Westway (WWAY) 10-Q 2009 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                   

Commission File Number 000-52642

Shermen WSC Acquisition Corp.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-4755936
(State or other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

c/o The Shermen Group, 230 Park Avenue, Suite 1000, New York, NY	10169
(Address of Principal Executive Offices)	(Zip Code)

(212) 332-2858

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  o    No  x

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate 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 April 27, 2009, 28,750,000 shares of common stock, par value $ 0.0001 per share, were issued and outstanding.

TABLE OF CONTENTS

Shermen Acquisition Corp.

(a development stage enterprise)

Contents

Part I: FINANCIAL INFORMATION:
Item 1 – Financial Statements:	1
Condensed Balance Sheets	1
Condensed Statements of Operations (Unaudited)	2
Condensed Statements of Stockholders’ Equity (Unaudited)	3
Condensed Statements of Cash Flows (Unaudited)	4
Notes to Condensed Unaudited Interim Financial Statements	5
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	18
Item 4 – Controls and Procedures	18
Part II. OTHER INFORMATION:	19
Item 1 – Legal Proceedings	19
Item 1A – Risk Factors	19
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3 – Defaults Upon Senior Securities	19
Item 4 – Submission of Matters to a Vote of Security Holders	19
Item 5 – Other Information	19
Item 6 – Exhibits	19
Signatures	20
Certifications

PART I — FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

CONDENSED BALANCE SHEETS

	March 31, 2009		December 31, 2008
	(unaudited)
ASSETS
Current assets
Cash	$	65,566	$	190,455
Prepaid expenses	154,136		28,767
Total current assets	219,702		219,222
Other assets
Deferred taxes	860,000		712,000
Investments held in Trust Account	137,973,055		138,445,809
Total Assets	$	139,052,757	$	139,377,031
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	278,331	$	199,659
Income taxes payable	—		286,000
Total current liabilities	278,331		485,659
Long-term liability,
deferred underwriters’ fee	3,312,000		3,312,000
Total liabilities	3,590,331		3,797,659
Commitments
Common stock subject to redemption, (9,199,999 shares at redemption value, $5.95 per share)	54,743,994		54,743,994
Deferred interest related to common stock subject to possible redemption, net of taxes	227,278		323,305
Stockholders’ equity
Preferred stock, $.0001 par value; 1,000,000 shares authorized; none issued
Common stock, $.0001 par value; 100,000,000 shares authorized; 28,750,000 shares issued and outstanding as of March 31, 2009 and December 31, 2008 (including 9,199,999 shares subject to possible redemption), respectively	2,875		2,875
Additional paid-in capital	78,941,231		78,941,231
Retained earnings	1,547,048		1,567,967
Total stockholders’ equity	80,491,154		80,512,073
Total liabilities and stockholders’ equity	$	139,052,757	$	139,377,031

The accompanying notes are an integral part of these condensed interim financial statements.

1

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended March 31, 2009				Three Months Ended March 31, 2008			Period from April 18, 2006 (inception) to March 31, 2009
Revenue	$	—			$	—		$	—
Interest income	77,316				1,016,441			5,461,635
Formation and operating costs	(321,396			)	(187,189		)	(2,076,977		)
Income (loss) before provision for income taxes	(244,080			)	829,252			3,384,658
Provision for (income taxes) benefit		127,134			(412,259		)	(1,610,332		)
Net income (loss) applicable to common stockholders	$		(116,946	)	$	416,993		$	1,774,326
Weighted average number of common shares subject to possible redemption, basic & diluted	9,199,999				9,199,999			5,729,749
Income (loss) per share subject to possible redemption, basic & diluted	$	(0.01		)	$	0.04		$	0.04
Weighted average number of common shares outstanding not subject to possible redemption, basic	19,550,001				19,550,001			14,344,625
Net income (loss) per common share, basic	$	(0.01		)	$	0.02		$	0.11
Weighted average number of common shares outstanding not subject to possible redemption, diluted	19,550,001				30,136,039			16,807,128
Net income per common share, diluted	$	(0.01		)	$	0.01		$	0.09

The accompanying notes are an integral part of these condensed interim financial statements.

