**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

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**FORM 10-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 March 31, 2008**                                                        |
| ** ** | ** **                                                                                                    |
| 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 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.    Yes  x    No  o

 

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

 

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

 

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

 

Asof May 13, 2008, 28,750,000 shares of common stock, par value $ 0.0001 pershare, were issued and outstanding.

 

 

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**TABLEOF CONTENTS**

 

ShermenAcquisition Corp.

(a developmentstage enterprise)

 

**Contents**

 
| Part I:  FINANCIAL INFORMATION:                                                                            | 1      |
|-----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |
| Item 1  — Financial Statements:                                                                       | 1      |
|                                                                                                            |   |
| Condensed  Balance Sheets                                                                                       | 1      |
|                                                                                                            |   |
| Condensed Statements of Operations (Unaudited)                                                                  | 2      |
|                                                                                                            |   |
| Statement of Stockholders’ Equity (Unaudited)                                                              | 3      |
|                                                                                                            |   |
| Condensed  Statements of Cash Flows (unaudited)                                                                 | 4      |
|                                                                                                            |   |
| Notes  to Condensed Unaudited Interim Financial Statements                                                      | 5      |
|                                                                                                            |   |
| Item 2  — Management’s Discussion and Analysis of Financial Condition and Results of  Operations | 12     |
|                                                                                                            |   |
| Item 3  — Quantitative and Qualitative Disclosures About Market Risk                                  | 14     |
|                                                                                                            |   |
| Item 4  — Controls and Procedures                                                                     | 14     |
|                                                                                                            |   |
| Part II. OTHER INFORMATION                                                                                 | 16     |
|                                                                                                            |   |
| Item 1 — Legal Proceedings                                                                            | 16     |
|                                                                                                            |   |
| Item 1A — Risk Factors                                                                                | 16     |
|                                                                                                            |   |
| Item 2  — Unregistered Sales of Equity Securities and Use of Proceeds                                 | 16     |
|                                                                                                            |   |
| Item 3  — Defaults Upon Senior Securities                                                             | 16     |
|                                                                                                            |   |
| Item 4  — Submission of Matters to a Vote of Security Holders                                         | 16     |
|                                                                                                            |   |
| Item 5 — Other Information                                                                            | 16     |
|                                                                                                            |   |
| Item 6 — Exhibits                                                                                     | 16     |
|                                                                                                            |   |
| Signatures                                                                                                      | 17     |
|                                                                                                            |   |
| Certifications                                                                                                  |   |

 

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**PART I — FINANCIAL INFORMATION**

 

**ITEM 1.****                ****FINANCIALSTATEMENTS**

 

**SHERMEN WSC ACQUISITION CORP. (a corporation in the development stage)**

** **

**CONDENSED BALANCE SHEETS**

 
| ** **                                                                                                                                                                                                                                                              | ** ** | **March 31, 2008** | ** **  | **December 31, 2007** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|-------------|----------------------------|------------|
| ** **                                                                                                                                                                                                                                                              | ** ** | **(Unaudited)**         | ** **  | ** **                 | ** ** |
| **ASSETS**                                                                                                                                                                                                                                                              | ** ** | ** **              | ** **  | ** **                 | ** ** |
| **Current assets**                                                                                                                                                                                                                                                      | ** ** | ** **              | ** **  | ** **                 | ** ** |
| Cash                                                                                                                                                                                                                                                                    |       | $                       | —      |                       | $          | 160,949 |   |
| Prepaid expenses                                                                                                                                                                                                                                                        |       | 11,161                  |        | 30,286                     |       |
| **Total current assets**                                                                                                                                                                                                                                                |       | 11,161                  |        | 191,235                    |       |
| ** **                                                                                                                                                                                                                                                              | ** ** | ** **              | ** **  | ** **                 | ** ** |
| **Other assets**                                                                                                                                                                                                                                                        | ** ** | ** **              | ** **  | ** **                 | ** ** |
| Deferred taxes                                                                                                                                                                                                                                                          |       | 494,180                 |        | 401,120                    |       |
| Cash held in Trust Fund                                                                                                                                                                                                                                                 |       | 138,506,163             |        | 138,589,757                |       |
| **Total  assets**                                                                                                                                                                                                                                                       |       | $                       | 139,011,504 |                       | $          | 139,182,112 |   |
|                                                                                                                                                                                                                                                                    |       |                    |        |                       |       |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                          | ** ** | ** **              | ** **  | ** **                 | ** ** |
|                                                                                                                                                                                                                                                                    |       |                    |        |                       |       |
| **Current liabilities**                                                                                                                                                                                                                                                 | ** ** | ** **              | ** **  | ** **                 | ** ** |
| Accounts payable and accrued expenses                                                                                                                                                                                                                                   |       | $                       | 41,066      |                       | $          | 86,817 |   |
| Income tax payable                                                                                                                                                                                                                                                      |       | 403,150                 |        | 945,000                    |       |
| **Total current liabilities**                                                                                                                                                                                                                                           |       | 444,216                 |        | 1,031,817                  |       |
|                                                                                                                                                                                                                                                                    |       |                    |        |                       |       |
| **Long-term liabilities**                                                                                                                                                                                                                                               | ** ** | ** **              | ** **  | ** **                 | ** ** |
| Deferred underwriters’ fee                                                                                                                                                                                                                                         |       | 3,312,000               |        | 3,312,000                  |       |
| **Total liabilities**                                                                                                                                                                                                                                                   |       | 3,756,216               |        | 4,343,817                  |       |
|                                                                                                                                                                                                                                                                    |       |                    |        |                       |       |
| **Commitments**                                                                                                                                                                                                                                                         | ** ** | ** **              | ** **  | ** **                 | ** ** |
| ** **                                                                                                                                                                                                                                                              | ** ** | ** **              | ** **  | ** **                 | ** ** |
| **Common stock subject to redemption,**9,199,999 shares at redemption value                                                                                                                                                                                             |       | 54,743,994              |        | 54,743,994                 |       |
| **Deferred interest related to common stock  subject to possible redemption, net of taxes**                                                                                                                                                                             |       | 335,570                 |        | 352,985                    |       |
|                                                                                                                                                                                                                                                                    |       |                    |        |                       |       |
| **Stockholders’ equity**                                                                                                                                                                                                                                           | ** ** | ** **              | ** **  | ** **                 | ** ** |
| Preferred stock, $.0001 par value; 1,000,000 shares  authorized; none issued                                                                                                                                                                                            |       |                    |        |                       |       |
| Common stock,  $.0001 par value; 100,000,000 shares authorized; 28,750,000 shares issued and  outstanding as of March 31, 2008 (including 9,199,999 shares subject to  possible redemption) and 5,000,000 shares issued and outstanding at  December 31, 2007 |       | 2,875                   |        | 2,875                      |       |
| Additional paid-in capital                                                                                                                                                                                                                                              |       | 78,941,231              |        | 78,941,231                 |       |
| Income accumulated during the development stage                                                                                                                                                                                                                         |       | 1,231,618               |        | 797,210                    |       |
| **Total stockholders’ equity**                                                                                                                                                                                                                                     |       | 80,175,724              |        | 79,741,316                 |       |
| **Total  liabilities and stockholders’ equity**                                                                                                                                                                                                                    |       | $                       | 139,011,504 |                       | $          | 139,182,112 |   |

