• may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

• could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

• may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights or a person seeking to obtain control of our company; and

• may adversely affect prevailing market prices for our common stock and/or warrants.

Similarly, if we issue debt securities, it could result in:
• default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

• acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

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

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

Business Combination with Graham Packaging On June 30, 2008, we announced that we had entered into an agreement in principle, subject to execution of a definitive agreement, with the current owners of Graham Packaging Holdings Company, which we refer to as Graham Packaging, pursuant to which Graham Packaging would go public through a transaction with us, with the combined company being renamed Graham Packaging Company.
On July 1, 2008, we entered into an equity purchase agreement (the "Purchase Agreement"), with GPC Holdings, L.P., a Pennsylvania limited partnership ("GPCH"), Graham Packaging Corporation, a Pennsylvania corporation ("GPC"), Graham Capital Company, a Pennsylvania limited partnership ("GCC"), Graham Engineering Corporation, a Pennsylvania corporation ("GEC" and, together with GPCH, GCC and GPC, the "Graham Family Holders"), BMP/Graham Holdings Corporation, a Delaware corporation ("BMP/GHC" and, together with the Graham Family Holders, the "Sellers"), GPC Capital Corp. II, a Delaware corporation ("IPO Corp."), Graham Packaging, and the other parties signatory thereto, pursuant to which through a series of transactions (collectively, the "Transaction"), our stockholders will acquire a majority of the outstanding common stock of IPO Corp., par value $0.01 per share, and IPO Corp. will own, either directly or indirectly, 100% of the partnership interests of Graham Packaging Company, L.P., a Delaware limited partnership (the "Operating Company").
We intend to file a preliminary proxy statement with the SEC with respect to this proposed business combination with Graham Packaging. As of the date of the filing of this Form 10-Q, neither the preliminary proxy statement nor the definitive proxy statement have been filed with the SEC or disseminated to stockholders. We have summarized the terms of the transaction below. Investors are urged to review the preliminary proxy statement and definitive proxy statement, when completed, in their entirety. A more complete description of the transactions described below, including exhibits related thereto, such as the Purchase Agreement, is included in a Current Report on Form 8-K filed on July 8, 2008. We intend to schedule a stockholder meeting following completion of the proxy statement.
In connection with the Transaction, we will (A) purchase an aggregate of 54,440,001 shares of IPO Corp.'s common stock from the Sellers for an aggregate purchase price of $350,000,000 and (B) contribute such shares to IPO Corp. for an equal number of newly-issued shares of IPO Corp.'s common stock to be issued to our stockholders in connection with our immediately subsequent merger with a newly formed subsidiary of the Operating Company. In connection with the merger, IPO Corp. will issue an additional number of shares to our stockholders in an amount equal to 16,559,999 less the number of shares of our common stock that are converted into the right to receive cash pursuant to conversion rights in accordance with our certificate of incorporation, in exchange for all of our then-remaining cash (after payment of expenses and discharge of liabilities).
The merger will be effectuated by converting each outstanding share of our common stock into the right to receive one share of IPO Corp.'s common stock; provided that 2,760,000 shares of our common stock that are held by HH-HACI, L.P., which we refer to as our sponsor, will be converted into shares of IPO Corp.'s common stock that will not have any voting or economic rights unless certain post-closing IPO Corp. common stock trading price targets are met by September 28, 2012. Outstanding warrants to acquire shares of our common stock will be converted into warrants to acquire the same number of shares of IPO Corp.'s common stock on the same terms and conditions as the existing warrants; provided that 2,760,000 warrants that are held by HH-HACI, L.P., which we refer to as our sponsor, will be converted into warrants to acquire shares of IPO Corp.'s common stock with an exercise price of $10 per share and an expiration date of September 28, 2012 that do not become exercisable unless certain post-closing IPO Corp. common stock trading price targets are met.
The Sellers will retain 33,000,000 shares of IPO Corp.'s common stock in the Transaction. In addition, the Sellers will also receive 2,760,000 warrants to purchase shares of IPO Corp.'s common stock and may be entitled to receive additional shares of IPO Corp.'s common stock based on a net debt closing adjustment provided for in the Purchase Agreement. Unexercised options in IPO Corp.'s predecessor will be converted into options to purchase shares of IPO Corp.'s common stock based on an exchange ratio determined in accordance with the Purchase Agreement.
In addition, certain affiliates of BMP/GHC have agreed not to sell, pledge or dispose of, or enter into a swap or other arrangement that transfers the economic consequences of, shares of IPO Corp.'s common stock or warrants or other securities exercisable into shares of IPO Corp.'s common stock for a period of six months after the closing of the Transaction. The Graham Family Holders have agreed to a similar restriction for a period of three months after the closing of the Transaction. After the six month anniversary of the closing of the Transaction, the affiliates of BMP/GHC may engage in such transactions solely to the extent that any such transactions do not cause a change of control, default or acceleration under Graham Packaging's existing credit agreement or indentures.

