Ultimate Escapes (ULEIQ) 10-K 2008 FY Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2008

OR

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

For the transition period from  to 

Commission file number:  0001-402364

SECURE AMERICA ACQUISITION CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction	26-0188408
of incorporation or organization)	(I.R.S. Employer Identification No.)
1005 North Glebe Road, Suite 550
Arlington, Virginia	22201
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code (703) 528-7073

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.0001 Par Value Per Share	NYSE Amex
Common Stock Purchase Warrant	NYSE Amex
Units, Consisting of One Share of Common Stock and Warrant	NYSE Amex

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes ¨   No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.     Yes ¨   No  x

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 ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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

Large accelerated filer ¨   Accelerated filer ¨

Non-accelerated filer ¨  [Do not check if a smaller reporting company]

Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes x   No  ¨

The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold, or $7.45 per share, as of the last business day of the registrant’s most recently completed second fiscal quarter was $56,574,808.

As of March 27, 2009, the registrant had 12,500,000 of common stock outstanding.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	16
Item 2.	Properties	16
Item 3.	Legal Proceedings	16
Item 4.	Submission of Matters to a Vote of Security Holders	16
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
Item 6.	Selected Financial Data	18
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 8.	Financial Statements and Supplementary Data	20
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
Item 9A(T).	Controls and Procedures	20
Item 9B.	Other Information	21
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	23
Item 11.	Executive Compensation	28
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	29
Item 13.	Certain Relationships and Related Transactions, and Director Independence	33
Item 14.	Principal Accountant Fees and Services	33
PART IV
Item 15.	Exhibits, Financial Statement Schedules	35

DOCUMENTS INCORPORATED BY REFERENCE

The following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K: None.

PART I

Item 1.    BUSINESS

Introduction

We were formed on May 14, 2007 as a blank check company for the purposes of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more domestic or international operating businesses, which we refer to as our initial business combination. Our efforts in identifying a prospective target business are limited to the homeland security industry, but not businesses that design, build or maintain mission-critical facilities. “Mission-critical” facilities are those facilities that shelter and support an organization's people, equipment and data to a level that far exceeds standards for normal facilities. Mission-critical facilities generally serve or house an essential business or government function that must operate absolutely reliably around the clock, 365 days per year, under any circumstances, such as data centers, operation centers, network facilities, server rooms, security operations centers, communications facilities and the infrastructure systems that are critical to their function. Services that may be provided to mission-critical facilities include technology consulting, engineering and design management, construction management, system installations, operations management and facilities management and maintenance.

The registration statement for our initial public offering was declared effective October 23, 2007. We consummated our initial public offering on October 29, 2007, issuing 10,000,000 units at a price of $8.00 per unit. Our management has broad discretion with respect to the specific application of the net proceeds of our initial public offering, although substantially all of the net proceeds of our initial public offering are intended to be generally applied toward consummating our initial business combination. There is no assurance that we will be able to successfully effect an initial business combination. Upon the closing of our initial public offering, we placed $7.92 per unit in our initial public offering, or $79,200,000 into a trust account and invested these proceeds in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 until the earlier of (i) the consummation of our initial business combination and (ii) the liquidation of the Company. The placing of funds in the trust account may not protect those funds from third party claims against us. Although we will seek to have all vendors, providers of financing, prospective target businesses or other entities we engage, execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. C. Thomas McMillen and Harvey Weiss, our Co-Chief Executive Officers, have agreed that they will be liable under certain circumstances to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or vendors, providers of financing, service providers or other entities that are owed money by us for services rendered to or contracted for or products sold to us. There can be no assurance that they will be able to satisfy those obligations. The 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. Additionally, up to an aggregate of $1,000,000 of interest earned on the trust account balance may be released to us to fund working capital requirements and additional funds may be released to fund tax obligations. An additional $150,000 of interest earned (net of taxes) on the trust account balance may be released to us to repay a loan made to us by Secure America Acquisition Holdings, LLC.

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Simultaneously with the consummation of our initial public offering, Secure America Acquisition Holdings, LLC, the principal initial stockholder of the Company, purchased a total of 2,075,000 warrants, or founder warrants, at $1.00 per founder warrant (for an aggregate purchase price of $2,075,000) privately from the Company. All of the proceeds received from this private placement were placed in the trust account. The founder warrants are identical to the warrants offered in our first public offering, except that (i) the founder warrants are not subject to redemption, (ii) the founder warrants may be exercised on a cashless basis while the warrants included in the units sold in our initial public offering cannot be exercised on a cashless basis, (iii) upon an exercise of the founder warrants, the holders of the founder warrants will receive unregistered shares of our common stock, and (iv) subject to certain limited exceptions, the founder warrants are not transferable until they are released from escrow, which would only be after the consummation of our initial business combination. The founder warrants are differentiated from warrants sold as part of the units in our initial public offering through legends contained on the certificates representing the founder warrants indicating the restrictions and rights specifically applicable to such founder warrants.

Through December 31, 2008, we have drawn $994,000 of the funds that may be released to us from the trust account to fund working capital requirements. As of December 31, 2008, there was $79,330,205 held in the trust account.

Homeland Security Industry

We believe that the homeland security industry is among the fastest growing industries in the United States. According to the Civitas Group, a strategic advisory and investment services firm serving the homeland security market, the U.S. homeland security market was approximately $31 billion in 2006 and has a projected market size of $136 to $145 billion over the next five years. In addition, the global homeland security market, which was approximately $55 billion in 2006, is projected to exceed $170 billion by 2015, according to Homeland Security Research Corp, a homeland security market research firm. We believe that this anticipated growth should create attractive acquisition opportunities.

We are focused on a business combination in the U.S. homeland security industry, which we believe includes, among others, the following sectors:

· Nuclear and radiological detection and prevention

· transportation security; ground, aviation and port and marine;

· border security;

· physical infrastructure security;

· cyber-security;

· emergency and disaster preparedness and response;

· bioterrorism prevention and detection;

· counterterrorism and law enforcement;

· domestic and foreign intelligence; and

· other sectors impacted by homeland security issues or directive.

We intend to strategically focus our efforts on four major phases encompassing domestic and global security threats: planning, prevention, response, and recovery. Although we may consider a target business in any segment of the homeland security industry, we currently intend to focus on companies with dual-use applications (i.e., companies with commercial private sector and homeland security applications) in the following segments:

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Planning:  Companies that help prepare for a possible attack or disaster, including:

· Security risk assessment, probability analysis, and simulation software for disaster planning;

· Bio-information systems for casualty analysis;

· Training for law enforcement, emergency, medical, security, food safety, and environmental remediation personnel; and

· Medical and public health preparedness.

Prevention:  Companies that help anticipate and take action to block attacks or avoid or mitigate the consequences of physical, virtual or economic disasters, including:

· Individual tracking and identification, including access control systems, smart cards, hardware, readers, software, and biometrics;

· Chemical, biological, radiological, nuclear and other explosive detection and identification products and services;

· Other remote sensing of air, food and water screening;

· Physical security products, including personnel and vehicle armor, ballistic and blast protection, non-lethal munitions, safe rooms, and alarm systems;

· Food safety products and services;

· Software for intelligence, security and data analysis;

· Data, cyber-security and information assurance;

· Other critical infrastructure security products and services for the private sector;

· Integrated security solution providers;

· Risk mitigation including consultative services, background screening, and investigative services;

· Energy infrastructure maintenance, protection and modernization;

· Alternative energy products, produces and providers; and

· Energy efficiency enhancement products and services.

Response:  Companies that help challenge attacks underway or cope with the immediate aftermath of an attack or a disaster, including:

· Personal protection equipment;

· Rapid containment products and services for chemical, biological or radiological agents;

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· Decontamination products and services to manage disaster occurrences;

· Emergency alert and response communication hardware, software and services;

· Advance fire suppression techniques;

· Medical and public health disaster management, including treatment for bio-terror;

· Terrorism-related insurance products and services;

· Mobile medical and command control units; and

· Energy supply alternatives and distribution management.

Recovery:  Companies that help restore and reconstruct governments and private enterprises after an attack or a disaster, including:

· Environmental and infrastructure cleanup and disaster management services;

· Recovery products, such as hydration, temporary housing, first aid materials, etc;

· Business continuity and substitute services for temporary loss of major services from attacks or disasters; and

· Energy infrastructure redundancy and recovery products and services.

We have not prioritized among any segments and do not currently have a preference regarding the segment in which we consummate a business combination. Although we may consider a target business outside of the United States as a result of the increased globalization of business and heightened security concerns abroad, we currently intend to concentrate our search of target businesses in the United States.

While we may effect our initial business combination with more than one target business, which may be in different homeland security sectors, our initial business acquisition must be with one or more operating businesses the fair market value of which is, either individually or collectively, at least equal to 80% of our net assets (excluding deferred underwriters’ discounts and commissions held in the trust account) at the time of such business combination.

Regulation

As a result of our focus on homeland security, it is likely that companies we target for acquisition may derive revenue from federal, state and local government contracts directly or indirectly. It is likely, if we acquire such a business, that we must comply with and be affected by complex procurement laws and regulations, particularly at the federal level, including, but not limited to, the Federal Acquisition Regulation (and any supplements as applicable), Cost Accounting Standards, Truth-in-Negotiations Act and the Anti-Deficiency Act. We are not currently aware of any licensing or training requirements that could be applicable to us or companies that we may target.

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Effecting a Business Combination

General

We have not engaged in any substantive commercial business since the consummation of our initial public offering. We intend to utilize cash derived from the proceeds of our initial public offering, our capital stock, debt or a combination of these in effecting a business combination. Although substantially all of the net proceeds of our initial public offering are intended to be generally applied toward effecting a business combination, the proceeds are not otherwise being designated for any more specific purposes. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense, loss of voting control and compliance with various federal and state securities laws. In the alternative, we may seek to consummate a business combination with a company that may be financially unstable or in its early stages of development or growth. While we may seek to effect business combinations with more than one target business, it is likely that we will have the ability to initially complete only a single business combination with the proceeds of our initial public offering, although this may entail the simultaneous acquisitions of several operating businesses at the same time.

We Have Not Identified a Target Business

As of December 31, 2008, we have not selected any target business with which to seek a business combination. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses, other than our exclusion of businesses that design, build, or maintain mission-critical facilities.

Subject to the limitation that a target business have a fair market value of at least 80% of our net assets (excluding deferred underwriters’ discounts and commissions held in the trust account) at the time of the acquisition, as described below in more detail, we will have virtually unrestricted flexibility in identifying and selecting a prospective acquisition candidate. Accordingly, there is no basis for our investors to evaluate the possible merits or risks of the target business with which we may ultimately complete a business combination. To the extent we effect a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

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Sources of Target Businesses

We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial community who will become aware that we are seeking a business combination partner via public relations and marketing efforts, direct contact by management or other similar efforts, who may present solicited or unsolicited proposals. Our stockholders, officers, directors and special advisors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. We may engage these professional firms or other individuals in the future, because we do not have full-time employees and our officers and directors may be limited in how much time they can devote to our affairs, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. Our management has experience in evaluating transactions but will retain advisors as they deem necessary to assist them in their due diligence efforts. In no event, however, will any of our existing officers, directors, special advisors or stockholders, or any of their affiliates, be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business combination (regardless of the form of such transaction). After the consummation of a business combination, our initial stockholders, officers, directors and special advisors may remain associated in some capacity with the acquired business if they are able to negotiate mutually agreeable employment or consulting agreements as part of any such combination, which terms would be disclosed to stockholders in any proxy statement relating to such transaction. In no event, however, would any of our initial stockholders, officers, directors or special advisors receive a finder’s fee from any party to a business combination. Negotiations with respect to an employment or consulting agreement would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation for services they would render to the combined company after the consummation of a business combination. We do not have a policy that prohibits such persons from pursuing or negotiating such agreements in connection with a business combination.

We would consider entering into a business combination with a target business that is affiliated with our officers, directors, special advisors or stockholders, only after exploring transactions with respect to unaffiliated business targets, if our board of directors determines that a business combination with such affiliated entity would be in the best interests of our public stockholders and if we obtain an opinion from an independent investment banking firm, which may or may not be a member of the Financial Industry Regulatory Authority, or FINRA, that the business combination is fair to our unaffiliated stockholders from a financial point of view. Because the opinion will likely be addressed to our board of directors for their use in evaluating the transaction, we do not anticipate that our stockholders will be entitled to rely on such opinion. However, as the opinion will be attached to, and thoroughly described in, our proxy soliciting materials, we believe investors will be provided with sufficient information in order to allow them to properly analyze the transaction. While we will consider whether such opinion may be relied on by our stockholders when selecting an investment banking firm to provide a fairness opinion, it will not be dispositive as to which investment banking firm we decide to engage for such opinion. Other factors expected to be considered by our board of directors in making such decision include, among others, cost, timing and reputation of the investment bank, including its knowledge of the homeland security industry. However, as of December 31, 2008, there are no affiliated entities that we believe we would consider as a business combination target, nor will we consider for our initial business combination any of the target businesses that were considered by Fortress International Group, Inc. prior to its initial business combination.

