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FINCERA INC. - Quarter Report: 2008 September (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

þ
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended September 30, 2008.
 
or

¨
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from _________ to ____________.
 
Commission File Number: 000-53082
 
SPRING CREEK ACQUISITION CORP.
(Exact name of registrant as specified in its charter)

Cayman Islands
  
39-2064705
(State or Other Jurisdiction of
  
(I.R.S. Employer
Incorporation or Organization)
  
Identification No.)
 
10F, Room #1005, Fortune Int’l Building
No. 17, North DaLiaShu Road
Hai Dain District, Beijing 10081
People’s Republic of China
(Address of Principal Executive Offices including Zip Code)

(86) 106214-3561
(Registrant’s Telephone Number, Including Area Code)
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ¨
Accelerated Filer ¨
Non-Accelerated Filer ¨
Smaller Reporting Company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes x No ¨
 
There were 6,468,750 shares of the Registrant’s common stock issued and outstanding as of November 14, 2008.
 
 
Spring Creek Acquisition Corp.
 
Index to Form 10-Q
 
 
3
ITEM 1 - FINANCIAL STATEMENTS
  
3
BALANCE SHEETS AS OF SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007
  
3
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND FROM OCTOBER 16, 2007 (INCEPTION) TO SEPTEMBER 30, 2008 (UNAUDITED)
  
4
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FROM OCTOBER 16, 2007 (INCEPTION) TO SEPTEMBER 30, 2008 (UNAUDITED)
  
5
STATEMENTS OF CASH FLOWS FOR THE NINE MONTH ENDED SEPTEMBER 30, 2008 AND FROM OCTOBER 16, 2007 (INCEPTION) TO SEPTEMBER 30, 2008 (UNAUDITED)
  
6
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
  
7
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
14
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
16
ITEM 4T. CONTROLS AND PROCEDURES
  
16
PART II - OTHER INFORMATION
  
18
ITEM 1. LEGAL PROCEEDINGS
  
18
ITEM 1A. RISK FACTORS
  
18
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
19
ITEM 5. OTHER INFORMATION
  
19
 
19
SIGNATURES
  
20
 
2
 
PART I - FINANCIAL INFORMATION
 
ITEM 1 - FINANCIAL STATEMENTS
 
SPRING CREEK ACQUISITION CORP.
(a corporation in the development stage)
 
BALANCE SHEETS
 
   
September 30, 2008
  
December 31, 2007
  
   
(Unaudited)
    
ASSETS
          
CURRENT ASSETS
          
Cash
  
$
124,916
  
$
628
  
Funds held in trust (including $76,659 in accrued interest)
    
40,870,967
    
—
  
Prepaid expenses
    
86,292
    
—
  
Total current assets
    
41,082,175
    
628
  
               
NON-CURRENT ASSETS
              
Deferred offering costs associated with public offering
    
—
    
199,957
  
Deferred acquisition costs
    
50,000
   
—
  
Total non-current assets
    
50,000
   
199,957
 
Total Assets
  
$
41,132,175
  
$
200,585
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
CURRENT LIABILITIES
              
Accrued expenses
  
$
7,840
  
$
99,013
  
Deferred underwriters fees
    
1,449,000
    
—
  
Deferred interest on funds held in trust
    
31,349
    
—
  
Income tax payable
    
102,000
    
—
  
Notes payable to stockholders
    
—
    
100,000
  
Total Current Liabilities
    
1,590,189
    
199,013
  
               
Ordinary shares, subject to possible redemption (2,069,999 shares
             
at redemption value)
    
16,270,192
   
—
  
               
STOCKHOLDERS' EQUITY
              
Preferred shares, $.001 par value
              
Authorized 1,000,000 shares; none issued
    
—
    
—
  
Ordinary shares, $.001 par value
              
Authorized 50,000,000 shares, issued and outstanding
              
6,468,750 shares (which includes 2,069,999 shares
              
subject to possible redemption at September 30, 2008);
              
1,293,750 shares at December 31, 2007
    
6,469
    
1,294
  
Additional paid-in capital
    
23,040,035
    
23,706
  
Earnings (deficit) accumulated during development stage
    
225,290
    
(23,428
)
Total Stockholders' equity
    
23,271,794
    
1,572
  
Total Liabilities and Stockholders' Equity
  
$
41,132,175
  
$
200,585
  
 
See notes to financial statements
 
3
 
SPRING CREEK ACQUISITION CORP.
(a corporation in the development stage)

