##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended
    
    March 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from
    
    
    
    to
 Commission File Number:
    
    001-33217
 Freedom Acquisition Holdings, Inc.
  Delaware
    
    20-5009693(State or other jurisdiction of incorporation)
    
    (IRS Employer Identification Number)
 1114 Avenue of the Americas, 41st Floor
New York, New York 10036
  (212) 380-2230
  þ o
  o Large accelerated filer
    
    o Accelerated filer
    
    þ Non-accelerated filer
 þ o




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##### 



PagePART 1.
    
    FINANCIAL INFORMATION
    
    
    2ITEM 1.
    
    FINANCIAL STATEMENTS
    
    
    2Unaudited Condensed Balance Sheets
    
    
    2Unaudited Condensed Statements of Operations
    
    
    3Unaudited Condensed Statements of Cash Flows
    
    
    4Notes to Condensed Financial Statements
    
    
    5ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    8Overview
    
    
    8Off-Balance
Sheet Arrangements
    
    
    9Liquidity and Capital Resources
    
    
    9ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    10ITEM 4.
    
    CONTROLS AND PROCEDURES
    
    
    10PART II
    
    OTHER INFORMATION
    
    
    11ITEM 1.
    
    LEGAL PROCEEDINGS
    
    
    11ITEM 1A.
    
    RISK FACTORS
    
    
    11ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    11ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
    
    
    12ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    12ITEM 5.
    
    OTHER INFORMATION
    
    
    12ITEM 6.
    
    EXHIBITS
    
    
    13SIGNATURES
    
    
    15Ex-31.1 Section 302 Certification of CEOEx-32.1 Section 906 Certification of CEO




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Forward-Looking Statements
 This report, and the information incorporated by reference in it, include 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 (the Exchange Act). Our
forward-looking statements include, but are not limited to, statements regarding our expectations,
hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that
refer to projections, forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words anticipates,
believe, continue, could, estimate, expect, intend, may, might, plan, possible,
potential, predict, project, should, would and similar expressions may identify
forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements in this report may include, for example, statements
about our:
 
    
    ability to complete a combination with one or more target businesses;
    
    success in retaining or recruiting, or changes required in, our management or directors
following a business combination;
    
    potential inability to obtain additional financing to complete a business combination;
    
    limited pool of prospective target businesses;
    
    potential change in control if we acquire one or more target businesses for stock;
    
    public securities limited liquidity and trading;
    
    failure to list or the delisting of our securities from the American Stock Exchange or
an inability to have our securities listed on the American Stock Exchange following a
business combination;
    
    use of proceeds not in trust or available to us from interest income on the trust account balance; or
    
    financial performance.
 The forward-looking statements contained or incorporated by reference in this report are based
on our current expectations and beliefs concerning future developments and their potential effects
on us and speak only as of the date of such statement. There can be no assurance that future
developments affecting us will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control) or other
assumptions that may cause actual results or performance to be materially different from those
expressed or implied by these forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described under the heading Risk Factors. Should one or
more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these forward-looking
statements. We undertake no obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except as may be required under
applicable securities laws.
 References in this report to we, us or our company refer to Freedom Acquisition
Holdings, Inc. References to public stockholders refer to purchasers of our securities by
persons other than our founders in, or subsequent to, our initial public offering.
 1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements.
 FREEDOM ACQUISITION HOLDINGS, INC.
(a corporation in the development stage)
 
 UNAUDITED CONDENSED BALANCE SHEETS
 March 31, 2007
    
    
    December 31, 2006ASSETSCurrent assetsCash
    
    $
    142,717
    
    
    $
    599,369Prepaid expenses
    
    
    68,785
    
    
    
    Total current assets
    
    
    211,502
    
    
    
    599,369Other assetCash held in trust account
    
    
    518,676,027
    
    
    
    466,707,382$
    518,887,529
    
    
    $
    467,306,751LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccrued expenses
    
    $
    20,750
    
    
    $
    250Accrued offering costs
    
    
    
    
    
    
    250,483Income taxes payable
    
    
    2,779,750
    
    
    
    127,355Franchise tax payable
    
    
    41,250
    
    
    
    93,575Notes payable, founding stockholders
    
    
    
    
    
    
    250,000Total current liabilities
    
    
    2,841,750
    
    
    
    721,663Long-term liabilitiesDeferred underwriters fee
    
    
    17,952,000
    
    
    
    16,320,000Common stock, subject to possible redemption, 10,554,720 and 9,595,200
shares at March 31, 2007 and December 31, 2006, respectively, at
redemption value
    
    
    102,572,088
    
    
    
    93,247,353Deferred interest income related to common stock subject to possible
redemption
    
    
    483,050
    
    
    
