SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

/X/  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934


FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2005

/ /  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 000-51362

                            ITHAKA ACQUISITION CORP.
                 (Name of Small Business Issuer in Its Charter)

                     DELAWARE                                20-2620798
             (State of Incorporation)                  (Small Business Issuer
                                                    I.R.S. Employer I.D. Number)

100 SOUTH POINTE DRIVE, 23RD FLOOR, MIAMI, FLORIDA             33139
     (Address of principal executive offices)                (zip code)

                                 (305) 532-3800
                (Issuer's Telephone Number, Including Area Code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                 Units consisting of one share of Common Stock,
                  par value $.0001 per share, and two Warrants
                    Common Stock, $.0001 par value per share
                   Warrants to purchase shares of Common Stock



Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |_|

Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirement for the past 90 days. Yes _X_ No ___

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. | 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 ___

Issuer's revenues for the fiscal year ended December 31, 2005 were $0.

As of March 27, 2006, the aggregate market value of the common stock held by
non-affiliates of the Registrant was approximately $47,342,685.

As of March 31, 2006, there were 10,974,100 shares of Common Stock, $.0001 par
value per share, outstanding.

Transitional Small Business Disclosure Format (check one): Yes ___ No _X_

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

        Ithaka Acquisition Corp. is a blank check company formed on April 4,
2005 to effect a merger, capital stock exchange, asset acquisition or other
similar business combination with an operating business in the healthcare
industry.

        On August 23, 2005, we closed our initial public offering of 8,500,000
units with each unit consisting of one share of our common stock and two
warrants, each to purchase one share of our common stock at an exercise price of
$5.00 per share. On September 20, 2005, we consummated the closing of an
additional 349,100 units which were subject to the over-allotment option. The
units were sold at an offering price of $6.00 per unit, generating total gross
proceeds of $53,094,600. After deducting the underwriting discounts and
commissions and the offering expenses, the total net proceeds to us from the
offering were approximately $48,323,000, of which $46,997,978 was deposited into
the trust account and the remaining proceeds of approximately $1,325,000 became
available to be used to provide for business, legal and accounting due diligence
on prospective business combinations and continuing general and administrative
expenses. Through December 31, 2005, we have used approximately $262,000 of the
net proceeds that were not deposited into the trust fund along with our initial
capital to pay general and administrative expenses. The net proceeds deposited
into the trust fund remain on deposit in the trust fund earning interest. As of
December 31, 2005, there was $47,608,849 held in the trust fund.

        We are not presently engaged in, and we will not engage in, any
substantive commercial business until we consummate a business combination. We
intend to utilize our cash, including the funds held in the trust fund, capital
stock, debt or a combination of the foregoing in effecting a business
combination. 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.

HEALTHCARE INDUSTRY

        Health care represents a large and expanding sector of the United States
economy. According to "Modern Healthcare's By the Numbers" (December 20, 2004),
the U. S. Department of Health and Human Services, or HHS, U.S. healthcare
expenditures grew at a compounded annual average of 13% from 1980 through 2005,
reaching a projected $1.9 trillion in 2005. The sustained demand for new drugs,
medical devices, diagnostic tools and other healthcare products is particularly
driven by aging populations and advances in therapeutic options. According to
the Federal Interagency Forum on Aging-Related Statistics, citing the U.S.
Census Bureau, the percentage of the U.S. population over 65 was 12.7% in 2000
and is projected to rise to 20.0% by 2030.

        The industry faces continual changes created by government and private
sector financial and regulatory initiatives. U.S. health care is characterized
by a fragmented provider system, geographic discrepancies in cost and quality,
high informational asymmetry, and high costs affecting the workforce. In
management's business judgment, growing healthcare sophistication worldwide is
also increasing the importance and potential of international markets.

        As a result of these dynamics, we expect biotechnology and healthcare
innovations to continue to create substantial new profit opportunities for both
established and emerging companies. At the same time,

                                       2
<PAGE>


emerging companies developing such innovations face a challenging financing
climate, as the traditional initial public offering market is often weak or
closed to these businesses. According to Dow Jones VentureSource, 2,142
venture-backed healthcare companies raised venture capital financing rounds from
2001 through 2004. During the same period, only 66 venture-backed healthcare
companies went public and another 194 were acquired through mergers and
acquisitions. The investment banking institutions that historically provided
equity research and underwriting support for these companies are themselves
dealing with rapid changes in regulation and market structure, generated by
developments such as the Global Research Settlement and as described, for
example, by Deloitte in its 2005 "Global Securities Industry Outlook."

SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A BUSINESS COMBINATION

        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 may present
solicited or unsolicited proposals. Our officers and directors as well as their
affiliates may also bring to our attention target business candidates that they
become aware of through their business contacts. While we do not currently have
any agreements or plans to engage professional firms that specialize in business
acquisitions to assist us in our search for a target business, we may do so in
the future. If we do, we may be required to pay such firm a finder's fee or
other compensation. In no event, however, will we pay any of our initial
officers, directors or stockholders (collectively, our "Founders") or any entity
with which they are affiliated any finder's fee or other compensation for
services rendered to us prior to, or for any services they render in order to
effectuate, the consummation of a business combination.

        Subject to the requirement that the target business must be in the
healthcare industry and have a fair market value that is at least 80% of our net
assets at the time of such acquisition, our management has virtually
unrestricted flexibility in identifying and selecting a prospective target
business. In evaluating a prospective target business, our management considers,
among other factors, the following:

        o  financial condition and results of operation;

        o  growth potential;

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

        o  capital requirements;

        o  competitive position;

        o  barriers to entry;

        o  stage of development of the products, processes or services;

        o  degree of current or potential market acceptance of the products,
           processes or services;

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

        o  regulatory environment of the industry; and

        o  costs associated with effecting the business combination.

                                       3
<PAGE>


        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 conduct
extensive due diligence reviews which encompass, among other things, meetings
with incumbent management and inspection of facilities, as well as review of
financial and other information which will be made available to us.

FAIR MARKET VALUE OF TARGET BUSINESS

        The initial target business that we acquire must have a fair market
value equal to at least 80% of our net assets at the time of such acquisition.
The fair market value of such business will be determined by our board of
directors based upon standards generally accepted by the financial community,
such as actual and potential sales, earnings and cash flow and book value. If
our board is not able to independently determine that the target business has a
sufficient fair market value, we will obtain an opinion from an unaffiliated,
independent investment banking firm with respect to the satisfaction of such
criteria. 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 has sufficient fair market value.

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 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,
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, our
Founders have agreed to vote their respective shares of common stock owned by
them immediately prior to our initial public offering ("Founder Shares") in
accordance with the vote of the majority of the shares of our common stock sold
in such offering ("IPO Shares"). This voting arrangement shall not apply to any
shares included in units purchased by our Founders in our initial public
offering or purchased by them after such offering in the open market. We will
proceed with the business combination only if a majority of the IPO Shares cast
at the meeting to approve the business combination are voted for the approval of
such business combination and stockholders holding less than 20% of the IPO
Shares exercise their conversion rights.

CONVERSION RIGHTS

        At the time we seek stockholder approval of any business combination, we
will offer the holders of IPO Shares the right to have such shares converted to
cash if the stockholder votes against the business combination and the business
combination is approved and completed. The actual per-share conversion price
will be equal to the amount in the trust fund, inclusive of any interest, as of
two business days prior to the consummation of the business combination, divided
by the total number of IPO Shares. As of December 31, 2005, the per-share
conversion price would have been approximately $5.38. 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. 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. We will not complete any business combination if
stockholders

                                       4
<PAGE>


owning 20% or more of the IPO Shares exercise their conversion rights. Holders
of IPO Shares who convert their stock into their share of the trust fund still
have the right to exercise any warrants they continue to hold that they
purchased as part of the units.

LIQUIDATION IF NO BUSINESS COMBINATION

        If we do not complete a business combination by February 23, 2007, or by
August 23, 2007 if the extension criteria described below have been satisfied,
we will be dissolved and will distribute to all holders of IPO Shares, in
proportion to the number of IPO Shares held by them, an aggregate sum equal to
the amount in the trust fund, inclusive of any interest, plus any remaining net
assets. The Founders have waived their rights to participate in any liquidation
distribution with respect to their Founder Shares. There will be no distribution
from the trust fund with respect to our warrants.

        If we enter into either a letter of intent, an agreement in principle or
a definitive agreement to complete a business combination prior to February 23,
2007, but are unable to complete the business combination prior to this date,
then we will have an additional six months in which to complete the business
combination contemplated by the letter of intent, agreement in principle or
definitive agreement. If we are unable to do so by August 23, 2007, we will then
liquidate. Upon notice from us, the trustee of the trust fund will commence
liquidating the investments constituting the trust fund and will turn over the
proceeds to our transfer agent for distribution to our stockholders. We
anticipate that our instruction to the trustee would be given promptly after the
expiration of the applicable time periods.

        If we were to expend all of the net proceeds of our initial public
offering, other than the proceeds deposited in the trust fund, the per-share
liquidation price as of December 31, 2005 would have been approximately $5.38.
However, the proceeds deposited in the trust fund could become subject to the
claims of our creditors which could be prior to the claims of our public
stockholders. Paul A. Brooke, our chairman of the board and chief executive
officer, and Eric Hecht, our president and chief financial officer, have
severally agreed that, if we liquidate prior to the consummation of a business
combination, they will be personally liable to pay debts and obligations to
vendors or other entities that are owed money by us for services rendered or
products sold to us to the extent they have claims against the funds in our
trust account. They have further agreed to be personally liable to pay debts and
obligations to target businesses that seek to recover amounts they claim we owe
them in connection with any proposed business combination to the extent they
have claims against the funds in our trust account if we do not obtain an
acknowledgment from such target business waiving any claims they may have
against the trust account.

COMPETITION

        In identifying, evaluating and selecting a target business, we expect to
encounter intense competition from other entities having a business objective
similar to ours. There are numerous blank check companies that have completed
initial public offerings that are seeking to carry out a business plan similar
to our business plan. Additionally, we may be subject to competition from other
companies 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 are
numerous potential target businesses that we could acquire, 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:

        o  our obligation to seek stockholder approval of a business combination
           may delay the completion of a transaction;

                                       5
<PAGE>


        o  our obligation to convert into cash shares of common stock held by
           our public stockholders in certain instances may reduce the resources
           available to us for a business combination; and

        o  our outstanding warrants and options, and the future dilution they
           potentially represent, may not be viewed favorably by certain target
           businesses.

