Commission
File No.: 001-33327
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CHURCHILL
VENTURES LTD.
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(Exact
name of registrant as specified in its charter)
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Delaware
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20-5113856
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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50
Revolutionary Road, Scarborough, New York
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10510
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(Address
of principal executive offices)
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(Zip
Code)
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(Registrant’s
telephone number, including area code: (914) 762-2553)
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Large
accelerated filer ¨
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Accelerated
filer ¨
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Non-accelerated
filer ý
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Smaller
reporting company ¨
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(Do
not check if smaller reporting company)
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Item
1.
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Condensed
Financial Statements
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Condensed
Balance Sheets as of September 30, 2008 (unaudited) and December
31, 2007
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3
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Unaudited
Condensed Statements of Operations for the three and nine months
ended
September 30, 2008, 2007 and for the period from June 26, 2006 (date
of
inception) to September 30, 2008
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4
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||
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Unaudited
Condensed Statements of Stockholders’ Equity for the period from June 26,
2006 (date of inception) to September 30, 2008
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5
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Unaudited
Condensed Statements of Cash Flows for the nine months ended September
30,
2008, 2007 and for the period from June 26, 2006 (date of inception)
to
September 30, 2008
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6
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Notes
to Unaudited Condensed Financial Statements
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7
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of Operations
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14
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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17
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Item
4.
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Controls
and Procedures
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18
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PART
II. OTHER INFORMATION
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Item
6.
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Exhibits
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19
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September
30,
2008
(unaudited)
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December
31,
2007
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||||||
ASSETS
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|||||||
Current
Assets
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|||||||
Cash
and cash equivalents
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$
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569,474
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$
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1,519,407
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|||
Cash
held in trust available for operations and taxes
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264,588
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312,368
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|||||
Interest
receivable (trust account)
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224,168
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435,364
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|||||
Prepaid
expenses
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93,827
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200,022
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|||||
Total
current assets
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1,152,057
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2,467,161
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|||||
Cash
held in trust account
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109,463,940
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108,303,244
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|||||
Non-current
asset
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-
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27,708
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|||||
Deferred
tax asset
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-
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293,552
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|||||
TOTAL
ASSETS
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$
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110,615,997
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$
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111,091,665
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LIABILITIES
& STOCKHOLDERS' EQUITY
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|||||||
Current
liabilities
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|||||||
Accounts
payable and accrued expenses
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$
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564,901
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$
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216,189
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Income
taxes payable
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588
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312,368
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|||||
Total
current liabilities
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565,489
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528,557
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|||||
Deferred
underwriting discount
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3,772,272
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3,772,272
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|||||
Total
liabilities
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4,337,761
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4,300,829
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|||||
Commitments
and contingencies
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|||||||
Common
stock, subject to possible conversion, 2,693,133 shares at conversion
value
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21,490,637
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21,490,637
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|||||
Interest
attributable to common stock, subject to possible conversion (net
of taxes
of $342,719 and $173,260, respectively)
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493,181
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249,326
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|||||
Stockholders'
equity
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|||||||
Preferred
Stock, $0.001 par value; 25,000,000 shares authorized; none issued
and
outstanding
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-
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-
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|||||
Common
Stock, $0.001 par value, 250,000,000 shares authorized, 16,597,400
shares
issued and outstanding as of September 30, 2008 and December 31,
2007
(which includes 2,693,133 shares subject to possible
conversion)
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16,597
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16,597
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|||||
Additional
paid- in capital
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83,195,407
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83,080,957
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|||||
Earnings
accumulated during the development stage
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1,082,414
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1,953,319
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Total
stockholders' equity
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84,294,418
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85,050,873
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TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
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$
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110,615,997
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$
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111,091,665
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For
the three months ended
September
30, 2008
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For
the three months ended
September
30, 2007
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For
the nine months ended
September
30, 2008
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For
the nine months ended
September
30, 2007
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For
the period from
June
26, 2006 (date of inception) to September 30,
2008
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||||||||||||
Formation
and operating costs
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$
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765,135
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$
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154,328
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$
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1,563,211
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$
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311,133
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$
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2,281,508
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||||||
Net
loss from operations
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(765,135
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)
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(154,328
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)
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(1,563,211
