“SPAC” – Special Purpose Acquisition Corporation

“SPAC” – Special Purpose Acquisition Corporation

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About The Panelists Joel Kanter

President and Secretary, has served as President of Windy City, Inc., a privately-held investment firm, since 1986. From 1995 to 1999, Mr. Kanter served as the Chief Executive Officer and President of Walnut Financial Services, Inc., a publicly traded company (formerly listed on Nasdaq). Walnut Financial’s primary business focus was the provision of different forms of financing to small businesses. Walnut Financial accomplished this objective by providing equity financing to start-up and early stage development companies, bridge financing and factoring services to small and medium-sized companies, and by providing later stage institutional financing to more mature enterprises through an institutional fund it ran for the Teachers Retirement System of Illinois.

Over the course of its 13 year history, Walnut Financial provided financing to over 300 companies, including many that became well known ventures including Plax Mouthwash (Oral Research Laboratories), Sonicare Toothbrushes (Optiva Corp.), the first manufacturer of Global Positioning System devices (Magellan Corp.), the largest and only nationwide Preferred Provider Organization (First Health), what became the country’s fifth largest nursing home company (GranCare), and the third largest U.S. institutional pharmacy company (Vitalink Pharmacy Services, Inc.). Walnut Financial was acquired by THCG, Inc. in 1999.

From 1985 through 1986, Mr. Kanter served as Managing Director of The Investors’ Washington Service, an investment advisory company specializing in providing advice to large institutional clients regarding the impact of federal legislative and regulatory decisions on debt and equity markets. Clients included Amoco Oil, AT&T, Bankers Trust, Chase Manhattan Bank, General Motors and J.C. Penney. Mr. Kanter serves on the Board of Directors of several public companies including Encore Medical Corporation (Nasdaq: ENMC), I-Flow Corporation (Nasdaq:IFLO), Logic Devices, Inc. (Nasdaq:LOGC) Magna-Lab, Inc. (OTC Bulletin Board:MAGLA.OB) Nesco Industries, Inc. (OTCBB:NESK.OB), a manufacturer of aqueous polymer Hydrogel used for wound care and transdermal drug delivery systems; and Prospect Medical Holdings, Inc. (AMEX:PZZ), a provider of management services to affiliated independent physician associations.

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Mr. Kanter also serves on the board of directors of several private companies, including BioHorizons Implant Systems, Inc., a provider of dental implants and related products; Med Images, Inc., a provider of integrated documentation services to surgeons and hospitals through multimedia technology; Marina Medical, Inc., a provider of medical billing and accounts receivable management services to hospital based physicians; Modigene Inc., a life sciences company that is developing technology to extend the life of proteins; MathMastery, Inc., a company that develops homework help products for the educational market; and Prescient Medical, Inc. an early stage company seeking methods to identify and treat vulnerable plaque in cardiology patients. He is the past President of the Board of Trustees of The Langley School in McLean Virginia and a current Trustee at the Georgetown Day School in Washington, D.C. Mr. Kanter graduated from Tulane University in 1978 with a Bachelor of Science in Psychology and a Bachelor of Arts in Political Science.

Mr. Ferrari Co-founder of RPCP and has been a partner of RPCP since July 2002 and as vice president and director of Royal Palm Capital Management, Inc., since February 2005. He has also served as a director of Devcon International Corp. since July 2004 and as vice chairman of Sunair Electronics, Inc. since February 2005. From June 2000 to June 2002, he was an investment banker with Morgan Stanley & Co., where he helped start the firm’s private equity placement group. Previously, Mr. Ferrari co-founded PowerUSA, LLC, a retail renewable energy services company, in October 1997 and was a managing member until September 1999. Mr. Ferrari graduated from Georgetown University, where he received his B.S., magna cum laude, in Finance and International Business.

Steven Slawson-PrincipalTCMP3 Partners/Titan Capital ManagementSteven Slawson has over 35 years of experience in the investment business. Since June 1999, when he co-founded TCMP3 Partners (the investment entity of Titan Capital Management) he has functioned as co-principal and Co-General Partner. TCMP3 is a $50 million value oriented hedge fund which focuses on capital preservation. Its three principal strategies are investing in micro caps (often well under $200 million), as a PIPE investor and an active participant in SPACs. Since its inception in June 1999, the fund is up 122% versus a gain in the S&P 500 of 4%, a decline in the NASDAQ Composite of 22%, and a rise in the Russell 2000 of 67%. The fund uses no financial leverage and emphasizes tax efficiency. TCMP3 Partners has had no down years, a relatively low maximum drawdown, and sharply lower volatility than most indices.