Any of these factors may place us at a competitive disadvantage in successfully
negotiating a business combination. Our management believes, however, that our
status as a public entity and potential access to the United States public
equity markets may give us a competitive advantage over privately-held entities
having a similar business objective as us in acquiring a target business 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.
Numerous companies, most of which have substantially greater financial resources
available to them than we do, are already engaged in the industry segments we
intend to focus on. We cannot assure you that, subsequent to a business
combination, we will have the resources or ability to compete effectively.

GOVERNMENT REGULATIONS

        The healthcare industry is highly regulated, and the federal and state
laws that may affect our business following a business combination could be
significant. The federal and state governments regulate the healthcare industry
extensively including through the Medicare and Medicaid government payment
programs, each of which is financed, at least in part, with federal money. State
jurisdiction is based upon the state's authority to license certain categories
of healthcare professionals and providers and the state's interest in regulating
the quality of healthcare in the state, regardless of the source of payment. The
significant areas of federal and state regulatory laws that could affect our
ability to conduct our business following a business combination could include,
among others, those regarding:

     o  FALSE AND OTHER IMPROPER CLAIMS FOR PAYMENT. The government may fine a
        provider if it knowingly submits, or participates in submitting, any
        claim for payment to the federal government that is false or fraudulent,
        or that contains false or misleading information.

     o  HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT. Laws designed to
        combat fraud against any healthcare benefit program for theft or
        embezzlement involving healthcare, as well as providing various privacy
        rights to patients and customers.

     o  ANTI-KICKBACK LAWS. Federal and state anti-kickback laws make it a
        felony to knowingly and willfully offer, pay, solicit or receive any
        form of remuneration in exchange for referrals or recommendations
        regarding services or products.

     o  THE STARK SELF-REFERRAL LAW AND OTHER LAWS PROHIBITING SELF-REFERRAL AND
        FINANCIAL INDUCEMENTS. Laws that limit the circumstances under which
        physicians who have a financial relationship with a company may refer
        patients to such company for the provision of certain services.

     o  CORPORATE PRACTICE OF MEDICINE. Many states have laws that prohibit
        business corporations from practicing medicine, employing physicians to
        practice medicine, exercising control over medical decisions by
        physicians, or engaging in certain arrangements, such as fee-splitting,
        with physicians.

     o  ANTITRUST LAWS. Wide range of laws that prohibit anticompetitive conduct
        among separate legal entities in the healthcare industry.

                                       6
<PAGE>


A violation of any of these laws could result in civil and criminal penalties,
the requirement to refund monies paid by government and/or private payors,
exclusion from participation in Medicare and Medicaid programs and/or the loss
of licensure. Following a business combination, our management intends to
exercise care in structuring our arrangements and our practices to comply with
applicable federal and state laws. However, we can not assure you that our
management will be successful in complying with all applicable laws and
regulations. If we have been found to have violated any rules or regulations
that could adversely affect our business and operations, the violations may
delay or impair our ability to complete a business combination. Additionally,
the laws in the healthcare industry are subject to change, interpretation and
amendment, which could adversely affect our ability to conduct our business
following a business combination.

EMPLOYEES

        We have three executive officers, all of whom are members of our board
of directors. These individuals are not obligated to contribute any specific
number of hours to our matters and intend to devote only as much time as they
deem necessary to our affairs. The amount of time they 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.

                       RISKS ASSOCIATED WITH OUR BUSINESS

        In addition to other information included in this report, the following
factors should be considered in evaluating our business and future prospects.

WE ARE A DEVELOPMENT STAGE COMPANY WITH NO OPERATING HISTORY AND VERY LIMITED
RESOURCES.

        We are a recently incorporated development stage company with no
operating results to date. Since we do not have an operating history, you will
have no basis upon which to evaluate our ability to achieve our business
objective, which is to acquire an operating business in the healthcare industry.
We will not generate any revenues until, at the earliest, after the consummation
of a business combination.

IF THIRD PARTIES BRING CLAIMS AGAINST US, THE PROCEEDS HELD IN TRUST COULD BE
REDUCED AND THE PER-SHARE LIQUIDATION PRICE RECEIVED BY STOCKHOLDERS WILL BE
LESS THAN APPROXIMATELY $5.38 PER SHARE.

        Our placing of funds in trust may not protect those funds from third
party claims against us. The proceeds held in trust could be subject to claims
which could take priority over the claims of our public stockholders. We cannot
assure you that the per-share liquidation price will not be less than the
approximately $5.38 per share held in trust as of December 31, 2005 due to
claims of creditors. If we liquidate before the completion of a business
combination, Paul A. Brooke and Eric Hecht have severally agreed that they will
be personally liable under certain circumstances to ensure that the proceeds in
the trust fund are not reduced by the claims of target businesses or vendors or
other entities that are owed money by us for services rendered or products sold
to us. However, we cannot assure you that they will be able to satisfy those
obligations. Furthermore, even after our liquidation (including the distribution
of the monies then held in the trust fund), 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. Accordingly, we cannot assure you that third parties will not seek
to recover from our stockholders amounts owed to them by us.

                                       7
<PAGE>


BECAUSE THERE ARE NUMEROUS COMPANIES WITH A BUSINESS PLAN SIMILAR TO OURS
SEEKING TO EFFECTUATE A BUSINESS COMBINATION, IT MAY BE MORE DIFFICULT FOR US TO
DO SO.

        There are numerous similarly structured blank check companies have
completed initial public offerings in the United States with business plans
similar to ours and 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. While some of those companies must complete a business
combination in specific industries, a number of them may consummate a business
combination in any industry they choose. Therefore, we may be subject to
competition from these and other companies seeking to consummate a business plan
similar to ours. Because of this competition, we cannot assure you that we will
be able to effectuate a business combination within the required time periods.

SINCE WE HAVE NOT CURRENTLY SELECTED ANY TARGET BUSINESS WITH WHICH TO COMPLETE
A BUSINESS COMBINATION, WE ARE UNABLE TO CURRENTLY ASCERTAIN THE MERITS OR RISKS
OF THE BUSINESS' OPERATIONS.

        Since we have not yet identified a prospective target business, there is
no basis for investors to evaluate the possible merits or risks of the target
business' operations. To the extent we complete a business combination with a
financially unstable company or an entity in its development stage, we may be
affected by numerous risks inherent in the business operations of those
entities. 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 of the significant risk factors. We also cannot assure
you that an investment in our securities will not ultimately prove to be less
favorable than a direct investment, if an opportunity were available, in a
target business.

IF WE EFFECT A BUSINESS COMBINATION WITH A COMPANY LOCATED OUTSIDE OF THE UNITED
STATES, WE WOULD BE SUBJECT TO A VARIETY OF ADDITIONAL RISKS THAT MAY NEGATIVELY
IMPACT OUR OPERATIONS.

        We may effect a business combination with a company located outside of
the United States. If we did, we would be subject to any special considerations
or risks associated with companies operating in the target business' home
jurisdiction, including any of the following:

        o  tariffs and trade barriers;

        o  regulations related to customs and import/export matters;

        o  longer payment cycles;

        o  tax issues, such as tax law changes and variations in tax laws as
           compared to the United States;

        o  currency fluctuations;

        o  challenges in collecting accounts receivable;

        o  cultural and language differences; and

        o  employment regulations.

We cannot assure you that we would be able to adequately address these
additional risks. If we were unable to do so, our operations might suffer.

                                       8
<PAGE>


IF WE EFFECT A BUSINESS COMBINATION WITH A COMPANY LOCATED OUTSIDE OF THE UNITED
STATES, THE LAWS APPLICABLE TO SUCH COMPANY WILL LIKELY GOVERN ALL OF OUR
MATERIAL AGREEMENTS AND WE MAY NOT BE ABLE TO ENFORCE OUR LEGAL RIGHTS.

        If we effect a business combination with a company located outside of
the United States, the laws applicable to such company will govern almost all of
our material agreements relating to its operations. We cannot assure you that
the target business will be able to enforce any of its material agreements or
that remedies will be available outside of the new jurisdiction. The system of
laws and the enforcement of existing laws in such jurisdiction may not be as
certain in implementation and interpretation as in the United States. The
inability to enforce or obtain a remedy under any of our future agreements could
result in a significant loss of business, business opportunities or capital.
Additionally, it is likely that substantially all of our assets would be located
outside of the United States and some of our officers and directors might reside
outside of the United States. As a result, it may not be possible for investors
in the United States to enforce their legal rights, to effect service of process
upon our directors or officers or to enforce judgments of United States courts
predicated upon civil liabilities and criminal penalties of our directors and
officers under Federal securities laws.

WE MAY ISSUE SHARES OF OUR COMMON STOCK AND PREFERRED STOCK TO COMPLETE A
BUSINESS COMBINATION, WHICH WOULD REDUCE THE EQUITY INTEREST OF OUR STOCKHOLDERS
AND LIKELY CAUSE A CHANGE IN CONTROL OF OUR OWNERSHIP.

        Our certificate of incorporation authorizes the issuance of up to
35,000,000 shares of common stock, par value $.0001 per share, and 1,000,000
shares of preferred stock, par value $.0001 per share. We currently have
5,052,700 authorized but unissued shares of our common stock available for
issuance (after appropriate reservation for the issuance of shares upon full
exercise of our outstanding warrants and options) and all of the 1,000,000
shares of preferred stock available for issuance. Although we currently have no
commitments to issue our securities, we will, in all likelihood, issue a
substantial number of additional shares of our common stock or preferred stock,
or a combination of common and preferred stock, to complete a business
combination. The issuance of additional shares of our common stock or any number
of shares of our preferred stock:

        o  may significantly reduce the equity interest of stockholders;

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

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

        o  may adversely affect prevailing market prices for our common stock.

