned by the Fund and Quintessence and held in the SeparateAccount. 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. The Fund acquired beneficial ownership ofmore than 5% of the outstanding shares of common stock as of January 7,2008.

 

(5)                                  Basedon a Schedule 13G/A filed by Third Point LLC and Daniel S. Loeb on February 10,2009. Third Point LLC (the “Management Company”) serves as investmentmanager or adviser to a variety of hedge funds and managed accounts (such fundsand accounts, collectively, the “Funds”) with respect to the shares of commonstock directly owned by the Funds, and Mr. Loeb, who is the ChiefExecutive Officer of the Management Company, controls the business activitiesof the Management Company, with respect to such shares of common stock. Each ofthe Management Company and Mr. Loeb may be deemed to be the beneficialowner of such shares of common stock.

 

(6)                                  Basedon a Schedule 13G filed by Polar Securities Inc. (“Polar Securities”)and North Pole Capital Master Fund (“North Pole”) on March 3, 2008. PolarSecurities serves as the investment manager to North Pole and a number ofdiscretionary accounts with respect to which it has voting and dispositiveauthority over the shares of common stock North Pole and such discretionaryaccounts beneficially own. Each of Polar Securities and North Pole disclaimsany beneficial ownership of such shares of common stock.

 

(7)                                  Basedon a Schedule 13G/A filed by Fir Tree SPAC Holdings 2, LLC (“SPAC Holdings2”) and Fir Tree, Inc.(“Fir Tree”) on February 11, 2009. Fir TreeSPAC Master Fund, LP is the sole member of SPAC Holdings 2, and Fir Tree is theinvestment manager of SPAC Holdings 2. Fir Tree has been granted investmentdiscretion over portfolio investments, including the common stock held by SPACHoldings 2. Fir Tree may be deemed to beneficially own the shares of commonstock held by SPAC Holdings 2 as a result of being the investment manager ofSPAC Holdings 2.

 

**Ownershipof Common Stock by Directors and Executive Officers of Shermen WSC AcquisitionCorp.**

 

The followingtable shows certain information regarding the amount of our common stockbeneficially owned as of February 28, 2009 by (a) the members of ourboard of directors; (b) our Chief Executive Officer and the four mosthighly compensated executive officers (other than the Chief Executive Officer)(collectively, the “Named Executive Officers”); and (c) our directors andexecutive officers as a group.

 
| **Name, Address and Position(1)** | ** ** | **Amount and  Nature  of Beneficial  Ownership of  Shermen Common  Stock(2)** | ** ** | **Percent of  Class(3)** | ** ** |
|--------------------------------------------------|------------|---------------------------------------------------------------------------------------------------|------------|-------------------------------|------------|
| Francis P.  Jenkins, Jr.(4)                 |       | 5,663,750                                                                                         |       | 19.7                          | %          |
| G. Kenneth  Moshenek(5)                          |       | 1,437,500                                                                                         |       | 5.0                           | %          |
| John E.  Toffolon, Jr.(6)                   |       | 316,250                                                                                           |       | 1.1                           | %          |
| Gregory  St. Clair(7)                       |       | 115,000                                                                                           |       | 0.4                           | %          |
| Joseph F.  Prochaska                             |       | 28,750                                                                                            |       | 0.1                           | %          |
| Donald D.  Pottinger                             |       | 28,750                                                                                            |       | 0.1                           | %          |
| Michiel C.  McCarty                              |       | 0                                                                                                 |       | 0.0                           | %          |
| All Directors  and Executive Officers as a Group |       | 5,750,000                                                                                         |       | 20.0                          | %          |

 

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*                                         Lessthan 1%.

 

(1)                                  Unlessotherwise noted, each person’s address is in care of Shermen WSC AcquisitionCorp., 230 Park Avenue, Suite 1000, New York, NY 10169.

 

(2)                                  Forpurposes of this security ownership table, beneficial ownership includescurrently exercisable options and options exercisable within 60 days afterFebruary 28, 2009. Except as otherwise noted below, all shares of commonstock, vested options and all restricted stock are owned beneficially by theindividual listed with sole voting and/or investment power.

 

(3)                                  Thepercentage class is calculated by dividing: (1) the number of sharesdeemed to be beneficially held by such stockholder as of February 28,2009, as determined in accordance with Rule 13d-3 of the Exchange Act; by(2) the sum of (A) 28,750,000 which is the number of shares of commonstock outstanding as of February 28, 2009; plus (B) the number ofshares of common stock issuable upon exercise of currently exercisable optionsand other derivative securities held by such stockholder.

 

(4)                                  Includes5,663,750 shares held by Shermen WSC Holding LLC, over whichMr. Francis Jenkins, Jr. has sole voting and dispositive power.

 

(5)                                  Theseshares represent the portion of the shares owned by Shermen WSCHolding LLC that are allocated to Mr. Moshenek’s capital account.Mr. Moshenek is a member of Shermen WSC Holding LLC, but does nothave the right to vote or dispose of such shares. Accordingly,Mr. Moshenek disclaims beneficial ownership of such shares. Pursuant tothe limited liability company agreement of Shermen WSC Holding LLC, in theevent that Mr. Moshenek ceases to be actively engaged in theimplementation of Shermen WSC Holding LLC’s business plan prior to theconsummation of Shermen’s first business combination, Shermen WSC Holding LLCwill have the option to purchase two-thirds of Mr. Moshenek’s interest inShermen WSC Holding LLC at cost.

 

(6)                                  Theseshares represent the 28,750 shares that Mr. Toffolon directly owns and theportion of the shares owned by Shermen WSC Holding LLC that are allocatedto Mr. Toffolon’s capital account. Mr. Toffolon is a member ofShermen WSC Holding LLC, but does not have the right to vote or dispose ofthe portion of the shares owned by Sherman WSC Holding LLC that areallocated to his capital account. Accordingly, Mr. Toffolon disclaimsbeneficial ownership of such shares. Pursuant to the limited liability companyagreement of Shermen WSC Holding LLC, in the event that Mr. Toffolonceases to be actively engaged in the implementation of Shermen WSC HoldingLLC’s business plan prior to the consummation of Shermen’s first businesscombination, Shermen WSC Holding LLC will have the option to purchase two-thirdsof Mr. Toffolon’s interest in Shermen WSC Holding LLC at cost.

 

(7)                                  Theseshares represent the portion of the shares owned by Shermen WSCHolding LLC that are allocated to Mr. St. Clair’s capitalaccount. Mr. St. Clair is a member of Shermen WSC Holding LLC,but does not have the right to vote or dispose of such shares. Accordingly,Mr. St. Clair disclaims beneficial ownership of such shares. Pursuantto the limited liability company agreement of Shermen WSC Holding LLC, in theevent that Mr. St. Clair ceases to be actively engaged in theimplementation of Shermen WSC Holding LLC’s business plan prior to theconsummation of Shermen’s first business combination, Shermen WSC Holding LLCwill have the option to purchase two-thirds of Mr. St. Clair’s interest inShermen WSC Holding LLC at cost.

 

**Item 13. Certain Relationship and Related Transactions**

 

On May 1,2006, we issued to the following directors and executive officers (or theiraffiliates) the number of shares of our common stock (after giving effect to a1.15 for 1 forward stock split effected immediately prior to the consummationof our initial public offering) set forth opposite their names forconsideration of $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 ofShermen WSC Holding LLC are our officers and certain of their family members.Shermen Capital Partners, LLC is the managing member of Shermen WSC HoldingLLC. Mr. Jenkins, Jr., our chairman and chief executive officer, isthe managing member of Shermen Capital Partners, LLC and may be deemed tobeneficially own the shares owned by Shermen WSC Holding LLC.

 

The holders of the majority of these shares will beentitled to make up to two demands that we register these shares pursuant to anagreement to signed on May 24, 2007. The holders of the majority of theseshares can elect to exercise these registration rights at any time after thedate on which the lock-up period expires. In addition, these stockholders havecertain “piggy-back” registration rights on registration statements filedsubsequent to such date. We will bear the expenses incurred in connection withthe filing of any such registration statements.

 

Concurrently with theconsummation of our initial public offering, on May 30, 2007, weconsummated a private sale of the founder warrants at a purchase price of $0.70per founder warrant, generating total proceeds of approximately $3.7million.  The founder warrants were purchased by certain of our directorsand officers through our sponsor whose managing member is Shermen CapitalPartners, LLC, an entity controlled by Francis P. Jenkins, Jr., ourchairman and chief executive officer.  The founder warrants are identicalto the warrants except that (i) if we call the warrants for redemption,the founder warrants will be exercisable on a cashless basis; (ii) thefounder warrants will not be transferable or salable by our sponsor or suchdirectors or officers or their respective affiliates until after we havecompleted our initial business combination, except our sponsor may distributethem to its members; and (iii) the holders of the founder warrants and thecommon stock underlying such founder warrants are entitled to registrationrights with respect to such securities under an agreement signed on May 30,2007.  Immediately after the purchase of the founder warrants, our sponsordistributed them to its members.

 

We have agreed to pay amonthly fee of $9,950 for general and administrative services including officespace, utilities and secretarial support.

 

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

 

Each of our directors whoowns shares of our securities may receive reimbursement for reasonableout-of-pocket expenses incurred by them in connection with activities on ourbehalf such as identifying a potential target business and performing duediligence on a suitable business combination. Additionally, there is no limit on the amount of reasonableout-of-pocket expenses that could be incurred and there will be no review ofthe reasonableness of the expenses by anyone other than our board of directors,which would include 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.

 

All transactions betweenus and any member of our management team or their respective affiliates were onterms believed by us at that time, based upon other similar arrangements knownto us, to be no less favorable than are available from unaffiliated thirdparties.

 

**Item 14. Principal Accountant Fees and Services**

** **

**Auditor’sServices**

 

Rothstein, Kass &Company, P.C., which we refer to as “Rothstein,” served as our independentauditors for the fiscal year ended December 31, 2008.

 

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**AuditFees**

 

The aggregate feesbilled by Rothstein for professional services rendered for the audit of ourannual financial statements for each of the last two fiscal years, and thereviews of the financial statements included in our quarterly reports on Form 10-Qfor those years were approximately $120,000.

 

**AuditRelated Fees**

 

Other than thefees described under the caption “Audit Fees” above, Rothstein did not bill anyfees for services rendered to us during the last two fiscal years for assuranceand related services in connection with the audit or review of our financialstatements.

 

**Tax Fees**

 

There were no feesbilled by Rothstein for professional services rendered during the last twofiscal years for tax compliance, tax advice, and tax planning.