 

The accompanying notesare an integral part of these condensed financial statements

 

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**SHERMENWSC ACQUISITION CORP.**

**(acorporation in the development stage)**

 

**CONDENSEDSTATEMENTS OF OPERATIONS**

**(unaudited)**

 
| ** **                                                                 | ** ** | **Three  Months  Ended March  31, 2008** | ** ** | **Three  Months  Ended  March 31, 2007** | ** ** | **Period  from  April 18, 2006  (date of inception) to  March 31, 2008** | ** ** |
|----------------------------------------------------------------------------|------------|-----------------------------------------------|------------|-----------------------------------------------|------------|------------------------------------------------------------------------------------|------------|
| ** **                                                                 | ** ** | **(unaudited)**                               | ** ** | ** **                                    | ** ** | ** **                                                                         | ** ** |
| Revenue                                                                    |       | $                                             | —     |                                          | $          | —                                                                             |       | $ | — |   |
| Formation and operating expenses                                           |       | 187,189                                       |       | 4,446                                         |       | 1,073,725                                                                          |       |
| Loss from operations                                                       |       | (187,189                                      | )          | (4,446                                        | )          | (1,073,725                                                                         | )          |
| Interest income                                                            |       | 1,016,441                                     |       |                                          |       | 4,004,498                                                                          |       |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Income (loss) before provision for income taxes                            |       | 829,252                                       |       | (4,446                                        | )          | 2,930,773                                                                          |       |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Provision for income taxes                                                 |       | (412,259                                      | )          |                                          |       | (1,363,570                                                                         | )          |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Net income (loss) applicable to common shareholders                        |       | $                                             | 416,993    |                                          | $          | (4,446                                                                             | )          | $ | 1,567,203 |   |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Number of shares Subject to possible  redemption, basic & diluted |       | 9,199,999                                     |       |                                          |       | 3,955,742                                                                          |       |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Income per share, basic & diluted                                 |       | 0.04                                          |       |                                          |       | 0.40                                                                               |       |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Weighted average number of common shares  outstanding, basic               |       | 19,550,001                                    |       | 5,000,000                                     |       | 12,006,093                                                                         |       |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Net income (loss) per common share, basic                                  |       | $                                             | 0.02       |                                          | $          | (0.0009                                                                            | )          | $ | 0.13 |   |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Weighted average number of common shares outstanding, diluted              |       | 30,136,039                                    |       | 5,000,000                                     |       | 15,625,323                                                                         |       |
|                                                                       |       |                                          |       |                                          |       |                                                                               |       |
| Net income (loss) per common share, diluted                                |       | $                                             | 0.01       |                                          | $          | (0.0009                                                                            | )          | $ | 0.10 |   |

 

The accompanyingnotes are an integral part of these condensed financial statements

 

2

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**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**STATEMENTOF STOCKHOLDERS’ EQUITY**

 