Each party's obligation to consummate the Transaction is subject to customary closing conditions, including, among others, (i) the approval of the Transaction by our stockholders, in accordance with the terms of our certificate of incorporation; (ii) the absence of any law, injunction, restraining order or decree of any governmental entity that prohibits the consummation of the Transaction; (iii) the expiration of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (iv) the compliance by the other parties with their respective agreements and covenants contained in the Purchase Agreement; and (v) the accuracy of the representations and warranties contained in the Purchase Agreement except, in the case of Graham Packaging, as would not have a material adverse effect on Graham Packaging. In addition, our obligation to consummate the Transaction is also subject to (x) the absence of any default with respect to any payment obligation or financial covenant under any material indebtedness of Graham Packaging or its subsidiaries, including, but not limited to, the Credit Agreement and the Indentures, (y) the termination of certain related-party contracts as set forth in the Purchase Agreement; and
(z) the receipt by Graham Packaging of a legal opinion from its counsel that the consummation of the Transaction will not result in a conflict and default under Graham Packaging's existing credit agreement or indentures. Results of Operations
For the three months ended June 30, 2008 and 2007, we had net income of $498,901 and net loss of $57,595, respectively. For the three months ended June 30, 2008, our income was all derived from interest on the cash held in the trust account established in connection with our initial public offering. For the three months ended June 30, 2007, all expenses related to the formation and operation of the Company. We incurred $336,627 in operational costs during the three months ended June 30, 2008.
For the six months ended June 30, 2008 and for the period from February 26, 2007 (inception) to June 30, 2007, we had net income of $1,618,759 and net loss of $59,771, respectively. For the six months ended June 30, 2008, our income was all derived from interest on the cash held in the trust account established in connection with our initial public offering. For the period February 26, 2007 (inception) to June 30, 2007, all expenses related to the formation and operation of the Company. We incurred $625,538 in operational costs during the six months ended June 30, 2008.
Liquidity and Capital Resources
On October 3, 2007, we consummated our initial public offering of 55,200,000 units (including 7,000,000 units pursuant to the underwriters' over-allotment option) at a price of $10 per unit. We received net proceeds of approximately $536.1 million from the offering and the private placement. Simultaneously with our initial public offering, we consummated a private placement of warrants to purchase shares of our common stock.
As of June 30, 2008, approximately $541 million was held in the trust account. We also had $949,286 of unrestricted cash available outside the trust account for us for our activities in connection with identifying and conducting due diligence of a suitable initial business combination and for general corporate matters. The following table shows the total funds held in the trust account through June 30, 2008:

Net proceeds from our initial public offering, the underwriters'
over-allotment and private placement of warrants that were place in
trust                                                                       $ 518,760,000
Deferred underwriting commissions                                              17,388,000
Total interest earned through June 30, 2008                                     9,682,946
Less total interest disbursed for working capital and payment of taxes
through June 30, 2008                                                          (4,800,000 )

Total funds held in trust account through June 30, 2008                     $ 541,030,946

For the six months ended June 30, 2008, we paid an aggregate of approximately $3.85 million in expenses for the following purpose:
• payment of estimated taxes incurred as a result of interest income earned on funds currently held in the trust account;

• legal and accounting fees related to our SEC reporting obligations and general corporate matters;

• expenses for due diligence and investigation of potential acquisition targets; and

• miscellaneous expenses.