 

**All OtherFees**

 

The fees billed byRothstein for professional services rendered for the audit of our balance sheetat May 30, 2007 included in our Current Report on Form 8-K, which wasfiled on June 5, 2007 and for services performed in connection with ourRegistration Statement on Form S-1, which was filed in connection with ourinitial public offering in 2007, were approximately $70,000.

 

**AuditCommittee Approval**

 

Our auditcommittee pre-approved all of the foregoing services, although any servicesrendered prior to the formation of our audit committee were approved by ourboard of directors. However, in accordance with Section 10A(i) of theSecurities Exchange Act of 1934, as amended, before we engage our independentaccountant to render audit or non-audit services on a going-forward basis, theengagement will be approved by our audit committee.

 

**Report ofthe Audit Committee of the Board of Directors**

 

**Membershipand Role of the Audit Committee**

 

Our board ofdirectors has designated an audit committee consisting of John E. Toffolon,Jr., Joseph F. Prochaska and Donald D. Pottinger.  Messrs. Prochaska and Pottinger areindependent as that term is used in Section 10A(m)(3) of theSecurities Exchange Act of 1934, as amended. Our board of directors committeehas not yet designated any individual as the audit committee’s financialexpert.

 

The oversightfunctions of the audit committee include, among other things:

 

·                  appointingour independent auditor;

 

·                  reviewingthe external audit plan and the results of the auditing engagement;

 

·                  ensuringthat management has maintained the reliability and integrity of our accountingpolicies and our financial reporting and disclosure practices;

 

·                  reviewingthe independence and performance of our independent registered publicaccounting firm; and

 

·                  reviewingthe adequacy of our system of internal control and compliance with allapplicable laws, regulations and corporate policies.

 

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**Review ofOur Financial Statements**

 

Our management hasresponsibility for preparing our financial statements, and our independentauditor Rothstein is responsible for auditing those financial statements. Inthis context, as part of its oversight of our financial statements, the AuditCommittee has met with management and Rothstein to review and discuss all ofour annual and quarterly financial statements prior to their issuance. Thisprocess includes an assessment of the quality, not just the acceptability, ofthe accounting principles utilized, the reasonableness of significant estimatesand judgments, and the clarity of disclosures in the financial statements.During the 2008 fiscal year, our management represented to the Audit Committeethat the financial statements were prepared in accordance with generallyaccepted accounting principles.

 

The AuditCommittee discussed with Rothstein the matters required to be discussed pursuantto Statement on Auditing Standards No. 61 (Codification of Statements onAuditing Standards, AU §380), as currently in effect, and the Sarbanes-OxleyAct of 2002, and had the opportunity to ask Rothstein questions relating tosuch matters. With and without management present, the Audit Committee alsoreviewed and discussed the results of Rothstein’s examination of the annualfinancial statements. The Audit Committee also discussed with our managementthe process for certifications by our chief executive officer and chieffinancial officer, which is required by the SEC and the Sarbanes-Oxley Act of2002 for certain of our filings with the SEC.

 

The AuditCommittee reviewed and discussed with Rothstein, Rothstein’s independence and,as part of that review, received the written disclosures required by applicableprofessional and regulatory standards relating to Rothstein’s independencepursuant to Independence Standards Board Standard No. 1 (IndependenceDiscussions with Audit Committees), as currently in effect. These writtendisclosures included a formal written statement from Rothstein to the AuditCommittee describing all relationships between it and us that might bear on theauditors’ independence from us and our management. The Audit Committee alsoreviewed and pre-approved all fees paid to the independent auditors. Foradditional information about the fess paid to Rothstein for services from ourinception, and for the 2008 fiscal year, please see the subsections aboveentitled “—Audit Related Fees,” “—Tax Fees” and “—All Other Fees.” The AuditCommittee considered whether Rothstein’s provision of audit and non-auditservices to us was compatible with its independence. The Audit Committee alsodiscussed with management and Rothstein any relationships that might haveimpacted or may impact the auditors’ objectivity and independence. The AuditCommittee concluded that Rothstein is independent from us and our management.

 

The AuditCommittee’s meetings include, whenever appropriate, executive sessions withRothstein without the presence of our management, to raise and discuss anyissues or concerns that they may have had about the adequacy and proper, timelyfunctioning of our control, reporting, disclosure and compliance systems andprocedures.

 

In performing allof these functions, the Audit Committee acted and continues to act only in anoversight capacity on behalf of the board of directors. In its oversight role,the Audit Committee necessarily relies on the procedures, work and assurancesof our management, which has the primary responsibility for financialstatements and reports, and of Rothstein, who, in its report, expresses anopinion on the conformity of our audited financial statements to accountingprinciples generally accepted in the United States of America.

 

In reliance on thereviews and discussions referred to above, the Audit Committee recommended toour board of directors, and our board of directors has approved, that theaudited financial statements be included in our Annual Report on Form 10-Kfor the fiscal year ended December 31, 2008, for filing with the SEC. TheAudit Committee also has retained Rothstein as our independent auditors for thefiscal year 2009.

 
| * * | *Submitted by*                                          |
|----------|---------------------------------------------------------|
| * * | *The Audit Committee of Shermen  WSC Acquisition Corp.* |
| * * | *John E. Toffolon, Jr.*                                 |
| * * | *Joseph F. Prochaska*                                   |
|     | *Donald D. Pottinger*                                   |

 

The foregoingReport of the Audit Committee does not constitute soliciting material andshould not be deemed filed with the SEC or incorporated by reference into anyof our prior or future filings under the Securities Act of 1933 or theSecurities Exchange Act of 1934, except to the extent we specificallyincorporate this Report by reference therein.

 

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** **

**PART IV**

** **

**Item 15. Exhibitsand Financial Statement Schedules**

** **

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

 

See Item 8. FinancialStatements and Supplemental Data.

 

**2.****              Financial StatementSchedules**

 

All supplementalschedules have been omitted since the required information is not present inamounts sufficient to require submission of the schedule, or because therequired information is included in the consolidated financial statements ornotes thereto.

 

**3.****              Exhibits**

** **
| **Exhibit  Number** | ** ** | **Exhibit Description**                                                                                            |
|---------------------|------------|-------------------------------------------------------------------------------------------------------------------------|
| 1.1                 |       | Underwriting Agreement*                                                                                                 |
| 2.1                 |       | Transaction 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*                                    |
| 21.1                |       | List of Subsidiaries                                                                                                    |
| 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 by  reference to our Registration Statement on Form S-1 (File  No. 333-133869)                                                                                           |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **     | Incorporated by  reference to our Current Report on Form 8-K filed on January 20, 2009                                                                                                     |
| † | Portions of such  exhibit have been omitted pursuant to a separate confidential treatment  request and such information has been filed separately with the Securities  and Exchange Commission. |

 

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** **

**SIGNATURES**

** **

Pursuant to therequirements of Section 13 or 15(d) the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe 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 13,  2009 |                                                                                                          |

 

 

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.

 

| **Signature**                     | ** ** | **Title**                                                                           | ** ** | **Date**            |
|-----------------------------------|------------|-------------------------------------------------------------------------------------|------------|---------------------|
|                              |       |                                                                                |       |                |
| /s/ Francis P.  Jenkins, Jr. |       | Chairman, Chief  Executive Officer and President                                    |       | March 13, 2009 |
| Francis P.  Jenkins, Jr.     |       |                                                                                |       |
|                              |       |                                                                                |       |                |
| /s/ G. Kenneth Moshenek           |       | President, Chief  Operating Officer and Director                                    |       | March 11, 2009 |
| G. Kenneth Moshenek               |       |                                                                                |       |
|                              |       |                                                                                |       |                |
| /s/ John E.  Toffolon, Jr.   |       | Chief  Financial Officer and Director  (Principal Financial and Accounting Officer) |       | March 11, 2009 |
| John E.  Toffolon, Jr.       |       |                                                                                |       |
|                              |       |                                                                                |       |                |
| /s/ Joseph F. Prochaska           |       | Director                                                                            |       | March 11, 2009 |
| Joseph F.  Prochaska              |       |                                                                                |       |
|                              |       |                                                                                |       |                |
| /s/ Donald D. Pottinger           |       | Director                                                                            |       | March 13, 2009 |
| Donald D. Pottinger               |       |                                                                                |       |
|                              |       |                                                                                |       |                |
| /s/ Michiel C. McCarty            |       | Director                                                                            |       | March 11, 2009 |
| Michiel C. McCarty                |       |                                                                                |       |

 

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** **

**INDEX TOFINANCIAL STATEMENTS**

 

**FINANCIALSTATEMENTS**

 
| ** **                                                                                                                                                                                                                                                                                    | **Page** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **Shermen WSC Acquisition Corp. Financial  Statements as of and for the Years Ended December 31, 2008 and 2007 and the  Period from April 18, 2006 (Date of Inception) to December 31, 2008**                                                                                                 |     |
|                                                                                                                                                                                                                                                                                          |     |
| Report  of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                      | F-2      |
|                                                                                                                                                                                                                                                                                          |     |
| Balance Sheets as of  December 31, 2008 and 2007                                                                                                                                                                                                                                         | F-4      |
|                                                                                                                                                                                                                                                                                          |     |
| Statements of  Operations for the Years ended December 31, 2008 and 2007 and the Period  from April 18, 2006 (Date of Inception) to December 31, 2008                                                                                                                          | F-5      |
|                                                                                                                                                                                                                                                                                          |     |
| Statements  of Stockholders’ Equity for the Period from April 18, 2006 (Date of  Inception) to December 31, 2008                                                                                                                                                               | F-6      |
|                                                                                                                                                                                                                                                                                          |     |
| Statements of  Cash Flows for the Years ended December 31, 2008 and 2007 and the Period  from April 18, 2006 (Date of Inception) to December 31, 2008                                                                                                                          | F-7      |
|                                                                                                                                                                                                                                                                                          |     |
| Notes to  Financial Statements                                                                                                                                                                                                                                                                | F-8      |
|                                                                                                                                                                                                                                                                                          |     |
| **Shermen WSC Acquisition Corp. Financial  Statements as of December 31, 2007 and 2006 and 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** |     |
| ** **                                                                                                                                                                                                                                                                                    |     |
| Report of  Independent Registered Public Accounting Firm                                                                                                                                                                                                                                      | F-18     |
|                                                                                                                                                                                                                                                                                          |     |
| Balance Sheets as of December 31,  2007 and 2006                                                                                                                                                                                                                                              | F-19     |
|                                                                                                                                                                                                                                                                                          |     |
| Statements of Operations  as of December 31, 2007 and 2006 and 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                                | F-20     |
|                                                                                                                                                                                                                                                                                          |     |
| Statements of  Stockholder’s Equity for the Period from April 18, 2006 (Date of Inception)  to December 31, 2007                                                                                                                                                                         | F-21     |
|                                                                                                                                                                                                                                                                                          |     |
| Statements of Cash Flows as  of December 31, 2007 and 2006 and 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                                | F-22     |
|                                                                                                                                                                                                                                                                                          |     |
| Notes to Financial  Statements                                                                                                                                                                                                                                                                | F-23     |

 

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Table of Contents

 

**REPORT OF INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM**

 

To the Board of Directorsand Stockholders of

Shermen WSC Acquisition Corp.

