1331945--4/2/2007--Harbor_Acquisition

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Risks Related to Our Business We are a development stage company with no operating history and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business objective. We have a limited operating history and may not be able to continue as a going concern. If we are unable to complete a business combination and are forced to liquidate and distribute the trust account, our public stockholders will receive less than $6.00 per share upon distribution of the trust account and our warrants will expire worthless. Under Delaware law, the requirements and restrictions relating to our public offering contained in our certificate of incorporation may be amended, which could reduce or eliminate the protection afforded to our public stockholders by such requirements and restrictions. Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs, which could have a negative impact on our ability to consummate a business combination. We may not be able to consummate a business combination within the required time frame, in which case we would be forced to liquidate. You will not be entitled to protections normally afforded to investors of blank check companies. Our board of directors may not accurately determine the fair market value of a targeted acquisition. If third parties bring claims against us, the proceeds held in trust could be reduced and the per share liquidation price received by stockholders would be less than $5.76 per share. We may issue shares of our capital stock to complete a business combination which would reduce the equity interest of our stockholders and could likely cause a change in control of our ownership. We intend to secure bank financing in connection with the Elmet acquisition and we may issue other debt securities to effect a business combination, which could subject us to risks associated with debtors. The ability of our stockholders to exercise their conversion rights may not allow us to effectuate the most desirable business combination or optimize our capital structure. Our current officers and directors may resign upon consummation of a business combination and we will have only limited ability to evaluate the management of any target business. Some of our officers and directors are currently, and may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. All of our officers and directors directly or indirectly own shares of our common stock that will not participate in liquidation distributions and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination. It is probable that we will only be able to complete one business combination, which will cause us to be solely dependent on a single business and a limited number of products or services. None of our officers or directors have ever been a principal of, or have ever been affiliated with, a publicly traded company formed with a business purpose similar to ours. Because of our limited resources and the significant competition for business combination opportunities, we may not be able to consummate an attractive business combination. We may have to use a portion of the funds not held in trust to pay a no-shop fee to an acquisition target. If additional financing is required, we may be unable to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure the transaction or abandon a particular business combination. The American Stock Exchange may in the future delist our securities from quotation on its exchange which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. Our initial stockholders, including our officers and directors, control a substantial interest in us and this may influence certain actions requiring a stockholder vote. Target business may be affiliated with one or more of our initial stockholders. Risks Related to Our Acquisition of Elmet As a result of the acquisition, our stockholders will be solely dependent on a single business. In connection with the acquisition, we anticipate borrowing $50 million under senior secured credit facilities to be established upon the closing. That borrowing and subsequent borrowings under those facilities will require us to pay significant interest in the future, and the credit agreement for such facilities will impose restrictions on our and Elmet s future operations. To the extent, if any, that our public stockholders vote against the acquisition and exercise their conversion rights, we will be required to use an increased portion of the borrowing under our senior credit facilities to pay the closing consideration for Elmet. If the acquisition s benefits do not meet the expectations of financial or industry analysts, the market price of our common stock may decline. Our directors may have conflicts in determining to recommend the acquisition of Elmet since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a stockholder. We plan to issue shares of our common stock to complete the acquisition of Elmet, which will dilute the equity interest of our stockholders. If our initial stockholders and certain Elmet stockholders exercise their registration rights, such exercise may have an adverse effect on the market price of our common stock. Risks Related to Elmet s Business and Operations Following the Acquisition Elmet s operations are dependent on production levels at its Lewiston facility and any disruption of production at this facility could lead to decreased sales, increased costs and lost opportunities. Elmet s profitability could be adversely affected by fluctuations in the cost or disruptions in the availability of raw materials. Elmet anticipates the need for increased capital expenditures in order to upgrade its facility and grow its business. The development of new applications and new products is important for Elmet s business. Elmet s financial results and the demand for its products are dependent upon its ability to successfully develop and implement new technology initiatives in a timely manner. Failure to develop new products could have an adverse effect on Elmet s business prospects. Failure to deploy Elmet s skills with tungsten and molybdenum to other refractory metals would limit the potential products that Elmet may manufacture in the future and adversely impact Elmet s business prospects and revenue. Elmet relies on a small number of customers for a significant portion of its sales, and the loss of any of those customers would adversely affect its revenues and results of operations. Elmet s business may be subject to significant environmental investigation, remediation and compliance costs. Elmet s business is dependent upon key personnel whose loss would adversely impact its business. Potential product liability may arise from the products that Elmet manufactures and sells. Most of Elmet s employees are unionized, and disputes and other employee relations issues could materially adversely affect its financial results. Elmet faces competition from two large existing companies and may face increasing competition from other companies. Competition from refractory metals manufacturers located outside of the United States may force Elmet to reduce the costs of its products or current or potential business may be lost. Risks Related to Our Future Combined Operations With Elmet We have not had operations, and Elmet has never operated as a public company. Fulfilling our obligations incident to being a public company after acquiring Elmet will be expensive and time consuming. Section 404 of the Sarbanes-Oxley Act of 2002 will require us to document and test our internal control over financial reporting for fiscal 2007 and beyond and will require an independent registered public accounting firm to report on our assessment as to the effectiveness of this control. Any delays or difficulty in satisfying these requirements could adversely affect our future results of operations and our stock price. Risks Related to Our Possible Failure to Complete the Elmet Acquisition We may not be able to consummate the acquisition of Elmet, or another business combination, within the required time frame, in which case we would be forced to liquidate. If we are forced to liquidate before a business combination, our public stockholders will receive less than $6.00 per share upon distribution of the trust account, and our warrants will expire worthless. We have incurred and will continue to incur significant costs associated with our operations and the proposed acquisition of Elmet, whether or not the acquisition is completed, which costs will significantly reduce the amount of cash we will have available to consummate another business combination if we fail to complete the Elmet acquisition.

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1331945--4/2/2007--Harbor_Acquisition_Corp.