Similarly, if we issue debt securities, it could result in:

        o  default and foreclosure on our assets if our operating revenues after
           a business combination were insufficient to pay our debt obligations;

        o  acceleration of our obligations to repay the indebtedness even if we
           have made all principal and interest payments when due if the debt
           security contains covenants that


                                       9
<PAGE>


           require the maintenance of certain financial ratios or reserves and
           any such covenant is breached without a waiver or renegotiation of
           that covenant;

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

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

OUR ABILITY TO SUCCESSFULLY EFFECT A BUSINESS COMBINATION AND TO BE SUCCESSFUL
THEREAFTER WILL BE TOTALLY DEPENDENT UPON THE EFFORTS OF OUR KEY PERSONNEL, SOME
OF WHOM MAY JOIN US FOLLOWING A BUSINESS COMBINATION.

        Our ability to successfully effect a business combination will be
totally dependent upon the efforts of our key personnel. The future role of our
key personnel in the target business, however, cannot presently be ascertained.
Although it is possible that some of our key personnel will remain associated in
various capacities with the target business following a business combination, it
is likely that the management of the target business at the time of the business
combination will remain in place. Moreover, our key personnel will be able to
remain with the company after the consummation of a business combination only if
they are able to negotiate employment or consulting agreements in connection
with the business combination, the terms of which, including the compensation to
be paid to such individuals, would be determined at such time between the
respective parties. However, the ability of our key personnel 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. While we intend to closely scrutinize the
management of a prospective target business in connection with evaluating the
desirability of effecting a business combination, we cannot assure you that our
assessment of management will prove to be correct. These individuals may be
unfamiliar with the requirements of operating a public company which could cause
us to have to expend time and resources helping them become familiar with such
requirements. This could be expensive and time-consuming and could lead to
various regulatory issues which may adversely affect our operations.

OUR OFFICERS AND DIRECTORS ALLOCATE THEIR TIME TO OTHER BUSINESSES THEREBY
CAUSING CONFLICTS OF INTEREST IN THEIR DETERMINATION AS TO HOW MUCH TIME TO
DEVOTE TO OUR AFFAIRS. THIS COULD HAVE A NEGATIVE IMPACT ON OUR ABILITY TO
CONSUMMATE A BUSINESS COMBINATION.

        Our officers and directors are not required to commit their full time to
our affairs, which may result in a conflict of interest in allocating their time
between our operations and other businesses. We do not intend to have any full
time employees prior to the consummation of a business combination. All of our
executive officers are engaged in several other business endeavors and are not
obligated to contribute any specific number of hours to our affairs. If our
executive officers' other business affairs require them to devote more
substantial amounts of time to such affairs, it could limit their ability to
devote time to our affairs and could have a negative impact on our ability to
consummate a business combination.

SOME OF OUR OFFICERS AND DIRECTORS 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
WHICH ENTITY A PARTICULAR BUSINESS OPPORTUNITY SHOULD BE PRESENTED TO.

        Some of our officers and directors may in the future become affiliated
with entities, including other "blank check" companies, engaged in business
activities similar to those intended to be conducted by us. Additionally, our
officers and directors may become aware of business opportunities which may

                                       10
<PAGE>


be appropriate for presentation to us as well as the other entities with which
they have fiduciary obligations to. Accordingly, they may have conflicts of
interest in determining to which entity a particular business opportunity should
be presented. We cannot assure you that these conflicts will be resolved in our
favor.

ALL OF OUR OFFICERS AND DIRECTORS OWN SHARES OF OUR COMMON STOCK AND WARRANTS
WHICH 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.

        All of our officers and directors own stock in our company, but have
waived their right to receive distributions upon our liquidation with respect to
their Founder Shares, and own warrants to purchase additional shares of our
common stock. The shares and warrants owned by our directors and officers will
be worthless if we do not consummate a business combination. The personal and
financial interests of our directors and officers may influence their motivation
in identifying and selecting a target business and completing a business
combination timely. Consequently, our directors' and officers' discretion in
identifying and selecting a suitable target business may result in a conflict of
interest when determining whether the terms, conditions and timing of a
particular business combination are appropriate and in our stockholders' best
interest.

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.

        As of December 31, 2005, we had $47,608,849 on deposit in a trust fund
that we may use to complete a business combination. Our initial business
combination must be with a business with a fair market value of at least 80% of
our net assets at the time of such acquisition. Consequently, it is probable
that we will consummate a business combination with a single operating business.
Accordingly, the prospects for our success may be:

        o  solely dependent upon the performance of a single business, or

        o  dependent upon the development or market acceptance of a single or
           limited number of products, processes or services.

        In this case, we will not be able to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses, unlike other
entities which may have the resources to complete several business combinations
in different industries or different areas of a single industry.

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.

        When we seek stockholder approval of any business combination, we will
offer each public stockholder the right to have his, her or its shares of common
stock converted to cash if the stockholder votes against the business
combination and the business combination is approved and completed. Such holder
must both vote against such business combination and then exercise his, her or
its conversion rights to receive a pro rata portion of the trust account.
Accordingly, if our business combination requires us to use substantially all of
our cash to pay the purchase price, because we will not know how many
stockholders may exercise such conversion rights, we may either need to reserve
part of the trust account for possible payment upon such conversion, or we may
need to arrange third party financing to help fund our business combination in
case a larger percentage of stockholders exercise their conversion rights than
we expect. Therefore, we may not be able to consummate a business combination
that requires us to use all of the funds held in the trust account as part of
the purchase price, or we may end up having a leverage

                                       11
<PAGE>


ratio that is not optimal for our business combination. This may limit our
ability to effectuate the most attractive business combination available to us.

BECAUSE OF OUR LIMITED RESOURCES AND STRUCTURE, WE MAY NOT BE ABLE TO CONSUMMATE
AN ATTRACTIVE BUSINESS COMBINATION.

        We expect to encounter intense competition from other entities having a
business objective similar to ours, including venture capital funds, leveraged
buyout funds and operating businesses competing for acquisitions. Many of these
entities are well established and have extensive experience in identifying and
effecting business combinations directly or through affiliates. Many of these
competitors possess greater technical, human and other resources than we do and
our financial resources will be relatively limited when contrasted with those of
many of these competitors. While we believe that there are numerous potential
target businesses that we could acquire, 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 certain target businesses. Further, the obligation
we have to seek stockholder approval of a business combination may delay the
consummation of a transaction, and our obligation to convert into cash the
shares of common stock held by public stockholders in certain instances may
reduce the resources available for a business combination. Additionally, our
outstanding warrants, and the future dilution they potentially represent, may
not be viewed favorably by certain target businesses. Any of these obligations
may place us at a competitive disadvantage in successfully negotiating a
business combination. Additionally, because of our structure, there may be fewer
attractive target businesses available to acquire or privately held target
businesses may not be not inclined to enter into a transaction with a publicly
held blank check companies like us.

WE MAY BE UNABLE TO OBTAIN ADDITIONAL FINANCING, IF REQUIRED, 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.

        Although we believe our current assets will be sufficient to allow us to
consummate a business combination, in as much as we have not yet identified any
prospective target business, we cannot ascertain the capital requirements for
any particular transaction. If we require further funds, either because of the
size of the business combination or the depletion of our available cash in
search of a target business, or because we become obligated to convert into cash
a significant number of shares from dissenting stockholders, we will be required
to seek additional financing. We cannot assure you that such financing would be
available on acceptable terms, if at all. To the extent that additional
financing proves to be unavailable when needed to consummate a particular
business combination, we would be compelled to restructure the transaction or
abandon that particular business combination and seek an alternative target
business candidate. In addition, if we consummate a business combination, we may
require additional financing to fund the operations or growth of the target
business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business.
None of our officers, directors or stockholders is required to provide any
financing to us in connection with or after a business combination.

OUR EXISTING STOCKHOLDERS, INCLUDING OUR OFFICERS AND DIRECTORS, CONTROL A
SUBSTANTIAL INTEREST IN US AND THUS MAY INFLUENCE CERTAIN ACTIONS REQUIRING
STOCKHOLDER VOTE.

        Our board of directors is divided into three classes, each of which will
generally serve for a term of three years with only one class of directors being
elected in each year. It is unlikely that there will be an annual meeting of
stockholders to elect new directors prior to the consummation of a business
combination, in which case all of the current directors will continue in office
at least until the consummation of the business combination. If there is an
annual meeting, as a consequence of our

                                       12
<PAGE>


"staggered" board of directors, only a minority of the board of directors will
be considered for election and our existing stockholders, because of their
ownership position, will have considerable influence regarding the outcome.
Accordingly, our existing stockholders will continue to exert control at least
until the consummation of a business combination.

OUR OUTSTANDING WARRANTS MAY HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF
COMMON STOCK AND MAKE IT MORE DIFFICULT TO EFFECT A BUSINESS COMBINATION.

        We currently have outstanding warrants to purchase 17,698,200 shares of
common stock and options to purchase 425,000 shares of common stock and warrants
to purchase an additional 850,000 shares of common stock. To the extent we issue
shares of common stock to effect a business combination, the potential for the
issuance of substantial numbers of additional shares upon exercise of these
warrants and options could make us a less attractive acquisition vehicle in the
eyes of a target business as such securities, when exercised, will increase the
number of issued and outstanding shares of our common stock and reduce the value
of the shares issued to complete the business combination. Accordingly, our
warrants and options may make it more difficult to effectuate a business
combination or increase the cost of the target business. Additionally, the sale,
or even the possibility of sale, of the shares underlying the warrants and
options could have an adverse effect on the market price for our securities or
on our ability to obtain future public financing. If and to the extent these
warrants and options are exercised, you may experience dilution to your
holdings.

IF WE ARE UNABLE TO EFFECT A BUSINESS COMBINATION AND ARE FORCED TO LIQUIDATE,
OUR WARRANTS WILL EXPIRE WORTHLESS.

        If we do not complete a business combination by February 23, 2007, or by
August 23, 2007 if certain criteria have been satisfied, we will be dissolved
and will distribute to all holders of IPO Shares, in proportion to the number of
IPO Shares held by them, an aggregate sum equal to the amount in the trust fund,
inclusive of any interest, plus any remaining net assets. In such event, there
will be no distribution with respect to our outstanding warrants. Accordingly,
the warrants will expire worthless.