 

We have audited theaccompanying balance sheets of Shermen WSC Acquisition Corp. (a corporation inthe development stage) (the “Company”) as of December 31, 2008 and 2007,and the related statements of operations and cash flows for the years ended December 31,2008 and 2007, and from April 18, 2006 (date of inception) through December 31,2008, and stockholders’ equity from April 18, 2006 (date of inception)through December 31, 2008. We have also audited the Company’s internalcontrol over financial reporting as of December 31, 2008, based oncriteria established in Internal Control – Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). TheCompany’s management is responsible for these financial statements, formaintaining effective internal control over financial reporting, and for itsassessment of the effectiveness of internal control over financial reporting,included in the accompanying Management’s Annual Report on Internal Controlover Financial Reporting. Our responsibility is to express an opinion on thesefinancial statements and an opinion on the Company’s internal control overfinancial reporting based on our audits.

 

We conducted our auditsin accordance with the standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform theaudits to obtain reasonable assurance about whether the financial statementsare free of material misstatement and whether effective internal control overfinancial reporting was maintained in all material respects. Our audit of thefinancial statements included examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements, assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. Our audit overinternal control over financial reporting included obtaining an understandingof internal control over financial reporting, assessing the risk that amaterial weakness exists, and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. Our audits alsoincluded performing such other procedures as we considered necessary in thecircumstances. We believe that our audits provide a reasonable basis for ouropinion.

 

A company’s internalcontrol over financial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generallyaccepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally acceptedaccounting principles, and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directorsof the company; and (3) provide reasonable assurance regarding preventionor timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.

 

Because of its inherentlimitations, internal control over financial reporting may not prevent or detectmisstatements. Also, projections of any evaluation of effectiveness to futureperiods are subject to the risk that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies orprocedures may deteriorate.

 

The accompanyingfinancial statements have been prepared assuming that Shermen WSC AcquisitionCorp. will continue as a going concern. As discussed in Note A to the financialstatements, Shermen WSC Acquisition Corp. will face a mandatory liquidation ifa business combination is not consummated by May 30, 2009, which raisessubstantial doubt about its ability to continue as a going concern. Thefinancial statements do not include any adjustments that might result from theoutcome of this uncertainty.

 

In our opinion, thefinancial statements referred to above present fairly, in all materialrespects, the financial position of the Company as of December 31, 2008and 2007, and the results of its operations and its cash flows for the years

 

F-2

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Table of Contents

 

ended December 31,2008 and 2007, and from April 18, 2006 (date of inception) through December 31,2008 in conformity with accounting principles generally accepted in the UnitedStates of America. Also in our opinion, the Company maintained, in all materialrespects, effective internal control over financial reporting as of December 31,2008, based on criteria established inInternal Control – Integrated Framework issued by the Committee of SponsoringOrganizations of the Treadway Commission (COSO).

 

 
| /s/ ROTHSTEIN,  KASS & COMPANY, P.C. |   |
|-----------------------------------------------|--------|
| Rothstein,  Kass & Company, P.C.     |   |
|                                          |   |
|                                          |   |
| Roseland, New Jersey                          |   |
| March 9,  2009                           |   |

 

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Table of Contents

 

**SHERMENWSC ACQUISITION CORP.**

**(acorporation in the development stage)**

 

**BALANCESHEETS**

** **
| ** **                                                                                                                                                                                                                                   | ** ** | **December 31, 2008** | ** **  | **December 31, 2007** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------|-------------|---------------------------------|------------|
| **ASSETS**                                                                                                                                                                                                                                   | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| **Current  assets**                                                                                                                                                                                                                          | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| Cash                                                                                                                                                                                                                                         |       | $                               | 190,455     |                            | $          | 160,949 |   |
| Prepaid expenses                                                                                                                                                                                                                             |       | 28,767                          |        | 30,286                          |       |
| **Total  current assets**                                                                                                                                                                                                                    |       | 219,222                         |        | 191,235                         |       |
| ** **                                                                                                                                                                                                                                   | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| **Other  assets**                                                                                                                                                                                                                            | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| Deferred income  tax asset                                                                                                                                                                                                                   |       | 712,000                         |        | 401,120                         |       |
| Investments held  in Trust Account                                                                                                                                                                                                           |       | 138,445,809                     |        | 138,589,757                     |       |
| **Total assets**                                                                                                                                                                                                                             |       | $                               | 139,377,031 |                            | $          | 139,182,112 |   |
|                                                                                                                                                                                                                                         |       |                            |        |                            |       |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                | ** ** | ** **                      | ** **  | ** **                      | ** ** |
|                                                                                                                                                                                                                                         |       |                            |        |                            |       |
| **Current  liabilities**                                                                                                                                                                                                                     | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| Accounts payable  and accrued expenses                                                                                                                                                                                                       |       | $                               | 199,659     |                            | $          | 86,817 |   |
| Income taxes  payable                                                                                                                                                                                                                        |       | 286,000                         |        | 945,000                         |       |
| **Total  current liabilities**                                                                                                                                                                                                               |       | 485,659                         |        | 1,031,817                       |       |
|                                                                                                                                                                                                                                         |       |                            |        |                            |       |
| **Long-term  liability,**                                                                                                                                                                                                                    | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| deferred  underwriters’ fee                                                                                                                                                                                                             |       | 3,312,000                       |        | 3,312,000                       |       |
| **Total  liabilities**                                                                                                                                                                                                                       |       | 3,797,659                       |        | 4,343,817                       |       |
|                                                                                                                                                                                                                                         |       |                            |        |                            |       |
| **Commitments**                                                                                                                                                                                                                              | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| ** **                                                                                                                                                                                                                                   | ** ** | ** **                      | ** **  | ** **                      | ** ** |
| **Common  stock subject to redemption,**(9,199,999 shares at  redemption value, $5.95 per share)                                                                                                                                             |       | 54,743,994                      |        | 54,743,994                      |       |
| **Deferred  interest related to common stock subject to possible redemption, net of taxes**                                                                                                                                                  |       | 323,305                         |        | 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, 2008 and December 31, 2007 (including  9,199,999 shares subject to possible redemption), respectively |       | 2,875                           |        | 2,875                           |       |
| Additional  paid-in capital                                                                                                                                                                                                                  |       | 78,941,231                      |        | 78,941,231                      |       |
| Income  accumulated during the development stage                                                                                                                                                                                             |       | 1,567,967                       |        | 797,210                         |       |
| **Total  stockholders’ equity**                                                                                                                                                                                                         |       | 80,512,073                      |        | 79,741,316                      |       |
| **Total  liabilities and stockholders’ equity**                                                                                                                                                                                         |       | $                               | 139,377,031 |                            | $          | 139,182,112 |   |

 

The accompanyingnotes are an integral part of these financial statements.

 

F-4

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Table of Contents

 

**SHERMEN WSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**STATEMENTSOF OPERATIONS**

 
| ** **                                                                                         | ** ** | **Year Ended  December 31, 2008** | ** ** | **Year Ended  December 31, 2007** | ** ** | **Period from  April 18, 2006  (date of inception) to  December 31, 2008** | ** ** |
|----------------------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|
| Revenue                                                                                            |       | $                                                | —     |                                             | $          | —                                                                                                   |       | $ | — |   |
| Interest income                                                                                    |       | 2,396,262                                        |       | 2,988,057                                        |       | 5,384,319                                                                                                |       |
| Formation and  administrative costs                                                                |       | (869,030                                         | )          | (870,520                                         | )          | (1,755,581                                                                                               | )          |
| Income before  provision for income taxes                                                          |       | 1,527,232                                        |       | 2,117,537                                        |       | 3,628,738                                                                                                |       |
|                                                                                               |       |                                             |       |                                             |       |                                                                                                     |       |
| Provision for  income taxes                                                                        |       | (786,155                                         | )          | (951,311                                         | )          | (1,737,466                                                                                               | )          |
| Net income  applicable to common stockholders                                                      |       | $                                                | 741,077    |                                             | $          | 1,166,226                                                                                                |       | $ | 1,891,272 |   |
|                                                                                               |       |                                             |       |                                             |       |                                                                                                     |       |
| Number of common  shares subject to possible redemption, basic & diluted                  |       | 9,199,999                                        |       | 5,444,000                                        |       | 5,413,953                                                                                                |       |
|                                                                                               |       |                                             |       |                                             |       |                                                                                                     |       |
| Income per  common share subject to possible redemption, basic & diluted                  |       | $                                                | 0.00       |                                             | $          | 0.06                                                                                                     |       | $ | 0.06 |   |
|                                                                                               |       |                                             |       |                                             |       |                                                                                                     |       |
| Weighted average  number of common shares outstanding not subject to possible redemption, basic    |       | 19,550,001                                       |       | 14,360,000                                       |       | 13,870,931                                                                                               |       |
|                                                                                               |       |                                             |       |                                             |       |                                                                                                     |       |
| Income per  common share not subject to possible redemption, basic                                 |       | $                                                | 0.04       |                                             | $          | 0.06                                                                                                     |       | $ | 0.14 |   |
|                                                                                               |       |                                             |       |                                             |       |                                                                                                     |       |
| Weighted average  number of common shares outstanding not subject to possible redemption,  diluted |       | 23,491,944                                       |       | 17,963,000                                       |       | 16,115,332                                                                                               |       |
|                                                                                               |       |                                             |       |                                             |       |                                                                                                     |       |
| Income per  common share not subject to possible redemption, diluted                               |       | $                                                | 0.03       |                                             | $          | 0.04                                                                                                     |       | $ | 0.12 |   |

 

The accompanyingnotes are an integral part of these financial statements.