2

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

STATEMENTS OF STOCKHOLDERS’ EQUITY

For the period from April 18, 2006 (date of inception) to March 31, 2009

	Common Shares	Amount		Additional Paid- in Capital			(Deficit Accumulated During the Development Stage) Retained earnings			Total Stockholders’ Equity
Sale of shares issued to Founders on May 1, 2006 at $0.005 per unit	5,750,000	$	575	$	24,425		$			$	25,000
Net loss applicable to common stockholders							(16,031		)	(16,031		)
Balances as of December 31, 2006	5,750,000	$	575	$	24,425		$	(16,031	)	$	8,969
Sale of 23,000,000 units on May 30, 2007 at $6 per unit in the public offering	23,000,000	2,300		137,997,700						138,000,000
Sale of warrants issued to Founders on May 30, 2007 at $0.70 per warrant				3,650,000						3,650,000
Underwriting and offering fees and expenses				(4,790,000		)				(4,790,000		)
Proceeds from public offering of common stock subject to possible redemption (9,199,999 shares common stock at redemption value)				(54,743,994		)				(54,743,994		)
Underwriters’ discount and offering costs related to public offering and over-allotment option				(3,196,900		)				(3,196,900		)
Accretion of Trust Account relating to common stock subject to possible redemption, net of tax							(323,305		)	(323,305		)
	��
Net income applicable to common stockholders							1,907,303			1,907,303
Balances at December 31, 2008	28,750,000	$	2,875	$	78,941,231		$	1,567,967		$	80,512,073
Accretion of Trust Account relating to common stock subject to possible redemption, net of tax (unaudited)							96,027			96,027
Net (loss) applicable to common stockholders (unaudited)							(116,946		)	(116,946		)
Balances at March 31, 2009 (unaudited)	28,750,000	$	2,875	$	78,941,231		$	1,547,048		$	80,491,154

The accompanying notes are an integral part of these condensed interim financial statements.

3

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31, 2009			Three Months Ended March 31, 2008			April 18, 2006 (date of inception) through March 31, 2009
Cash flows from operating activities
Net income (loss)	$	(116,946	)	$	416,993		$	1,774,326
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Deferred tax benefit	(148,000		)	(93,060		)	(860,000		)
Changes in operating assets and liabilities:
Prepaid expenses	(125,369		)	19,125			(154,136		)
Accounts payable and accrued expenses	78,672			(45,751		)	278,331
Income taxes	(286,000		)	(541,850		)	—
Cash provided by (used in) operating activities	(597,643		)	(244,543		)	1,038,521
Cash provided by (used in) investing activities
Investments held in Trust Account	472,754			83,594			(137,973,055		)
Cash flows from financing activities:
Proceeds from note payable, stockholder	—			—			150,000
Payments for note payable, stockholder	—			—			(150,000		)
Payments of offering costs	—			—			(4,675,000		)
Proceeds from sale of stock options from the offering	—			—			100
Proceeds from issuance of common stock from the offering	—			—			141,675,000
Net cash provided by financing activities	—			—			137,000,100
Net decrease in cash	(124,889		)	(160,949		)	—
Cash, beginning of the period	190,455			160,959			—
Cash, end of the period	$	65,566		$	—		$	65,566
Supplemental schedule of :
Non-cash financing activity:
Deferred underwriters’ fees	$	—		$	—		$	3,312,000
Cash used for:
Taxes paid	$	578,931		$	1,159,670		$	2,816,489

The accompanying notes are an integral part of these condensed interim financial statements.

4

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE A—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Shermen WSC Acquisition Corp. (a corporation in the development stage) (the “Company”) was incorporated in Delaware on April 18, 2006. The Company was formed to acquire an operating business in the agriculture industry through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination. The Company has neither engaged in any operations nor generated significant revenue to date, with the exception of interest income earned on cash held in the trust account as described below. The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting By Development Stage Enterprises,” and is subject to the risks associated with activities of development stage companies. The Company has selected December 31st as its fiscal year end.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering of Units (as defined in Note F below), although substantially all of the net proceeds of the Offering are intended to be generally applied toward consummating a business combination with (or acquisition of) an operating business in the agriculture industry (“Business Combination”). Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. Since the closing of the Offering, at least 99.5% of the gross proceeds, after the payment of certain amounts to the underwriters for the Offering, are held in a trust account (“Trust Account”) and invested in U.S. “government debt securities,” defined as any Treasury Bill issued by the United States government having a maturity of one hundred and eighty  (180) days or less or any open ended investment company registered under the Investment Company Act of 1940 that holds itself out as a money market fund and bears the highest credit rating issued by a United States nationally recognized rating agency, until the earlier of (i) the consummation of its first Business Combination or (ii) the distribution of the Trust Account as described below. The remaining proceeds will 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 40% or more of the outstanding common stock of the Company (excluding, for this purpose, those shares of common stock of the Company issued prior to the Offering) vote against the Business Combination and exercise their conversion rights described below, the Business Combination will not be consummated. The stockholders who purchased Units in the Offering (the “Public Stockholders”) and vote against a Business Combination will be entitled to convert their common stock into a pro rata share of the Trust Account (including the additional 4% fee of the gross proceeds of the Offering payable to the underwriters for the Offering upon the Company’s consummation of a Business Combination), including any interest earned (net of taxes payable and the amount distributed to the Company to fund its working capital requirements) on their pro rata share, if the Business Combination is approved and consummated. However, voting against the Business Combination alone will not result in an election to exercise a Public Stockholder’s conversion rights. A Public Stockholder must also affirmatively exercise such conversion rights at or prior to the time the Business Combination is voted upon by the stockholders.   If holders of no more than approximately 39.99% of the shares sold in the Offering vote against a Business Combination and seek to exercise their conversion rights and such Business Combination is consummated, the stockholders who held shares of common stock of the Company (the “Founding Stockholders”) have agreed to forfeit and return to the Company for cancellation a number of shares so that they will collectively own no more than 23.0% of the Company’s outstanding common stock upon consummation of such Business Combination (without giving effect to any shares that may be issued in such Business Combination).  If the Company is unable to effect a Business Combination and liquidates, none of the Founding Stockholders will receive any portion of the proceeds of the Offering held in the Trust Account to be distributed to the Company’s stockholders with respect to common stock owned by them immediately before the Offering.  As of March 31, 2009, after giving effect to a 1.15 for 1 stock split which was effected immediately prior to the Offering, all of the Founding Stockholders, including all of the directors and officers of the Company, have agreed to vote all of the shares of common stock of the Company held by them in accordance with the vote of the majority in interest of all other stockholders of the Company.