    Stockholders equityPreferred stock, $.0001 par value; 1,000,000 shares authorized; none issuedCommon stock, $.0001 par value, 200,000,000 shares authorized; 64,800,003
shares issued and outstanding (including 10,554,720 shares subject to
possible redemption) at March 31, 2007 and 60,000,003 shares issued and
outstanding (including 9,595,200 shares subject to possible redemption) at
December 31, 2006
    
    
    6,480
    
    
    
    6,000Additional paid-in capital
    
    
    392,126,827
    
    
    
    356,842,491Income accumulated during the development stage
    
    
    2,905,334
    
    
    
    169,244Total stockholders equity
    
    
    395,038,641
    
    
    
    357,017,735$
    518,887,529
    
    
    $
    467,306,751
 See accompanying notes to condensed financial statements.
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FREEDOM ACQUISITION HOLDINGS, INC.
(a corporation in the development stage)
 
 UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
 Period fromFor the Three
    
    
    June 8, 2006Months Ended
    
    
    (inception) toMarch 31, 2007
    
    
    March 31, 2007Interest income
    
    $
    6,212,197
    
    
    $
    6,602,771Formation and operating costs
    
    
    154,412
    
    
    
    248,387Income before provision for income taxes
    
    
    6,057,785
    
    
    
    6,354,384Provision for income taxes
    
    
    2,838,645
    
    
    
    2,966,000Net income
    
    
    3,219,140
    
    
    
    3,388,384Interest income related to common stock
subject to possible redemption
    
    
    483,050
    
    
    
    483,050Net income allocable to common stockholders
not subject to possible redemption
    
    $
    2,736,090
    
    
    $
    2,905,334Weighted average shares outstanding, basic
    
    
    63,573,336
    
    
    
    28,167,571Net income per common share, basic
    
    $
    .05
    
    
    $
    .12Weighted average shares outstanding, diluted
    
    
    72,931,670
    
    
    
    31,131,929Net income per common share, diluted
    
    $
    .04
    
    
    $
    .11
 See accompanying notes to condensed financial statements.
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FREEDOM ACQUISITION HOLDINGS, INC.
(a corporation in the development stage)
 
 UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
 Period fromFor the Three
    
    
    June 8, 2006Months Ended
    
    
    (inception) toMarch 31, 2007
    
    
    March 31, 2007Cash Flows from Operating ActivitiesNet income
    
    $
    3,219,140
    
    
    $
    3,388,384Adjustments to reconcile net income to net
cash provided by operating activities:Increase in prepaid expenses
    
    
    (68,785
    )
    
    
    (68,785
    )Increase in income taxes payable
    
    
    2,652,395
    
    
    
    2,779,750Increase (decrease) in franchise tax payable
    
    
    (52,325
    )
    
    
    41,250Increase in accrued expenses
    
    
    20,500
    
    
    
    20,750Net cash provided by operating activities
    
    
    5,770,925
    
    
    
    6,161,349Net Cash Flows used in Investing Activities,Cash held in trust account
    
    
    (51,968,645
    )
    
    
    (518,676,027
    )Cash Flows from Financing ActivitiesProceeds from notes payable, stockholders
    
    
    
    
    
    
    250,000Proceeds from issuance of founders units
    
    
    
    
    
    
    25,000Gross proceeds of public offering
    
    
    48,000,000
    
    
    
    528,000,000Proceeds from issuance of sponsors warrants
in private placement
    
    
    
    
    
    
    4,500,000Principal payments made on notes payable,
stockholders
    
    
    (250,000
    )
    
    
    (250,000
    )Payments for underwriters discount and
offering costs
    
    
    (2,008,932
    )
    
    
    (19,867,605
    )Net cash provided by financing activities
    
    
    45,741,068
    
    
    
    512,657,395Net increase (decrease) in cash
    
    
    (456,652
    )
    
    
    142,717Cash at beginning of the period
    
    
    599,369
    
    
    
    Cash at end of the period
    
    $
    142,717
    
    
    $
    142,717Supplemental disclosure of cash flow information:Cash paid for income taxes
    
    $
    186,250
    
    
    $
    186,250Supplemental schedule of non-cash financing
activities:Deferred underwriters fees
    
    $
    1,632,000
    
    
    $
    17,952,000
 See accompanying notes to condensed financial statements.
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Freedom
Acquisition Holdings, Inc.  (a corporation in the development stage)
 
 Notes to Condensed Financial Statements
 NOTE ADESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND BASIS OF PRESENTATION
 Accounting and Reporting By Development Stage
Enterprises, st
    5




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NOTE BINITIAL PUBLIC OFFERING AND OVER-ALLOTMENT OPTION EXERCISE
   6




