**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

** **

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** **

**FORM10-Q**

 

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** **

**(Mark One)**

| **x**      | ** ** | **QUARTERLY REPORT UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                     |
|------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                                                                                                                                                                      |
| ** ** | ** ** | **For the quarterly period ended September 30, 2007**                                                                                                                                                                           |
| ** ** | ** ** | ** **                                                                                                                                                                                                                      |
| **o**      | ** ** | **TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                    |
| ** ** | ** ** | ** **                                                                                                                                                                                                                      |
| ** ** | ** ** | **For the transition period  from                to               ** |

** **

**Commission File Number 000-52642**

** **

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** **

**ShermenWSC Acquisition Corp.**

(Exact Name of Registrant as Specified in Its Charter)

 

| **Delaware**                     | ** ** | **20-4755936**       |
|----------------------------------|------------|----------------------|
| (State or other  Jurisdiction of |       | (I.R.S. Employer     |
| Incorporation or  Organization)  |       | Identification  No.) |

 

| **c/o The  Shermen Group, 1251 Avenue of the Americas, Suite 900, New York, NY** | ** ** | **10020**  |
|----------------------------------------------------------------------------------|------------|------------|
| (Address of  Principal Executive Offices)                                        |       | (Zip Code) |

 

**(212) 300-0020**

(Registrant’s Telephone Number, Including Area Code)

 

**Not Applicable**

(Former Name, Former Address and Former Fiscal Year, if Changed SinceLast Report)

 

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Indicateby check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90days.    Yes  x    No  o

 

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

 

| Large accelerated filer o |   | Accelerated filer o |   | Non-accelerated filer x |
|---------------------------|--------|---------------------|--------|-------------------------|

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).   Yes  x    No  o.

 

Asof November 13, 2007, 28,750,000 shares of common stock, par value $0.0001 per share, were issued and outstanding.

 

 

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**TABLEOF CONTENTS**

 

ShermenAcquisition Corp.

(a developmentstage enterprise)

 

**Contents**

 
| Part I:  FINANCIAL INFORMATION: |                                                                                                                 |
|--------------------------------------|----------------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                                                 |
|                                 | Item 1 – Financial Statements:                                                                             |   |
|                                 |                                                                                                                 |   |
|                                 | Condensed Balance Sheet as of September  30, 2007 (Unaudited)                                                        |   |
|                                 |                                                                                                                 |   |
|                                 | Condensed  Statement of Operations for the Period April 18, 2006 (inception) to  September 30, 2007 (Unaudited)      |   |
|                                 |                                                                                                                 |   |
|                                 | Statement of Stockholders’  Equity for the Period April 18, 2006 (inception) to September 30, 2007  (Unaudited) |   |
|                                 |                                                                                                                 |   |
|                                 | Condensed Statement of Cash  Flows for the Period April 18, 2006 (inception) to September 30, 2007  (unaudited)      |   |
|                                 |                                                                                                                 |   |
|                                 | Notes to Condensed Interim Financial Statements                                                                      |   |
|                                 |                                                                                                                 |   |
|                                 | Item 2 – Management’s Discussion and Analysis of  Financial Condition and Results of Operations       |   |
|                                 |                                                                                                                 |   |
|                                 | Item 3 – Quantitative and Qualitative Disclosures  About Market Risk                                       |   |
|                                 |                                                                                                                 |   |
|                                 | Item 4 – Controls and Procedures                                                                           |   |
|                                 |                                                                                                                 |   |
|                                 | Part  II. OTHER INFORMATION                                                                                          |   |
|                                 |                                                                                                                 |   |
|                                 | Item 1  – Legal Proceedings                                                                                |   |
|                                 |                                                                                                                 |   |
|                                 | Item 1A  – Risk Factors                                                                                    |   |
|                                 |                                                                                                                 |   |
|                                 | Item 2 – Unregistered Sales of Equity Securities  and Use of Proceeds                                      |   |
|                                 |                                                                                                                 |   |
|                                 | Item 3 – Defaults Upon Senior Securities                                                                   |   |
|                                 |                                                                                                                 |   |
|                                 | Item 4 – Submission of Matters to a Vote of  Security Holders                                              |   |
|                                 |                                                                                                                 |   |
|                                 | Item 5  – Other Information                                                                                |   |
|                                 |                                                                                                                 |   |
|                                 | Item 6  – Exhibits                                                                                         |   |
|                                 |                                                                                                                 |   |
| Signatures                           |                                                                                                                 |
|                                 |                                                                                                                 |
| Certifications                       |                                                                                                                 |

 

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**PART I – FINANCIAL INFORMATION**