STATEMENTS OF OPERATIONS 
(Unaudited)
 
     
Three 
Months
Ended
September 30,
    
Nine 
Months
Ended
September 30,
    
Period from 
October 16, 2007 
(Inception) to
September 30,
  2008
  
     
2008
    
  2008
    
(Cumulative)
  
Revenue
  
$
—
  
$
—
  
$
—
  
Operating expenses
    
70,259
    
166,939
    
185,639
  
Formation costs
    
—
    
356
    
5,084
  
Total operating expenses
    
70,259
    
167,295
    
190,723
  
Operating loss
    
(70,259
)
  
(167,295
)
  
(190,723
)
Interest income
    
233,277
    
549,362
    
549,362
  
Income before provision for income tax
    
163,018
    
382,067
    
358,639
  
Provision for income tax
    
102,000
    
102,000
    
102,000
  
Income before allocation of trust account interest
    
61,018
    
280,067
    
256,639
  
Allocation of trust account interest relating to ordinary shares subject to possible redemption
    
(31,349
)
  
(31,349
)
  
(31,349
)
Net income available to ordinary stockholders
  
$
29,669
  
$
248,718
  
$
225,290
  
 
              
Net income per ordinary share —
              
Basic
  
$
0.00
  
$
0.05
      
Diluted
  
$
0.00
  
$
0.04
      
Weighted average ordinary shares outstanding —
              
Basic
    
6,468,750
    
5,242,376
      
Diluted
    
8,454,869
    
6,794,615
      
 
See notes to financial statements
 
4
 
SPRING CREEK ACQUISITION CORP.
(a corporation in the development stage)
 
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the period from October 16, 2007 (inception) to September 30, 2008
 
   
Ordinary Shares
  
Additional Paid-in
  
Earnings (Deficit) Accumulated During the Development
 
Total Stockholders'
 
   
Shares
  
Amount
 
Capital
 
Stage
 
Equity
 
Ordinary shares issued October 16, 2007 for
                                
cash at $0.02 per share
    
1,293,750
  
$
1,294
  
$
23,706
  
$
—
  
$
25,000
  
                                 
Net loss from the period October 16, 2007 (inception)
                                
to December 31, 2007
    
—
    
—
    
—
    
(23,428
)
  
(23,428
)
                                 
Balance at December 31, 2007
    
1,293,750
   
1,294
   
23,706
   
(23,428
)
  
1,572
 
                                 
Proceeds from sale of warrants in private placement
    
—
    
—
    
1,430,000
   
—
    
1,430,000
 
                                 
Proceed from sales of shares and warrants in public
                                
offering, net of offering costs of $3,538,403
    
5,175,000
   
5,175
   
37,856,421
   
—
    
37,861,596
 
                                 
Sale of unit purchase option to underwriters
    
—
    
—
    
100
   
—
    
100
 
                                 
Shares reclassified to "Ordinary shares, subject to
                                
possible redemption"
    
—
    
—
    
(16,270,192
)
  
—
    
(16,270,192
)
                                 
Net Income available to ordinary stockholders for the
                                
nine months ended September 30, 2008
    
—
    
—
    
—
    
248,718
   
248,718
 
                                 
Balance at September 30, 2008 (Unaudited)
    
6,468,750
  
$
6,469
  
$
23,040,035
  
$
225,290
  
$
23,271,794
  
 
See notes to financial statements
 
5
 
SPRING CREEK ACQUISITION CORP.
(a corporation in the development stage)
 
STATEMENTS OF CASH FLOWS 
(Unaudited)
 
       
For the period
 
   
Nine
  
from October 16
 
   
months ended
  
2007 (inception)
  
   
September 30, 2008
  
to September 30, 2008
  
CASH FLOW FROM OPERATING ACTIVITIES
          
Net income
  
$
248,718
  
$
225,290
  
Changes in operating assets and liabilities:
              
Increase in prepaid expenses
    
(86,293
)
  
(86,293
)
Increase (decrease) in accrued expenses
    
(91,174
)
  
7,839
 
Increase in income tax payable
    
102,000
   
102,000
 
Net cash provided by operating activities
    
173,251
   
248,836
 
               
CASH FLOW FROM INVESTING ACTIVITIES
              
Offering proceeds investments in money market funds
    
(40,671,000
)
  
(40,671,000
)
Increase in trust account from interest earned on funds held in trust
    
(518,013
)
  
(518,013
)
Withdrawal from trust account
    
349,396
   
349,396
 
Payment of deferred acquisition costs
     (50,000
)
   (50,000
)
Net cash used in investment activities
    
