Polaris Acquisition Corp.

( a corporation in the development stage )

TABLE OF CONTENTS

As of September 30, 2008

 

		Page
Part I.  Financial Information
Item 1.	Condensed Financial Statements	3
	Balance Sheet	3
	Statements of Operations	4
	Statement of Stockholders' Equity	5
	Statement of Cash Flows	6
	Notes to Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Conditions and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
Part II. Other Information
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
Item 5.	Other Information	17
Item 6.	Exhibits	17
SIGNATURES		17
Exhibits

Polaris Acquisition Corp.

( a corporation in the development stage )

CONDENSED BALANCE SHEET

 

		September 30,
		2008			December 31,
		(unaudited)			2007
ASSETS
Current Assets:
Cash		$	103,550		$	12,801
Investments Held in Trust			150,579,302			—
Prepaid Expenses			76,257			—
Total Current Assets			150,759,109			12,801
Deferred Tax Asset			349,744			—
Deferred Offering Costs			—			175,802
Total Assets		$	151,108,853		$	188,603
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accrued Operating Expenses		$	238,812		$	—
Income Taxes Payable			253,757			—
Accrued Offering Costs			—			51,365
Due to Affiliate			—			12,911
Note Payable to Affiliate			—			100,000
Deferred Underwriting Fee			6,750,000			—
Total Liabilities			7,242,569			164,276
Common Stock, subject to possible conversion of 4,499,999 shares at conversion value			44,999,990			—
Commitments (Note 5)
Stockholders' Equity
Preferred stock, $.0001 par value Authorized 1,000,000 shares; none issued and outstanding			—			—
Common stock, $.0001 par value Authorized 55,000,000 shares
Issued and outstanding 18,750,000 shares (which includes 4,499,999 shares subject to possible
conversion) and 5,175,000 shares			1,875			518
Additional Paid in Capital			98,403,826			24,482
Income/(Deficit) Accumulated During the Development Stage			460,593			(673	)
Total Stockholders' Equity			98,866,294			24,327
Total Liabilities and Stockholders' Equity		$	151,108,853		$	188,603

Polaris Acquisition Corp.

( a corporation in the development stage )

CONDENSED STATEMENT OF OPERATIONS

(Unaudited)

 

											Period From			Period From
		For The Three			For The Nine			For The Three			June 18, 2007			June 18, 2007
		Months Ended			Months Ended			Months Ended			(inception) to			(inception) to
		September 30, 2008			September 30, 2008			September 30, 2007			September 30, 2007			September 30, 2008
Formation Costs		$	—		$	—		$	—		$	1,062		$	1,062
Trustee Fees			4,275			12,044			—			—			12,044
Administrative Fees			22,500			67,500			—			—			67,500
Professional Fees			69,146			120,254			—			—			120,254
Operating Costs			83,827			230,187			—			—			230,187
Due Diligence Costs			188,364			599,564			—			—			599,564
Delaware Franchise Taxes			26,387			85,742			—			—			85,742
Operating Expenses			(394,499	)		(1,115,291	)		—			(1,062	)		(1,116,353	)
Interest Income			661,886			1,987,041			320			320			1,987,430
Income (Loss) Before Provision For Income Taxes			267,387			871,750			320			(742	)		871,077
Provision For Income Taxes			128,761			410,484			—			—			410,484
Net Income (Loss)		$	138,626		$	461,266		$	320		$	(742	)	$	460,593
Weighted average shares outstanding, basic and diluted			18,750,000			18,092,381			5,175,000			5,175,000			12,689,570
Basic and diluted net income per share		$	0.01		$	0.03		$	—		$	—		$	0.04

 

Polaris Acquisition Corp.

( a corporation in the development stage )

CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY

For the Period from June 18, 2007 (Inception) to September 30, 2008

 

											Income/(Deficit)
								Additional			Accumulated			Total
		Common Stock						Paid - In			During the			Stockholders'
		Shares			Amount			Capital			Development Stage			Equity
Issuance of Units to Founders on June 18, 2007 at
approximately $0.005 per share			5,175,000		$	518		$	24,482		$	—		$	25,000
Net Loss			—			—			—			(673	)		(673	)
Balance at December 31, 2007			5,175,000			518			24,482			(673	)		24,327
Contribution of shares to capital on January 11, 2008			(862,500	)		(87	)		87			—			—
Sale of 4,500,000 Private Placement Warrants at $1 per warrant						—			4,500,000			—			4,500,000
Sale of 15,000,000 units on January 17, 2008 at $10
per unit through public offering (net of
underwriter's discount and offering expenses)
including 4,499,999 shares subject to possible
conversion			15,000,000			1,500			138,879,191			—			138,880,691
Proceeds subject to possible conversion			—			—			(44,999,990	)		—			(44,999,990	)
Unaudited:
Forfeited Founders shares on April 23, 2008			(562,500	)		(56	)		56			—
Net Income			—			—			—			461,266			461,266
Balance at September 30, 2008			18,750,000		$	1,875		$	98,403,826		$	460,593		$	98,866,294

Polaris Acquisition Corp.

