UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

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

Commission file number 000-54206

L&L ACQUISITION CORP.

(Exact Name of Registrant as Specified in its Charter)

Delaware		27-3109518
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

265 Franklin Street, 20^th Floor, Boston, MA 02110
(Address of Principal Executive Offices, Including Zip Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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

Large Accelerated Filer o		Accelerated Filer o		Non-Accelerated Filer o		Smaller reporting company þ
				(Do not check if a smaller reporting company)

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

As of May 12, 2011, the registrant had 5,000,000 shares of common stock, par value $0.0001 per share, outstanding.

 

 

L&L Acquisition Corp. and Subsidiary
(a development stage company)

Form 10-Q
For the Quarterly Period Ended March 31, 2011

TABLE OF CONTENTS

		Page No.
PART I: FINANCIAL INFORMATION
Item 1. Condensed Consolidated
Financial Statements (Unaudited)			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations			4
Condensed Consolidated Statements of Changes in Stockholders’ Equity			5
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3. Quantitative and Qualitative Disclosures About Market Risk			19
Item 4. Controls and Procedures			19
PART II: OTHER INFORMATION
Item 1. Legal Proceedings			20
Item 1A. Risk Factors			20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			20
Item 3. Defaults Upon Senior Securities			20
Item 5. Other Information			20
Item 6. Exhibits			20
SIGNATURES			21
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

PART I— FINANCIAL INFORMATION

Item 1.		Financial Statements.

L&L Acquisition Corp. and Subsidiary
(a development stage company)

CONDENSED CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,
		2011				2010
		(unaudited)				(audited)
ASSETS
Current assets
Cash and cash equivalents		$	342,832			$	815,026
Restricted cash held in Trust Account			40,416,418				40,404,326
Prepaid expenses			71,809				84,187
Total assets		$	40,831,059			$	41,303,539
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accrued expenses		$	141,808			$	198,300
Franchise taxes payable			45,000				18,735
Total current liabilities			186,808				217,035
Deferred underwriting compensation			331,300				331,300
Deferred legal fees relating to the offering			100,000				100,000
Due to Sponsor			—				260,000
Total liabilities			618,108				908,335
Common stock subject to possible redemption, 3,480,000 shares (at redemption value)			35,148,000				35,148,000
Common stock, $.0001 par value, 100,000,000 shares authorized; 5,000,000 shares issued and outstanding at March 31, 2011 and 5,150,000 shares issued and outstanding at December 31, 2010 (includes 3,480,000 shares subject to possible redemption)			500				515
Additional paid-in capital			5,404,734				5,404,719
Deficit accumulated during development stage			(340,283	)			(158,030	)
Total stockholders’ equity			5,064,951				5,247,204
Total liabilities and stockholders’ equity		$	40,831,059			$	41,303,539

See accompanying notes to condensed consolidated financial statements.

L & L Acquisition Corp. and Subsidiary
(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

						Period from
						July 26, 2010
		Three months ended				(inception) through
		March 31, 2011				March 31, 2011
Revenue		$	—			$	—
General and administrative expenses			194,408				356,819
Loss from operations			(194,408	)			(356,819	)
Interest and dividend income			12,155				16,536
Loss before provision for income taxes			(182,253	)			(340,283	)
Provision for income taxes			—				—
Net loss attributable to common shares outstanding		$	(182,253	)		$	(340,283	)
Weighted average number of common shares outstanding — basic and diluted			5,011,667				3,227,682
Net loss per share outstanding — basic and diluted		$	(0.04	)		$	(0.11	)
Two Class Method:
Weighted average number of common shares outstanding subject to possible redemption			3,480,000				1,732,955
Net loss per common share outstanding subject to possible redemption		$	0.00			$	0.00
Weighted average number of common shares outstanding, excluding shares subject to possible redemption — basic and diluted			1,531,667				1,494,727
Net loss per common share outstanding subject to possible redemption - basic and diluted		$	(0.12	)		$	(0.23	)

See accompanying notes to condensed consolidated financial statements.