5

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE A—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued)

In the event that the Company does not consummate a Business Combination within 18 months from the date of the consummation of the Offering, or 24 months from the consummation of the Offering (May 27, 2007) if certain extension criteria have been satisfied, the proceeds held in the Trust Account will be distributed to the Public Stockholders, excluding the Founding Stockholders to the extent of their initial stock holdings. In the event of such distribution, 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 Unit in the Offering (assuming no value is attributed to the Warrants contained in the Units offered in the Offering discussed in Note F).

NOTE B — BASIS OF PRESENTATION

The accompanying  condensed interim financial statements have been prepared by the Company and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position as of March 31, 2009 and the financial results for the three months ended March 31, 2009 and 2008 and from April 18, 2006 (date of inception) to March 31, 2009, in accordance with accounting principles generally accepted in the United States of America for interim financial statements and pursuant to the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”).   Certain information and footnote disclosures normally included in the Company’s annual audited financial statements have been condensed or omitted pursuant to such rules and regulations.

The results of operations for the three months ended March 31, 2009 are not necessarily indicative of the results of operations to be expected for a full fiscal year.  These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements for the fiscal year ended December 31, 2008, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC.

NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Development stage company:

The Company complies with the reporting requirements of SFAS No. 7, “Accounting and Reporting by Development Stage Enterprises.”

Earnings per common share:

The Company complies with the accounting and disclosure provision of SFAS No. 128, “Earnings Per Share.” SFAS No. 128 requires dual presentation of basic and diluted income per common share for all periods presented. Basic income per common share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then share in the income of the Company. The difference between the number of shares used to compute basic income per common share and diluted income per common share relates to additional shares to be issued upon the assumed exercise of stock options and warrants, net of shares hypothetically repurchased at the average market price with the proceeds of exercise.  The Company used treasury stock method to calculate the diluted earnings per share based on the outstanding warrants issued in the private placement, the initial public offering and the over allotment. As a result, the Company added 4,825,832, 10,586,038 and 2,462,503 shares as of the three months ended March 31, 2009 and 2008, and the period from April 18, 2006 (date of inception) to March 31, 2009, respectively to its basic weighted average number of shares to arrive at the diluted shares used in its calculation of weighted average diluted earnings per share.

6

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings per common share: (continued)

The Company’s statement of operations includes a presentation of earnings per share for common stock subject to possible redemption in a manner similar to the two-class method of earnings per share. Basic and diluted net income per share amount for the maximum number of shares subject to possible redemption is calculated by dividing the net interest attributable to common shares subject to possible redemption by the weighted average number of shares subject to possible redemption.  Basic and diluted net loss per share amount for the common shares outstanding not subject to possible redemption is calculated by dividing the net loss exclusive of the net interest income attributable to common shares subject to redemption by the weighted average number of common shares not subject to possible redemption.

Concentration of credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which potentially may, in the future, exceed the Federal depository insurance coverage of $250,000.  The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Fair value of financial instruments:

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under SFAS No. 107, “Disclosure About Fair Value of Financial Instruments,” approximates the carrying amounts represented in the accompanying condensed balance sheets.

Income Taxes:

The Company complies with SFAS 109, “Accounting for Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are 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 the Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”).  There were no unrecognized tax benefits as of March 31, 2009.  FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.  For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.  The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.  No amounts were accrued for the payment of interest and penalties at March 31, 2009.  Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviation from its position.

7

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Securities held in trust

Investment securities consist of United States Treasury securities. The Company classifies its securities as held-to-maturity in accordance with SFAS No. 115, “Accounting for Certain Debt and Equity Securities.”  Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity.  Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value.  The impairment is charged to earnings and a new cost basis for the security is established.  To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary.  Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method.  Such amortization and accretion is included in the “interest Income” line item in the statement of operations. Interest income is recognized when earned.

Recently issued accounting pronouncements:

In December 2007, the FASB issued SFAS 141(R), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) provides companies with principles and requirements on how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any non-controlling interest in the acquiree as well as the recognition and measurement of goodwill acquired in a business combination. SFAS 141(R) also requires certain disclosures to enable users of the financial statements to evaluate the nature and financial effects of the business combination. Acquisition costs associated with the business combination will generally be expensed as incurred. SFAS 141(R) is effective for business combinations occurring in fiscal years beginning after December 15, 2008, which will require the Company to adopt these provisions for business combinations occurring in fiscal 2009 and thereafter. Early adoption of SFAS 141(R) is not permitted.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial statements — An Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 requires reporting entities to present noncontrolling (minority) interests as equity as opposed to as a liability or mezzanine equity and provides guidance on the accounting for transactions between an entity and noncontrolling interests. SFAS 160 is effective the first fiscal year beginning after December��15, 2008. SFAS 160 applies prospectively as of the beginning of the fiscal year SFAS 160 is initially applied, except for the presentation and disclosure requirements which are applied retrospectively for all periods presented subsequent to adoption. The adoption of SFAS 160 will not have a material impact on the Company’s results of operations or financial position; however, it could impact future transactions entered into by the Company.