 

F-5

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Tableof Contents

 

**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**STATEMENTSOF STOCKHOLDERS’ EQUITY**

**For theperiod from April 18, 2006 (date of inception) to December 31, 2008**

** **
| ** **                                                                                                                                         | ** ** | **Common Shares** | ** ** | **Amount** | ** ** | **Additional Paid-  in  Capital** | ** ** | **Income (Deficit)  Accumulated  During the  Development  Stage** | ** ** | **Total  Stockholders’  Equity** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------|------------|------------|------------|-----------------------------------|------------|------------------------------------------------------------------------|------------|---------------------------------------|------------|
| Sale of shares  issued to Founders on May 1, 2006 at approximately $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                                 |       |
| Sale 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                           |       |
|                                                                                                                                               |       |                   |       |       |       |                              |       |                                                                   |       |                                  |       |
| Sale of 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 of common stock subject to possible redemption (9,199,999  shares common stock at redemption value $5.95 per share) |       |                   |       |       |       | (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                            | )          |
|                                                                                                                                               |       |                   |       |       |       |                              |       |                                                                   |       |                                  |       |
| Change in balance  of Trust Account relating to common stock subject to possible redemption, net  of tax                                           |       |                   |       |       |       |                              |       | (352,985                                                               | )          | (352,985                              | )          |
|                                                                                                                                               |       |                   |       |       |       |                              |       |                                                                   |       |                                  |       |
| Net income  applicable to common stockholder                                                                                                       |       |                   |       |       |       |                              |       | 1,166,226                                                              |       | 1,166,226                             |       |
| Balances at  December 31, 2007                                                                                                                |       | 28,750,000             |       | 2,875      |       | 78,941,231                        |       | 797,210                                                                |       | 79,741,316                            |       |
| Change in balance  of Trust Account relating to common stock subject to possible redemption, net  of tax                                           |       |                   |       |       |       |                              |       | 29,680                                                                 |       | 29,680                                |       |
| Net income  applicable to common stockholder                                                                                                       |       |                   |       |       |       |                              |       | 741,077                                                                |       | 741,077                               |       |
| Balances at  December 31, 2008                                                                                                                |       | $                      | 28,750,000 |       | $          | 2,875                             |       | $                                                                      | 78,941,231 |                                  | $          | 1,567,967 |   | $ | 80,512,073 |   |
|                                                                                                                                                    |            |                        |            |            |            |                                   |            |                                                                        |            |                                       |            |  |  |  |  |  |

The accompanyingnotes are an integral part of these financial statements.

 

F-6

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Table of Contents

 

**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**STATEMENTS OF CASH FLOWS**

 
| ** **                                                                                   | ** ** | **Year Ended  December 31, 2008** | ** ** | **Year Ended  December 31, 2007** | ** ** | **April 18, 2006  (date of inception)  through  December 31, 2008** | ** ** |
|----------------------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|---------------------------------------------------------------------------------------------------|------------|
| **Cash  flows from operating activities**                                                    |       |                                             |       |                                             |       |                                                                                              |       |
| Net income                                                                                   |       | $                                                | 741,077    |                                             | $          | 1,166,126                                                                                         |       | $ | 1,891,272 |   |
| Deferred income  tax benefit                                                                 |       | (310,880                                         | )          | (401,120                                         | )          | (712,000                                                                                          | )          |
| Adjustments to  reconcile net income to net cash provided by (used in) operating activities: |       |                                             |       |                                             |       |                                                                                              |       |
| Changes in  operating assets and liabilities:                                                |       |                                             |       |                                             |       |                                                                                              |       |
| Prepaid expenses                                                                             |       | 1,519                                            |       | (30,286                                          | )          | (28,767                                                                                           | )          |
| Accounts payable  and accrued expenses                                                       |       | 112,842                                          |       | 85,022                                           |       | 199,659                                                                                           |       |
| Income tax  payable                                                                          |       | (659,000                                         | )          | 945,000                                          |       | 286,000                                                                                           |       |
| **Cash  provided by (used in) operating activities**                                         |       | (114,442                                         | )          | 1,764,842                                        |       | 1,636,164                                                                                         |       |
|                                                                                         |       |                                             |       |                                             |       |                                                                                              |       |
| **Cash  provided by (used in) investing activities**                                         | ** ** | ** **                                       | ** ** | ** **                                       | ** ** | ** **                                                                                        | ** ** |
| Change in  investments held in Trust Account                                                 |       | 143,948                                          |       | (138,589,757                                     | )          | (138,445,809                                                                                      | )          |
|                                                                                         |       |                                             |       |                                             |       |                                                                                              |       |
| **Cash  flows from financing activities:**                                                   | ** ** | ** **                                       | ** ** | ** **                                       | ** ** | ** **                                                                                        | ** ** |
| Proceeds from  note payable, stockholder                                                     |       | —                                           |       | —                                           |       | 150,000                                                                                           |       |
| Payments for  note payable, stockholder                                                      |       | —                                           |       | (150,000                                         | )          | (150,000                                                                                          | )          |
| Payments of  offering costs                                                                  |       | —                                           |       | (4,535,590                                       | )          | (4,675,000                                                                                        | )          |
| Proceeds from  underwriters purchase option                                                  |       | —                                           |       | 100                                              |       | 100                                                                                               |       |
| Proceeds from  issuance of common stock from the offering                                    |       | —                                           |       | 141,650,000                                      |       | 141,675,000                                                                                       |       |
| **Net  cash provided by financing activities**                                               |       | —                                           |       | 136,964,510                                      |       | 137,000,100                                                                                       |       |
|                                                                                         |       |                                             |       |                                             |       |                                                                                              |       |
| **Net  increase in cash**                                                                    |       | 29,506                                           |       | 139,595                                          |       | 190,455                                                                                           |       |
|                                                                                         |       |                                             |       |                                             |       |                                                                                              |       |
| **Cash,**  beginning of the period                                                           |       | 160,949                                          |       | 21,354                                           |       | —                                                                                            |       |
|                                                                                         |       |                                             |       |                                             |       |                                                                                              |       |
| **Cash,**end  of the period                                                                  |       | $                                                | 190,455    |                                             | $          | 160,949                                                                                           |       | $ | 190,455 |   |
|                                                                                         |       |                                             |       |                                             |       |                                                                                              |       |
| **Supplemental  schedule of non-cash financing activities:**                                 |       |                                             |       |                                             |       |                                                                                              |       |
| Accrual of  deferred underwriters’ fees                                                 |       | $                                                | 3,312,000  |                                             | $          | 3,312,000                                                                                         |       | $ | 3,312,000 |   |
|                                                                                         |       |                                             |       |                                             |       |                                                                                              |       |
| **Supplemental  disclosure of cash-flow information:**                                       |       |                                             |       |                                             |       |                                                                                              |       |
| Cash paid for  income taxes                                                                  |       | $                                                | 1,756,035  |                                             | $          | —                                                                                            |       | $ | 2,163,466 |   |

 

The accompanyingnotes are an integral part of these financial statements.

 

F-7

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Table of Contents

 

**SHERMENWSC ACQUISITION CORP.**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTEA—DESCRIPTION OF ORGANIZATION 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 significant revenue to date, with the exception of interest incomeearned on cash held in the trust account as described below. The Company isconsidered to be in the development stage as defined in Statement of FinancialAccounting Standards (“SFAS”) No. 7, “Accounting and Reporting ByDevelopment Stage Enterprises,” and is subject to the risks associated withactivities of development stage companies. The Company has selected December 31stas its fiscal year end.

 

The Company’s managementhas broad discretion with respect to the specific application of the netproceeds of the Offering of Units (as defined in Note E below), althoughsubstantially all of the net proceeds of the Offering are intended to begenerally applied toward consummating a business combination with (oracquisition of) an operating business in the agriculture industry (“BusinessCombination”). Furthermore, there is no assurance that the Company will be ableto successfully effect a Business Combination. Since the closing of theOffering, at least 99.5% of the gross proceeds, after the payment of certainamounts to the underwriters for the Offering, are held in a trust account(“Trust Account”) and invested in U.S. “government debt securities,” defined asany Treasury Bill issued by the United States government having a maturity ofone hundred and eighty (180) days or less or any open ended investment companyregistered under the Investment Company Act of 1940 that holds itself out as amoney market fund and bears the highest credit rating issued by a United Statesnationally recognized rating agency, until the earlier of (i) theconsummation of its first Business Combination or (ii) the distribution ofthe Trust Account as described below. The remaining proceeds will be used topay for business, legal and accounting due diligence on prospectiveacquisitions and continuing general and administrative expenses. The Company,after signing a definitive agreement for the acquisition of a target business,will submit such transaction for stockholder approval. In the event that 40% ormore of the outstanding common stock of the Company (excluding, for thispurpose, those shares of common stock of the Company issued prior to theOffering) vote against the Business Combination and exercise their conversionrights described below, the Business Combination will not be consummated. Thestockholders who purchased Units in the Offering (the “Public Stockholders”)and vote against a Business Combination will be entitled to convert theircommon stock into a pro rata share of the Trust Account (including theadditional 4% fee of the gross proceeds of the Offering payable to theunderwriters for the Offering upon the Company’s consummation of a BusinessCombination), including any interest earned (net of taxes payable and theamount distributed to the Company to fund its working capital requirements) ontheir pro rata share, if the Business Combination is approved and consummated.However, voting against the Business Combination alone will not result in anelection to exercise a Public Stockholder’s conversion rights. A PublicStockholder must also affirmatively exercise such conversion rights at or priorto the time the Business Combination is voted upon by the stockholders. Ifholders of no more than approximately 39.99% of the shares sold in the Offeringvote against a Business Combination and seek to exercise their conversionrights and such Business Combination is consummated, the stockholders who heldshares of common stock of the Company prior to the Offering (the “FoundingStockholders”) have agreed to forfeit and return to the Company forcancellation a number of shares so that they will collectively own no more than23.0% of the Company’s outstanding common stock upon consummation of suchBusiness Combination (without giving effect to any shares that may be issued insuch Business Combination). If the Company is unable to effect a Business Combinationand liquidates, none of the Founding Stockholders will receive any portion ofthe proceeds of the Offering held in the Trust Account to be distributed to theCompany’s stockholders with respect to common stock owned by them immediatelybefore the Offering. As of December 31, 2008, after giving effect to a1.15 for 1 stock split which was effected immediately prior to the Offering,all of the Founding Stockholders, including all of the directors and officersof the Company, have agreed to vote all of the shares of common stock of theCompany held by them in accordance with the vote of the majority in interest ofall other stockholders of the Company.

 

F-8

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Table of Contents

 

**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**NOTE A—DESCRIPTION OF ORGANIZATION AND BUSINESSOPERATIONS (continued)**

 

In theevent 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 (May 30, 2007) if certain extension criteriahave been satisfied, the proceeds held in the Trust Account will be distributedto the Public Stockholders, excluding the Founding Stockholders to the extentof their initial stock holdings. In the event of such distribution, it islikely that the 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 — BASIS OF PRESENTATION**

 

The accompanying financialstatements have been prepared in accordance with accounting principlesgenerally accepted in the United States of America (“U.S. GAAP”) and pursuantto the instructions to the Annual Report on Form 10-K and the accountingand disclosure rules and regulations of the U.S. Securities and ExchangeCommission (“SEC”). These financial statements reflect all adjustments,consisting of normal recurring adjustments, which are, in the opinion ofmanagement, necessary for a fair presentation of the financial position,results of operations, and cash flows for all period presented.

