Platinum Energy Resources (PGRIU) 10-Q 2007 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

or

o 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: 000-51553

PLATINUM ENERGY RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Delaware	14-1928384
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
25 Phillips Parkway Montvale, New Jersey (Address of principal executive offices)	07645 (Zip Code)

(212) 581-2401

(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 Securities Exchange Act of 1934 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, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (check one).

Large Accelerated Filer o  Accelerated Filer x  Non-Accelerated Filer o

Indicated by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes x No o

As of August 10, 2007, 18,000,000 shares of the registrant’s common stock, par value $0.0001 per share, were outstanding.

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

Table of Contents

		Page
PART I- FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1-17
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18-21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II- OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23-25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Submission of Matters to a Vote of Security Holders	25
Item 5.	Other Information	25
Item 6.	Exhibits	25
Signatures		26

FINANCIAL INFORMATION

Item 1.Financial Statements.

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,		December 31,
	2007		2006
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	-	$	-
Cash and cash equivalents held in trust		111,044,966		109,213,492
Prepaid expenses and other current assets		30,892		79,526
Total Current Assets		111,075,858		109,293,018
Deferred acquisition costs		1,938,275		1,662,632
Total Assets	$	113,014,133	$	110,955,650
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,635,831	$	1,471,167
Due to related party		130,585		85,585
Notes payable - stockholder		415,000		75,000
Income taxes payable - state		196,960		130,960
Total Current Liabilities		2,378,376		1,762,712
Common stock subject to possible redemption, 2,878,560 shares at conversion value		22,197,888		21,831,777
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value, 1,000,000 authorized, 0 issued		-		-
Common stock, $.0001 par value; 75,000,000 shares authorized; 18,000,000 shares (which includes 2,878,560 subject to possible redemption) issued and outstanding		1,512		1,512
Additional paid-in capital		85,424,242		85,424,242
Earnings accumulated during the development stage		3,012,115		1,935,407
Total Stockholders' Equity		88,437,869		87,361,161
Total Liabilities and Stockholders' Equity	$	113,014,133	$	110,955,650

See notes to condensed consolidated financial statements

1

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended June 30, 2007			For the Three Months Ended June 30, 2006		For the Six Months Ended June 30, 2007			For the Six Months Ended June 30, 2006		Cumulative for the Period from April 25, 2005 (Inception) to June 30, 2007
	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)
OPERATING EXPENSES
Administrative cost allowance - related party	$	22,500		$	19,170	$	45,000		$	33,570	$	130,585
Marketing, general and administrative expenses		121,714			134,048		254,205			323,915		1,122,194
Total operating expenses		144,214			153,218		299,205			357,485		1,252,779
OTHER INCOME (EXPENSE)
Interest income, net of interest allocated to common stock subject to possible redemption of $188,991, $168,108, $366,111, $407,832 and $1,126,829		756,437			672,854		1,465,362			1,156,249		4,510,136
Interest expense		(5,380	)		—		(23,449	)		—		(31,142	)
Total other income (expense)		751,057			672,854		1,441,913			1,156,249		4,478,994
NET INCOME BEFORE INCOME TAXES		606,843			519,636		1,142,708			798,764		3,226,215
PROVISION FOR INCOME TAXES		28,000			63,300		66,000			111,200		214,100
NET INCOME	$	578,843		$	456,336	$	1,076,708		$	687,564	$	3,012,115
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
BASIC		15,121,440			15,121,440		15,121,440			15,121,440
DILUTED		18,220,150			17,529,635		17,882,548			17,456,693
NET INCOME PER COMMON SHARE:
BASIC	$	0.04		$	0.03	$	0.07		$	0.05
DILUTED	$	0.03		$	0.03	$	0.06		$	0.04

See notes to condensed consolidated financial statements

2

PLATINUM ENERGY RESOURCES, INC.AND SUBSIDIARY

(A Development Stage Enterprise)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

Unaudited

	Common stock						Additional paid-in			Earnings accumulated during the development		Total stockholders'
	Shares			Amount			capital			stage		equity
Common shares issued to founders for cash, May 6, 2005 at $.0077 per share		3,250,000		$	325		$	24,675		$	—	$	25,000
Retroactive effect of common stock dividend, declared September 23, 2005		1,250,000			125			(125	)		—		—
Retroactive effect of four-for-five reverse split effected October 21, 2005		(900,000	)		(90	)		90			—		—
Sale of 14,400,000 units, net of underwriters’ discount and offering expenses (includes 2,878,560 shares subject to possible redemption), October 28, 2005 at $8.00 per Unit		14,400,000			1,440			106,470,273			—		106,471,713
Proceeds subject to possible redemption of 2,878,560 shares, October 28, 2005 at $7.32 per Unit		(2,878,560	)		(288	)		(21,070,771	)		—		(21,071,059	)
Proceeds from issuance of option, October 28, 2005		—			—			100			—		100
Net income, for the period from April 25, 2005 (Inception) to December 31, 2005		—			—			—			275,728		275,728
Balance at December 31, 2005		15,121,440			1,512			85,424,242			275,728		85,701,482
Net income, for the year ended December 31, 2006		—			—			—			1,659,679		1,659,679
Balance at December 31, 2006		15,121,440			1,512			85,424,242			1,935,407		87,361,161
Net income, for the six months ended June 30, 2007		—			—			—			1,076,708		1,076,708
Balance at June 30, 2007		15,121,440		$	1,512		$	85,424,242		$	3,012,115	$	88,437,869

See notes to condensed consolidated financial statements

3

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30, 2007			Six Months Ended June 30, 2006			Cumulative for the Period from April 25, 2005 (Inception) to June 30, 2007
	(Unaudited)			(Unaudited)			(Unaudited)
Cash Flows From Operating Activities
Net income	$	1,076,708		$	687,564		$	3,012,115
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		48,634			86,469			(30,892	)
Accounts payable and accrued expenses		(88,188	)		56,684			240,880
Due to related party		45,000			33,570			130,585
Income taxes payable - State		66,000			111,200			196,960
Net cash provided by operating activities		1,148,154			975,487			3,549,648
Cash Flows From Investing Activities
Deposits to cash and cash equivalents held in Trust Fund		(1,831,474	)		(1,564,081	)		(111,044,966	)
Payment of performance deposit		—			(500,000	)		(500,000	)
Recovery of perfomance deposit upon restructuring		—			—			500,000
Payment of deferred acquistion costs		(22,791	)		(264,900	)		(543,324	)
Net cash used in investing activities		(1,854,265	)		(2,328,981	)		(111,588,290	)
Cash Flows From Financing Activities
Interest on cash held in trust, allocated to common
stock subject to possible redemption		366,111			407,832			1,126,829
Proceeds from the sale of common stock		—			—			25,000
Proceeds from notes payable-stockholder		340,000			50,000			595,000
Repayment of note payable-stockholder		—			—			(180,000	)
Gross proceeds of public offering		—			—			115,200,000
Payments of costs of public offering		—			—			(8,728,287	)
Proceeds from issuance of underwriter’s option		—			—			100
Net cash provided by financing activities		706,111			457,832			108,038,642
Net (Decrease) Increase in Cash		—			(895,662	)		—
Cash - Beginning of the Period		—			902,498			—
Cash - End of Period	$	—		$	6,836		$	—
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	16,639		$	—
Income taxes	$	—		$	—
Non-Cash Investing Activities:
Deferred acquisition costs accrued and deferred	$	252,852		$	628,965

See notes to condensed consolidated financial statements

4

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(a Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies

Platinum Energy Resources, Inc. and subsidiary (a development stage enterprise) (the “Company”) was incorporated in Delaware on April 25, 2005 as a blank check company. The Company’s objective is to acquire an operating business in the energy industry.