( a corporation in the development stage )

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)

 

					Period From			Period From
		For The Nine			June 18, 2007			June 18, 2007
		Months Ended			(inception) to			(inception) to
		September 30, 2008			September 30, 2007			September 30, 2008
Cash Flows from Operating Activities
Net Income (Loss)		$	461,266		$	(742	)	$	460,593
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Increase in accrued operating expenses			238,812			1,000			238,812
Increase in income taxes payables			253,757			—			253,757
Increase in prepaid expenses			(76,257	)		—			(76,257	)
Interest earned on trust			(1,984,902	)		—			(1,984,902	)
Increase in deferred tax asset			(349,744	)		—			(349,744	)
Net Cash (Used in) provided by Operating Activities			(1,457,068	)		258			(1,457,741	)
Cash Flows from Investing Activities
Investments placed in trust			(150,000,000	)		—			(150,000,000	)
Disbursements from trust			1,405,600			—			1,405,600
Net Cash Used in Investing Activities			(148,594,400	)		—			(148,594,400	)
Cash Flows from Financing Activities
Proceeds from sale of units to public			150,000,000			—			150,000,000
Proceeds from private placement of warrants			4,500,000			—			4,500,000
Proceeds from sale of units to Founders			—			25,000			25,000
Proceeds from notes payable to affiliates of Founders			—			100,000			100,000
Payment of notes payable Founders			(100,000	)		—			(100,000	)
Proceeds from due to affiliates			—			12,911			12,911
Payment of due to affiliates			(12,911	)		—			(12,911	)
Payment of offering costs			(4,244,872	)		(107,455	)		(4,369,309	)
Net Cash Provided by Financing Activities			150,142,217			30,456			150,155,691
Net Increase in Cash			90,749			30,714			103,550
Cash at Beginning of Period			12,801			—
Cash at End of Period		$	103,550		$	30,714		$	103,550
Supplemental Disclosure of Noncash Financing Activities
Accrual of deferred offering costs		$	—		$	9,479		$	—
Accrual of deferred underwriting fee		$	6,750,000		$	—		$	6,750,000

POLARIS ACQUISITION CORP.

(A CORPORATION IN THE DEVELOPMENT STAGE)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 

Note 1.	BASIS OF PRESENTATION
	The financial statements of Polaris Acquisition Corp. (the “Company”) at September 30, 2008, for the three and nine months ended September 30, 2008, for the three months ended September 30, 2007, for the period June 18, 2007 (inception) to September 30, 2007 and for the period from June 18, 2007 (inception) to September 30, 2008 (cumulative), are unaudited. In the opinion of management, all adjustments (consisting of normal accruals) have been made that are necessary to present fairly the financial position of the Company as of September 30, 2008 and the results of its operations and its cash flows for the period ended September 30, 2008, for the period June 18, 2007 (inception) to September 30, 2007 and for the period from June 18, 2007 (inception) to September 30, 2008. Operating results for the interim periods are not necessarily indicative of the results to be expected for a full fiscal year. The December 31, 2007 balance sheet has been derived from the audited financial statements.
	The statements and related notes have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles may be omitted pursuant to such rules and regulations.
Note 2.	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
	Polaris Acquisition Corp. (the "Company") was incorporated in Delaware on June 18, 2007 for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with an operating business.
	The registration statement for the Company's Offering (as described in Note 3) was declared effective on January 14, 2008. The Company consummated the Offering on January 17, 2008, and received gross proceeds of approximately $154,500,000, including $4,500,000 of proceeds from the private placement ("the Private Placement") sale of 4,500,000 sponsors’ warrants to certain affiliates of the Company. The net proceeds were approximately $143,381,000.
	The Company's management has broad discretion with respect to the specific application of the net proceeds of this Offering, although substantially all of the net proceeds of this Offering are intended to be generally applied toward consummating a business combination with an operating business ("Business Combination"). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Offering and Private Placement, $150,000,000, including $6,750,000 of the underwriters' discounts and commissions (as described in Note 3), is being held in a trust account ("Trust Account") and invested in United States "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 until the earlier of (i) the consummation of its first Business Combination and (ii) liquidation of the Company.
	The Placing of funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, providers of financing, prospect target businesses or other entities it engages, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements or that such agreements, if executed, will insure that no claims are filed against the Trust. Two of the Company's affiliates have agreed that they will be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors, providers of financing, service providers or other entities that are owed money by the Company for services rendered to or contracted for or products sold to the Company. There can be no assurance that they will be able to satisfy those obligations. The net proceeds not held in the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.
	Additionally, up to an aggregate of $1,800,000 of interest earned on the Trust Account balance may be released to the Company to fund working capital requirements and additional funds may be released to fund tax obligations.

