**UNITEDSTATES**

**SECURITIESANDEXCHANGECOMMISSION**

**Washington, DC 20549**

 

**FORM 10-Q**

 

| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                            SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------------------------------------|

 

For            the quarterly period ended June 30, 2007

 

or

 

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                            SECURITIES EXCHANGE ACT OF 1934 |
|---|---------------------------------------------------------------------------------------------------------------------|

 

Commission file number: 001-33342

 

_______________________

 

**SYMMETRY HOLDINGS INC.**

(Exact name of registrant as specified in its charter)

 

| **Delaware**                                                    |   | **20-4790836**                       |
|-----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of

incorporation or organization) |   | (I.R.S. Employer Identification No.) |
|                                                            |   |                                 |
| **28 W. 44th STREET**

**16th FLOOR**

**NEW YORK, NEW YORK**   |   | **10036**                            |
| (Address of principal executive offices)                        |   | (Zip Code)                           |

 

**(646) 429-1505**

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the Registrant (1) has filed all reports            required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12            months (or for such shorter period that the Registrant was required to file such            reports), and (2) has been subject to such filing requirements for the past 90 days.            YesxNoo

 

Indicate by check mark whether the Registrant is an accelerated filer            (as defined in Rule 12b-2 of the Exchange Act). YesoNox

 

Indicated by check mark whether the Registrant is a shell company (as            defined in Rule 12b-2 of the Exchange Act). YesxNoo

 

As of            August 7, 2007, 23,437,500 shares of the registrant’s common stock, par value            $0.001 per share, were outstanding.

             

**SYMMETRY HOLDINGS INC.**

**Table of Contents**

 

|                                                                                                                               | **Page** |
|------------------------------------------------------------------------------------------------------------------------------------|----------|
| **PART I – FINANCIAL INFORMATION**                                                                                           |
| **Item 1. Financial Statements**                                                                                                   | F-1      |
| Balance Sheets                                                                                                                     | F-1      |
| Statements of Income                                                                                                               | F-2      |
| Statements of Stockholders’ Equity                            (Deficit)                                                      | F-3      |
| Statement of Cash Flows                                                                                                            | F-4      |
| Notes to Consolidated Financial Statements                                                                                         | 1        |
| **Item 2. Management’s Discussion and Analysis of                            Financial Condition and Results of Operations** | 8        |
| **Item 3. Quantitative and Qualitative Disclosures                            about Market Risk**                                  | 14       |
| **Item 4. Controls and Procedures**                                                                                                | 14       |
| **PART II – OTHER INFORMATION**                                                                                              |
| **Item 1. Legal Proceedings**                                                                                                      | 15       |
| **Item 2. Unregistered Sales of Equity Securities and                            Use of Proceeds**                                 | 15       |
| **Item 3. Defaults upon Senior                            Securities**                                                             | 15       |
| **Item 4. Submission of Matters to a Vote of Security                            Holders**                                         | 15       |
| **Item 5. Other Information**                                                                                                      | 15       |
| **Item 6. Exhibits**                                                                                                               | 15       |
| **SIGNATURES**                                                                                                                     | 17       |
|                                                                                                                               |     |
|                                                                                                                               |
|                                                                                                                               |
|                                                                                                                                    |          |  |

 

 

 

 

 

 

**PART I – FINANCIAL INFORMATION**

**Item 1. Financial Statements.**

**SYMMETRY HOLDINGS INC.**

(a            development stage company)

**Balance Sheet**

 

|                                                                                                                                     |            | **June 30,** |        |          |   | **December 31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------|-----------------|--------------|-------------|---------------|--------|------------------|--------|
|                                                                                                                                     | **2007**        |         |        | **2006**      |   |
|                                                                                                                                     | **(Unaudited)** |         |        | **(Audited)** |   |
|                                                                                                                                     |            |              |        |          |   |                  |   |
| **ASSETS**                                                                                                                               |            |         |        |          |   |             |   |   |   |
| **Current assets:**                                                                                                                      |            |         |        |          |   |             |   |   |   |
| Cash                                                                                                                                     |            | $            | 2,449,385   |          |   |             | $      | 261,729 |   |
| Cash and cash equivalents held in trust                            accounts                                                              |            |         | 145,988,624 |          |   |             |   | — |   |
| Restricted cash                                                                                                                          |            |         | 1,250,000   |          |   |             |   | — |   |
| Deferred offering costs                                                                                                                  |            |         | —     |          |   |             |   | 443,224 |   |
| Deferred acquisition costs                                                                                                               |            |         | 1,205,930   |          |   |             |   | — |   |
| Prepaid and other assets                                                                                                                 |            |         | 166,536     |          |   |             |   | 9,301 |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **Total current assets**                                                                                                                 |            |         | 151,060,475 |          |   |             |   | 714,254 |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **Fixed assets**                                                                                                                         |            |         |        |          |   |             |   |   |   |
| Equipment                                                                                                                                |            |         | 29,411      |          |   |             |   | — |   |
| Accumulated Depreciation                                                                                                                 |            |         | (2,742      | )             |   |             |   | — |   |
|                                                                                                                                     |            |              |             |               |   |             |        |  |   |
| **Total fixed assets**                                                                                                                   |            |         | 26,669      |          |   |             |   | — |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **Other assets**                                                                                                                         |            |         |        |          |   |             |   |   |   |
| Other Assets                                                                                                                             |            |         | 47,779      |          |   |             |   | — |   |
| Deferred Taxes                                                                                                                           |            |         | 336         |          |   |             |   | — |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **Total other assets**                                                                                                                   |            |         | 48,115      |          |   |             |   | — |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **Total Assets**                                                                                                                         |            | $            | 151,135,259 |          |   |             | $      | 714,254 |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY                            (DEFICIT)**                                                      |            |         |        |          |   |             |   |   |   |
| **Current                            liabilities**:                                                                                      |            |         |        |          |   |             |   |   |   |
| Accrued expenses                                                                                                                         |            | $            | 1,164,064   |          |   |             | $      | 357,165 |   |
| Note payable, related party                                                                                                              |            |         | —     |          |   |             |   | 500,000 |   |
| Deferred underwriting fees                                                                                                               |            |         | 6,000,000   |          |   |             |   | — |   |
| Accrued Taxes                                                                                                                            |            |         | 636,431     |          |   |             |   | — |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **Total current liabilities**                                                                                                            |            |         | 7,800,495   |          |   |             |   | 857,165 |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |
| **Stockholders’ Equity (Deficit)**                                                                                                 |            |         |        |          |   |             |   |   |   |
| Preferred stock: $.001 par value; authorized 10,000,000                            shares; none issued and outstanding                   |            |         | —     |          |   |             |   | — |   |
| Common stock, $.001 par value; authorized 100,000,000                            shares; issued and outstanding 23,437,500 and 4,687,500 |            |         | 23,437      |          |   |             |   | 4,687 |   |
| Additional paid-in-capital                                                                                                               |            |         | 142,341,524 |          |   |             |   | — |   |
| Retained earnings (deficit accumulated) during the                            development stage                                          |            |         | 969,803     |          |   |             |   | (147,598 | ) |
|                                                                                                                                     |            |              |             |          |   |             |        |  |  |
| **Total stockholders’ equity                            (deficit)**                                                                |            |         | 143,334,764 |          |   |             |   | (142,911 | ) |
|                                                                                                                                     |            |              |             |          |   |             |        |  |  |
| **Total liabilities and stockholders’ equity                            (deficit)**                                                |            | $            | 151,135,259 |          |   |             | $      | 714,254 |   |
|                                                                                                                                     |            |              |             |          |   |             |        |  |   |

 

See            Accompanying Notes to Financial Statements

 

|   | F-1 |
|--------|-----|

 

**SYMMETRY HOLDINGS INC.**

(a            development stage company)

**Statements of Income**

**(unaudited)**

 