(40,889,617
)
  
(40,889,617
)
               
CASH FLOW FROM FINANCING ACTIVITIES
              
Proceeds from sale of ordinary shares to founding stockholders
    
—
    
25,000
 
Proceeds from stockholders notes payable
    
—
    
100,000
 
Payment of stockholders notes payable
    
(100,000
)
  
(100,000
)
Gross proceeds from initial public offering
    
36,000,000
   
36,000,000
 
Gross proceeds from issuance of underwriter purchase option
    
100
   
100
 
Gross proceeds from private placement of insider warrants
    
1,430,000
   
1,430,000
 
Gross proceeds from over allotment option exercised
    
5,400,000
   
5,400,000
 
Payment of offering costs
    
(1,889,446
)
  
(2,089,403
)
               
Net cash provided by financing activities
    
40,840,654
   
40,765,697
 
               
NET INCREASE IN CASH
    
124,288
   
124,916
 
               
CASH, Beginning
    
628
   
—
  
CASH, Ending
  
$
124,916
  
$
124,916
  
               
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
      
Deferred underwriters fees
  
$
1,449,000
  
$
1,449,000
  
 
See notes to financial statements
 
6
 
Spring Creek Acquisition Corp.
(a corporation in the development stage)
 
NOTES TO FINANCIAL STATEMENTS
 
NOTE 1 -  ORGANIZATION AND PLAN OF BUSINESS OPERATIONS
 
Spring Creek Acquisition Corp. (the “Company”) was incorporated in the Cayman Islands on October 16, 2007 as a blank check company whose objective is to acquire, through a stock exchange, asset acquisition or other similar business combination, an operating business, or control of such operating business through contractual arrangements, that has its principal operations located in the Greater China region, which includes Hong Kong, Macau and Taiwan (“Greater China”).
 
At September 30, 2008 the Company had commenced seeking a target business with which to complete a business combination.
 
The financial statements at September 30, 2008 and for the three-month and nine-month periods ended September 30, 2008 are unaudited. In the opinion of management, all adjustments (consisting of normal adjustments) 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 cash flows for the three months and nine months period ended September 30, 2008 and for the period from October 16, 2007 (inception) through September 30, 2008. Operating results as presented are not necessarily indicative of the results to be expected for a full year.
 
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 note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations.
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and any disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. The interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s final prospectus, dated February 27, 2008.
 
The registration statement for the Company’s initial public offering (“Offering”) was declared effective on February 27, 2008. The Company consummated the Offering on March 4, 2008 and received proceeds net of transaction costs of approximately $34,030,000 (Note 3). The Company consummated an offering for 675,000 units of over-allotment on March 13, 2008 and received proceeds net of transaction costs of approximately $4,974,293 including unpaid underwriters compensation of $189,000. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the 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 that has its principal operations located in the Greater China region (“Business Combination”). Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. Net proceeds of $40,671,000 (including $1,430,000 of proceeds from the sale of insider warrants and $1,449,000 of deferred underwriting discounts) 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 or (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, prospective 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. Two of the initial shareholders have agreed that they will be liable under certain circumstances to ensure that the funds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by the Company for services rendered contracted for or products sold to the Company. However, there can be no assurance that they will be able to satisfy those obligations should they arise. The remaining funds (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 $1,050,000 of interest earned on the Trust Account balance may be released to the Company to fund working capital requirements as well as any amounts that are necessary to pay the Company’s tax obligations.
 
7
 
The Company, after signing a definitive agreement for the acquisition of a target business, is required to submit such transaction for stockholders’ approval. In the event that stockholders owning 40% or more of the shares sold in the Offering vote against the Business Combination and exercise their redemption rights described below, the Business Combination will not be consummated. All of the Company’s stockholders prior to the Offering, including all of the officers and directors of the Company (the “Initial Stockholders”), have agreed to vote their founding shares of ordinary shares in accordance with the vote of the majority interest of all other stockholders of the Company (the “Public Stockholders”) with respect to any Business Combination. After the 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 votes against the Business Combination may demand that the Company convert his or her shares to cash. The per share redemption 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 ordinary shares held by Public Stockholders at the consummation of the Offering. Accordingly Public Stockholders holding up to 2,069,999 shares may seek redemption of their shares in the event of a Business Combination (a greater number would not be able to since the Business Combination would not be able to be consummated with such greater number of shares choosing to redeem). Such Public Stockholders are entitled to receive their per share interest in the Trust Account computed without regard to the shares held by Initial Stockholders.
 