In March 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment to FASB Statement No. 133”. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for

8

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS 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 in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

NOTE D—INCOME TAXES

The Company’s provision for income taxes reflects the application of Federal, State and City statutory rates to the Company’s income before taxes. For the three months ended March 31, 2009 and 2008, and for the period from April 18, 2006 (inception) to March 31, 2009, the effective income tax rate differs from the federal statutory rate of 34% principally due to the effect of state and city income taxes.

Component of the provision for income taxes consists of:

	For three months ended March 31, 2009			For three months ended March 31, 2008			April 18, 2006 (inception) to March 31, 2009
Current Expense (Benefit)
Federal	$	—		$	263,306		$	1,453,500
State and City	20,866			242,013			1,016,832
Total current expense	20,866			505,319			2,470,332
Deferred Expense (Benefit)
Federal	(29,758		)	(92,157		)	(508,725		)
State and City	(118,242		)	(903		)	(351,275		)
Total deferred benefit	(148,000		)	(93,060		)	(860,000		)
Provision for income taxes	$	(127,134	)	$	412,259		$	1,610,332

NOTE E—INVESTMENT IN TRUST ACCOUNT; MARKETABLE SECURITIES

Since the closing of the Offering, net proceeds from the offering have been held in a trust account (“Trust Account”).  The Trust Account may be invested in U.S. “government debt securities,” defined as any Treasury Bill or equivalent securities issued by the United States government having a maturity of one hundred eighty (180) days or less or money market funds meeting the conditions specified in Rule 2a-7 under the Investment Company Act of 1940, until the earlier of (i) the consummation of its first Business Combination or (ii) the distribution of the Trust Account as described below.

9

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE E—INVESTMENT IN TRUST ACCOUNT; MARKETABLE SECURITIES (continued)

As of March 31, 2009 investment securities in the Company’s Trust Account consist of (a) approximately $137,959,193 in Treasury Bills and (b) approximately $1,000 in a mutual fund that invests in U.S. Treasury securities.  The Company classifies its U.S. Treasury securities as held-to-maturity in accordance with SFAS No. 115, “Accounting for Certain Debt and Equity Securities.”  Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity.  Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts.  The Company’s investment in the U.S. Treasury mutual fund account (approximately $1,000 at March 31, 2009) is recorded at fair value.

The carrying amount, including accrued interest, gross unrealized holding gains, and fair value of held-to-maturity securities at March 31, 2009 were as follows:

	Carrying amount		Gross unrealized holding gains		Fair value
Held-to-maturity:
U. S. Treasury securities	$	137,959,193	$	13,195	$	137,972,388

NOTE F—OFFERING AND OVER-ALLOTMENT

The Company offered 20,000,000 units (“Units”) for public sale (the “Offering”) in May 2007. Each Unit consists of one share of the Company’s common stock, $0.0001 par value (“Common Stock”), and two redeemable common stock purchase warrants (“Warrants”). Each Warrant entitles the holder to purchase from the Company one share of Common Stock at an exercise price of $5.00 commencing on the later of (a) one year from the date of the final prospectus for the Offering or (b) the completion of a Business Combination with a target business or the distribution of the Trust Account, and will expire four years from the date of such final prospectus. The Warrants will be redeemable at a price of $0.01 per Warrant upon 30 days prior notice after the Warrants become exercisable, only in the event that the last sale price of Common Stock is at least $8.50 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given.

No Warrants will be exercisable and the Company will not be obligated to issue shares of Common Stock unless at the time a holder seeks to exercise such Warrant, a prospectus relating to Common Stock issuable upon exercise of the Warrants is current and Common Stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Warrants.  Under the terms of the warrant agreement, the Company has agreed to use its best efforts to meet these conditions and to maintain a current prospectus relating to Common Stock issuable upon exercise of the Warrants until the expiration of the Warrants.  However, if the Company does not maintain a current prospectus relating to Common Stock issuable upon exercise of the Warrants, holders will be unable to exercise their Warrants.  In no circumstance will the Company be required to settle any such Warrant exercise for cash.  If the prospectus relating to Common Stock issuable upon the exercise of the Warrants is not current or if Common Stock is not qualified or exempt from qualification in the jurisdiction in which the holders of the Warrants reside, the Warrants may have no value, the market for the Warrants may be limited and the Warrants may expire worthless.