Selection of a Target Business and Structuring of a Business Combination

Subject to the requirement that our initial business combination must be with a target business or businesses with a collective fair market value that is at least 80% of our net assets (excluding deferred underwriters’ discounts and commissions held in the trust account) at the time of such acquisition, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. Since the consummation of our initial public offering, we have been searching for a possible target business in the homeland security industry. In evaluating a prospective target business, our management will conduct the necessary business, legal and accounting due diligence on such target business and will consider, among other factors, the following:

· financial condition and results of operations;

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· growth potential;

· experience and skill of management and availability of additional personnel;

· capital requirements;

· competitive position;

· stage of development of the products, provisions or services;

· proprietary features and degree of intellectual property or other protection of the products, processes or services;

· barriers to entry into the industry;

· breadth of products or services offered;

· degree of current or potential market acceptance of the products or services;

· regulatory environment of the industry,

· costs associated with effecting the business combination; and

· relative valuation multiples of similar publicly traded companies.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which is made available to us.

We expect that our officers will allocate a significant amount of their time, as necessary, for meetings with management and/or other representatives of target business candidates, site visits, due diligence, interviews with incumbent management, negotiations and any other activities necessary to complete a business combination. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we have no current intention to engage any such third parties. We intend to have all prospective target businesses execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. If any prospective target business refused to execute such agreement, it is unlikely we would continue negotiations with such target business. However, in no event will we enter into a definitive agreement for a business combination with a target business unless such entity executes a valid and enforceable waiver.

We will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business and its stockholders, as well as our own stockholders. We cannot assure you, however, that the Internal Revenue Service or appropriate state tax authority will agree with our tax treatment of the business combination.

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The time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination. We will not pay any finders’ or consulting fees to our initial stockholders, or any of their respective affiliates, for services rendered to or in connection with a business combination.

Fair Market Value of a Target Business

In our initial business combination, the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of our net assets (excluding the deferred underwriting discounts and commissions held in the trust account) at the time of such business combination, although we may acquire a target business whose fair market value significantly exceeds 80% of our net assets (excluding the deferred underwriting discounts and commissions held in the trust account). We anticipate structuring a business combination to acquire 100% of the equity interests or assets of the target business. We may, however, structure a business combination to acquire less than 100% of such interests or assets of the target business but will not acquire less than majority voting control of the target business. This restriction will not preclude a reverse merger or similar transaction in which we acquire, or acquire control of, the target business. If we acquire only a controlling interest in a target business or businesses, the portion of such business that we acquire must have a fair market value equal to at least 80% of our net assets (excluding the deferred underwriting discounts and commissions held in the trust account). In order to consummate such a business combination, we may issue a significant amount of our debt or equity securities to the sellers of such businesses and/or seek to raise additional funds through a private offering of debt or equity securities. Since we have no specific business combination under consideration, we have not entered into any such fundraising arrangement and have no current intention of doing so nor can we assure you that we will be able to locate or enter into a business combination with a target business on favorable terms or at all.

The fair market value of the target will be determined by our board of directors based upon one or more standards generally accepted by the financial community (which may include actual and potential sales, earnings, cash flow and/or book value). If our board is not able to determine independently that the target business has a sufficient fair market value, we will obtain an opinion from an independent investment banking firm, which may or may not be a member of FINRA, with respect to the satisfaction of such criteria. If we obtain such an opinion, we will include a summary of the opinion in the proxy statement we will mail to stockholders seeking their approval of our initial business combination. Because the opinion will likely be addressed to our board of directors for their use in evaluating the transaction, we do not anticipate that our stockholders will be entitled to rely on such opinion. However, as the opinion will be attached to, and thoroughly described in, our proxy soliciting materials, we believe investors will be provided with sufficient information in order to allow them to properly analyze the transaction. While we will consider whether such opinion may be relied on by our stockholders when selecting an investment banking firm to provide a fairness opinion, it will not be dispositive as to which investment banking firm we decide to engage for such opinion. Other factors expected to be considered by our board of directors in making such decision include, among others, cost, timing and reputation of the investment bank, including its knowledge of the homeland security industry. We will not be required to obtain an opinion from an investment banking firm as to the fair market value if our board of directors independently determines that the target business complies with the 80% threshold.

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Possible Lack of Business Diversification

Our business combination must be with a target business or businesses that collectively satisfy the minimum valuation standard at the time of such acquisition, as discussed above, although this process may entail the simultaneous acquisitions of several operating businesses at the same time. Therefore, at least initially, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations or benefit from the possible spreading of risks or offsetting of losses. By consummating a business combination with only a single entity, our lack of diversification may:

· subject us to numerous economic, competitive and regulatory developments, and or all of which may have substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination; and

· result in our dependency upon the development or market acceptance of a single or limited number of products or services.

If we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the business combination. With multiple acquisitions, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.

Limited Ability to Evaluate the Target Business’s Management

Although we intend to scrutinize closely the management of a prospective target business when evaluating the desirability of effecting a business combination, we can give no assurance that our assessment will prove to be correct. In addition, we can give no assurance that new members that join our management following a business combination will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and directors, if any, in the target business following a business combination cannot presently be stated with any certainty. While our Co-Chief Executive Officers may remain associated in senior management or advisory positions with us, for example, as a member of the board of directors or a consultant, following a business combination, they may not devote their full time and efforts to our affairs subsequent to a business combination. Moreover, they would only be able to remain with the company after the consummation of a business combination if they are able to negotiate employment or consulting agreements in connection with such business combination, which would be negotiated at the same time as the business combination negotiations are being conducted and which may be a term of the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation of the business combination. While the personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, the ability of such individuals to remain with the company after the consummation of a business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. Additionally, we cannot assure you that our officers and directors will have significant experience or knowledge relating to the operations of the particular target business.

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Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

Opportunity for Stockholder Approval of Business Combination

Prior to the completion of a business combination, we will submit the transaction to our stockholders for approval, even if the nature of the acquisition is such as would not ordinarily require stockholder approval under applicable state law. In connection with any such transaction, we will also submit to our stockholders for approval a proposal to amend our amended and restated certificate of incorporation to provide for our corporate life to continue perpetually following the consummation of such business combination. The approval of the proposal to amend our amended and restated certificate of incorporation to provide for our perpetual existence in connection with a business combination would require the affirmative vote of a majority of our outstanding shares of common stock. Any vote to extend our corporate life to continue perpetually following the consummation of a business combination will be taken only if the business combination is approved. We will only consummate a business combination if stockholders vote both in favor of such business combination and our amendment to extend our corporate life.

In connection with seeking stockholder approval of a business combination, we will furnish our stockholders with proxy solicitation materials prepared in accordance with the Securities Exchange Act of 1934, as amended, which, among other matters, will include a description of the operations of the target business and audited historical financial statements of the business.

In connection with the vote required for any business combination, all of our initial stockholders, including all of our officers and directors, have agreed to vote their respective initial shares in accordance with the majority of the shares of common stock voted by the public stockholders. This voting arrangement shall not apply to shares included in units purchased following our initial public offering in the open market by any of our initial stockholders, officers and directors. Accordingly, they may vote these shares on a proposed business combination any way they choose. None of our initial stockholders, directors or officers purchased units in our initial public offering, the aftermarket or otherwise. However, they are not prohibited from making any such purchases in the aftermarket or otherwise. If they do so, our initial stockholders, including our directors and officers, will have a greater influence on the outcome of matters requiring stockholder approval, such as a business combination. To the extent that such initial stockholders, directors or officers make purchases of our securities in the aftermarket, such purchases may have an impact on the market price of our common stock. In such case, investors should consider the potential impact of any such purchases on the market price for our common stock and should not place undue reliance on such price, but should instead consider the merits of the proposed business combination in deciding whether or not to vote in favor of such business combination. In addition, such purchases may be made from public stockholders that have indicated their intention to vote against the business combination and exercise their conversion rights. Accordingly, such purchases could result in a business combination being approved that may have otherwise not been approved by our public stockholders, but for the purchases made by our initial stockholders, directors or officers.

We will proceed with the business combination only if a majority of the shares of common stock voted by the public stockholders are voted in favor of the business combination and public stockholders owning less than 30% of the shares sold in our initial public offering both vote against the business combination and exercise their conversion rights. Voting against the business combination alone will not result in conversion of a stockholder’s shares into a pro rata share of the trust account. Such stockholder must have also exercised its conversion rights as described below.

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Conversion Rights

At the time we seek stockholder approval of our initial business combination, we will offer each public stockholder the right to have such stockholder’s shares of common stock converted to cash if the stockholder votes against the business combination and the business combination is approved and completed. Our initial stockholders will not have such conversion rights with respect to any shares of common stock owned by them, directly or indirectly, including their initial shares or any shares of common stock included in units purchased by them in the aftermarket. The actual per-share conversion price will be equal to the aggregate amount then on deposit in the trust account inclusive of any remaining interest after deduction for taxes payable, which shall be paid from the trust account (calculated as of two business days prior to the consummation of the proposed business combination), divided by the number of shares sold in our initial public offering. The initial conversion price for every share would be approximately $7.92, or $0.08 less than the per-unit offering price of $8.00. An eligible stockholder may request conversion at any time after the mailing to our stockholders of the proxy statement and prior to the vote taken with respect to a proposed business combination at a meeting held for that purpose, but the request will not be granted unless the stockholder votes against the business combination and the business combination is approved and completed. Stockholders will not be requested to tender their shares of common stock before a business combination is consummated. If a business combination is consummated, stockholders exercising their conversion rights will be sent instructions on how to tender their shares of common stock and when they should expect to receive the conversion amount. In order to ensure accuracy in determining whether the conversion threshold has been met, each stockholder exercising his, her or its conversion rights must continue to hold his, her or its shares of common stock until the consummation of the business combination. We will not charge converting stockholders any fees in connection with the tender of shares for conversion. If a stockholder votes against a business combination but fails to properly exercise his, her or its conversion rights, such stockholder will not have his, her or its shares of common stock converted and will therefore not receive his, her or its pro rata distribution of the trust account. Any request for conversion, once made, may be withdrawn at any time up to the date of the meeting.

It is anticipated that the funds to be distributed to stockholders entitled to convert their shares who elect conversion will be distributed promptly after completion of a business combination. Public stockholders who convert their stock into their share of the trust account still have the right to exercise the warrants that they received as part of the units. We will not complete any business combination if public stockholders owning 30% or more of the shares sold in our initial public offering both exercise their conversion rights and vote against the business combination. Accordingly, it is our intention to structure and consummate a business combination in which public stockholders owning up to 2,999,999 shares of our common stock included in the units sold in our initial public offering may exercise their conversion rights, in which case the business combination may still be consummated. Although a 20% threshold has been more typical in offerings of this type, we have increased the threshold to reduce the risk of a small group of shareholders exercising undue influence on the approval process. However, the 30% threshold does entail certain risks, including making it easier for us to obtain stockholder approval of an initial business combination which a stockholder may not consider to be the most desirable business combination. In addition, the threshold may not optimize our capital structure.

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Liquidation if No Business Combination

Our amended and restated certificate of incorporation provides that we will continue in existence only until October 29, 2009. This provision may not be amended except in connection with the consummation of a business combination. If we have not completed a business combination by such date, our corporate existence will cease except for the purposes of winding up our affairs and liquidating, pursuant to Section 278 of the Delaware General Corporation Law. This has the same effect as if our board of directors and stockholders had formally voted to approve our dissolution pursuant to Section 275 of the Delaware General Corporation Law. Accordingly, limiting our corporate existence to a specified date as permitted by Section 102(b)(5) of the Delaware General Corporation Law removes the necessity to comply with the formal procedures set forth in Section 275 (which would have required our board of directors and stockholders to formally vote to approve our dissolution and liquidation and to have filed a certificate of dissolution with the Delaware Secretary of State). We view this provision terminating our corporate life by October 29, 2009 as an obligation to our stockholders and will not take any action to amend or waive this provision to allow us to survive for a longer period of time except in connection with the consummation of a business combination.

If we are unable to complete a business combination by October 29, 2009, we will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the amount in the trust account, inclusive of any interest, plus any remaining net assets (subject to our obligations under Delaware law to provide for claims of creditors as described below). We anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after such date and anticipate it will take no more than 10 business days to effectuate such distribution. Our initial stockholders have waived their rights to participate in any liquidation distribution with respect to their existing shares. There will be no distribution from the trust account with respect to our warrants, which will expire worthless. We will pay the costs of liquidation from our remaining assets outside of the trust account. If such funds are insufficient, Messrs. McMillen and Weiss have agreed to advance us the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and have agreed not to seek or accept repayment of such expenses.