As of June 30, 2007, the Company had not yet commenced any commercial operations. All activities through June 30, 2007 relate to the Company's formation, the completion of the public offering described below and the completion of the Asset Acquisition transaction, as described in Note 4. The Company selected December 31 as its fiscal year-end. The accompanying condensed consolidated financial statements have been prepared in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 7, Development Stage Enterprises, since planned principal operations have not commenced.

The registration statement of the Company’s initial public offering (“Offering”) was declared effective on October 24, 2005. The Company consummated the Offering on October 28, 2005 and received net proceeds of approximately $106,472,000. See Note 3 - “Initial Public Offering,” for a complete discussion. 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 the Offering are intended to be generally applied toward consummating a business combination with an operating business in the global oil and gas energy and production industry (“Business Combination”). There is no assurance that the Company will be able to successfully affect a Business Combination. An amount of $105,408,000 of the net proceeds plus interest earned is being held in a trust account (“Trust Account”) and invested in United States Treasury Bills 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 the consummation of its first Business Combination or liquidation of the Company. The Company’s first Business Combination must be with a target business or businesses whose collective fair market value would be at least equal to 80% of the Company’s net assets at the time of such acquisition. The remaining net proceeds (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. The Company, after signing a definitive agreement for the acquisition of a target business, will submit such transaction for stockholder approval. In the event that stockholders owning 20% or more of the shares sold in the Offering 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 Offering, including all of the officers and directors of the Company (“Founding Stockholders”), have agreed to vote their 3,600,000 founding shares of common stock in accordance with the vote of the majority in 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. See Note 4 - “Proposed Business Combination,” for a discussion of a definitive Asset Acquisition Agreement and Plan of Reorganization entered into on October 4, 2006, as amended, which replaced an Agreement and Plan of Merger entered into on January 26, 2006 with the same parties.

With respect to a Business Combination that is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company convert his or her shares into 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 common stock held by Public Stockholders at the consummation of the Offering. Accordingly, Public Stockholders holding less than 20% of the aggregate number of shares owned by all Public Stockholders may seek conversion of their shares in the event of a Business Combination. Such Public Stockholders are entitled to receive their per-share interest in the Trust Account computed without regard to the shares held by Founding Stockholders.

5

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies, continued

The Company’s Certificate of Incorporation provides for mandatory liquidation of the Company in the event that the Company does not consummate a Business Combination within 18 months from the date of the consummation of the Offering (October 28, 2005), or 24 months from the consummation of the Offering if certain extension criteria have been satisfied. This condition raises substantial doubt as to the Company’s ability to continue as a going concern (See Note 2 for Management’s Plan). As of June 30, 2007, the Company had satisfied the conditions to extend the mandatory liquidation date to October 28, 2007, which is the date 24 months subsequent to the consummation of the Offering. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Fund 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 Units in the Offering discussed in Note 3 - “Initial Public Offering”).

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiary PER Acquisition Corp, (“PER”) after elimination of all intercompany accounts and transactions. PER was organized as a Delaware corporation on January 25, 2006 for the purpose of merging into Tandem Energy Holdings, Inc. (“Tandem”) See Note 4 - "Proposed Business Combination" for a discussion of a definitive agreement and plan of merger entered into January 26, 2006, which agreement was subsequently terminated and replaced by a definitive Asset Acquisition Agreement and Plan of Reorganization entered into on October 4, 2006, as amended.

Income Taxes

Deferred income taxes are provided for the differences between the 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. 

Effective January 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the Company’s financial statements in accordance with FASB Statement 109, “Accounting for Income Taxes”, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Management has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements as of January 1, 2007. The evaluation was performed for the tax period April 25 (inception) to December 31, 2005 and the for the year ended December 31, 2006, the tax years which remain subject to examination for Federal and New Jersey State purposes as of June 30, 2007.

The Company’s policy is to classify assessments, if any, for tax related interest as interest expenses and penalties as marketing, general and administrative expenses.

6

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies, continued

Income Per Share

The Company follows the provisions of SFAS No. 128, “Earnings Per Share”. In accordance with SFAS No. 128, earnings per common share amounts (“Basic EPS”) were computed by dividing earnings by the weighted average number of common shares outstanding for the period. Earnings per common share amounts, assuming dilution (“Diluted EPS”), were computed by reflecting the potential dilution from common share amounts, assuming dilution (“Diluted EPS”), were computed by reflecting the potential dilution from the exercise of dilutive common stock purchase warrants. SFAS No. 128 requires the presentation of both Basic EPS and Diluted EPS on the face of the condensed consolidated statements of operations.

A reconciliation between the numerators and denominators of the Basic and Diluted EPS computations for earnings is as follows.

	Three Months Ended June 30, 2007
	Net Income (Numerator)		Shares (Denominator)		Per Share Amounts
Basic EPS
Net Income	$	578,843		15,121,440	$	0.04
Effect of Dilutive Securities
Warrants	$	—		3,098,710	$	0.01
Net income attributable to common stock and assumed exercise of warrants	$	578,843		18,220,150	$	0.03

	Six Months Ended June 30, 2007
	Net Income  (Numerator)		Shares  (Denominator)		Per Share Amounts
Basic EPS
Net Income	$	1,076,708		15,121,440	$	0.07
Effect of Dilutive Securities
Warrants	$	—		2,761,108	$	0.01
Net income attributable to common stock and assumed exercise of warrants	$	1,076,,708		17,882,548	$	0.06

7

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies, continued

	Three Months Ended June 30, 2006
	Net Income  (Numerator)		Shares  (Denominator)		Per Share Amounts
Basic EPS
Net Income	$	456,336		15,121,440	$	0.03
Effect of Dilutive Securities
Warrants	$	—		2,408,195	$	0.00
Net income attributable to common stock and assumed exercise of warrants	$	456,336		17,529,635	$	0.03

	Six Months Ended June 30, 2006
	Net Income (Numerator)		Shares (Denominator)		Per Share Amounts
Basic EPS
Net Income	$	687,564		15,121,440	$	0.05
Effect of Dilutive Securities
Warrants	$	—		2,335,253	$	0.01
Net income attributable to common stock and assumed exercise of warrants	$	687,564		17,456,693	$	0.04

The Company has determined that the Warrants contained in the Units sold in the IPO (see Note 3) are dilutive and accordingly has included the affects of the Warrants in Diluted EPS using the Treasury Stock Method. An option to purchase 720,000 Units was excluded in the computation of Diluted EPS because the option exercise price exceeded the average market price for the Units in these periods.