10

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE F—OFFERING AND OVER-ALLOTMENT (continued)

Shermen WSC Holding (“Shermen WSC Holding”) has purchased 5,214,286 Warrants (“Founder Warrants”) at $0.70 per Founder Warrant (for an aggregate purchase price of approximately $3,650,000) from the Company in a private placement exempt from registration under Securities Act of 1933, as amended. These purchases took place simultaneously with the consummation of the Offering. All of the proceeds received from these purchases were placed in the Trust Account. The Founder Warrants purchased by Shermen WSC Holding are identical to the Warrants underlying the Units sold in the Offering except that (i) the Company has no obligation to register the sale of the Warrants and the underlying shares of Common Stock and their exercise is not limited by the absence of an effective registration statement and current prospectus relating to the resale of the underlying shares of Common Stock and (ii) the Founder Warrants may be exercisable on a “cashless basis” if the Company calls the Warrants for redemption. Shermen WSC Holding agreed that the Founder Warrants would not be transferable or salable by it or such directors or officers or their respective affiliates until after the Company completed a Business Combination, except it may distribute them to its members.  Immediately after the purchase of the Founder Warrants, Shermen WSC Holding distributed them to its members.

All shares of Common Stock owned by the Founding Stockholders prior to the closing of the Offering (the “Initial Shares”) were placed into an escrow account maintained by Continental Stock Transfer & Trust Company, acting as escrow agent.  The Initial Shares will not be released from escrow until six months following the completion of a Business Combination.

The foregoing restriction is subject to certain limited exceptions such as transfers to family members and trusts for estate planning purposes, upon death of an escrow depositor, transfers to an estate or beneficiaries, or other specified transfers.  Even if transferred under these circumstances, the Initial Shares will remain in the escrow account.

On May 30, 2007, the underwriters’ for the Offering exercised the full over-allotment of 3,000,000 units.  As a result, the deferred underwriters’ fee was increased approximately $432,000.

NOTE G—COMMON STOCK

On May 23, 2007, the Company effected a 1.15 for 1 forward stock split of the Initial Shares and issued 750,000 shares of Common Stock to the Founding Stockholders prior to the closing of both the Offering and the over-allotment. All transaction and disclosures in the financial statements relating to Common Stock, have been adjusted to reflect the effects of the stock split.

NOTE H—RELATED PARTY TRANSACTIONS

The Company presently occupies office space provided by an affiliate of a certain stockholder of the Company. Such affiliate has agreed that, until the consummation of 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 such affiliate $9,950 per month for such services.

Certain of the directors and officers of the Company have purchased through Shermen WSC Holding, in a private placement, 5,214,286 Founder Warrants immediately prior to the Offering at a price of $0.70 per Founder Warrant (an aggregate purchase price of approximately $3,650,000) from the Company and not as part of the Offering. They have also agreed that these Founder Warrants purchased by them will not be sold or transferred until the completion of a Business Combination.

11

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE I—COMMITMENTS

The Company is committed to paying an underwriting discount of 4% of the Unit Offering price to the underwriters for the Offering (less $0.21 for each share of common stock converted to cash in connection with a Business Combination) payable upon the Company’s consummation of a Business Combination.

The Company has sold to the underwriters, for $100, as additional compensation, an option to purchase up to a total of 700,000 Units in the aggregate (350,000 Units to each underwriter) at a per-unit price of $7.50.  The Units issuable upon exercise of this option are also identical to those offered in the Offering, except that each Warrant underlying such Units entitles the holder to purchase one share of Common Stock at a price of $6.25.  In no circumstance will the Company be required to settle any such option exercise for cash.

The sale of this option was accounted for as an equity transaction.  Accordingly, there will be no net impact on the Company’s financial position or results of operations, except for the recording of the $100 proceeds from the sale of such option.

The Company has determined, based upon a Black-Scholes model, that the fair value of this option on the date of sale would be approximately $0.60 per unit, or $420,000 in total, using an expected life of four years, volatility of 52.13% and a risk-free interest rate of 4.92%.

The volatility calculation of 52.13% is based on the average 90-day Bloomberg volatility of a portfolio of nine publicly traded U.S. agricultural companies with market capitalizations between $50,000,000 and $500,000,000. Because the Company does not have a trading history, the Company needed to estimate the potential volatility of Common Stock price, which will depend on a number of factors which cannot be ascertained at this time.  The Company referred to the Index because management believes that the average volatility is a reasonable benchmark to use in estimating the expected volatility of Common Stock post-business combination.  Although an expected life of four years was taken into account for 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, this option would become worthless.  Although this option and its underlying securities have been registered under the registration statement of which the prospectus forms a part of, this option will provide for registration rights that will permit the holder of this option to demand that a registration statement will be filed with respect to all or any part of the securities underlying this option within five years of the completion of the Offering.  Further, the holders of this option will be entitled to piggy-back registration rights in the event the Company undertakes a subsequent registered offering within seven years of the completion of the Offering.

NOTE J—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 of the Company.  As of March 31, 2009, the Company has not issued any shares of its preferred stock.