If we were to expend all of the net proceeds of our initial public offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share liquidation price would be approximately $7.92. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors (which could include vendors and service providers we have engaged to assist us in any way in connection with our search for a target business and that are owed money by us, as well as target businesses themselves) which could have higher priority than the claims of our public stockholders. Prior to completion of our initial business combination, we will seek to have all vendors, target businesses, prospective target businesses or other entities that we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders. In the event that a vendor, target business, prospective target business or other entity were to refuse to execute such a waiver, we will execute an agreement with that entity only if our management first determines that we would be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing to execute such a waiver. Messrs. McMillen and Weiss, our Co-Chief Executive Officers and members of our board of directors, have agreed, pursuant to agreements with us and the representative of the underwriters, that if we liquidate prior to the consummation of a business combination, they will be personally liable, on a joint and several basis, to ensure that the amounts in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us, to the extent that such target businesses, vendors or entities did not execute a valid and enforceable waiver. However, we have not requested that either of Messrs. McMillen or Weiss reserve for such indemnification obligations, and we therefore cannot assure you that they would be able to satisfy those obligations if required to do so. Accordingly, the actual per share liquidation price could be less than approximately $7.92, plus interest, due to claims of creditors. Furthermore, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the amounts held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return to our public stockholders at least approximately $7.92 per share.

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Our public stockholders will be entitled to receive funds from the trust account only in the event of the expiration of our corporate existence and our liquidation or if they seek to convert their respective shares into cash upon a business combination which they voted against and which is completed by us. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account.

Under the Delaware General Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures set forth in Section 280 of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, as stated above, it is our intention to make liquidating distributions to our stockholders as soon as reasonably possible after October 29, 2009 and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date. Because we will not be complying with Section 280, Section 281(b) of the Delaware General Corporation Law requires us to adopt a plan that will provide for our payment, based on facts known to us at such time, of (i) all existing claims, (ii) all pending claims and (iii) all claims that may be potentially brought against us within the subsequent 10 years. Accordingly, we would be required to provide for any claims of creditors known to us at that time or those that we believe could be potentially brought against us within the subsequent 10 years prior to our distributing the funds in the trust account to our public stockholders. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors and service providers (such as accountants, lawyers, investment bankers, etc.) and potential target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers and prospective target businesses execute agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account. As a result, the claims that could be made against us will be limited, thereby lessening the likelihood that any claim would result in any liability extending to the trust. We therefore believe that any necessary provision for creditors will be reduced and should not have a significant impact on our ability to distribute the funds in the trust account to our public stockholders. Nevertheless, we cannot assure you of this fact as there is no guarantee that vendors, service providers and prospective target businesses will execute such agreements. Nor is there any guarantee that, even if they execute such agreements with us, they will not seek recourse against the trust account. A court could also conclude that such agreements are not legally enforceable. As a result, if we liquidate, the per-share distribution from the trust account could be less than approximately $7.92 due to claims or potential claims of creditors.

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the amounts held in the trust account to our public stockholders promptly after October 29, 2009, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

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Competition

In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. Based upon publicly available information, there are approximately 161 blank check companies that have completed initial public offerings in the United States, out of which approximately 60 companies with more than $12.4 billion in trust combined are seeking to carry out a business plan similar to our business plan. Furthermore, there are a number of additional offerings for blank check companies that are still in the registration process but have not completed initial public offerings, and there are likely to be more blank check companies filing registration statements for initial public offerings prior to our completion of a business combination. Additionally, we may be subject to competition from entities other than blank check companies having a business objective similar to ours, including venture capital firms, leverage buyout firms and operating businesses looking to expand their operations through the acquisition of a target business. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target businesses that we could acquire with the net proceeds of our initial public offering, our ability to compete in acquiring certain sizable target businesses will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of a target business. Further, the following may not be viewed favorably by certain target businesses:

· our obligation to seek stockholder approval of a business combination or obtain the necessary financial information to be included in the proxy statement to be sent to stockholders in connection with such business combination may delay or prevent the completion of a transaction;

· our outstanding warrants, and the future dilution they potentially represent; and

· the requirement to acquire an operating business that has a fair market value equal to at least 80% of our net assets (excluding deferred underwriting discounts and commissions held in the trust account) at the time of the acquisition could require us to acquire several companies or closely related operating businesses at the same time, all of which sales would be contingent on the closings of the other sales, which could make it more difficult to consummate the business combination.

Any of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that to the extent that our target business is a privately held entity, our status as a well-financed public entity may give us a competitive advantage over entities having a similar business objective as ours in acquiring a target business with significant growth potential on favorable terms.

If we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure you that, subsequent to a business combination, we will have the resources or ability to compete effectively.

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Employees

We have three executive officers, two of whom are also members of our board of directors. These individuals are not obligated to contribute any specific number of hours per week and intend to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time period will vary based on the availability of suitable target businesses to investigate. We do not intend to have any full-time employees prior to the consummation of a business combination, although we expect each of our officers to devote an average of approximately ten hours per week to our business.

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Item 1A.  RISK FACTORS

This item is not required as we are a smaller reporting company.

Item 1B.  UNRESOLVED STAFF COMMENTS

This item is not required as we are a smaller reporting company.

Item 2.  PROPERTIES

We do not own any real estate or other physical property. We maintain our executive offices at 1005 North Glebe Road, Suite 550, Arlington, Virginia 22201. The cost for this space is included in the $7,500 per-month fee Homeland Security Capital Corporation charges us for general and administrative services pursuant to a letter agreement between us and Homeland Security Capital Corporation, an affiliate of Mr. McMillen. We consider our current office space adequate for our current operations up to the completion of a business combination.

Item 3.  LEGAL PROCEEDINGS

None.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

Item 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our units, common stock and warrants are traded on the NYSE Amex (formerly the American Stock Exchange) under the symbols HLD.U, HLD and HLD.W, respectively. Each of our units consists of one share of our common stock and one warrant. The following table sets forth the range of high and low closing bid prices for the units, common stock and warrants for the period indicated. The units commenced public trading on October 23, 2007 and the common stock and warrants commenced separate public trading on January 18, 2008. Prior to October 23, 2007, there was no established public trading market for our units. Prior to January 18, 2008, there was no established public trading market for our common stock or warrants.

	Units				Common				Warrants
	High		Low		High		Low		High		Low
Quarter ended December 31, 2007	$	8.06	$	7.83	$	N/A	$	N/A	$	N/A	$	N/A
Quarter ended March 31, 2008		7.95		7.41		7.30		6.67		0.68		0.28
Quarter ended June 30, 2008		7.72		7.40		7.49		7.18		0.32		0.25
Quarter ended September 30, 2008		7.70		7.46		7.60		7.35		0.26		0.10
Quarter ended December 31, 2008		7.28		7.00		7.32		6.99		0.13		0.02

Stockholders

As of March 24, 2008, there was one holder of record of our units, seven holders of record of our common stock and two holders of record of our warrants. The units (and the shares of common stock included in the units) issued in our initial public offering were available initially only in book-entry form and are currently represented by one or more global certificates, which were deposited with, or on behalf of, the Depository Trust Company and registered in its name or in the name of its nominee. Accordingly, all of the public shares are held in “street name.”

Dividends

We have not paid any dividends on our units or our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.

Unregistered Sales of Securities

None.

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Issuer Purchases of Equity Securities

  None.

Item 6.  SELECTED FINANCIAL DATA

This item is not required as we are a smaller reporting company.

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements and related notes thereto contained in this annual report on Form 10-K.

We were formed on May 14, 2007, as a blank check company for the purpose of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination, one or more domestic or international operating businesses, which we refer to as our initial business combination. Our efforts in identifying a prospective target business are limited to the homeland security industry, but not businesses that design, build or maintain mission-critical facilities. “Mission-critical” facilities are those facilities that shelter and support an organization's people, equipment and data to a level that far exceeds standards for normal facilities. Mission-critical facilities generally serve or house an essential business or government function that must operate absolutely reliably around the clock, 365 days per year, under any circumstances, such as data centers, operation centers, network facilities, server rooms, security operations centers, communications facilities and the infrastructure systems that are critical to their function. Services that may be provided to mission-critical facilities include technology consulting, engineering and design management, construction management, system installations, operations management and facilities management and maintenance. We changed our name from “Fortress America Acquisition Corporation II” to “Secure America Acquisition Corporation” on August 6, 2007.

Results of Operations

For the year ended December 31, 2008

For the year ended December 31, 2008, we had total income of $1,272,409, consisting of net interest income on investments held in trust and on cash balances maintained. Total expenses for this period were $839,581, consisting of $548,318 in formation and operating expenses and $291,263 in income tax expense. We had net income of $432,828 for the period.

For the period from May 14, 2007 (inception) through December 31, 2007

For the period from May 14, 2007 (inception) through December 31, 2007, we had total income of $546,377, consisting of net interest income on investments held in trust and on cash balances maintained. Total expenses for this period were $267,634, consisting of $95,310 in formation and operating expenses and $172,324 in income tax expense. We had net income of $278,743 for the period.

For the period from May 14, 2007 (inception) through December 31, 2008

For the period from May 14, 2007 (inception) through December 31, 2007, we had total income of $1,818,786, consisting of net interest income on investments held in trust and on cash balances maintained. Total expenses for this period were $1,107,215, consisting of $643,628 in formation and operating expenses and $463,587 in income tax expense. We had net income of $711,571 for the period.

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Liquidity and Capital Resources

The reconciliation of investments held in the trust as of December 31, 2008 and 2007 is as follows:

	December 31, 2008			December 31, 2007
Contribution to trust	$	79,200,000		$	79,200,000
Interest income received		1,856,031			546,371
Withdrawals to fund loan repayments		(150,000	)		(100,000	)
Withdrawals to fund income taxes		(581,826	)		-
Withdrawals to fund operations (a)		(994,000	)		(180,000	)
Total investments held in trust	$	79,330,205		$	79,466,371

(a) amount is limited to $1,000,000.

Prior to the consummation of our initial public offering, our liquidity needs were satisfied through receipt of $25,000 in stock subscriptions from our initial stockholders and a loan of $150,000 from Secure America Acquisition Holdings, LLC.

The net proceeds from (i) the sale of the units in our initial public offering, after deducting offering expenses of approximately $713,000 (of which approximately $88,000 was paid from interest earned on amounts held in the trust account) and underwriting discounts and commissions of approximately $5,600,000, (ii) the sale of the founder warrants in a private placement which occurred immediately prior to the closing of our initial public offering for an aggregate purchase price of $2,075,000 and (iii) the $150,000 loan made to us by Secure America Acquisition Holdings, LLC, were approximately $76,000,000. All such net proceeds were placed in the trust account. An additional amount equal to 4.0% of the gross proceeds of our initial public offering, or $3,200,000, was also placed in the trust account and will be used to pay the underwriters a deferred fee (or paid to public stockholders who elect to convert their common stock in connection with our initial business combination, as the case may be) upon the consummation of our initial business combination, and will not be available for our use to acquire a target business. We expect that most of the amounts held in the trust account will be used as consideration to pay the sellers of a target business or businesses with which we ultimately complete a business combination. We will use substantially all of the net proceeds of our initial public offering not in the trust account to acquire, or acquire control of, a target business, including identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the amounts held in the trust account as well as any other net proceeds not expended will be used to finance the operations of the target business.

We believe that the maximum $1,000,000 of interest earned (net of taxes) on the trust account balance that may be released to us as well as amounts necessary for our income tax obligations, will be sufficient to allow us to operate until October 23, 2009, assuming that a business combination is not consummated during that time. Over this time period, we anticipate making the following expenditures:

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· approximately $400,000 of expenses for legal, accounting and other expenses attendant to the due diligence investigations, structuring and negotiation of a business combination;

· approximately $100,000 of expenses for the due diligence and investigation of a target business;

· approximately $150,000 of expenses in legal and accounting fees relating to our Securities and Exchange Commission reporting obligations;

· approximately $180,000 of expenses in fees relating to our office space and certain general and administrative services; and

· approximately $170,000 for general working capital that will be used for miscellaneous expenses and reserves, including approximately $130,000 for director and officer liability and other insurance premiums, finders’ fees, consulting fees or other similar compensation, potential deposits, down payments or funding of a “no-shop” provision with respect to a particular business combination.

An additional $150,000 of interest earned (net of taxes) on the trust account balance has been released to us to repay the loan made to us by Secure America Acquisition Holdings, LLC.

Through December 31, 2008, we have drawn $994,000 of the funds that may be used by us from the trust account to fund working capital requirements and to repay loans made to us.

We do not believe we will need additional financing following our initial public offering in order to meet the expenditures required for operating our business prior to our initial business combination. We will need to obtain additional financing to the extent such financing is required to consummate a business combination or because we become obligated to convert into cash a significant number of shares from dissenting stockholders, in which case we may issue additional securities or incur debt in connection with such business combination. Following a business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This item is not required as we are a smaller reporting company.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

This information appears following Item 14 of this annual report on Form 10-K and is incorporated herein by this reference.