 

|                                                                                     |   |   |   | **Three months****ended****June 30, 2007** |       |   |   | **From the period****April 26, 2006****(date of inception)****through****June 30, 2006** |   |      |   | **Six months****ended****June 30, 2007** |   |   |       | **From the period****April 26, 2006****(date of inception)****through****June 30, 2006** |   |   |   | **From the period****April 26, 2006****(date of inception)****through****June 30, 2007** |   |
|------------------------------------------------------------------------------------------|--------|--------|--------|--------------------------------------------|------------|--------|--------|------------------------------------------------------------------------------------------|--------|-----------|--------|------------------------------------------|--------|--------|------------|------------------------------------------------------------------------------------------|--------|--------|--------|------------------------------------------------------------------------------------------|--------|
| Formation and operating costs                                                            |   |   |   | $                                          | (467,596   | )      |   |                                                                                     | $      | (13,878   | )      |                                     |   | $      | (579,035   | )                                                                                        |   |   | $      | (13,878                                                                                  | )      |   |   | $ | (723,307 | ) |
|                                                                                     |   |   |   |                                            |            |        |   |                                                                                     |        |           |        |                                     |   |        |            |                                                                                          |   |   |        |                                                                                          |        |   |   |  |  |  |
| Loss before interest expense and income taxes                                            |   |   |   |                                       | (467,596   | )      |   |                                                                                     |   | (13,878   | )      |                                     |   |   | (579,035   | )                                                                                        |   |   |   | (13,878                                                                                  | )      |   |   |   | (723,307 | ) |
|                                                                                     |   |   |   |                                            |            |        |   |                                                                                     |        |           |        |                                     |   |        |            |                                                                                          |   |   |        |                                                                                          |        |   |   |  |  |  |
|                                                                                     |   |   |   |                                       |       |   |   |                                                                                     |   |      |   |                                     |   |   |       |                                                                                     |   |   |   |                                                                                     |   |   |   |   |   |   |
| Interest income (expense), net                                                           |   |   |   |                                       | 1,912,715  |   |   |                                                                                     |   | (875      | )      |                                     |   |   | 2,332,531  |                                                                                     |   |   |   | (875                                                                                     | )      |   |   |   | 2,329,205 |   |
| Income tax                                                                               |   |   |   |                                       | (512,740   | )      |   |                                                                                     |   | —   |   |                                     |   |   | (636,095   | )                                                                                        |   |   |   | —                                                                                  |   |   |   |   | (636,095 | ) |
|                                                                                     |   |   |   |                                            |            |        |   |                                                                                     |        |           |   |                                     |   |        |            |                                                                                          |   |   |        |                                                                                          |   |   |   |  |  |  |
| Net income (loss)                                                                        |   |   |   | $                                          | 932,379    |   |   |                                                                                     | $      | (14,753   | )      |                                     |   | $      | 1,117,401  |                                                                                     |   |   | $      | (14,753                                                                                  | )      |   |   | $ | 969,803 |   |
|                                                                                     |   |   |   |                                            |            |   |   |                                                                                     |        |           |        |                                     |   |        |            |                                                                                     |   |   |        |                                                                                          |        |   |   |  |  |   |
|                                                                                     |   |   |   |                                       |       |   |   |                                                                                     |   |      |   |                                     |   |   |       |                                                                                     |   |   |   |                                                                                     |   |   |   |   |   |   |
| Net income (loss) per share – basic                                                |   |   |   | $                                          | 0.04       |   |   |                                                                                     | $      | 0.00      |   |                                     |   | $      | 0.07       |                                                                                     |   |   | $      | 0.00                                                                                     |   |   |   | $ | 0.10 |   |
|                                                                                     |   |   |   |                                            |            |   |   |                                                                                     |        |           |   |                                     |   |        |            |                                                                                     |   |   |        |                                                                                          |   |   |   |  |  |   |
| Net income (loss) per share – diluted                                              |   |   |   | $                                          | 0.03       |   |   |                                                                                     | $      | 0.00      |   |                                     |   | $      | 0.06       |                                                                                     |   |   | $      | 0.00                                                                                     |   |   |   | $ | 0.09 |   |
|                                                                                     |   |   |   |                                            |            |   |   |                                                                                     |        |           |   |                                     |   |        |            |                                                                                     |   |   |        |                                                                                          |   |   |   |  |  |   |
| Weighted average number of shares outstanding —                            basic   |   |   |   |                                       | 23,437,500 |   |   |                                                                                     |   | 4,687,500 |   |                                     |   |   | 16,186,119 |                                                                                     |   |   |   | 4,687,500                                                                                |   |   |   |   | 9,516,386 |   |
|                                                                                     |   |   |   |                                            |            |   |   |                                                                                     |        |           |   |                                     |   |        |            |                                                                                     |   |   |        |                                                                                          |   |   |   |  |  |   |
| Weighted average number of shares outstanding —                            diluted |   |   |   |                                       | 29,365,701 |   |   |                                                                                     |   | 4,687,500 |   |                                     |   |   | 19,860,971 |                                                                                     |   |   |   | 4,687,500                                                                                |   |   |   |   | 11,059,654 |   |
|                                                                                     |   |   |   |                                            |            |   |   |                                                                                     |        |           |   |                                     |   |        |            |                                                                                     |   |   |        |                                                                                          |   |   |   |  |  |   |

 

See            Accompanying Notes to Financial Statements

 

|   | F-2 |
|--------|-----|

 

**SYMMETRY HOLDINGS INC.**

(a            development stage company)

**Statements of Stockholders’ Equity (Deficit)**

**For the period from April 26, 2006 (date of inception)**

**through June 30, 2007**

**(unaudited)**

 

 

|                                                                 | Common Stock | Additional                        Paid-in Capital | Retained                        Earnings                        (Deficit                        Accumulated)                        During the                        Development                        Stage | Total      |
|-----------------------------------------------------------------|--------------|---------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
||
| Balance -                    April 30, 2006 (date of inception) |         |                                              |                                                                                                                                                                                                           | -          |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Common stock issued                    during the period        |         |                                              |                                                                                                                                                                                                           | 4,687,500  |   | $ | 4,687 |   |   | - |   |   | - |   | $ | 4,687 |   |
|                                                                 |              |                                                   |                                                                                                                                                                                                                |            |  |
|                                                                 |              |                                                   |                                                                                                                                                                                                                |            |  |  |  |  |  |  |
| Net loss                                                        |         |                                              |                                                                                                                                                                                                           | -          |   |   | - |   |   | - |   |   | (147,598 | ) |   | (147,598 | ) |
|                                                                 |              |                                                   |                                                                                                                                                                                                                |            |  |  |  |  |  |  |
| Balance at December 31,                    2006                 |         |                                              |                                                                                                                                                                                                           | 4,687,500  |   |   | 4,687 |   |   | - |   |   | (147,598 | ) |   | (142,911 | ) |
| Issuance of Warrants on                    March 5, 2007        |         |                                              |                                                                                                                                                                                                           | -          |   |   | - |   |   | 3,750,000 |   |   | - |   |   | 3,750,000 |   |
| Issuance of common stock                    on March 12,        |         |                                              |                                                                                                                                                                                                                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 2007, net of offering                    expenses               |         |                                              |                                                                                                                                                                                                           | 18,750,000 |   |   | 18,750 |   |   | 137,591,524 |   |   | - |   |   | 137,610,274 |   |
| Issuance of Warrants on                    June 21, 2007        |         |                                              |                                                                                                                                                                                                           | -          |   |   | - |   |   | 1,000,000 |   |   | - |   |   | 1,000,000 |   |
|                                                                 |              |                                                   |                                                                                                                                                                                                                |            |  |
|                                                                 |              |                                                   |                                                                                                                                                                                                                |            |  |  |  |  |  |  |
| Net income                                                      |         |                                              |                                                                                                                                                                                                           | -          |   |   | - |   |   | - |   |   | 1,117,401 |   |   | 1,117,401 |   |
|                                                                 |              |                                                   |                                                                                                                                                                                                                |            |  |  |  |  |  |  |
| Balance - June 30,                    2007                      |         |                                              |                                                                                                                                                                                                           | 23,437,500 |   | $ | 23,437 |   | $ | 142,341,524 |   | $ | 969,803 |   | $ | 143,334,764 |   |
|                                                                 |              |                                                   |                                                                                                                                                                                                                |            |  |  |  |  |  |  |

 

See            Accompanying Notes to Financial Statements

 

|   | F-3 |
|--------|-----|

 

**SYMMETRY HOLDINGS INC.**

(a            development stage company)

**Statements of Cash Flows**

**(unaudited)**

 

 