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

 
| ** **                                                                                                         | ** ** | **Common  Shares** | ** ** | **Amount** | ** ** | **Additional  Paid-in  Capital** | ** ** | **Income  Accumulated  During the  Development  Stage** | ** ** | **Total  Stockholders’  Equity** | ** ** |
|--------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|------------|------------|----------------------------------|------------|---------------------------------------------------------|------------|---------------------------------------|------------|
| Balances at April 18, 2006                                                                                    |       | —             |       | $          | —     |                             | $          | —                                                  |       | $                                     | —     |   | $ | — |   |
| Sale of units  issued to Founders on May 1, 2006 at $0.005 per unit                                           |       | 5,750,000          |       | 575        |       | 24,425                           |       |                                                    |       | 25,000                                |       |
| Net (loss) applicable to common stockholders                                                                       |       |               |       |       |       |                             |       | (16,031                                                 | )          |                                  |       |
| Balance as of December 31, 2006                                                                               |       | 5,750,000          |       | $          | 575        |                             | $          | 24,425                                                  |       | $                                     | (16,031    | ) | $ | 25,000 |   |
| Sale of 23,000,000  units on May 30, 2007 at $6 per unit in the public offering                               |       | 23,000,000         |       | 2,300      |       | 137,997,700                      |       |                                                    |       | 138,000,000                           |       |
| Sale of warrants  issued to Founders on May 30, 2007 at $0.70 per warrant                                     |       |               |       |       |       | 3,650,000                        |       |                                                    |       | 3,650,000                             |       |
| Underwriting and offering fees and expenses                                                                        |       |               |       |       |       | (4,790,000                       | )          |                                                    |       | (4,790,000                            | )          |
| Proceeds from  public offering subject to possible redemption (9,199,999 shares common stock  at redemption value) |       |               |       |       |       | (54,743,994                      | )          |                                                    |       | (54,743,994                           | )          |
| Underwriters’  discount and offering costs related to public offering and over-allotment  option              |       |               |       |       |       | (3,196,900                       | )          |                                                    |       | (3,196,900                            | )          |
| Accretion of  trust account relating to common stock subject to possible redemption, net of  tax.                  |       |               |       |       |       |                             |       | (352,985                                                | )          | (352,985                              | )          |
| Net income applicable to common stockholder                                                                        |       |               |       |       |       |                             |       | 1,166,226                                               |       | 1,166,226                             |       |
| Balances at December 31, 2007                                                                                 |       | 28,750,000         |       | $          | 2,875      |                             | $          | 78,941,231                                              |       | $                                     | 797,210    |   | $ | 79,741,316 |   |
| Accretion of  trust account relating to common stock subject to possible redemption, net of  tax. (unaudited)      |       |               |       |       |       |                             |       | 17,415                                                  |       | 17,415                                |       |
| Net income  applicable to common stockholder (unaudited)                                                           |       |               |       |       |       |                             |       | 416,993                                                 |       | 416,993                               |       |
| Balances at March 31, 2008 (unaudited)                                                                        |       | 28,750,000         |       | $          | 2,875      |                             | $          | 78,941,231                                              |       | $                                     | 1,231,618  |   | $ | 80,175,724 |   |

 

The accompanyingnotes are an integral part of these condensed financial statements

 

3

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**SHERMENWSC ACQUISITION CORP**

**(acorporation in the development stage)**

 

**UNAUDITED CONDENSED STATEMENTS OFCASH FLOWS**

 
| ** **                                                                                           | ** ** | ** **              | ** ** | ** **              | ** ** | **April 18, 2006**              | ** ** |
|------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|-------------------------|------------|--------------------------------------|------------|
| ** **                                                                                           | ** ** | **Three Months**        | ** ** | **Three Months**        | ** ** | **(date of inception)**              | ** ** |
| ** **                                                                                           | ** ** | **Ended**               | ** ** | **Ended**               | ** ** | **through**                          | ** ** |
| ** **                                                                                           | ** ** | **March 31, 2008** | ** ** | **March 31, 2007** | ** ** | **March 31, 2008**              | ** ** |
| **Cash flows from operating activities:**                                                            | ** ** | ** **              | ** ** | ** **              | ** ** | ** **                           | ** ** |
| Net income (loss)                                                                                    |       | $                       | 416,993    |                    | $          | (4,446                               | )          | $ | 1,567,188 |   |
| Adjustments to  reconcile net income (loss) to net cash provided by (used in) operating  activities: |       |                    |       |                    |       |                                 |       |
| Deferred tax benefit                                                                                 |       | (93,060                 | )          |                    |       | (494,180                             | )          |
|                                                                                                 |       |                    |       |                    |       |                                 |       |
| **Changes in operating assets and liabilities:**                                                     | ** ** | ** **              | ** ** | ** **              | ** ** | ** **                           | ** ** |
| Prepaid expenses                                                                                     |       | 19,125                  |       |                    |       | (11,161                              | )          |
| Accounts payable and accrued expenses                                                                |       | (45,751                 | )          | 4,030                   |       | 41,066                               |       |
| Income tax payable                                                                                   |       | (541,850                | )          |                    |       | 403,150                              |       |
| **Cash provided by (used in) operating activities**                                                  |       | (244,543                | )          | (416                    | )          | 1,506,063                            |       |
|                                                                                                 |       |                    |       |                    |       |                                 |       |
| **Cash flows from investing activities:**                                                            | ** ** | ** **              | ** ** | ** **              | ** ** | ** **                           | ** ** |
| Cash held in Trust Fund                                                                              |       | 83,594                  |       |                    |       | (138,506,163                         | )          |
| **Cash provided by (used in) investing activities**                                                  |       | 83,594                  |       |                    |       | (138,506,163                         | )          |
|                                                                                                 |       |                    |       |                    |       |                                 |       |
| **Cash flows from financing activities:**                                                            | ** ** | ** **              | ** ** | ** **              | ** ** | ** **                           | ** ** |
| Proceeds from note payable, stockholder                                                              |       |                    |       |                    |       | 150,000                              |       |
| Payments for note payable, stockholder                                                               |       |                    |       |                    |       | (150,000                             | )          |
| Payments of offering costs                                                                           |       |                    |       |                    |       | (4,675,000                           | )          |
| Proceeds from sale of stock options                                                                  |       |                    |       |                    |       | 100                                  |       |
| Proceeds from issuance of common stock from the  Offering                                            |       |                    |       |                    |       | 141,675,000                          |       |
| **Net cash provided by financing activities**                                                        |       | —                  |       | —                  |       | 137,000,100                          |       |
|                                                                                                 |       |                    |       |                    |       |                                 |       |
| **Net decrease in cash**                                                                             |       | (160,949                | )          | (416                    | )          | —                               |       |
|                                                                                                 |       |                    |       |                    |       |                                 |       |
| **Cash****,**beginning of the period                                                                 |       | 160,949                 |       | 21,354                  |       | —                               |       |
|                                                                                                 |       |                    |       |                    |       |                                 |       |
| **Cash****,**end of the period                                                                       |       | $                       | —     |                    | $          | 20,938                               |       | $ | — |   |
|                                                                                                 |       |                    |       |                    |       |                                 |       |
| **Supplemental schedule of non-cash financing  activities:**                                         | ** ** | ** **              | ** ** | ** **              | ** ** | ** **                           | ** ** |
| Deferred  underwriters’ fees                                                                    |       | $                       | —     |                    | $          |        |       | $ | 3,312,000 |   |