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

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Item 9A(T).  CONTROLS AND PROCEDURES

In accordance with Exchange Act Rules 13a-15 and 15d-d, we carried out an evaluation as of December 31, 2008, under the supervision and with the participation of our Co-Chief Executive Officers and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)). Based on that evaluation, our Co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures were sufficiently effective to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, accumulated, processed, summarized, reported and communicated on a timely basis within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(a) Management’s Annual Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, or GAAP. Our internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records the in reasonable detail accurately and fairly reflect transactions involving our assets;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management, and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, management used the framework set forth in the report entitled Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.

Based on its evaluation of our disclosure controls and procedures, our management has concluded that during the period covered by this report, our disclosure controls and procedures were effective and there were no material weaknesses in our internal control system over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

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This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.

(b)           Changes in Internal Control Over Financial Reporting.  There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.  OTHER INFORMATION

None.

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our Board of Directors

Our board of directors is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term. The term of office of the Class A directors, consisting of Philip A. McNeill, will expire at our first annual meeting of stockholders. The term of office of the Class B directors, consisting of S. Kent Rockwell and Asa Hutchinson, will expire at the second annual meeting. The term of office of the Class C directors, consisting of C. Thomas McMillen and Harvey L. Weiss, will expire at the third annual meeting.

Director Independence

The NYSE Amex (formerly the American Stock Exchange) requires that a majority of our board must be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with our Company, either directly or indirectly.  Based upon this review, our Board has determined that Messrs. Hutchinson, Rockwell and McNeill are our independent directors, constituting a majority of our board. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

Our current directors and special advisors are as follows:

Name	Age	Position
C. Thomas McMillen	56	Chairman of the Board, Co-Chief Executive Officer
Harvey L. Weiss	65	Co-Chief Executive Officer, Director
Asa Hutchinson	57	Director
Philip A. McNeill	49	Director
S. Kent Rockwell	64	Director
Mark A. Frantz	40	Special Advisor
Brian C. Griffin	55	Special Advisor

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C. Thomas McMillen has served as our Chairman and Co-Chief Executive Officer since inception and has over 18 years of experience in government, finance and mergers and acquisitions. From December 2004 until January 2007, he served as the Chairman of Fortress America Acquisition Corporation (now Fortress International Group, Inc.; NASDAQ: FIGI), where he currently serves as Vice Chairman. Mr. McMillen has also served, since August 2005, as the President, Chief Executive Officer and Chairman of the board of directors of Homeland Security Capital Corporation (OTC: HOMS), a consolidator of homeland security companies that provides capital and management advice for developing companies. Mr. McMillen is also the Chairman of three of Homeland Security Capital Corporation’s subsidiaries, Nexus Technologies Group, Inc. (since February 2006), Security Holding Corp. (since August 2006), and Polimatrix, Inc. (since September 2006). In 2003, Mr. McMillen co-founded Global Secure Corp., a homeland security company providing integrated products and services for critical incident responders, and served as its Chief Executive Officer from March 2003 until February 2004. From February 2004 until February 2005, Mr. McMillen served as a consultant to Global Secure Corp. In addition, from October 2004 to July 2005, he served as a Chairman of the board of directors of Global Defense Corporation, a development stage company focused on acquiring companies in critical infrastructure security. From December 2002 to February 2004, Mr. McMillen served as Vice Chairman and Director of Sky Capital Enterprises, Inc., a venture firm, and until February 2005 served as a consultant. From March 2003 to February 2004, Mr. McMillen served as Chairman of Sky Capital Holdings, Ltd, Sky Capital Enterprises’ London stock exchange-listed brokerage affiliate. In addition, Mr. McMillen is a founder and has been Chief Executive Officer and Chairman of Washington Capital Advisors, LLC, a merchant bank, since 2003. He also served as Chairman of TPF Capital, Washington Capital Advisors, LLC’s predecessor company, from June 2001 through December 2002. Mr. McMillen has also been an independent consultant throughout his career. From November 1994 through February 1999, Mr. McMillen served as the Founder, Chief Executive Officer and Director of Complete Wellness Centers, Inc. (OTC: CMWCO), a medical multi-disciplinary clinic management company. Mr. McMillen was appointed by President Clinton to Co-Chair the President’s Council on Physical Fitness and Sports from 1993 to 1997. From 1987 through 1993, he served three consecutive terms in the United States House of Representatives from the 4th Congressional District of Maryland. Prior to that, Mr. McMillen played 11 years in the National Basketball Association. Mr. McMillen serves on the Board of Regents of the University of Maryland System. Mr. McMillen received a Bachelor of Science in chemistry from the University of Maryland and a Bachelor of Arts and a Master of Arts from Oxford University as a Rhodes Scholar.

Harvey L. Weiss has served as our Co-Chief Executive Officer and a member of our board of directors since inception and has over 35 years of experience in the information technology and security marketplace. From December 2004 until January 2007, he served as the President, Chief Executive Officer and a director of Fortress America Acquisition Corporation (now Fortress International Group, Inc.; NASDAQ: FIGI), where he currently serves as Chairman. Mr. Weiss has also served as a Director of Vision Technologies, Inc. since September 2006. From June 2002 to December 2004, Mr. Weiss served as the Chief Executive Officer and President of System Detection, Inc., a software security company and is presently serving as a consultant. From January 2002 to June 2002, Mr. Weiss served as Chief Executive Officer of W Consulting LLC. From January 2001 to December 2002, he served as President of Engineering Systems Solutions, Inc., a security and biometrics integration firm. From June 1999 to December 2000, Mr. Weiss was the Chief Executive Officer and President of Global Integrity Corporation, a subsidiary of Science Applications International Corporation, which specializes in information security, and served as a Director until the company was sold in 2002. From October 1998 to May 1999, Mr. Weiss served as Vice President, Government and North America of Network Associates, Inc., now doing business as McAfee Inc. (NYSE: MFE)From January 1996 to October 1998, until sold to Network Associates, Inc., Mr. Weiss was President of the Commercial Division, Secretary, and Director of Trusted Information Systems, Inc., a Nasdaq-listed security network company. Prior to that time, from 1994 to 1996, Mr. Weiss served as President of Public Sector Worldwide Division for Unisys Corporation (NYSE: UIS). From 1991 to 1993, Mr. Weiss was the Vice President of Sales and the President and Chief Operating Officer of Thinking Machines Corporation, a massively parallel processing company (the computing architecture used by the “supercomputer” product developed by Thinking Machine Corporation). Prior to that time, he served in various senior capacities in Digital Equipment Corporation. Mr. Weiss serves on the Board of Forterra Systems, Inc., a simulation company (one of Forterra’s products that creates interactive, virtual simulated environments), is a member of the Brookings Institution Council, and is a trustee of Capitol College. Mr. Weiss received a Bachelor of Science in Mathematics from the University of Pittsburgh.

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Asa Hutchinson has been a member of our board of directors since our inception. Mr. Hutchinson was one of the original leaders of the Department of Homeland Security, serving as Undersecretary for Border and Transportation Security for the first two years of the Department’s history, from January 2003 to March 2005. As one of the nation’s top-ranking homeland security officials after Secretary Tom Ridge, he was responsible for more than 110,000 federal employees housed in such agencies as the Transportation Security Administration, Customs and Border Protection, Immigration and Customs Enforcement, and the Federal Law Enforcement Training Center. In addition to managing the overall security of United States borders and transportation systems, he set immigration enforcement policies and developed and implemented visa security measures. Mr. Hutchinson served three terms in the United States House of Representatives from the 3rd Congressional District of Arkansas, from January 1997 to August 2001, and as Administrator of the Drug Enforcement Administration, from August 2001 to January 2003. He has served as the chief executive officer of Hutchinson Group LLC, a homeland security and business consulting group, since March 2005, and as a partner in the law firm of Venable LLP in Washington, D.C., from March 2005 to March 2006 and since January 2007. Mr. Hutchinson is also the principal of Hutchinson Security Strategies, a consulting firm that develops comprehensive security plans for companies. Mr. Hutchinson currently serves as a director of Fortress International Group, Inc. (NASDAQ: FIGI), where he serves as a member of the compensation committee, and also currently serves on the board of directors of SAFLINK Corporation. Mr. Hutchinson received a Bachelor of Science in accounting from Bob Jones University and a Juris Doctor from the University of Arkansas School of Law.

Philip A. McNeill has been a member of our board of directors since our inception. Since July 2002, Mr. McNeill has been a manager of and investor in the SPP Mezzanine group of companies, most recently as Managing Director and the Chief Investment Officer (since November 2003) of SPP Mezzanine Partners II, LLC (and its predecessor, SPP Management Company, L.L.C.), the management company of each of SPP Mezzanine Funding, LP, SPP Mezzanine Funding II, LP and SPP Mezzanine Funding IIA, LP. Prior to working with the SPP Mezzanine group of companies, Mr. McNeill served as Managing Director of Allied Capital Corporation (NYSE: ALD), where he was co-head of its Private Finance and Mezzanine activities and a member of its Investment Committee. From the time of his appointment as Managing Director in June 1998 until he left Allied Capital in May 2002, the company grew from approximately $740 million in assets to nearly $2.4 billion. Mr. McNeill joined Allied Capital directly from M&T Capital, the Small Business Investment Company investment division of M&T Bank (OTC: MTB), where he was a Vice President of M&T Capital/M&T Bank and an investment professional from August 1988 to August 1993. Mr. McNeill serves on the board of directors of Homeland Security Capital Corporation (OTC: HOMS) (since December 2005), on the Whitman Advisory Council of the Martin J. Whitman School of Management at Syracuse University (since April 2005) and on the emeritus board of advisors of the National Foundation for Teaching Entrepreneurship for the Greater Washington Region (since December 1999), where he volunteers to mentor young entrepreneur students in inner-city schools. Mr. McNeill received a Bachelor of Science in Business Administration, with concentrations in accounting, finance, and law & public policy, from Syracuse University and a Masters in Business Administration from Harvard Business School.

S. Kent Rockwell has been a member of our board of directors since our inception. Mr. Rockwell is Vice President, Corporate Development, of Argon ST, Inc. (NASDAQ: STST), and has been a director of that company since 1987. From 2000 until the merger of SenSyTech and Argon Engineering Associates, Inc. in the Fall of 2004, Mr. Rockwell was the Chief Executive Officer, Chief Financial Officer and Chairman of SenSyTech. From January 1998 to June 2000, Mr. Rockwell held the role of Vice Chairman and Chief Executive Officer of ST Research, the private company that became SenSyTech following its merger with Daedalus Enterprises, Inc. in 1998. From November 1986 to June 1997, Mr. Rockwell served as Chairman of the Board, Chief Executive Officer, and President of Astrotech International Corporation. Mr. Rockwell has also served as Chairman of Rockwell Forest Products, Inc. since 1983, Chairman of Appalachian Timber Services, Inc. since 1988, and Chairman and Chief Executive Officer of Rockwell Venture Capital, Inc. since 1988. Mr. Rockwell previously served on the board of Rockwell International, Inc. from 1973 to 1983. Mr. Rockwell earned a Bachelor of Arts in economics from Lafayette College and attended the Wharton School of the University of Pennsylvania.

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Special Advisors

Mark A. Frantz has been a Special Advisor to our board of directors since our inception. Mr. Frantz has been a General Partner at RedShift Ventures since July 2006, where he is focused on software and media investments for RedShift Ventures and currently serves on the board of directors at portfolio companies Intelliworks and TerraGo Technologies. Mr. Frantz also serves on the board of directors at ODIN Technologies, the Northern Virginia Technology Council (NVTC) and the Commonwealth of Virginia's Research & Technology Advisory Council (VRTAC). Mr. Frantz has also been an investor/advisor to New Media Strategies (acquired by Meredith Corp., NYSE: MDP), Sourcefire (NASDAQ: FIRE) and Luna Innovations (NASDAQ: LUNA). From March to July 2006, Mr. Frantz was the Managing General Partner of In-Q-Tel, the strategic venture capital affiliate of the U.S. Intelligence Community. From January 2001 to March 2006, Mr. Frantz was with Carlyle Venture Partners, where he worked with Blackboard (NASDAQ: BBBB), Imagitas (acquired by Pitney Bowes, NYSE: PBI), ISR Solutions (acquired by Stanley Works, NYSE: SWK), Panasas, Grant Street Group and Secure Elements. Mr. Frantz joined Carlyle from Redleaf and prior to Redleaf, he was the Associate to the Senior Chairman of investment bank Alex. Brown (now Deutsche Bank Alex. Brown, NYSE: DB). He also served as the Associate Director in his last position at The White House Office of Intergovernmental Affairs under President George H. W. Bush from December 1990 to January 1993 and as the economic and technology policy advisor to Pennsylvania Governor Tom Ridge from January 1995 to 1997. He holds a Bachelor of Arts degree from Allegheny College and Juris Doctor and Master of Business Administration degrees from the University of Pittsburgh.