NOTE K—THE PROPOSED BUSINESS COMBINATION WITH WESTWAY

On November 25, 2008, the Company entered into a Transaction Agreement with Terminal Merger Sub, LLC, Feed Merger Sub, LLC, ED&F Man Holdings Limited (“ED&F Man”), Westway Holdings Corporation, Westway Terminal Company Inc. and Westway Feed Products, Inc. (the “Transaction Agreement”) pursuant to which the Company will acquire ED&F Man’s bulk liquid storage and liquid feed supplements businesses in exchange for shares of the Company’s common and preferred stock and cash (such transaction, the “Business Combination”).  The Business Combination will be effected by mergers between wholly-owned subsidiaries of ED&F Man and wholly-owned subsidiaries of the Company and by the Company’s purchase of the equity securities of ED&F Man’s other subsidiaries that engage in the bulk liquid storage and liquid feed supplements businesses.  The Company refers to ED&F Man’s bulk liquid storage business and liquid feed

12

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE K—THE PROPOSED BUSINESS COMBINATION WITH WESTWAY (continued)

supplements business collectively as “Westway” or the “Westway business.”  If the Business Combination is approved by the Company’s stockholders, all of the direct and indirect subsidiaries of ED&F Man that currently engage in the Westway business will become the Company’s wholly-owned subsidiaries, ED&F Man and its affiliates will be the Company’s largest stockholder, owning 49.5% of the Company’s outstanding common stock and over 99% of the Company’s Series A Preferred Stock, and the Company will change its name to “Westway Group, Inc.”

Consummation of the Business Combination is subject to customary closing conditions, including (a) approval by the Company’s stockholders of the Transaction Agreement; (b) approval by the Company’s stockholders of the amendment and restatement of the Company’s certificate of incorporation; and (c) fewer than 40% of the holders of the shares of the Company’s common stock issued in the Offering (“IPO shares”) vote against the Transaction Agreement and elect that the Company convert their shares into cash.  The Business Combination will be terminated under certain circumstances, including (a) if the Business Combination is not consummated by May 30, 2009; (b) the Company’s stockholders do not approve the Transaction Agreement; or (c) holders of 40% or more of the IPO shares vote against the Transaction Agreement and elect that the Company convert their shares into cash.

Under the terms of the Transaction Agreement, as consideration for the Business Combination, ED&F Man and its affiliates will receive at the closing cash and securities valued at approximately $267.8 million, based on the $138.4 million in the Company’s trust account as of November 25, 2008, the date of the Transaction Agreement (assuming a value of $5.02 per share of common stock, based on the trust value of $6.02 per IPO share (as of that date), less a special dividend of $1.00 per share to be paid to holders of the IPO shares). Specifically, as consideration for the acquisition, the Company will:

·pay to ED&F Man approximately $103.0 million in cash, subject to adjustments described below;

·issue to ED&F Man approximately 7.4 million newly-issued shares of the Company’s Series A Preferred Stock; and

·issue to ED&F Man up to 24.3 million newly-issued shares of the Company’s common stock.

However, if the holders of some, but less than 40%, of the IPO shares elect that the Company convert their shares into cash, the number of shares of common stock the Company will issue will decrease and the number of shares of preferred stock the Company will issue will increase pursuant to a formula described in the Company’s proxy statement.  If the holders of 39.99% of the IPO shares exercise their conversion rights, the consideration would consist of approximately 15.3 million shares of the Company’s common stock, approximately 16.0 million shares of the Company’s preferred stock and $103.0 million in cash. In this case, the Company estimates that the aggregate value of the consideration would be $272.1 million (assuming the values per share set forth above).

The consideration payable to ED&F Man described above will be subject to pre-closing and post-closing adjustments relating to Westway’s closing date net indebtedness and net working capital and to aggregate capital expenditures made by Westway prior to the closing.

Upon consummation of the Business Combination, the holders of the Company’s common stock, warrants and units will continue to own their existing common stock, warrants and units, and the Company will change its name to “Westway Group, Inc.”  Shares of common stock currently held by the Company’s stockholders will be designated as Class A Common Stock.

13

SHERMEN WSC ACQUISITION CORP.

(a corporation in the development stage)

(Unaudited)

NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS

NOTE K—THE PROPOSED BUSINESS COMBINATION WITH WESTWAY (continued)

Upon the consummation of the Business Combination, the Company will be delivering to an escrow agent for deposit into an escrow account approximately 12.2 million shares of the Company’s Series A Preferred Stock, issued to ED&F Man, as part of the consideration for the Business Combination.  These shares will be released to ED&F Man only upon the achievement by the combined company of certain earnings or share price targets described in the Company’s proxy statement (generally, one-third of these shares will be released upon the achievement of earnings or share price targets of $52.0 million or $6.50 per share, $57.0 million or $7.00 per share and $62.0 million or $7.50 per share, respectively).  Assuming the release to ED&F Man of all of these escrowed shares, the value of the consideration to be paid in connection with the Business Combination would increase by $70.1 million, and would total $337.9 million assuming no exercise of conversion rights by the Company’s stockholders or $342.2 million assuming that holders of 39.99% of the IPO shares exercise their conversion rights.

The Business Combination will be accounted for under the purchase method of accounting.  The purchase price allocation has not been finalized and is subject to change based upon recording actual transaction costs, finalization of working capital adjustments, and completion of appraisals of tangible and intangible assets of the acquired Westway business.  The final allocation of the purchase price will be determined after the Business Combination is complete and after completion of a final analysis to determine the fair values of the tangible and identifiable intangible assets and liabilities as of the closing date of the Business Combination.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Condensed Unaudited Interim Financial Statements and notes thereto contained in this Quarterly Report on Form 10-Q.