The Company’s Memorandum and Articles of Association were amended prior to the Offering to provide that the Company will continue in existence only until 18 months from the effective date of the Offering or until 30 months if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months after consummation of the Offering and the Business Combination has not been consummated within such 18 month period. If the Company has not completed a Business Combination by such dates, its corporate existence will cease and it will dissolve and liquidate its assets. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Account 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 Offering Unit discussed in Note 3).
 
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
 
Development Stage Company
 
The Company complies with the reporting requirements of Statements of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises.”
 
Cash
 
Cash comprises cash in bank and on hand and demand deposits with banks and other financial institutions.
 
Investment Held in Trust
 
The Company’s restricted investment held in the Trust Fund at September 30, 2008 is comprised of one money market account with a short term maturity.
 
8
 
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. The Company has provided for income taxes, where appropriate, in all jurisdictions in which it is subject to taxation.
 
Concentration of Credit Risk
 
The Company maintains cash in bank deposit accounts which, at times, exceed federally insured limits. The Company has not experienced any losses on these accounts.
 
Earnings Per Share
 
Basic and diluted Earnings Per Share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period and weighted average number of ordinary shares on an as-if-exercised basis:
 
   
Three months ended September 30, 2008
  
Nine months ended September 30, 2008
  
   
 (Unaudited)
  
 (Unaudited)
  
Net Income
  
$
29,669
  
$
248,718
  
Denominator
              
Basic weighted average shares
    
6,468,750
    
5,242,376
  
Effect of dilutive redeemable warrants & options*
    
1,986,119
    
1,527,569
  
Total
    
8,454,869
    
6,794,615
  
Basic Income Per Share
  
$
0.00
  
$
0.05
  
Diluted Income Per Share
  
$
0.00
  
$
0.04
  
 
* computed using the Treasury Stock Method; the price of $7.15 per share was used as the average trading price for the three months ended September 30, 2008, and $7.20 per share was used as the average trading price for the period from Feb. 28, 2008 to September 30, 2008.
 
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.
 
Recently Issued Accounting Standards
 
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 is effective in fiscal years beginning after November 15, 2007. The Company adopted SFAS No. 157 with no material effect on the interim financial statements.
 
9
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits companies to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 did not have a material impact on our financial statements.

In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements. SFAS No. 141 (R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS No. 160 clarifies that a noncontrolling interest in a subsidiary should be reported as equity in the consolidated financial statements. The calculation of earnings per share will continue to be based on income amounts attributable to the parent. SFAS No. 141 (R) and SFAS No. 160 are effective for financial statements issued for fiscal years beginning after December 15, 2008. Management is evaluating the impact of adopting SFAS No. 141(R) and SFAS No. 160, if any, on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an Amendment of FASB Statement No. 133" ("SFAS No. 161"). SFAS No. 161 expands the disclosure requirements in SFAS No. 133, regarding an entity's derivative instruments and hedging activities. SFAS No. 161 is effective on January 1, 2009. Management is evaluating the impact of adopting SFAS No. 161, if any, on the Company's financial statements.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS No. 162''). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GMP hierarchy). SFAS No. 162 shall be effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board (PCAOB) amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles". Management is evaluating the impact of adopting SFAS No. 162, if any, on the Company's financial statements.

In May 2008, the FASB issued FASB Statement No. 163. "Accounting for Financial Guarantee Insurance Contracts" ("SFAS No. 163"), which clarifies how FASB Statement No. 60, "Accounting and Reporting by Insurance Enterprises", applies to financial guarantee insurance contracts issued by insurance enterprises. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2008, including interim periods in that year. Management is evaluating the impact of adopting SFAS No. 163, if any, on the Company's financial statements.
 
Management does not believe that any 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 February 27, 2008, the Company sold 4,500,000 units (“units”) at a price of $8.00 per unit in the Offering. Each unit consists of one ordinary share of the Company’s stock and one Redeemable Ordinary Share Purchase Warrant (“Warrants”). Each Warrant entitles the holder to purchase from the Company one ordinary share at an exercise price of $5.00 commencing the later of the completion of a Business Combination or one year from the Effective Date of the Offering. The Warrants expire in four years from the Effective Date of the Offering. The Company may redeem the Warrants, with the prior consent of EarlyBirdCapital, Inc. (“EBC”), the representative of the underwriters in the Offering, 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 ordinary shares is at least $11.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given. If the Company redeems the Warrants as described above, management will have the option to require any holder who wishes to exercise his Warrant to do so on a “cashless basis.” In such event, the holder would pay the exercise price by surrendering his Warrants for the number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to holders of Warrants. In accordance with the warrant agreement relating to the Warrants to be sold and issued in the Offering the Company is only 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 at the time of exercise. Additionally, in the event that a registration is not effective at the time of exercise, the holder of such Warrant shall not be entitled to exercise such Warrant 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.
 