 

The accompanyingnotes are an integral part of these condensed financial statements

 

 

4

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**SHERMENWSC ACQUISITION CORP.**

**(acorporation in the development stage)**

**(unaudited)**

 

**NOTES TOCONDENSED FINANCIAL STATEMENTS**

 

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

** **

ShermenWSC Acquisition Corp. (a corporation in the development stage) (the “Company”)was incorporated in Delaware on April 18, 2006. The Company was formed toacquire an operating business in the agriculture industry through a merger,capital stock exchange, asset acquisition, stock purchase or other similarbusiness combination. The Company has neither engaged in any operations norgenerated significant revenue to date, with the exception of interest incomeearned on cash held in the trust account as described below. The Company isconsidered to be in the development stage as defined in Statement of FinancialAccounting Standards (“SFAS”) No. 7, “Accounting and Reporting ByDevelopment Stage Enterprises,” and is subject to the risks associated withactivities of development stage companies. The Company has selected December 31stas its fiscal year end.

 

The Company’s managementhas broad discretion with respect to the specific application of the netproceeds of the initial offering of Units (as defined in Note D 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 effect a Business Combination. Since the closing of theOffering, at least 99.5% of the gross proceeds, after the payment of certainamounts to the underwriters for the Offering, are held in a trust account (“TrustAccount”) and invested in U.S. “government debt securities,” defined as anyTreasury Bill issued by the United States government having a maturity of onehundred and eighty  (180) days or less orany open ended investment company registered under the Investment Company Actof 1940 that holds itself out as a money market fund and bears the highestcredit rating issued by a United States nationally recognized rating agency,until the earlier of (i) the consummation of its first BusinessCombination or (ii) the distribution of the Trust Account as describedbelow. The remaining proceeds will be used to pay for business, legal andaccounting due diligence on prospective acquisitions and continuing general andadministrative expenses. The Company, after signing a definitive agreement forthe acquisition of a target business, will submit such transaction forstockholder approval. In the event that 40% or more of the outstanding commonstock of the Company (excluding, for this purpose, those shares of common stockof the Company issued prior to the Offering) vote against the BusinessCombination and exercise their conversion rights described below, the BusinessCombination will not be consummated. The stockholders who purchased Units inthe Offering (the “Public Stockholders”) and vote against a BusinessCombination will be entitled to convert their common stock into a pro ratashare of the Trust Account (including the additional 4% fee of the grossproceeds of the Offering payable to the underwriters for the Offering upon the Company’sconsummation of a Business Combination), including any interest earned (net oftaxes payable and the amount distributed to the Company to fund its workingcapital requirements) on their pro rata share, if the Business Combination isapproved and consummated. However, voting against the Business Combinationalone will not result in an election to exercise a Public Stockholder’sconversion rights. A Public Stockholder must also affirmatively exercise suchconversion rights at or prior to the time the Business Combination is votedupon by the stockholders.   If holders ofno more than approximately 39.99% of the shares sold in the Offering voteagainst a Business Combination and seek to exercise their conversion rights andsuch Business Combination is consummated, the stockholders who held shares ofcommon stock of the Company (the “Founding Stockholders”) have agreed toforfeit and return to the Company for cancellation a number of shares so thatthey will collectively own no more than 23.0% of the Company’s outstandingcommon stock upon consummation of such Business Combination (without givingeffect to any shares that may be issued in such Business Combination).  If the Company is unable to effect a BusinessCombination and liquidates, none of the Founding Stockholders will receive anyportion of the proceeds of the Offering held in the Trust Account to bedistributed to the Company’s stockholders with respect to common stock owned bythem immediately before the Offering.  Asof March 31, 2008, after giving effect to a 1.15 for 1 stock split whichwas effected immediately prior to the Offering, all of the FoundingStockholders, including all of the directors and officers of the Company, haveagreed to vote all of the shares of common stock of the Company held by them inaccordance with the vote of the majority in interest of all other stockholdersof the Company.