IF OUR FOUNDERS EXERCISE THEIR REGISTRATION RIGHTS, IT MAY HAVE AN ADVERSE
EFFECT ON THE MARKET PRICE OUR COMMON STOCK AND THE EXISTENCE OF THESE RIGHTS
MAY MAKE IT MORE DIFFICULT TO EFFECT A BUSINESS COMBINATION.

        Our Founders are entitled to demand that we register the resale of their
shares of common stock at any time commencing three months prior to the date on
which the shares of common stock are to be released from escrow. If our Founders
exercise their registration rights with respect to all of their shares of common
stock, then there will be an additional 2,125,000 shares of common stock
eligible for trading in the public market. The presence of this additional
number of shares of common stock eligible for trading in the public market may
have an adverse effect on the market price of our common stock. In addition, the
existence of these rights may make it more difficult to effectuate a business
combination or increase the cost of the target business, as the stockholders of
the target business may be discouraged from entering into a business combination
with us or will request a higher price for their securities as a result of these
registration rights and the potential future effect their exercise may have on
the trading market for our common stock.

IF WE ARE DEEMED TO BE AN INVESTMENT COMPANY, WE MAY BE REQUIRED TO INSTITUTE
BURDENSOME COMPLIANCE REQUIREMENTS AND OUR ACTIVITIES MAY BE RESTRICTED, WHICH
MAY MAKE IT DIFFICULT FOR US TO COMPLETE A BUSINESS COMBINATION.

        If we are deemed to be an investment company under the Investment
Company Act of 1940, we

                                       13
<PAGE>


may be subject to certain restrictions that may make it more difficult for us to
complete a business combination, including:

        o  restrictions on the nature of our investments; and

        o  restrictions on the issuance of securities.

        In addition, we may have imposed upon us burdensome requirements,
including:

        o  registration as an investment company;'

        o  adoption of a specific form of corporate structure; and

        o  reporting, record keeping, voting, proxy and disclosure requirements
           and other rules and regulations.

        We do not believe that our anticipated principal activities will subject
us to the Investment Company Act of 1940. To this end, the proceeds held in
trust may only be invested by the trust agent in "government securities" with
specific maturity dates. By restricting the investment of the proceeds to these
instruments, we intend to meet the requirements for the exemption provided in
Rule 3a-1 promulgated under the Investment Company Act of 1940. If we were
deemed to be subject to the act, compliance with these additional regulatory
burdens would require additional expense that we have not allotted for.

                    RISKS RELATED TO THE HEALTHCARE INDUSTRY

IF WE ARE UNABLE TO COMPLY WITH GOVERNMENTAL REGULATIONS AFFECTING THE
HEALTHCARE INDUSTRY, IT COULD NEGATIVELY AFFECT OUR OPERATIONS.

        There is extensive government regulation of many healthcare businesses
as well as various proposals at the federal government level to reform the
healthcare system. Changes to the existing regulatory framework and/or
implementation of various reform initiatives could adversely effect certain
sectors of the healthcare industry. If we are unable to adhere to these
requirements, it could result in the imposition of penalties and fines against
us, and could also result in the imposition of restrictions on our business and
operations. Furthermore, the costs of compliance also could have a material
adverse effect on our profitability and operations.

IF WE ARE REQUIRED TO OBTAIN GOVERNMENTAL APPROVAL OF OUR PRODUCTS FOLLOWING A
BUSINESS COMBINATION, THE PRODUCTION OF OUR PRODUCTS COULD BE DELAYED AND WE
COULD BE REQUIRED TO ENGAGE IN A LENGTHY AND EXPENSIVE APPROVAL PROCESS THAT MAY
NOT ULTIMATELY BE SUCCESSFUL.

        Unanticipated problems may arise in connection with the development of
new products or technologies, and many such efforts may ultimately be
unsuccessful. In addition, testing or marketing products may require obtaining
government approvals, which may be a lengthy and expensive process with an
uncertain outcome. Delays in commercializing products may result in the need to
seek additional capital, potentially diluting the interests of investors. These
various factors may result in abrupt advances and declines in the securities
prices of particular companies in the healthcare industry and, in some cases,
may have broad effect on the prices of securities of specific healthcare
companies or of companies in the healthcare industry generally.

                                       14
<PAGE>


THE HEALTHCARE INDUSTRY IS SUSCEPTIBLE TO SIGNIFICANT LIABILITY EXPOSURE. IF
LIABILITY CLAIMS ARE BROUGHT AGAINST US FOLLOWING A BUSINESS COMBINATION, IT
COULD MATERIALLY ADVERSELY AFFECT OUR OPERATIONS.

        Any target business we acquire in the healthcare industry will be
exposed to potential liability risks that are inherent in the testing,
manufacturing, marketing and sale of healthcare products and/or the provisions
of healthcare services. We cannot assure you that a liability claim would not
have material adverse effect on our business, financial condition or market
prices of our securities.

IF WE ARE UNABLE TO OBTAIN AND MAINTAIN PROTECTION FOR THE INTELLECTUAL PROPERTY
RELATING TO OUR TECHNOLOGIES AND PRODUCTS OR SERVICES FOLLOWING A BUSINESS
COMBINATION, THE VALUE OF OUR TECHNOLOGY, PRODUCTS OR SERVICES MAY BE DECREASED
AND OUR REVENUES MAY BE LIKEWISE DECREASED.

        Intellectual property rights in the fields of biotechnology,
pharmaceuticals, diagnostics and medical devices is highly uncertain and
involves complex legal and scientific questions. At the same time, the
profitability of companies in these fields generally depends on sustained
competitive advantages and differentiation that are based on intellectual
property. Our success following a business combination will depend in large part
on our ability to obtain and maintain protection in the United States and other
countries for the intellectual property covering or incorporated into our
technology, products or services. We may not be able to obtain additional issued
patents relating to our technology, products or services. Even if issued,
patents may be challenged, narrowed, invalidated or circumvented, which could
limit our ability to stop competitors from marketing similar products or
services, limit the length of term of patent protection we may have for our
products or services, and expose us to substantial litigation costs and drain
our resources. Changes in either patent laws or in interpretations of patent
laws in the United States and other countries may diminish the value of our
intellectual property or narrow the scope of our patent protection.

THE COMMERCIAL SUCCESS OF ANY PRODUCTS UNDER DEVELOPMENT BY A TARGET BUSINESS WE
ACQUIRE WILL DEPEND UPON PRODUCT SUPERIORITY AND SALES AND MARKETING EFFORTS
THAT TOGETHER SUCCESSFULLY GENERATE CONTINUING MARKET ACCEPTANCE BY PHYSICIANS,
PATIENTS, HEALTHCARE PAYORS AND OTHERS IN THE MEDICAL COMMUNITY.

        Any products or services that we bring to the market following a
business combination may not gain market acceptance by physicians, patients,
healthcare payors and others in the medical community, unless they offer
superior therapeutic or diagnostic benefits and safety that are communicated
through effective sales and marketing efforts. If we do not achieve such
acceptance, we may not generate material new product revenues or profits.
Moreover, the healthcare industry is intensely competitive, and we will face
competition with respect to current and future products, such that any market
acceptance we do achieve will be subject to continual threat, including from
market participants with substantially greater resources.

IF WE COMPLETE A BUSINESS COMBINATION THAT INVOLVES A TARGET FOCUSED ON
DEVELOPMENT-STAGE PHARMACEUTICAL COMPOUNDS OR BIOTECHNOLOGY THERAPEUTICS, WE MAY
NOT BE ABLE TO COMMERCIALIZE OUR PRODUCT CANDIDATES.

        Before obtaining regulatory approval for the sale of drug product
candidates, development-stage pharmaceutical and biotechnology therapeutic
companies must conduct, at their own expense, extensive preclinical tests and
clinical trials to demonstrate the safety and efficacy in humans of their
product candidates. Preclinical and clinical testing is expensive, is difficult
to design and implement, necessarily involves substantial cooperation with and
reliance on third parties, can take many years to complete and is uncertain as
to outcome. Success in preclinical testing and early clinical trials does not
ensure that later clinical trials will be successful, and interim results of a
clinical trial do not necessarily predict final results. A failure of one or
more clinical trials can occur at any stage of testing.

                                       15
<PAGE>


        Our failure to obtain and maintain regulatory approval for a product
candidate following a business combination will prevent us from commercializing
it. Product candidates and the activities associated with their development and
commercialization, including their testing, manufacture, safety, efficacy,
recordkeeping, labeling, storage, approval, advertising, promotion, sale and
distribution, will be subject to comprehensive regulation by the FDA and other
United States regulatory agencies and by comparable authorities in other
countries. Securing approval requires the submission of extensive preclinical
and clinical data, information about product manufacturing processes and
inspection of facilities and supporting information for each therapeutic
indication to establish the product candidate's safety and efficacy. Varying
interpretations of the data obtained from preclinical and clinical testing could
delay, limit or prevent regulatory approval of a product candidate. The process
of obtaining and maintaining regulatory approvals may vary and involves
substantial regulatory discretion, is expensive, and often takes many years, if
approval is obtained at all.

        We will also have to rely on third parties for the production of
clinical and commercial quantities of drug product candidates. There are a
limited number of manufacturers operating under the FDA's current Good
Manufacturing Practices, or cGMP, regulations that will be both capable of
manufacturing our products and willing to do so. These manufacturers are subject
to inspection to ensure strict compliance with cGMP regulations and other
governmental regulations and corresponding foreign standards. We will not be
certain that our manufacturers will be able to comply with these regulations and
standards and will not control their compliance, while we will risk regulatory
sanctions, liabilities and penalties if they fail to comply. Our dependence upon
others for the manufacture of product candidates and products may adversely
affect our future profits and our ability, on a timely and competitive basis,
both to develop product candidates and to commercialize any products that
receive regulatory approval.

ITEM 2. DESCRIPTION OF PROPERTY

        We maintain our executive offices at 100 South Pointe Drive, 23rd Floor,
Miami, Florida. This space is being provided to us, at no cost, by Eric Hecht,
our president and chief financial officer. We also maintain an office at 1114
Avenue of the Americas, 41st Floor, New York, New York 10036 pursuant to an
arrangement with one of our stockholders. We pay this stockholder $3,500 per
month for the use of this office space. We consider our current office space,
combined with the other office space otherwise available to our executive
officers, adequate for our current operations.