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)
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(311,133
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)
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(2,281,508
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)
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||||||
Other
Income
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||||||||||||||||
Interest
income- Trust
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625,846
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1,400,813
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2,067,604
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3,137,650
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6,469,725
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|||||||||||
Interest
income- Other
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3,041
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15,837
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16,213
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28,877
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61,623
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|||||||||||
Income
before provision for income taxes
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(136,248
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)
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1,262,322
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520,606
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2,855,394
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4,249,840
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||||||||||
Provision
for income taxes
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(260,135
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)
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(517,962
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)
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(1,147,656
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)
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(1,170,712
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)
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(2,674,245
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)
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Net
(loss) or income
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$
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(396,383
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)
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$
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744,360
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$
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(627,050
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)
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$
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1,684,682
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$
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1,575,595
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Maximum
number of shares outstanding subject to possible
conversion:
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||||||||||||||||
Weighted
average number of shares
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2,693,133
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2,693,133
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2,693,133
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2,111,100
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Income
per share amount-basic & diluted
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$
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0.03
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$
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0.04
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$
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0.09
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$
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0.05
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||||||||
Weighted
average shares outstanding not subject to possible
conversion:
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||||||||||||||||
Basic
and Diluted
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13,904,267
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13,904,267
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13,904,267
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11,574,682
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||||||||||||
Pro
Forma Diluted effect of warrants
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-
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3,946,266
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-
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2,939,825
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||||||||||||
Pro
Forma Diluted
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13,904,267
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17,850,533
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13,904,267
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14,514,507
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Net
income per share
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||||||||||||||||
Basic
and Diluted
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$
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(0.03
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)
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$
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0.05
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$
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(0.06
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)
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$
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0.14
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||||||
Pro
Forma Diluted
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$
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(0.03
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)
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$
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0.04
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$
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(0.06
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)
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$
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0.11
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(Loss)
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||||||||||||||
Earnings
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|||||||||||||||
Accumulated
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|||||||||||||||
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Additional
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in
the
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Total
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||||||||||||
Common
Stock
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Paid-in
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Development
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Stockholders'
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|||||||||||||
Shares
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Amount
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capital
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Stage
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Equity
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||||||||||||
June
26, 2006 (Inception) to September 30, 2008
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||||||||||||||||
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||||||||||||||||
Initial
Capital from founding stockholders for cash - July 6, 2006
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3,250,000
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$
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3,250
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$
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13,000
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$
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-
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$
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16,250
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|||||||
Repurchase
and retirement of common stock - September 5, 2006
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(125,000
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)
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(125
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)
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(500
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)
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-
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(625
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)
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|||||||
Net
loss for the period June 26, 2006 (inception) to December 31,
2006
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-
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-
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-
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(1,000
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)
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(1,000
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)
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|||||||||
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Balance,
December 31, 2006
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3,125,000
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3,125
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12,500
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(1,000
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)
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14,625
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||||||||||
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Sale
of private placement warrants - February 28, 2007
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-
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-
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5,000,000
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-
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5,000,000
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|||||||||||
Sale
of 13,472,400 units at $8.00 per unit, net of underwriter's discount
and
offering expenses (including 2,693,133 shares subject to possible
conversion) - March 9, 2007
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13,472,400