L & L Acquisition Corp. and Subsidiary
(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

														Deficit
														Accumulated
		Common Stock								Additional				During				Total
						Amount				Paid-in				Development				Stockholders’
		Shares				$.0001 par				Capital				Stage				Equity
Sale of common stock issued to initial stockholders on July 28, 2010 at $.017 per share			1,437,500			$	144			$	24,856			$	—			$	25,000
Forfeiture of common stock issued to initial stockholders on November 22, 2010			(287,500	)			(29	)			29
Sale of 4,000,000 units, net of underwriters’ discount and offering expenses (including 3,480,000 shares subject to possible redemption)			4,000,000				400				38,247,834								38,248,234
Net proceeds subject to possible redemption of 3,480,000 shares											(35,148,000	)							(35,148,000	)
Sale of private placement warrants											2,280,000								2,280,000
Net loss attributable to common shares			—				—				—				(158,030	)			(158,030	)
Balance, December 31, 2010 (audited)			5,150,000				515				5,404,719				(158,030	)			5,247,204
Forfeiture on January 8, 2011 of common stock issued to initial stockholders			(150,000	)			(15	)			15
Net loss attributable to common shares			—				—				—				(182,253	)			(182,253	)
Balance, March 31, 2011 (unaudited)			5,000,000			$	500			$	5,404,734			$	(340,283	)		$	5,064,951

See accompanying notes to condensed consolidated financial statements.

L & L Acquisition Corp. and Subsidiary
(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

						Period from
						July 26, 2010
		Three months ended				(inception) through
		March 31, 2011				March 31, 2011
Cash Flows from Operating Activities
Net loss		$	(182,253	)		$	(340,283	)
Adjustments to reconcile net loss to net cash used in operating activities:
Dividend income earned on cash held in Trust Account			(12,092	)			(16,418	)
Change in operating assets and liabilities
(Increase) decrease in prepaid expenses			12,378				(71,809	)
Increase (decrease) in accrued expenses and other liabilities			(56,492	)			13,376
Increase in franchise taxes payable			26,265				45,000
Net cash used in operating activities			(212,194	)			(370,134	)
Cash Flows from Investing Activities
Cash held in Trust Account			—				(40,400,000	)
Cash Flows from Financing Activities
Proceeds from notes payable, stockholders			—				75,000
Payments of notes payable, stockholders			—				(75,000	)
Proceeds from issuance of stock to initial stockholders			—				25,000
Proceeds from public offering			—				40,000,000
Proceeds from issuance of warrants			—				2,280,000
Payment of offering costs			—				(1,192,034	)
Advance from Sponsor			—				260,000
Repayment of advance from Sponsor			(260,000	)			(260,000	)
Net cash provided by (used in) financing activities			(260,000	)			41,112,966
Net increase (decrease) in cash			(472,194	)			342,832
Cash and cash equivalents at beginning of the period			815,026				—
Cash and cash equivalents at end of the period		$	342,832			$	342,832
Supplemental schedule of non-cash financial activities:
Accrual for offering costs and other expenses		$	128,432			$	128,432
Deferred underwriters’ compensation		$	331,300			$	331,300
Deferred legal fees related to the offering		$	100,000			$	100,000

See accompanying notes to condensed consolidated financial statements.

L&L Acquisition Corp. and Subsidiary
(a development stage company)

1. Description of Organization and Business Operations

L&L Acquisition Corp. and Subsidiary (collectively, the “Company”), a corporation in the development stage, was incorporated in Delaware on July 26, 2010. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets that we have not yet identified (a “Business Combination”). The Company has neither engaged in any operations nor generated significant revenue to date with the exception of interest income. The Company is considered to be in the development stage as defined in the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification, or ASC 915, “Development Stage Entities,” and is subject to the risks associated with activities of development stage companies. The Company has selected December 31 as its fiscal year end.