 

5

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**NOTE A—DESCRIPTION OFORGANIZATION AND BUSINESS OPERATIONS (continued)**

 

In theevent that the Company does not consummate a Business Combination within 18months from the date of the consummation of the Offering, or 24 months from theconsummation of the Offering if certain extension criteria have been satisfied,the proceeds held in the Trust Account will be distributed to the PublicStockholders, excluding the Founding Stockholders to the extent of theirinitial stock holdings. In the event of such distribution, it is likely thatthe per share value of the residual assets remaining available for distribution(including Trust Account assets) will be less than the initial public offeringprice per Unit in the Offering (assuming no value is attributed to the Warrantscontained in the Units offered in the Offering discussed in Note C).

 

**NOTE B — 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 fair presentationof the financial position as of March 31, 2008 and the financial resultsfor the three months ended March 31, 2008 and March 31, 2007 and fromApril 18, 2006 (date of inception) to March 31, 2008, in accordancewith accounting principles generally accepted in the United States of Americafor interim financial statements and pursuant to the instructions to theQuarterly Report on Form 10-Q and Article 10 of Regulation S-X of theSecurities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in theCompany’s annual audited financial statements have been condensed or omittedpursuant to such rules and regulations.

 

The results of operations for the three months ended March 31,2008 are not necessarily indicative of the results of operations to be expectedfor a full fiscal year.  These unaudited condensed financial statements should be read inconjunction with the audited financial statements for the fiscal year ended December 31,2007, which are included in the Company’s Annual Report on Form 10-K forthe year ended December 31, 2007 filed with the SEC.

 

**NOTE C—SUMMARY OF SIGNIFICANT 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 the accounting and disclosure provision ofSFAS No. 128, “Earnings Per Share.” SFAS No. 128 requires dualpresentation of basic and diluted income per common share for all periodspresented. Basic income per common share excludes dilution and is computed bydividing net income by the weighted average number of common shares outstandingfor the period. Diluted income per common share reflects the potential dilutionthat could occur if securities or other contracts to issue common stock wereexercised or converted into common stock or resulted in the issuance of commonstock that then share in the income of the Company. The difference between the numberof shares used to compute basic income per common share and diluted income percommon share relates to additional shares to be issued upon the assumedexercise of stock options and warrants, net of shares hypotheticallyrepurchased at the average market price with the proceeds of exercise.

 

The Company’s statementof operations includes a presentation of earnings per share for common stocksubject to possible redemption in a manner similar to the two-class method ofearnings per share. Basic and diluted net income per share amount for themaximum number of shares subject to possible redemption is calculated bydividing the net interest attributable to common shares subject to possibleredemption by the weighted average number of shares subject to possibleredemption.

 

6

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

** **

**Concentration of credit risk:**

 

Financialinstruments that potentially subject the Company to concentrations of creditrisk consist of cash accounts in a financial institution, which potentiallymay, in the future, exceed the Federal depository insurance coverage of$100,000.  The Company has notexperienced losses on these accounts and management believes the Company is notexposed to significant risks on such accounts.

 

**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 inIncome Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”).  There were no unrecognized tax benefits as ofas of March 31, 2008.  FIN 48prescribes 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, a tax position must bemore-likely-than-not to be sustained upon examination by taxingauthorities.  The Company recognizesaccrued interest and penalties related to unrecognized tax benefits as incometax expense.  No amounts were accrued forthe payment of interest and penalties at March 31, 2008.  Management is currently unaware of any issuesunder review that could result in significant payments, accruals or materialdeviation from its position.  Theadoption of the provisions of FIN 48 did not have a material impact on theCompany’s financial position and results of operation and cash flow.

 

Income tax expense forthe three months ended March 31, 2008 was approximately $412,000.  The expense is comprised of current federal,state and city income taxes of $505,000 and deferred federal, state and city incometaxes benefit of $93,000.  The effectivetax rate of 49% for the three months ended March 31, 2008, differs fromthe federal statutory rate of approximately 35% as a result of state and cityincome taxes.

 

Deferred income taxes areprovided for the differences between the bases of assets and liabilities forfinancial reporting and income tax purposes. As of March 31, 2008, the Company has a deferred tax asset ofapproximately $494,000 primarily attributable to deferred offering costs.

 

7

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

** **

**Recently IssuedAccounting Pronouncements:**

** **

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

 

In December 2007, the FASB issued SFAS No. 160,“*Noncontrolling Interests in Consolidated**Financial Statements — An Amendment of ARB No. 51*”(“SFAS 160”). SFAS 160 requires reporting entities to present noncontrolling(minority) interests as equity as opposed to as a liability or mezzanine equityand provides guidance on the accounting for transactions between an entity andnoncontrolling interests. SFAS 160 is effective the first fiscal year beginningafter December 15, 2008, and interim periods within that fiscal year. SFAS160 applies prospectively as of the beginning of the fiscal year SFAS 160 isinitially applied, except for the presentation and disclosure requirementswhich are applied retrospectively for all periods presented subsequent toadoption. The adoption of SFAS 160 will not have a material impact on the Company’sresults of operations or financial position; however, it could impact futuretransactions entered into by the Company.