 

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

 

**Development stage company:**

 

**               **TheCompanycomplies with the reporting requirements of SFAS No. 7, “Accounting andReporting by Development Stage Enterprises.”

 

**Earningsper common share:**

 

The Company complies with the accounting and disclosure provision ofSFAS No. 128, “Earnings Per Share.” SFAS No. 128 requires dualpresentation of basic and diluted income per common share for all periodspresented. Basic income per common share excludes dilution and is computed bydividing net income by the weighted average number of common shares outstandingfor the period. Diluted income per common share reflects the potential dilutionthat could occur if securities or other contracts to issue common stock wereexercised or converted into common stock or resulted in the issuance of commonstock that then share in the income of the Company. The difference between thenumber of shares used to compute basic income per common share and dilutedincome per common share relates to additional shares to be issued upon theassumed exercise of stock options and warrants, net of shares hypotheticallyrepurchased at the average market price with the proceeds of exercise. TheCompany used treasury stock method to calculate the diluted earnings per sharebased on the outstanding warrants issued in the private placement, the initialpublic offering and the over allotment. As a result, the Company added3,941,943, 3,603,080 and 2,244,401 shares as of the year ended December 31,2008 and 2007, and the period from April 18, 2006 (date of inception) to December 31,2008, 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 statementof operations includes a presentation of earnings per share for common stocksubject to possible redemption in a manner similar to the two-class method ofearnings per share. Basic and diluted net income per common share amount forthe maximum number of shares subject to possible redemption is calculated bydividing the net interest attributable to common shares subject to possible redemptionby the weighted average number of common shares subject to possible redemption.Basic anddiluted net loss per common share amount for the common shares outstanding notsubject to possible redemption is calculated by dividing the net loss exclusiveof the net interest income attributable to common shares subject to redemptionby the weighted average number of common shares not subject to possibleredemption.

 

F-9

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Tableof Contents

 

**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**NOTE C—SUMMARY OF SIGNIFICANTACCOUNTING POLICIES (continued)**

 

**Concentration of credit risk:**

 

Financialinstruments that potentially subject the Company to concentrations of creditrisk consist of cash accounts in a financial institution, which potentiallymay, in the future, exceed the Federal depository insurance coverage of$250,000.  The Company has notexperienced losses on these accounts and management believes the Company is notexposed to significant risks on such accounts.

 

**Fair value of financial instruments:**

 

The carrying amounts ofthe Company’s assets and liabilities, which qualify as financial instrumentsunder SFAS No. 107, “*Disclosure AboutFair Value of Financial Instruments*,” approximates their fair value.

 

**Income Taxes:**

 

The Company complies withSFAS 109, “Accounting for Income Taxes,” which requires an asset and liabilityapproach to financial accounting and reporting for income taxes. Deferredincome tax assets and liabilities are computed for differences between thefinancial statement and tax bases of assets and liabilities that will result infuture taxable or deductible amounts, based on enacted tax laws and ratesapplicable to the periods in which the differences are expected to affecttaxable income. Valuation allowances are established, when necessary, to reducedeferred tax assets to the amount expected to be realized.

 

Effective January 1,2007, the Company adopted the provisions of the Financial Accounting StandardsBoard (“FASB”) Interpretation No. 48, “Accounting for Uncertainty inIncome Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”).  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 December 31,2008.  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 position and results of operation and cashflow.  There were no unrecognized taxbenefits as of December 31, 2008.

 

**Recentlyissued accounting pronouncements:**

 

In December 2007,the FASB issued SFAS 141(R), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) providescompanies with principles and requirements on how an acquirer recognizes andmeasures in its financial statements the identifiable assets acquired,liabilities assumed, and any non-controlling interest in the acquiree as wellas the recognition and measurement of goodwill acquired in a businesscombination. SFAS 141(R) also requires certain disclosures to enable usersof the financial statements to evaluate the nature and financial effects of thebusiness combination. Acquisition costs associated with the businesscombination will generally be expensed as incurred. SFAS 141(R) iseffective for business combinations occurring in fiscal years beginning after December 15,2008, which will require the Company to adopt these provisions for businesscombinations occurring in fiscal 2009 and thereafter. Early adoption of SFAS141(R) is not permitted.

 

F-10

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Table of Contents

 

**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)**

 

In December 2007, the FASB issued SFAS No. 160,“*Noncontrolling Interests in ConsolidatedFinancial statements – An Amendment of ARB No. 51*” (“SFAS 160”).SFAS 160 requires reporting entities to present noncontrolling (minority)interests as equity as opposed to as a liability or mezzanine equity andprovides guidance on the accounting for transactions between an entity andnoncontrolling interests. SFAS 160 is effective the first fiscal year beginningafter December 15, 2008. SFAS 160 applies prospectively as of thebeginning of the fiscal year SFAS 160 is initially applied, except for thepresentation and disclosure requirements which are applied retrospectively forall periods presented subsequent to adoption. The adoption of SFAS 160 will nothave a material impact on the Company’s results of operations or financialposition; however, it could impact future transactions entered into by theCompany.

 

In March 2008, the Financial Accounting StandardsBoard (“FASB”) issued SFAS No. 161, “Disclosures about DerivativeInstruments and Hedging Activities – an amendment to FASB Statement No. 133”.SFAS No. 161 is intended to improve financial standards for derivativeinstruments and hedging activities by requiring enhanced disclosures to enableinvestors to better understand their effects on an entity’s financial position,financial performance, and cash flows. Entities are required to provideenhanced disclosures about: (a) how and why an entity uses derivativeinstruments; (b) how derivative instruments and related hedged items areaccounted for under Statement 133 and its related interpretations; and (c) howderivative instruments and related hedged items affect an entity’s financialposition, financial performance, and cashflows. It is effective for financialstatements issued for fiscal years beginning after November 15, 2008, withearly adoption encouraged. The adoption of this statement is not expected tohave a material effect on the Company’s financial statements.

 

In May 2008,the FASB issued SFAS No. 162, “The Hierarchy of Generally AcceptedAccounting Principles”. SFAS 162 identifies the sources of accountingprinciples and the framework for selecting the principles to be used in thepreparation of financial statements of nongovernmental entities that arepresented in conformity with generally accepted accounting principles in theUnited States. It is effective 60 days following the SEC’s approval of thePublic Company Accounting Oversight Board amendments to AU Section 411, “TheMeaning of Present Fairly in Conformity With Generally Accepted AccountingPrinciples”. The adoption of this statement is not expected to have a materialeffect on the Company’s financial statements.

 

Management does not believe that any other recentlyissued, but not yet effective, accounting pronouncements, if currently adopted,would have a material effect on the Company’s financial statements.

 

**NOTE D—INCOME TAXES**

 

The Company’sprovision for income taxes reflects the application of  Federal, State andCity statutory rates to the Company’s income before taxes. For the years ended December 31,2008 and 2007, and for the period from April 18, 2006 (inception) to December 31,2008, the effective income tax rate differs from the federal statutory rate of34% principally due to the effect of state and city income taxes.  The Company recognizes deferred tax assetsfrom the formation and operational expense during the development stage, whichis not deductible for the income tax purposes.

 

F-11

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Table of Contents

 

**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**NOTE D—INCOME TAXES (continued)**

 

The provision for incometaxes consists of:

 
| ** **                      | ** ** | **For the year ended  December 31, 2008** | ** ** | **For the year ended  December 31, 2007** | ** ** | **April 18, 2006  (inception) to  December 31, 2008** | ** ** |
|---------------------------------|------------|--------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|--------------------------------------------------------------------------------|------------|
| **Current  Expense**            |       |                                                               |       |                                                               |       |                                                                           |       |
| Federal                         |       | $                                                                  | 680,509    |                                                               | $          | 852,940                                                                        |       | $ | 1,533,449 |   |
| State and City                  |       | 416,526                                                            |       | 499,491                                                            |       | 916,017                                                                        |       |
| Total current  expense          |       | 1,097,035                                                          |       | 1,352,431                                                          |       | 2,449,466                                                                      |       |
|                            |       |                                                               |       |                                                               |       |                                                                           |       |
| **Deferred  Benefit**           |       |                                                               |       |                                                               |       |                                                                           |       |
| Federal                         |       | (234,245                                                           | )          | (296,120                                                           | )          | (530,365                                                                       | )          |
| State and City                  |       | (76,635                                                            | )          | (105,000                                                           | )          | (181,635                                                                       | )          |
| Total deferred  benefit         |       | (310,880                                                           | )          | (401,120                                                           | )          | (712,000                                                                       | )          |
|                            |       |                                                               |       |                                                               |       |                                                                           |       |
| **Provision  for income taxes** |       | $                                                                  | 786,155    |                                                               | $          | 951,311                                                                        |       | $ | 1,737,466 |   |

 

**NOTE E—OFFERING AND OVER-ALLOTMENT**

 

The Company offered20,000,000 units (“Units”) for public sale (the “Offering”) in May 2007.Each Unit consists of one share of the Company’s common stock, $0.0001 parvalue (“Common Stock”), and two redeemable common stock purchase warrants (“Warrants”).Each Warrant entitles the holder to purchase from the Company one share ofCommon Stock at an exercise price of $5.00 commencing on the later of (a) oneyear from the date of the final prospectus for the Offering or (b) thecompletion of a Business Combination with a target business or the distributionof the Trust Account, and will expire four years from the date of such finalprospectus. The Warrants will be redeemable at a price of $0.01 per Warrantupon 30 days prior notice after the Warrants become exercisable, only in theevent that the last sale price of Common Stock is at least $8.50 per share forany 20 trading days within a 30 trading day period ending on the third businessday prior to the date on which notice of redemption is given.

 

No Warrants will beexercisable and the Company will not be obligated to issue shares of CommonStock unless at the time a holder seeks to exercise such Warrant, a prospectusrelating to Common Stock issuable upon exercise of the Warrants is current andCommon Stock has been registered or qualified or deemed to be exempt under thesecurities laws of the state of residence of the holder of the Warrants.  Under the terms of the warrant agreement, theCompany has agreed to use its best efforts to meet these conditions and tomaintain a current prospectus relating to Common Stock issuable upon exerciseof the Warrants until the expiration of the Warrants.  However, if the Company does not maintain acurrent prospectus relating to Common Stock issuable upon exercise of theWarrants, holders will be unable to exercise their Warrants.  In no circumstance will the Company berequired 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.