10
 
On March, 13 2008, the Company announced that the underwriters of its initial public offering (“IPO”) exercised their over-allotment option in full, for a total of an additional 675,000 units (over and above the 4,500,000 units sold in the IPO). Each unit (the “Units”) consists of one ordinary share, $.001 par value per share (the “Common Stock”), and one warrant, each warrant to purchase one share of Common Stock at an exercise price of $5.00 per share. The 5,175,000 Units sold in the Offering, including the 675,000 units subject to the over-allotment option, were sold at an offering price of $8.00 per unit, generating gross proceeds of $41,400,000. $40,671,000, which includes the $1,430,000 of proceeds from the previously-announced private placement of warrants to the founding stockholders, has been placed in the Trust Account.
 
The Company is obligated to pay the underwriters in the Offering an underwriting discount of 7.0% of the gross proceeds of the Offering. However, the underwriters have agreed that 3.5% of the underwriting discounts will not be payable unless and until the Company completes a Business Combination and have waived their right to receive such payment upon the Company’s liquidation if it is unable to complete a Business Combination. The Company issued a unit purchase option, for $100, to the underwriters to purchase 450,000 units at an exercise price of $8.80 per unit. The units issuable upon exercise of this option are identical to the Offering units. The Company has accounted for the fair value of the unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the Offering resulting in a charge directly to stockholders’ equity. The Company estimates that the fair value of this unit purchase option is approximately $701,005 ($1.56 per unit) using the Black-Scholes option-pricing model. The fair value of the unit purchase option granted to the underwriters is estimated as of the date of grant using the following assumptions: (1) expected volatility of 17.46%, (2) risk-free interest rate of 3.70% and (3) expected life of 5 years. The unit purchase option may be exercised for cash or on a “cashless basis”, at the holder’s option (except in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described above), such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise price of the unit purchase option and the underlying Warrants and the market price of the Units and underlying ordinary shares) to exercise the unit purchase option without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the unit purchase option or the Warrants underlying the unit purchase option. The holder of the unit purchase option will not be entitled to exercise the unit purchase option or the Warrants underlying the unit purchase option unless a registration statement covering the securities underlying the unit purchase option is effective or an exemption from registration is available. If the holder is unable to exercise the unit purchase option or underlying Warrants, the unit purchase option or Warrants, as applicable, will expire worthless.
 
NOTE 4 - DEFERRED OFFERING COSTS
 
Deferred offering costs consist principally of legal and underwriting fees incurred prior to the initial public offering that are directly related to the Offering. At closing, the deferred offering costs were charged to stockholders’ equity.

NOTE 5 FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company adopted SFAS 157 on January 1, 2008. This statement establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

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SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

 -
Level 1 — quoted prices (unadjusted) in active markets for identical asset or liabilities that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active exchange-traded securities and exchange-based derivatives.
 
 
 -
Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges.
 
 
 -
Level 3 — unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded, non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

In accordance with SFAS 157, the Company determines the level in the fair value hierarchy within which each fair value measurement in its entirety falls, based on the lowest level input that is significant to the fair value measurement in its entirety. The following table presents the investment in a money market fund, the Company’s only financial asset measured and recorded at fair value on the Company’s balance sheets on a recurring basis and its level within the fair value hierarchy as of September 30, 2008:
 
   
Fair Value
  
As of September 30, 2008
  
Level 1
  
Level 2
  
Level 3
  
Total
  
 
  
 
  
 
  
 
  
 
  
Investment in Money Market Fund
  
$
40,870,967
  
$
    
$
—
  
$
40,870,967
  

The following table shows the gain on fair value adjustments to the financial instruments that are recognized at fair value in the financial statements:
 
Gain on fair value adjustments to the Money Market Fund
  
$
233,277
  
 
The valuation of the money market fund is based on the fair market value of all securities underlying the fund.
 
NOTE 6 - NOTES PAYABLE TO STOCKHOLDERS
 
The Company issued unsecured promissory notes in the aggregate principal amount of $100,000 to certain officers and initial stockholders on October 24, 2007. The notes were non-interest bearing and were repaid from the net proceeds of the Offering at the closing of the IPO.
 