** **

**ITEM1.   FINANCIAL STATEMENTS**

** **

**SHERMEN WSC ACQUISITION CORP.**

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

** **

**CONDENSED BALANCE SHEETS**

 
| ** **                                                                                                                                                                                                                                                        | ** ** | **September 30, 2007** | ** **  | **December 31, 2006** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------|-------------|---------------------------------|------------|
| ** **                                                                                                                                                                                                                                                        | ** ** | **(Unaudited)**                  | ** **  | ** **                      | ** ** |
| **ASSETS**                                                                                                                                                                                                                                                        |       |                             |        |                            |       |
| **Current  assets**                                                                                                                                                                                                                                               |       |                             |        |                            |       |
| Cash                                                                                                                                                                                                                                                              |       | $                                | 476,819     |                            | $          | 21,354 |   |
| Prepaid expenses                                                                                                                                                                                                                                                  |       | 55,786                           |        |                            |       |
| **Total  current assets**                                                                                                                                                                                                                                         |       | 532,605                          |        | 21,354                          |       |
|                                                                                                                                                                                                                                                              |       |                             |        |                            |       |
| **Other  assets**                                                                                                                                                                                                                                                 |       |                             |        |                            |       |
| Deferred  offering costs                                                                                                                                                                                                                                          |       |                             |        | 457,410                         |       |
| Deferred taxes                                                                                                                                                                                                                                                    |       | 276,000                          |        |                            |       |
| Cash held in  Trust Fund                                                                                                                                                                                                                                          |       | 137,908,307                      |        |                            |       |
| **Total  assets**                                                                                                                                                                                                                                                 |       | $                                | 138,716,912 |                            | $          | 478,764 |   |
|                                                                                                                                                                                                                                                              |       |                             |        |                            |       |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                     |       |                             |        |                            |       |
|                                                                                                                                                                                                                                                              |       |                             |        |                            |       |
| **Current  liabilities**                                                                                                                                                                                                                                          |       |                             |        |                            |       |
| Accounts payable  and accrued expenses                                                                                                                                                                                                                            |       | $                                | 29,462      |                            | $          | 1,795 |   |
| Accrued offering  costs                                                                                                                                                                                                                                           |       |                             |        | 318,000                         |       |
| Income tax  payable                                                                                                                                                                                                                                               |       | 832,000                          |        |                            |       |
| Notes payable,  founding stockholders                                                                                                                                                                                                                             |       | 75,000                           |        | 150,000                         |       |
| **Total  current liabilities**                                                                                                                                                                                                                                    |       | 936,462                          |        | 469,795                         |       |
|                                                                                                                                                                                                                                                              |       |                             |        |                            |       |
| **Long-term  liabilities**                                                                                                                                                                                                                                        |       |                             |        |                            |       |
| Deferred  underwriters’ fee                                                                                                                                                                                                                                  |       | 3,312,000                        |        |                            |       |
| **Total  liabilities**                                                                                                                                                                                                                                            |       | 4,248,462                        |        | 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**                                                                                                                                                                       |       | 213,460                          |        |                            |       |
|                                                                                                                                                                                                                                                              |       |                             |        |                            |       |
| **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 September 30, 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                          |       |
| Income (deficit)  accumulated during the development stage                                                                                                                                                                                                        |       | 566,890                          |        | (16,031                         | )          |
| **Total  stockholders’ equity**                                                                                                                                                                                                                              |       | 79,510,996                       |        | 8,969                           |       |
| **Total  liabilities and stockholders’ equity**                                                                                                                                                                                                              |       | $                                | 138,716,912 |                            | $          | 478,764 |   |

 

The accompanying notesare an integral part of these condensed financial statements

 

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**CONDENSED STATEMENTS OF OPERATIONS**

**(Unaudited)**

** **
| ** **                                                                              | ** ** | **Three Months  Ended September  30, 2007** | ** ** | **Nine Months Ended  September 30, 2007** | ** ** | **Period from  April 18, 2006  (date of inception)  to  September 30,  2006** | ** ** | **Period from  April 18, 2006  (date of inception)  to  September 30,  2007** | ** ** |
|-----------------------------------------------------------------------------------------|------------|------------------------------------------------------------|------------|---------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|
| Revenue                                                                                 |       | $                                                          | —     |                                                          | $          | —                                                                                                      |       | $                                                                                                           | —     |   | $ | — |   |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Formation and operating expenses                                                        |       | (84,927                                                    | )          | (547,191                                                      | )          | (11,318                                                                                                     | )          | (563,222                                                                                                    | )          |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Loss from operations                                                                    |       | (84,927                                                    | )          | (547,191                                                      | )          | (11,318                                                                                                     | )          | (563,222                                                                                                    | )          |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Other income                                                                            |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Interest income                                                                         |       | 1,358,295                                                  |       | 1,899,572                                                     |       | —                                                                                                      |       | 1,899,572                                                                                                   |       |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Income (loss) before provision for income  taxes                                        |       | 1,273,368                                                  |       | 1,352,381                                                     |       | (11,318                                                                                                     | )          | 1,336,350                                                                                                   |       |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Income taxes                                                                            |       | (520,000                                                   | )          | (556,000                                                      | )          | —                                                                                                      |       | (556,000                                                                                                    | )          |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Net income                                                                              |       | 753,368                                                    |       | 796,381                                                       |       | (11,318                                                                                                     | )          | 780,350                                                                                                     |       |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Interest income related to common stock  subject to possible conversion                 |       | (96,878                                                    | )          | (213,460                                                      | )          | —                                                                                                      |       | (213,460                                                                                                    | )          |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Net income (loss) applicable to common  stockholders not subject to possible conversion |       | $                                                          | 656,490    |                                                          | $          | 582,921                                                                                                     |       | $                                                                                                           | (11,318    | ) | $ | 566,890 |   |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Weighted average number of common shares  outstanding, basic                            |       | 28,750,000                                                 |       | 15,787,546                                                    |       | 5,000,000                                                                                                   |       | 10,546,139                                                                                                  |       |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Net income (loss) per common share, basic                                               |       | $                                                          | 0.0262     |                                                          | $          | 0.0504                                                                                                      |       | $                                                                                                           | (0.0023    | ) | $ | 0.074 |   |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Weighted average number of common shares  outstanding, diluted                          |       | 34,650,675                                                 |       | 21,493,274                                                    |       | 5,000,000                                                                                                   |       | 16,251,868                                                                                                  |       |
|                                                                                    |       |                                                       |       |                                                          |       |                                                                                                        |       |                                                                                                        |       |
| Net income (loss) per common share,  diluted                                            |       | $                                                          | 0.0218     |                                                          | $          | 0.0371                                                                                                      |       | $                                                                                                           | (0.0023    | ) | $ | 0.048 |   |

 

The accompanyingnotes are an integral part of these condensed financial statements

 

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**STATEMENT OF STOCKHOLDERS’ EQUITY**