ITEM 3. LEGAL PROCEEDINGS

None.

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

None.


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

        Our units, common stock and warrants are traded on the Over-the-Counter
Bulletin Board under the symbols ITHKU, ITHK and ITHKW, respectively. The
following table sets forth the range of high

                                       16
<PAGE>


and low closing bid prices for the units, common stock and warrants for the
periods indicated since the units commenced public trading on August 18, 2005
and since the common stock and warrants commenced public trading on September
26, 2005. The over-the-counter market quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily reflect
actual transactions.

                                        Units       Common Stock      Warrants
                                    ------------    ------------    ------------
                                    High     Low    High     Low    High     Low
                                    ----    ----    ----    ----    ----    ----

        2006:
             First Quarter* ....    6.72    5.93    5.42    5.12    0.73    0.43

        2005:
             Fourth Quarter ....    6.07    5.69    5.13    5.00    0.53    0.34
             Third Quarter .....    6.10    6.00    5.07    5.05    0.55    0.45

*Through March 27, 2006

HOLDERS

        As of March 29, 2006, there was one holder of record of our units, five
holders of record of our common stock and one holder of record of our warrants.

DIVIDENDS

        We have not paid any cash dividends on our common stock to date and do
not intend to pay cash dividends prior to the completion of a business
combination. The payment of cash 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.

RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS

        In April 2005, we sold the following shares of common stock without
registration under the Securities Act of 1933, as amended:

               Stockholders             Number of Shares
               ------------             ----------------

               Paul A. Brooke                225,000

               Eric Hecht                    900,000

               John M. Glazer                200,000

               PMSV Holdings LLC             675,000

Such shares were issued in connection with our organization pursuant to the
exemption from registration contained in Section 4(2) of the Securities Act as
they were sold to sophisticated, wealthy individuals or entities. The shares
issued to the individuals and entities above were sold at a purchase price of
$0.0125

                                       17
<PAGE>


per share. Effective June 2, 2005, our board of directors authorized a stock
dividend of 0.0625 shares of common stock for each outstanding share of common
stock, effectively lowering the purchase price to $0.01176 per share.

INITIAL PUBLIC OFFERING

        On August 23, 2005, we closed our initial public offering of 8,500,000
units with each unit consisting of one share of our common stock and two
warrants, each to purchase one share of our common stock at an exercise price of
$5.00 per share. On September 20, 2005, we consummated the closing of an
additional 349,100 units which were subject to the over-allotment option. The
units were sold at an offering price of $6.00 per unit, generating total gross
proceeds of $53,094,600. The managing underwriter in the offering was
EarlyBirdCapital, Inc. The securities sold in the offering were registered under
the Securities Act of 1933 on a registration statement on Form S-1 (No.
333-124521). The Securities and Exchange Commission declared the registration
statement effective on August 17, 2005.

        We paid a total of $3,716,622 in underwriting discounts and commissions
and approximately $1,055,468 for other costs and expenses related to the
offering, including $510,000 for the underwriters' non-accountable expense
allowance of 1% of the gross proceeds. After deducting the underwriting
discounts and commissions and the other offering expenses, the total net
proceeds to us from the offering were approximately $48,323,000, of which
$46,997,978 was deposited into the trust account and the remaining proceeds of
approximately $1,325,000 became available to be used to provide for business,
legal and accounting due diligence on prospective business combinations and
continuing general and administrative expenses. The net proceeds deposited into
the trust fund remain on deposit in the trust fund and have earned $610,871 in
interest through December 31, 2005.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

        We were formed on April 4, 2005 to serve as a vehicle to effect a
merger, capital stock exchange, asset acquisition or other similar business
combination with an operating company in the healthcare industry. We intend to
utilize cash derived from the proceeds of our recently completed public
offering, our capital stock, debt or a combination of cash, capital stock and
debt, in effecting a business combination.

        We consummated our initial public offering on August 23, 2005. All
activity from April 4, 2005 through August 23, 2005 related to our formation and
our initial public offering. Since August 23, 2005, we have been searching for
prospective target businesses to acquire.

        For the period from April 4, 2005 (inception) to December 31, 2005, we
had a net income of $165,779 derived from interest income of $489,418 (net of
deferred interest) offset by $29,699 in Delaware franchise taxes, $39,595 for
officer liability insurance, $11,188 for marketing and advertising expenses,
$63,993 for professional fees, $85,401 for federal income taxes, $14,619 for
Florida income taxes, $46,700 for travel and other expenses, $6,997 for transfer
agent fees and $25,447 for other operating expenses.

        $46,997,978 of the net proceeds of our initial public offering are in
trust, with the remaining net proceeds of $1,324,532 to pay for business, legal
and accounting due diligence on prospective acquisitions and continuing general
and administrative expenses. We will use substantially all of the net proceeds
of our initial public offering not held in trust to identify and evaluate
prospective acquisition candidates, select the target business, and structure,
negotiate and consummate the business combination. We intend to utilize our
cash, including the funds held in the trust fund, capital stock, debt or a
combination

                                       18
<PAGE>


of the foregoing to effect a business combination. To the extent that our
capital stock or debt securities are used in whole or in part as consideration
to effect a business combination, the proceeds held in the trust fund as well as
any other available cash will be used to finance the operations of the target
business. At December 31, 2005, we had cash outside of the trust fund of
$1,087,359 and total liabilities of $296,855, leaving us with working capital of
$790,471. We believe that we have sufficient available funds outside of the
trust fund to operate through August 23, 2007, assuming that a business
combination is not consummated during that time. However, 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 us.
We would only consummate such a financing simultaneously with the consummation
of a business combination.

        In April 2005, our directors advanced an aggregate of $100,000 to us, on
a non-interest bearing basis, for payment of offering expenses on our behalf.
These amounts were repaid in August 2005 out of proceeds of our initial public
offering.

        In connection with our initial public offering, we issued an option, for
$100, to EarlyBirdCapital to purchase 425,000 units at an exercise price of
$7.50 per unit, with each unit consisting of one share of common stock and two
warrants. The warrants underlying such units are exercisable at $7.25 per share.
We accounted for the fair value of the option, inclusive of the receipt of the
$100 cash payment, as an expense of the public offering resulting in a charge
directly to stockholders' equity. We estimated that the fair value of this
option was approximately $935,000 ($2.20 per Unit) using a Black-Scholes
option-pricing model. The fair value of the option granted to EarlyBirdCapital
was estimated as of the date of grant using the following assumptions: (1)
expected volatility of 44.5%, (2) risk-free interest rate of 3.8% and (3)
expected life of 5 years. The option may be exercised for cash or on a
"cashless" basis, at the holder's option, such that the holder may use the
appreciated value of the option (the difference between the exercise prices of
the option and the underlying warrants and the market price of the units and
underlying securities) to exercise the option without the payment of any cash.

OFF-BALANCE SHEET ARRANGEMENTS

        Options and warrants issued in conjunction with our initial public
offering are equity linked derivatives and accordingly represent off-balance
sheet arrangements. The options and warrants meet the scope exception in
paragraph 11(a) of Financial Accounting Standard (FAS) 133 and are accordingly
not accounted for as derivatives for purposes of FAS 133, but instead are
accounted for as equity. See Footnote 2 to the financial statements for more
information.

ITEM 7. FINANCIAL STATEMENTS

        This information appears following Item 14 of this Report and is
incorporated herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

        None.

                                       19
<PAGE>


ITEM 8A. CONTROL AND PROCEDURES

        Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed in company
reports filed or submitted under the Securities Exchange Act of 1934 (the
"Exchange Act") is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
company reports filed or submitted under the Exchange Act is accumulated and
communicated to management, including our chief executive officer and treasurer,
as appropriate to allow timely decisions regarding required disclosure.

        As required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief
executive officer and chief financial officer carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2005. Based upon their evaluation, they concluded
that our disclosure controls and procedures were effective.

        Our internal control over financial reporting is a process designed by,
or under the supervision of, our chief executive officer and chief financial
officer and effected by our board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of our financial
reporting and the preparation of our financial statements for external purposes
in accordance with generally accepted accounting principles. Internal control
over financial reporting includes policies and procedures that pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of our assets; provide reasonable assurance
that transactions are recorded as necessary to permit preparation of our
financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in
accordance with the authorization of our board of directors and management; and
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on our financial statements.

        During the most recently completed fiscal quarter, there has been no
significant change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.

ITEM 8B.  OTHER INFORMATION

None.


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

DIRECTORS AND EXECUTIVE OFFICERS

        Our current directors and executive officers are as follows:

        Name             Age   Position
        ----             ---   --------
        Paul A. Brooke   60    Chairman of the Board and Chief Executive Officer
        Eric Hecht       46    President, Chief Financial Officer and Director
        John M. Glazer   41    Chief Operating Officer, Secretary and Director

                                       20
<PAGE>


        PAUL A. BROOKE has served as our chairman of the board and chief
executive officer since our inception. Mr. Brooke has served as a managing
member of PMSV Holdings, LLC, a private investment firm, since 1993. He has also
served as a venture partner of MPM Capital, a venture capital firm specializing
in the healthcare industry since 1997. Mr. Brooke has also served as an advisory
director for Morgan Stanley & Co., Inc. since April 2000. From March 1999 to May
2000, Mr. Brooke served as a Managing Director of Tiger Management LLC, a money
management hedge fund. From March 1983 to March 1999, he served as a Managing
Director and the Global Head of Healthcare Research and Strategy at Morgan
Stanley. Mr. Brooke is also a director of the following public companies:

        o  Incyte Corporation, a Nasdaq National Market listed company that is
           focused on the discovery and development of novel, small molecule
           drugs to treat major medical conditions, including infection with
           human immunodeficiency virus, or HIV, inflammatory disorders, cancer
           and diabetes;

        o  WebMD Corporation, a Nasdaq National Market listed company that
           provides various types of healthcare information services and
           technology solutions and products; and

        o  ViroPharma, Inc., a Nasdaq National Market listed pharmaceutical
           company dedicated to the development and commercialization of
           products that address serious diseases treated by physician
           specialists and in hospital settings.

Mr. Brooke received an B.A. (cum laude) from Columbia College and an M.A. from
Columbia University.