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John Dalfonsi, Managing Director – Roth Capital Partners, LLCMr. Dalfonsi is a managing director in the investment banking department at Roth Capital Partners. During his career, Mr. Dalfonsi has closed over 150 financings and advised companies on mergers and acquisitions totaling over $6 billion in value. Mr. Dalfonsi has worked in an investment banking capacity at firms including William Blair & Company, Friedman Billings Ramsey and The Sakura Bank Limited over the last ten years. Mr. Dalfonsi received his B.S in Industrial Engineering from Northwestern University and has MBA from the University of Chicago Graduate School of Business. Mr. Dalfonsi currently serves on the board of Mazda Motor Funding.

Douglas S. EllenoffA member of Ellenoff Grossman & Schole LLP, is a corporate and securities attorney with a specialty in business transactions and corporate financings. During his career, he has represented numerous broker-dealers (underwriters and placement agents), venture capital investor groups and many corporations involved in the capital formation process. In the last few years, he has been involved in over 20 registered public offerings and over 100 private placements into public companies (PIPEs). As a result of his firm's recognition within the SPAC program, Mr. Ellenoff has been involved at various stages with over 30 SPACs. He also provides counsel with regard to their respective ongoing (SEC, AMEX and NASD) regulatory compliance. Mr. Ellenoff has represented public companies in connection with their initial public offerings, secondary public offerings, regulatory compliance as well as general corporate governance matters.

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What is a SPAC? Newly formed corporation by prominent and qualified sponsor/management team

for the purpose of raising capital in an IPO in anticipation of identifying and consummating a business combination

SPAC seeks to leverage the strength and recognition of the management team within an industry or geographic location to secure propriety deal flow and identify attractive acquisition candidates

Provides public company transparency to investors with full disclosure and voting rights with respect to approving the proposed business combination

Public shareholders are able to sell their securities in the open market Structure permits an investor to:

Approve the business combination Reject the business combination and elect to receive pro rata portion of the amount held in

the trust account (even if the majority of holders approve the business combination)

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What are the Advantages to the Investor? Access to investments in acquisitions and buy-outs typically restricted to

private equity funds

Investing with Sponsor (investing their own capital-up to 5% of IPO) who have industry expertise

Structure and Limited Risk Capital held in a trust account pending approval of business combination Benefits from liquidity of publicly-traded security and ability to control timing of

exit Pending business combination, no cash compensation to

Sponsor/Management Team Warrants included in Units offered in IPO enable holder to invest more capital

at a pre-determined price and leverage initial investment Grants investors voting rights to approve or reject the business combination Provider a minimum liquidation value per share in the event no business

combination is effected

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What Are Advantages To Sponsor/Management?

Pre-funding an acquisition strategy

Greater flexibility than with traditional private equity

Better economics for sponsor/management

More credibility with seller with cash in trust

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Offered Securities*Offerings consist of units comprised of common shares and warrants

that are registered with the SEC and trade freely

*This structure may not be indicative of all structures and is intended for illustrative purposes only.

Traditional SPAC Structure $8.00 Unit

Composition of Units 1 common share 1 warrant Trade separately

Warrant Strike Price $6.00

Warrant Exercise Period 4 year life from the date of the IPO

Call Provision ≥ $11.50 for any 20 trading days

within a 30 day period

Liquidation Value per Share $7.60+

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Features

Feature Significance

Third Party Escrow 95% + of cash held in trust

Target Enterprise Value must be 80%

of net assets

Ensures that only targets of a

minimum size are proposed Shareholder Approval Only well-received transactions get

approved Management Ownership and

Concurrent Investment

Incentivizes management to find and

close a deal Escrow of Insider’s Shares Insiders do not participate in a

liquidating distribution for interests

held prior to IPO Deal Deadline Limits the time capital is invested

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SPAC Regulatory History – Disruptive Events Concern with identification of deal prior to IPO - International Shipping

(February - July 2005)

Warrant Purchase Obligation/Regulation M - Key Hospitality (EGS/Underwriter Counsel) (November 2005)

Amending Charter-Great Wall Acquisition (January 2006)

Delaware Dissolution-HD Partners (EGS - Issuer Counsel) (May 2006)

Warrant EITF 0019 Cash Settlement Value of Warrants - Energy Infrastructure (EGS - Underwriters Counsel) (July 2006)

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Trends

Concurrent Private Placement/Sponsor Loan

AIM SPAC’s

Private SPAC’s

Business Combinations with Simultaneous PIPE’s

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Timing and ResponsibilitiesMonth 1

S M T W TH F S

1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31

Month 2

S M T W TH F S

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30

Month 3

S M T W TH F S

1

2 3 4 5 6 7 8

9 10 11 12 13 14 15

16 17 18 19 20 21 22

23 24 25 26 27 28 29

30 31

Month 4

S M T W TH F S

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30

Sponsor Team SCompany Counsel CCUnderwriters UUnderwriter’s Counsel UC

Week Objectives Primary Responsibility

Organizational Meeting S, CC, U, UC

Complete working group list All

1 Execute Engagement All

Engage Underwriter Counsel and Issuers Counsel S, U

Set up corporation CC

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S M T W TH F S

1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31

Month 2

S M T W TH F S

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30

Month 3

S M T W TH F S

1

2 3 4 5 6 7 8

9 10 11 12 13 14 15

16 17 18 19 20 21 22

23 24 25 26 27 28 29

30 31

Month 4

S M T W TH F S

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30


Begin first draft of registration statement S, U

2 Finalize Board of Directors positions S

Commence Blue Sky qualification and NASD approval process UC

Finalize registration statement All

3 File registration statement Apply to Exchange NASDAQ Bulletin Board

All All

4 Begin preparation of management presentations S, U

5-6 Plan road show and management presentations (chose cities) Distribute draft of underwriting agreement