|                                                                                                           |   | **Six months****ended****June 30,****2007** |         |   |   | **For the period****from April****26, 2006****(inception) to****June 30,****2006** |   |    |   | **For the period****from April 26, 2006****(inception) to****June 30,****2007** |   |
|----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------------|--------|--------|------------------------------------------------------------------------------------|--------|---------|--------|---------------------------------------------------------------------------------|--------|
|                                                                                                           |   |                                             |         |   |   |                                                                                    |   |    |   |                                                                                 |   |
| **Cash flows from operating activities:**                                                                      |   |                                        |         |   |   |                                                                               |   |    |   |                                                                            |   |   |   |   |
| Net income                                                                                                     |   | $                                           | 1,117,401    |   |   |                                                                               | $      | (14,753 | )      |                                                                            |   | $ | 969,803 |   |
| **Adjustments to reconcile net loss to net cash                            provided by operating activities:** |   |                                        |         |   |   |                                                                               |   |    |   |                                                                            |   |   |   |   |
| Depreciation                                                                                                   |   |                                        | 2,742        |   |   |                                                                               |   | — |   |                                                                            |   |   | 2,742 |   |
| Deferred Taxes                                                                                                 |   |                                        | (336)        |   |   |                                                                               |   | — |   |                                                                            |   |   | (336) |   |
| (Increase) Decrease in other current assets                                                                    |   |                                        | (157,235     | )      |   |                                                                               |   | — |        |                                                                            |   |   | (166,536 | ) |
| Increase (Decrease) in accounts payable                                                                        |   |                                        | (82,249      | )      |   |                                                                               |   | 1,412   |   |                                                                            |   |   | 41,661 |  |
| Increase (Decrease) in accrued taxes                                                                           |   |                                        | 636,431      |   |   |                                                                               |   | — |   |                                                                            |   |   | 636,431 |   |
| (Increase) Decrease in other non-current                            assets                                     |   |                                        | (47,779      | )      |   |                                                                               |   | — |   |                                                                            |   |   | (47,779 | ) |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |   |                                                                            |   |  |  |   |
| **Net cash provided by (used in) operating                            activities**                             |   |                                        | 1,468,975    |   |   |                                                                               |   | (13,341 | )      |                                                                            |   |   | 1,435,986 |   |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |        |                                                                            |   |  |  |   |
| **Cash flows from investing activities**                                                                       |   |                                        |         |   |   |                                                                               |   |    |   |                                                                            |   |   |   |   |
| Cash held in trust                                                                                             |   |                                        | (143,700,000 | )      |   |                                                                               |   | — |   |                                                                            |   |   | (143,700,000 | ) |
| Increase in investments in trust                                                                               |   |                                        | (2,288,624   | )      |   |                                                                               |   | — |   |                                                                            |   |   | (2,288,624 | ) |
| Increase in investments in escrow                                                                              |   |                                        | (1,250,000   | )      |   |                                                                               |   | — |   |                                                                            |   |   | (1,250,000 | ) |
| Increase in acquisition                                                                                        |        |                                             | (83,527      | )      |        |                                                                                    |        | — |        |                                                                                 |        |  | (83,527 | ) |
| Purchase of equipment                                                                                          |   |                                        | (29,411      | )      |   |                                                                               |   | — |   |                                                                            |   |   | (29,411 | ) |
|                                                                                                           |   |                                             |              |        |   |                                                                               |        |         |   |                                                                            |   |  |  |  |
| **Net cash used in investing activities**                                                                      |   |                                        | (147,351,562 | )      |   |                                                                               |   | — |   |                                                                            |   |   | (147,351,562 | ) |
|                                                                                                           |   |                                             |              |        |   |                                                                               |        |         |   |                                                                            |   |  |  |  |
| **Cash flows from financing activities:**                                                                      |   |                                        |         |   |   |                                                                               |   |    |   |                                                                            |   |   |   |   |
| Gross proceeds from public offering - units                                                                    |   |                                        | 150,000,000  |   |   |                                                                               |   | — |   |                                                                            |   |   | 150,000,000 |   |
| Gross proceeds from private offerings -                            warrants                                    |   |                                        | 4,750,000    |   |   |                                                                               |   | — |   |                                                                            |   |   | 4,750,000 |   |
| Gross proceeds from private offering – common                            stock                           |   |                                        | —      |   |   |                                                                               |   | 4,687   |   |                                                                            |   |   | 4,687 |   |
| Payment of offering costs                                                                                      |   |                                        | (6,179,757   | )      |   |                                                                               |   | — |   |                                                                            |   |   | (6,389,726 | ) |
| Proceeds from notes payable – related                            party                                   |   |                                        | —      |   |   |                                                                               |   | 500,000 |   |                                                                            |   |   | 500,000 |   |
| Interest payable on note - related party                                                                       |   |                                        | —      |   |   |                                                                               |   | 1,875   |   |                                                                            |   |   | — |   |
| Payment of note payable – related party                                                                  |   |                                        | (500,000     | )      |   |                                                                               |   | — |   |                                                                            |   |   | (500,000 | ) |
|                                                                                                           |   |                                             |              |        |   |                                                                               |        |         |   |                                                                            |   |  |  |  |
| **Net cash provided by financing                            activities**                                       |   |                                        | 148,070,243  |   |   |                                                                               |   | 506,562 |   |                                                                            |   |   | 148,364,961 |   |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |   |                                                                            |   |  |  |   |
| **Net increase in cash**                                                                                       |   |                                        | 2,187,656    |   |   |                                                                               |   | 493,221 |   |                                                                            |   |   | 2,449,385 |   |
| **Cash, beginning of period**                                                                                  |   |                                        | 261,729      |   |   |                                                                               |   | — |   |                                                                            |   |   | — |   |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |   |                                                                            |   |  |  |   |
| **Cash, end of period**                                                                                        |   | $                                           | 2,449,385    |   |   |                                                                               | $      | 493,221 |   |                                                                            |   | $ | 2,449,385 |   |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |   |                                                                            |   |  |  |   |
| **Supplement Disclosures of Cash Flow                            Information:**                                |   |                                        |         |   |   |                                                                               |   |    |   |                                                                            |   |   |   |   |
| **Schedule of Non-cash Financing                            Transactions**                                     |   |                                        |         |   |   |                                                                               |   |    |   |                                                                            |   |   |   |   |
| Deferred underwriting fees and expenses                                                                        |   | $                                           | 6,000,000    |   |   |                                                                               | $      | 84,528  |   |                                                                            |   | $ | 6,000,000 |   |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |   |                                                                            |   |  |  |   |
| Accrued acquisition costs                                                                                      |   | $                                           | 1,122,903    |   |   |                                                                               | $      | — |   |                                                                            |   | $ | 1,122,903 |   |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |   |                                                                            |   |  |  |   |
| Cash paid for interest                                                                                         |   | $                                           | 17,137       |   |   |                                                                               | $      | — |   |                                                                            |   | $ | 17,137 |   |
|                                                                                                           |   |                                             |              |   |   |                                                                               |        |         |   |                                                                            |   |  |  |   |

 

 

See            Accompanying Notes to Financial Statements

 

|   | F-4 |
|--------|-----|

 

**Symmetry Holdings Inc.**

**(a            development stage company)**

 

**Notes to Financial Statements**

 

| **1.** | **BASIS OF PRESENTATION** |
|--------|---------------------------|

 

The accompanying interim financial statements of Symmetry Holdings Inc.            (the “Company”) should be read in conjunction with the financial statements            for the period ending December 31, 2006 and notes thereto contained in the            Company’s registration statement, effective March 6, 2007. The December 31, 2006            amounts were derived from the Company’s audited financial statements. The            financial statements presented herein are unaudited but, in the opinion of management,            include all necessary adjustments (which comprise only normal recurring items) required            for a fair statement of the financial position as of June 30, 2007 and December 31,            2006, and the related income statements for three months and six months ended June 30,            2007, April 26, 2006 (inception) to June 30, 2006 and April 26, 2006 (inception) to            June 30, 2007. However, interim results of operations may not be indicative of results            for the full fiscal year. The accompanying interim consolidated financial statements of            the Company have been prepared in conformity with accounting principles generally            accepted in the United States of America.

 

| **2.** | **ORGANIZATION AND BUSINESS OPERATIONS** |
|--------|------------------------------------------|

The Company was incorporated in Delaware on April 26, 2006 as a            development stage company formed for the purpose of acquiring, through a merger,            capital stock exchange, asset acquisition, stock purchase or other similar business            combination, one or more operating businesses. The Company’s initial efforts in            identifying target businesses has been focused on industrial, asset-based businesses,            based in North America, that are in, or are suppliers to, the basic industries sector.            All activity from April 26, 2006 (inception) through June 30, 2007, has been limited to            organizational activities, activities relating to the Company’s initial public            offering, activities relating to identifying and evaluating prospective acquisition            candidates, activities relating to general corporate matters and, since April 21, 2007,            discussions and negotiations with Novamerican Steel Inc. (“Novamerican”)            regarding an initial business combination. The Company has not engaged in any            operations nor generated any revenues, other than interest income earned on the            proceeds from the private placements and initial public offering. The Company has            selected December 31 as its fiscal year end.

The registration statement for the Company’s initial public            offering of units (as described in Note 4) (the “Offering”) was declared            effective on March 6, 2007. On March 7, 2007, the units began trading on the American            Stock Exchange under the symbol SHJ.U. On March 12, 2007, the Company’s Offering            of 18,750,000 units was consummated, generating aggregate gross proceeds of            $150,000,000. Net proceeds of $143,700,000, inclusive of deferred underwriting costs            (see Note 4), are being held in a trust account at JPMorgan Chase, N.A. maintained by            Continental Stock Transfer & Trust Company, as trustee. At June 30, 2007, the            balance of the trust was approximately $145,988,624 (or $145,352,529 net of $636,095            for federal, state, and local taxes, representing a conversion price per share for the            public stockholders of $7.75 per share). The trust funds are invested in            “government securities” within the meaning of, or money market funds            meeting the conditions of Rule 2a-7 promulgated under, the Investment Company Act of            1940, and will not be released until the earlier of (i) the consummation of the            Company’s initial business combination within the time period and on the terms            described in the Company’s amended and restated certificate of incorporation or            (ii) the Company’s dissolution and liquidation as described below. On April 4,            2007, the Company’s common stock and warrants began to trade separately under the            symbols SHJ and SHJ.WS, respectively.