At March 31, 2011, the Company had not commenced any operations. All activity through March 31, 2011 relates to the Company’s formation and initial public offering (the “Offering”) described below.

The registration statement for the Offering was declared effective on November 23, 2010. The Company consummated the Offering on November 29, 2010 and received net proceeds of $38,248,234, before deducting deferred underwriting compensation of $1,000,000 and includes $200,000 received for the purchase of 266,667 warrants by the underwriters. 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. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

Upon the closing of the Offering and the private placement of warrants, $40,400,000 was placed in a trust account (“Trust Account”) and invested in U.S. “government securities,” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 (the “1940 Act”) with a maturity of 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the 1940 Act, until the earlier of (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account as described below.

The Company, after signing a definitive agreement for the acquisition of one or more target businesses or assets, will not submit the transaction for stockholder approval, unless otherwise required by law. The Company will proceed with a Business Combination if it is approved by the board of directors. In the event that the Company is required to seek stockholder approval in connection with its initial Business Combination, it will proceed with a Business Combination if a majority of the outstanding shares of common stock voted are voted in favor of a Business Combination. In connection with such a vote, if a Business Combination is approved and completed, stockholders that vote against a Business Combination and elect to put their shares of common stock back to the Company

for cash will be entitled to receive their pro-rata portion of the Trust Account as follows: (i) public stockholders voting against a Business Combination and electing to put shares of common stock to the Company shall be entitled to receive a per share pro-rata portion of the Trust Account excluding interest and net of franchise and income taxes payable and (ii) public stockholders voting in favor of a Business Combination and electing to put shares of common stock to the Company shall be entitled to receive a per share pro-rata portion of the Trust Account together with interest thereon but net of franchise and income taxes payable. These shares of common stock will be recorded at a fair value and classified as temporary equity upon the completion of the Offering, in accordance with FASB ASC 480, “Distinguishing Liabilities from Equity.” John L. Shermyen, LLM Structured Equity Fund L.P., and LLM Investors L.P. (the “Sponsors”) and John A. Svahn, E. David Hetz, Alan W. Pettis, William A. Landman, Diane M. Daych, Mitchell Eisenberg, M.D. and Alan R. Hoops (collectively with the Sponsors, the “initial stockholders”) have agreed, in the event the Company is required to seek stockholder approval of a Business Combination, to vote their initial shares in accordance with the majority of the votes cast by the public stockholders and to vote any public shares purchased during or after the offering in favor of a Business Combination. The initial stockholders have also agreed to vote shares of common stock acquired by them in the Offering or in the aftermarket in favor of a Business Combination submitted to the Company’s stockholders for approval.

The Company’s Sponsors, officers and directors have agreed that the Company will only have 18 months from November 23, 2010, the date of the closing for the Offering, to consummate a Business Combination. If the Company does not consummate a Business Combination within such 18 month period, it shall (i) cease all operations except for the purposes of winding up, (ii) as promptly as reasonably possible, but not more than two business days thereafter, redeem 100% of its public shares for cash equal to their pro-rata share of the aggregate amount then on deposit in the Trust Account (including interest), less franchise and income taxes payable, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and subject to the requirement that any refund of income taxes that were paid from the Trust Account which is received after the redemption shall be distributed to the former public stockholders, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its board of directors, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The initial stockholders have waived their rights to participate in any redemption with respect to their initial shares. However, the initial stockholders acquired shares of common stock in the Offering, entitling them to a pro-rata share of the Trust Account upon the Company’s redemption or liquidation in the event the Company does not consummate a Business Combination within the required time period. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Offering.

2. Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements as of March 31, 2011, the results of operations and cash flows for the period from July 26, 2010 (inception) through March 31, 2011, have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements of L&L Acquisition Corp. In the opinion of management, all adjustments necessary for a fair presentation have been included and are of a normal recurring nature. Interim results are not necessarily indicative of the results that may be expected for any other interim period or for the full year.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the period ended December 31, 2010 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2011. The December 31, 2010 balance sheet and the changes in stockholders’ equity through December 31, 2010 have been derived from those audited financial statements. The accounting policies used in preparing these unaudited financial statements are consistent with those derived in the December 31, 2010 audited financial statements.