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

8

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies, continued

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.

Concentration of Credit Risk

At June 30, 2007, the Company had cash balances (including trust funds) in banks in excess of the maximum amount insured by the FDIC.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with an initial maturity of three months or less to be cash equivalents.

Recent Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”).  SFAS 159 provides companies with an option to report selected financial assets and liabilities at fair value.  The objective of SFAS 159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. Generally accepted accounting principles have required different measurement attributes for different assets and liabilities that can create artificial volatility in earnings.  The FASB has indicated it believes that SFAS 159 helps to mitigate this type of accounting-induced volatility by enabling companies to report related assets and liabilities at fair value, which would likely reduce the need for companies to comply with detailed rules for hedge accounting. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS 157 and SFAS No. 107, “Disclosures about Fair Value of Financial Instruments.” SFAS 159 is effective for the Company as of the beginning of fiscal year 2008. The Company has not yet determined the impact SFAS 159 may have on its consolidated financial position, results of operations, or cash flows. 

9

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies, continued

In December 2006, the FASB issued FASB Staff Position (“FSP”) EITF 00-19-2 “Accounting for Registration Payment Arrangements” (“FSP EITF 00-19-2”) which specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement should be separately recognized and measured in accordance with SFAS No. 5, “Accounting for Contingencies”. Adoption of FSP EITF 00-19-02 is required for fiscal years beginning after December 15, 2006. Adoption of FSP EITF 00-19-02 did not have a material impact on the Company’s financial position, results of operations or cash flows.

NOTE 2 - Basis of Presentation and Management Plans

The accompanying condensed consolidated unaudited interim financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial statements and the instructions to Form 10-Q. These financial statements reflect all adjustments, consisting of normal and recurring adjustments and accruals, which are, in the opinion of management, necessary for a fair presentation of the financial position of the Company as of June 30, 2007 and the results of operations and cash flows for the three and six month periods ended June 30, 2007 and 2006, in conformity with accounting principles generally accepted in the United States of America applicable to interim periods. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These financial statements should be read in conjunction with the financial statements and related footnotes included in the Company’s audited financial statements filed on Form 10-K as of December 31, 2006. The results of operations presented are not necessarily indicative of the results to be expected for the future quarters or for the year ending December 31, 2007.

Management believes that it will consummate the Asset Acquisition described in Note 4 and that it will have sufficient available funds (outside of the trust fund) to operate through the consummation of the Asset Acquisition. The principal sources of these funds will be from loans advanced from certain stockholders of the Company. Upon consummation of the Asset Acquisition, cash held in trust will be released after the payment of debt pursuant to the Asset Acquisition and payment to stockholders exercising their conversion rights as described in Note 3.

Between May 11, 2007 and May 17, 2007, a number of class action lawsuits were filed against Optionable, Inc. (“Optionable”), Mr. Mark Nordlicht, Mr. Albert Helmig and certain other directors and officers of Optionable, alleging violations of securities laws. Mr. Nordlicht is the Chairman and a director of the Company and former chairman of the board of directors of Optionable and Mr. Helmig is a former director of the Company and currently chairman of the board of directors of Optionable. Optionable is energy trading and brokerage company founded in 2000 by Mr. Nordlicht. On May 11, 2007, Mr. Helmig resigned as a member of the Company’s board of directors. In addition, on May 16, 2007, Mr. James E. Bashaw resigned as a member of the Company’s board of directors. These lawsuits may lead to further comments on the proxy statement in connection with Asset Acquisition described in Note 4 and could result in a delay in clearance by the SEC and mailing to the Company’s stockholders of the proxy statement.

There can be no assurance that the acquisition described in Note 4 will be consummated. Should this Business Combination not be consummated by October 28, 2007 the Company would be required to return the funds held in trust to holders of shares issued in the Initial Public Offering described in Note 3, as a mandatory liquidating distribution, pursuant to a plan of dissolution and liquidation approved by the stockholders.

10

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 - Initial Public Offering

On October 28, 2005, the Company sold to the public 14,400,000 units (“Units”) at an offering price of $8.00 per Unit. Each Unit consists of one share of the Company’s common stock, $0.0001 par value, and one Redeemable Common Stock Purchase Warrant (“Warrant”). Each Warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $6.00 commencing on the later of the completion of a Business Combination with a target business or one year from the effective date of the Offering and expiring four years from the effective date of the Offering. The Warrants will be redeemable, in whole or in part, upon written consent of the representative of the underwriters, at a price of $0.01 per Warrant upon thirty (30) days notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $11.50 per share for any twenty (20) trading days within a thirty (30) trading day period ending on the third day prior to the date on which notice of redemption is given. Separate trading of the common stock and Warrants comprising the Units commenced on or about December 9, 2005. An additional 2,160,000 Units could have been sold for over-allotments in the 45-day period after the closing date of October 28, 2005. No over-allotment Units were sold.

In connection with the Offering, the Company issued an option, for $100.00, to the representative of the underwriters to purchase up to 720,000 Units at an exercise price of $10.00 per Unit. The Units issuable upon exercise of this option are identical to those described in the preceding paragraph, except that the warrants underlying the Units will be exercisable at $7.50 per share. This option is exercisable at $10.00 per Unit commencing on the later of the consummation of a Business Combination and one year from the date of the prospectus relating to the Offering (October 24, 2005) and expiring five years from such date. The option may be exercised for cash or on a “cashless” basis, at the holder’s option, such that the holder may use the appreciated value of the option (the difference between the exercise prices of the option and the underlying Warrants and the market price of the Units and underlying securities) to exercise the option without the payment of any cash.

The option and the 720,000 units, the 720,000 shares of common stock and the 720,000 warrants underlying such units, and the 720,000 shares of common stock underlying such warrants, have been deemed compensation by the National Association of Securities Dealers (“NASD”) and are therefore subject to a 180-day lock-up pursuant to Rule 2710(g)(1) of the NASD Conduct Rules. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the date of the Offering prospectus (October 24, 2005). Although the purchase option and its underlying securities are intended to be registered under the registration statement relating to the Offering, the option grants to holders demand and “piggy back” rights for periods of five and seven years, respectively, from the date of the Offering with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The Company would be obligated to bear all fees and expenses attendant to registering the securities, other than underwriting commissions, which will be paid for by the holders themselves.