** **

**(Unaudited)**

** **
| ** **                                                                                                                                                                                  | ** ** | **Common Stock** | ** ** | **Additional  Paid-In ** | ** ** | **Earnings  Accumulated  During the  Development ** | ** ** | ** ** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------------------|------------|---------------------------------------------------------------|------------|------------|------------|
| ** **                                                                                                                                                                                  | ** ** | **Shares**            | ** ** | **Amount**                    | ** ** | **Capital**                                                   | ** ** | **Stage**  | ** ** | **Total** | ** ** |
|                                                                                                                                                                                        |       |                  |       |                          |       |                                                          |       |       |       |   |   |
| Balance - April 18, 2006 (date of inception)                                                                                                                                                |       | —                |       | $                             | —     |                                                          | $          | —     |       | $ | — |   | $ | — |   |
| Issuance of common  stock to existing stockholders                                                                                                                                          |       | 5,000,000             |       | 500                           |       | 24,500                                                        |       |       |       | 25,000 |   |
| Issuance of warrants in private placement                                                                                                                                                   |       | —                |       |                          |       | 3,650,000                                                     |       |       |       | 3,650,000 |   |
| 750,000 units resulted  from a 1.15 for 1 forward stock split on May 23, 2007                                                                                                               |       | 750,000               |       | 75                            |       |                                                          |       |       |       | 75 |   |
| Sale of 20,000,000  units on May 30, 2007 at a price of $6 per unit, net of underwriter’s  discount and offering expenses (including 9,199,999 shares subject to  possible redemption) |       | 20,000,000            |       | 2000                          |       | 113,052,804                                                   |       |       |       | 113,054,804 |   |
| Sale of 3,000,000 over  allotment units not subject to stock split on May 30, 2007 at a price of $6  per unit, net of underwriter’s discount and offering expenses                     |       | 3,000,000             |       | 300                           |       | 16,957,921                                                    |       |       |       | 16,958,221 |   |
| Proceeds subject to  possible conversion 9,199,999 shares                                                                                                                                   |       |                  |       |                          |       | (54,743,994                                                   | )          |       |       | (54,743,994 | ) |
|                                                                                                                                                                                        |       |                  |       |                          |       |                                                          |       |       |       |   |   |
| Net income for the period                                                                                                                                                                   |       |                  |       |                          |       |                                                          |       | 566,890    |       | 566,890 |   |
|                                                                                                                                                                                        |       |                  |       |                          |       |                                                          |       |       |       |   |   |
| Balance - September 30, 2007                                                                                                                                                                |       | 28,750,000            | ** ** | $                             | 2,875      |                                                          | $          | 78,941,231 |       | $ | 566,890 |   | $ | 79,510,996 |   |

 

The accompanyingnotes are an integral part of these condensed financial statements

 

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**CONDENSED STATEMENTS OF CASH FLOWS**

** **

**(Unaudited)**

** **
| ** **                                                                            | ** ** | **Nine  Months Ended  September 30, 2007** | ** ** | **April 18, 2006  (date of inception)  through  September 30, 2006** | ** ** | **April 18, 2006  (date of inception)  through  September 30, 2007** | ** ** |
|---------------------------------------------------------------------------------------|------------|-----------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------|------------|
| **Cash  flows from operating activities:**                                            |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| Net income  (loss)                                                                    |       | $                                                         | 582,921    |                                                                                               | $          | (11,318                                                                                            | )          | $ | 566,890 |   |
| Deferred tax  benefit                                                                 |       | (276,000                                                  | )          | —                                                                                             |       | (276,000                                                                                           | )          |
| Adjustments to  reconcile net income (loss) to net cash used in operating activities: |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| **Changes  in operating assets and liabilities:**                                     |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| Prepaid expenses                                                                      |       | (55,786                                                   | )          | —                                                                                             |       | (55,786                                                                                            | )          |
| Accounts payable  and accrued expenses                                                |       | (27,667                                                   | )          | —                                                                                             |       | (29,462                                                                                            | )          |
| Income tax  payable                                                                   |       | 832,000                                                   |       | —                                                                                             |       | 832,000                                                                                            |       |
| **Cash  provided by (used in) operating activities**                                  |       | 1,055,468                                                 |       | (11,318                                                                                            | )          | 1,037,642                                                                                          |       |
|                                                                                  |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| **Cash  used in investing activities:**                                               | ** ** | ** **                                                | ** ** | ** **                                                                                         | ** ** | ** **                                                                                         | ** ** |
| Cash held in  Trust Fund                                                              |       | (137,908,307                                              | )          | —                                                                                             |       | (137,908,307                                                                                       | )          |
|                                                                                  |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| **Cash  flows from financing activities:**                                            | ** ** | ** **                                                | ** ** | ** **                                                                                         | ** ** | ** **                                                                                         | ** ** |
| Proceeds from  (payments for) note payable, stockholder                               |       | (75,000                                                   | )          | 150,000                                                                                            |       | 75,000                                                                                             |       |
| Payments of offering  costs                                                           |       | (4,266,796                                                | )          | (106,510                                                                                           | )          | (4,402,616                                                                                         | )          |
| Proceeds from  sale of stock options                                                  |       | 100                                                       |       | —                                                                                             |       | 100                                                                                                |       |
| Proceeds from  issuance of common stock                                               |       | 141,650,000                                               |       | 25,000                                                                                             |       | 141,675,000                                                                                        |       |
| **Net  cash provided by financing activities**                                        |       | 137,308,304                                               |       | 68,490                                                                                             |       | 137,347,484                                                                                        |       |
|                                                                                  |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| **Net  increase in cash**                                                             |       | 455,465                                                   |       | 57,172                                                                                             |       | 476,819                                                                                            |       |
|                                                                                  |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| **Cash,**beginning  of the period                                                     |       | 21,354                                                    |       | —                                                                                             |       | —                                                                                             |       |
|                                                                                  |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| **Cash,**  end of the period                                                          |       | $                                                         | 476,819    |                                                                                               | $          | 57,172                                                                                             |       | $ | 476,819 |   |
|                                                                                  |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| **Supplemental  schedule of non-cash financing activities:**                          |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| Deferred  underwriters’ fees                                                     |       | $                                                         | 3,312,000  |                                                                                               | $          | —                                                                                             |       | $ | 3,312,000 |   |
|                                                                                  |       |                                                      |       |                                                                                               |       |                                                                                               |       |
| Accrued offering  costs                                                               |       | $                                                         | —     |                                                                                               | $          | 318,000                                                                                            |       | $ | 318,000 |   |