 

F-12

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Table of Contents

 

**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**NOTE E—OFFERING AND OVER-ALLOTMENT (continued)**

 

Certain of the directorsand officers of the Company purchased 5,214,286 Warrants (“Founder Warrants”)at $0.70 per Founder Warrant (for an aggregate purchase price of approximately$3,650,000) from the Company through Shermen WSC Holding LLC (“Shermen WSCHolding”) in a private placement exempt from registration under Securities Actof 1933, as amended. These purchases took place simultaneously with the consummationof the Offering. All of the proceeds received from these purchases were placedin the Trust Account. The Founder Warrants purchased by Shermen WSC Holding areidentical to the Warrants underlying the Units sold in the Offering except that(i) if the Company calls the Warrants for redemption, the Founder Warrantswill be exercisable on a cashless basis; (ii) the Founder Warrants willnot be transferable or salable by Shermen WSC Holding or such directors orofficers or their respective affiliates until after the Company completed theBusiness Combination, except Shermen WSC Holding may distribute them to itsmembers; and (iii) the holders of the Founder Warrants and the CommonStock underlying such Founder Warrants are entitled to registration rights withrespect to such securities under an agreement signed on May 30, 2007.  Shermen WSC Holding agreed that the FounderWarrants would not be transferable or salable by it or such directors orofficers or their respective affiliates until after the Company completed aBusiness Combination, except it may distribute them to its members.  Immediately after the purchase of the FounderWarrants, Shermen WSC Holding distributed them to its members.

 

All shares of Common Stock owned by the FoundingStockholders prior to the closing of the Offering (the “Initial Shares”) wereplaced into an escrow account maintained by Continental Stock Transfer &Trust Company, acting as escrow agent. The Initial Shares will not be released from escrow until six monthsfollowing the completion of a Business Combination.

 

The foregoing restriction is subject to certainlimited exceptions such as transfers to family members and trusts for estateplanning purposes, upon death of an escrow depositor, transfers to an estate orbeneficiaries, or other specified transfers. Even if transferred under these circumstances, the Initial Shares willremain in the escrow account.

 

On May 30, 2007, the underwriters’ for theOffering exercised the full over-allotment of 3,000,000 units.  As a result, the deferred underwriters’ feewas increased approximately $432,000.

 

**NOTE F**—**COMMON STOCK**

 

On May 23, 2007, the Company effected a 1.15 for1 forward stock split of the Initial Shares and issued 750,000 shares of CommonStock to the Founding Stockholders prior to the closing of both the Offeringand the over-allotment. All transactions and disclosures in the financialstatements relating to Common Stock, have been adjusted to reflect the effectsof the stock split.

 

**NOTE G—RELATED PARTY TRANSACTIONS**

 

TheCompany presently occupies office space provided by an affiliate of a certainstockholder of the Company. Such affiliate has agreed that, until theconsummation of a Business Combination, it will make such office space, as wellas certain office and secretarial services, available to the Company, as may berequired by the Company from time to time. The Company has agreed to pay suchaffiliate $9,950 per month for such services.

 

Certain of the directors and officers of the Companyhave purchased through Shermen WSC Holding, in a private placement, 5,214,286Founder Warrants immediately prior to the Offering at a price of $0.70 perFounder Warrant (an aggregate purchase price of approximately $3,650,000) fromthe Company and not as part of the Offering. They have also agreed that theseFounder Warrants purchased by them will not be sold or transferred until thecompletion of a Business Combination.

 

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**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**NOTE H—FAIR VALUE MEASUREMENTS**

 

EffectiveJanuary 1, 2008, the Company adopted SFAS No. 157, Fair ValueMeasurement (“SFAS 157”) for its financial assets and liabilities that arere-measured and reported at fair value at each reporting period, andnon-financial assets and liabilities that are re-measured and reported at fairvalue at least annually. In accordance with the provisions of FSP No. FAS157-2, Effective Date of FASB Statement No. 157, the Company has electedto defer implementation of SFAS 157 as it relates to its non-financial assetsand non-financial liabilities that are recognized and disclosed at fair valuein the financial statements on a nonrecurring basis until January 1, 2009.The Company is evaluating the impact, if any, this standard will have on itsnon-financial assets and liabilities. The adoption of SFAS 157 to the Company’sfinancial assets and liabilities did not have an impact on the Company’sfinancial results.

 

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

 
| **Description**                    | ** ** | **Fair Value at  December 31,  2008** | ** **  | **Quoted Prices  in  Active Markets  (Level 1)** | ** ** | **Significant  Other  Observable  Inputs  (Level 2)** | ** ** | **Significant  Unobservable  Inputs  (Level 3)** | ** ** |
|------------------------------------|------------|------------------------------------------------------|-------------|-----------------------------------------------------------------|------------|------------------------------------------------------------|------------|-------------------------------------------------------|------------|
| Assets:                            |       |                                                 |        |                                                            |       |                                                       |       |                                                  |       |
| Investments held  in Trust Account |       | $                                                    | 138,445,809 |                                                            | $          | 138,445,809                                                |       | $                                                     | —     |   | $ | — |   |
|                               |       |                                                 |        |                                                            |       |                                                       |       |                                                  |       |
| Total                              |       | $                                                    | 138,445,809 |                                                            | $          | 138,445,809                                                |       | $                                                     | —     |   | $ | — |   |

 

Thefair values of the Company’s investments held in the Trust Account isdetermined through market, observable and corroborated sources.

 

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**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**NOTES TO FINANCIAL STATEMENTS**

 

**NOTE I—COMMITMENTS**

 

The Company is committedto paying an underwriting discount of 4% of the Unit Offering price to theunderwriters for the Offering (less $0.21 for each share of common stockconverted to cash in connection with a Business Combination) payable upon theCompany’s consummation of a Business Combination.

 

The Company has sold tothe underwriters, for $100, as additional compensation, an option to purchaseup to a total of 700,000 Units in the aggregate (350,000 Units to eachunderwriter) at a per-unit price of $7.50. The Units issuable upon exercise of this option are also identical tothose offered in the Offering, except that each Warrant underlying such Unitsentitles the holder to purchase one share of Common Stock at a price of$6.25.  In no circumstance will theCompany be required to settle any such option exercise for cash.

 

The sale of this optionwas accounted for as an equity transaction. Accordingly, there will be no net impact on the Company’s financialposition or results of operations, except for the recording of the $100proceeds from the sale of such option.

 

The Company hasdetermined, based upon a Black-Scholes option pricing model, that the fairvalue of 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 of52.13% and a risk-free interest rate of 4.92%.

 

The volatilitycalculation of 52.13% is based on the average 90-day Bloomberg volatility of aportfolio of nine publicly traded U.S. agricultural companies with marketcapitalizations between $50,000,000 and $500,000,000. Because the Company doesnot have a trading history, the Company needed to estimate the potentialvolatility of Common Stock price, which will depend on a number of factorswhich could not be ascertained at the time of issuance.  The Company referred to the Index becausemanagement believes that the average volatility is a reasonable benchmark touse in estimating the expected volatility of Common Stock post-businesscombination.  Although an expected lifeof four years was taken into account for purposes of assigning a fair value tothe option, if the Company does not consummate a Business Combination withinthe prescribed time period and liquidates, this option would becomeworthless.  Although this option and itsunderlying securities have been registered under a registration statement, thisoption will provide for registration rights that will permit the holder of thisoption to demand that a registration statement will be filed with respect toall or any part of the securities underlying this option within five years ofthe completion of the Offering.  Further,the holders of this option will be entitled to piggy-back registration rightsin the event the Company undertakes a subsequent registered offering withinseven years of the completion of the Offering.

 

**NOTE J—PREFERRED STOCK**

 

The Company is authorizedto issue 1,000,000 shares of preferred stock with such designations, voting andother rights and preferences as may be determined from time to time by theBoard of Directors of the Company.  As ofDecember 31, 2008, the Company has not issued any shares of its preferredstock.

 

**NOTE K — THE PROPOSED BUSINESSCOMBINATION WITH WESTWAY**

 

OnNovember 25, 2008, the Company entered into a Transaction Agreement withTerminal Merger Sub, LLC, Feed Merger Sub, LLC, ED&F Man Holdings Limited (“ED&FMan”), Westway Holdings Corporation, Westway Terminal Company Inc. and WestwayFeed Products, Inc. pursuant to which the Company will acquire ED&FMan’s bulk liquid storage and liquid feed supplements businesses in exchangefor shares of the Company’s common and preferred stock and cash (the “TransactionAgreement”).  The acquisition will beeffected by mergers between wholly-owned subsidiaries of ED&F Man andwholly-owned subsidiaries of the Company and by the Company’s purchase of theequity securities of ED&F Man’s other subsidiaries that engage in the bulkliquid storage and liquid feed supplements businesses.  The Company refers to ED&F Man’s bulkliquid storage business and liquid feed

 

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**NOTE K — THE PROPOSED BUSINESSCOMBINATION WITH WESTWAY (continued)**

 

supplementsbusiness collectively as “Westway” or the “Westway business.”  If the business combination is approved bythe Company’s stockholders, all of the direct and indirect subsidiaries ofED&F Man that currently engage in the Westway business will become theCompany’s wholly-owned subsidiaries, ED&F Man and its affiliates will bethe Company’s largest stockholder, owning 49.5% of the Company’s outstandingcommon stock and over 99% of the Company’s Series A Preferred Stock, andthe Company will change its name to “Westway Group, Inc.”

 

Consummationof the business combination is subject to customary closing conditions,including (a) approval by the Company’s stockholders of the TransactionAgreement; (b) approval by the Company’s stockholders of the amendment andrestatement of the Company’s certificate of incorporation; and (c) fewerthan 40% of the holders of the shares of the Company’s common stock issued inthe Offering (“IPO shares”) vote against the Transaction Agreement and electthat the Company convert their shares into cash.  The business combination will be terminatedunder certain circumstances, including (a) if the business combination isnot consummated by May 30, 2009; (b) the Company’s stockholders donot approve the Transaction Agreement; or (c) holders of 40% or more ofthe IPO shares vote against the Transaction Agreement and elect that theCompany convert their shares into cash.