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NOTE CSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Net income per common share:
 Earnings Per Share,
 Use of estimates:
  Income tax:
 Accounting for Income Taxes,
 Accounting for Uncertainty in Income Taxes - an interpretation
of FASB Statement No. 109
 Recently Issued Accounting Pronouncements:
  NOTE DCOMMITMENT
  NOTE ERELATED PARTY TRANSACTIONS
   NOTE FSUBSEQUENT EVENT
  7




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ITEM. 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 
 Overview
  
    
    may significantly reduce the equity interest of our stockholders;
    
    may cause a change in control if a substantial number of shares of our stock are issued,
which may affect, among other things, our ability to use our net operating loss
carry-forwards, if any, and may also result in the resignation or removal of Mr. Berggruen,
our president and chief executive officer, or one or more of our other present directors;
and
    
    may adversely affect prevailing market prices for our common stock.Similarly, debt securities issued by us in a business combination may result in:
    
    default and foreclosure on our assets if our operating revenues after a business
combination were insufficient to pay our debt obligations;
    
    acceleration of our obligations to repay the indebtedness even if we have made all
principal and interest payments when due if the debt security contained covenants requiring
the maintenance of certain financial ratios or reserves and any such covenant was breached
without a waiver or renegotiation of that covenant;
    
    our immediate payment of all principal and accrued interest, if any, if the debt
security was payable on demand; and
    
    our inability to obtain additional financing, if necessary, if the debt security
contained covenants restricting our ability to obtain additional financing while such debt
security was outstanding.
   8




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Off-Balance Sheet Arrangements
  
 Liquidity and Capital Resources
       9




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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.
    
 ITEM 4. Controls and Procedures.
 (a) Evaluation of Disclosure Controls and Procedures
  (b) Changes in Internal Controls over Financial Reporting
  10




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PART II  OTHER INFORMATION
 
 ITEM 1. Legal Proceedings.
  
 ITEM 1A. Risk Factors
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 Unregistered
Sales of Equity Securities
     Use
of Proceeds from Initial Public Offering
  11




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
    
    payment of estimated taxes incurred as a result of interest income earned on funds
currently held in the trust account;
    
    payment of premiums associated with our directors and officers liability insurance;
    
    expenses for due diligence and investigation of prospective target businesses;
    
    legal and accounting fees relating to our SEC reporting obligations and general
corporate matters; and
    
    miscellaneous expenses.
  
 ITEM 3. Defaults upon Senior Securities.
  
 ITEM 4. Submission of Matters to a Vote of the Security Holders.
  
 ITEM 5. Other Information.
  12




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ITEM 6. Exhibits.
 ExhibitNumber
    
    Description3.1
    
    Form of Amended and Restated Certificate of Incorporation (1)3.2
    
    Bylaws (1)4.1
    
    Specimen Unit Certificate (1)4.2
    
    Specimen Common Stock Certificate (1)4.3
    
    Warrant Agreement dated July 20, 2006 between Continental Stock
Transfer & Trust Company and the Registrant (1)4.4
    
    Specimen Public Warrant Certificate (included in Exhibit 4.3)4.5
    
    Specimen Private Warrant Certificate (included in Exhibit 4.3)4.6
    
    First Amendment dated as of November 9, 2006 to Warrant Agreement
between Continental Stock Transfer & Trust Company and the Registrant
(2)4.7
    
    Second Amendment dated as of November 29, 2006 to Warrant Agreement
between Continental Stock Transfer & Trust Company and the Registrant
(3)4.8
    
    Amended and Restated Warrant Agreement dated as of December 21, 2006
between Continental Stock Transfer & Trust Company and the Registrant
(6)10.1
    
    Registration Rights Agreement among the Registrant and the Founders
dated December 21, 2006 (6)10.2
    
    Founders Units Subscription Agreement dated as of July 20, 2006
among the Registrant and Berggruen Holdings (1)10.3
    
    Founders Units Subscription Agreement dated as of July 20, 2006
among the Registrant and Marlin Equities (1)10.4
    
    Founders Units Subscription Agreement dated as of July 20, 2006
among the Registrant and James N. Hauslein (1)10.5
    
    Founders Units Subscription Agreement dated as of July 20, 2006
among the Registrant and William P. Lauder (1)10.6
    
    Founders Units Subscription Agreement dated as of July 20, 2006
among the Registrant and Herbert A. Morey (1)10.7
    
    Sponsors Warrant and Co-Investment Units Subscription Agreement
dated as of July 20, 2006 among the Registrant and Berggruen Holdings
(1)10.8
    
    Sponsors Warrant and Co-Investment Units Subscription Agreement
dated as of July 20, 2006 among the Registrant and Marlin Equities
(1)10.10
    
    Letter Agreement dated as of July 20, 2006 among the Registrant,
Citigroup Global Markets Inc. and Berggruen Holdings (1)10.11
    