We believe that we will have sufficient funds to allow us to operate through the next twelve months, assuming that an initial business combination is not consummated before that date. Approximately $6.6 million of working capital over this time period will be funded from the interest earned on the funds held in the trust account.
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 $10,000 for office space and general and administrative services payable to Hicks Holdings Operating LLC, an affiliate of our founder and chairman of the board. We began incurring this fee on October 3, 2007, and will continue to incur this fee monthly until the completion of our initial business combination. Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:
Cash and cash equivalents
We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Such cash and cash equivalents, at times, may exceed federally insured limits. We maintain our accounts with financial institutions with high credit ratings.
Cash Held in Trust
A total of $536.1 million of the net proceeds from our initial public offering, including $7.0 million from the private placement and $17.4 million of deferred underwriting commissions, has been placed in a trust account at JPMorgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company serving as trustee. The trust account is invested in, at the option of the Company, U.S. Treasury bills with a maturity of 90 days or less and money market funds meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the Investment Company Act of 1940, as amended. As of June 30, 2008, the balance in the trust account was approximately $541 million, which includes approximately $9.7 million of investment income earned since the inception of the trust (less $4.8 million of interest income disbursed to us), and represents approximately $9.80 per share (excluding 13,800,000 shares of common stock owned by our sponsor and certain of our directors, as such shares do not have liquidation rights). We withdrew from the trust account $4.8 million of interest income for the six months ended June 30, 2008 to pay income taxes on the investment income, to fund due diligence and similar costs relating to the investigation of potential acquisition targets, and to fund general and administrative expenses. Earnings per common share
Earnings per share is computed by dividing net income applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. The weighted average of shares of common stock issued and outstanding of 52,440,001 used for the computation of basic earnings per share for the three months ended June 30, 2008, takes into effect the 11,500,000 shares outstanding for the entire period, 2,300,000 shares from the stock split outstanding from September 27, 2007 and the 55,200,000 shares (less 16,559,999 shares subject to possible redemption) sold in the initial public offering and outstanding since October 3, 2007. The weighted average of shares of common stock issued and outstanding of 11,500,000 used for the computation of basic earnings per

share for the three months ended June 30, 2007, takes into effect the 11,500,000 shares outstanding for the entire period. The weighted average of shares of common stock issued and outstanding of 52,440,001 used for the computation of basic earnings per share for the six months ended June 30, 2008, takes into effect the 11,500,000 shares outstanding for the entire period, 2,300,000 shares from the stock split outstanding from September 27, 2007 and the 55,200,000 shares (less 16,559,999 shares subject to possible redemption) sold in the initial public offering and outstanding since October 3, 2007. The weighted average of shares of common stock issued and outstanding of 11,500,000 used for the computation of basic earnings per share for the period from February 26, 2007 (inception) through June 30, 2007, takes into effect the 11,500,000 shares outstanding for the entire period. The weighted average of shares of common stock issued and outstanding of 34,564,776 used for the computation of basic earnings per share for the period from February 26, 2007 (inception) through June 30, 2008, takes into effect the 11,500,000 shares outstanding for the entire period, 2,300,000 shares from the stock split outstanding from September 27, 2007 and the 55,200,000 shares (less 16,559,999 shares subject to possible redemption) sold in the initial public offering and outstanding since October 3, 2007.
The 76,000,000 warrants related to our initial public offering, private placement and the units (consisting of one share of common stock and one warrant to purchase one share of common stock) outstanding prior to the consummation of our initial public offering are contingently issuable shares and are excluded from the calculation of diluted earnings per share Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Income taxes
Deferred income taxes are provided for the differences between the bases of assets and liabilities for financial reporting and income tax purposes. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
We recorded a deferred income tax asset for the tax effect of certain temporary differences, aggregating $134,338 and $154,751 at June 30, 2008 and December 31, 2007, respectively.
Deferred acquisition costs
As of June 30, 2008, we had accumulated approximately $1.9 million in deferred costs related to the proposed transaction with Graham Packaging. These costs will be capitalized contingent upon the completion of the transaction following receipt of the required approval by our stockholders and the fulfillment of certain other conditions. If the acquisition is not completed, these costs will be recorded as an expense. Deferred acquisition costs consist primarily of approximately $847,000 for legal services, $1,085,000 for due diligence services and $14,000 for other related deal expenses. Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our financial statements.