 

 

 

 

Note 2.	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES-Continued
	The Company, after signing a definitive agreement for the acquisition of a target business, is required to submit such transaction for stockholder approval. In the event that stockholders owning 30% or more of the shares sold in the Offering vote against the Business Combination and exercise their conversion rights described below, the Business Combination will not be consummated. All of the Company's stockholders prior to the Offering ("Founders"), have agreed to vote their founding shares of common stock in accordance with the vote of the majority of the shares voted by all other stockholders of the Company ("Public Stockholders") with respect to any Business Combination. After consummation of a Business Combination, these voting safeguards will no longer be applicable.
	With respect to a Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company convert his or her shares. The per share conversion price will equal the amount in the Trust Account, calculated as of two business days prior to the consummation of the proposed Business Combination, divided by the number of shares of common stock held by Public Stockholders at the consummation of the Offering. Accordingly, Public Stockholders holding 4,499,999 shares sold in the Offering may seek conversion of their shares in the event of a Business Combination. Such Public Stockholders are entitled to receive their per share interest in the Trust Account computed without regard to the shares of common stock held by the Founders prior to the consummation of the Offering. Accordingly, a portion of the net proceeds from the Offering (29.99% of the amount held in Trust Fund, including the deferred portion of the underwriters' discount and commission) has been classified as common stock subject to possible conversion on the accompanying September 30, 2008 balance sheet.
	The Company's Certificate of Incorporation provides that the Company will continue in existence only until 24 months from the Effective Date of the Offering. If the Company has not completed a Business Combination by such date, its corporate existence will cease and it will dissolve and liquidate for the purposes of winding up its affairs. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Fund assets) will 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 to be offered in the Offering discussed in Note 3).
	CONCENTRATION OF CREDIT RISK
	The Company maintains cash in a bank deposit account which, at times, exceeds federally insured (FDIC) limits. The Company has not experienced any losses on this account.
	DEFERRED INCOME TAXES
	Deferred income taxes are provided for the differences between 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.
	INCOME PER COMMON SHARE
	Income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. The effect of the 15,000,000 outstanding warrants issued in connection with the Offering, the 4,500,000 outstanding warrants issued in connection with the Founders' initial unit purchase and the 4,500,000 outstanding warrants issued in connection with the Private Placement has not been considered in diluted income per share calculations since the warrants cannot be exercised until the later of the Company’s initial business combination or January 11, 2009.
	USE OF ESTIMATES
	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 amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

 

 

 

 