NOTE 7 - COMMITMENTS
 
The Company presently occupies office space in Beijing, China provided by an affiliate of the Company’s Chief Executive Officer and director. The affiliate has agreed that, until the Company consummates a Business Combination, it will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company has agreed to pay the affiliate $7,500 per month for such services commencing on the effective date of the Offering.
 
Pursuant to letter agreements dated as of September 25, 2007 between the Company and the underwriters, the initial stockholders have waived their right to receive distributions with respect to their founding shares upon the Company’s liquidation.
 
NOTE 8 - INSIDER WARRANTS AND SHARES
 
The Initial stockholders of the Company purchased 1,430,000 Warrants (“Insider Warrants”) at $1.00 per Warrant (for an aggregate purchase price of $1,430,000) in a private placement that took place simultaneously with the Offering. The Company believes the purchase price of these warrants approximates the fair value of such warrants because the fair market value of publicly traded warrants for similarly structured blank check companies is typically no greater than $1.00. The warrants will be accounted for as part of the stockholders’ equity. All of the proceeds received from this purchase were placed in the Trust Account. The Insider Warrants purchased by such purchasers are identical to the Warrants in the Offering except that if the Company calls the Warrants for redemption, the Insider Warrants may be exercisable on a “cashless basis,” at the holder’s option (except in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described above), so long as such securities are held by such purchasers or their affiliates. Furthermore, the purchasers have agreed that the Insider Warrants will not be sold or transferred by them until after the Company has completed a Business Combination.
 
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The Initial Stockholders and the holders of the Insider Warrants (or underlying ordinary shares) will be entitled to registration rights with respect to their founding shares or Insider Warrants (or underlying ordinary shares) pursuant to an agreement signed prior to or on the effective date of the Offering. The holders of the founding shares are entitled to demand that the Company register 50% of these shares at any time commencing three months prior to nine months after the consummation of the Business Combination and the balance of these shares at any time commencing three months prior to the first anniversary of the consummation of a Business Combination. The holders of the Insider Warrants (or underlying ordinary shares) are entitled to demand that the Company register these securities at any time after the Company consummates a Business Combination. In addition, the Initial Stockholders and holders of the Insider Warrants (or underlying ordinary shares) have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination.
 
NOTE 9 - 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 ordinary shares on a Business Combination.
 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Forward Looking Statements
 
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission filings. The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report.
 
Overview
 
Spring Creek Acquisition Corp. (“we”, “us”, “our” or the “Company”) is a limited life Cayman Islands exempted company incorporated on October 16, 2007, organized as a blank check company for the purpose of acquiring, through a stock exchange, asset acquisition or other similar business combination, or controlling, through contractual arrangements, an operating business, that has its principal operations in the People’s Republic of China, or PRC, as well as the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan (“Greater China”). Our Memorandum and Articles of Association provides that we may not consummate a business combination with a business that has its principal operations outside of Greater China. Our efforts to identify a prospective target business will not be limited to a particular industry.
 
Results of Operations for the Nine-Month Period ended September 30, 2008
 
We reported net income of $248,718 for the nine-months ended September 30, 2008. Until we enter into a Business Combination, our only significant income will be from interest generated in the Trust Account.
 
Overall, for the nine-month period ended September 30, 2008, not including fees and expenses incurred in connection with our IPO, we incurred $166,939 of general and administrative expenses and $356 of formation costs. Our trust account earned interest of $549,362 for the nine months ended September 30, 2008.
 
Results of Operations for the Three-Month Period ended September 30, 2008
 
We reported net income of $29,669 for the three-months ended September 30, 2008. Until we enter into a Business Combination, our only significant revenues will be from interest generated in the Trust Account.
 
Overall, for the quarter ended September 30, 2008, not including fees and expenses incurred in connection with our IPO, we incurred $70,259 of general and administrative expenses. Our Trust Account earned interest of $233,277 for the three months ended September 30, 2008.
 