 

The accompanyingnotes are an integral part of these condensed financial statements

 

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** **

**SHERMEN WSC ACQUISITION CORP.**

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

 

**NOTES TO CONDENSED UNAUDITED INTERIM FINANCIALSTATEMENTS**

 

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

** **

ShermenWSC Acquisition Corp. (a corporation in the development stage) (the “Company”)was incorporated in Delaware on April 18, 2006. The Company was formed toacquire an operating business in the agriculture industry through a merger,capital stock exchange, asset acquisition, stock purchase or other similarbusiness combination. The Company has neither engaged in any operations norgenerated significant revenue to date, with the exception of interest income.The Company is considered to be in the development stage as defined inStatement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting andReporting By Development Stage Enterprises,” and is subject to the risksassociated with activities of development stage companies. The Company hasselected December 31st as its calendar year end.

 

The Company’s managementhas broad discretion with respect to the specific application of the netproceeds of this offering of Units (as defined in Note C below) (the “Offering”),although substantially all of the net proceeds of the Offering are intended tobe generally 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 affect a Business Combination. Since the closing of theOffering, at least 99.5% of the gross proceeds, after the payment of certainamounts to the underwriters, are held in a trust account (“Trust Account”) andinvested in U.S. “government debt securities,” defined as any Treasury Billissued by the United States government having a maturity of one hundred andeighty  (180) days or less or any openended investment company registered under the Investment Company Act of 1940that holds itself out as a money market fund and bears the highest creditrating issued by a United States nationally recognized rating agency, until theearlier of (i) the consummation of its first Business Combination or (ii) thedistribution of the Trust Account as described below. The remaining proceedswill be used to pay for business, legal and accounting due diligence onprospective acquisitions and continuing general and administrative expenses.The Company, after signing a definitive agreement for the acquisition of atarget business, will submit such transaction for stockholder approval. In theevent that 40% or more of the outstanding stock (excluding, for this purpose,those shares of common stock issued prior to the Offering) vote against theBusiness Combination and exercise their conversion rights described below, theBusiness Combination will not be consummated. Public stockholders votingagainst a Business Combination will be entitled to convert their stock into apro rata share of the Trust Account (including the additional 4% fee of thegross proceeds payable to the underwriters upon the Company’s consummation of aBusiness Combination), including any interest earned (net of taxes payable andthe amount distributed to the Company to fund its working capital requirements)on their pro rata share, if the business combination is approved andconsummated. However, voting against the Business Combination alone will notresult in an election to exercise a stockholder’s conversion rights. Astockholder 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 thisoffering vote against a Business Combination and seek to exercise theirconversion rights and such Business Combination is consummated, the existingstockholders have agreed to forfeit and return to the Company for cancellationa number of shares so that they will collectively own no more than 23.0% of theCompany’s outstanding common stock upon consummation of such BusinessCombination (without giving effect to any shares that may be issued in suchBusiness Combination). If the Company is unable to affect a BusinessCombination and liquidates, none of the existing stockholders will receive anyportion of the proceeds held in the Trust Account to be distributed to theCompany’s stockholders with respect to common stock owned by them immediatelybefore this Offering. As of September 30, 2007, after giving effect to a 1.15for 1 stock split which was effected immediately prior to this Offering, all ofthe Company’s stockholders prior to the

 

5

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Offering, including allof the directors and officers of the Company, have agreed to vote all of theshares of common stock held by them in accordance with the vote of the majorityin interest of all other stockholders of the Company.

 

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 if certain extension criteria have been satisfied,the proceeds held in the Trust Account will be distributed to the Company’spublic stockholders, excluding the stockholders prior to the Offering to theextent of their initial stock holdings. In the event of such distribution, itis likely that the per share value of the residual assets remaining availablefor distribution (including Trust Account assets) will be less than the initialpublic offering price per Unit in the Offering (assuming no value is attributedto the Warrants contained in the Units to be offered in the Offering discussedin Note C).

 

**NOTE B – BASIS OFPRESENTATION**

** **

Theaccompanying condensed interim financial statements have been prepared by theCompany and reflect all adjustments, consisting only of normal recurringadjustments, which are, in the opinion of management, necessary for a fairpresentation of the financial position as of September 30, 2007 and thefinancial results for the three months and nine months ended September 30, 2007and the periods from April 18, 2006 (date of inception) to September 30, 2006and from April 18, 2006 (date of inception) to September 30, 2007, inaccordance with accounting principles generally accepted in the United Statesof America for interim financial statements and pursuant to the instructions toForm 10-Q and Article 10 of Regulation S-X. Certain information and footnotedisclosures normally included in the Company’s annual audited financialstatements have been condensed or omitted pursuant to such rules andregulations.

 

The results of operations for the three months andnine months ended September 30, 2007 and the periods from April 18, 2006 (dateof inception) to September 30, 2006 and from April 18, 2006 (date of inception)to September 30, 2007 are not necessarily indicative of the results ofoperations to be expected for a full fiscal year. Theseunaudited condensed financial statements should be read in conjunction with thefinancial statements for the fiscal year ended December 31, 2006, which areincluded in the Company’s 2006 Form 10-K filed with the Securities and ExchangeCommission.