The Company, after signing a definitive agreement for a business            combination, will submit such proposed transaction for stockholder approval. In the            event that stockholders owning 29.99999% or more of the shares of common stock included            in the units sold in the Offering both vote against the proposed

 

|   | 1 |
|--------|---|

 

business combination and exercise their conversion rights, the proposed            business combination will not be consummated. The Company’s existing stockholders            have agreed to vote all of their shares of common stock the same way as the majority of            the shares of common stock voted by other persons who acquired shares of common stock            included in the units sold in the Offering. After consummation of the initial business            combination, these arrangements will no longer be applicable.

The amended and restated certificate of incorporation of the Company and            the trust agreement signed in connection with the Offering provide that if the Company            does not consummate the initial business combination within 15 months after the closing            of the Offering (or within 24 months after such closing, if a letter of intent,            agreement in principle or definitive agreement has been executed within such 15-month            period and the business combination related thereto has not been consummated within            such 15-month period), the Company’s corporate purposes and powers will be            limited to actions and activities related to dissolution and winding up of its affairs,            including liquidation, and it will not be able to engage in any other business            activities. In the event of liquidation, the per share value of the residual assets            remaining available for distribution (including trust account assets) may be less than            the initial public offering price per share in the Offering (assuming no value is            attributed to the warrants contained in the units sold in the Offering).

On June 21, 2007, the Company and its wholly owned indirect subsidiary,            632422 N.B. LTD. (“Acquisitionco”), a corporation existing under the laws            of the Province of New Brunswick, entered into an arrangement agreement with            Novamerican Steel Inc. (“Novamerican”), a corporation existing under the            laws of Canada, to acquire all of the outstanding common shares of Novamerican in            exchange for cash by way of a court-approved statutory plan of arrangement under the            Canada Business Corporations Act (the “Acquisition”). Following completion            of the Acquisition, Novamerican will be a wholly owned indirect subsidiary of the            Company.The Acquisition is expected to be consummated in the second half of 2007,            subject to the approval of the Acquisition by the Company’s stockholders, the            approval of the arrangement by Novamerican’s stockholders, the receipt of            approval of the court pursuant to the Canada Business Corporations Act, and the            satisfaction of certain other conditions.

             

| **3.** | **SIGNIFICANT ACCOUNTING POLICIES** |
|--------|-------------------------------------|

The preparation of financial statements in conformity with accounting            principles generally accepted in the United States of America requires management to            make estimates and assumptions that affect the reported amount of assets and            liabilities at the date of the financial statements and the reported amount of expenses            during the reporting period. Actual results could differ from those            estimates.

The Company considers all highly liquid investments with original            maturities of three months or less to be cash equivalents.

Property and equipment are stated at cost and primarily consist of            office and computer equipment. Depreciation is typically computed using the            straight-line method over 3-5 years.

The Company has adopted Statement of Financial Accounting Statement No.            123R “Accounting for Stock-Based Compensation” and the fair value method of            valuing options. The Company does not currently have a stock-based compensation            plan.

The Company’s financial instruments consist primarily of cash,            cash and cash equivalents held in trust, restricted cash, and accounts payable.            Management believes that the carrying value of these assets and liabilities are            representative of their respective fair values.

Income per share is computed by dividing net income by the            weighted-average number of shares of common stock outstanding during the            period.

 

|   | 2 |
|--------|---|

 

The Company does not believe that any recently issued but not yet            effective accounting standards, if currently adopted, would have a material effect on            the accompanying financial statements.

The Company applies Statement of Financial Accounting Standards            (“SFAS”) No. 109, “Accounting for Income Taxes,” which            principally utilizes a balance sheet approach to provide for income taxes. Under this            method, deferred tax assets and liabilities are recognized for the expected future tax            consequences of net operating loss carryforwards and temporary differences between the            carrying amounts and the tax bases of assets and liabilities. A valuation allowance is            established when necessary to reduce deferred tax assets to the amount expected to be            realized.

In June 2006, FASB issued Interpretation No. 48 (“FIN            48”), “*Accounting for Uncertainty in Income Taxes            — an interpretation of FASB Statement No.* *109.*“ FIN 48 clarifies the            recognition threshold and measurement attribute for the financial statement recognition            and measurement of a tax position taken or expected to be taken in a tax return. Under            the guidelines of FIN 48, an entity should recognize a financial statement benefit for            a tax position if it determines that it is more likely than not that the position will            be sustained upon examination. The Company adopted FIN 48 as of January 1,            2007.

             

Management has evaluated and concluded that there are no significant            uncertain tax positions requiring recognition in the Company’s financial            statements as of January 1, 2007. The evaluation was performed for the initial tax year            ended December 31, 2006, the only year which is subject to examination for Federal and            state purposes as of June 30, 2007.

             

The Company elected to report interest and penalties related to            uncertain income tax positions as income tax expense.

 

| **4.** | **INITIAL PUBLIC OFFERING** |
|--------|-----------------------------|

On March 12, 2007, the Company consummated its offering of 18,750,000            units at an offering price of $8.00. Each unit consists of one share of the            Company’s common stock, $.001 par value, and one warrant. Accordingly, 18,750,000            of these public warrants were outstanding at June 30, 2007. Each warrant entitles the            holder to purchase from the Company one share of common stock, $.001 par value per            share, at an exercise price of $5.50 commencing on the later of (a) one year from the            effective date of the final prospectus relating to the Offering or (b) the consummation            of the Company’s initial business combination. The warrants will expire four            years from the date of the final prospectus. The Company may redeem the outstanding            warrants that constitute part of the units in the Offering, as well as the warrants            that were issued in the private placement (as described in Note 6), in whole, but not            in part, at a price of $.01 per warrant at any time after the warrants become            exercisable, upon a minimum of 30 days’ prior written notice of redemption, if            (and only if), the last sales price of the common stock equals or exceeds $11.00 per            share for any 20 trading days within a 30 day trading period ending three business days            before the Company sends the notice of redemption.

On April 4, 2007, the Company’s common stock and warrants started            trading separately under the symbols SHJ and SHJ.WS, respectively.

The public warrants will not be exercisable unless at the time of            exercise a prospectus relating to common stock issuable upon exercise of the warrants            is current and the common stock has been registered or qualified or exempt under the            securities laws of the state of residence of the holder of the warrants. Under the            terms of the warrant agreement, the Company has agreed to use its best efforts to            maintain a current prospectus relating to common stock issuable upon exercise of the            warrants until the expiration of the warrants. In no event shall the Company be liable            for, or any registered holder of any warrant be entitled to receive, (a) physical            settlement in securities unless the conditions and requirements set forth in the            warrant agreement have been satisfied or (b) any net cash settlement or other            consideration in lieu of physical settlement in securities. The warrants may be            deprived of any value and the market for the warrants may be limited if the prospectus            relating to the common stock issuable upon the exercise of the warrants is not current            or if the common stock is not qualified or exempt from qualification in the

 

|   | 3 |
|--------|---|

 

jurisdictions in which the holders of the warrants reside, and in such            event the warrants may expire worthless.

The Company agreed to pay the underwriters of the Offering fees equal to            7.0% of the gross proceeds; the underwriters have agreed to defer approximately 57% (or            $6,000,000) of their fees until consummation of the Company’s initial business            combination. The Company will pay the deferred fees out of the proceeds of the Offering            held in trust. If there is no initial business combination, such fees will not be paid            to the underwriters but will be part of the assets distributed to the stockholders            during the dissolution and liquidation of the Company.

| **5.** | **PER SHARE INFORMATION** |
|--------|---------------------------|

In accordance with SFAS No. 128, “Earnings Per Share,” basic            earnings per common share (“Basic EPS”) is computed by dividing the net            income by the weighted-average number of shares outstanding. Diluted earnings per            common share (“Diluted EPS”) is computed by dividing the net income by the            weighted-average number of common shares and dilutive common share equivalents then            outstanding. SFAS No. 128 requires the presentation of both Basic EPS and Diluted EPS            on the face of the Company’s Condensed Statements of Income.