Brian C. Griffin has been a Special Advisor to our board of directors since our inception. Dr. Griffin has served since January 2006 as Chairman of the Board of Clean Energy Systems, Inc. and has served as a member of the board of directors of Homeland Security Capital Corporation (OTC: HOMS) since May 2007. Dr. Griffin served two terms as Oklahoma’s Secretary of Environment from April 1997 to January 2003.During that time, he chaired and was a member of several committees sponsored by the U.S. Environmental Protection Agency, the U.S. Department of Energy and the Southern States Energy Board. He was also a member of the Biomass & Bio-Energy Research and Development Federal Advisory Committee, which was sponsored by the U.S. Environmental Protection Agency and the U.S. Department of Agriculture. Dr. Griffin also served as a member of the Coal & Advanced Power Systems Committee sponsored by the U.S. Department of Energy and the Southern States Energy Board from January 1999 to January 2003. In addition, he served as the National Chairman of the Interstate Technology and Regulatory Council from March 2001 to October 2003. In April 2003, President George W. Bush appointed him to serve as the Federal Representative to the Southern States Energy Board, a position he still holds. Dr. Griffin received a Bachelor of Arts degree from Harvard University and was selected as a Rhodes Scholar. As a Rhodes Scholar, he attended Oxford University where he received his Master of Jurisprudence degree. He also earned a Juris Doctor degree from University of Oklahoma College of Law and a Master of Laws degree from Southern Methodist University.

We have no formal arrangements or agreements with these special advisors to provide any particular services to us, and they have no fiduciary obligations to us or our stockholders. These special advisors will provide advice, introductions to potential targets, and assistance to us, at our request, only if they are able to do so. Nevertheless, we believe that, with their business background and extensive contacts, they will be helpful to our search for a target business and our consummation of a business combination.

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Committees of the Board of Directors and Meetings

Our Board of Directors has an Audit Committee and a Nominating Committee.

Meeting Attendance.  During the fiscal year ended December 31, 2008, there were three meetings of our Board of Directors, and the various committees of the Board of Directors met a total of four times.  No director attended fewer than 75% of the total number of meetings of the Board and of committees of the Board on which he served during fiscal 2008.

Audit Committee.  Our Audit Committee met four times during fiscal 2008.  This committee currently has three members, Phillip A. McNeill (Chairman), S. Kent Rockwell and Asa Hutchinson.  Our Audit Committee has the authority to retain and terminate the services of our independent accountants, reviews annual financial statements, considers matters relating to accounting policy and internal controls and reviews the scope of annual audits.  All members of the Audit Committee satisfy the current independence standards promulgated by the Securities and Exchange Commission and by the NYSE Amex (formerly the American Stock Exchange), as such standards apply specifically to members of audit committees. The Board has determined that Mr. McNeill is an “audit committee financial expert,” as the Securities and Exchange Commission has defined that term in Item 407 of Regulation S-K.

In addition, the Audit Committee reviews and approves all expense reimbursements made to our officers or directors. Any expense reimbursements payable to members of our Audit Committee will be reviewed and approved by our board of directors, with the interested director or directors abstaining from such review and approval.

A copy of the Audit Committee’s written charter is publicly available on our website at www.secureamericaacquisition.net..

Nominating Committee.  Our Nominating Committee did not meet during fiscal 2008, as we are a blank check company with no operations as of the date of this report.  Our Nominating Committee has three members, Asa Hutchinson, Phillip A. McNeill, and S. Kent Rockwell (Chairman).  This committee’s role is to make recommendations to the full Board as to the size and composition of the Board and its committees, and to evaluate and make recommendations as to potential candidates.  All members of the Nominating Committee qualify as independent under the definition promulgated by the NYSE Amex (formerly the American Stock Exchange).

The Nominating Committee may consider candidates recommended by stockholders as well as from other sources such as other directors or officers, third party search firms or other appropriate sources. For all potential candidates, the Nominating Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment, business and professional skills and experience, independence, knowledge of the industry in which we operate, possible conflicts of interest, diversity, the extent to which the candidate would fill a present need on the Board, and concern for the long-term interests of the stockholders. Our Nominating Committee will not be considering candidate recommendations until after we consummate our initial business combination and commence operations.

A copy of the Nominating Committee’s written charter is publicly available on the Company’s website at www.secureamericaacquisition.net.

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Executive Officers

The following table sets forth certain information regarding our executive officers who are not also directors.  None of our executive officers are considered to be employees.

Name	Age	Position
James Maurer	48	Chief Financial Officer and Secretary

James Maurer has served as our Chief Financial Officer and Secretary since our inception and has over 18 years of diversified finance and strategic planning experience. Since November 2007, Mr. Maurer also has served as the Chief Financial Officer of Lasco Enterprises, L.L.C., an owner and operator of restaurants based in Houston, Texas. From January 2006 to February 2007, Mr. Maurer served as the Secretary of Homeland Security Capital Corporation (OTC: HOMS). From July 2005 to March 2007, he also served as a consultant to Fortress America Acquisition Corporation (now Fortress International Group, Inc., NASDAQ: FIGI). From December 2002 to April 2005, Mr. Maurer served as an advisor and consultant to the chief executive officer of BBC America, a United States-based cable television channel owned by the British Broadcasting Corporation. Previous to such time, Mr. Maurer served as the Chief Financial Officer of Inforum Communications (OTC: IFMC), a consolidator of Internet service providers, from December 1998 to February 2001. Prior to that he held a variety of finance and business development positions with businesses in the wireless telecommunications industry. Mr. Maurer received his Bachelor of Arts in economics from Harvard University and his Master of Science in management from the MIT Sloan School of Management.

Section 16(a) Beneficial Ownership Reporting Compliance

Our records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Exchange Act were filed on a timely basis, except that Bulldog Investors failed to file an initial report of ownership, as well as an unknown number of reports covering an unknown number of transactions

Code of Conduct and Ethics

We have adopted a code of conduct and ethics applicable to our directors and officers in accordance with applicable federal securities laws and the rules of the NYSE Amex (formerly American Stock Exchange). A copy of the Code of Conduct and Ethics is publicly available on the Company’s website at www.secureamericaacquisition.net.  In addition, a copy of the Code of Conduct and Ethics will be provided without charge upon request from us.

Item 11. EXECUTIVE COMPENSATION

No executive officer has received any cash compensation for services rendered and no compensation of any kind, including finder’s and consulting fees, will be paid to any of our initial stockholders, officers, directors, special advisors or any of their respective affiliates. Nor will any of our initial stockholders, officers, directors, special advisors or any of their respective affiliates receive any cash compensation for services rendered prior to or in connection with a business combination. However, all of these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness of the expenses by anyone other than our board of directors, which includes persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged. Because none of our directors may be deemed “independent” for such purposes, we will generally not have the benefit of independent directors examining the propriety of expenses incurred on our behalf and subject to reimbursement.

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Commencing on the effective date of our initial public offering, we began paying Homeland Security Capital Corporation a fee of up to $7,500 per month for providing us with office space and certain office and administrative services. This arrangement was agreed to by Homeland Security Capital Corporation, an affiliate of Mr. McMillen, solely for our benefit and is not intended to provide Mr. McMillen compensation in lieu of a salary.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of our common stock as of March 16, 2009, based on 12,500,000 shares of common stock outstanding as of such date and information obtained from the persons named below, with respect to the beneficial ownership of shares of our common stock by:

· each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;

· each of our officers and directors; and

· all of our officers and directors as a group.

Name and Address of Beneficial Owner(1)	Amount and Nature of Beneficial Ownership(2)		Percentage of Class
Secure America Acquisition Holdings, LLC(3)		2,360,000		18.9	%
Philip A. McNeill(4)		2,390,000		19.2	%
S. Kent Rockwell(5)		2,390,000		19.2	%
C. Thomas McMillen(6)		1,308,333		10.5	%
Harvey L. Weiss(7)		334,467		2.7	%
Asa Hutchinson(8)		50,000		*
Mark A. Frantz		20,000		*
James E. Maurer(9)		52,500		*
Bulldog Investors(10)		2,406,066		19.3	%
HBK Investments L.P.(11)		1,249,900		9.9	%
HBK Master Fund L.P. (11)		1,249,100		9.9	%
Israel A. Englander(12)		1,082,500		8.7	%
Peter W. Poole(13)		1,033,020		8.3	%
QVT Financial LP(14)		1,035,717		8.3	%
QVT Associates GP LLC(14)		947,852		7.6	%
QVT Fund LP(14)		853,664		6.8	%
Commerce Court Value, Ltd.(13)		650,010		5.2	%
Homeland Security Capital Corporation(15)		325,000		2.6	%
Brian C. Griffin(16)		35,000		*
Michael T. Brigante(17)		82,500		*
All of our officers and directors as a group (6 individuals)		2,500,000		20	%

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* Less than 1%

(1) Unless otherwise indicated, the primary business address of each beneficial owner is 1005 North Glebe Road, Suite 550, Arlington, Virginia, 22201.

(2) Except as specifically indicated in the footnotes to this table, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options, warrants or rights held by that person that are currently exercisable or exercisable, convertible or issuable within 60 days of March 16, 2008, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

(3) Secure America Acquisition Holdings, LLC is the record holder of 2,360,000 shares of our common stock. Secure America Acquisition Holdings, LLC serves solely as a holding company with respect to our securities and has no operations. The membership interests of Secure America Acquisition Holdings, LLC are held as follows: C. Thomas McMillen (49.94%); Harvey L. Weiss (13.67%); Homeland Security Capital Corporation (13.77%); S. Kent Rockwell (10.59%); Michael Brigante (3.51%); James Maurer (2.22%); Philip A. McNeill (4.24%); Brian Griffin (1.06%) and Secure America Holdings, LLC (1%). Under the terms of a proxy agreement with the managing member, Secure America Holdings, LLC, Messrs. McNeill and Rockwell share voting and investment power with respect to all 2,360,000 shares of common stock held by Secure America Acquisition Holdings, LLC, although each of Messrs. McNeill and Rockwell disclaim beneficial ownership of such shares except to the extent of their respective pecuniary interests. The beneficial ownership reflected in this table does not include 2,075,000 shares of common stock issuable upon exercise of founder warrants that are not exercisable and will not become exercisable within 60 days.

(4) Mr. McNeill is one of our independent directors. Reflects 2,360,000 shares of common stock owned by Secure America Acquisition Holdings, LLC and 30,000 shares of common stock owned by Mr. McNeill. Mr. McNeill shares voting and investment power with Mr. Rockwell with respect to all 2,360,000 shares held of record by Secure America Acquisition Holdings, LLC through a proxy agreement with its managing member, Secure America Holdings, LLC. Mr. McNeill disclaims beneficial ownership of all such shares held of record by Secure America Acquisition Holdings, LLC except to the extent of his pecuniary interests.

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(5) Mr. Rockwell is one of our independent directors. Reflects 2,360,000 shares of common stock owned by Secure America Acquisition Holdings, LLC and 30,000 shares of common stock owned by Mr. Rockwell. Mr. Rockwell shares voting and investment power with Mr. McNeill with respect to all 2,360,000 shares held of record by Secure America Acquisition Holdings, LLC through a proxy agreement with its managing member, Secure America Holdings, LLC. Mr. Rockwell disclaims beneficial ownership of all such shares held of record by Secure America Acquisition Holdings, LLC except to the extent of his pecuniary interests.

(6) Mr. McMillen is our Chairman and Co-Chief Executive Officer. Mr. McMillen owns 55.5% of the membership interests of Secure America Acquisition Holdings, LLC, which includes 118,300 shares deemed to be beneficially owned by Mr. McMillen through his 36.4% ownership in Homeland Security Capital Corporation which includes 11,800 shares deemed to be beneficially owned by Mr. McMillen through his 50% ownership of Secure America Holdings, LLC, the managing member of Secure America Acquisition Holdings, LLC.

(7) Mr. Weiss is our Co-Chief Executive Officer and a director. Mr. Weiss owns 14.2% of the membership interests of Secure America Acquisition Holdings, LLC, which includes 11,800 shares deemed to be beneficially owned by Mr. Weiss through his 50% ownership of Secure America Holdings, LLC, the managing member of Secure America Acquisition Holdings, LLC.

(8) Mr. Hutchinson is a member of our board of directors.

(9) Mr. Maurer is our Chief Financial Officer and Secretary. Reflects the ownership by Mr. Maurer of 2.2% of the membership interests of Secure America Acquisition Holdings, LLC, which is the record holder of 2,360,000 shares of our common stock. Mr. Maurer may be deemed to own beneficially 52,500 shares of our common stock. However, as noted in footnotes (4) and (5) above, Messrs. McNeill and Rockwell share voting and investment power with respect to all 2,360,000 shares of common stock held by Secure America Acquisition Holdings, LLC.

(10) Based on information contained in a Schedule 13G/A filed with the SEC on January 12, 2009 by Bulldog Investors, Phillip Goldstein and Andrew Dakos. Phillip Goldstein and Andrew Dakos are principals of Bulldog Investors. Clients of Phillip Goldstein and Andrew Dakos are entitled to receive dividends and sale proceeds. The address of Bulldog Investors is Park 80 West, Plaza Two, Saddle Brook, New Jersey 07663.