 

**NOTE C—SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES**

** **

**Developmentstage company:**

 

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

 

**Earnings (loss)per common share:**

** **

The Company complies with SFAS No. 128, “Earnings Per Share.” SFAS No.128 requires dual presentation of basic and diluted income per common share forall periods presented. Basic income per common share excludes dilution and iscomputed by dividing net income by the weighted average number of

 

6

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common shares outstanding forthe 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.

 

**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, exceeds the Federal depository insurance coverage of$100,000. The Company has not experienced losses on these accounts andmanagement believes the Company is not exposed to significant risks on suchaccounts.

 

**Use of estimates:**

** **

The preparation ofcondensed interim 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 condensed interim financial statements and the reported amounts of revenuesand expenses during the reporting period. Actual results could differ fromthose estimates.

 

**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 in IncomeTaxes – an interpretation of FASB Statement No. 109” (“FIN 48”). There were nounrecognized tax benefits as of January 1, 2007 and as of September 30, 2007. FIN48 prescribes a recognition threshold and a measurement attribute for thefinancial statement recognition and measurement of tax positions taken orexpected to be taken in a tax return. For those benefits to be recognized, atax position must be more-likely-than-not to be sustained upon examination bytaxing authorities. The Company recognizes accrued interest and penaltiesrelated to unrecognized tax benefits as income tax expense. No amounts wereaccrued for the payment of interest and penalties at January 1, 2007. There wasno change to this balance at September 30, 2007. Management is currentlyunaware of any issues under review that could result in significant payments,accruals or material deviation from its position. The adoption of theprovisions of FIN 48 did not have a material impact on the Company’s financialposition and results of operation and cash flow.

 

7

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Income tax expense forthe three and nine months ended September 30, 2007 was approximately $520,000and $556,000 respectively. The expense is comprised of current federal, stateand city income taxes of $832,000 and deferred federal, state and city incometaxes benefit of $276,000. The effective tax rate of 41% for the three monthsand nine months ended September 30, 2007, differs from the federal statutoryrate of approximately 35% as a result of state and city income taxes.

 

Deferred income taxes areprovided for the differences between the bases of assets and liabilities forfinancial reporting and income tax purposes. As of September 30, 2007, theCompany has a deferred tax asset of approximately $276,000 primarilyattributable to deferred offering costs.

 

**Recently IssuedAccounting Pronouncements:**

** **

In September 2006, theFASB issued SFAS No. 157, *“Fair ValueMeasurements,”* which defines fair value, established a framework formeasuring fair value in generally accepted accounting principles, expandsdisclosure about fair value measurements, and applies under other accountingpronouncements 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 change currentpractice. SFAS No. 157 is effective for financial statements issued for fiscalyears beginning after November 15, 2007, which for the Company would be itsfiscal year beginning January 1, 2008. The Company is currently evaluating theimpact of SFAS No 157 but does not expect that it will have a material impacton its condensed interim financial statements.

 

In September 2006, theSecurities and Exchange Commission issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior YearMisstatements when Quantifying Misstatements in Current Year FinancialStatements” (“SAB 108”).  SAB108 provides guidance on how prior year misstatements should be considered whenquantifying misstatements in the current year financial statements. The SABrequires registrants to quantify misstatements using both a balance sheet andan income statement approach and evaluate and evaluate whether either approachresults in quantifying a misstatement that, when all relevant quantitative andqualitative factors are considered, is material. SAB 108 does not change theguidance in SAB 99, “Materiality,”when evaluating the materiality of misstatements. SAB 108 is effective forfiscal years ending after November 15, 2006. Upon initial application, SAB 108permits a one-time cumulative effect adjustment to beginning retained earnings.  TheCompany is currently evaluating the potential impact, if any, that the adoptionof SAB 108 will have on its condensed interim financial statements.

 

In February 2007, theFASB issued SFAS 159, “The Fair ValueOption for Financial Assets and Financial Liabilities.” This statementpermits entities to choose to measure many financial instruments at fair value.Unrealized gains and losses on items for which option has been elected arereported in earnings. SFAS No. 159 is effective for fiscal years beginningafter November 15, 2007. The Company is currently assessing impact of SFAS 159on its condensed interim financial statements.

 

**NOTE D—OFFERING ANDOVER-ALLOTMENT**

** **

The Company offered20,000,000 units (“Units”) for public sale in May 2007. Each Unit consists ofone share of the Company’s common stock, $0.0001 par value, and two redeemablecommon stock purchase

 

8

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warrants (“Warrants”). Each Warrant entitles theholder to purchase from the Company one share of common stock at an exerciseprice of $5.00 commencing on the later of (a) one year from the date of thefinal prospectus for the Offering or (b) the completion of a BusinessCombination with a target business or the distribution of the Trust Account,and will expire four years from the date of such final prospectus. The Warrantswill be redeemable at a price of $0.01 per Warrant upon 30 days prior noticeafter the Warrants become exercisable, only in the event that the last saleprice of the common stock is at least $8.50 per share for any 20 trading dayswithin a 30 trading day period ending on the third business day prior to thedate on which notice of redemption is given.

 

NoWarrants will be exercisable and the Company will not be obligated to issueshares of common stock unless at the time a holder seeks to exercise suchWarrant, a prospectus relating to the common stock issuable upon exercise ofthe Warrants is current and the common stock has been registered or qualifiedor deemed to be exempt under the securities laws of the state of residence ofthe 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 the common stock issuable uponexercise of the Warrants until the expiration of the Warrants. However, if theCompany does not maintain a current prospectus relating to the common stockissuable upon exercise of the Warrants, holders will be unable to exercisetheir Warrants. In no circumstance will the Company be required to settle anysuch Warrant exercise for cash. 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 jurisdiction 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.