The following table sets forth the computation of basic and diluted per            share information:

             

 

|                                                                                     |   | **Three months**

**ended June 30, 2007**              |   |   |   | **Six Months ended****June 30, 2007**                  |   |   |   | **For the period****from April 26, 2006****(inception) to****June 30, 2007** |   |
|------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|--------|--------|--------------------------------------------------------|--------|--------|--------|------------------------------------------------------------------------------|--------|
| Numerator:                                                                               |   |                                                   |   |   |   |                                                   |   |   |   |                                                                         |   |
| Net Income                                                                               | $      | 932,379                                                |   |   | $      | 1,117,401                                              |   |   | $      | 969,803                                                                      |   |
|                                                                                     |   |                                                        |   |   |   |                                                        |   |   |   |                                                                              |   |
|                                                                                     |   |                                                   |   |   |   |                                                   |   |   |   |                                                                         |   |
| Denominator:                                                                             |   |                                                   |   |   |   |                                                   |   |   |   |                                                                         |   |
| Weighted-average common shares outstanding                                               |   |  

23,437,500                                     |   |   |   |  

16,186,119                                     |   |   |   |  

9,516,386                                                            |   |
| Dilutive effect of warrants                                                              |   | 5,928,201                                              |   |   |   | 3,674,852                                              |   |   |   | 1,543,268                                                                    |   |
|                                                                                     |   |                                                        |   |   |   |                                                        |   |   |   |                                                                              |   |
| Weighted-average common shares outstanding, assuming                            dilution |   |  

                             

29,365,701 |   |   |   |  

                             

19,860,971 |   |   |   |  

                             

11,059,654                       |   |
|                                                                                     |   |                                                   |   |   |   |                                                   |   |   |   |                                                                         |   |
| Net Income Per Share:                                                                    |   |                                                   |   |   |   |                                                   |   |   |   |                                                                         |   |
|                                                                                     |   |                                                        |   |   |   |                                                        |   |   |   |                                                                              |   |
| Basic                                                                                    | $      | 0.04                                                   |   |   | $      | 0.07                                                   |   |   | $      | 0.10                                                                         |   |
|                                                                                     |   |                                                        |   |   |   |                                                        |   |   |   |                                                                              |   |
| Diluted                                                                                  | $      | 0.03                                                   |   |   | $      | 0.06                                                   |   |   | $      | 0.09                                                                         |   |
|                                                                                     |   |                                                        |   |   |   |                                                        |   |   |   |                                                                              |   |

 

| **6.** | **WARRANT PRIVATE PLACEMENTS** |
|--------|--------------------------------|

Certain of the Company’s founding stockholders purchased an            aggregate of 4,166,667 warrants in a private placement, which was consummated on March            5, 2007, at a price of $.90 per warrant, or an aggregate purchase price of $3,750,000.            Each warrant entitles the holder to purchase one share of common stock at a price of            $5.50 and is exercisable on the later of the consummation of the initial business            combination or March 7, 2008 until expiration on March 5, 2011 or earlier upon            redemption.

             

To further fund the Company’s working capital requirements, the            Company’s Chairman purchased, on June 21, 2007, in a private placement, 787,402            warrants for $1,000,000, or $1.27 per

 

|   | 4 |
|--------|---|

 

warrant, the volume-weighted average price for the 20 trading days prior            to the placement. Each warrant entitles the holder to purchase one share of common            stock at a price of $5.50 and is exercisable on the later of the consummation of the            initial business combination or March 7, 2008 until expiration on June 21, 2011 or            earlier upon redemption.

             

The Company intends to use these funds to cover its expenses, including            expenses incurred in identifying a target business and the negotiation and consummation            of its initial business combination. These warrants are identical to the warrants            included in the units contained in the public offering, except as otherwise necessary            to reflect the fact that they were sold in a private placement, to permit delivery of            unregistered shares upon exercise and permit net cashless exercise so as to, among            other reasons, permit tacking of holding periods under Rule 144. Subject to limited            exceptions (such as a transfer to relatives and trusts and controlled entities for            estate and tax planning purposes), these warrants are not transferable until            consummation of the Company’s initial business combination. The underwriters are            not entitled to any underwriting discounts or commissions on the sale of these            warrants.

             

| **7.** | **RESTRICTED CASH** |
|--------|---------------------|

Restricted cash is $1,250,000 held in escrow by our lawyers, Davies,            Ward, Phillips & Vineberg LLP, in connection with a portion of the reverse break            fee the Company may be required to pay to Novamerican in the event it does not receive            stockholder approval of the Acquisition.

| **8.** | **NOTE PAYABLE – RELATED PARTY** |
|--------|----------------------------------------|

On May 31, 2006, the Company borrowed $500,000 under a secured            promissory note from a director and stockholder. The note bore interest at a rate of            4.5% per annum, was secured by the assets of the Company and matured upon consummation            of the private placement of warrants to the founding stockholders. On March 5, 2007,            the Company repaid the loan of $500,000 and accrued interest of $17,137.

| **9.** | **DEFERRED OFFERING COSTS** |
|--------|-----------------------------|

Deferred offering costs consist of registration, accounting, legal and            other administrative expenses incurred through the balance sheet date that are related            to the Offering and charged to capital upon the receipt of proceeds from the            Offering.

| **10.** | **DEFERRED ACQUISITION COSTS** |
|---------|--------------------------------|

Deferred acquisition costs are primarily related to the due diligence            and arrangement agreement with Novamerican and consist primarily of legal, tax,            accounting and other administrative expenses, including travel and related expenses,            incurred through the balance sheet date.

| **11.** | **INCOME TAXES** |
|---------|------------------|

Income tax expense was $512,740 and $636,095 for the three and six            months ended June 30, 2007, respectively. The income tax expense represents the net            federal, state and local income tax estimates, primarily resulting from the income            earned on our Offering proceeds held in trust.

| **12.** | **STOCK SPLITS** |
|---------|------------------|

On June 26, 2006, the Company filed an amended and restated certificate            of incorporation with the Secretary of the State of Delaware in order to (i) increase            the number of shares of its common stock authorized by 99,999,000 shares to a total            number of authorized shares of 100,000,000, (ii) effect a stock split of its common            stock on a 5,000 for 1 basis, (iii) create a new class of preferred stock, to consist            of 10,000,000 shares, par value $0.001, (iv) designate the rights and preferences of            the common stock and the preferred stock and (v) integrate into one instrument all of            the provisions of its amended and restated certificate of incorporation, as            amended.

 

|   | 5 |
|--------|---|

 

On October 3, 2006, the Company filed an amended and restated            certificate of incorporation with the Secretary of the State of Delaware in order to,            among other things, (i) effect a reverse stock split of its common stock on a 4 for 5            basis, resulting in 3,750,000 shares issued and outstanding, and (ii) integrate into            one instrument all of the provisions of its amended and restated certificate of            incorporation, as amended.

On October 13, 2006, the Company filed an amended and restated            certificate of incorporation with the Secretary of the State of Delaware in order to,            among other things, (i) effect a reverse stock split of its common stock on a 5 for 6            basis, resulting in 3,125,000 shares issued and outstanding, and (ii) integrate into            one instrument all of the provisions of its amended and restated certificate of            incorporation, as amended.

On January 12, 2007, the Company filed an amended and restated            certificate of incorporation with the Secretary of the State of Delaware in order to,            among other things, (i) effect a stock split of its common stock on a 3 for 2 basis,            resulting in 4,687,500 shares issued and outstanding, and (ii) integrate into one            instrument all provisions of its amended and restated certificate of incorporation, as            amended.

             

| **13.** | **PREFERRED STOCK** |
|---------|---------------------|

The Company is authorized to issue 10,000,000 shares of preferred stock            with such designations, voting and other rights and preferences as may be determined            from time to time by the board of directors.

| **14.** | **COMMON STOCK RESERVED FOR ISSUANCE** |
|---------|----------------------------------------|

At June 30, 2007, the Company had reserved 23,704,069 shares of common            stock for issuance upon exercise of redeemable warrants.

| **15.** | **COMMITMENTS** |
|---------|-----------------|

On March 15, 2007, the Company entered into a 6 month lease for office            space at a rent of $4,500 per month.

If any of the parties terminates the arrangement agreement because the            Company’s stockholders do not approve the Acquisition, or if Novamerican            terminates the arrangement agreement because the Company has breached any of its            covenants or any of its representations and warranties in any material respect, then            the Company must immediately pay to Novamerican $1,250,000, and pay a further amount of            $3,750,000 upon distribution of, and from, the funds on deposit in the Company’s            trust account as promptly as practicable as part of (a) the dissolution and liquidation            of the Company or (b) the release of funds in the trust account upon the            Company’s consummation of its initial business combination, in each case in            accordance with the Company’s amended and restated certificate of incorporation            and all applicable laws.

| **16.** | **SUBSEQUENT EVENTS** |
|---------|-----------------------|

The completion of the Novamerican Acquisition and the other transactions            contemplated by the arrangement agreement are subject to various regulatory            requirements and approvals, including approval of the stockholders of Novamerican            holding at least 66 2/3% of votes cast at the special meeting of stockholders of            Novamerican, approval of the stockholders of the Company pursuant to its amended and            restated certificate of incorporation, the approval of the Acquisition pursuant to the            Investment Canada Act, the approval of the Acquisition under the Competition Act            (Canada) and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust            Improvements Act of 1976 (the “HSR Act”).

On July 9, 2007, the Company filed its preliminary proxy statement with            the U.S. Securities and Exchange Commission. On July 10, 2007, the Company and            Acquisitionco submitted its application for review with the Director of Investments in            accordance with the requirements of the Investment Canada Act. Such application is            under review by the Director of Investments. On July 12, 2007, the Company            and

 

|   | 6 |
|--------|---|

 

Acquisitionco filed a request for an advance-ruling certificate with the            Commissioner under the Competition Act (Canada). On July 20, 2007, the Company and            Acquisitionco received an advance-ruling certificate from the Competition Bureau,            providing their approval for the Acquisition to be completed. On July 24, 2007, the            Company and Acquisitionco filed Notification and Report Forms under the HSR Act with            the U.S. Department of Justice (the “DOJ”) and U.S. Federal Trade            Commission (the “FTC”) and requested early termination of the waiting            period. Such Notification and Report Forms and request for early termination of the            waiting period are under review by the DOJ and FTC.

|   | The filing fee’s                            associated with these filings totaled $291,155. |
|--------|---------------------------------------------------------------------------------------------------|

 

|   | 7 |
|--------|---|

 

**Item            2. Management’s Discussion and Analysis of Financial Condition and Results of            Operations.**

 

**FORWARD-LOOKING STATEMENTS**

The following discussion should be read in conjunction with our            Financial Statements and related Notes thereto included elsewhere in this            report.

