ý
|
Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the quarterly period ended June 30,
2008
|
or
|
ð
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
For
the transition period from
to
|
Delaware
|
03-0561397
|
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(I.R.S.
Employer
Identification
No.)
|
Page
No.
|
||
Part
I.
|
Financial
Information
|
F-1
|
Item
1.
|
Financial
Statements
|
F-1
|
Condensed
Balance Sheets as of June 30, 2008 (unaudited) and December 31,
2007
|
F-1
|
|
Condensed
Statements of Income for the three and six months ended June 30,
2008 and
June 30, 2007, and for the period from April 20, 2005 (date of inception)
to June 30, 2008 (unaudited)
|
F-2
|
|
Condensed
Statement of Stockholders’ Equity for the period from April 20, 2005 (date
of inception) to June 30, 2008
|
F-3
|
|
Condensed
Statements of Cash Flows for the three and six months ended June
30, 2008
and June 30, 2007, and from April 20, 2005 (date of inception) to
June 30,
2008
|
F-4
|
|
Notes
to Condensed Financial Statements
|
F-5
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
2
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
4
|
Item
4T.
|
Controls
and Procedures
|
4
|
Part
II.
|
Other
Information
|
5
|
Item
1.
|
Legal
Proceedings
|
5
|
Item
1A.
|
Risk
Factors
|
5
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
5
|
Item
3.
|
Default
Upon Senior Securities
|
5
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
5
|
Item
5.
|
Other
Information
|
5
|
Item
6.
|
Exhibits
|
5
|
Signatures
|
6
|
June
30, 2008
|
December
31, 2007
|
||||||
|
(unaudited)
|
||||||
ASSETS
|
|||||||
Current
Assets
|
|||||||
Cash
|
$
|
14,558
|
$
|
8,726
|
|||
Investment
in trust account
|
60,735,326
|
60,578,630
|
|||||
Prepaid
expenses & taxes
|
29,671
|
17,342
|
|||||
Total
current assets
|
60,779,555
|
60,604,698
|
|||||
Deferred
tax asset
|
282,775
|
150,220
|
|||||
Property
& equipment, net of depreciation
|
7,259
|
6,099
|
|||||
Total
assets
|
$
|
61,069,589
|
$
|
60,761,017
|
|||
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities
|
|||||||
Accounts
payable and accrued expenses
|
$
|
125,074
|
$
|
75,235
|
|||
Income
taxes payable
|
61,054
|
-
|
|||||
Deferred
underwriting fees
|
1,800,000
|
1,800,000
|
|||||
Notes
payable - stockholders
|
250,000
|
250,000
|
|||||
Total
liabilities
|
2,236,128
|
2,125,235
|
|||||
Common
stock, subject to possible redemption,
2,099,400
shares, at redemption value of $9.70 per share
|
20,364,180
|
20,364,180
|
|||||
Commitments
|
|||||||
Stockholders'
equity
|
|||||||
Preferred
stock, $.0001 par value, authorized
1,000,000
shares, none issued
|
|||||||
Common
stock, $.0001 par value, authorized
30,000,000
shares; issued and outstanding
7,580,000
shares, inclusive of 2,099,400 shares subject
to
possible redemption, at June 30, 2008 and December 31,
2007
|
758
|
758
|
|||||
Additional
paid-in capital
|
37,488,281
|
37,488,281
|
|||||
Earnings
accumulated during the development stage
|
980,242
|
782,563
|
|||||
Total
stockholders' equity
|
38,469,281
|
38,271,602
|
|||||
$
|
61,069,589
|
$
|
60,761,017
|
||||
Total
liabilities and stockholders' equity
|
For
the
|
For
the period from
|
|||||||||||||||
April
20, 2005
|
||||||||||||||||
Three
months ended
|
Six
months ended
|
(inception)
to
|
||||||||||||||
June
30, 2008
|
June
30, 2007
|
June
30, 2008
|
June
30, 2007
|
June
30, 2008
|
||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||
Interest
and dividend income
|
$
|
329,060
|
$
|
720,902
|
$
|
869,634
|
$
|
771,125
|
$
|
2,964,163
|
||||||
Formation
and operating costs
|
(266,539
|
)
|
(193,394
|
)
|
(424,890
|
)
|
(219,116
|
)
|
(964,192
|
)
|
||||||
Net
income before provision for income taxes
|
62,521
|
527,508
|
444,744