 

Shermen WSC Holding LLC (“Shermen WSC Holding”) has purchased5,214,286 Warrants (“Founder Warrants”) at $0.70 per Founder Warrant (for anaggregate purchase price of approximately $3,650,000) privately from theCompany in a private placement exempt from registration under Securities Act of1933, as amended. These purchases took place simultaneously with theconsummation of the Offering. All of the proceeds received from these purchaseswere placed in the Trust Account. The Founder Warrants purchased by Shermen WSCHolding are identical to the Warrants underlying the Units sold in the Offeringexcept that (i) the Company has no obligation to register the sale of theWarrants and the underlying shares of common stock and their exercise is notlimited by the absence of an effective registration statement and currentprospectus relating to the resale of the underlying shares of common stock and(ii) the Founder Warrants may be exercisable on a “cashless basis” if theCompany calls the Warrants for redemption. Shermen WSC Holding agreed that theFounder Warrants would not be transferable or salable by it or such directorsor officers or their respective affiliates until after the Company completed aBusiness Combination, except it may distribute them to its members. Immediatelyafter the purchase of the Founder Warrants, Shermen WSC Holding distributedthem to its members.

 

All shares of common stock owned by the initialstockholders 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 releasedfrom escrow until nine months following the consummation of a BusinessCombination.

 

9

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

 

On May30, 2007, the underwriters’ for the Offering exercised the full over-allotmentof 3,000,000 units. As a result, the deferred underwriters’ fee was increasedapproximately $432,000.

 

**NOTE E**—**COMMON STOCK**

 

On May23, 2007, the Company affected a 1.15 for 1 forward stock split of the InitialShares and issued 750,000 shares of its common stock, $0.0001 par value pershare, to the initial stockholders prior to the closing of both the Offeringand the over-allotment.

 

**NOTE F—RELATED PARTY TRANSACTIONS**

 

TheCompany issued a $150,000 unsecured promissory note to a stockholder, ShermenCapital Partners, LLC, on April 30, 2006 of which $75,000 was repaid onSeptember 27, 2007. The note is non-interest bearing and the final maturity isfive business days after twenty-four months after the date of the Offering, butto the extent that the Company’s working capital in any month, includingone-half of the interest earned on the Trust Account, net of taxes, that isreleased to the Company in that month, is greater than the Company’s currentexpenses in that month, all or a portion of such excess may be applied to aprepayment of the remaining $75,000 loan from Shermen Capital Partners, LLC.

 

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.

 

Certainof the directors and officers of the Company have purchased through Shermen WSCHolding, in a private placement, 5,214,286 Founder Warrants immediately priorto the Offering at a price of $0.70 per Founder Warrant (an aggregate purchaseprice of approximately $3,650,000) from the Company and not as part of theOffering. They have also agreed that these Founder Warrants purchased by themwill not be sold or transferred until completion of a Business Combination.

 

**NOTE G—COMMITMENTS**

** **

The Company is committedto paying an underwriting discount of 4% of the public Unit offering price tothe underwriters (less $0.21 for each share of common stock converted to cashin connection with a Business Combination) payable upon the Company’sconsummation of a Business Combination.

 

The Company has sold tothe underwriters, for $100, as additional compensation, an option to purchase

 

10

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up to a total of 700,000Units in the aggregate (350,000 Units to each underwriter) at a per-unit priceof $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 the Company’s common stock at aprice of $6.25. In no circumstance will the Company be required to settle anysuch option exercise for cash.

 

The sale of the option topurchase was accounted for as an equity transaction. Accordingly, there will beno net impact on the Company’s financial position or results of operations,except for the recording of the $100 proceeds from the sale.

 

The Company hasdetermined, based upon a Black-Scholes model, that the fair value of the optionon the date of sale would be approximately $0.60 per unit, or $420,000 intotal, using an expected life of four years, volatility of 52.13% and arisk-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 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 the Company’s commonstock post-business combination. Although an expected life of four years wastaken into account for purposes of assigning a fair value to the option, if theCompany does not consummate a business combination within the prescribed timeperiod and liquidates, the option would become worthless. Although the purchaseoption and its underlying securities have been registered under theregistration statement of which the prospectus forms a part of, the purchaseoption will provide for registration rights that will permit the holder of thepurchase option to demand that a registration statement will be filed withrespect to all or any part of the securities underlying the purchase optionwithin five years of the completion of the Offering. Further, the holders ofthe purchase option will be entitled to piggy-back registration rights in theevent the Company undertakes a subsequent registered offering within sevenyears of the completion of the Offering.

 

**NOTE H—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.

 

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**ITEM2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS**

 

Thefollowing discussion should be read in conjunction with our Condensed FinancialStatements and footnotes thereto contained in this Quarterly Report on Form10-Q.

 

**Forward LookingStatements**

** **

ThisQuarterly Report on Form 10-Q includes forward-looking statements within themeaning of Section 27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended. We have based theseforward-looking statements on our current expectations and projections aboutfuture events. These forward-looking statements are subject to known andunknown risks, uncertainties and assumptions about us that may cause our actualresults, levels of activity, performance or achievements to be materiallydifferent from any future results, levels of activity, performance or achievementsexpressed or implied by such forward-looking statements. In some cases, you canidentify forward-looking statements by terminology such as “may,” “should,” “could,”“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” orthe negative of such terms or other similar expressions. Factors that mightcause or contribute to such a discrepancy include, but are not limited to,those described in our other Securities and Exchange Commission (“SEC”)filings.

 

**Overview**

** **

Wewere formed on April 18, 2006 for the purpose of acquiring, through a merger,capital stock exchange, asset acquisition, stock purchase or other similarbusiness combination, an operating business in the agriculture industry.