All UC

7-8

Receive comments from the SEC Respond to comments from the SECPreliminary Blue Sky Memorandum (if applicable)Print preliminary prospectus (“red herring”)

All AllUCPrinter

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S M T W TH F S

1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31

Month 2

S M T W TH F S

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30

Month 3

S M T W TH F S

1

2 3 4 5 6 7 8

9 10 11 12 13 14 15

16 17 18 19 20 21 22

23 24 25 26 27 28 29

30 31

Month 4

S M T W TH F S

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30


9-10

Underwriters’ sales force meeting (“teach in”) Company presentation to institutional sales force Finalize road show presentation schedule Company presentation to retail sales force Send out red herrings

UC, CC S, U S, U S, U S, U, CC

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[Day before Closing Date]

[Closing Date=

3 days after pricing or

next business day]

Institutional meetings (Domestic and European) Negotiate underwriting agreement Agree on final terms of offering Price offering, sign underwriting agreement Go effective (delivery of comfort letter and CC opinion) File final prospectus Print and distribute final prospectus Closing. Securities delivered and payment is made to the Company minus the

underwriters’ discounts

Closing documents exchanged

S, U UC, CC S, U S, U All All All All

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AboutEllenoff Grossman & Schole LLP

Ellenoff Grossman & Schole LLP is a New York-based law firm with over 35 professionals offering its clients legal services in a broad range of business related matters. The Firm specializes in many areas of commercial law: Corporate, Securities, Broker-Dealer Regulations, Hedge Funds, Real Estate, Litigation, Tax and Estate Planning. The philosophy of the Firm is to provide the highest quality legal advice and counsel, dedicating consistent, personalized attention to each client at a reasonable price. The Firm has nearly 20 securities professionals specializing in a range of activities, including:

• Public Offerings (IPOs and Secondaries)• PIPEs • Mergers and Acquisitions• Exchange Act reporting (Form 10-Ks, 10-Qs and Proxies) • NASD, AMEX, NASDAQ and OTC compliance• Broker-dealer regulations • Rule 144 transactions• Section 16 compliance

Douglas S. Ellenoff Adam Mimeles Leslie A. Martey

Barry I. Grossman Martin R. Bring Joan Adler

Brian C. Daughney Christopher E. Celano Debra M. Burg

C. David Selengut Michael Midura Phi H. D. Nguyen

Lawrence A. Rosenbloom Sarah E. Williams Brian Lee

Stuart Neuhauser Annie Y. Wong Tamar Donikyan

Eden Rohrer Steven Saide

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SPAC PRACTICE Ellenoff Grossman & Schole LLP

During the course of the last two year, Ellenoff Grossman & Schole LLP has been involved at various stages in over 30 proposed SPACs. 7 of those financings were successfully consummated and resulted in the raising of over $650,000,000. We have several others on file with the Securities and Exchange Commission awaiting their road shows and numerous others in the pre-filing preparation stages. At present, we have 8 securities professional who are engaged in our SPAC practice. Ellenoff Grossman & Schole represented 3 of the issuers listed below and 4 underwriters (Roth Capital Partners, Maxim Group, Citigroup Capital Markets and Morgan Joseph).

Healthcare Acquisition Corp. ($ 75,200,000)

Key Hospitality Acquisition Corp. ($ 48,000,000)

Boulder Specialty Brands, Inc. ($102,086,720)

Echo Healthcare Acquisition Corporation ($ 50,000,000)

HD Partners Acquisition Corp. ($150,000,000)

Affinity Media International Corp. ($ 18,975,000)

Energy Infrastructure Acquisition Corp. ($202,500,000)

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This information may answer some questions, but is not intended as a comprehensive analysis of the topic. In addition, this information should not be relied upon as the only source of information.

This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy.

This document and the information contained herein is confidential. This document has been furnished to you solely for your information and neither this document nor the information contained herein my be reproduced, disclosed or redistributed, in whole or in part, by mail, facsimile, electronic or computer transmission or by any other means to any other person, except with the prior written consent of the Ellenoff Grossman & Schole LLC.

The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy.

This presentation is made solely for the interest of friends and clients of Ellenoff Grossman & Schole LLP and should in no way be relied upon or construed as legal advice. For specific information on particular factual situations, an opinion of legal counsel should be sought.

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“SPAC” – Special Purpose Acquisition Corporation