 

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

 

**NOTE D—OFFERING ANDOVER-ALLOTMENT**

** **

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

 

No Warrants will be exercisableand the Company will not be obligated to issue shares of Common Stock unless atthe time a holder seeks to exercise such Warrant, a prospectus relating toCommon Stock issuable upon exercise of the Warrants is current and Common Stockhas been registered or qualified or deemed to be exempt under the securitieslaws of the state of residence of the holder of the Warrants.  Under the terms of the warrant agreement, theCompany has agreed to use its best efforts to meet these conditions and tomaintain a current prospectus relating to Common Stock issuable upon exerciseof the Warrants until the expiration of the Warrants.  However, if the Company does not maintain acurrent prospectus relating to Common Stock issuable upon exercise of theWarrants, holders will be unable to exercise their Warrants.  In no circumstance will the Company berequired to settle any such Warrant exercise for cash.  If the prospectus relating to Common Stockissuable upon the exercise of the Warrants is not current or if Common Stock isnot qualified or exempt from qualification in the jurisdiction in which theholders of the Warrants reside, the Warrants may have no value, the market forthe Warrants may be limited and the Warrants may expire worthless.

 

8

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**NOTE D—OFFERING ANDOVER-ALLOTMENT (continued)**

** **

Shermen WSC Holding LLC (“ShermenWSC Holding”) has purchased 5,214,286 Warrants (“Founder Warrants”) at $0.70per Founder Warrant (for an aggregate purchase price of approximately$3,650,000) from the Company in a private placement exempt from registrationunder Securities Act of 1933, as amended. These purchases took placesimultaneously with the consummation of the Offering. All of the proceedsreceived from these purchases were placed in the Trust Account. The FounderWarrants purchased by Shermen WSC Holding are identical to the Warrantsunderlying the Units sold in the Offering except that (i) the Company hasno obligation to register the sale of the Warrants and the underlying shares ofCommon Stock and their exercise is not limited by the absence of an effectiveregistration statement and current prospectus relating to the resale of theunderlying shares of Common Stock and (ii) the Founder Warrants may beexercisable on a “cashless basis” if the Company calls the Warrants forredemption. Shermen WSC Holding LLC agreed that the Founder Warrants would notbe transferable or salable by it or such directors or officers or theirrespective affiliates until after the Company completed a Business Combination,except it may distribute them to its members. Immediately after the purchase of the Founder Warrants, Shermen WSCHolding LLC distributed them to its members.

 

All shares of Common Stock owned by the FoundingStockholders prior to the closing of the Offering (the “Initial Shares”) wereplaced into an escrow account maintained by Continental Stock Transfer &Trust Company, acting as escrow agent. The Initial Shares will not be released from escrow until May 23,2010.

 

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

 

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

 

**NOTE E**—**COMMON STOCK**

 

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

 

**NOTE F—RELATED PARTY TRANSACTIONS**

 

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

 

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

 

9

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**NOTE G—FAIR VALUE MEASUREMENTS**

 

EffectiveJanuary 1, 2008, the Company implemented Statement of Financial AccountingStandard No. 157, Fair Value Measurement, or SFAS 157, for its financialassets and liabilities that are re-measured and reported at fair value at eachreporting period, and non-financial assets and liabilities that are re-measuredand reported at fair value at least annually. In accordance with the provisionsof FSP No. FAS 157-2, Effective Date of FASB Statement No. 157, theCompany has elected to defer implementation of SFAS 157 as it relates to itsnon-financial assets and non-financial liabilities that are recognized anddisclosed at fair value in the financial statements on a nonrecurring basisuntil January 1, 2009. The Company is evaluating the impact, if any, thisstandard will have on its non-financial assets and liabilities. The adoption ofSFAS 157 to the Company’s financial assets and liabilities and non-financialassets and liabilities that are re-measured and reported at fair value at leastannually did not have an impact on the Company’s financial results.

 

Thefollowing table presents information about the Company’s assets and liabilitiesthat are measured at fair value on a recurring basis as of March 31, 2008,and indicates the fair value hierarchy of the valuation techniques the Companyutilized to determine such fair value. In general, fair values determined byLevel 1 inputs utilize quoted prices (unadjusted) in active markets foridentical assets or liabilities. Fair values determined by Level 2 inputsutilize data points that are observable such as quoted prices, interest rates andyield curves. Fair values determined by Level 3 inputs utilize unobservabledata points for the asset or liability, and includes situations where there islittle, if any, market activity for the asset or liability (in millions):

 
| **Description**            | ** ** | **March 31,  2008** | ** ** | **Quoted  Prices  in  Active  Markets  (Level 1)** | ** ** | **Significant  Other  Observable  Inputs  (Level 2)** | ** ** | **Significant  Unobservable  Inputs  (Level 3)** | ** ** |
|----------------------------|------------|--------------------------|------------|----------------------------------------------------|------------|-------------------------------------------------------|------------|--------------------------------------------------|------------|
|                       |       |                     |       |                                               |       |                                                  |       |                                             |       |
| Assets:                    |       |                     |       |                                               |       |                                                  |       |                                             |       |
| Cash                       |       | $                        | —     |                                               | $          | —                                                |       | $                                                | —     |   | $ | — |   |
| Cash held in trust account |       | 138.5                    |       | 138.5                                              |       | —                                                |       | —                                           |       |
|                       |       |                     |       |                                               |       |                                                  |       |                                             |       |
| Total                      |       | $                        | 138.5      |                                               | $          | —                                                |       | $                                                | —     |   | $ | — |   |

 

Thefair values of the Company’s cash and cash held in the Trust Account aredetermined through market, observable and corroborated sources. The carryingamounts reflected in the condensed balance sheets for other current assets andaccrued expenses approximate fair value due to their short-term maturities.