|
552,009
|
1,999,971
|
|||||||||||
Provision
for income taxes
|
(57,260
|
)
|
(272,880
|
)
|
(247,065
|
)
|
(272,880
|
)
|
(1,019,729
|
)
|
||||||
Net
income
|
$
|
5,261
|
$
|
254,628
|
$
|
197,679
|
$
|
279,129
|
$
|
980,242
|
||||||
Weighted
average shares outstanding
|
7,580,000
|
7,580,000
|
7,580,000
|
4,729,171
|
3,956,815
|
|||||||||||
Net
income per share-basic and diluted
|
$
|
0.00
|
$
|
0.03
|
$
|
0.03
|
$
|
0.06
|
$
|
0.25
|
For
the period from April 20, 2005 (inception) to June 30,
2008
|
||||||||||||||||
|
|
|
||||||||||||||
Common
stock
|
||||||||||||||||
|
Earnings
(deficit)
|
|||||||||||||||
Additional
paid-in
|
accumulated
during
the
|
Stockholders'
|
||||||||||||||
Shares
|
Amount
|
capital
|
development
stage
|
equity
(deficiency)
|
||||||||||||
Common
shares issued July
18, 2005 at $.0156
|
1,600,000
|
$
|
160
|
$
|
24,840
|
$
|
-
|
$
|
25,000
|
|||||||
Net
loss - 2005
|
(11,140
|
)
|
(11,140
|
)
|
||||||||||||
|
||||||||||||||||
|
-
|
|||||||||||||||
Balance
- December 31, 2005
|
1,600,000
|
160
|
24,840
|
(11,140
|
)
|
13,860
|
||||||||||
|
-
|
|||||||||||||||
Net
loss - 2006
|
(23,905
|
)
|
(23,905
|
)
|
||||||||||||
Redemption
- September 15, 2006
|
(20,000
|
)
|
(2
|
)
|
(310
|
)
|
(312
|
)
|
||||||||
Balance
- December 31, 2006
|
1,580,000
|
158
|
24,530
|
(35,045
|
)
|
(10,357
|
)
|
|||||||||
Proceeds
of private placement - March
21, 2007
|
3,200,000
|
3,200,000
|
||||||||||||||
Common
shares issued March
28, 2007 at $10 per share
|
6,000,000
|
600
|
59,999,400
|
60,000,000
|
||||||||||||
Proceeds
subject to possible
redemption
|
(20,364,180
|
)
|
(20,364,180
|
)
|
||||||||||||
Expenses
of the Offering
|
(5,371,569
|
)
|
(5,371,569
|
)
|
||||||||||||
Net
income - 2007
|
817,608
|
817,608
|
||||||||||||||
Proceeds
of options sold
|
100
|
100
|
||||||||||||||
Balance
- December 31, 2007
|
7,580,000
|
758
|
37,488,281
|
782,563
|
38,271,602
|
|||||||||||
(unaudited)
|
||||||||||||||||
Net
income-for the period
|
197,679
|
197,679
|
||||||||||||||
Balance
- June 30, 2008
|
7,580,000
|
$
|
758
|
$
|
37,488,281
|
$
|
980,242
|
$
|
38,469,281
|
For
the period from
|
||||||||||
April
20, 2005
|
January
1, 2008
|
January
1, 2007
|
||||||||
(Inception)
to
|
to
|
to
|
||||||||
June
30, 2008
|
June
30, 2008
|
June
30, 2007
|
||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income
|
$
|
980,242
|
$
|
197,679
|
$
|
279,129
|
||||
Adjustments
to reconcile net income to net
cash used in operating activities:
|
||||||||||
Depreciation
|
1,139
|
840
|
-
|
|||||||
Increase
in investment in Trust Account
|
(2,956,467
|
)
|
(869,633
|
)
|
(763,429
|
)
|
||||
Increase
in deferred tax asset
|
(282,775
|
)
|
(132,555
|
)
|
(64,891
|
)
|
||||
Increase
in prepaid expenses/other receivables
|
(29,671
|
)
|
(12,858
|
)
|
(66,713
|
)
|
||||
Increase
in income taxes payable
|
61,054
|
61,584
|
-
|
|||||||
Increase
in accounts payable and accrued
expenses
|
125,074
|
49,838
|
38,912
|
|||||||
Net
cash used in operating activities
|
(2,101,404
|
)
|
(705,105
|
)
|
(576,992
|
)
|
||||
Cash
flows from investing activities
|
||||||||||
Payment
to trust account
|
(60,002,831
|
)
|
-
|
(60,002,831
|
)
|
|||||
Withdrawals
from trust account
|
2,223,972
|
712,937
|
621,759
|
|||||||
Purchase
of equipment
|
(8,398
|
)
|
(2,000
|
)
|
-
|
|||||
Net
cash provided by (used in) investing activities
|
(57,787,257
|
)
|
710,937
|
(59,381,072
|
)
|
|||||
|
||||||||||
Cash
flows from financing activities:
|
||||||||||
Payment
of expenses of offering
|
(3,571,569
|
)
|
-
|
(3,310,009
|
)
|
|||||
Proceeds
from sale of common stock
|
25,000
|
-
|
-
|
|||||||
Proceeds
from notes payable - stockholder(s)
|
250,000
|
-
|
250,000
|
|||||||
Proceeds
from initial public offering