 

Underthe terms of the Transaction Agreement, as consideration for the businesscombination, ED&F Man and its affiliates will receive at the closing cashand securities valued at approximately $267.8 million, based on the $138.4million in the Company’s trust account as of January 31, 2009 (assuming avalue of $5.02 per share of common stock, based on the trust value of $6.02 perIPO share (as of that date), less a special dividend of $1.00 per share to bepaid to holders of the IPO shares). Specifically, as consideration for theacquisition, the Company will:

 

·                  pay to ED&F Man approximately $103.0million in cash, subject to adjustments described below;

 

·                  issue to ED&F Man approximately 7.4million newly-issued shares of the Company’s Series A Preferred Stock; and

 

·                  issue to ED&F Man up to 24.3 million newly-issuedshares of the Company’s common stock.

 

However, if the holdersof some, but less than 40%, of the IPO shares elect that the Company converttheir shares into cash, the number of shares of common stock the Company willissue will decrease and the number of shares of preferred stock the Companywill issue will increase pursuant to a formula described in the Company’s proxystatement.  If the holders of 39.99% ofthe IPO shares exercise their conversion rights, the consideration wouldconsist of approximately 15.3 million shares of the Company’s common stock,approximately 16.0 million shares of the Company’s preferred stock and $103.0million in cash. In this case, the Company estimates that the aggregate valueof the consideration would be $272.1 million (assuming the values per share setforth above).

 

The consideration payableto ED&F Man described above will be subject to pre-closing and post-closingadjustments relating to Westway’s closing date net indebtedness and net workingcapital and to aggregate capital expenditures made by Westway prior to theclosing.

 

Uponconsummation of the business combination, the holders of the Company’s commonstock, warrants and units will continue to own their existing common stock,warrants and units, and the Company will change its name to “Westway Group, Inc.”  Shares of common stock currently held by theCompany’s stockholders will be designated as Class A Common Stock.

 

Upon the consummation ofthe business combination, the Company will be delivering to an escrow agent fordeposit into an escrow account approximately 12.2 million shares of theCompany’s Series A Preferred Stock, issued to ED&F Man, as part of theconsideration for the business combination. These shares will be released to ED&F Man only upon the achievementby the combined company of certain earnings or share price targets described inthe Company’s proxy statement (generally, one-third of these shares will bereleased upon the achievement of earnings or share price targets of $52.0million or $6.50 per share, $57.0 million or $7.00 per share and $62.0 millionor $7.50 per share, respectively). Assuming the release to ED&F Man of all of these escrowed shares,the value of the

 

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**NOTE K — THE PROPOSED BUSINESSCOMBINATION WITH WESTWAY (continued)**

 

consideration to be paidin connection with the business combination would increase by $70.1 million,and would total $337.9 million assuming no exercise of conversion rights by theCompany’s stockholders or $342.2 million assuming that holders of 39.99% of theIPO shares exercise their conversion rights.

 

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**REPORT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM**

 

To the Board of Directors andStockholders ofShermen WSC Acquisition Corp.

 

We have audited the accompanyingbalance sheets of Shermen WSC Acquisition Corp. (a corporation in thedevelopment stage) (the “Company”) as of December 31, 2007 and 2006, andthe related statements of operations, stockholders’ equity, and cash flows forthe 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 statementsare the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audit inaccordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. The Company is not required to have, nor were we engagedto perform, an audit of its internal control over financial reporting. Ouraudit included consideration of internal control over financial reporting as abasis for designing audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting. Accordingly, we express nosuch opinion. An audit also includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements, assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.

 

In our opinion, the financialstatements referred to above present fairly, in all material respects, the financialposition of the Company as of December 31, 2007 and 2006, and the resultsof 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

 

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**SHERMEN WSC ACQUISITION CORP.**

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

 

**BALANCE SHEETS**

 
| ** **                                                                                                                                                                                                                                                                | ** ** | **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.

 

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Table of Contents

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**STATEMENTS OF 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 |   |

 

Seeaccompanying notes to the financial statements.

 

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Table of Contents

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**STATEMENTS OF STOCKHOLDERS’ EQUITY**

**For the period from April 18, 2006 (dateof inception) 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 |   |

 

Seeaccompanying notes to the financial statements.

 

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**SHERMEN WSC ACQUISITION CORP.**

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

 

**STATEMENTS OF 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  |                                                                                              | $          | 8,886                                                                                             |       | $ | 3,312,000 |   |
| Accrual of offering costs                                                                           |       | $                                            | —     |                                                                                              | $          | 318,000                                                                                           |       | 318,000 |   |

 

Seeaccompanying notes to the financial statements.

 

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Tableof Contents

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIALSTATEMENTS**

 

**NOTE A—DESCRIPTION OF ORGANIZATION ANDBUSINESS OPERATIONS**

 

Shermen WSCAcquisition Corp. (a corporation in the development stage) (the “Company”) wasincorporated 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 yearend.

 

The Company’smanagement has broad discretion with respect to the specific application of thenet proceeds of the initial public offering of Units (as defined in Note Cbelow) (the “Offering”), although substantially all of the net proceeds of theOffering are intended to be generally applied toward consummating a businesscombination with (or acquisition of) an operating business in the agricultureindustry (“Business Combination”). Furthermore, there is no assurance that theCompany will be able to successfully affect a Business Combination. Since theclosing of the Offering, at least 99.5% of the gross proceeds, after thepayment of certain amounts to the underwriters for the Offering, is held in atrust account (“Trust Account”) and invested in U.S. “government debtsecurities,” defined as any Treasury Bill issued by the United Statesgovernment having a maturity of one hundred and eighty (180) days or lessor any open ended investment company registered under the Investment CompanyAct of 1940 that holds itself out as a money market fund and bears the highestcredit rating issued by a United States nationally recognized rating agency,until the earlier of (i) the consummation of its first BusinessCombination or (ii) the distribution of the Trust Account as describedbelow. The remaining proceeds will be used to pay for business, legal andaccounting due diligence on prospective acquisitions and continuing general andadministrative expenses. The Company, after signing a definitive agreement forthe acquisition of a target business, will submit such transaction forstockholder approval. In the event that 40% or more of the outstanding commonstock of the Company (excluding, for this purpose, those shares of common stockof the Company issued prior to the Offering) vote against the BusinessCombination and exercise their conversion rights described below, the BusinessCombination will not be consummated. The stockholders who purchased Units inthe Offering (the “Public Stockholders”) and vote against a BusinessCombination will be entitled to convert their common stock into a pro ratashare of the Trust Account (including the additional 4% fee of the grossproceeds of the Offering payable to the underwriters for the Offering upon theCompany’s consummation of a Business Combination), including any interestearned (net of taxes payable and the amount distributed to the Company to fundits working capital requirements) on their pro rata share, if the BusinessCombination is approved and consummated. However, voting against the BusinessCombination alone will not result in an election to exercise a PublicStockholder’s conversion rights. A Public Stockholder must also affirmatively exercisesuch conversion rights at or prior to the time the Business Combination isvoted upon by the stockholders. If holders of no more than approximately 39.99%of the shares sold in the Offering vote against a Business Combination and seekto exercise their conversion rights and such Business Combination isconsummated, the stockholders who held shares of common stock of the Company(the “Founding Stockholders”) have agreed to forfeit and return to the Companyfor cancellation a number of shares so that they will collectively own no morethan 23% of the Company’s outstanding common stock upon consummation of suchBusiness Combination (without giving effect to any shares that may be issued insuch Business Combination). If

 

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Table of Contents

** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIAL STATEMENTS (Continued)**

** **

**NOTE A—DESCRIPTION OF ORGANIZATION ANDBUSINESS OPERATIONS (Continued)**

 

the Company is unable to effecta Business Combination and liquidates, none of the Founding Stockholders willreceive any portion of the proceeds of the Offering held in the Trust Accountto be distributed to the Company’s stockholders with respect to common stockowned by them immediately before the Offering. All of the FoundingStockholders, including all of the directors and officers of the Company, haveagreed to vote all of the shares of common stock of the Company held by them inaccordance with the vote of the majority in interest of all other stockholdersof the Company.

 

In the eventthat the Company does not consummate a Business Combination within18 months from the date of the consummation of the Offering, or24 months from the consummation of the Offering if certain extensioncriteria have been satisfied, the proceeds held in the Trust Account will bedistributed to the Public Stockholders, excluding the Founding Stockholders tothe extent of their initial stock holdings. In the event of such distribution,it is likely that the per share value of the residual assets remainingavailable for distribution (including Trust Account assets) will be less thanthe initial public offering price per Unit in the Offering (assuming no valueis attributed to the Warrants contained in the Units offered in the Offeringdiscussed in Note C).

 

**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES**

 

**Basis of presentation:**

 

Theaccompanying financial statements are presented in U.S. dollars and have beenprepared in accordance with accounting principles generally accepted in theUnited States of America (“US GAAP”) and pursuant to the rules andregulations of the Securities Exchange Commission (the “SEC”).

 

**Development stage company:**

 

The Companycomplies with the reporting requirements of SFAS No. 7, “Accounting andReporting by Development Stage Enterprises.”

 

**Earnings (loss) per share:**

 

The Companycomplies with the accounting and disclosure provision of SFAS No. 128, “EarningsPer Share.” SFAS No. 128 requires dual presentation of basic and dilutedincome (loss) per common share for all periods presented. Basic income pershare excludes dilution and is computed by dividing net income (loss)applicable to common stockholders by the weighted average number of commonshares outstanding for the period. Diluted income per share reflects thepotential dilution that could occur if securities or other contracts to issuecommon stock were exercised or converted into common stock or resulted in theissuance of common stock that then share in the income of the Company. Thedifference between the number of shares used to compute basic income per shareand diluted income per share relates to additional incremental shares to beissued upon the assumed exercise of stock options and warrants, net of shareshypothetically repurchased at the average market price with the proceeds ofexercise. The Company used treasury stock method to calculate the dilutedearnings per share based on the outstanding warrants issued in the privateplacement, the initial public offering and the over-allotment. As a result, theCompany 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) toDecember 31, 2007,

 

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIAL STATEMENTS (Continued)**

 

**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (Continued)**

 

respectively to its basicweighted average number of shares to arrive at the diluted shares used in itscalculation of weighted average diluted earnings per share.

 

The Company’sstatement of operations includes a presentation of earnings per share forcommon stock subject to possible redemption in a manner similar to the two-classmethod of earnings per share. Basic and diluted net loss per share amount forthe maximum number of shares subject to possible conversion is calculated bydividing the net interest attributable to common shares subject to redemptionby the weighted average number of common shares subject to possible redemption.Basic and diluted net loss per share amount for the common shares outstandingnot subject to possible redemption is calculated by dividing the net lossexclusive of the net interest income attributable to common shares subject toredemption by the weighted average number of common shares not subject topossible redemption.

 

**Concentration of credit 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 hasnot experienced losses on these accounts and management believes the Company isnot exposed to significant 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 financial statements and the reported amounts of revenues and expensesduring the reporting period. Actual results could differ from those estimates.