(11) Based on information contained in a Schedules 13G/A filed with the SEC on February 4, 2009 by HBK Investments L.P. (“HBK Investments”), HBK Services LLC (“Services”), HBK Partners II L.P. (“HBK Partners”), HBK Management LLC (“HBK Management”), and HBK Master Fund L.P. (“HBK Master”).  Excludes an aggregate of 1,249,100 shares of common stock that may be issued upon the exercise of warrants purchased by these entities on the later of the completion of our initial business combination or October 23, 2008. HBK Investments has delegated discretion to vote and dispose of securities to Services.  Services may, from time to time, delegate discretion to vote and dispose of certain of the shares to HBK New York LLC, HBK Virginia LLC, HBK Europe Management LLP, and/or HBK Hong Kong Ltd. (collectively, the “Subadvisors”). Each of Services and the Subadvisors is under common control with HBK Investments.  The Subadvisors disclaim beneficial ownership of the securities. The address for all of the above listed entities, except HBK New York, is 2101 Cedar Springs Road, Suite 700, Dallas, Texas 79201.  The address for HBK New York is 350 Park Avenue, 20th Floor, New York, NY 10022.

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(12) Based on information contained in a Schedule 13G/A filed with the SEC on November 3, 2008 by Millenco, L.P. (“Millenco”), Millennium Management, L.L.C. (“Millennium Management”) and Israel A. Englander. Excludes an aggregate of 1,082,500 shares of common stock that may be issued upon the exercise of warrants purchased by these entities on the later of the completion of our initial business combination or October 23, 2008.  Millennium Management is the manager of Millenco, and consequently may be deemed to have voting control and investment discretion over securities owned by Millenco. Mr. Englander is the managing member of Millennium Management. As a result, Mr. Englander may be deemed to be the beneficial owner of any shares deemed to be beneficially owned by Millennium Management. The address for Millenco, Millennium Management and Mr. Englander is 666 Fifth Avenue, New York, New York 10103.

(13) Based on information contained in a Schedule 13G/A filed with the SEC on February 13, 2009 by Commerce Court Value, Ltd. (“Commerce”), Peter W. Poole and Azimuth Opportunity, Ltd. (“Azimuth”). Excludes an aggregate of 1,249,100 shares of common stock that may be issued upon the exercise of warrants purchased by these entities on the later of the completion of our initial business combination or October 23, 2008. Mr. Poole is the director of Commerce and Azimuth, has shared voting and investment power with respect to securities owned by Commerce and Azimuth and disclaims beneficial ownership of such securities. The address for the above listed entities is c/o Ogier, Qwomar Complex, 4th Floor, P.O. Box 3170, Road Town, Tortola, British Virgin Islands.

(14) Based on information contained in a Schedule 13G/A filed with the SEC on February 4, 2009 by QVT Financial LP (“QVT Financial”), QVT Financial GP LLC (“QVT Financial GP”), QVT Fund (“QVT Fund”) and QVT Associates GP LLC (“QVT Associates”). QVT Financial is the investment manager for QVT Fund, which beneficially owns 853,664 shares of common stock, and for Quintessence Fund L.P. (“Quintessence”), which beneficially owns 94,188 shares of common stock. QVT Financial is also the investment manager for a separate discretionary account managed for Deutsche Bank AG (the “Separate Account”), which holds 87,865 shares of common stock. QVT Financial has the power to direct the vote and disposition of the common stock held by the Fund, Quintessence and the Separate Account. Accordingly, QVT Financial may be deemed to be the beneficial owner of an aggregate of 1,035,717 shares of common stock, consisting of the shares owned by the Fund and Quintessence and the shares held in the Separate Account. Excludes warrants held by the Fund, Quintessence and the Separate Account that are not exercisable until the later of the completion of our initial business combination or October 23, 2008. QVT Financial GP, as General Partner of QVT Financial, may be deemed to beneficially own the same number of shares of common stock reported by QVT Financial. QVT Associates, as General Partner of the Fund and Quintessence, may be deemed to beneficially own the aggregate number of shares of common stock owned by the Fund and Quintessence, and accordingly, QVT Associates may be deemed to be the beneficial owner of an aggregate amount of 947,852 shares of common stock. Each of QVT Financial and QVT Financial GP disclaims beneficial ownership of the shares of common stock owned by the Fund and Quintessence and held in the Separate Account. QVT Associates GP disclaims beneficial ownership of all shares of common stock owned by the Fund and Quintessence, except to the extent of its pecuniary interest therein. The address for QVT Financial is 1177 Avenue of the Americas, 9th Floor, New York, New York 10036.

(15) Reflects the ownership by Homeland Security Capital Corporation of 13.8% of the membership interests of Secure America Acquisition Holdings, LLC, which is the record holder of 2,360,000 shares of our common stock. Accordingly, Homeland Security Capital Corporation may be deemed to own beneficially 325,000 shares of our common stock. However, as noted in footnotes (4) and (5) above, Messrs. McNeill and Rockwell share voting and investment power with respect to all 2,360,000 shares of common stock held by Secure America Acquisition Holdings, LLC.

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(16) Reflects the ownership by Dr. Griffin of 10,000 shares of our common stock as well as 1.1% of the membership interests of Secure America Acquisition Holdings, LLC, which is the record holder of 2,360,000 shares of our common stock. Accordingly, Dr. Griffin may be deemed to own beneficially an additional 25,000 shares of our common stock. However, as noted in footnotes (4) and (5) above, Messrs. McNeill and Rockwell share voting and investment power with respect to all 2,360,000 shares of common stock held by Secure America Acquisition Holdings, LLC.

(17) Reflects the ownership by Mr. Brigante of 3.5% of the membership interests of Secure America Acquisition Holdings, LLC, which is the record holder of 2,360,000 shares of our common stock. Accordingly, Mr. Brigante may be deemed to own 82,500 shares of our common stock. However, as noted in footnotes (4) and (5) above, Messrs. McNeill and Rockwell share voting and investment power with respect to all 2,360,000 shares of common stock held by Secure America Acquisition Holdings, LLC.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

None.

Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

As previously disclosed in a Current Report on Form 8-K filed on February 6, 2008, certain of the partners of Goldstein Golub Kessler LLP, (“GGK”), became partners of McGladrey & Pullen (“M&P”). As a result, GGK resigned as our auditors effective January 28, 2008, and M&P was appointed as our independent registered public accounting firm in connection with our annual financial statements for the fiscal years ended December 31, 2007 and 2008. This change in accountants was effected solely as a result of the transaction between GGK and M&P.

Description of Professional Services

Audit Fees.  We expect to be billed approximately $30,000 by M&P in connection with our December 31, 2008 year end audit. The aggregate fees for professional services rendered by M&P in 2008 for our quarterly reviews were approximately $33,000.  M&P billed us approximately $31,000 in connection with our December 31, 2007 year-end audit.

The aggregate fees for professional services rendered by GGK in 2007 were approximately $53,000, including $47,500 relating to our initial public offering.

Audit-Related Fees.  Audit related fees are for assurance and related services including, among others, consultation concerning financial accounting and reporting standards. There were no aggregate fees billed for audit related services rendered by GGK or M&P.

Tax Fees.  We paid approximately $4,000 in fees to RSM McGladrey, Inc.,an affiliate of M&P, in 2008 for tax compliance.

Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

Consistent with SEC policies regarding auditor independence, our board of directors has responsibility for appointing, setting compensation and overseeing the work of the independent auditor. In recognition of this responsibility, our board of directors has established a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor.

33

Prior to engagement of the independent auditor for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of the following four categories of services to our board of directors for approval.

Audit services include audit work performed in the preparation of financial statements, as well as work that generally only the independent auditor can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards.

Audit-Related services are for assurance and related services that are traditionally performed by the independent auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.

Tax services include all services performed by the independent auditor’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice.

Other Fees are those associated with services not captured in the other categories.

Prior to engagement, our board of directors pre-approves these services by category of service. The fees are budgeted and our board of directors requires the independent auditor and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent auditor for additional services not contemplated in the original pre-approval. In those instances, our board of directors requires specific pre-approval before engaging the independent auditor.

Our board of directors may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to our board of directors at its next scheduled meeting.

34

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following is a list of exhibits filed as part of this Annual Report on Form 10-K.

Exhibit

Number                      Description

Exhibit No.	Description
1.1	Form of Underwriting Agreement (previously filed with the Commission as Exhibit 1.1 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
3.1	Certificate of Incorporation filed on May 14, 2007 (previously filed with the Commission as Exhibit 3.1 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
3.2	Amendment to Certificate of Incorporation filed on August 6, 2007(previously filed with the Commission as Exhibit 3.2 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
3.3	Form of Amended and Restated Certificate of Incorporation (previously filed with the Commission as Exhibit 3.3 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
3.4	By-laws (previously filed with the Commission as Exhibit 3.4 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
4.1	Specimen Unit Certificate (previously filed with the Commission as Exhibit 4.1 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
4.2	Specimen Common Stock Certificate (previously filed with the Commission as Exhibit 4.2 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
4.3	Specimen Warrant Certificate (previously filed with the Commission as Exhibit 4.3 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
4.4	Amended and Restated Founder Warrant Purchase Agreement, dated October 12, 2007 between the Registrant and Secure America Acquisition Holdings, LLC (previously filed with the Commission as Exhibit 4.4 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
4.5	Form of Warrant Agreement between Continental Stock Transfer and Trust Company and the Registrant (previously filed with the Commission as Exhibit 4.5 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.1	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and C. Thomas McMillen (previously filed with the Commission as Exhibit 10.1 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).

35

Exhibit No.	Description
10.2	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and Harvey L. Weiss (previously filed with the Commission as Exhibit 10.2 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.3	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and Asa Hutchinson (previously filed with the Commission as Exhibit 10.3 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.4	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and Philip A. McNeill (previously filed with the Commission as Exhibit 10.4 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.5	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and S. Kent Rockwell (previously filed with the Commission as Exhibit 10.5 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.6	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and Brian C. Griffin (previously filed with the Commission as Exhibit 10.6 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.7	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and Mark A. Frantz (previously filed with the Commission as Exhibit 10.7 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.8	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and James A. Maurer (previously filed with the Commission as Exhibit 10.8 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.9	Letter Agreement among the Registrant, SunTrust Robinson Humphrey and Secure America Acquisition Holdings, LLC (previously filed with the Commission as Exhibit 10.9 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.10	Form of Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Registrant (previously filed with the Commission as Exhibit 10.10 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.11	Form of Stock Escrow Agreement by and among the Registrant, Continental Stock Transfer & Trust Company and the Existing Stockholders (previously filed with the Commission as Exhibit 10.11 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).

36

Exhibit No.	Description
10.12	Form of Founder Warrant Escrow Agreement by and among the Registrant, Continental Stock Transfer & Trust Company and Secure America Acquisition Holdings, LLC (previously filed with the Commission as Exhibit 10.12 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.13	Form of Services Agreement between Homeland Security Capital Corporation and the Registrant (previously filed with the Commission as Exhibit 10.13 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.14	Amended and Restated Promissory Note, dated October 12, 2007 issued to Fortress America Acquisition Holdings, LLC (previously filed with the Commission as Exhibit 10.14 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.15	Form of Registration Rights Agreement by and among the Registrant and the Existing Stockholders (previously filed with the Commission as Exhibit 10.15 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.16	Form of Subscription Agreement by and between the Registrant and Fortress America Acquisition Holdings, LLC (previously filed with the Commission as Exhibit 10.16 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.17	Form of Subscription Agreement by and between the Registrant and Brian C. Griffin (previously filed with the Commission as Exhibit 10.17 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.18	Form of Subscription Agreement by and between the Registrant and Philip A. McNeill (previously filed with the Commission as Exhibit 10.18 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.19	Form of Subscription Agreement by and between the Registrant and Asa Hutchinson (previously filed with the Commission as Exhibit 10.19 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.20	Form of Subscription Agreement by and between the Registrant and Mark Frantz (previously filed with the Commission as Exhibit 10.20 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.21	Form of Subscription Agreement by and between the Registrant and S. Kent Rockwell (previously filed with the Commission as Exhibit 10.21 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.22	Side Letter Agreement by and among the Registrant, C. Thomas McMillen, Harvey L. Weiss and Secure America Holdings, LLC (previously filed with the Commission as Exhibit 10.22 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).

37

Exhibit No.	Description
10.23	Proxy Voting Agreement by and between Philip A. McNeill and Harvey L. Weiss (previously filed with the Commission as Exhibit 10.23 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
10.24	Proxy Voting Agreement by and between C. Thomas McMillen and S. Kent Rockwell (previously filed with the Commission as Exhibit 10.24 to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-144028).
31.1*	Certifications of C. Thomas McMillen pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Harvey L. Weiss pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3*	Certification of James Maurer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32†	Certifications of C. Thomas McMillen, Harvey L. Weiss and James Maurer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).