Principles of Consolidation

The Company’s consolidated financial statements include the accounts of L&L Acquisition Corp. and its wholly-owned subsidiary, L&L Acquisition Securities Corp. (“Subsidiary”). All significant intercompany balances and transactions have been eliminated in consolidation.

Development Stage Company

The Company complies with the reporting requirements of FASB ASC 915, “Development Stage Entities.” At March 31, 2011, the Company has not commenced any operations nor generated revenue. All activity through March 31, 2011 relates to the Company’s formation and the Offering. Following such offering, the Company will not generate any operating revenues until after completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest and dividend income on the designated Trust Account after the Offering.

Net Loss Per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. At March 31, 2011, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common share for the period. The Company’s statements of operations include a presentation of income per share for common stock subject to possible redemption in a manner similar to the two-class method of income per share. Net income per common share, basic and diluted amount for the maximum number of shares subject to possible redemption is calculated by dividing the income, net of applicable income taxes and franchise taxes, attributable to common shares subject to redemption by the weighted average number of common shares subject to possible redemption.

Concentration of Credit Risk

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

Investments held in the Trust Account

The amounts held in the Trust Account represent substantially all of the proceeds of the Offering and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination. The funds held in the Trust Account are invested in a money market mutual fund that meets the conditions of Rule 2a-7 of the 1940 Act. The Company considers the investment in the money market mutual fund to be a cash equivalent.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet due to their short-term nature.

Redeemable common stock

The Company accounts for redeemable common stock that is redeemable for cash or other assets, by classifying it outside of permanent equity if it is redeemable at the option of the holder. In addition, the amount of common stock subject to redemption is classified outside of permanent equity to the extent that such redemption does not cause a liquidation event.

Accordingly, 3,480,000 shares of common stock have been classified outside of permanent equity at redemption value. The Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying value of common stock subject to redemption equal its redemption value at the end of each reporting period.

Cash and cash equivalents

The Company considers all highly-liquid instruments with original maturities of three months or less to be cash equivalents.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

The Company complies with the accounting and reporting requirements of FASB ASC 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company has the following deferred tax assets and liabilities at March 31, 2011:

Noncurrent assets and liabilities:
Net operating loss carryforwards		$	25,000
Amortizable start-up costs			110,000
			135,000
Valuation allowance			(135,000	)
Net noncurrent deferred tax asset		$	—

The Company has net operating losses amounting to approximately $64,000 that expire in 2030. The ultimate realization of the net operating losses is dependent upon future taxable income, if any, of the Company and may be limited in any one period by alternative minimum tax rules. Although management believes that the Company will have sufficient future taxable income to absorb the net operating loss carryovers before the expiration of the carryover period, the current global economic recession imposes additional profitability risks that are beyond the Company’s control. Accordingly, management has determined that a full valuation allowance of the deferred tax asset is appropriate at this time.

Internal Revenue Code Section 382 imposes limitations on the use of net operating loss carryovers when the stock ownership of one or more 5% stockholders (stockholders owning 5% or more of the Company’s outstanding capital stock) has increased by more than 50 percentage points. Management cannot control the ownership changes occurring as a result of public trading of the Company’s common stock. Accordingly, there is a risk of an ownership change beyond the control of the Company that could trigger a limitation of the use of the loss carryover.

The Company established a valuation allowance of $135,000 as of March 31, 2011, which fully offset the deferred tax assets of $135,000. The deferred tax asset results from applying an effective combined federal and state tax rate of 40% to start-up costs of approximately $277,000 and net operating losses of approximately $64,000. Effective tax rates differ from statutory rates due to timing differences in the deductibility of expenses.