11

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 - Initial Public Offering, continued

The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or a recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of common stock at a price below its exercise price.

Should the Company be unable to deliver shares of its common stock underlying the exercise of the Warrants included in the Units and shares of its common stock underlying the exercise of the Company’s Unit Purchase Option (“UPO”) as a result of the absence of an effective registration statement with respect to these securities, then the Warrants and the UPO would not be exercisable and the Company will have no obligation to pay holders of the Warrants and UPO any cash or otherwise “net cash settle” the Warrant or the UPO. In this event, the Warrants and UPO may expire worthless.

The Company has accounted for the fair value of the option, inclusive of the receipt of the $100.00 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 option was approximately $2,412,000 ($0.168 per Unit) using a Black-Scholes option-pricing model. The fair value of the option granted to the representative of the underwriters is estimated as of the date of grant using the following assumptions: (i) expected volatility of 49.65%, (ii) risk-free interest rate of 4.34%, (iii) expected life of 5 years and (iv) a dividend rate of zero.

The volatility calculation of 49.65% is based on the 365-day average volatility of a representative sample of seven (7) companies with an average market capitalization of $407.0 million, ranging from $309.0 million to $595.0 million, that Management believes are engaged in the oil and gas energy and production industry (the “Sample Companies”). Because the Company did not have a trading history, the Company needed to estimate the potential volatility of its common stock price, which depended upon a number of factors which could not be ascertained at the time. The Company referred to the 365-day average volatility of the Sample Companies because Management believed that the average volatility of such companies was a reasonable benchmark to use in estimating the expected volatility of the Company’s common stock post-business combination. A one-year period was selected as being representative of the current environment and market valuations for companies in this sector. Although an expected life of five years was taken into account for the purposes of assigning a fair value to the option, if the Company does not consummate a Business Combination within the prescribed time period and liquidates, the option would become worthless. 

NOTE 4 - Proposed Business Combination

On January 26, 2006, we announced that we had executed a definitive agreement and plan of merger with Tandem Energy Holdings, Inc., a Nevada corporation, which was amended on June 30, 2006 and July 31, 2006, pursuant to which, subject to satisfaction of the conditions contained in the merger agreement, our wholly-owned subsidiary, PER Acquisition Corp., would merge with and into Tandem. At the effective time of the merger, Tandem would be the surviving corporation in the merger with PER Acquisition Corp. and would continue as a wholly-owned subsidiary of Platinum. Currently, Tandem, through its wholly-owned subsidiary, Tandem Energy Corporation, a Colorado corporation headquartered in Midland, Texas, is engaged in the oil and gas E&P industry and operates oil fields in Texas and New Mexico.

12

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 - Proposed Business Combination, continued

On October 4, 2006, Platinum, the Company’s wholly-owned subsidiary, PER Acquisition Corp., and Tandem restructured their previously announced merger and Platinum, PER Acquisition Corp. and Tandem’s wholly-owned subsidiary Tandem Energy Corporation (“TEC”) entered into an Asset Acquisition Agreement and Plan of Reorganization, as amended, pursuant to which Platinum will acquire all of the assets and assume substantially all of the liabilities of TEC, including approximately $42 million of TEC’s debt which will be retired at closing, in exchange for the issuance of approximately eight million shares of Platinum common stock to TEC. The total number of shares to be received by TEC will be determined by dividing $60 million by the per share cash value of Platinum’s IPO trust account, which is determined by dividing the amount held in trust by 14,400,000 (the number of shares issued in Platinum’s IPO). The per share cash value was $7.71 at June 30, 2007. In connection with the transaction, Tandem returned $350,000 of the performance deposit associated with the original Merger Transaction to the Company. The remaining balance of $150,000 is to be applied towards the payment of Tandem/TEC transaction costs incurred in connection with the Asset Acquisition. After the consummation of the Asset Acquisition, TEC and its parent, Tandem, will liquidate and distribute the Platinum shares to Tandem’s stockholders.

The closing of the Asset Acquisition is subject to various closing conditions, including the filing of a proxy statement with the U.S. Securities and Exchange Commission, approval of the Asset Acquisition by the stockholders of the Company and Tandem and the satisfaction or waiver of other customary conditions. In addition, the closing is conditioned on holders of less than twenty percent (20%) of the shares of the Company common stock issued in the Offering voting against the Asset Acquisition and electing to convert their shares of the Company common stock into cash, as permitted by the Company’s amended certificate of incorporation. The Company’s initial shareholders, officers and directors, who hold approximately 20% of the Company’s voting stock, have agreed to vote their shares in accordance with the vote of the majority of the non-affiliated public stockholders on the Asset Acquisition.

The parties have made customary representations and warranties and covenants in the Asset Acquisition. In addition, TEC has agreed not to solicit proposals related to alternative business combination transactions or enter into discussions concerning or to provide information in connection with alternative business combination transactions. The Company has agreed not to enter into any agreement to acquire any oil and gas interest that would require a closing prior to the closing of the Asset Purchase Agreement. The Asset Acquisition contains certain termination rights for both the Company and TEC.

13

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 - Proposed Business Combination, continued

On December 6, 2006, Platinum executed an amendment to the Asset Acquisition agreement. In accordance with the Asset Acquisition agreement, following the consummation of the transaction, TEC will dissolve and in connection therewith transfer the shares of Platinum common stock to Tandem, its sole stockholder. In the amendment to the Asset Acquisition agreement, Platinum has agreed to register such shares for distribution to the stockholders of Tandem upon the contemplated dissolution of Tandem.

On February 9, 2007, the Acquisition Agreement was amended to extend the termination date of the Acquisition Agreement to March 31, 2007. On March 29, 2007, the Acquisition Agreement was amended to extend the termination date of the Acquisition Agreement to May 31, 2007. On June 1, 2007, the Acquisition Agreement was amended to extend the termination date of the Acquisition Agreement to June 30, 2007.

On July 18, 2007, the Acquisition Agreement was amended to: (1) extend the termination date of the Acquisition Agreement to August 31, 2007; (2) provide for Platinum to cause, on the acquisition closing date, Tim G. Culp (currently CEO of Tandem and TEC and indirect controlling stockholder of TEC) to be elected as a Class C director and an individual recommended by Mr. Culp (who shall be “independent” within the meaning of the NASDAQ Corporate Governance Rules) to be elected as a Class A director, each filling existing vacancies in their respective classes; (3) provide that, for so long as Mr. Culp owns at least one percent (1%) of the outstanding shares of Platinum, to the extent permitted by applicable law and corporate governance rules, Platinum will: (i) cause Mr. Culp to be nominated to the board as a Class C director and submitted for election by the shareholders of Platinum; and (ii) cause an individual recommended by Mr. Culp (which individual shall be “independent” within the meaning of the NASDAQ Corporate Governance Rules) to be nominated to the board as a Class A director and submitted for election by the shareholders of Platinum; (4) provide that Platinum will enter into an employment agreement to be negotiated in good faith with Mr. Culp providing for, among other things, his employment as Platinum’s Chairman of the Board for an initial period of not less than two years; and (5) provide that Acquisition Sub (which will be renamed Tandem Energy Corporation) will enter into employment agreements, consistent with their respective written offers of employment and to be negotiated in good faith, with Messrs. Michael G. Cunningham, Todd Yocham and Toben Scott (all of whom are currently officers of TEC) providing for, among other things, their respective employments for terms of not less than two years.