*          Filed herewith.

†          Furnished herewith.

Where a document is incorporated by reference from a previous filing, the exhibit number of the document in that previous filing is indicated in parentheses after the description of such document.

38

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

		SECURE AMERICA ACQUISITION CORPORATION
Date: March 30, 2009	By:	/s/ C. Thomas McMillen
		C. Thomas McMillen
		Co-Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated below and on the dates indicated.

Signature	Title	Date
/s/ Harvey L. Weiss	Co-Chief Executive Officer, Director	March 30, 2009
Harvey L. Weiss	(principal executive officer)
/s/ C. Thomas McMillen	Co-Chief Executive Officer, Chairman	March 30, 2009
C. Thomas McMillen	(principal executive officer)
/s/ James Maurer	Chief Financial Officer and Secretary	March 30, 2009
James Maurer	(principal financial and accounting officer)
/s/ Asa Hutchinson	Director	March 30, 2009
Asa Hutchinson
/s/ Philip A. McNeill	Director	March 30, 2009
Philip A. McNeill
/s/ S. Kent Rockwell	Director	March 30, 2009
S. Kent Rockwell

39

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Secure America Acquisition Corporation

We have audited the accompanying balance sheets of Secure America Acquisition Corporation (a corporation in the development stage) as of December 31, 2008 and 2007, and the related statements of income, stockholders' equity, and cash flows for the year ended December 31, 2008, the period from May 14, 2007 (inception) to December 31, 2007 and the cumulative period from May 14, 2007 (inception) to December 31, 2008.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Secure America Acquisition Corporation as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the year ended December 31, 2008, the period from May 14, 2007 (inception) to December 31, 2007 and the cumulative period from May 14, 2007 (inception) to December 31, 2008, in conformity with U.S. generally accepted accounting principles.

We were not engaged to examine management's assessment of the effectiveness of Secure America Acquisition Corporation internal control over financial reporting as of December 31, 2008, included in “Management’s Annual Report on Internal Control Over Financial Reporting” and, accordingly, we do not express an opinion thereon.

The accompanying financial statements have been prepared assuming that Secure America Acquisition Corporation will continue as a going concern. As discussed in Note 1 to the financial statements, the Company will face a mandatory liquidation on October 23, 2009 if a business combination is not consummated,  which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ McGladrey & Pullen, LLP
  

McGLADREY & PULLEN, LLP

New York, New York

March 30, 2009

F-1

Secure America Acquisition Corporation

(a corporation in the development stage)

Balance Sheets

	December 31, 2008		December 31, 2007
Assets
Current assets:
Cash	$	207,803	$	6,867
Investments held in Trust Fund		79,330,205		79,466,371
Prepaid expenses		25,148		95,015
Total current assets		79,563,156		79,568,253
Deferred acquisition costs		105,000		-
Deferred tax asset		133,909		26,058
Total assets		79,802,065		79,594,311
Liabilities and Stockholders’ Equity
Current liabilities:
Accrued expenses	$	45,882	$	47,274
Accounts payable		4,774		33,005
Income taxes payable		15,670		198,382
Deferred interest on investments held in Trust Fund		37,261		-
Deferred underwriters’ discounts and commissions		3,200,000		3,200,000
Note payable to stockholder		-		50,000
Total  current liabilities		3,303,587		3,528,661
Common subject to possible conversion, 2,999,999 shares		22,799,992		22,799,992
Commitment
Stockholders' equity
Preferred stock, $.0001 par value, Authorized 1,000,000 shares; none issued and outstanding		-		-
Common stock, $.0001 par value, Authorized 50,000,000 shares; 12,500,000 shares issued and outstanding (including 2,999,999 shares subject to possible conversion)		1,250		1, 250
Additional paid-in capital		52,985,665		52,985,665
Income accumulated during the development stage		711,571		278,743
Total stockholders' equity		53,698,486		53,265,658
Total liabilities and stockholders' equity	$	79,802,065	$	79,594,311

See Notes to Financial Statements.

F-2

Secure America Acquisition Corporation

(a corporation in the development stage)

Statements of Operations

	For the Year ended December 31, 2008		For the Period May 14, 2007 (inception) to December 31, 2007		For the Cumulative Period May 14, 2007 (inception) to December 31, 2008
Income:
Net interest income	$	1,272,409	$	546,377	$	1,818,786
Total income		1,272,409		546,377		1,818,786
Expenses:
Formation and operating costs		548,318		95,310		643,628
Net income for the period before income taxes		724,091		451,067		1,175,158
State and federal income taxes		291,263		172,324		463,587
Net income for the period	$	432,828	$	278,743	$	711,571
Weighted average number of shares outstanding – basic and diluted		12,500,000		5,258,621		9,690,635
Net income per share – basic and diluted	$	0.03	$	0.05	$	0.07

See Notes to Financial Statements.

F-3

Secure America Acquisition Corporation

(a corporation in the development stage)

Statement of Stockholders' Equity

For the period from May 14, 2007 (inception) to December 31, 2008

					Additional			Income Accumulated During the
	Common Stock				paid-in			Development		Stockholders’
	Shares		Amount		capital			Stage		Equity
Common shares issued May 14, 2007 at $.01 per share		2,500,000	$	250	$	24,750			-	$	25,000
Common shares issued October 29, 2007, par value $0.0001, net of underwriters’ discount and offering expenses (includes 2,999,999 shares subject to possible conversion)		10,000,000		1,000		73,685,907			-		73,686,907
Proceeds from private placement of Founder Warrants		-		-		2,075,000			-		2,075,000
Proceeds subject to possible conversion of 2,999,999 shares		-		-		( 22,799,992	)		-		( 22,799,992	)
Net Income		-		-		-		$	278,743		278,743
Balance at December 31, 2007		12,500,000		1,250		52,985,665			278,743		53,265,658
Net Income		-		-		-			432,828		432,828
Balance at December 31, 2008		12,500,000	$	1,250	$	52,985,665		$	711,571	$	53,698,486

See Notes to Financial Statements

F-4

Secure America Acquisition Corporation

(a corporation in the development stage)

Statements of Cash Flows

	For the year ended December 31, 2008			For the period  May 14, 2007 (inception) to December 31, 2007			For the cumulative period May 14, 2007(inception) to December 31, 2008
Cash flows from operating activities
Net income	$	432,828		$	278,743		$	711,571
Adjustments to reconcile net loss to net cash used in operating activities:
Interest income on investments held in trust account		(1,309,660	)		(546,371	)		(1,856,031	)
Increase in deferred acquisition costs		(105,000	)		-			(105,000	)
Increase in deferred income taxes		(107,851	)		(26,058	)		(133,909	)
Decrease (increase) in prepaid expenses		69,867			(95,015	)		(25,148	)
Increase in accounts payable		3,673			1,101			4,774
(Decrease) increase in accrued expenses		(1,392	)		47,274			45,882
(Decrease) increase in income taxes payable		(182,712	)		198,382			15,670
Increase in deferred interest on investments held in trust account		37,261			-			37,261
Net cash used in operating activities		(1,162,986	)		(141,944	)		(1,304,930	)
Cash flows from investing activities
Investments deposited in trust account		-			(79,200,000	)		(79,200,000	)
Interest drawn from trust account		1,445,826			280,000			1,725,826
Net cash provided by (used in) investing activities		1,445,826			(78,920,000	)		(77,474,174	)
Cash flows from financing activities
Gross proceeds of public offering		-			80,000,000			80,000,000
Proceeds from private placement of Founder Warrants		-			2,075,000			2,075,000
Proceeds from notes payable, stockholder		-			215,000			215,000
Payment of note payable, stockholder		(50,000	)		(165,000	)		(215,000	)
Proceeds from sale of shares of common stock		-			25,000			25,000
Payment of costs related to proposed offering		(31,904	)		(3,081,189	)		(3,113,093	)
Net cash provided by (used in) financing activities		(81,904	)		79,068,811			78,986,907
Net increase in cash		200,936			6,867			207,803
Cash at beginning of the period		6,867			-			-
Cash at the end of the period	$	207,803		$	6,867		$	207,803
Non cash financing activities:
Accrual of costs of public offering		-		$	31,904			-
Accrual of deferred underwriters’ discounts and commissions	$	-		$	3,200,000		$	3,200,000
Supplemental schedule of cash flows information:
Cash paid during the period for income taxes	$	581,826			-		$	581,826

See Notes to Financial Statements.

F-5

Secure America Acquisition Corporation

(a corporation in the development stage)

Notes to Financial Statements

1.    Organization and Business Operations

Secure America Acquisition Corporation (the “Company”) was incorporated in Delaware on May 14, 2007 as a blank check company for the purposes of acquiring, or acquiring control of, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more domestic or international operating businesses, which we refer to as our initial business combination. The Company’s efforts in identifying a prospective target business will be limited to the homeland security industry, but not businesses that design, build or maintain mission-critical facilities.

The registration statement for the Company’s initial public offering (“Offering”) was declared effective October 23, 2007. The Company consummated the Offering on October 29, 2007, issuing 10,000,000 units at a price of $8.00 per unit, which started trading separately on January 18, 2008. 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 (“Business Combination”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Offering, management placed $7.92 per unit sold in the Offering, or $79,200,000 into a trust account (“Trust Account”) and invested these proceeds in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 until the earlier of (i) the consummation of its first Business Combination and (ii) liquidation of the Company. The investments in the Trust Account have been accounted for as trading securities and are recorded at their market value of approximately $79,330,205 at December 31, 2008. The placing of funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, providers of financing, prospective target businesses or other entities it engages, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements. Two of the Company’s affiliates have agreed that they will be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors, providers of financing, service providers or other entities that are owed money by the Company for services rendered to or contracted for or products sold to the Company. There can be no assurance that they will be able to satisfy those obligations. The 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. Additionally, up to an aggregate of $1,000,000 of interest earned on the Trust Account balance may be released to the Company to fund working capital requirements and additional funds may be released to fund tax obligations. An additional $150,000 of interest earned (net of taxes) on the Trust Account balance was released to the Company to repay a loan made to the Company by Secure America Acquisition Holdings, LLC.  The reconciliation of investments held in the Trust Account as of December 31, 2008 and 2007 is as follows:

F-6

	December 31, 2008			December 31, 2007
Contribution to trust	$	79,200,000		$	79,200,000
Interest income received		1,856,031			546,371
Withdrawals to fund loan repayments		(150,000	)		(100,000	)
Withdrawals to fund income taxes		(581,826	)		-
Withdrawals to fund operations (a)		(994,000	)		(180,000	)
Total investments held in trust	$	79,330,205		$	79,466,371

(a) amount is limited to $1,000,000.

The Company, after signing a definitive agreement for the acquisition of a target business, is required to submit such transaction for stockholder approval. In the event that stockholders owning 30% 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 (“Founders”), have agreed to vote their 2,500,000 founding shares of common stock in accordance with the vote of the majority of the shares voted by all other stockholders of the Company (“Public Stockholders”) with respect to any Business Combination. After consummation of a Business Combination, these voting safeguards will no longer be applicable.

With respect to a Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company convert his or her shares. 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 2,999,999 shares sold in the Offering may seek conversion of their shares in the event of a Business Combination. Accordingly, a portion of the proceeds of the Offering (29.999% of the amounts placed in the Trust Account other than those related to deferred underwriters’ discounts and commissions as described in Note 3) have been classified as common stock subject to possible conversion and a portion (29.99%) of the interest earned on the Trust Account, after deducting the amounts permitted to be utilized for tax obligations, loan repayment and working capital purposes has been recorded as deferred interest in the accompanying balance sheets. Such Public Stockholders are entitled to receive their per share interest in the Trust Account computed without regard to the shares of common stock held by the Founders prior to the consummation of the Offering.

On the effective date of the Offering (“Effective Date”), the Company’s Certificate of Incorporation was amended (i) to provide that the Company will continue in existence only until 24 months from the Effective Date of the Offering and (ii) to increase the number of authorized shares to 50,000,000. If the Company has not completed a Business Combination by such date, its corporate existence will cease and it will dissolve and liquidate. This factor raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of this uncertainty. In the event of liquidation, it is likely that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per share in the Offering (assuming no value is attributed to the warrants contained in the Units to be offered in the Offering discussed in Note 2).

Concentration of Credit Risk   —   The Company maintains cash in a bank deposit account which, at times, exceeds federally insured (FDIC) limits. The Company has not experienced any losses on this account.  The Trust Account is held at Suntrust Bank. Continental Stock Transfer and Trust Company is the trustee of the Trust Account.

Deferred Income Taxes   —   Deferred income taxes are provided for the differences between bases of assets and liabilities for financial reporting and income tax purposes. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

Income Per Share   —   Income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period.

The effect of the 10,000,000 outstanding warrants included in the units issued in connection with the Offering and the 2,075,000 outstanding warrants issued in connection with the private placement has not been considered in the diluted income per share calculation since such warrants are contingently exercisable.