The statutory federal income tax rate and the effective rate are reconciled as follows:

Statutory federal income tax rate			34	%
State and local taxes, net of federal tax benefit			6	%
Valuation allowance			(40	)%
			0	%

There were no unrecognized tax benefits as of March 31, 2011. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at March 31, 2011. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities for all years since its inception. The adoption of the provisions of ASC 740 did not have a material impact on the Company’s financial position and results of operations and cash flows as of and for the period July 26, 2010 (date of inception) to March 31, 2011.

Recently Issued Accounting Standards

In January 2010, the FASB issued “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements,” which provides guidance on how investment assets and liabilities are to be valued and disclosed. Specifically, the amendment requires reporting entities to disclose (i) the input and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements, for Level 2 or Level 3 positions, (ii) transfers between all levels (including Level 1 and Level 2) will be required to be disclosed on a gross basis (i.e., transfers out must be disclosed separately from transfers in) as well as the reason(s) for the transfers and (iii) purchases, sales, issuances and settlements must be shown on a gross basis in the Level 3 rollforward rather than as one net number. The effective date of the amendment is for interim and annual periods beginning after December 15, 2009. However, the requirement to provide the Level 3 activity for purchases, sales, issuances and settlements on a gross basis will be effective for interim and annual periods beginning after December 15, 2010. The adoption of the amendment did not have a material impact on the Company’s condensed consolidated financial statements.

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

3. Initial Public Offering

On November 29, 2010, the Company sold to the public 4,000,000 units at $10 per unit (“Units”). Each Unit consists of one share of the Company’s common stock, $0.0001 par value, and one redeemable common stock purchase warrant (“Warrant”). Each Warrant will entitle the holder to purchase from the Company one share of common stock at an exercise price of $11.50 commencing on the later of (a) 30 days after the completion of a Business Combination or (b) one year from November 23, 2010, the date of the prospectus for the Offering, and will expire five years from the consummation of a Business Combination. The Warrants will be redeemable by the Company at a price of $0.01 per Warrant upon 30 days prior notice after the Warrants become exercisable, only in the event that the last sale price of the common stock is at least $17.50 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given.

4. Related Party Transactions

In July 2010, Mr. Shermyen, LLM Structured Equity Fund L.P. and LLM Investors L.P. purchased an aggregate of 1,437,500 shares of the Company’s common stock, for an aggregate purchase price of $25,000, or approximately $0.0174 per share. Subsequently, on November 22, 2010, Mr. Shermyen, LLM Structured Equity Fund L.P. and LLM Investors L.P. each returned to the Company an aggregate of 287,500 of such initial shares, which have been cancelled. These shares are referred to as the “initial shares” and consist of (i) 511,111 shares (66,667 of which have been forfeited during the three months ended March 31, 2011 as the underwriters’ over-allotment option was not exercised in full) which will be held in escrow until the first anniversary of a Business Combination and (ii) 638,889 shares (83,333 of which have been forfeited during the three months ended March 31, 2011 as the underwriters’ over-allotment option was not exercised in full) which will be held in escrow and forfeited on the fifth anniversary of a Business Combination unless, prior to such time, either (x) the last sales price of the Company’s common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period or (y) a transaction is consummated following a Business Combination in which all stockholders have the right to exchange their common stock for cash consideration which equals or exceeds $18.00 per share. Subsequent to the purchase of these shares, (i) Mr. Shermyen transferred at cost an aggregate of 58,219 of these shares to William A. Landman and Mitchell Eisenberg, M.D., each of whom is a member of the Company’s advisory board, and Alan W. Pettis, E. David Hetz and Diane M. Daych, each of whom is a director, (ii) LLM Investors L.P. transferred at cost an aggregate of 2,197 of these shares to E. David Hetz and Diane M. Daych and (iii) LLM Structured Equity Fund L.P. transferred at cost an aggregate of 56,022 of these shares to Alan R. Hoops, a member of our advisory board, John A. Svahn, a director, E. David Hetz and Diane M. Daych. The Company’s initial stockholders have contractually agreed with the Company that they will have no ability to vote any of the 638,889 shares being held in escrow until such time, if ever, that such shares are released to them.