Note 2.	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES-Continued
	FAIR VALUE OF FINANCIAL INSTRUMENTS
	The fair values of the Company's assets and liabilities that qualify as financial instruments under SFAS No. 107 "Disclosures about Fair Value of Financial Instrument," approximate their carrying amounts presented in the balance sheet at September 30, 2008.
	The Company accounts for derivative instruments, if any, in accordance with SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" as amended ("SFAS 133"), which establishes accounting and reporting standards of derivative instruments.
	NEW ACCOUNTING PRONOUNCEMENTS
	In July 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," an interpretation of FASB Statement No. 109 ("FIN 48"), which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. A tax benefit from an uncertain position may be recognized only if it is "more likely than not" that the position is sustainable based on its technical merits. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 did not have a material effect on the Company's financial condition or results of operations.
	In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (FAS 141(R)). This Statement provides greater consistency in the accounting and financial reporting of business combinations. It requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction, establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to disclose the nature and financial effect of the business combination. FAS 141(R) is effective for fiscal years beginning after December 15, 2008. We will adopt FAS 141(R) no later than the first quarter of fiscal 2009 and are currently assessing the impact the adoption will have on our financial position and results of operations.
	In December 2007, the FASB issued SFAS No. 160. Noncontrolling Interests in Consolidated Financial Statements (FAS 160). This Statement amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. FAS 160 is effective for fiscal years beginning after December 15, 2008. We will adopt FAS 160 no later than the first quarter of fiscal 2009 and are currently assessing the impact the adoption will have on our financial position and results of operations.
	The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Note 3.	INITIAL PUBLIC OFFERING
	On January 17, 2008 the Company sold 15,000,000 units ("Units") in the Offering at a price of $10 per Unit. Each Unit consists of one share of the Company's common stock and one Redeemable Common Stock Purchase Warrant ("Warrants"). Each Warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $7.00 commencing at the later of the completion of a Business Combination and January 11, 2009, and expiring on January 10, 2012, four years from the effective date of the Offering. The Company may redeem all of the Warrants, at a price of $.01 per Warrant upon 30 days' notice while the Warrants are exercisable, only in the event that the last sale price of the Company’s common stock is equals or exceeds $14.25 per share for any 20 trading days within a 30 trading day period ending three business days prior to the date on which notice of redemption is given. In accordance with the warrant agreement relating to the Warrants to be sold and issued in the Offering, the Company is required to use its best efforts to maintain the effectiveness of the registration statement covering the Warrants.
	The Company will not be obligated to deliver securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective. Additionally, in the event that a registration statement is not effective, the Warrant holders shall not be entitled to exercise their Warrants and in no event (whether in the case of a registration statement not being effective or otherwise) will the Company be required to net cash settle the warrant exercise. Consequently, the Warrants may expire unexercised and unredeemed.

 

 

 

 

Note 3.	INITIAL PUBLIC OFFERING-Continued
	The Company entered into an agreement with the underwriters of the Offering (the "Underwriting Agreement"). The Underwriting Agreement requires the Company to pay 2.5% of the gross proceeds of the Offering as an underwriting discount plus an additional 4.5% of the gross proceeds of the Offering only upon consummation of a Business Combination. The Company paid an underwriting discount of 2.5% of the gross proceeds of the Offering ($3,750,000) in connection with the consummation of the Offering and has placed 4.5% of the gross proceeds of the Offering ($6,750,000) in the Trust Account. The Company did not have to pay any discount related to the Sponsors' Warrants sold on a private basis. The underwriters have waived their right to receive payment of the 4.5% of the gross proceeds for the Offering upon the Company's liquidation if the Company is unable to complete a Business Combination.
	Pursuant to purchase agreements, certain of the Initial Stockholders have purchased from the Company, in the aggregate, 4,500,000 warrants for $4,500,000 (the Sponsors' Warrants). The purchase and issuance of the Sponsors' Warrants occurred simultaneously with the consummation of the Offering on a private placement basis. All of the proceeds the Company received from these purchases were placed in the Trust Account. The Sponsors' Warrants are identical to the Warrants included in the Units being offered in the Offering except that if the Company calls the warrants for redemption, the Sponsors' Warrants will be exercisable on a cashless basis so long as such warrants are held by the initial purchasers or their affiliates. The Sponsors' Warrants may not be sold or transferred until 45 days after the consummation of a Business Combinations. The purchase price of the Sponsors' Warrants has been determined to be the fair value of such warrants as of the purchase date.
Note 4.	NOTE PAYABLE TO AFFILIATE AND RELATED PARTY TRANSACTIONS
	The Company issued an aggregate $100,000 unsecured promissory note to an affiliated company on July 12, 2007. The note was non-interest bearing and was payable on the earlier of the consummation of the Offering by the Company or July 12, 2008. The note was repaid from the net proceeds of the Offering.
	An affiliated company advanced $12,911. No formal repayment arrangement was in place and no interest was due on the advance. The advance was repaid.
	The Company has entered into an administrative service agreement with an affiliated company as more fully described in Note 5 below.
	Trivergance Business Resources (“TBR”), an affiliate of our Founders, entered into a Services Agreement & Statement of Work with HUGHES Telematics, Inc. (“HTI”) on September 26, 2008. Pursuant to this agreement, TBR began providing a marketing assessment and other research for HTI to aid in creating a world-class marketing and retention platform. HTI agreed to pay TBR a fee of $150,000 (toward which HTI has paid a $75,000 deposit to date), reasonable and customary travel expenses and certain other expenses incurred in connection with the engagement.
Note 5.	COMMITMENTS
	PLAN OF MERGER
	On June 13, 2008, the Company entered into an Agreement and Plan of Merger pursuant to which it has agreed to merge (the “Merger”) with Hughes Telematics, Inc. (“HTI”). The Company and HTI amended and restated that agreement on November 10, 2008 (such agreement, as amended and restated, the “Merger Agreement”). In conjunction with this agreement, the Company will increase the number of authorized shares of common stock to 155,000,000 and the number of authorized shares of preferred stock to 10,000,000.
	The Merger Agreement specifies that. at the closing of the Merger, all the outstanding shares of HTI common stock shall be converted into the right to receive, in the aggregate, approximately 15 million shares of Polaris common stock. In addition, holders of Polaris common stock shall be entitled to receive an aggregate of approximately 59 million “earnout” shares of Polaris common stock, in three tranches, which will be issued into escrow at the closing of the Merger and released to HTI shareholders upon the achievement of certain share price targets over the five-year period following closing. Outstanding options exercisable for shares of HTI common stock will roll over in the Merger to become options exercisable for shares of Polaris common stock. In connection with the Merger Agreement the company will amend and restate its certificate of incorporation to increase the number of shares of both common and preferred stock.
	The Merger Agreement also requires that the Founders deposit 1.25 million shares of their Polaris common stock into an escrow, to be released upon the achievement of the first stock price target between the first and fifth anniversaries of closing.
	The number of shares of Polaris common stock received by HTI shareholders at the closing will be subject to possible adjustments, including the issuance of additional shares of Polaris common stock for the value of equity raised by HTI prior to closing, if any, and for a cash shortfall in the trust account of Polaris below an agreed upon amount.