Liquidity and Capital Resources
 
On February 27, 2008, we completed a private placement of 1,430,000 warrants to James Cheng-Jee Sha, our Chief Executive Officer and Chairman, Diana Chia-Huei Liu, our President and Director, William Tsu-Cheng Yu, our Chief Financial Officer and Director, Jimmy (Jim) Yee-Ming Wu, our Chief Operating Officer and Director and Gary Han Ming Chang, our Special Advisor, which we collectively refer to as our founding shareholders, and received net proceeds of $1,430,000. On March 4, 2008, we consummated our IPO of 4,500,000 units. On March 13, 2008, the underwriters of our IPO exercised their over-allotment option in full, for a total of an additional 675,000 units (over and above the 4,500,000 units sold in the IPO) for an aggregate offering of 5,175,000 units. Each unit in the IPO consisted of one share of common stock and one redeemable common stock purchase warrant. Each warrant (including the private placement warrants) entitles the holder to purchase from us one share of our common stock at an exercise price of $5.00. Our common stock and warrants started trading separately as of March 28, 2008.
 
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The net proceeds from the sale of our warrants and units, after deducting certain offering expenses of $3,520,366, including underwriting discounts of approximately $2,898,000, were approximately $39,310,000. $40,671,000 of the proceeds from the IPO and the private placement was placed in a trust account for our benefit. The Trust Account contains $1,449,000 of the underwriter’s compensation which will be paid to them only in the event of a business combination. Except for up to $1,050,000 in interest that is earned on the funds contained in the trust account that may be released to us to be used as working capital, of which $349,396 has been released as of September 30, 2008, we will not otherwise be able to access the amounts held in the trust account until we consummate a business combination. The amounts held outside of the trust account are available to be used by us to provide for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. From October 16, 2007 (the date of our inception) through December 31, 2007, we had operating expenses of $23,428 and deferred offering costs of $199,957. From January 1, 2008 through September 30, 2008, we had operating expenses of $166,939 and formation costs of $356, exclusive of the $2,898,000 in underwriting discounts. The net proceeds deposited into the trust account remain on deposit in the trust account earning interest. Other than $1,050,000 in interest which we may use to fund working capital, the amounts held in the trust account may only be used by us upon the consummation of a business combination. As of September 30, 2008, there was $40,797,308 held in the trust account, which includes deferred underwriting fees of $1,449,000. Additionally, as of September 30, 2008, we have $124,916 outside the trust account to fund our working capital requirements
 
We expect to use substantially all of the net proceeds of the IPO to acquire a target business, including identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust account as well as any other net proceeds not expended will be used to finance the operations of the target business.
 
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 40% or more of the shares sold in the IPO 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 IPO, including all of the officers and directors of the Company (the “Initial Stockholders”), have agreed to vote their founding ordinary shares in accordance with the vote of the majority interest of 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 to cash. 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 ordinary shares held by Public Stockholders at the consummation of the IPO, Public Stockholders holding up to 2,069,999 shares may seek conversion of their shares in the event of a business combination (a greater number would not be able to since the business combination would not be able to be consummated with such greater number of shares choosing to redeem). Such Public Stockholders are entitled to receive their per share interest in the trust account computed without regard to the shares held by the Initial Stockholders.
 
Assuming the release of the full amount of the interest we are entitled to receive from the trust account, we believe we will have sufficient available funds outside of the trust account to operate through September 4, 2010, assuming that a business combination is not consummated during that time. We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, we may need to raise additional funds through a private offering of debt or equity securities if such funds are required to consummate a business combination that is presented to us. We would only consummate such a financing simultaneously with the consummation of a business combination.
 
15
 
Commencing on February 27, 2008 we began incurring a fee of $7,500 per month for office space. The office space is provided by LiveABC of Beijing, China, an affiliate of James Cheng-Jee Sha, the Company’s Chief Executive Officer and director. Mr. Sha has agreed that, until the Company consummates a business combination, he will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time.
 
Off-Balance Sheet Arrangements
 
We have not entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.
 
Contractual Obligations
 
We do not have any long term debt, capital lease obligations, operating lease obligations, purchase obligations or other long term liabilities. However, as discussed above, we have entered into a lease with the landlord of our office facilities at a monthly rental of $7,500.
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. We are not presently engaged in and, if a suitable business target is not identified by us prior to the prescribed liquidation date of the trust account, we may not engage in, any substantive commercial business. Accordingly, we are not and, until such time as we consummate a business combination, we will not be, exposed to risks associated with foreign exchange rates, commodity prices, equity prices or other market-driven rates or prices. The net proceeds of our IPO held in the trust account have been invested only in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940. Given our limited risk in our exposure to money market funds, we do not view the interest rate risk to be significant.
 