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 (“SEC”) filings.

Overview

We were formed on April 18, 2006 for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination, an operating business in the agriculture industry.

On May 30, 2007, we completed our initial public offering (“IPO”) of 23,000,000 units (“Units”).  Each Unit consists of one share of our common stock, $0.0001 par value per share (“Common Stock”), and two warrants (“Warrants”), each to purchase one share of Common Stock at $5.00 per share.  The public offering price of each Unit was $6.00, and we generated gross proceeds of $138,000,000 in the IPO (including proceeds from the exercise of the underwriters’ over-allotment option).  Of the gross proceeds: (i) we deposited $133,210,000 into a trust account (the “Trust Account”) at JP Morgan Chase NY Bank, maintained by Continental Stock Transfer & Trust Company as trustee, which included $5,520,000 of deferred underwriting fees; (ii) the underwriters received $4,140,000 as underwriting fees (excluding the deferred underwriting fees); and (iii) we retained $607,900 for offering expenses.  In addition, we deposited into the Trust Account $3,650,000.20 that we received from the issuance and sale of 5,214,286 warrants (the “Founder Warrants”) to Shermen WSC Holding LLC, whose managing member is Shermen Capital Partners, LLC, an entity controlled by Francis P. Jenkins, Jr., our chairman and chief executive officer, on May 30, 2007 in a private placement exempt from registration under Securities Act of 1933, as amended.

After completion of the IPO, we began contacting investment bankers, private equity firms and other business contacts in order to generate ideas about a suitable business combination. We also received unsolicited inquiries from several investment banking firms, private equity firms and other business intermediaries. We informed these contacts that we were seeking an operating business for our initial business combination.  We did not retain an investment banking firm or fairness or valuation advisor to conduct a formal search for a business combination. Criteria for suitability included our management’s assessment of the competitive strengths and weaknesses of the potential business targets, the strength of the management team, and the quality of the assets to be acquired.

We intend to utilize cash derived from the proceeds of the IPO, our capital stock, debt or a combination of such cash, capital stock and debt, in effecting a business combination.  The issuance of additional shares of our capital stock:

·may significantly reduce the equity interest of our stockholders;

·may subordinate the rights of holders of Common Stock if we issue preferred stock with rights senior to those afforded to Common Stock;

15

·will likely cause a change in control if a substantial number of shares of Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and

·may adversely affect prevailing market prices for our common stock.

Similarly, if we issue debt securities, it could result in:

·default and foreclosure on our assets if our operating revenues after a business combination are insufficient to pay our debt obligations;

·acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant;

·our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and

·our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding.

We intend to use substantially all of the net proceeds of the IPO and the issuance and sale of the Founder Warrants, including the funds held in the trust account (excluding deferred underwriting discounts and commissions), to acquire a target business.  To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business.  Such working capital funds could be used in a variety of ways including continuing or expanding the target business operations, for strategic acquisitions and for marketing, research and development of existing or new products.  Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our business combination if the funds available to us outside of the trust fund were insufficient to cover such expenses.

On November 25, 2008, our board of directors approved a business combination with ED&F Man Holdings Limited (“ED&F Man”), and we entered into a transaction agreement with ED&F Man (the “Transaction Agreement”) pursuant to which we will acquire ED&F Man’s bulk liquid storage and liquid feed supplements business (such business, “Westway” or the “Westway Business”) in exchange for our common and preferred stock and cash.  ED&F Man is a leading global supplier of a broad range of commodity products, including sugar, molasses, animal feed, tropical oils, biofuels and coffee to multi-national and industrial consumers.

Under the terms of the Transaction Agreement, our acquisition of Westway (the “Business Combination”) will be effected by mergers between Westway Holdings Corporation (“ED&F Sub”), Westway Terminal Company Inc. and Westway Feed Products, Inc., which are wholly-owned subsidiaries of ED&F Man, and us, which mergers will be implemented by our wholly-owned subsidiaries, Terminal Merger Sub LLC and Feed Merger Sub LLC, and by our purchase of the equity securities of ED&F Man’s other subsidiaries that engage in the Westway Business.  If the Business Combination is approved by our stockholders, all of the direct and indirect subsidiaries of ED&F Man that currently engage in the Westway Business will become our wholly-owned subsidiaries, ED&F Man and its affiliates will be our largest stockholder, owning 49.5% of our outstanding common stock and over 99% of our Series A Preferred Stock, and we will change our name to “Westway Group, Inc.”

Results of Operations, Financial Condition and Liquidity

Through March 31, 2009, our efforts have been limited to organizational activities, activities relating to the IPO, activities relating to identifying and evaluating prospective acquisition candidates, and activities relating to general

16

corporate matters; we have neither engaged in any operations nor generated any revenues, other than interest income earned on the proceeds of the IPO and our private placement of the Founder Warrants.