 

 

 

 

	The obligations of HTI and Polaris to complete the Merger are subject to the satisfaction or waiver by the other party at or prior to the closing date of various customary conditions, including (i) the receipt of all required regulatory approvals and consents, (ii) the approval of the Merger by Polaris’ stockholders, (iii) subject to certain exceptions and materiality thresholds, the accuracy of the representations and warranties of the other party and (iv) compliance of the other party with its covenants, subject to specified materiality thresholds.
	OTHER COMMITMENTS
	The Company has agreed to pay up to $7,500 a month in total for office space and general and administrative services to an affiliated company. Services will commence on the effective date of the offering and will terminate upon the earlier of (i) the completion of the Business Combination, or (ii) the Company's liquidation.   The Company has incurred $67,500 related to this agreement which is included in Administrative and General Expenses.
	Pursuant to letter agreements which the Founders have entered into with the Company and the underwriters, the Founders have waived their right to receive distributions with respect to their founding shares upon the Company's liquidation.
	The Company currently expects to pay legal fees in the range of $1,250,000 upon the successful completion of the Merger. In the event the Merger is not consummated, the Company expects to pay a substantially lower amount.
Note 6.	PREFERRED STOCK
	The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.
	The agreement with the underwriters prohibits the Company, prior to a Business Combination, from issuing preferred stock which participates in the proceeds of the Trust Account or which votes as a class with the Common Stock on a Business Combination.
Note 7.	COMMON STOCK
	On June 18, 2007, 4,312,500 shares of common stock were issued to nine (9) stockholders (initial stockholders). Such shares were purchased at an average purchase price of approximately $0.006 per share. Effective November 8, 2007, the Company's Board of Directors authorized a stock dividend of 0.2 share of common stock for each outstanding share of common stock. All references in the accompanying financial statements to the number of shares of stock have been retroactively restated to reflect this transaction. In January, 2008, the initial stockholders contributed an aggregate of 862,500 shares back to capital. The over-allotment option was not exercised and the initial stockholders forfeited 562,500 shares on April 23, 2008 to maintain a 20% ownership of the common shares after the offering.
Note 8.	INCOME TAXES
	The provision for income taxes for the nine months ended September 30, 2008 consists of the following:

 

Current:
Federal		$	589,111
State			171,117
Total Current			760,228
Deferred:
Federal			(349,744	)
State			—
Total Deferred			(349,744	)
		$	410,484

 

Expense deferred for income tax purposes		$	411,028
Valuation allowance			(61,284	)
		$	349,744

 

 

 

Statutory U.S. federal rate			34.00	%
State income taxes, net of federal effect			5.96	%
Non-deductible expenses			0.00	%
Valuation allowance			7.13	%
Effective Tax Rate			47.09	%

 

 

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net proceeds from our initial public offering and private placement of warrants placed in trust		$	143,250,000
Deferred underwriters' discounts and commissions			6,750,000
Total interest received through September 30, 2008			1,984,902
Withdrawals for operating expense through September 30, 2008			(900,000	)
Withdrawals for tax obligations through September 30, 2008			(505,600	)
Total funds held in trust account as of September 30, 2008		$	150,579,302