ITEM 4T. CONTROLS AND PROCEDURES
 
An evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2008 was made under the supervision of our Chief Executive Officer and Chief Financial Officer with the participation of our management. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. During the most recently completed fiscal quarter, there has been no significant change in our internal control over financial reporting that had materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
Compliance with Section 404 of the Sarbanes-Oxley Act of 2002
 
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the Act), beginning with our Annual Report on Form 10-K for the fiscal year ending December 31, 2009, we will be required to furnish a report by our management on our internal control over financial reporting. This report will contain, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. If we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. This report will also contain a statement that our independent registered public accountants have issued an attestation report on management’s assessment of such internal controls and conclusion on the operating effectiveness of those controls.
 
16
 
Management acknowledges its responsibility for internal controls over financial reporting and seeks to continually improve those controls. In order to achieve compliance with Section 404 of the Act within the prescribed period, we are currently performing the system and process documentation and evaluation needed to comply with Section 404, which is both costly and challenging. We believe our process, which will begin in 2008 and continue in 2009 for documenting, evaluating and monitoring our internal control over financial reporting is consistent with the objectives of Section 404 of the Act.
 
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PART II - OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
None.
 
ITEM 1A. RISK FACTORS
 
We are not required to respond to this item because we are a smaller reporting company.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
Use of Proceeds
 
On February 27, 2008, we completed a private placement of 1,430,000 warrants. On March 4, 2008, we consummated our IPO of 4,500,000 units. On March 13, 2008, the underwriters of our IPO exercised their over-allotment option in full, for a total of an additional 675,000 units (over and above the 4,500,000 units sold in the IPO) for an aggregate offering of 5,175,000 units. Each unit consists of one share of common stock and one redeemable common stock purchase warrant. Each warrant entitles the holder to purchase from us one share of our common stock at an exercise price of $5.00. The units were sold at an offering price of $8.00 per unit and the private placement warrants were sold at an offering price of $1.00 per warrant, generating total gross proceeds of $42,830,000. EarlyBirdCapital, Inc. acted as lead underwriter. The securities sold in our IPO were registered under the Securities Act of 1933 on a registration statement on Form S-1 (No. 333-147284). The Securities and Exchange Commission declared the registration statement effective on February 27, 2008.
 
We incurred a total of $2,898,000 in underwriting discounts and commissions, of which $1,449,000 is deferred and is included in the trust account. Such portion of the underwriters’ compensation will only be paid to the underwriters in the event that we consummate a business combination. The total expenses in connection with the sale of our warrants in the private placement and the IPO were $3,458,000. No expenses of the IPO were paid to any of our directors or officers or any of their respective affiliates. We did, however, repay James Sha, Diana Liu, and William Yu for interest free loans they made to us prior to the consummation of the private placement and the IPO. The aggregate amount of principal on such loans that we repaid was $100,000. All the funds held in the trust account have been invested in either government securities or Money Market Accounts.
 
After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds to us from the private placement and the IPO were approximately $39,372,000. Approximately $40,671,000 (or approximately $7.86 per unit sold in our IPO) of the proceeds from the IPO and the private placement was placed in a trust account for our benefit the remaining proceeds are available to be used to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The amounts held in the trust account may only be used by us upon the consummation of a business combination, except that we may use up to $1,050,000 of the interest earned on the trust account to fund our working capital prior to a business combination. As of September 30, 2008, there was $40,870,967 held in the trust account, which includes deferred underwriting fees of $1,449,000.
 
Overall, for the quarter ended September 30, 2008, not including fees and expenses incurred in connection with our IPO, we incurred general and administrative expenses of $70,259.
 
Repurchases of Equity Securities
 
None
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
None.
 
18
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
None.
 
ITEM 5. OTHER INFORMATION
 
None.
 
ITEM 6. EXHIBITS

Exhibit No.
  
Description
31.1
  
Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.
     
31.2
  
Certification of the Chief Financial Officer (Principal Financial and Accounting 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 pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
     
 
SPRING CREEK ACQUISITION CORP.
 
 		  
 		  
 
November 14, 2008 By:   /s/ James Cheng-Jee Sha 
 
James Cheng-Jee Sha
 
Chief Executive Officer and Chairman
(Principal Executive Officer)
 
     
November 14, 2008 By:   /s/ William Tsu-Cheng Yu 
 
William Tsu-Cheng Yu
 
Chief Financial Officer
(Principal Financial and Accounting Officer)
 
20
 
Exhibit Index

Exhibit No.
  
Description
31.1
  
Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.
     
31.2
  
Certification of the Chief Financial Officer (Principal Financial and Accounting 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 pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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