 

**NOTE H—COMMITMENTS**

** **

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

 

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

 

10

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**NOTE H—COMMITMENTS (continued)**

 

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

 

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

 

The volatilitycalculation of 52.13% is based on the average 90-day Bloomberg volatility of aportfolio of nine publicly traded U.S. agricultural companies with marketcapitalizations between $50,000,000 and $500,000,000. Because the Company doesnot have a trading history, the Company needed to estimate the potentialvolatility of Common Stock price, which will depend on a number of factorswhich cannot be ascertained at this time. The Company referred to the Index because management believes that theaverage volatility is a reasonable benchmark to use in estimating the expectedvolatility of Common Stock 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, this option would become worthless.  Although this option and its underlyingsecurities have been registered under the registration statement of which theprospectus forms a part of, this option will provide for registration rightsthat will permit the holder of this option to demand that a registrationstatement will be filed with respect to all or any part of the securities underlyingthis option within five years of the completion of the Offering.  Further, the holders of this option will beentitled to piggy-back registration rights in the event the Company undertakesa subsequent registered offering within seven years of the completion of theOffering.

 

**NOTE I—Preferred Stock**

 

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

 

11

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** **

**ITEM 2.****                    ****MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS**

 

Thefollowing discussion should be read in conjunction with our Condensed UnauditedInterim Financial Statements and notes thereto contained in this Quarterly Reporton Form 10-Q.

 

**Forward LookingStatements**

** **

ThisQuarterly Report on Form 10-Q includes forward-looking statements withinthe meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended.  We have based these forward-lookingstatements on our current expectations and projections about futureevents.  These forward-looking statementsare subject to known and unknown risks, uncertainties and assumptions about usthat may cause our actual results, levels of activity, performance orachievements to be materially different from any future results, levels ofactivity, performance or achievements expressed or implied by suchforward-looking statements.  In somecases, you can identify forward-looking statements by terminology such as “may,”“should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”“continue,” or the negative of such terms or other similar expressions.  Factors that might cause or contribute tosuch a discrepancy include, but are not limited to, those described in ourother Securities and Exchange Commission (“SEC”) filings.

 

**Overview**

** **

Wewere formed on April 18, 2006 for the purpose of acquiring, through amerger, capital stock exchange, asset acquisition, stock purchase or othersimilar business combination, an operating business in the agricultureindustry.

 

On May 30,2007, we completed our initial public offering (“IPO”) of 23,000,000 units (“Units”).  Each Unit consists of one share of our commonstock, $0.0001 par value per share (“Common Stock”), and two warrants (“Warrants”),each to purchase one share of Common Stock at $5.00 per share.  The public offering price of each Unit was$6.00, and we generated gross proceeds of $138,000,000 in the IPO (includingproceeds from the exercise of the underwriters’ over-allotment option).  Of the gross proceeds: (i) we deposited$133,210,000 into a trust account (the “Trust Account”) at JP Morgan Chase NYBank, maintained by Continental Stock Transfer & Trust Company astrustee, which included $5,520,000 of deferred underwriting fees; (ii) theunderwriters received $4,140,000 as underwriting fees (excluding the deferredunderwriting fees); and (iii) we retained $607,900 for offeringexpenses.  In addition, we deposited intothe Trust Account $3,650,000.20 that we received from the issuance and sale of5,214,286 warrants (the “Founder Warrants”) to Shermen WSC Holding LLC, whosemanaging member is Shermen Capital Partners, LLC, an entity controlled byFrancis P. Jenkins, Jr., our chairman and chief executive officer, on May 30,2007 in a private placement exempt from registration under Securities Act of1933, as amended.

 

Aftercompletion of the IPO, we began contacting investment bankers, private equityfirms and other business contacts in order to generate ideas about a suitablebusiness combination. We also received unsolicited inquiries from severalinvestment banking firms, private equity firms and other businessintermediaries. We informed these contacts that we were seeking an operatingbusiness for our initial business combination.  We did not retain aninvestment banking firm or fairness or valuation advisor to conduct a formalsearch for a business combination. Criteria for suitability included our management’sassessment of the competitive strengths and weaknesses of the potentialbusiness targets, the strength of the management team, and the quality of theassets to be acquired.  Certain targets were considered by management tohave too great a level of business risk due to poor asset quality or poor orerratic financial results.

 

Weintend to utilize cash derived from the proceeds of the IPO, our capital stock,debt or a combination of such cash, capital stock and debt, in effecting abusiness combination.  The issuance ofadditional shares of our capital stock:

 

·                                          maysignificantly reduce the equity interest of our stockholders;

 

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

 

12

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

 

·                                          mayadversely affect prevailing market prices for our common stock.

 

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

 

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

 

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

 

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

 

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

 

Weintend to use substantially all of the net proceeds of the IPO and the issuanceand sale of the Founder Warrants, including the funds held in the trust account(excluding deferred underwriting discounts and commissions), to acquire atarget business.  To the extent that ourcapital stock is used in whole or in part as consideration to effect a 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.  Suchworking capital funds could be used in a variety of ways including continuingor expanding the target business operations, for strategic acquisitions and formarketing, research and development of existing or new products.  Such funds could also be used to repay anyoperating 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**

** **

ThroughMarch 31, 2008, our efforts have been limited to organizationalactivities, activities relating to the IPO, activities relating to identifyingand evaluating prospective acquisition candidates, and activities relating togeneral corporate matters; we have neither engaged in any operations norgenerated any revenues, other than interest income earned on the proceeds ofthe IPO and our private placement of the Founder Warrants.