14

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 - Proposed Business Combination, continued

In connection with the Asset Purchase Agreement:

a.  The Company retained C.K. Cooper & Company, Inc., an investment banking firm, to provide a fairness opinion as to whether the consideration to be paid by the Company in the Asset Acquisition is fair, from a financial point of view, to the Company’s stockholders and that the fair value of TEC is at least equal to 80% of the Company’s net assets. C.K. Cooper was originally retained to provide a fairness opinion in connection with the previously proposed merger with Tandem and was paid $50,000 at that time. In October 2006, the Company, entered into a letter agreement with C.K. Cooper to provide a fairness opinion in connection with the Asset Acquisition Agreement, with $25,000 paid upon execution of the arrangement and an additional $25,000 due upon closing of the Asset Acquisition.

b. In connection with the Asset Acquisition Agreement, the Company entered into a Finders Agreement with Mr. Lance Duncan, an individual with prior affiliations with Tandem, who had been given limited authority by Tandem management to act on its behalf. Pursuant to the Finders Agreement, the Company agreed to pay Mr. Duncan a fee of $3.0 million at the consummation of the Asset Purchase Agreement in consideration for his introduction of TEC to Platinum. The Company also entered into a Consulting Agreement pursuant to which the Company agreed to issue to Mr. Duncan over an 18-month period following the consummation of the Asset Purchase Agreement restricted shares of the Company’s common stock valued at $5.0 million in consideration of future consulting services, including the investigation and evaluation of enterprises in the energy industry, focusing on oil and gas, with a view to possible future acquisition and, if warranted, to assist in the scheduling of meetings, site inspections and due diligence investigations between the parties, as applicable.

Deferred acquisition costs reflected on the condensed consolidated balance sheets, include costs principally incurred in connection with the Tandem transaction, including due diligence related costs, fair value consultants and other fees.

NOTE 5 - Note Payable - Stockholder

In the year ended December 31, 2006 and the three and six month periods ended June 30, 2007, the Company received an aggregate of $75,000, $80,000 and $340,000 in proceeds, respectively, of notes payable to an officer and stockholder of the Company. The notes bear interest at 5% per annum and are due on the earlier of (i) October 31, 2007 or (ii) upon the consummation of the Asset Purchase Agreement.

15

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 - Commitments, Contingencies and Related Party

a. As of June 30, 2007 the Company occupied office space provided by an affiliate of a Founding Stockholder. Such affiliate has agreed that, until the acquisition of a target business by the Company, 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 agreed to pay such affiliate $7,500 per month for such office space and services commencing on the effective date of the Offering. As of June 30 2007, $130,585 has been accrued with respect to this arrangement. Upon completion of a Business Combination or the distribution of the trust account to the public stockholders, the Company will no longer be required to incur this monthly fee.

b. In February 2006, the Company entered into an operating facilities sublease arrangement in New Jersey. The term of the sublease commenced on March 1, 2006 and expires February 28, 2009. Future minimum payments under this sublease arrangement, including executory costs, approximated $20,000 for each of the years ending December 31, 2007 and 2008 and $3,333 for the year ending December 31, 2009. In 2007, the parties to this arrangement modified its terms, converting the arrangement to a month-to-month rental for reduced space. The monthly rental payment under this arrangement has been reduced to $825.

c. The Company has engaged Casimir Capital LP (“CCLP”), the representative of the underwriters, on a non-exclusive basis, as its agent for the solicitation of the exercise of the Warrants. To the extent not inconsistent with the guidelines of the NASD and the rules and regulations of the Securities and Exchange Commission (“SEC”), the Company has agreed to pay CCLP for bona fide services rendered, a commission equal to 5% of the exercise price for each warrant exercised more than one year after the date of an effective prospectus if the exercise was solicited by the underwriters. In addition to soliciting, either orally or in writing, the exercise of the warrants, the representative’s services may also include disseminating information, either orally or in writing, to warrant holders about the Company or the market for its securities, and assisting in the processing of the exercise of the warrants. No compensation will be paid to the representative upon the exercise of the warrants if: 

· 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 underwriters 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.

16

PLATINUM ENERGY RESOURCES, INC. AND SUBSIDIARY

(A Development Stage Enterprise)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 - Commitments, Contingencies and Related Party, continued

 d. On March 20, 2006, the board of directors of the Company approved its 2006 Long-Term Incentive Plan (the “Plan”) subject to approval and consummation of the Asset Acquisition with TEC and to the approval of the Company’s stockholders. If the asset acquisition proposal is not approved and/or the asset acquisition is not consummated, the Plan will not be effective. Under the proposed Plan, the Company may grant incentive and non-qualified stock options, stock appreciation rights, performance units, restricted stock awards and performance bonuses, or collectively, awards, to officers and key employees. In addition, the Plan authorizes the grant of non-qualified stock options and restricted stock awards to directors and to any independent contractors and consultants. Generally, all classes of employees are eligible to participate in the Plan. No options, restricted stock or other awards under the Plan have been made or committed to be made as of the date of hereof. The Company has reserved a maximum of 4 million shares of its authorized common stock for issuance upon the exercise of awards to be granted pursuant to the Plan.  

e. Subsequent to May 10, 2007, seven class action lawsuits were filed against Optionable, Inc. (“Optionable”) and certain directors and officers of Optionable, alleging violations of the U.S. securities laws. Five of these class actions name Mark Nordlicht as a defendant. Mr. Nordlicht is the chairman of the board and a director of the Company. Optionable provides natural gas and other energy derivatives trading and brokerage services to brokerage firms, financial institutions, energy traders and hedge funds. Mr. Nordlicht founded Optionable in 2000 and formerly served as its chairman of the board of directors but was never employed by Optionable. Four of the class actions suits against Optionable also name Mr. Albert Helmig as a defendant. Mr. Helmig served as a director of the Company from inception until his resignation on May 11, 2007, and currently serves as chairman of the board of directors of Optionable.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

Platinum is a blank check company. We were formed on April 25, 2005, to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an unidentified operating business in the global oil and gas exploration and production, or E&P, industry. Our initial business combination must be with a target business or businesses whose fair market value is at least equal to 80% of net assets at the time of such acquisition. We intend to utilize a portion of the cash derived from the proceeds of our recently completed public offering, our capital stock, debt or a combination of cash, capital stock and debt, in effecting a business combination.

