x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Delaware
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|
20-2650200
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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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|
|
|
360
Madison Avenue, 21st
Floor
New
York, New York
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10017
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(Address
of principal executive
offices)
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(Zip
Code)
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PART I
- FINANCIAL INFORMATION
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|
Item
1. Financial Statements
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|
Balance
Sheets
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1
|
Statements
of Operations
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2
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Statement
of Cash Flows
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3
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Notes
to Consolidated Financial Statements
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4
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
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9
|
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
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11
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Item
4. Controls and Procedures
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11
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PART II
- OTHER INFORMATION
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|
Item
1. Legal Proceedings
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12
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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12
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Item
3. Defaults Upon Senior Securities
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12
|
Item
4. Submission of Matters to a Vote of Security
Holders
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12
|
Item
5. Other Information
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12
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Item
6. Exhibits
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12
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SIGNATURES
|
13
|
September
30, 2006
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March
31, 2006 (As Restated)
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||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
149,076
|
$
|
579,029
|
|||
Prepaid
expenses
|
31,721
|
72,488
|
|||||
Total
current assets
|
$
|
180,797
|
$
|
651,517
|
|||
Investments
held in Trust Account
|
51,893,803
|
51,108,343
|
|||||
Fixed
assets, net of accumulated depreciation
|
3,554
|
4,062
|
|||||
Total
assets
|
$
|
52,078,154
|
$
|
51,763,922
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities
|
|||||||
Accrued
expenses
|
$
|
111,661
|
$
|
90,310
|
|||
Taxes
payable
|
14,000
|
116,000
|
|||||
Derivative
liabilities
|
7,914,887
|
13,393,035
|
|||||
Total
current liabilities
|
$
|
8,040,548
|
$
|
13,599,345
|
|||
Common
stock, and changes in Trust Account value attributable to shares
subject
to possible redemption, 1,799,100 shares at $5.60 per
share
|
10,378,012
|
10,193,318
|
|||||
STOCKHOLDERS’
EQUITY
|
|||||||
Preferred
stock — $.0001 par value, 1,000,000 shares authorized; 0 shares issued and
outstanding
|
—
|
—
|
|||||
Common
stock — $.0001 par value, 50,000,000 shares authorized; 11,249,997 shares
issued and outstanding (which includes 1,799,100 shares subject to
possible redemption)
|
1,125
|
1,125
|
|||||
Additional
paid-in capital
|
32,343,046
|
32,343,046
|
|||||
Retained
earnings/ (deficit) accumulated during the development
stage
|
1,315,423
|
(4,372,912
|
)
|
||||
Total
stockholders’ equity
|
33,659,594
|
27,971,259
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
52,078,154
|
$
|
51,763,922
|
Three
Months Ended
September
30, 2006
|
Three
Months Ended
September
30, 2005
(As
Restated)
|
Six
Months Ended
September
30, 2006
|
April
7, 2005 (Date of Inception) Through
September
30, 2005
(As
Restated)
|
April
7, 2005 (Date of Inception) Through
September
30, 2006
|
||||||||||||
Operating
costs
|
$
|
(166,126
|
)
|
$
|
(20,199
|
)
|
$
|
(267,693
|
)
|
$
|
(21,199
|
)
|
(481,486
|
)
|
||
Loss
from operations
|
(166,126
|
)
|
(20,199
|
)
|