 

**Fair value of financial instruments:**

 

The fair valueof the Company’s assets and liabilities, which qualify as financial instrumentsunder SFAS No. 107, “Disclosure About Fair Value of Financial Instruments,”approximates the carrying amounts represented in the accompanying balancesheets.

 

**Income taxes:**

 

The Companycomplies with SFAS 109, “Accounting for Income Taxes,” which requires anasset and liability approach to financial accounting and reporting for incometaxes. Deferred income tax assets and liabilities are computed for differencesbetween the financial statement and tax bases of assets and liabilities thatwill result in future taxable or deductible amounts, based on enacted tax lawsand rates applicable to the periods in which the differences are expected toaffect taxable income. Valuation allowances are established, when necessary, toreduce deferred tax assets to the amount expected to be realized.

 

Effective January 1,2007, the Company adopted the provisions of the Financial Accounting StandardsBoard (“FASB”) Interpretation No. 48, “Accounting for Uncertainty inIncome Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”).There were no unrecognized tax benefits as of

 

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Table of Contents

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIAL STATEMENTS (Continued)**

 

**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (Continued)**

 

January 1, 2007 and as of December 31,2007. FIN 48 prescribes a recognition threshold and a measurementattribute for the financial statement recognition and measurement of taxpositions taken or expected to be taken in a tax return. For those benefits tobe recognized, a tax position must be more-likely-than-not to be sustained uponexamination by taxing authorities. The Company recognizes accrued interest andpenalties related to unrecognized tax benefits as income tax expense. Noamounts were accrued for the payment of interest and penalties at January 1,2007. There was no change to this balance at December 31, 2007. Managementis currently unaware of any issues under review that could result insignificant payments, accruals or material deviation from its position. Theadoption of the provisions of FIN 48 did not have a material impact on theCompany’s financial statements.

 

**Redeemable common stock:**

 

The Companyaccounts for redeemable common stock in accordance with Emerging Issue TaskForce D-98 “*Classification and Measurementof Redeemable Securities*”. Securities that are redeemable for cashor other assets are classified outside of permanent equity if they areredeemable at the option of the holder. In addition, if the redemption causes aliquidation event, the redeemable securities should not be classified outsideof permanent equity. As discussed in Note A, the Business Combination willonly be consummated if a majority of the shares of common stock voted by thePublic Stockholders are voted in favor of the Business Combination and PublicStockholders holding less than 40% (9,200,000) of shares sold in the Offeringexercise their redemption rights. As further discussed in Note A, if aBusiness 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 measurements, SFAS No. 157does not require any new fair value measurements. However, the FASB anticipatesthat for some entities, the application of SFAS No. 157 will changecurrent practice. SFAS No. 157 is effective for financial statementsissued for fiscal years beginning after November 15, 2007, which for theCompany would be its fiscal year beginning January 1, 2008. The Company iscurrently evaluating the impact of SFAS No 157 but does not expect that it willhave a material impact on its condensed interim financial statements.

 

In February 2007,the FASB issued SFAS 159, “The Fair Value Option for Financial Assets andFinancial Liabilities.” This statement permits entities to choose to measuremany financial instruments at fair value. Unrealized gains and losses on itemsfor which option has been elected are reported in earnings. SFAS No. 159is effective for fiscal years beginning after November 15, 2007. TheCompany is currently assessing impact of SFAS 159 on its condensed interimfinancial statements.

 

In December 2007,the FASB issued SFAS 141(R), “*BusinessCombinations*”. SFAS 141(R) provides companies withprinciples and requirements on how an acquirer recognizes and measures in

 

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Table of Contents

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIAL STATEMENTS (Continued)**

** **

**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (Continued)**

 

its financial statements theidentifiable assets acquired, liabilities assumed, and any noncontrollinginterest in the acquiree as well as the recognition and measurement of goodwillacquired in a business combination. SFAS 141(R) also requires certaindisclosures to enable users of the financial statements to evaluate the natureand financial effects of the business combination. Acquisition costs associatedwith the business combination will generally be expensed as incurred.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 AND OVER-ALLOTMENT**

 

The Companyoffered 20,000,000 units (“Units”) for public sale. Each Unit consists of oneshare of the Company’s common stock, $0.0001 par value (“Common Stock”), andtwo 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 daysprior notice after the Warrants become exercisable, only in the event that thelast sale price of Common Stock is at least $8.50 per share for any 20 tradingdays within a 30 trading day period ending on the third business day prior tothe date on which notice of redemption is given.

 

No Warrantswill be exercisable and the Company will not be obligated to issue shares ofCommon Stock unless at the time a holder seeks to exercise such Warrant, aprospectus relating to Common Stock issuable upon exercise of the Warrants iscurrent and Common Stock has been registered or qualified or deemed to beexempt under the securities laws of the state of residence of the holder of theWarrants. Under the terms of the warrant agreement, the Company has agreed touse its best efforts to meet these conditions and to maintain a currentprospectus relating to Common Stock issuable upon exercise of the Warrantsuntil the expiration of the Warrants. However, if the Company does not maintaina current prospectus relating to Common Stock issuable upon exercise of theWarrants, holders will be unable to exercise their Warrants. In no circumstancewill the Company be required to settle any such Warrant exercise for cash. Ifthe prospectus relating to Common Stock issuable upon the exercise of theWarrants is not current or if Common Stock is not qualified or exempt fromqualification in the jurisdiction in which the holders of the Warrants reside,the Warrants may have no value, the market for the Warrants may be limited andthe Warrants may expire worthless.

 

Shermen WSCHolding 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

 

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Table of Contents

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIAL STATEMENTS (Continued)**

 

**NOTE C—OFFERING AND OVER-ALLOTMENT(Continued)**

 

obligation to register the saleof the Warrants and the underlying shares of Common Stock and their exercise isnot limited by the absence of an effective registration statement and currentprospectus relating to the resale of the underlying shares and (ii) theFounder Warrants may be exercisable on a “cashless basis” if the Company callsthe Warrants for redemption. Shermen WSC Holding has also agreed that theFounder Warrants will not be transferable or alable by it or such directors orofficers or their respective affiliates until after the Company has completed aBusiness Combination, except it may distribute them to its members. Immediatelyafter the purchase of the Founder Warrants, Shermen WSC Holding LLCdistributed them to its members.

 

All shares ofCommon Stock owned by the Founding Stockholders prior to the closing of theOffering (the “Initial Shares”) were placed into an escrow account maintainedby Continental Stock Transfer & Trust Company, acting as escrow agent.The Initial Shares will not be released from escrow until twelve monthsfollowing the consummation of a Business Combination.

 

The foregoingrestriction is subject to certain limited exceptions such as transfers tofamily members and trusts for estate planning purposes, upon death of an escrowdepositor, transfers to an estate or beneficiaries, or other specifiedtransfers. Even if transferred under these circumstances, the Initial Shareswill remain in the escrow account.

 

On May 30,2007, the underwriters for the Offering exercised the full over-allotment of3,000,000 units. As a result, the deferred underwriters’ fee was increasedapproximately $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**

 

The Companyissued a $150,000 unsecured promissory note to a stockholder, Shermen CapitalPartners, 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.

 

The Companypresently 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 thedirectors and officers of the Company have purchased through Shermen WSC Holding LLC,in a private placement, 5,214,286 Founder Warrants immediately prior to theOffering at a price of $0.70 per warrant (an aggregate purchase price ofapproximately $3,650,000) from the Company and not as part of the Offering.They have also agreed that the Found Warrants purchased by them will not besold or transferred until completion of a Business Combination.

 

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Table of Contents

 

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIAL STATEMENTS (Continued)**

 

**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.

 

Components ofthe 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 |   |
|                            |        |           |         |  |  |

 

The basiccomponent of deferred tax asset are the formation and operational expenseswhich are not deductible for the income tax purposes as corporation is still adevelopment stage corporation. The effective income tax rate differs from thefederal statutory rate of 34% principally due to the effect of state and cityincome taxes.

 

**NOTE G—COMMITMENTS**

 

The Company iscommitted to paying an underwriting discount of 4% of the public offering priceof the Unit to the underwriters for the Offering (less $0.21 for each share ofcommon stock converted to cash in connection with a Business Combination)payable upon the Company’s consummation of a Business Combination.

 

The Companyhas 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. TheUnits issuable upon exercise of this option are also identical to those offeredin the Offering, except that each Warrant underlying such Units entitles theholder to purchase one share of Common Stock at a price of $6.25. In nocircumstance will the Company be required to settle any such option exercisefor cash.

 

The sale ofthis option was accounted for as an equity transaction. Accordingly, there willbe no net impact on the Company’s financial position or results of operations,except for the recording of the $100 proceeds from the sale of such option.

 

The Companyhas determined, based upon a Black-Scholes model, that the fair value of thisoption on the date of sale would be approximately $0.60 per unit, or $420,000in total, using an expected life of four years, volatility of 52.13% and a risk-freeinterest rate of 4.92%.

 

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO FINANCIAL STATEMENTS (Continued)**

 

**NOTE G—COMMITMENTS (Continued)**

 

The volatilitycalculation of 52.13% is based on the average 90-day Bloomberg volatility of aportfolio of nine publicly traded U.S. agricultural companies with marketcapitalizations between $50,000,000 and $500,000,000. Because the Company doesnot have a trading history, the Company needed to estimate the potentialvolatility of its Common Stock price, which will depend on a number of factorswhich cannot be ascertained at this time. The Company referred to the Indexbecause management believes that the average volatility is a reasonablebenchmark to use in estimating the expected volatility of Common Stock post-businesscombination. Although an expected life of four years was taken into account forpurposes of assigning a fair value to the option, if the Company does notconsummate a Business Combination within the prescribed time period andliquidates, this option would become worthless. Although this option and itsunderlying securities have been registered under a registration statement, thisoption will provide for registration rights that will permit the holder of thisoption to demand that a registration statement will be filed with respect toall or any part of the securities underlying this option within five years ofthe completion of the Offering. Further, the holders of this option will beentitled to piggy-back registration rights in the event we undertake asubsequent registered offering within seven years of the completion of theOffering.

 

**NOTE H—PREFERRED STOCK**

 

The Company isauthorized to issue 1,000,000 shares of preferred stock with such designations,voting and other rights and preferences as may be determined from time to timeby the Board of Directors. As of December 31, 2007, the Company had notissued shares of preferred stock. The Company’s certificate of incorporationprohibits it, prior to a Business Combination, from issuing preferred stockwhich participates in the proceeds of the Trust Account or which votes as aclass with the Common Stock on a Business Combination.

 

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