At June 30, 2007, Platinum had not yet commenced any commercial operations. All activities for the period from April 25, 2005 (inception) through June 30, 2007 relate to our formation, the completion of our initial public offering and the consummation of the Asset Acquisition Agreement described below.

Acquisition Announcement

On January 26, 2006, we announced that we had executed a definitive agreement and plan of merger with Tandem Energy Holdings, Inc., a Nevada corporation (“Tandem”), which was amended on June 30, 2006 and July 31, 2006, pursuant to which, subject to satisfaction of the conditions contained in the merger agreement, our wholly-owned subsidiary, PER Acquisition Corp., would merge with and into Tandem. At the effective time of the merger, Tandem would be the surviving corporation in the merger with PER Acquisition Corp. and would continue as a wholly-owned subsidiary of Platinum. Currently, Tandem, through its wholly-owned subsidiary, Tandem Energy Corporation, a Colorado corporation headquartered in Midland, Texas, is engaged in the oil and gas E&P industry and operates oil fields in Texas and New Mexico.

On October 4, 2006, Platinum, its wholly-owned subsidiary, PER Acquisition Corp., and Tandem restructured their previously announced merger and Platinum, PER Acquisition Corp. and Tandem’s wholly-owned subsidiary Tandem Energy Corporation (“TEC”) entered into an Asset Acquisition Agreement and Plan of Reorganization pursuant to which Platinum will acquire all of the assets and assume substantially all of the liabilities of TEC, including approximately $42 million of TEC’s debt which will be retired at closing, in exchange for the issuance of approximately eight million shares of Platinum common stock to TEC. The total number of shares to be received by TEC will be determined by dividing $60 million by the per share cash value of Platinum’s IPO trust account, which is determined by dividing the amount held in trust by 14,400,000 (the number of shares issued in Platinum’s IPO). The per share cash value was $7.71 at June 30, 2007.

18

After the consummation of the acquisition, TEC and its parent, Tandem, will liquidate and distribute the Platinum shares to Tandem’s stockholders.

Results of Operations

For the three and six month periods ended June 30, 2007 and 2006, we had net income of $578,843, $456,336, $1,076,708 and $687,564, respectively, attributable to net interest income of $751,057, $672,854, $1,441,913 and $1,156,249, respectively, (net of interest income in the amount of $188,991, $168,108,$ 366,112 and $312,660, respectively, attributable to shares of common stock subject to conversion rights) resulting primarily from interest income earned on the proceeds of our IPO, offset by expenses attributable to organization and formation expenses, expenses incurred in identifying and qualifying an acquisition candidate and legal and accounting costs. As more fully described below, the interest income is earned on funds held in the trust account. The funds held in trust and related interest income are only available, subject to certain conditions, for use in making a qualified acquisition and not for our normal daily operating expenses. Interest income was derived from sources free of federal income taxes resulting in a lower than normal provision for income taxes. 

Liquidity and Capital Resources

On October 28, 2005, we consummated our initial public offering (“IPO”) of 14,400,000 units with each unit consisting of one share of our common stock, $0.0001 per share, and one warrant to purchase one share of common stock at an exercise price of $6.00 per share. The units were sold at an offering price of $8.00 per unit, generating gross proceeds of $115,200,000. The total net proceeds to us from the offering were approximately $106,472,000, of which $105,408,000 was deposited into a trust fund and the remaining proceeds ($1,064,000) were available to be used to provide for business, legal and accounting, due diligence on prospective business combinations and continuing general and administrative expenses. The net proceeds deposited into the trust fund remain on deposit in the trust fund, earning interest, and are contemplated for use in connection with a business combination. As of June 30, 2007, there was $111,044,966 held in the trust fund. During the year ended December 31, 2006, we used $500,000 towards a deposit on the Tandem acquisition (of which $350,000 was returned in September 2006) and $520,533 for payment of deferred acquisition costs, principally for the Tandem acquisition. In the six months ended June 30, 2007 we disbursed an additional $22,791 for these costs, bringing the accumulated amount paid through June 30, 2007 to $543,324. Deferred acquisition costs of $1,142,099 and $1,394,952 are included in accounts payable and accrued expenses as of December 31, 2006 and June 30, 2007, respectively. In the year ended December 31, 2006, we received $75,000 of proceeds from short-term notes payable issued to our Chairman, as well as an additional $340,000 in proceeds of notes issued in the six month period ended June 30, 2007. The notes bear interest at 5% per annum and are due on the earlier of (i) October 31, 2007 or (ii) upon the consummation of the Asset Purchase Agreement.

In July 2006, we received a commitment letter from a bank, conditioned upon consummation of the Tandem transaction and execution of a definitive financing agreement for $45 million in financing. This arrangement was comprised of a $35 million formula based secured reducing revolving line of credit and a $10,000,000 secured acquisition line of credit. Availability will be subject to a formula based upon assets and maintenance of compliance with certain financial ratios. The arrangement would have a four-year term, and would require minimum $825,000 monthly mandatory payments to reduce any outstanding balance of the revolving line of credit. Subsequent to the restructuring of the proposed merger and the execution of the Asset Acquisition Agreement with TEC, while the original commitment letter is no longer applicable, the bank initially verbally indicated that it was willing to provide a new commitment letter on similar terms. However, there have been no further discussions with the bank. In January 2007, the Company received a non binding summary of terms and conditions from financial institutions for up to a $75,000,000 revolving line of credit facility (initial borrowing base would be set at $38,000,000), subject to a borrowing base limitation and compliance with other debt covenants, which would be defined in a definitive agreement. No assurance can be given that either bank will enter into a definitive credit facility on terms satisfactory to Platinum, if at all.

19

We intend to use a substantial amount of the net proceeds from the IPO to acquire the assets and assume substantially all the liabilities of TEC. To the extent that our capital stock is used, in whole or in part, as consideration to effect this business combination, the proceeds held in the trust fund will be used to finance the operations of the target business and purchase shares of Platinum common stock pursuant to Platinum’s share repurchase plan.

We believe that we will consummate the TEC asset acquisition discussed above and that we will have sufficient funds available to us (outside of the trust fund) to operate through the consummation of the asset acquisition. The principal sources of these funds will be from loans advanced from certain of our stockholders. Upon consummation of the Asset Acquisition Agreement, cash held in trust will be released to us and, after payment of debt pursuant to the Asset Acquisition Agreement, payment to stockholders exercising their conversion rights and payment of certain fees and expenses relating to the asset acquisition, will be available for operations and conduct of the business.