This Quarterly Report on Form 10-Q includes forward-looking statements            within the meaning of Section 27A of the Securities Act of 1933, as amended, and            Section 21E of the Securities Exchange Act of 1934, as amended. We have based these            forward-looking statements on our current expectations and projections about future            events. These forward-looking statements are subject to known and unknown risks,            uncertainties and assumptions about us that may cause our actual results, levels of            activity, performance or achievements to be materially different from any future            results, levels of activity, performance or achievements expressed or implied by such            forward-looking statements. In some cases, you can identify forward-looking statements            by terminology such as “may,” “will,” “should,”            “could,” “would,” “expect,” “plan,”            “anticipate,” “believe,” “estimate,”            “continue,” “intend,” “project,”            “goal,” “potential,” “target,” and similar terms or            the negative of such terms. Factors that might cause or contribute to such a            discrepancy include, but are not limited to, those described in “Risk            Factors” contained in our filings with the Securities and Exchange Commission            (“SEC”), as well as by future decisions by us.

We have based the forward-looking statements included in this quarterly            report on Form 10-Q on information available to us on the date of this quarterly report            on Form 10-Q, and we assume no obligation to update any such forward-looking            statements. Although we undertake no obligation to revise or update any forward-looking            statements, whether as a result of new information, future events or otherwise, you are            advised to consult any additional disclosures that we may make directly to you or            through reports that we in the future may file with the SEC, including annual reports            on Form 10-K, quarterly reports on Form 10-Q and current reports on Form            8-K.

**MANAGEMENT’S DISCUSSION AND ANALYSIS**

**OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

The following Management’s Discussion and Analysis of Financial            Condition and Results of Operations should be read in conjunction with our financial            statements and the related notes and schedules thereto.

**Overview**

We are a development stage company organized under the laws of the State            of Delaware on April 26, 2006. We were formed for the purpose of acquiring one or            more operating businesses, through a merger, stock exchange, asset acquisition,            reorganization or similar business combination, and managing such businesses. Our            efforts have been limited to organizational activities, activities relating to our            initial public offering, activities relating to identifying and evaluating prospective            acquisition candidates, activities relating to general corporate matters and, since            April 21, 2007, discussions and negotiations with Novamerican Steel Inc. regarding a            possible business combination. We have neither engaged in any operations nor generated            any revenues, other than interest income earned on the proceeds of our private            placements and initial public offering. Since the consummation of our initial public            offering, we have been actively engaged in sourcing a suitable business combination            candidate. We have focused our search on industrial, asset-based businesses, based in            North America, that are in, or are suppliers to, the basic industries sector. We have            focused on potential target businesses with valuations between $110 million and $500            million. We have met with service professionals, other intermediaries and target            companies, to discuss with them our Company, the background of our management and our            combination preferences. In the course of these discussions, we have also spent time            explaining the capital structure of the initial public offering, the initial business            combination approval process, and the timeline under which we are operating before the            proceeds of the Offering are returned to investors. Our initial business combination            must be with one or more operating businesses, whose fair market value is, either            individually or collectively, equal to at least 80% of our net assets at the time of            the execution of a definitive agreement for such acquisition.

 

|   | 8 |
|--------|---|

 

We have engaged legal and financial advisors to assist us in connection            with due diligence investigations, structuring and negotiation of a business            combination and to assist us with our SEC reporting obligations and other public            company governance requirements.

On June 21, 2007, we and our wholly owned indirect subsidiary, 632422            N.B. LTD. (“Acquisitionco”), a corporation existing under the laws of the            Province of New Brunswick, entered into an arrangement agreement with Novamerican Steel            Inc. (“Novamerican”), a corporation existing under the laws of Canada, to            acquire all of the outstanding common shares of Novamerican in exchange for cash by way            of a court-approved statutory plan of arrangement under the Canada Business            Corporations Act (the “Acquisition”). Following completion of the            Acquisition, Novamerican will be a wholly owned indirect subsidiary of us.The            Acquisition is expected to be consummated in the second half of 2007, subject to the            approval of the Acquisition by our stockholders, the approval of the arrangement by            Novamerican’s stockholders, the receipt of approval of the court pursuant to the            Canada Business Corporations Act, and the satisfaction of certain other            conditions.

*Private Securities Offerings*

On March 5, 2007, we consummated a private placement of 4,166,667            warrants for $.90 per warrant, or an aggregate purchase price of $3,750,000, with            certain of our founding stockholders. The proceeds were used to repay the loan of            $500,000, plus interest of approximately $17,137, from a director and shareholder and            fund our operating expenses.

To further fund our working capital requirements, our Chairman            purchased, on June 21, 2007, in a private placement, 787,402 warrants for $1,000,000,            or $1.27 per warrant, the volume-weighted average price for the 20 trading days prior            to the placement. Each warrant entitles the holder to purchase one share of common            stock at a price of $5.50 and is exercisable on the later of the consummation of our            initial business combination or March 7, 2008 until expiration on June 21, 2011 or            earlier upon redemption.

 

*Public Securities Offerings*

On March 12, 2007, we consummated our initial public offering of            18,750,000 units, each consisting of one share of common stock, $.001 par value per            share, and one warrant to purchase one share of common stock at $5.50 per share. Our            common stock and warrants started trading separately as of April 4, 2007 under the            symbols SHJ and SHJ.WS, respectively.

The units were sold at an offering price of $8.00 per unit, generating            aggregate gross proceeds of $150,000,000. Our net proceeds from the sale of our units            were $137,700,000, after deducting offering expenses of approximately $1,800,000 and            underwriting discounts of $10,500,000. All such net proceeds, including the deferred            underwriters’ discount of $6,000,000, are held in trust. We also incurred            additional offering expenses, beyond those paid from the gross proceeds of the initial            public offering, of approximately $105,179. These expenses have been paid from our            general working capital and were primarily for travel and printing expenses.

*Results of Operations*

On April 6, 2007, we paid premiums of $220,000 associated with an            18-month directors and officers liability insurance policy.

For the period ended June 30, 2007, we have paid or incurred            approximately $1,205,930 in expenses for due diligence investigation of prospective            target businesses, legal and accounting fees for our SEC reporting obligations,            regulatory listing fees, insurance and other miscellaneous expenses. In addition            $1,250,000 is being held in escrow by our lawyers, Davies, Ward, Phillips &            Vineberg LLP, in connection with a reverse break fee we may be required to pay to            Novamerican in the event we do not receive stockholder approval of the Acquisition. We            have also accrued $512,740 for the three months ended June

 

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30,            2007 and $636,095 for the six months ended June 30, 2007, for the net federal, state,            and local income tax estimates as a result of, primarily, the interest income earned on            our Offering proceeds held in trust.

*Liquidity and Capital Resources*

At June 30, 2007, the balance of the trust was approximately            $145,988,624 (or $145,352,529 net of $636,095 for federal, state, and local taxes,            representing a conversion price per share for the public stockholders of $7.75 per            share). This includes interest income earned from March 12, 2007 through June 30, 2007,            of approximately $2,288,624.

At June 30, 2007, we had cash outside of the trust account of            approximately $2,449,385, an additional $1,250,000 of cash held in escrow by our            lawyers, Davies, Ward, Phillips & Vineberg LLP, in connection with a reverse break            fee we may be required to pay to Novamerican in the event we do not receive stockholder            approval of the Acquisition, cash held in the trust account of approximately            $145,988,624, accrued expenses of approximately $1,800,495 and total liabilities of            approximately $7,800,495 (which includes $6,000,000 of deferred underwriting discounts            held in trust). We believe that the funds available to us outside of the trust account            will be sufficient to allow us to consummate the Acquisition. Of the funds held outside            of the trust account, we anticipate using these funds to cover legal, accounting and            other third party expenses in connection with the due diligence investigation,            structuring and negotiation of a business combination, travel expenses, legal and            accounting expenses related to SEC and other regulatory filings and reporting            obligations, insurance and other miscellaneous expenses.

We intend to utilize the net proceeds of our Offering held in the trust            account (excluding $6,000,000 of deferred underwriting discounts), debt, and the            proceeds from a $15 million private placement of units to fund the Acquisition purchase            price.