        ERIC HECHT has served as our president, chief financial officer and a
member of our board of directors since our inception. Since January 2003, Dr.
Hecht has served as chief executive officer of Potomac Pharma, Inc., a private
specialty pharmaceutical company. From January 1997 to December 2002, he served
as a senior research analyst for Merrill Lynch and from September 1992 to
December 1996, he served as a senior research analyst for Morgan Stanley. While
at Merrill Lynch and Morgan Stanley, Dr. Hecht focused on biotechnology
companies. Dr. Hecht received a B.S. from Touro College and an M.D. from the
Albert Einstein College of Medicine.

        JOHN M. GLAZER has served as our chief operating officer and a member of
our board of directors since our inception. Since April 2003, Mr. Glazer has
served as managing director of ATP Management Group LLC, a private venture
capital firm. He also served as a principal of CSFB Private Equity, the private
equity division of Credit Suisse First Boston, from September 1997 to March
2002, and has served as a consultant since April 2002. From May 1995 to August
1997, Mr. Glazer served as an investment banking associate of Credit Suisse
First Boston where he focused on mergers and acquisitions. Mr. Glazer received
an A.B. from Harvard University and a J.D. from Stanford Law School.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Securities Exchange Act of 1934 requires our
officers, directors and persons who own more than ten percent of a registered
class of our equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
ten percent stockholders are required by regulation to furnish us with copies of
all Section 16(a) forms they file. Based solely on copies of such forms received
or written representations from certain reporting persons that no Form 5s were
required for those persons, we believe that, during the fiscal year ended

                                       21
<PAGE>


December 31, 2005, all filing requirements applicable to our officers, directors
and greater than ten percent beneficial owners were complied with.

CODE OF ETHICS

        In September 2005, our board of directors adopted a code of ethics that
applies to our directors, officers and employees as well as those of our
subsidiaries. Requests for copies of our code of ethics should be sent in
writing to Ithaka Acquisition Corp., 100 South Pointe Drive, 23rd Floor, Miami,
Florida 33139, Attn: Corporate Secretary.

ITEM 10. EXECUTIVE COMPENSATION

        No compensation of any kind, including finders and consulting fees, will
be paid to any of our Founders or any of their respective affiliates, prior to,
or for any services they render in order to effectuate, the consummation a
business combination. However, our Founders 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.

        Since our formation, we have not granted any stock options or stock
appreciation rights or any awards under long-term incentive plans.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth information regarding the beneficial
ownership of our common stock as of March 31, 2006 by:

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

        o  each of our officers and directors; and

        o  all our officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have
sole voting and investment power with respect to all shares of common stock
beneficially owned by them.

                                                         Amount and
                                                          Nature of
                                                         Beneficial      Percent
Name and Address of Beneficial Owner(1)                   Ownership     of Class
--------------------------------------                  ------------    --------
Amaranth LLC(2)                                         1,052,000(3)      9.6%
Fir Tree, Inc.(4)                                       1,020,000(5)      9.3%
Paul A. Brooke                                            956,250(6)      8.7%
Eric Hecht                                                956,250(7)      8.7%
John M. Glazer(8)                                         212,500(9)      1.9%

All directors and executive officers as a group         2,125,000(10)    19.4%
(three individuals)

                                       22
<PAGE>


         -----------------------------------

(1)     Unless otherwise indicated, the business address of each of the
        following is 100 South Pointe Drive, 23rd Floor, Miami, Florida 33139.

(2)     The business address of Amaranth LLC is c/o Amaranth Advisors L.L.C.,
        One American Lane, Greenwich, Connecticut 06831.

(3)     Amaranth Advisors L.L.C. is the trading advisor for Amaranth LLC.
        Nicholas M. Maounis is the managing member of Amaranth Advisors and
        exercises voting and dispositive power over these shares. The foregoing
        information was derived from a Schedule 13G filed with the SEC on
        October 7, 2005.

(4)     The business address of Fir Tree, Inc. is 535 Fifth Avenue, 31st Floor,
        New York, New York 10017.

(5)     Represents (i) 686,007 shares of common stock held by Sapling, LLC and
        (ii) 333,993 shares of common stock held by Fir Tree Recovery Master
        Fund, L.P. Fir Tree, Inc. is the investment manager of both entities.
        The foregoing information was derived from a Schedule 13G filed with the
        SEC on August 25, 2005.

(6)     Includes 717,188 shares of common stock held by PMSV Holdings LLC, an
        entity that Mr. Brooke controls. Does not include 553,750 shares of
        common stock issuable upon exercise of warrants held by Mr. Brooke that
        are not currently exercisable and will not become exercisable within 60
        days.

(7)     Does not include 553,750 shares of common stock issuable upon exercise
        of warrants held by Mr. Hecht that are not currently exercisable and
        will not become exercisable within 60 days.

(8)     The business address of Mr. Glazer is ATP Management Group LLC, 712
        Fifth Avenue, 20th Floor, New York, New York 10019.

(9)     Does not include 142,500 shares of common stock issuable upon exercise
        of warrants held by Mr. Glazer that are not currently exercisable and
        will not become exercisable within 60 days.

(10)    Does not include 1,250,000 shares of common stock issuable upon exercise
        of warrants held by our officers and directors that are not currently
        exercisable and will not become exercisable within 60 days.

        All 2,125,000 shares of our outstanding common stock owned by our
Founders prior to our initial public offering have been placed in escrow with
Continental Stock Transfer & Trust Company, as escrow agent, pursuant to an
escrow agreement described below.

        Paul A. Brooke, Eric Hecht and John M. Glazer may be deemed to be our
"parents" and "promoters," as these terms are defined under the Federal
securities laws.

                                       23
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        In April 2005, we issued 2,000,000 shares of our common stock to the
following individuals for $25,000 in cash, at a purchase price of $0.0125 per
share as set forth below:

        Name                Number of Shares   Relationship to Us
        ----                ----------------   ------------------

        Paul A. Brooke      225,000            Chairman of the Board and
                                               Chief Executive Officer
        Eric Hecht          900,000            President, Chief Financial
                                               Officer and Director
        John M. Glazer      200,000            Chief Operating Officer,
                                               Secretary and Director
        PMSV Holdings LLC   675,000            Stockholder

        Effective June 2, 2005, our board of directors authorized a stock
dividend of 0.0625 shares of common stock for each outstanding share of common
stock, effectively lowering the purchase price to $0.01176 per share.

         Pursuant to an escrow agreement between us, the Founders and
Continental Stock Transfer & Trust Company, all of the Founders Shares were
placed in escrow, with Continental acting as escrow agent, pursuant to an escrow
agreement, until the earliest of:

        o  August 17, 2008;

        o  our liquidation; or

        o  the consummation of a liquidation, merger, stock exchange or other
           similar transaction which results in all of our stockholders having
           the right to exchange their shares of common stock for cash,
           securities or other property subsequent to our consummating a
           business combination with a target business.

        During the escrow period, these shares cannot be sold, but the Founders
will retain all other rights as stockholders, including, without limitation, the
right to vote their shares of common stock and the right to receive cash
dividends, if declared. If dividends are declared and payable in shares of
common stock, such dividends will also be placed in escrow. If we are unable to
effect a business combination and liquidate, none of our Founders will receive
any portion of the liquidation proceeds with respect to common stock owned by
them prior to our initial public offering.

        We also entered into a registration rights agreement with the Founders
pursuant to which the holders of the majority of the Founders Shares will be
entitled to make up to two demands that we register these shares pursuant to an
agreement to be signed prior to or on the date of this prospectus. The holders
of the majority of these shares may elect to exercise these registration rights
at any time commencing three months prior to the date on which these shares of
common stock are released from escrow. In addition, these stockholders have
certain "piggy-back" registration rights on registration statements filed
subsequent to the date on which these shares of common stock are released from
escrow. We will bear the expenses incurred in connection with the filing of any
such registration statements.

        Each of our Founders also entered into a letter agreement with us and
EarlyBirdCapital pursuant to which, among other things:

                                       24
<PAGE>


        o  each agreed to vote all Founder Shares owned by him in accordance
           with the majority of the IPO Shares if we solicit approval of our
           stockholders for a business combination;

        o  if we fail to consummate a business combination by February 23, 2007
           (or by August 23, 2007 under certain limited circumstances), each
           agreed to take all reasonable actions within his power to cause us to
           liquidate as soon as reasonably practicable;

        o  each waived any and all rights he may have to receive any
           distribution of cash, property or other assets as a result of such
           liquidation with respect to his Founder Shares;

        o  each agreed to present to us for our consideration, prior to
           presentation to any other person or entity, any suitable opportunity
           to acquire an operating business, until the earlier of our
           consummation of a business combination, our liquidation or until such
           time as he ceases to be an officer or director of ours, subject to
           any pre-existing fiduciary obligations he might have;

        o  each agreed that we could not consummate any business combination
           which involves a company which is affiliated with any of the Founders
           unless we obtain an opinion from an independent investment banking
           firm reasonably acceptable to EarlyBirdCapital that the business
           combination is fair to our stockholders from a financial perspective;

        o  each agreed that he and his affiliates will not be entitled to
           receive and will not accept any compensation for services rendered to
           us prior to the consummation of our business combination; and

        o  each agreed that he and his affiliates will not be entitled to
           receive or accept a finder's fee or any other compensation in the
           event he or his affiliates originate a business combination.

        During 2005, our directors advanced an aggregate of $100,000 to us to
cover expenses related to our initial public offering. The loans were payable
without interest on the earlier of April 21, 2006 or the consummation of our
initial public offering. These loans were repaid in August 2005.

        We will reimburse our officers and directors for any reasonable
out-of-pocket business expenses incurred by them in connection with certain
activities on our behalf such as identifying and investigating possible target
businesses and business combinations.

        Other than reimbursable out-of-pocket expenses payable to our officers
and directors, no compensation or fees of any kind, including finders and
consulting fees, will be paid to any of our Founders or to any of their
respective affiliates prior to, or for any services they render in order to
effectuate, the consummation of a business combination.

         All ongoing and future transactions between us and any of our officers
and directors or their respective affiliates, will be on terms believed by us to
be no less favorable than are available from unaffiliated third parties and will
require prior approval in each instance by a majority of the members of our
board who do not have an interest in the transaction.