The Sponsors, certain of the Company’s directors and advisors and the underwriters purchased, in a private placement, 3,040,000 Warrants (“Sponsor Warrants”) prior to the Offering at a price of $0.75 per Warrant (a purchase price of $2,280,000) from the Company. Based on the observable market prices, the Company believes that the purchase price of $0.75 per Warrant for such Sponsor Warrants exceeds the fair value of such Sponsor Warrants on the date of the purchase. The valuation is based on comparable initial public offerings by other blank check companies. The holders have agreed that such Sponsor Warrants will not be sold or transferred until 30 days following consummation of a Business Combination, subject to certain limited exceptions. If the Company does not complete a Business Combination, then the proceeds will be part of the liquidating distribution to the public stockholders and the Sponsor Warrants issued to such holders will expire worthless. The Company intends to classify the Sponsor Warrants within permanent equity as additional paid-in capital in accordance with FASB ASC 815, “Derivatives and Hedging”.

In connection with the Offering, the Sponsors purchased 586,400 Units at $10 per Unit on November 29, 2010.

Also in connection with the Offering, LLM Structured Equity Fund L.P. advanced the Company $260,000 on November 29, 2010. This advance was repaid by the Company on January 7, 2011.

Commencing on November 29, 2010, the Company entered into an Administrative Services Agreement with LLM Capital Partners LLC for an aggregate monthly fee of $7,500 for office space, general and administrative services. This agreement will expire upon the earlier of: (a) the successful completion of the Company’s Business Combination, (b) 18 months from November 23, 2010, the date of the prospectus for the Offering, or (c) the date on which the Company is dissolved and liquidated.

The initial stockholders are entitled to registration rights pursuant to a registration rights agreement entered into on November 23, 2010, the date of the prospectus for the Offering. The initial stockholders are entitled to demand registration rights and certain “piggy-back” registration rights with respect to their shares of common stock, the Warrants and the common stock underlying the Warrants, commencing on the date such common stock or Warrants are released from escrow. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

5. Commitments and Contingencies

The Company granted the underwriters a 45-day option to purchase up to 600,000 additional Units to cover the over-allotment at the initial public offering price less the underwriting discounts and commissions. This option was not exercised by the underwriters.

The underwriters will be entitled to two and one half percent (2.5%) of the funds released from the Trust Account to the Company or the target upon closing of a Business Combination, which shall be paid as a placement fee to Morgan Joseph LLC or such other firms, if any, who are instrumental in advising the Company with respect to the completion of a Business Combination.

6. Fair Value Measurement

The Company complies with Fair Value measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2011 and December 31, 2010, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair value determined by Level 2 inputs utilize data points that are observable such as quoted prices in markets that are not active, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.

Financial Assets at Fair Value as of March 31, 2011 (unaudited)

										Significant
						Quoted Prices				Other
						in				Observable				Unobservable
		Fair Value				Active Markets				Inputs				Inputs
Description		March 31, 2011				(Level 1)				(Level 2)				(Level 3)
Assets
Restricted cash held in Trust Account		$	40,416,418			$	40,416,418			$	—			$	—
Total		$	40,416,418			$	40,416,418			$	—			$	—

Financial Assets at Fair Value as of December 31, 2010 (audited)

										Significant
						Quoted Prices				Other
						in				Observable				Unobservable
		Fair Value				Active Markets				Inputs				Inputs
Description		December 31, 2010				(Level 1)				(Level 2)				(Level 3)
Assets
Restricted cash held in Trust Account		$	40,404,326			$	40,404,326			$	—			$	—
Total		$	40,404,326			$	40,404,326			$	—			$	—

The fair values of the Company’s cash and cash equivalents held in the Trust Account are determined through market, observable and corroborated sources.