|
60,000,000
|
-
|
60,000,000
|
|||||||
Proceeds
from private placement
|
3,200,000
|
-
|
3,200,000
|
|||||||
Proceeds
from sale of option
|
100
|
-
|
100
|
|||||||
Repayment
of notes payable - stockholders
|
-
|
-
|
(187,802
|
)
|
||||||
Redemption
of stock
|
(312
|
)
|
-
|
-
|
||||||
Net
cash provided by financing activities
|
59,903,219
|
-
|
59,952,289
|
|||||||
|
||||||||||
Net
increase (decrease) in cash
|
14,558
|
5,832
|
(5,775
|
)
|
||||||
Cash
- beginning of period
|
-
|
8,726
|
7,119
|
|||||||
Cash
- end of period
|
$
|
14,558
|
$
|
14,558
|
$
|
1,344
|
||||
Supplemental
disclosure of cash flow information
|
||||||||||
Cash
paid for income taxes
|
$
|
1,241,075
|
$
|
318,037
|
$
|
346,556
|
||||
Supplemental
disclosure of non-cash financing
activities:
|
||||||||||
Accrual
of deferred offering costs
|
$
|
1,800,000
|
$
|
-
|
$
|
1,890,000
|
·
|
the
market price of the underlying shares of common stock is lower than
the
exercise price;
|
·
|
the
holder of the warrants has not confirmed in writing that the
representative solicited the
exercise;
|
·
|
the
warrants are held in a discretionary
account;
|
·
|
the
warrants are exercised in an unsolicited transaction;
or
|
·
|
the
arrangement to pay the commission is not disclosed in the prospectus
provided to warrant holders at the time of exercise.
|
6
months ended
|
Year
ended
|
||||||
June
30, 2008
|
December 31, 2007
|
||||||
Current:
|
|
|
|||||
Federal
|
$
|
236,396
|
$
|
574,837
|
|||
|
|||||||
State
|
143,224
|
348,047
|
|||||
|
|||||||
Total
Current
|
$
|
379,620
|
$
|
922,884
|
|||
|
|||||||
|
|||||||
Deferred:
|
|||||||
Federal
|
$
|
(86,036
|
)
|
$
|
(93,658
|
)
|
|
|
|||||||
State
|
(46,519
|
)
|
(56,562
|
)
|
|||
|
|||||||
Total
Deferred
|
$
|
(132,555
|
)
|
$
|
(150,220
|
)
|
|
|
|||||||
Total
provision
|
$
|
247,065
|
$
|
772,664
|
|||
June
30, 2008
|
December 31, 2007
|
||||||
|
|
|
|||||
Expenses
deferred for income tax purposes
|
$
|
831,691
|
$
|
441,823
|
|||
|
|||||||
Adjusted
deferred tax asset
|
415,330
|
193,878
|
|||||
|
|||||||
Valuation
allowance
|
(132,555
|
)
|
(43,658
|
)
|
|||
|
|||||||
Total
deferred tax asset
|
$
|
282,775
|
$
|
150,220
|
|||
|
June
30, 2008
|
December 31, 2007
|
||||||
Federal
income tax rate
|
34.00
|
%
|
34.00
|
%
|
|||
|
|||||||
State
& local tax rate
|
10.90
|
%
|
10.90
|
%
|
|||
|
|||||||
Valuation
Allowance
|
3.70
|
%
|
3.70
|
%
|
|||
Effective
Tax Rate
|
48.60
|
%
|
48.60
|
%
|
|||
·
|
payment of taxes on trust account interest income; |
·
|
payment of State of Delaware franchise taxes; |
·
|
repayment
of up to $250,000 of an additional officer loan made prior to the
closing
of this offering by Steven M. Wasserman;
|
·
|
our
working capital requirements before we complete a business combination
and, if necessary, funding the costs of our potential dissolution
and
liquidation;
|
·
|
solely if we complete a business combination, interest on the amount of deferred underwriters’ compensation payable to the underwriters; and |
·
|
the
balance, if any, to us if we complete a business combination or to
our
public stockholders if we do not complete a business
combination.
|
Exhibit
No.
|
Description
|
|
31.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer (Principal
Executive and Financial Officer) pursuant to Rule 13a-14(a) of the
Securities Exchange Act, as amended.
|
|
32.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer (Principal
Executive and Financial Officer) pursuant to 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
ALPHA
SECURITY GROUP CORPORATION
|
|||
August
14, 2008
|
By:
|
/s/
Steven M. Wasserman
|
|
Steven
M. Wasserman
|
|||
Chief
Executive Officer and Chief Financial Officer
(Principal
Executive and Financial Officer)
|