 

On May30, 2007, we completed our initial public offering (“IPO”) of 23,000,000 units(“Units”). Each Unit consists of one share of our common stock, $0.0001 parvalue per share (“Common Stock”), and two warrants (“Warrants”), each topurchase one share of Common Stock at $5.00 per share. The public offeringprice of each Unit was $6.00, and we generated gross proceeds of $138,000,000in the IPO (including proceeds from the exercise of the underwriters’over-allotment option). Of the gross proceeds: (i) we deposited $133,210,000into a trust account (the “Trust Account”) at JP Morgan Chase NY Bank,maintained by Continental Stock Transfer & Trust Company as trustee, whichincluded $5,520,000 of deferred underwriting fees; (ii) the underwritersreceived $4,140,000 as underwriting fees (excluding the deferred underwritingfees); and (iii) we retained $607,900 for offering expenses. In addition, wedeposited into the Trust Account $3,650,000.20 that we received from theissuance and sale of 5,214,286 warrants (the “Founder Warrants”) to Shermen WSCHolding LLC, whose managing member is Shermen Capital Partners, LLC, an entitycontrolled by Francis P. Jenkins, Jr., our chairman and chief executiveofficer, on May 30, 2007.

 

Weintend to utilize cash derived from the proceeds of our initial publicoffering, our capital stock, debt or a combination of such cash, capital stockand debt, in effecting a business combination. The issuance of additionalshares of our capital stock:

 

•                                         maysignificantly reduce the equity interest of our stockholders;

 

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

 

•                                         will likelycause a change in control if a substantial number of shares of Common Stock areissued, which may affect, among other things, our ability to use our netoperating loss carry forwards, if any, and most likely will also result in theresignation or removal of our present officers and directors; and

 

•                                         may adverselyaffect prevailing market prices for our common stock.

 

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

 

12

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•                                         default andforeclosure on our assets if our operating revenues after a businesscombination are insufficient to pay our debt obligations;

 

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

 

•                                         our immediatepayment of all principal and accrued interest, if any, if the debt security ispayable on demand; and

 

•                                         our inabilityto obtain additional financing, if necessary, if the debt security containscovenants restricting our ability to obtain additional financing while suchsecurity is outstanding.

 

Weintend to use substantially all of the net proceeds of our initial publicoffering and the issuance and sale of the Founder Warrants, including the fundsheld in the trust account (excluding deferred underwriting discounts andcommissions), to acquire a target business. To the extent that our capitalstock is used in whole or in part as consideration to effect a businesscombination, the remaining proceeds held in the trust account as well as anyother net proceeds not expended will be used as working capital to finance theoperations of the target business. Such working capital funds could be used ina variety of ways including continuing or expanding the target businessoperations, for strategic acquisitions and for marketing, research anddevelopment of existing or new products. Such funds could also be used to repayany operating expenses or finders’ fees which we had incurred prior to thecompletion of our business combination if the funds available to us outside ofthe trust fund were insufficient to cover such expenses.

 

**Results of Operations,Financial Condition and Liquidity**

** **

ThroughSeptember 30, 2007, our efforts have been limited to organizational activities,activities relating to our initial public offering, activities relating toidentifying and evaluating prospective acquisition candidates, and activitiesrelating to general corporate matters; we have neither engaged in any operationsnor generated any revenues, other than interest income earned on the proceedsof our private placement and initial public offering.

 

Netincome totaled $582,921 and $566,890 for the nine months ended September 30,2007 and for the period from inception (April 18, 2006) to September 30, 2007,respectively.

 

Ouroperating expenses totaled $547,191 and $563,222 for the nine months endedSeptember 30, 2007 and for the period from inception (April 18, 2006) toSeptember 30, 2007, respectively.

 

We hadnet interest income earned on marketable securities and held in the TrustAccount of $1,899,572 for the nine months ended September 30, 2007 and for theperiod from inception (April 18, 2006) to September 30, 2007. Interest income,after up to $1,500,000 which may be released to us on a monthly basis, excludesearnings on funds held in the Trust Account associated with Common Stocksubject to possible conversion, and, except for amounts equal to any taxespayable by us relating to such interest earned, will not be released to us fromthe Trust Account until the earlier of the completion of a business combinationor the expiration of the time period during which we may complete a businesscombination.

 

Wehave provided for only an effective tax rate of slightly over 34% on a year andinception-to-date basis primarily because substantially all of the fundsdeposited in the Trust Account are exempt from federal, state and local taxes. Forthe nine months ended September 30, 2007 and for the period from inception to September,2007, there was no liability.

 

Weissued a $150,000 unsecured promissory note to one of our stockholders, ShermenCapital Partners, LLC, an entity controlled by Francis P. Jenkins, Jr., ourchairman and chief executive officer, on April 30, 2006, and we repaid $75,000of the principal amount of such unsecured promissory note on September 27, 2007with the portion of our working capital for the month of September 2007 thatwas greater than our current expenses in that month.

 

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As ofSeptember 30, 2007, we had approximately $476,819 of unrestricted cashavailable to us for our activities in connection with identifying andconducting due diligence of a suitable business combination, and for general corporatematters. The following table shows the total funds held in the trust accountthrough September 30, 2007:

 
| Net proceeds  from our initial public offering and private placement of the Founder  Warrants placed in trust |       | $               | 136,860,000 |   |
|---------------------------------------------------------------------------------------------------------------|------------|-----------------|-------------|--------|
| Total interest received  to date                                                                              |       | 1,899,572       |        |
| Less: total  interest disbursed to us for working capital through September 30, 2007                          |       | 851,265         |        |
| Less: total  taxes paid through September 30, 2007                                                            |       | 0               |        |
| Total funds held  in trust through September 30, 2007                                                         | ** ** | **137,908,307** | ** **  |

 

We believethat we will have sufficient funds to allow us to operate through May 24, 2009,assuming that a business combination is not consummated during that time. Approximately$1,500,000 of working capital over this time period will be funded from theinterest earned from the funds held in the Trust Account. Over this timeperiod, 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;

 

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

 

•                                          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.