The carrying amounts reflected in the balance sheet for other current assets and accrued expenses approximate fair value due to their short-term maturities.

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

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events, and we assume no obligation to update any such forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause our future results to differ from those statements include, but are not limited to, those described in the section entitled “Risk Factors” of the prospectus filed with the SEC in connection with our initial public offering. The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this report and with the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010.

Overview

L&L Acquisition Corp. is a newly-organized blank check company formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business combination, which we refer to throughout this Quarterly Report on Form 10-Q as a business combination, with one or more operating businesses or assets that we have not yet identified. We intend to focus on businesses in the healthcare industry or healthcare-related assets, but we may pursue opportunities in other business sectors. We have not identified any acquisition target. Unlike many other blank check companies, we are not required to consider a target’s valuation when entering into or consummating a business combination. We will have considerable flexibility in identifying and selecting a prospective acquisition target, except that we will not acquire another blank check company or a similar type of company. Our sponsors, officers and directors have agreed that we will only have 18 months from the closing of the initial public offering to consummate a business combination.

Results of Operations

For the three months ended March, 31, 2011, we had a net loss of $182,253 consisting of interest and dividend income of $12,155 less costs attributable to general and administrative expenses of $194,408.

Through March 31, 2011, we did not engage in any significant operations. Our activities from inception through March 31, 2011 were to prepare for our initial public offering and to begin the identification of a suitable business combination candidate.

We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant based on the current low interest rates on risk-free investments (treasury securities). We expect our expenses to increase substantially if we consummate a business combination as a result of our acquiring an operating company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

Liquidity and Capital Resources

In July 2010, Mr. Shermyen, LLM Structured Equity Fund L.P. and LLM Investors L.P. purchased an aggregate of 1,437,500 shares of our common stock, for an aggregate purchase price of $25,000, or approximately $0.0174 per share. Subsequently, on November 22, 2010, each of Mr. Shermyen, LLM Structured Equity Fund L.P. and LLM Investors L.P. returned to the Company an aggregate of 287,500 of such initial shares, which we have cancelled. These shares are referred to as the “initial shares” and consist of (i) 511,111 shares (66,667 of which were forfeited as the underwriters’ over-allotment option was not exercised in full) which will be held in escrow until the first anniversary of our initial business combination and (ii) 638,889 shares (83,333 of which were forfeited as the underwriters’ over-allotment option was not exercised in full) which will be held in escrow and forfeited on the fifth anniversary of our initial business combination unless, prior to such time, either (x) the last sales price of our stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period or (y) a transaction is consummated following our initial business combination in which all stockholders have the right to exchange their common stock for cash consideration which equals or exceeds $18.00 per share. Subsequent to the purchase of these shares, (i) Mr. Shermyen transferred at cost an aggregate of 58,219 of these shares to Mr. Landman and Dr. Eisenberg, each of whom is a member of our advisory board, and Messrs. Pettis and Hetz and Ms. Daych, each of whom is a director, (ii) LLM Investors L.P. transferred at cost an aggregate of 2,197 of these shares to Mr. Hetz and Ms. Daych and (iii) LLM Structured Equity Fund L.P. transferred at cost an aggregate of 56,022 of these shares to Mr. Hoops, a member of our advisory board, Mr. Svahn, a director, Mr. Hetz and Ms. Daych. Our initial stockholders have contractually agreed with us that they will have no ability to vote any of the 638,889 shares being held in escrow until such time, if ever, that such shares are released to them.

The sponsors, certain of our directors and advisors and the underwriters purchased, in a private placement, 3,040,000 warrants prior to the initial public offering at a price of $0.75 per warrant (a purchase price of $2,280,000) from us. Based on the observable market prices, we believe that the purchase price of $0.75 per warrant for such warrants exceeds the fair value of such warrants on the date of the purchase. The valuation is based on comparable initial public offerings by other blank check companies. The holders have agreed that such warrants will not be sold or transferred until 30 days following consummation of a business combination, subject to certain limited exceptions. If we do not complete a business combination, then the proceeds will be part of the liquidating distribution to the public stockholders and the warrants issued to such holders will expire worthless.