**Recent Developments**

On June 21, 2007, we and our wholly-owned indirect subsidiary, 632422            N.B. LTD. (“Acquisitionco”), a corporation existing under the laws of the            Province of New Brunswick, entered into an arrangement agreement with Novamerican Steel            Inc. (“Novamerican”), a corporation existing under the laws of Canada, to            acquire all of the outstanding common shares of Novamerican in exchange for cash by way            of a court-approved statutory plan of arrangement under the Canada Business            Corporations Act (the “Acquisition”). Following completion of the            Acquisition, Novamerican will be a wholly-owned indirect subsidiary of us.The            Acquisition is expected to be consummated in the second half of 2007, subject to the            approval of the Acquisition by the Company’s stockholders, the approval of the            arrangement by Novamerican’s stockholders, the receipt of approval of the court            pursuant to the Canada Business Corporations Act, and the satisfaction of certain other            conditions.

*Regulatory Filings*

The completion of the Novamerican Acquisition and the other transactions            contemplated by the arrangement agreement are subject to various regulatory            requirements and approvals, including the approval of stockholders of Novamerican            holding at least 66 2/3% of votes cast at the special meeting of stockholders of            Novamerican, approval of our stockholders pursuant to our amended and restated            certificate of incorporation, the approval of the Acquisition pursuant to the            Investment Canada Act, the approval of the Acquisition under the Competition Act            (Canada) and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust            Improvements Act of 1976 (the “HSR Act”).

On July 9, 2007, we filed our preliminary proxy statement with the U.S.            Securities and Exchange Commission. On July 10, 2007, Acquisitionco and we submitted            out application for review with the Director of Investments in accordance with the            requirements of the Investment Canada Act. Such application is under review by the            Director of Investments. On July 12, 2007 Acquisitionco and we filed a request for an            advance-ruling certificate with the Commissioner under the Competition Act (Canada). On            July 20, 2007, Acquisitionco and we received an advance ruling certificate from the            Competition Bureau,

 

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providing their approval for the Acquisition to be completed. On July            24, 2007, Acquisitionco and we filed Notification and Report Forms under the HSR Act            with the U.S. Department of Justic (the “DOJ”) and U.S. Federal Trade            Commission (the “FTC”) and requested early termination of the waiting            period. Such Notification and Report Forms and request for early termination of the            waiting period are under review by the DOJ and FTC.

|   | The filing fees associated with these filings totaled                            $291,155. |
|--------|--------------------------------------------------------------------------------------------|

*Break Fee, Reverse Break Fee and Expense Reimbursement*

 

If any of the parties terminates the arrangement agreement because our            stockholders do not approve the Acquisition, or if Novamerican terminates the            arrangement agreement because we have breached any of our covenants or any of our            representations and warranties in any material respect, then we must immediately pay to            Novamerican $1,250,000, and pay a further amount of $3,750,000 upon distribution of,            and from, the funds on deposit in our trust account as promptly as practicable as part            of (a) our dissolution and liquidation or (b) the release of funds in our trust account            upon our consummation of our initial business combination, in each case in accordance            with our amended and restated certificate of incorporation and all applicable            laws.

             

If we terminate the arrangement agreement (a) because (i) the            Novamerican board of directors fails to recommend or withdraws, modifies or changes in            a manner adverse to us its approval or recommendation of the arrangement agreement, the            Acquisition or the shareholders resolution approving the Acquisition, (ii) the            Novamerican board of directors approves or recommends any other acquisition proposal            (as defined in the arrangement agreement), or (iii) an acquisition proposal shall have            been publicly made, announced or otherwise disclosed before the Novamerican            shareholders meeting and the Novamerican board of directors shall not have sent to            Novamerican shareholders a statement re-affirming the recommendation for the            Acquisition within 15 days (in the case of a take-over bid) or issued a press release            within 15 days disclosing that the Novamerican board of directors reaffirms its            recommendation of the Acquisition (in the case of an acquisition proposal that is not a            take-over bid), or (b) Novamerican terminates the arrangement agreement in order to            enter into a definitive agreement with respect to a superior proposal, then in any such            case Novamerican shall immediately pay to us $1,250,000, and, on termination of the            Lock-Up Agreement (provided that the Acquisition has not been completed on or before            termination of the Lock-Up Agreement), Novamerican shall pay to us            $3,750,000.

             

If we terminate the arrangement agreement because the closing condition            as to the minimum cash and inventory amount not having been satisfied, then Novamerican            shall pay to us $1,250,000, as payment in full of our out-of-pocket costs and expenses            incurred in connection with the Acquisition.

             

*Acquisition Financing*

 

Debt Financing

             

We received a loan commitment letter from JPMCB, JPMorgan, CIBC, CIT and            CIBC World Markets, who have committed to provide financing of up to $500.0 million            (which may be reduced by an amount by which the amount of our trust account exceeds            certain minimums), consisting of a $175.0 million senior secured asset based            credit facility (“ABL Facility”), of which a maximum of $71.2 million may            be used to fund the Acquisition and related transaction costs, and a $325.0 million            senior secured bridge facility (“Bridge Facility”), which may not be drawn            or may be repaid as described below, and an intra-day closing day facility.

             

JPMCB’s, CIBC’s and CIT’s commitment is not            conditioned upon completion of due diligence nor is it conditioned upon the absence of            a material adverse change in debt markets from the time that the commitment was entered            into. The initial effectiveness of such debt financing will be subject to (a) the            closing of the Acquisition, (b) completion, execution and delivery of satisfactory            definitive documentation, (c) receipt by JPMorgan and CIBC World Markets of the results            of field examinations and inventory

 

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appraisals (prepared by a third party appraisal firm) reasonably            satisfactory to JPMorgan and CIBC World Markets, (d) receipt of solvency opinion, (e)            absence of a material adverse change, (f) perfection of security interests, (g)             receipt of the proceeds of a private placement of units, and (h) receipt of            customary closing documentation.

We intend to complete a capital markets transaction whereby an aggregate            of up to $325.0 million of debt securities (“Senior Notes”) are issued to            finance the Acquisition. To the extent Senior Notes are not issued prior to the close            of the Acquisition, then the Acquisition will be funded under the Bridge Facility.            JPMCB’s, CIBC’s and CIT’s commitment to provide the Bridge Facility            is reduced by the principal amount of Senior Notes issued on or prior to the closing            date of the Acquisition. If Senior Notes are issued after the closing of the            Acquisition, the proceeds will be used to repay the Bridge Facility.

The commitment letter provides for the ABL Facility to be a five-year            facility, with a borrowing base at any time equal to: (a) the sum of (i) up to 90% of            eligible accounts and (ii) the lesser of (A) up to 70% of the eligible inventory and            (B) up to 85% of then net orderly liquidation value of inventory, in each case, subject            to certain eligibility reserves; minus (b) the sum of (i) a customary availability            block and (ii) usual and customary reserves. The borrowing base will be determined            separately for our U.S. subsidiaries and the Canadian subsidiaries. US dollar            borrowings under the ABL Facility will bear interest at LIBOR, or US base rate, plus an            applicable margin, depending upon the excess availability under the ABL Facility.            Initially, the applicable margins will be LIBOR plus 1.50% or US base rate plus 0.50%.            The US base rate is the higher of (i) the prime rate announced by JPMCB or (ii) the            federal fund effective rate plus 0.50%. In the case of Canadian dollar-denominated            loans, the interest rate will be the Canadian prime rate plus the applicable margin for            base rate loans. For Canadian dollar-denominated bankers acceptances (or BA equivalent            loans), the discount rate for the period selected by the borrower plus stamping fees            will be equal to the margin for LIBOR based rates.

The commitment letter provides for the senior secured loans under the            Bridge Facility to mature on the first anniversary of the Closing, but that each lender            in respect of any senior secured loan under the Bridge Facility outstanding on the            first anniversary of the Closing will have the option to exchange its loans for senior            notes issued under an indenture that complies with the Trust Indenture Act of 1940. The            maturity of any such loans not so exchanged will automatically be extended to the            eighth anniversary of the Closing. Prior to the first anniversary of the closing, such            loans will bear interest at LIBOR plus 4.50%, plus a spread that increases after each            three-month period, subject to a cap of 11.50%. Following the first anniversary of the            closing, the extended loans will bear interest at a rate equal to the interest rate            borne by the Bridge Facility on the day immediately preceding the first anniversary            plus 50 basis points plus a spread that increases after each three-month period,            subject to a cap of 11.50%. The Bridge Facility is subject to mandatory redemption with            the proceeds from certain asset sales, the issuance of debt securities and the issuance            of equity, and subject to repurchase or repayment at the option of the holder upon a            change in control. The Bridge Facility may be optionally repaid at any time.

The ABL Facility will be secured by (a) perfected first priority            security interests in substantially all the cash, deposit accounts, accounts receivable            and inventory of us and each subsidiary guarantor (the “ABL Collateral”)            and (b) perfected second priority security interests in substantially all of the            remaining assets of us and our subsidiaries, subject to certain limitations with            respect to non-US subsidiaries (“Senior Secured Loan Collateral”). The            Bridge Facility will have a perfected first priority security interest in the Senior            Secured Loan Collateral and will have a perfected second priority security interest in            the ABL Collateral, subject in each case to certain limitations.