Between May 11, 2007 and the date hereof, a number of class action lawsuits were filed against Optionable, Mr. Mark Nordlicht, Mr. Albert Helmig and certain other directors and officers of Optionable, alleging violations of securities laws. Mr. Nordlicht is our Chairman and a director and former chairman of the board of directors of Optionable and Mr. Helmig is a former director of our company and currently chairman of the board of directors of Optionable. Optionable is energy trading and Brokerage Company founded in 2000 by Mr. Nordlicht. On May 11, 2007, Mr. Helmig resigned as a member of our board of directors. In addition, on May 16, 2007, Mr. James E. Bashaw resigned as a member of our board of directors. These lawsuits may lead to further comments on this proxy statement by the SEC and could result in a delay in clearance by the SEC and mailing of this proxy statement.

There can be no assurance that the TEC acquisition will be consummated. Should this asset acquisition not be consummated by October 28, 2007, we would be required to return the funds held is trust to holders of shares issued in the IPO as a mandatory liquidating distribution, pursuant to a plan of dissolution and liquidation. Any such plan of dissolution, if required, would have to first be submitted to our stockholders for approval. These conditions raise a substantial doubt about our ability to continue as a going concern.

In the period from October 28, 2005 through October 28, 2007, we initially estimated that we would incur approximately $300,000 in expenses for legal, accounting and other expenses attendant to the due diligence investigations, structuring and negotiating of a business combination and preparation of a proxy statement, an aggregate of $180,000 for the administrative fees payable to Platinum Partners Value Arbitrage, L.P. or other designated parties (a total of $7,500 per month for two years), $100,000 for expenses for the due diligence and investigation of a target business, $50,000 of expenses in legal and accounting fees relating to our SEC reporting obligations and $358,000 for general working capital that will be used for miscellaneous expenses and reserves, including approximately $75,000 for director and officer liability insurance premiums. Through June 30, 2007, these expenses have been incurred and have increased substantially, and been paid resulting in the Company’s cash position at June 30, 2007 as noted above. Expenses attributable to the asset acquisition incurred through June 30, 2007 aggregated $1,938,275.

20

In connection with the IPO, we sold to the representatives of the underwriters a five year option to purchase up to a total of 720,000 units in the aggregate at a per unit price of $10.00. The units issuable upon exercise of this option are identical to those offered in the IPO except that the warrants included in the option have an exercise price of $7.50 (125% of the exercise price of the warrants included in the units sold in the IPO). The unit purchase option may be exercised for cash or on a “cashless” basis, at the holder’s option, such that the holder may use the appreciated value of the option (the difference between the exercise prices of the option and the underlying warrants and the market price of the units and underlying securities) to exercise the option without the payment of any cash. If circumstances warrant and in the event that any holders of the unit purchase option choose to exercise all or a portion of the unit purchase option on a cashless basis, we will receive no cash proceeds but would be required to issue additional units.

In the event that we consummate the currently proposed asset acquisition with TEC, the net proceeds of our IPO would be released and approximately $42 million of such funds would be used to retire the indebtedness of TEC assumed as part of the transaction. The remaining amount, together with the financing which we anticipate, would be used to: (1) make payments to Platinum stockholders who exercise their conversion rights in the business combination vote, (2) pay the finder’s fee of $3 million payable in connection with the transaction, as well as other transaction-related expenses and (3) fund future acquisitions, working capital, capital expenditures associated with TEC’s assets and repurchases of shares of Platinum common stock under the contemplated Platinum Share Repurchase Plan.

Off-Balance Sheet Arrangements

As of June 30, 2007, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Exchange Act of 1934.

Contractual Obligations and Commitments

In February 2006, we entered into a sublease arrangement for office space located in Montvale, New Jersey. The term of the sublease commenced on March 1, 2006 and expires February 28, 2009. Gross rent, including annual escalations and electric charges, is approximately $20,000 for each year of the three year lease term. In 2007, the parties to this arrangement modified its terms, converting the arrangement to a month-to-month rental for reduced space. The monthly rental payment under this arrangement has bee reduced to $825.

Critical Accounting Policies

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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.

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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 the TEC acquisition is not consummated by us prior to the prescribed liquidation date of the trust fund, 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 fund 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 4.Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

The Company, under the supervision of our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of June 30, 2007. Based upon that evaluation, management, including our principal executive officer and principal financial officer, concluded that the Company’s disclosure controls and procedures were effective in alerting it in a timely manner to information relating to the Company required to be disclosed in this report.

During the three months ended June 30, 2007, there have been no significant changes in our internal controls over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

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OTHER INFORMATION

Item 1.Legal Proceedings.

A lawsuit was filed against Platinum and Tandem in Florida Circuit Court on or about June 14, 2006. The lawsuit involves a claim with respect to ownership of 2.7 million shares of the common stock of Tandem that were purportedly transferred to a third party by an affiliate of Mr. Lyle Mortensen, one of the promoters of Tandem, which shares Tandem maintains were invalidly issued and subsequently cancelled in 2005 by board action of Tandem’s board. This action was later upheld by the District Court of the State of Nevada, Tandem’s state of incorporation, which declared in a judgment that the certificates evidencing the shares are invalid and void and directed Tandem’s transfer agent to void the certificates if presented for transfer, as well as enjoined the transfer agent from transferring the certificates if so presented. The third party’s Florida suit was filed against Tandem and Platinum seeking a declaration by the court that Tandem’s cancellation of the shares was improper and that the third party is the rightful owner of the shares and an injunction prohibiting Tandem and Platinum from taking any action in detriment to his alleged rights in and to the shares. Tandem and Platinum have no contacts with the State of Florida and they filed a motion seeking dismissal of the lawsuit on the grounds that Florida courts have no jurisdiction over them. A hearing on the motion was held on November 7, 2006 and the court subsequently issued an order dismissing the lawsuit without prejudice against Tandem and Platinum. The third party filed a motion seeking clarification of the court’s order, and the court issued an order on February 22, 2007, upholding its prior ruling. The third party then filed a second motion for clarification, and the court issued another order on May 1, 2007, declaring once again that it had dismissed the entire complaint filed by the third party on the grounds that it did not have jurisdiction over the matter. The third party then filed a motion seeking an extension of time in which to file an amended complaint, but prior to the hearing on the motion, the third party dismissed his lawsuit. On June 12, 2007, the third party filed a lawsuit in the United States District Court for the Western District of Texas, Midland-Odessa Division, against Tandem, TEC, and Messrs. Yocham, Culp, Chambers and Cunningham, and Tandem’s transfer agent alleging conversion and conspiracy to convert with respect to the certificate representing the 2.7 million shares, and the defendants in that lawsuit are vigorously contesting these allegations.

There are no other material legal proceedings pending against us.

Item 1A.Risk Factors.

The following is an update of one of the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. There have otherwise been no material changes in our risk factors from the information provided in Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2006.