                                       25
<PAGE>


ITEM 13. EXHIBITS

(a) The following Exhibits are filed as part of this report.

    Exhibit No.         Description
    -----------         -----------

        3.1             Certificate of Incorporation. (1)

        3.2             By-laws. (1)

        4.1             Specimen Unit Certificate. (1)

        4.2             Specimen Common Stock Certificate. (1)

        4.3             Specimen Warrant Certificate. (1)

        4.4             Form of Unit Purchase Option granted to
                        EarlyBirdCapital, Inc. (1)

        4.5             Form of Warrant Agreement between Continental Stock
                        Transfer & Trust Company and the Registrant. (1)

        10.1            Letter Agreement among the Registrant, EarlyBirdCapital,
                        Inc. and Paul A. Brooke (1)

        10.2            Letter Agreement among the Registrant, EarlyBirdCapital,
                        Inc. and Eric Hecht (1)

        10.3            Letter Agreement among the Registrant, EarlyBirdCapital,
                        Inc. and John M. Glazer (1)

        10.4            Letter Agreement among the Registrant, EarlyBirdCapital,
                        Inc. and PMSV Holdings, LLC (1)

        10.5            Form of Investment Management Trust Agreement between
                        Continental Stock Transfer & Trust Company and the
                        Registrant. (1)

        10.6            Form of Stock Escrow Agreement between the Registrant,
                        Continental Stock Transfer & Trust Company and the
                        Founders. (1)

        10.7            Promissory Note, dated April 21, 2005, issued to each of
                        Paul A. Brooke, Eric Hecht and John M. Glazer. (1)

        10.8            Registration Rights Agreement among the Registrant and
                        the Founders. (1)

        10.9            Form of Warrant Purchase Agreements among
                        EarlyBirdCapital, Inc. and each of Paul A. Brooke, Eric
                        Hecht and John M. Glazer. (1)

        31.1            Certification of Chief Executive Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

        31.2            Certification of Chief Financial Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

                                       26
<PAGE>


        32              Certification of Chief Executive Officer and Chief
                        Financial Officer pursuant to Section 906 of the
                        Sarbanes-Oxley Act of 2002.

        (1)     Incorporated by reference to the Registrant's Registration
                Statement on Form S-1 (SEC File No. 333-124521).

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

        The firm of Goldstein Golub Kessler LLP ("GGK") acts as our principal
accountant. Through September 30, 2005, GGK had a continuing relationship with
American Express Tax and Business Services Inc. ("TBS") from which it leased
auditing staff who are full time, permanent employees of TBS and through which
its partners provided non-audit services. Subsequent to September 30, 2005, this
relationship ceased and the firm established a similar relationship RSM
McGladrey, Inc. ("RSM"). As a result of this arrangement, GGK has no full time
employees and therefore, none of the audit services performed were provided by
permanent full-time employees of GGK. GGK manages and supervises the audit and
audit staff, and is exclusively responsible for the opinion rendered in
connection with its examination. The following is a summary of fees paid or to
be paid to GGK and RSM for services rendered.

AUDIT FEES

        During the fiscal year ended December 31, 2005, we paid or will pay our
principal accountant $33,000, representing $28,000 for the services they
performed in connection with our initial public offering and $5,000 in
connection with the review of our Quarterly Report on Form 10-QSB for the
quarter ended September 30, 2005. In addition, we expect to pay approximately
$15,000 in connection with the December 31, 2005 audit and Annual Report on Form
10-KSB.

AUDIT-RELATED FEES

        During 2005, our principal accountant did not render assurance and
related services reasonably related to the performance of the audit or review of
financial statements.

TAX FEES

        During 2005, there were no fees billed in connection with tax return
preparation.

ALL OTHER FEES

        During 2005, there were no fees billed for products and services
provided by the principal accountant other than those set forth above.

AUDIT COMMITTEE APPROVAL

        We currently do not have an audit committee. However, our board of
directors has approved the services described above.

                                       27
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)


        REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM              F-2


        FINANCIAL STATEMENTS

            Balance Sheet                                                    F-3
            Statements of Operations                                         F-4
            Statement of Stockholders' Equity                                F-5
            Statement of Cash Flows                                          F-6

        NOTES TO FINANCIAL STATEMENTS                                   F-7-F-12


                                      F-1
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                                   BALANCE SHEET



Report of Independent Registered Public Accounting Firm
-------------------------------------------------------

To the Board of Directors
Ithaka Acquisition Corp.

We have audited the accompanying balance sheet of Ithaka Acquisition Corp. (a
corporation in the development stage) as of December 31, 2005, and the related
statement of operations, stockholders' equity and cash flows for the period from
April 4, 2005 (inception) to December 31, 2005. 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 audit.

We conducted our audit 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 audit 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 Ithaka Acquisition Corp. as of
December 31, 2005, and the results of its operations and its cash flows for the
period from April 4, 2005 (inception) to December 31, 2005 in conformity with
United States generally accepted accounting principles.


/s/ Goldstein Golub Kessler LLP

Goldstein Golub Kessler LLP
New York, New York

March 28, 2006

                                      F-2
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                                   BALANCE SHEET

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                                               December 31, 2005

--------------------------------------------------------------------------------

ASSETS
Current assets:
   Cash                                                            $   1,087,359
   Investments held in Trust Fund (Note 1)                            47,608,849
   Prepaid expenses                                                      117,908
                                                                   -------------
Total current assets                                                  48,814,116
Deferred tax asset                                                       118,244
                                                                   -------------
Total assets                                                       $  48,932,360
                                                                   =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses                           $      48,892
   Income and Franchise taxes payable                                    247,963
   Deferred interest                                                     122,116
                                                                   -------------
Total current liabilities                                                418,971
                                                                   -------------

Common stock, subject to possible conversion,
   1,768,935 shares at conversion value (Note 1)                       9,394,896
                                                                   -------------

Commitment (Note 5)

Stockholders' equity (Notes 1, 2, 6 and 7)
   Preferred stock, $.0001 par value, Authorized
      1,000,000 shares; none issued
   Common stock, $.0001 par value
      Authorized 35,000,000 shares
      Issued and outstanding 10,974,100 shares
         (which includes 1,768,935 subject to
         possible conversion)                                              1,098
   Additional paid-in capital                                         38,951,616
   Earnings accumulated during the development stage                     165,779
                                                                   -------------
      Total stockholders' equity                                      39,118,493
                                                                   -------------
Total liabilities and stockholders' equity                         $  48,932,360
                                                                   =============

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                      F-3
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                         STATEMENT OF OPERATIONS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                                                     Period from
                                                                   April 4, 2005
                                                                  (inception) to
                                                               December 31, 2005

--------------------------------------------------------------------------------

Expenses:


Formation and operating costs                                     $     223,619
                                                                  -------------

Operating loss for the period                                          (223,619)
                                                                  -------------

Interest Income                                                         489,418
                                                                  -------------

Income before provision for income tax                                  265,799
                                                                  -------------

Provision for income taxes                                              100,020
                                                                  -------------

Net income                                                        $     165,779
                                                                  -------------

Net income per share basic and diluted                            $         .03
                                                                  -------------

Weighted average shares outstanding                                   6,349,663
                                                                  -------------


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                      F-4
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                               STATEMENT OF STOCKHOLDERS' EQUITY

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                     Common Stock            Additional     Earnings accumulated
                                                ----------------------        Paid-In                 during the
                                                  Shares        Amount        Capital        developmental stage         Total
                                                ----------      ------      -----------     --------------------      ------------
<S>                                             <C>             <C>         <C>                         <C>           <C>
Sale of 2,125,000 shares of common stock
  to initial stockholders on April 4, 2005
  at $0.01176 per share                          2,125,000      $  213      $    24,787                 $     --      $     25,000

Sale of 8,849,100 units, net of
  underwriters' discount and offering
  expenses (includes 1,768,935 shares
  subject to possible conversion)                8,849,100         885       48,321,625                       --        48,322,510

Proceeds subject to possible conversion
  of 1,768,935 shares                                   --          --       (9,394,896)                      --        (9,394,896)

Proceeds from issuance of option                        --          --              100                       --               100

Net income for the period                               --          --               --                  165,779           165,779

                                                ----------      ------      -----------                 --------      ------------
Balance, December 31, 2005                      10,974,100      $1,098      $38,951,616                 $165,779      $ 39,118,493
                                                ==========      ======      ===========                 ========      ============
</TABLE>


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                      F-5
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                         STATEMENT OF CASH FLOWS

                                                                   April 4, 2005
                                                                  (inception) to
                                                               December 31, 2005

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                    $      165,779
   Adjustments to reconcile net income to net income
      used in operating activities:
   Income earned on investments held in trust                          (610,871)
   Increase in prepaid expenses                                        (117,908)
   Increase in deferred taxes asset                                    (118,244)
   Increase in income and franchise taxes payable                       247,963
   Increase in deferred interest                                        122,116
   Increase in accounts payable and accrued expenses                     48,892
                                                                 --------------
      Net cash used in operating activities                            (262,273)
                                                                 --------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Investments placed in Trust Fund                                 (46,997,978)
                                                                 --------------
        Net cash used in investing activities                       (46,997,978)
                                                                 --------------

                      CASH FLOWS FROM FINANCING ACTIVITIES

   Gross proceeds of public offering                                 53,094,600
   Proceeds from notes payable, stockholders                            100,000
   Proceeds from sale of shares of common stock                          25,000
   Proceeds from issuance of option                                         100
   Principal payments on notes payable                                 (100,000)
   Payment of costs of public offering                               (4,772,090)
                                                                 --------------
      Net cash provided by financing activities                      48,347,610
                                                                 --------------

Net increase in cash                                                  1,087,359
Cash at beginning of the period                                              --
                                                                 --------------
Cash at end of the period                                        $    1,087,359
                                                                 ==============

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                                      F-6
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

1.     ORGANIZATION
       AND                  Ithaka Acquisition Corp. (the "Company") was
       BUSINESS             incorporated in Delaware on April 4, 2005 as a blank
       OPERATIONS           check company whose objective is to acquire an
                            operating business in the healthcare industry.