The debt financing described above will contain representations,            warranties and covenants which will restrict, among other things, our ability to sell            assets, incur more indebtedness, pay dividends on our common stock, make certain            investments or business acquisitions, repurchase or redeem our stock, engage in            business mergers or consolidations, and engage in certain transactions with affiliated            parties. The ABL Facility will also contain a requirement for us to maintain a minimum            ratio of EBITDA to fixed charges when availability under the ABL Facility is less than            $20 million.

 

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Equity Financing

             

Our Chairman and certain existing stockholders have agreed to purchase            in a private placement, to be closed simultaneously with the closing of the            Acquisition, 1,875,000 of our units for $15.0 million, or $8.00 per unit. Each unit            will consist of one share of common stock and one warrant. Each warrant entitles the            holder to purchase one share of common stock at a price of $5.50 and is exercisable on            the later of the consummation of the acquisition or March 7, 2008 until expiration 4            years from the issue date or earlier upon redemption. The warrants are identical to the            public warrants, except as to the expiration date, and as otherwise necessary to            reflect the fact that they were sold in a private placement, permit delivery of            unregistered shares upon exercise and permit net cashless exercise so as to, among            other reasons, permit tacking of holding periods under Rule 144. The purchasers            may not transfer any of the shares of common stock included in the units prior to 2            years after the issue date other than to an estate, family member, family company or            partnership or similar related persons.

             

The equity financing and a portion of the debt financing will be funded            at the Closing and the proceeds will be combined with up to approximately $140 million            of cash held in trust by us to pay the Acquisition price and related fees and            expenses.

 

**Critical Accounting Policies**

***Cash and cash equivalents***

We consider all highly liquid investments with original maturities of            three months or less to be cash equivalents.

***Earnings per common share***

Earnings per share are computed by dividing net income by the            weighted-average number of shares of common stock outstanding during the            period.

***Use of estimates***

The preparation of financial statements in conformity with accounting            principles generally accepted in the United States of America requires us to make            estimates and assumptions that affect the reported amount of assets and liabilities and            disclosure of contingent assets and liabilities at the date of the financial statements            and the reported amount of revenues and expenses during the reporting period. Actual            results could differ from those estimates.

***Income taxes***

Deferred income taxes are provided for the differences between the bases            of assets and liabilities for financial reporting and income tax purposes. A valuation            allowance is established when necessary to reduce deferred tax assets to the amount            expected to be realized.

**Recent Accounting Pronouncements**

We do not believe that any recently issued but not yet effective            accounting standards, if currently adopted, would have a material effect on the            accompanying Financial Statements.

In June 2006, the FASB issued Interpretation No. 48 (“FIN            48”), “*Accounting for Uncertainty in Income Taxes            — an interpretation of FASB Statement No.* *109.*“ FIN 48 clarifies the            recognition threshold and measurement attribute for the financial statement recognition            and measurement of a tax position taken or expected to be taken in a tax return. Under            the guidelines of FIN 48, an entity should recognize a

 

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financial statement benefit for a tax position if it determines that it            is more likely than not that the position will be sustained upon examination. We have            adopted FIN 48 as of January 1, 2007.

             

We have evaluated and concluded that there are no significant uncertain            tax positions requiring recognition in our financial statements as of January 1, 2007.            The evaluation was performed for the initial tax year ended December 31, 2006, the only            year which is subject to examination for Federal and state purposes as of June 30,            2007.

             

We have elected to report interest and penalties related to uncertain            income tax positions as income tax expense.

 

**Item 3. Quantitative and Qualitative Disclosures About Market            Risk.**

Market risk is the sensitivity of future cash flows to changes in            interest rates, foreign currency exchange rates, commodity prices, equity prices, and            other market-driven rates or prices. To date, our efforts have been limited to            organizational activities and activities relating to our initial public offering and            the identification of a target business. We have neither engaged in any operations nor            generated any revenues from operations. The net proceeds from our initial public            offering held in trust have been invested only in money market funds meeting certain            conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940.            Accordingly, our only market risk exposure relates to fluctuation in interest            rates.

As of June 30, 2007, the balance held in trust for the purpose of            consummation of a business combination including the deferred underwriters discounts of            $6,000,000 was $145,988,624 (or $145,352,529 net of $636,095 for federal, state, and            local taxes, representing a conversion price per share for the public stockholders of            $7.75 per share). The proceeds held in trust have been invested in a money market fund            that invests principally in short-term securities issued by the United States            government and its agencies and repurchase agreements collateralized by such            securities. As of June 30, 2007, the annualized 7-day current yield payable on our            investment was approximately 5.25%. Assuming no other changes to our holdings as of            June 30, 2007, a 1% decrease in the underlying interest rate payable on our investment            as of June 30, 2007 would result in a decrease of approximately $112,607 in the            interest earned on our investment for the following 30-day period, and a corresponding            decrease in our net increase in stockholders’ equity resulting from operations,            if any, for that period.

We have not engaged in any hedging activities since our inception on            April 26, 2006. We do not expect to engage in any hedging activities with respect to            the market risk to which we are exposed.

**Item 4. Controls and Procedures.**

As of June 30, 2007, we, including our chief executive officer, who also            serves as our principal financial officer, evaluated the effectiveness of the design            and operation of our disclosure controls and procedures. Based upon that evaluation,            our management, including our chief executive officer, concluded that our disclosure            controls and procedures were effective in timely alerting management, including the            chief executive officer, of material information about us required to be included in            periodic Securities and Exchange Commission filings.

There has not been any change in our internal control over financial            reporting that occurred during the quarter ended June 30, 2007, that has materially            affected, or is reasonably likely to materially affect, our internal control over            financial reporting.

 

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**PART II – OTHER INFORMATION**

**Item 1. Legal Proceedings.**

We are not currently subject to any material legal proceedings, nor, to            our knowledge, is any material legal proceeding threatened against us.

**Item 2. Unregistered Sales of Equity Securities and Use of            Proceeds.**

To further fund our working capital requirements, our Chairman            purchased, on June 21, 2007, in a private placement, 787,402 warrants for $1,000,000,            or $1.27 per warrant, the volume-weighted average price for the 20 trading days prior            to the placement. Each warrant entitles the holder to purchase one share of common            stock at a price of $5.50 and is exercisable on the later of the consummation of our            initial business combination or March 7, 2008 until expiration on June 21, 2011 or            earlier upon redemption.

             

**Item 3. Defaults Upon Senior Securities.**

|   | Not applicable. |
|--------|-----------------|

 

**Item 4. Submission of Matters to a Vote of Security            Holders.**

|   | Not applicable. |
|--------|-----------------|

 

**Item 5. Other Information.**

|   | Not applicable. |
|--------|-----------------|

 

**Item            6. Exhibits.**

 

| 10.1 | Commitment Letter, dated                            July 6, 2007, among JPMorgan Chase Bank, N.A., J.P. Morgan Securities,                            Inc., CIBC, CIT Business Credit Canada Inc. and CIBC World Markets                            Corp. and Symmetry Holdings Inc. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2 | Warrant Subscription                            Agreement, dated June 21, 2007, by and between Symmetry Holdings Inc.                            and Gilbert E. Playford                                                                                                             |
| 10.3 | Unit Subscription                            Agreement, dated June 21, 2007, by and between Symmetry Holdings Inc.                            and Gilbert E. Playford                                                                                                                |
| 10.4 | Arrangement Agreement,                            dated as of June 21, 2007, by and between Symmetry Holdings Inc.,                            632422 N.B. Ltd., and Novamerican Steel Inc.                                                                                          |
| 10.5 | Lock-Up Agreement, dated                            as of June 21, 2007, by and between Symmetry Holdings Inc., 632422 N.B.                            Ltd., and D.Bryan Jones and Scott B. Jones.                                                                                   |
| 10.6 | Non-Competition                            Agreement, dated as of June 21, 2007, between Symmetry Holdings Inc,                            Novamerican Steel Inc., 632422 N.B. Ltd., and Scott B.                            Jones.                                                  |
| 10.7 | Non-Competition                            Agreement, dated as of June 21, 2007, between Symmetry Holdings Inc,                            Novamerican Steel Inc., 632422 N.B. Ltd., and D. Bryan                            Jones.                                                  |
| 31.1 | Section 302                            Certification of Chief Executive Officer                                                                                                                                                                                                      |
| 31.2 | Section 302                            Certification of Principal Financial Officer                                                                                                                                                                                                  |

 

 

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| 32.1 | Section 906                            Certification |
|------|------------------------------------------------------|

 

 

|   | 16 |
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**SIGNATURES**

 

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

 

|                                             |   |                       |   |                                                                                                            |
|--------------------------------------------------|--------|----------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
|                                             |   | **SYMMETRY HOLDINGS INC.** |
|                                             |   |                       |
| Date:                            August 10, 2007 |   | By:                        |   | /s/ Corrado De Gasperis                                                                                         |
|                                             |   |                       |   |                                                                                                                 |
|                                             |   |                       |   | Corrado De Gasperis                                                                                             |
|                                             |   |                       |   | *Chief Executive Officer (Principal Executive Officer,                            Principal Financial Officer)* |
|                                                  |        |                            |        |                                                                                                                 |  |

 

 

 

 

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