Since Tandem, TEC’s parent entity, was a publicly-traded shell corporation, our acquisition of all of the assets and substantially all liabilities of TEC may subject us to successor liability for the shell corporation’s known and unknown liabilities.

Tandem was originally incorporated in Nevada as Las Vegas Major League Sports, Inc. (“LVMS”) on July 22, 1993 with the plan of engaging in certain business activities associated with the Canadian Football League. In April 1994, it completed an initial public offering and began trading under the symbol LVTD. In 1996, LVMS filed for bankruptcy protection and ceased being a reporting company and also ceased operations and was considered to be a “shell” corporation. In 1998, LVMS changed its name to Pacific Medical Group, Inc. (“Pacific Medical Group”) in connection with a share exchange transaction with a privately-held company whose business plan was to engage in the manufacture and sale of medical products. To our knowledge, that business was unsuccessful and, again, the company ceased operations and was considered to be a “shell” corporation. In February, 2005, Pacific Medical Group changed its name to Tandem Energy Holdings, Inc. and changed its trading symbol to TDYH.PK. In June, 2005, Tandem Energy Corporation became a wholly-owned subsidiary of Tandem Energy Holdings, Inc.

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The risks and uncertainties involved in our proposed acquisition of all of the assets and substantially all liabilities of TEC include that we may be deemed to be a successor to Tandem, TEC’s parent, and thus subject to the existing liabilities, including undisclosed liabilities, of the prior shell corporations arising out of the their prior business operations, financial activities and equity dealings. These risks and uncertainties are greater when a corporation is used as a shell vehicle more than once, such as Tandem. There is a risk of litigation by third parties or governmental investigations or proceedings. Some potential claims against Tandem that have been identified to date include the following:

· Tandem has been informed of a claim of ownership of 2.7 million shares of Tandem common stock. Such claim could result in a successor liability claim against Platinum upon consummation of the asset acquisition. These shares are not included in the outstanding shares of Tandem. 

· Messrs. Jack and Rex Chambers are the subjects of an Order of Permanent Injunction resulting from proceedings instituted against them in 1984 by the Securities and Exchange Commission. The Order enjoins Messrs. Chambers from, directly or indirectly, engaging in the sale or offer for sale of securities in the form of fractional undivided interests in oil or gas leases of Chambers Oil and Gas or any other security without a registration statement being in effect or an exemption from registration otherwise being available. To the extent a court were to conclude that the asset acquisition constitutes the sale of securities by Messrs. Chambers in violation of the Order of Permanent Injunction, Platinum potentially could be subject to a successor liability claim to the extent that any liability was imposed upon Tandem as a result. 

· The Securities and Exchange Commission has taken the position that promoters or affiliates of a blank check company and their transferees, both before and after a business combination, would act as an “underwriter” under the Securities Act when reselling the securities of a blank check company. Accordingly, the Securities and Exchange Commission believes that those securities can be resold only through a registered offering. Claims may be made that certain persons who have sold shares of Tandem common stock may have been considered promoters or affiliates of Tandem and thus may have sold shares in violation of this position. In that event, Platinum potentially could be subject to a successor liability claim to the extent that any liability was imposed upon Tandem as a result.

· Lance Duncan played a key role in connection with the acquisition by Tandem of the stock of TEC and the assets of Shamrock.  It is possible that a court could determine that Mr. Duncan acted as an unlicensed broker-dealer in connection with such transactions. In that event, Platinum potentially could be subject to a successor liability claim to the extent that any liability was imposed upon Tandem as a result. 

· Tandem has been unsuccessful in its efforts to locate corporate records and other material agreements and documents relating to itself and its predecessors in name for periods prior to mid-March 2005. As a result, no assurance can be given that certain actions taken with respect to Tandem, including the 1:500 stock split, were authorized by the necessary corporate action on the part of Tandem’s board of directors and its shareholders. If the stock split was not effective, Tandem would have 32,944,000 shares outstanding instead of 23,799,322 shares, and Platinum potentially could be subject to a successor liability claim to the extent that the holders of the additional shares (a total of 9,161,000) do not receive their full proportion share of the stock of Platinum distributed to shareholders upon the liquidation and dissolution of Tandem. Platinum potentially also could be subject to successor liability claims for other actions of the predecessors to Tandem’s current management that were not properly authorized and implemented, including any shares that Messrs. Ronald G. Williams or Lyle Mortensen may claim to have acquired in connection with the acquisition of Pacific Medical Group that were not disclosed to Tandem and thus not presently reflected in the shares currently outstanding. 

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·  Prior to its acquisition of TEC, Mr. Williams claims to have acquired control of Pacific Medical Group from Mr. John Karlsson. Tandem has also been unsuccessful in its efforts to obtain documentation relating to such acquisition and, as such, has not been able to determine the amount or percentage of the outstanding shares of Pacific Medical Group that Mr. Williams acquired. Platinum could be subject to potential successor liability claims to the extent that Mr. Williams did not properly acquire control of Pacific Medical Group and did not have proper authority to enter into the transactions with TEC. 

We will not receive a legal opinion relating to Tandem’s capitalization or corporate actions in connection with the closing of the asset acquisition. Given the uncertainty regarding Tandem’s prior corporate history, the lack of corporate documentation, claims of share ownership and other related concerns, Tandem’s legal counsel is unwilling to render such an opinion. Accordingly, we will not have a legal opinion to support the representations and warranties of Tandem contained in the asset acquisition agreement regarding these matters.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3.Defaults Upon Senior Securities.

None

Item 4.Submission of Matters to a Vote of Security Holders.

None

Item 5.Other Information.

 Between May 11, 2007 and the date hereof, a number of class action lawsuits were filed against Optionable, Mr. Mark Nordlicht, Mr. Albert Helmig and certain other directors and officers of Optionable, alleging violations of the U.S. securities laws. Mr. Nordlicht is our Chairman and a director and former chairman of the board of directors of Optionable and Mr. Helmig is a former director of our company and currently chairman of the board of directors of Optionable. Optionable is an energy trading and brokerage company founded in 2000 by Mr. Nordlicht. On May 11, 2007, Mr. Helmig resigned as a member of our board of directors. These lawsuits may lead to further comments by the SEC on the preliminary proxy statement filed with the SEC in connection with the Asset Acquisition described in “Acquisition Announcement” above and could result in a delay in clearance by the SEC and mailing of the proxy statement. In addition, on May 16, 2007, Mr. James E. Bashaw resigned as a member of our board of directors.

Item 6.Exhibits.

31.1     Section 302 Certification of Principal Executive Officer

31.2     Section 302 Certification of Principal Financial Officer

32.1     Section 906 Certification

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PLATINUM ENERGY RESOURCES, INC.
Date: August 13, 2007	By:	/s/ Mark Nordlicht
		Mark Nordlicht Chairman of the Board (Principal Executive and Financial and Accounting Officer)

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