Net loss totaled $116,946, which consisted of $77,316 of interest income from the Trust Account offset by $321,396 of formation and operating expenses and $(127,134) of provision for income taxes, for the three months ended March 31, 2009.  Net income totaled $416,993, which consisted of $1,016,441of interest income from the Trust Account offset by $187,189 of formation and operating expenses and $412,259 of provision for income taxes, for the three months ended March 31, 2008.  From inception, net income totaled $1,774,326, which consisted of $5,461,635 of interest income from the Trust Account offset by $2,076,977 of formation and operating expenses and $1,610,332 of provision for income taxes.

Interest income from the Trust Account excludes earnings on funds held in the Trust Account associated with Common Stock subject to possible conversion, and, except for amounts equal to any taxes payable by us relating to such interest earned and one half of such interest earned, net of taxes, up to $1,500,000 which may be released to us on a monthly basis to cover our operating expenses, will not be released to us from the Trust Account until the earlier of the completion of a business combination or the expiration of the time period during which we may complete a business combination (May 31, 2009).

We have provided for only an effective tax rate of slightly over 46% on a year and inception-to-date basis primarily because substantially all of the funds deposited in the Trust Account are exempt from federal, state and local taxes.  For the three months ended March 31, 2009 and for the period from inception to March 31, 2009, our income tax (benefits) expenses were approximately $(127,134) and $1,610,332, respectively.

As of March 31, 2009, we had approximately no unrestricted cash available to us for our activities in connection with identifying and conducting due diligence of a suitable business combination, and for general corporate matters.  The following table shows the total funds held in the Trust Account through March 31, 2009:

Gross proceeds from our initial public offering of common stock and financing transaction	$	138,000,000
Gross proceeds from private placement warrant holders	3,650,000
Underwriters’ fee	(4,140,000		)
Blue Sky fees	(25,000		)
Custodial fees	(17,100		)
Funds not placed in trust	(607,900		)
Cash placed in trust on May 31, 2007	136,860,000
Total investment income earned on assets held in trust, May 31, 2007 through March 31, 2009:	5,461,635
Subtotal	142,321,635
Withdrawals from the trust during the period May 31, 2007 through March 31, 2009:
Payments for all taxes and SEC filing fees	(2,789,166		)
Transfers to the Company’s operating account for payment of additional offering costs, general and administrative expenses and for working capital purposes	(1,493,428		)
Unspent monies in checking	(65,566		)
Custodial transfer fees	(420		)
Total transfers from custodial accounting to checking	(4,348,580		)
Total assets held in trust account as of March 31, 2009	$	137,973,055

We believe that we will have sufficient funds to allow us to operate through May 24, 2009, assuming that a business combination is not consummated during that time.  Approximately $1,500,000 of working capital over this time period will be funded from the interest earned from the funds held in the Trust Account.  Over this time period, we anticipate incurring expenses for the following purposes:

17

·payment of premiums associated with our director’s and officer’s insurance;

·payment of estimated taxes incurred as a result of interest income earned on funds currently held in the Trust Account;

·due diligence and investigation of prospective target businesses;

·legal and accounting fees relating to our SEC reporting obligations and general corporate matters;

·structuring and negotiating a business combination, including the making of a down payment or the payment of exclusivity or similar fees and expenses; and

·other miscellaneous expenses including the $9,950 per month to Shermen Capital Partners, LLC.

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 we do not consummate a suitable business combination prior to the prescribed liquidation date of the Trust Account (May 31, 2009), 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 the IPO held in the Trust Account may be invested by the trustee only in U.S. “government securities,” defined as any Treasury Bill issued by the United States government having a maturity of one hundred and eighty days or less, or any open ended investment company registered under the Investment Company Act of 1940, as amended, that holds itself out as a money market fund and bears the highest credit rating issued by a United States nationally recognized rating agency.  Given our limited risk in our exposure to government securities and money market funds, we do not view the interest rate risk to be significant.

ITEM 4.CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in its 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 and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer (who is also the principal financial officer) as appropriate, to allow timely decisions regarding required disclosure.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.  We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer (who is also the principal financial officer), of the effectiveness of the design and operation of our disclosure control and procedures.  Our chief executive officer and our chief financial officer (who is also the principal financial officer) concluded that our disclosure controls and procedures are effective at such reasonable assurance level as of the end of the quarterly period ended March 31, 2009.

There have been no changes in our internal control over financial reporting during the quarterly period ended March 31, 2009 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

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PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 1A.  RISK FACTORS

There have been no material changes to the risk factors disclosed under the caption “Risk Factors” beginning on page 29 of our Annual Report on Form 10-K filed with the SEC on March 13, 2009.

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

None.

ITEM 6.  EXHIBITS

Exhibit Number	Exhibit Description
31.1	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

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

	SHERMEN WSC ACQUISITION CORP.
	/s/ Francis P. Jenkins, Jr.
	Name:	Francis P. Jenkins, Jr.
	Title:	Chairman, Chief Executive Officer and
		Director (Principal Executive Officer)
	/s/ John E. Toffolon, Jr.
	Name:	John E. Toffolon, Jr.
	Title:	Chief Financial Officer and
		Director (Principal Financial and
		Accounting Officer)
Dated: April 28, 2009

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