(267,693
|
)
|
(21,199
|
)
|
(481,486
|
)
|
||||||
Gain
(loss) from change in value of derivative liabilities
|
701,714
|
604,499
|
5,478,147
|
604,499
|
815,584
|
|||||||||||
Other
income—interest
|
399,034
|
74
|
791,575
|
74
|
1,529,377
|
|||||||||||
Income
before provision for income taxes
|
934,622
|
584,374
|
6,002,029
|
583,374
|
1,863,475
|
|||||||||||
Provision
for income taxes
|
(65,000
|
)
|
-
|
(129,000
|
)
|
-
|
(245,000
|
)
|
||||||||
Net
income
|
$
|
869,622
|
$
|
584,374
|
$
|
5,873,029
|
$
|
583,374
|
$
|
1,618,475
|
||||||
Weighted
average number of shares outstanding—basic
|
11,249,997
|
5,282,606
|
11,249,997
|
3,891,173
|
-
|
|||||||||||
Net
income per share—basic
|
$
|
0.08
|
$
|
0.11
|
$
|
0.52
|
$
|
0.15
|
-
|
|||||||
Weighted
average number of shares outstanding—diluted
|
12,916,059
|
5,282,606
|
12,916,059
|
3,891,173
|
-
|
|||||||||||
Net
income per share—diluted
|
$
|
0.03
|
$
|
0.11
|
$
|
0.06
|
$
|
0.15
|
|
-
|
||||||
Pro
Forma Adjustment:
|
||||||||||||||||
Interest
income attributable to common stock subject to possible redemption
(net of
taxes of $0)
|
$
|
(79,767
|
)
|
$
|
-
|
$
|
(184,694
|
)
|
$
|
-
|
-
|
|||||
Pro
forma net income attributable to common stockholders not subject
to
possible redemption
|
$
|
789,855
|
$
|
584,374
|
$
|
5,688,335
|
$
|
583,374
|
-
|
|||||||
Pro
forma weighted average number of shares outstanding, excluding shares
subject to possible redemption—basic
|
9,450,897
|
4,676,387
|
9,450,897
|
3,563,102
|
-
|
|||||||||||
Pro
forma net income per share, excluding shares subject to possible
redemption—basic
|
$
|
0.08
|
$
|
0.12
|
$
|
0.60
|
$
|
0.16
|
-
|
|||||||
Pro
forma weighted average number of shares outstanding, excluding shares
subject to possible redemption—diluted
|
11,116,959
|
4,676,387
|
11,116,959
|
3,563,102
|
-
|
|||||||||||
Pro
forma net income per share, excluding shares subject to possible
redemption—diluted
|
$
|
0.02
|
$
|
0.12
|
$
|
0.06
|
$
|
0.16
|
-
|
Six
Months Ended
September
30, 2006
|
April
7, 2005 (Date of Inception) Through
September
30, 2005 (As Restated)
|
April
7, 2005 (Date of Inception) Through September 30,
2006
|
||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income
|
$
|
5,873,029
|
$
|
583,374
|
$
|
1,618,475
|
||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||||
Depreciation
|
508
|
-
|
1,522
|
|||||||
Gain/loss
from change in value of derivative liabilities
|
(5,478,148
|
)
|
(604,499
|
)
|
(815,584
|
)
|
||||
Changes
in operating assets and liabilities
|
||||||||||
Prepaid
expenses
|
40,767
|
(109,838
|
)
|
(31,721
|
)
|
|||||
Accrued
expenses
|
21,351
|
1,000
|
111,661
|
|||||||
Taxes
payable
|
(102,000
|
)
|
-
|
14,000
|
||||||
Net
cash provided by (used in) operating
activities
|
355,507
|
(129,963
|
)
|
898,353
|
||||||
Cash
flows from investing activities:
|
||||||||||
Investments held
in Trust Account
|
(785,460
|
)
|
(50,380,000
|
)
|
(51,893,803
|
)
|
||||
Purchase
of property and equipment
|
-
|
-
|
(5,077
|
)
|
||||||
Net
cash used in investing activities
|
(785,460
|
)
|
(50,380,000
|
)
|
(51,898,880
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Issuance
of stock
|
-
|
51,293,918
|
51,148,503
|
|||||||
Proceeds
from notes payable to stockholder
|
-
|
150,000
|
150,000
|
|||||||
Repayment
of note payable to stockholder
|
-
|
(150,000
|
)
|
(150,000
|
)
|
|||||
Proceeds
from sale of common stock to founders
|
-
|
1,000
|
1000
|
|||||||
Proceeds
from issuance of representative’s option
|
-
|
100
|
100
|
|||||||
Net
cash provided by financing activities
|
-
|
51,295,018
|
51,149,603
|
|||||||
Net
increase in cash and cash equivalents
|
(429,953
|
)
|
785,055
|
149,076
|
||||||
Cash
and cash equivalents—beginning of period
|
579,029
|
-
|
-
|
|||||||
Cash
and cash equivalents—end of period
|
$
|
149,076
|
$
|
785,055
|
$
|
149,076
|
[1] |
Cash
and cash equivalents:
|
[2] |
Investments
held in Trust Account:
|
[3] |
Accounting
for Warrants and Derivative
Instruments
|
[4] |
Earnings
per common share:
|
[5] |
Use
of estimates:
|
[6] |
Income
taxes:
|
31.1
|
Section 302
Certification of Chief Executive Officer
|
31.2
|
Section 302
Certification of Chief Financial Officer
|
32.1
|
Section 906
Certification
|
|
AD.VENTURE
PARTNERS, INC.
|
|
|
|
|
Date:
November 14, 2006
|
By: | /s/ Howard S. Balter |
Howard S. Balter |
||
Chairman and Chief Executive | ||
Officer
(Principal Executive Officer)
|
By: | /s/ Ilan M. Slasky | |
Ilan M. Slasky |
||
President and Secretary (Principal Financial and | ||
Accounting Officer) |