    Letter Agreement dated as of July 20, 2006 among the Registrant,
Citigroup Global Markets Inc. and Marlin Equities (1)10.12
    
    Letter Agreement dated as of July 20, 2006 among the Registrant,
Citigroup Global Markets Inc. and Nicolas Berggruen (1)10.13
    
    Letter Agreement dated as of July 20, 2006 among the Registrant,
Citigroup Global Markets Inc. and Martin E. Franklin (1)10.14
    
    Letter Agreement dated as of July 20, 2006 among the Registrant,
Citigroup Global Markets Inc. and James N. Hauslein (1)10.15
    
    Letter Agreement dated as of July 20, 2006 among the Registrant,
Citigroup Global Markets Inc. and William P. Lauder (1)10.16
    
    Letter Agreement dated as of July 20, 2006 among the Registrant,
Citigroup Global Markets Inc. and Herbert A. Morey (1)10.17
    
    Form of Letter Agreement among the Registrant and Berggruen Holdings,
Inc. Providing office space to the Registrant (1)10.18
    
    Promissory Note, dated June 14, 2006, issued to Berggruen Holdings (1)
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ExhibitNumber
    
    Description10.19
    
    Promissory Note, dated June 14, 2006, issued to Marlin Equities (1)10.20
    
    Amended Letter Agreement dated as of November 30, 2006 among the
Registrant, Citigroup Global Markets Inc. and Berggruen Holdings (3)10.21
    
    Amended Letter Agreement dated as of November 30, 2006 among the
Registrant, Citigroup Global Markets Inc. and Marlin Equities (3)10.22
    
    Amended Letter Agreement dated as of November 30, 2006 among the
Registrant, Citigroup Global Markets Inc. and Nicolas Berggruen (3)10.23
    
    Amended Letter Agreement dated as of November 30, 2006 among the
Registrant, Citigroup Global Markets Inc. and Martin E. Franklin (3)10.24
    
    Amended Letter Agreement dated as of November 30, 2006 among the
Registrant, Citigroup Global Markets Inc. and James N. Hauslein (3)10.25
    
    Amended Letter Agreement dated as of November 30, 2006 among the
Registrant, Citigroup Global Markets Inc. and William P. Lauder (3)10.26
    
    Amended Letter Agreement dated as of November 30, 2006 among the
Registrant, Citigroup Global Markets Inc. and Herbert A. Morey (3)10.27
    
    Form of Berggruen Holdings Employee Letter Agreement (3)10.28
    
    Second Amended Letter Agreement dated as of December 15, 2006 among
the Registrant, Citigroup Global Markets Inc. and Berggruen Holdings
(4)10.29
    
    Second Amended Letter Agreement dated as of December 15, 2006 among
the Registrant, Citigroup Global Markets Inc. and Marlin Equities (4)10.30
    
    Second Amended Letter Agreement dated as of December 15, 2006 among
the Registrant, Citigroup Global Markets Inc. and Nicolas Berggruen
(4)10.31
    
    Second Amended Letter Agreement dated as of December 15, 2006 among
the Registrant, Citigroup Global Markets Inc. and Martin E. Franklin
(4)10.32
    
    Investment Management Trust Agreement by and between the Registrant
and Continental Stock Transfer & Trust Company (5)31.1
    
    Chief Executive Officer Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Chief Executive Officer Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.99.2
    
    Form of Charter of Audit Committee (1)99.3
    
    Form of Charter of Governance and Nominating Committee (1)99.4
    
    Form of Charter of Compensation Committee (1)
 
 (1)
    
    Incorporated by reference to the corresponding exhibit filed with the Registration Statement
on Form S-1 (File No. 333-136248) with the SEC on August 2, 2006.(2)
    
    Incorporated by reference to the corresponding exhibit filed with Amendment No. 2 to the
Registration Statement on Form S-1 (File No. 333-136248) filed with the SEC on November 13,
2006.(3)
    
    Incorporated by reference to the corresponding exhibit filed with Amendment No. 3 to the
Registration Statement on Form S-1 (File No. 333-136248) filed with the SEC on November 30,
2006.(4)
    
    Incorporated by reference to the corresponding exhibit filed with Amendment No. 4 to the
Registration Statement on Form S-1 (File No. 333-136248) filed with the SEC on December 18,
2006.(5)
    
    Incorporated by reference to the corresponding exhibit filed with the Registrants Current
Report on Form 8-K filed with the SEC on December 29, 2006.(6)
    
    Incorporated by reference to the corresponding exhibit filed with the Registrants Annual
Report on Form 10-K filed with the SEC on March 27, 2007. 14




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SIGNATURES
  FREEDOM ACQUISITION HOLDINGS, INC.May 15, 2007
    By:
    /s/ Nicolas BerggruenNicolas BerggruenTitle:
    President and Chief Executive Officer 15