 

**ITEM3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT 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 businesscombination, we will not be, exposed to risks associated with foreign exchangerates, commodity prices, equity prices or other market-driven rates or prices. Thenet proceeds of our initial public offering held in the Trust Account may beinvested by the trustee only in U.S. “government securities,” defined as anyTreasury Bill issued by the United States government having a maturity of onehundred and eighty days or less, or any open ended investment companyregistered under the Investment Company Act of 1940, as amended, that holdsitself out as a money market fund and bears the highest credit rating issued bya United States nationally recognized rating agency. Given our limited risk inour exposure to government securities and money market funds, we do not viewthe interest rate risk to be significant.

 

**ITEM4.   CONTROLS AND PROCEDURES**

 

Wemaintain disclosure controls and procedures that are designed to ensure thatinformation required to be disclosed in our 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 rulesand forms, and that such information is accumulated and communicated to ourmanagement, including our chief executive officer and chief financial 

 

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officer, as appropriate, to allow timely decisionsregarding required disclosure. In designing and evaluating the disclosurecontrols and procedures, management recognized that any controls andprocedures, no matter how well designed and operated, can provide onlyreasonable assurance of achieving the desired control objectives, andmanagement necessarily was required to apply its judgment in evaluating thecost-benefit relationship of possible controls and procedures.

 

Wecarried out an evaluation, under the supervision and with the participation ofour management, including our chief executive officer and chief financialofficer, of the effectiveness of the design and operation of our disclosurecontrols and procedures. Based on the foregoing, our chief executive officerand chief financial officer, concluded that our disclosure controls andprocedures (as defined in Rules 13a-15(e) and 15d-15(e) under the SecuritiesExchange Act) were effective as of the end of the fiscal quarter endedSeptember 30, 2007.

 

Therehave been no changes in our internal control over financial reporting duringthe fiscal quarter ended September 30, 2007 that have materially affected, orare reasonably likely to materially affect our internal control over financialreporting.

 

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**PARTII: OTHER INFORMATION**

 

**ITEM 1. LEGALPROCEEDINGS**

** **

None.

 

**ITEM 1A. RISKFACTORS**

** **

Therehave been no material changes to the risk factors disclosed under the caption “RiskFactors” beginning on page 17 of our Prospectus filed with the SEC on May 24,2007 relating to our Registration Statement on Form S-1 (File No. 333-133869).

 

**ITEM 2. UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

** **

Concurrentlywith the consummation of the IPO, on May 30, 2007, we consummated a privatesale of the Founder Warrants at a purchase price of $0.70 per Founder Warrant,generating total proceeds of $3,650,000.20. The Founder Warrants were purchasedby certain of our directors and officers through Shermen WSC Holding LLC whosemanaging member is Shermen Capital Partners, LLC, an entity controlled byFrancis P. Jenkins, Jr., our chairman and chief executive officer. The FounderWarrants are identical to the Warrants except that (i) if we call the Warrantsfor redemption, the Founder Warrants will be exercisable on a cashless basis;(ii) the Founder Warrants will not be transferable or salable by Shermen WSCHolding LLC or such directors or officers or their respective affiliates untilafter we have completed our initial business combination, except Sherman WSCHolding LLC may distribute them to its members; and (iii) the holders of theFounder Warrants and the Common Stock underlying such Founder Warrants areentitled to registration rights with respect to such securities under anagreement signed on May 30, 2007. Immediately after the purchase of the FounderWarrants, Shermen WSC Holding LLC distributed them to its members.

 

For adescription of the use of the proceeds of the private sale of the FounderWarrants, see Part I, Item 2 of this Quarterly Report on Form 10-Q.

 

**ITEM 3. DEFAULTSUPON SENIOR SECURITIES**

** **

None.

 

**ITEM 4. SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS**

** **

None.

 

**ITEM 5. OTHERINFORMATION**

** **

None.

 

**ITEM 6. EXHIBITS**

 
| **Exhibit  Number** | ** ** | **Exhibit Description**                                                                         | ** ** |
|---------------------|------------|------------------------------------------------------------------------------------------------------|------------|
|                |       |                                                                                                 |       |
| 31.1                |       | Certification of Chief Executive Officer, pursuant  to Section 302 of the Sarbanes-Oxley Act of 2002 |       |
| 31.2                |       | Certification of Chief Financial Officer, pursuant  to Section 302 of the Sarbanes-Oxley Act of 2002 |       |
| 32.1                |       | Certification of Chief Executive Officer, pursuant  to Section 906 of the Sarbanes-Oxley Act of 2002 |       |
| 32.2                |       | Certification of Chief Financial Officer, pursuant  to Section 906 of the Sarbanes-Oxley Act of 2002 |       |

 

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrantcaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

 
|                          | **SHERMEN WSC  ACQUISITION CORP.** |
|-------------------------------|------------------------------------|
|                          |                               |
|                          |                               |
|                          | /s/ Francis P. Jenkins, Jr.        |   |
|                          | Name:                              | Francis P. Jenkins, Jr. |
|                          | Title:                             | Chairman, Chief Executive Officer and |
|                          |                               | Director (Principal Executive Officer) |
|                          |                               |
|                          |                               |
|                          | /s/ John E. Toffolon, Jr.          |   |
|                          | Name:                              | John E. Toffolon, Jr. |
|                          | Title:                             | Chief Financial Officer and |
|                          |                               | Director (Principal Financial and |
|                          |                               | Accounting Officer) |
|                          |                               |
| Dated: November 14, 2007 |                               |
|                               |                                    |  |  |

 

17

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