8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

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

Date of Report (Date of earliest event reported): December 15, 2006

STONE ARCADE ACQUISITION CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-51150	20-2699372
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
c/o Stone-Kaplan Investments, LLC One Northfield Plaza, Suite 480 Northfield, IL		60093
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s telephone number, including area code: (847) 441-0929
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

As previously disclosed in a Current Report on Form 8-K filed on June 26, 2006, the registrant, through its wholly-owned subsidiary, KapStone Kraft Paper Corporation (“KapStone Kraft”) entered into a purchase agreement (the “Purchase Agreement”) with International Paper Company (“IP”), pursuant to which it agreed to acquire substantially all of the assets of the Kraft Papers Business, a division of IP (“KPB”). Pursuant to the terms of the Purchase Agreement the registrant or IP could terminate the Purchase Agreement if the closing did not occur before December 31, 2006 (the “Termination Date”).

On December 15, 2006, the registrant, KapStone Kraft and IP agreed to extend the Termination Date until January 5, 2007.

ITEM 8.01. OTHER EVENTS

On December 15, 2006, the registrant announced that its Board of Directors has set December 29, 2006 as the date for the registrant’s special meeting of stockholders to consider and approve the acquisition of KPB. The Board has also set a record date of November 17, 2006 for the meeting. Holders of record of the registrant’s common stock at the record date will be entitled to vote their shares at the meeting.

The meeting will be held at the time and place identified in the formal notice of meeting, which, together with a proxy statement and form of proxy, will be sent to stockholders in the near future. Stockholders are urged to read those materials carefully.

A copy of the registrant’s press release concerning the foregoing is included as Exhibit 99.1 to this Current Report on Form 8-K.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d)Exhibits:

Exhibit No.	Description
99.1	Press release, dated December 15, 2006

2

SIGNATURE

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 hereunto duly authorized.

Dated: December 15, 2006	STONE ARCADE ACQUISITION CORPORATION
	By:	/s/ Roger W. Stone
		Roger W. Stone
		Chief Executive Officer

3

EX-99.1

Exhibit 99.1

STONE ARCADE ACQUISITION CORP
ONE NORTHFIELD PLAZA, SUITE 480
NORTHFIELD, IL 60093
TEL: (847) 441-0929

News Release

STONE ARCADE ACQUISITION CORP. ANNOUNCES DATE FOR SPECIAL MEETING

NORTHFIELD, IL. — December 15, 2006 — Stone Arcade Acquisition Corp. (OTCBB:SCDE) announced today it has set December 29, 2006 for a special meeting of stockholders to consider and vote on its previously-announced proposed acquisition of Kraft Papers Business, a division of International Paper Company. Stockholders of record as of November 17, 2006, the record date for the meeting, will be entitled to attend the special meeting and vote on the proposed acquisition and related proposals.

In connection with the proposed business combination, Stone has filed a definitive proxy statement with the SEC. Investors and security holders are advised to read the proxy statement carefully because it contains important information. Investors and security holders may obtain such materials and other documents filed by Stone from the SEC’s web site at www.sec.gov.

Stone and International Paper Company have agreed to extend the termination date of the acquisition until January 5, 2007.

This press release is not a proxy statement or a solicitation of proxies from the holders of common stock of Stone and does not constitute an offer to sell or a solicitation of an offer to purchase any securities of Stone. Any solicitation of proxies will be made only by the proxy statement that will be provided to Stone stockholders. Investors and security holders of Stone are urged to read the proxy material because it contains important information about Stone, KPB and the proposed KPB acquisition.

Stone Arcade Acquisition Corporation is a publicly traded special purpose acquisition company founded in April 2005 that consummated its initial public offering of units in August 2005. Stone Arcade was formed for the purpose of identifying and effecting an asset acquisition or business combination with an unidentified business in the paper, packaging, forest products, and related industries.

###

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about Stone Arcade that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in Stone Arcade’s Securities and Exchange Commission filings. The information set forth herein should be read in light of such risks. Stone Arcade does not assume any obligation to update the information contained in this press release.

Contacts:

For Stone Arcade Acquisition Corporation:

Roger Stone or Matt Kaplan, 847-441-0929