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13,472
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99,559,094
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-
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99,572,566
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|||||||||||
Net
proceeds subject to possible conversion of 2,693,133
shares
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-
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-
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(21,490,637
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)
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-
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(21,490,637
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)
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|||||||||
Accretion
of trust fund relating to common stock subject to possible conversion
for
the year ended December 31, 2007 (net of taxes of
$173,260)
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(249,326
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)
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(249,326
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)
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||||||||||||
Net
income for the year ended December 31, 2007
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-
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-
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-
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2,203,645
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2,203,645
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|||||||||||
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Balance,
December 31, 2007
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16,597,400
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16,597
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83,080,957
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1,953,319
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85,050,873
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|||||||||||
Accretion
of trust fund relating to common stock subject to possible conversion
for
the nine months ended September 30, 2008 (net of taxes of
$169,459)
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(243,855
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)
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(243,855
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)
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||||||||||||
Transfer
of Common Stock (deemed compensation)
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114,450
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114,450
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||||||||||||||
Net
loss for the nine months ended September 30, 2008
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(627,050
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)
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(627,050
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)
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||||||||||||
Balance,
September 30, 2008 (unaudited)
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16,597,400
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$
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16,597
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$
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83,195,407
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$
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1,082,414
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$
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84,294,418
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For
the nine months ended September 30, 2008
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For
the nine months ended September 30, 2007
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For
the period from June 26, 2006 (date of inception) to September 30,
2008
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||||||||
Cash
flows from operating activities:
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||||||||||
Net
(loss) or income
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$
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(627,050
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)
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$
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1,684,682
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$
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1,575,595
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|||
Stock
Based Compensation
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114,450
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114,450
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||||||||
Deferred
taxes
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293,552
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(127,565
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)
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-
|
||||||
Adjustments
to reconcile net income to net cash (used in) operating
activities:
|
||||||||||
Changes
in operating assets and liabilities:
|
||||||||||
Prepaid
expenses
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133,903
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(236,286
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)
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(93,827
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)
|
|||||
Accounts
payable and accrued expenses
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348,711
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-
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564,901
|
|||||||
Interest
receivable
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211,196
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(461,758
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)
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(224,168
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)
|
|||||
Income
taxes payable
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(311,780
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)
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330,203
|
588
|
||||||
Net
cash provided by operating activities
|
162,982
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1,189,276
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1,937,539
|
|||||||
Cash
flows from investing activities:
|
||||||||||
Cash
held in trust account
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(1,112,915
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)
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(107,911,098
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)
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(109,728,528
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)
|
||||
Net
cash (used in) investing activities
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(1,112,915
|
)
|
(107,911,098
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)
|
(109,728,528
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)
|
||||
|
||||||||||
Cash
flows from financing activities:
|
||||||||||
Proceeds
from public offering - net
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-
|
103,344,838
|
103,344,838
|
|||||||
Net
proceeds from the sale of stock to founding stockholders
|
-
|
-
|
16,250
|
|||||||
Proceeds
from note payable to affiliate
|
-
|
-
|
240,000
|
|||||||
Repayment
of note payable to affiliate
|
-
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(240,000
|
)
|
(240,000
|
)
|
|||||
Deferred
offering costs
|
-
|
163,186
|
-
|
|||||||
Repurchase
and retirement of common stock
|
-
|
-
|
(625
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)
|
||||||
Proceeds
from private placement warrants
|
-
|
5,000,000
|
5,000,000
|
|||||||
Net
cash provided by financing activities
|
-
|
108,268,024
|
108,360,463
|
|||||||
Net
increase (decrease) in cash and cash equivalents for
period
|
(949,933
|
)
|
1,546,202
|
569,474
|
||||||
Cash
and cash equivalents, beginning of period
|
1,519,407
|
91,439
|
-
|
|||||||
Cash
and cash equivalents, end of period
|
$
|
569,474
|
$
|
1,637,641
|
$
|
569,474
|
||||
|
||||||||||
Supplemental
cash disclosure
|
||||||||||
Cash
paid for income taxes
|
$
|
1,165,884
|
$
|
968,073
|
$
|
2,673,957
|
||||
Supplemental
schedule of non-cash financing activities
|
||||||||||
Accrued
offering costs
|
$
|
-
|
$
|
-
|
$
|
-
|
||||
Deferred
underwriting discount
|
-
|
3,772,272
|
3,772,272
|
|||||||
Common
stock subject to possible conversion
|
-
|
21,490,637
|
21,490,637
|
·
|
Level
1: Observable inputs such as quoted prices in active markets for
identical
assets of liabilities.
|
·
|
Level
2: Inputs other than quoted prices that are observable for the
asset or
liability, either directly or
indirectly.
|
·
|
Level
3: Significant unobservable inputs.
|
Fair
Value
as
of
September
30
|
Fair
Value Measurements at September 30, 2008
Using
Fair Value Hierarchy
|
|||
Level
1
|
Level
2
|
Level
3
|
||
Cash
and cash equivalents
|
$569,474
|
$569,474
|
-
|
-
|
Cash
held in trust account
|
109,728,528
|
109,728,528
|
-
|
-
|
Total
|
$110,298,002
|
$110,298,002
|
-
|
-
|
-
|
premiums
associated with our directors and officers liability
insurance;
|
-
|
expenses
for due diligence and investigation of prospective target
businesses;
|
-
|
Delaware
franchise taxes
|
-
|
legal
and accounting fees relating to our SEC reporting obligations and
general
corporate matters; and
|
-
|
miscellaneous
expenses.
|
-
|
payment
of premiums associated with our directors and officers
insurance;
|
-
|
due
diligence and investigation of prospective target
businesses;
|
-
|
legal
and accounting fees relating to our SEC reporting obligations and
general
corporate matters;
|
-
|
structuring
and negotiating a business combination, including the making of
a down
payment or the payment for exclusivity or similar fees and expense;
and
|
-
|
other
miscellaneous expenses.
|
Item
6.
|
|
Exhibits.
|
|
|
|
Exhibit
Number
|
|
Exhibit
Description
|
|
|
|
31.1
|
|
Certification
by Principal Executive Officer pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
|
|
||
31.2
|
|
Certification
by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
||
32.1
|
|
Certification
by Principal Executive Officer pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
||
32.2
|
|
Certification
by Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
CHURCHILL
VENTURES LTD.
|
||
|
|||
|
|||
Date:
November 12 , 2008
|
By:
|
/s/
Itzhak Fisher
|
|
|
|
Itzhak
Fisher
|
|
|
|
Principal
Executive Officer
|
|
|
|||
|
|||
Date:
November 12, 2008
|
By:
|
/s/
Elizabeth O’Connell
|
|
|
|
Elizabeth
O’Connell
|
|
|
|
Chief
Financial Officer
|
|