 

Netincome (loss) totaled $416,993, which consisted of $1,016,441of interest incomefrom the Trust Account offset by $187,189 of formation and operating expensesand $412,259 of provision for income taxes, and $(4,446), which consisted of$4,446 of formation and operating expenses, for the three months ended March 31,2008 and March 31, 2007, respectively. Net income for the period from inception (April 18, 2006) to September 30,2007, totaled $1,567,203, which consisted of $4,004,498 of interest income fromthe Trust Account offset by $1,073,725 of formation and operating expenses and$1,363,570 of provision for income taxes.

 

Interestincome from the Trust Account, after up to $1,500,000 which may be released tous on a monthly basis, excludes earnings on funds held in the Trust Accountassociated with Common Stock subject to possible conversion, and, except foramounts equal to any taxes payable by us relating to such interest earned, willnot be released to us from the Trust Account until the earlier of thecompletion of a business combination or the expiration of the time periodduring which we may complete a business combination.

 

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Wehave provided for only an effective tax rate of slightly over 49% on a year andinception-to-date basis primarily because substantially all of the fundsdeposited in the Trust Account are exempt from federal, state and localtaxes.  For the three months ended March 31,2008 and for the period from inception to March 31, 2008, our income taxliabilities were approximately $412,000 and $1,363,570, respectively.

 

As of March 31,2008, we had approximately $0 of unrestricted cash available to us for ouractivities in connection with identifying and conducting due diligence of asuitable business combination, and for general corporate matters.  The following table shows the total fundsheld in the Trust Account through March 31, 2008:

 
| 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                                                                               |       | 4,004,498       |        |
| Less: total interest disbursed to us for working  capital through March 31, 2008                         |       | 911,171         |        |
| Less: total taxes paid through March 31, 2008                                                            |       | 1,363,570       |        |
| Total funds held in trust through March 31,  2008                                                        | ** ** | **138,589,757** | ** **  |

 

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

 

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

 

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

 

·                                          duediligence and investigation of prospective target businesses;

 

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

 

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

 

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

 

**ITEM 3.****                    ****QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK**

 

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 inand, if we do not consummate a suitable business combination prior to theprescribed liquidation date of the Trust Account, we may not engage in, anysubstantive commercial business. Accordingly, we are not and, until such timeas we consummate a business combination, we will not be, exposed to risksassociated with foreign exchange rates, commodity prices, equity prices orother market-driven rates or prices.  Thenet proceeds of the IPO held in the Trust Account may be invested by thetrustee only in U.S. “government securities,” defined as any Treasury Billissued by the United States government having a maturity of one hundred andeighty days or less, or any open ended investment company registered under theInvestment Company Act of 1940, as amended, that holds itself out as a moneymarket fund and bears the highest credit rating issued by a United Statesnationally recognized rating agency. Given our limited risk in our exposure to government securities andmoney market funds, we do not view the interest rate risk to be significant.

 

**ITEM 4.****                ****CONTROLSAND 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, 

 

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summarized, and reported within the time periodsspecified in the SEC’s rules and forms, and that such information is accumulatedand communicated to our management, including our chief executive officer andchief financial officer, as appropriate, to allow timely decisions regardingrequired disclosure.  In designing andevaluating the disclosure controls and procedures, management recognized thatany controls and procedures, no matter how well designed and operated, canprovide only reasonable assurance of achieving the desired control objectives,and management 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 theforegoing, our chief executive officer and chief financial officer, concludedthat our disclosure controls and procedures (as defined in Rules 13a-15(e) and15d-15(e) under the Securities Exchange Act) were effective as of the endof the fiscal quarter ended March 31, 2008.

 

Therehave been no changes in our internal control over financial reporting duringthe fiscal quarter ended March 31, 2008 that have materially affected, orare reasonably likely to materially affect our internal control over financialreporting.

 

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**PART II:OTHER INFORMATION**

 

**ITEM 1.  LEGAL PROCEEDINGS**

** **

None.

 

**ITEM 1A.  RISK FACTORS**

** **

Therehave been no material changes to the risk factors disclosed under the caption “RiskFactors” beginning on page 14 of our Annual Report on Form 10-K filedwith the SEC on March 31, 2008.

 

**ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES ANDUSE OF PROCEEDS**

** **

Concurrentlywith the consummation of the IPO, on May 30, 2007, we consummated aprivate sale of the Founder Warrants at a purchase price of $0.70 per FounderWarrant, generating total proceeds of $3,650,000.20.  The Founder Warrants were purchased bycertain 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 Founder Warrants are identical to theWarrants except that (i) if we call the Warrants for redemption, theFounder Warrants will be exercisable on a cashless basis; (ii) the FounderWarrants will not be transferable or salable by Shermen WSC Holding LLC or suchdirectors or officers or their respective affiliates until after we havecompleted our initial business combination, except Sherman WSC Holding LLC maydistribute them to its members; and (iii) the holders of the FounderWarrants and the Common Stock underlying such Founder Warrants are entitled toregistration rights with respect to such securities under an agreement signedon May 30, 2007.  Immediately afterthe purchase of the Founder Warrants, Shermen WSC Holding LLC distributed themto 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.  DEFAULTS UPON SENIOR SECURITIES**

** **

None.

 

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

** **

None.

 

**ITEM 5.  OTHER INFORMATION**

** **

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: May 15, 2008

 

17

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