Use of Estimates   —   The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Fair value of Financial Instruments — The following methods and assumptions are used to estimate fair value of each class of financial instruments for which it is practical to estimate.

The fair value of the Company's assets and liabilities that qualify as financial instruments under SFAS No. 107 "Disclosures about Fair Value of Financial Instrument," approximate their carrying amounts presented in the balance sheet December 31, 2008 and 2007.

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Recent Accounting Pronouncements   —   In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141R”), which establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree.  SFAS 141R also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.  SFAS 141R will apply to us with respect to any acquisitions that we complete on or after January 1, 2009.

In December 2007, the FASB released SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51 (“SFAS 160”), which establishes accounting and reporting standards for the ownership interests in subsidiaries held by parties other than the parent and for the deconsolidation of a subsidiary.  SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interest of the parent and the interests of the non-controlling owners. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008.  SFAS 160 will apply to us with respect to any acquisitions, that we complete on or after January 1, 2009, which will result in a noncontrolling interest.

In June 2008, the FASB ratified EITF Issue No. 07-5, “Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock” (“EITF 07-5”).  EITF 07-5 provides guidance on how to determine if certain instruments or embedded features are considered indexed to our own stock, including instruments similar to our convertible notes and warrants to purchase our stock.  EITF 07-5 requires companies to use a two-step approach to evaluate an instrument’s contingent exercise provisions and settlement provisions in determining whether the instrument is considered to be indexed to its own stock and exempt from the application of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”.  Although EITF 07-5 is effective for fiscal years beginning after December 15, 2008, any outstanding instrument at the date of adoption will require a retrospective application of the accounting through a cumulative effect adjustment to retained earnings upon adoption.  The Company is currently evaluating the impact that adoption of EITF 07-5 will have on its financial statements.

In September 2006 the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 157,  Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurement. SFAS No. 157 also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under SFAS No. 157, fair value measurements are disclosed by level within that hierarchy. In February 2008, the FASB issued FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157, which permits a one-year deferral for the implementation of SFAS No. 157 with regard to nonfinancial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis. The Company adopted SFAS No. 157 for the fiscal year beginning January 1, 2008, except for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis for which delayed application is permitted until the Company’s fiscal year beginning January 1, 2009. The Company is currently assessing the potential effect of the adoption of the remaining provisions of SFAS No. 157 on its financial position, results of operations and cash flows. The adoption of the remaining provisions of SFAS No. 157 is not expected to have a material impact on the Company's financial position, results of operations or cash flows.

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

2.    Initial Public Offering

On October 29, 2007, the Company sold 10,000,000 Units at a price of $8.00 per unit. Each unit consists of one share of the Company’s common stock and one warrant. Each warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $5.25 commencing on the later of the completion of a Business Combination and 12 months from the Effective Date and expiring four years from the Effective Date. The Company may redeem all of the warrants, at a price of $.01 per warrant upon 30 days’ notice while the warrants are exercisable, only in the event that the last sale price of the common stock is at least $11.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to the date on which notice of redemption is given. In accordance with the warrant agreement relating to the warrants to be sold and issued in the Offering, the Company is only required to use its best efforts to maintain the effectiveness of the registration statement covering the warrants. The Company will not be obligated to deliver securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective at the time of exercise. Additionally, in the event that a registration is not effective at the time of exercise, the holder of such warrant shall not be entitled to exercise such warrant and in no event (whether in the case of a registration statement not being effective or otherwise) will the Company be required to net cash settle the warrant exercise. Consequently, the warrants may expire unexercised and unredeemed.

The Company agreed to pay the underwriters in the Offering an underwriting discount of 7.0% of the gross proceeds of the Offering. The underwriters were paid an underwriting discount of 3.0% of the gross proceeds of the Offering at closing. However, the underwriters have agreed that 4.0% of the underwriting discounts will not be payable unless and until the Company completes a Business Combination (See Note 3).

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3.   Deferred Underwriters’ Discounts and Commissions

      Deferred underwriters’ discounts and commissions at December 31, 2008 and 2007 were $3,200,000.  The underwriters (i) have agreed that deferred underwriting discounts (equal to 4.0% of the underwriting discounts) will not be payable unless and until the Company completes a Business Combination; (ii) have waived their right to receive such payment upon the Company’s liquidation if it is unable to complete a Business Combination; and (iii) will forfeit, on a pro rata basis, to pay converting stockholders (as described in Note 1).

4.    Notes Payable to Stockholder

The Company issued an unsecured promissory note in an aggregate principal amount of $150,000 to a stockholder of the Company on June 4, 2007. The note was non-interest bearing and was payable on the earlier of June 4, 2008 or the consummation of a Business Combination. The Company repaid this note on January 7, 2008. The Company issued a second unsecured promissory note in an aggregate principal amount of $65,000 to a stockholder of the Company on October 19, 2007. The note was non-interest bearing and was payable on October 18, 2008.  The Company repaid this note on October 29, 2007.

5.    Commitments and Related Party Transactions

The Company presently occupies office space provided by an affiliate of one of the Founders. This affiliate has agreed that, until the Company consummates a Business Combination, it will make such office space, as well as certain office and secretarial services, available to the Company, as may be required by the Company from time to time. The Company has agreed to pay such affiliate a total of $7,500 per month for such services commencing on the Effective Date. The Company records this fee as rent expense.  The Company recorded $90,000 and $16,694 respectively in rent expense under this agreement during the year ended December 31, 2008 and the period from May 14, 2007 (inception) to December 31, 2007, respectively.

Pursuant to letter agreements entered into among the Founders,  the Company and the underwriters, the Founders have waived their right to receive distributions with respect to their founding shares upon the Company’s liquidation.

Secure America Acquisition Holdings, LLC, the principal initial stockholder of the Company, purchased a total of 2,075,000 warrants (“Founder Warrants”) at $1.00 per Warrant (for an aggregate purchase price of $2,075,000) from the Company in a private placement. This private placement took place immediately prior to the consummation of the Offering. All of the proceeds received from this purchase were placed in the Trust Account. The Founder Warrants are identical to the warrants offered in the Offering, except that (i) the Founder Warrants are not subject to redemption, (ii) the Founder Warrants may be exercised on a cashless basis while the warrants included in the units sold in this offering cannot be exercised on a cashless basis, (iii) upon an exercise of the Founder Warrants, the holders of the Founder Warrants will receive unregistered shares of our common stock, and (iv) subject to certain limited exceptions, the Founder Warrants are not transferable until they are released from escrow, as described below, which would only be after the consummation of a Business Combination. The Founder Warrants are differentiated from warrants sold as part of the units in the Offering through legends contained on the certificates representing the Founder Warrants indicating the restrictions and rights specifically applicable to such Founder Warrants.

Secure America Acquisition Holdings, LLC, the holder of the Founder Warrants, is beneficially owned by two of the Company’s independent directors. The Company determined that the purchase price of $1.00 per Founder Warrant was above the average trading price for warrants of similarly structured blank check companies. Accordingly, the Company concluded that the purchase price of the Founder Warrants was greater than the fair value of the warrants included in the Units and, therefore, the Company did not record compensation expense upon purchase of the Founder Warrants.

Exercising warrants on a “cashless basis” means that, in lieu of paying the aggregate exercise price for the shares of common stock being purchased upon exercise of the warrant in cash, the holder forfeits a number of shares issuable upon exercise of the warrant with a market value equal to such aggregate exercise price. Accordingly, the Company will not receive additional proceeds to the extent the Founder Warrants are exercised on a cashless basis.

Warrants included in the Units sold in the Offering are not exercisable on a cashless basis and the exercise price with respect to these warrants will be paid directly to the Company. The Founder Warrants have been placed in an escrow account at Continental Stock Transfer and Trust Company, acting as escrow agent, and will not be released from escrow until the later of (i) one year after the consummation of the Offering and (ii) sixty days after the consummation of the Company’s initial Business Combination.

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Except for transfers to members of Secure America Acquisition Holdings, LLC, the Founder Warrants are not transferable (except in limited circumstances) or salable by the purchaser until the Company consummates a Business Combination, and are non-redeemable so long as the purchaser or a member transferee holds such warrants. The holders of Founder Warrants and the underlying shares of common stock are entitled to registration rights to enable their resale commencing on the date such warrants become exercisable. The Company has elected to make the Founder Warrants non-redeemable in order to provide the purchaser and its member transferees a potentially longer exercise period for those warrants because they bear a higher risk while being required to hold such warrants until the consummation of a Business Combination. With those exceptions, the Founder Warrants have terms and provisions that are substantially identical to those of the warrants sold as part of the units in the Offering.

Prior to their release from escrow, the Founder Warrants may be transferred to (i) persons or entities controlling, controlled by, or under common control with Secure America Acquisition Holdings, LLC, or to any stockholder, member, partner or limited partner of such entity, or (ii) family members and trusts of permitted assignees for estate planning purposes, or, upon the death of any such person, to an estate or beneficiaries of permitted assignees; in each case, such transferees will be subject to the same transfer restrictions as Secure America Acquisition Holdings, LLC until after the Company completes its initial Business Combination. If the purchaser or member transferees acquire warrants for their own account in the open market, any such warrants will be redeemable. If the Company’s other outstanding warrants are redeemed and the market price of a share of the Company’s common stock rises following such redemption, holders of the Founder Warrants could potentially realize a larger gain on exercise or sale of those warrants than is available to other warrant holders, although the Company does not know if the price of its common stock would increase following a warrant redemption. If the Company’s share price declines in periods subsequent to the redemption of the warrants and Secure America Acquisition Holdings, LLC or one of its existing members continue to hold the Founder Warrants, the value of the Founder Warrants still held by such persons may also decline.

The Company’s outside counsel has agreed to waive claims against the Trust Account and to defer a portion of fees incurred until either a Business Combination is consummated or the Company is liquidated. In exchange for outside counsel taking this business risk, the Company has agreed to reimburse outside counsel for fees incurred plus a premium in the event a Business Combination is consummated. As of December 31, 2008, the amount of legal fees that was unbilled and contingently payable, including the potential premium, was $991,700.

6.    Common Stock

The Company has reserved 12,075,000 shares of common stock for issuance for the exercise of the Founder Warrants and the warrants sold in the Offering.

7.    Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.

The agreement with the underwriters prohibits the Company, prior to a Business Combination, from issuing preferred stock which participates in the proceeds of the Trust Account or which votes as a class with the Common Stock on a Business Combination.

8.    Income Taxes

  The provision for income taxes consists of the following:

				For the period May 14,
	For the period ended			2007 (Inception) to
	December 31, 2008			December 31, 2007
Current:
Federal	$	345,139		$	170,825
State		53,975			27,557
Deferred:
Federal		(107,851	)		(26,058	)
	$	291,263		$	172,324

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   The total provision for income taxes differs from that amount which would be computed by applying the U.S. federal income tax rate to income before provision for income taxes due to the following:

				For the period May 14,
	For the period ended			2007 (Inception) to
	December 31, 2008			December 31, 2007
Federal statutory rate		34	%		34	%
State tax, net of income tax benefit		4			4
Increase in valuation allowance	2				-
		40	%		38	%

The tax effect of temporary differences that give rise to the net deferred tax asset is as follows:

	December 31, 2008		December 31, 2007
Interest income deferred for reporting purposes	$	13,046	$	-
Expenses deferred for incomes tax purposes		137,710		29,957
Subtotal		150,756		29,957
Valuation allowance		16,847		3,899
Net deferred tax asset		133,909		26,058

The Company is considered to be in the development stage for income tax reporting purposes. Federal income tax regulations require that the Company defer substantially all of its operating expenses for tax purposes until the Company begins business operations. These expenses will be deductible for income tax purposes over a period of time when a trade or business, as defined in the Internal Revenue Code, begins operations or in the event the Company liquidates. The deferred tax asset titled “Expenses deferred for income tax purposes” relates to the future benefit the Company will receive when it is able to deduct these costs for income tax purposes. In recognition of the uncertainty regarding the ultimate amount of income tax benefits to be derived, the Company has recorded a valuation allowance against substantially all of the state portion of its deferred tax asset because it believes that based on current operations at December 31, 2008, it may not be able to fully utilize this asset.

There have been no audits of the Company’s tax returns since inception and all years remain open to tax examination.

9. Fair Value of Financial Instruments

Effective January 1, 2008 the Company adopted Statement No. 157, Fair Value Measurements.  Statement No. 157 applies to all assets and liabilities that are being measured and reported on a fair value basis.  Statement No. 157 requires new disclosure that establishes a framework for measuring fair value in GAAP, and expands disclosure about fair value measurements.  This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values.  The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to Statement No. 157.  At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis by level within the hierarchy.

	December 31, 2008
	Total		Level 1		Level 2		Level 3
Funds Held in Trust	$	79,330,205	$	79,330,205	$	—	$	—
Total assets	$	79,330,205	$	79,330,205	$	—	$	—

The Company’s restricted funds held in the Trust Account are invested in a money market that invests in U.S. Government securities. This investment is considered to be highly liquid and easily tradable.

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