                            The registration statement for the Company's initial
                            public offering ("Offering") was declared effective
                            August 17, 2005. The Company consummated the
                            offering on August 23, 2005 (Note 2). The Company's
                            management has broad discretion with respect to the
                            specific application of the net proceeds of this
                            Offering, although substantially all of the net
                            proceeds of this Offering are intended to be
                            generally applied toward consummating a business
                            combination with an operating business in the
                            healthcare industry ("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,
                            including the over-allotment option, an amount of
                            $46,997,978 of the net proceeds was deposited in an
                            interest-bearing trust account ("Trust Account")
                            until the earlier of (i) the consummation of a
                            Business Combination or (ii) liquidation of the
                            Company. Under the agreement governing the Trust
                            Account, funds will only be invested in United
                            States "government securities" within the meaning of
                            Section 2(a)(16) of the Investment Company Act of
                            1940 with a maturity of 180 days or less. The Trust
                            Account has been invested in Treasury Bills. The
                            Treasury Bills, which have been classified as
                            trading securities, have been recorded at their
                            market value at December 31, 2005. The remaining 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.

                            The Company, after signing a definitive agreement
                            for the acquisition of a target business, will
                            submit such transaction for stockholder approval. In
                            the event that stockholders owning 20% 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, including all of the officers and
                            directors of the Company ("Initial Stockholders"),
                            have agreed to vote their 2,125,000 founding shares
                            of common stock in accordance with the vote of the
                            majority in interest of 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

                                      F-7
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                            consummated, any Public Stockholder who voted
                            against the Business Combination may demand that the
                            Company convert his 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
                            19.99% of the aggregate number of shares owned by
                            all Public Stockholders may seek conversion of their
                            shares in the event of a Business Combination. Such
                            Public Stockholders are entitled to receive their
                            per share interest in the Trust Account computed
                            without regard to the shares held by Initial
                            Stockholders. Accordingly, a portion of the net
                            proceeds from the offering (19.99% of the amount
                            held in the Trust Account) has been classified as
                            common stock subject to possible conversion and
                            19.99% of the interest earned on the Trust Account
                            has been classified as deferred interest in the
                            accompanying December 31, 2005 balance sheet.

                            The Company's Certificate of Incorporation, as
                            amended, provides for mandatory liquidation of the
                            Company in the event that the Company does not
                            consummate a Business Combination within 18 months
                            from the date of the consummation of the Offering,
                            or 24 months from the consummation of the Offering
                            if certain extension criteria have been satisfied.
                            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 due to
                            costs related to the Offering and since no value
                            would be attributed to the Warrants contained in the
                            Units sold (Note 2).

                            The Company considers all highly liquid debt
                            securities purchased with original or remaining
                            maturities of three months or less to be cash
                            equivalents.

                            The Company maintains cash in bank deposit accounts
                            which, at times, exceed federally insured limits.
                            The company has not experienced any losses on these
                            accounts.

                            Basic earnings per share is computed by dividing net
                            income by the weighted-average number of shares of
                            common stock outstanding during the period. Diluted
                            earnings per share reflects the additional dilution
                            for all potentially dilutive securities such as
                            stock warrants and options. The effect of the
                            17,698,200 outstanding warrants, issued in
                            connection with the initial public offering
                            described in Note 2, has not been considered in the
                            diluted earnings per share since the warrants are
                            contingently


                                      F-8
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                            exerciseable and the effect of the 425,000
                            outstanding underwriter option units have not been
                            considered since the market value of the units was
                            less than the exercise price during the period ended
                            December 31, 2005.

                            Deferred income taxes are provided for the
                            differences between the basis 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.

                            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.

                            In December 2004, the Financial Accounting Standards
                            Board issued Statement of Financial Accounting
                            Standards No. 123 (revised 2004) ("SFAS 123(R)"),
                            "Share Based Payment". SFAS 123(R) requires all
                            share-based payments to employees, including grants
                            of employee stock options, to be recognized in the
                            financial statements based on their fair values. The
                            Company is required to adopt SFAS 123(R) effective
                            January 1, 2006. The Company does not believe that
                            the adoption of SFAS No. 123(R) will have a
                            significant impact on its financial condition or
                            results of operations.

                            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       On August 23, 2005, the Company sold 8,500,000 units
       OFFERING             ("Units") in the Offering. On September 20, 2005,
                            the Company consummated the closing of an additional
                            349,100 Units which were subject to the
                            over-allotment option. Each Unit consists of one
                            share of the Company's common stock, $.0001 par
                            value, and two Redeemable Common Stock Purchase
                            Warrants ("Warrants"). Each Warrant entitles the
                            holder to purchase from the Company one share of
                            common stock at an exercise price of $5.00
                            commencing the later of the completion of a Business
                            Combination or one year from the effective date of
                            the Offering and expiring four years from the
                            effective date of the Offering. The Warrants will be
                            redeemable, at the Company's option, with the prior
                            consent of


                                      F-9
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                            EarlyBirdCapital, Inc., the representative of the
                            underwriters in the Offering ("Representative"), at
                            a price of $.01 per Warrant upon 30 days' notice
                            after the Warrants become exercisable, only in the
                            event that the last sale price of the common stock
                            is at least $8.50 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. The Company paid the underwriters in the
                            Offering an underwriting discount of 7% of the gross
                            proceeds of the Offering and a non-accountable
                            expense allowance of 1% of the gross proceeds of the
                            Offering. In connection with this Offering, the
                            Company also issued an option ("Option"), for $100,
                            to the Representative to purchase 425,000 Units at
                            an exercise price of $7.50 per Unit. The Company
                            accounted for the fair value of the Option,
                            inclusive of the receipt of the $100 cash payment,
                            as an expense of the Offering resulting in a charge
                            directly to stockholders' equity. The Company
                            estimates that the fair value of the Option is
                            approximately $935,000 ($2.20 per Unit) using a
                            Black-Scholes option-pricing model. The fair value
                            of the Option granted to the Representative is
                            estimated as of the date of grant using the
                            following assumptions: (1) expected volatility of
                            44.5%, based on the volatilities of similar entities
                            who have effected a Business Combination, (2)
                            risk-free interest rate of 3.8% and (3) expected
                            life of 5 years. The Option may be exercised for
                            cash or on a "cashless" basis, at the holder's
                            option, such that the holder may use the appreciated
                            value of the Option (the difference between the
                            exercise prices of the Option and the underlying
                            Warrants and the market price of the Units and
                            underlying securities) to exercise the option
                            without the payment of any cash. In addition, the
                            Warrants underlying such Units are exercisable at
                            $7.25 per share.

3.     NOTES PAYABLE,       The Company issued unsecured promissory notes in
       STOCKHOLDERS         aggregate amount of $100,000 to three of the Initial
                            Stockholders. The notes were non interest bearing
                            and were paid from the net proceeds of the Offering.

4.     INCOME TAXES         The Company's provision for income taxes reflects
                            the application of federal and state statutory rates
                            to the Company's net income before taxes. The
                            effective tax rate was 38% for the period April 4,
                            2005 (inception) to December 31, 2005.

                            Components of the provision for income taxes are as
                            follows:


                                      F-10
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

               Current
                  Federal                                             $ 120,272
                  State                                                  97,992
                                                                      ---------

               Total current                                            218,264
                                                                      ---------


               Deferred
                  Federal                                               (99,503)
                  State                                                 (18,741)
                  Total deferred                                       (118,244)
                                                                      ---------
               Total provision for income taxes                       $ 100,020


               The Deferred tax asset consists of the following:

                  Interest income deferred for reporting purposes     $  45,916
                  Operating costs deferred for income tax purposes       72,328
                                                                      ---------
                                                                      $ 118,244
                                                                      =========

                            The effective income tax differs from the statutory
                            rate of 34% principally due to the effect of state
                            income taxes.

5.     COMMITMENT           Pursuant to letter agreements with the Company and
                            the Representative, the Initial Stockholders have
                            waived their right to receive distributions with
                            respect to their founding shares upon the Company's
                            liquidation.

                            Pursuant to agreements with the Representative, the
                            Initial Stockholders collectively purchased
                            1,250,000 Warrants at $0.51 per Warrant (for an
                            aggregate purchase price of $637,500) in the public
                            marketplace during the first 90 day period after
                            separate trading of the Warrants commenced.

                            The Initial Stockholders are entitled to
                            registration rights with respect to their founding
                            shares pursuant to an agreement dated August 17,
                            2005. The holders of the majority of these shares
                            are entitled to make up to two demands that the
                            Company register these shares at any time commencing
                            three months prior to the third anniversary of the
                            effective date of the Offering. In addition, the
                            Initial Stockholders have certain "piggy-back"
                            registration rights on registration statements filed
                            subsequent to the third anniversary of the effective
                            date of the Offering.

                                      F-11
<PAGE>


                                                        ITHAKA ACQUISITION CORP.
                                        (A CORPORATION IN THE DEVELOPMENT STAGE)

                                                   NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

6.     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.

7.     COMMON STOCK         Effective June 2, 2005, the Company's Board of
                            Directors authorized a stock dividend of 0.0625
                            shares of common stock for each outstanding share of
                            common stock. All references in the accompanying
                            financial statements to the number of shares of
                            stock have been retroactively restated to reflect
                            this transaction.

                            At December 31, 2005, 18,973,200 shares of common
                            stock were reserved for issuance upon exercise of
                            the Warrants and the Option.


                                      F-12
<PAGE>


                                   SIGNATURES

        Pursuant to the requirements of the Section 13 or 15 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 on the
31st day of March 2006.

                           ITHAKA ACQUISITION CORP.


                           By: /s/ Paul A. Brooke
                               Paul A. Brooke
                               Chairman of the Board and Chief Executive Officer
                               (Principal Executive Officer)

In accordance with 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 and on the dates indicated.

Name                                    Title                          Date

/s/ Paul A. Brooke    Chairman of the Board and Chief Executive   March 31, 2006
------------------    Officer (Principal Executive Officer)
Paul A. Brooke

/s/ Eric Hecht        President, Chief Financial Officer          March 31, 2006
------------------    (Principal Accounting and Financial
Eric Hecht            Officer) and Director

/s/ John M. Glazer    Chief Operating Officer, Secretary and      March 31, 2006
------------------    Director
John M. Glazer