We consummated our initial public offering of 4,000,000 units at a price of $10 per unit on November 29, 2010. Gross proceeds from our initial public offering were $40,000,000. Total net proceeds were $38,248,234, before deducting deferred underwriting compensation of $1,000,000 and includes $200,000 received for the purchase of 266,667 warrants by the underwriters. Upon the closing of the initial public offering and the private placement of warrants, $40,400,000 was placed in the trust account. We intend to use substantially all of the net proceeds of the initial public offering to acquire a target business, including identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating a business combination. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust account as well as any other net proceeds not expended will be used to finance the operations of the target business. We believe we will have sufficient available funds outside of the trust account to operate through May 29, 2012, assuming that a business combination is not consummated during that time. However, we cannot be certain that this will be the case.

We expect our primary liquidity requirement during this period to include approximately $380,000 for legal, accounting and other expenses associated with due diligence of a prospective target business including structuring, negotiating and documenting a business combination; $150,000 of expenses for the due diligence (excluding accounting and legal due diligence) of prospective target businesses by our officers, directors and sponsors; $125,000 of legal and accounting expenses attendant to the due diligence investigations, structuring and negotiating of a business combination; $30,000 reserve for liquidation expenses; and $75,000 that will be used for other miscellaneous expenses and reserves, including for audit fees, as well as stock transfer agent expenses. We may need to raise additional funds through a private offering of debt or equity securities if such funds are required to consummate a business combination that is presented to the Company. We would only consummate such a financing simultaneously with the consummation of a business combination.

As of March 31, 2011, we had cash outside of the trust account of $342,832 which is available for use by management to cover the costs associated with identifying a business combination candidate and negotiating a related acquisition or merger. Out of the proceeds of our initial public offering which remained available outside of the trust account, we purchased a directors and officers insurance policy covering an 18 month period from November 23, 2010 through May 23, 2012 at a cost of $93,970 and with a prepaid balance at March 31, 2011 of $71,809.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than a monthly fee of $7,500 for office space and general and administrative services payable to LLM Capital Partners LLC, an affiliate of LLM Structured Equity Fund L.P., one of our sponsors, Patrick J. Landers, our President, and Frederick S. Moseley IV, a member of our advisory board and partial owner of LLM Capital Partners LLC. We began incurring this fee on November 29, 2010, and will continue to incur this fee monthly until the completion of a business combination.

Item 3.		Quantitative and Qualitative Disclosures About Market Risk.

To date, our efforts have been limited to organizational activities, activities relating to our initial public offering and the identification of a business combination candidate. We have neither engaged in any operations nor generated any revenues.

As of March 31, 2011, $40,416,418 of the net proceeds of our initial public offering was held in the trust account and is invested in a money market fund meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940. Due to the short-term nature of this investment, we believe there will be no associated material exposure to interest rate risk.

Item 4.		Controls and Procedures.

Disclosure Controls and Procedures

Our management with the participation of our chief executive officer and chief financial officer (the “Certifying Officers”) evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Certifying Officers have concluded that, as of the end of such period, our disclosure controls and procedures were adequate and effective.

Changes in Internal Control over Financial Reporting

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A.		Risk Factors.

There have been no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the period ended December 31, 2010.

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

None.

Item 3.		Defaults Upon Senior Securities.

None.

Item 5.		Other Information.

None.

Item 6.		Exhibits.

(a) List of exhibits

Exhibit
Number				Description
	31.1			Rule 13a-14(a) / Rule 15d-14(a) Certification
	31.2			Rule 13a-14(a) / Rule 15d-14(a) Certification
	32.1			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

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