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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 2005

                                       or

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

                        Commission file number: 000-51456

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


                            AD.VENTURE PARTNERS, INC.
             (Exact name of registrant as specified in its charter)


           Delaware                                      20-2650200
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


         360 Madison Avenue, 21st Floor
               New York, New York                           10017
     (Address of principal executive offices)             (Zip Code)


                                 (212) 703-7241
               Registrant's telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the 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  requirements for the past 90
days. Yes |X| No |_|

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |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 |_|

As of November 14, 2005, 11,249,997 shares of the registrant's common stock, par
value $0.001 per share, were outstanding.

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<PAGE>

                            AD.VENTURE PARTNERS, INC.

                                Table of Contents

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements                                                   3
           Balance Sheets                                                    F-1
           Statements of Operations                                          F-2
           Statement of Cash Flows                                           F-3
           Notes to Consolidated Financial Statements                        F-4
Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                                    3
Item 3. Quantitative and Qualitative Disclosures about Market Risk             4
Item 4. Controls and Procedures                                                4

                           PART II - OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds            6
Item 6. Exhibits                                                               6

SIGNATURES                                                                     7

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Reference  is made to our  financial  statements  beginning  on page F-1 of this
report.

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

      This  Quarterly  Report on Form 10-Q includes  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the  Securities  Exchange Act of 1934, as amended.  We have based
these  forward-looking  statements on our current  expectations  and projections
about future events. These  forward-looking  statements are subject to known and
unknown risks,  uncertainties and assumptions about us that may cause our actual
results,  levels of  activity,  performance  or  achievements  to be  materially
different  from  any  future  results,   levels  of  activity,   performance  or
achievements  expressed or implied by such forward-looking  statements.  In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should,"   "could,"  "would,"   "expect,"  "plan,"   "anticipate,"   "believe,"
"estimate,"  "continue,"  or  the  negative  of  such  terms  or  other  similar
expressions.  Factors  that  might  cause or  contribute  to such a  discrepancy
include,  but are not limited to, those  described in our other  Securities  and
Exchange  Commission  filings.  The  following  discussion  should  be  read  in
conjunction  with our financial  statements  and related notes thereto  included
elsewhere in this report.

      We were formed on April 7, 2005,  for the purpose of acquiring,  through a
merger,  capital stock  exchange,  asset  acquisition or other similar  business
combination,  one or more  operating  businesses  in the  technology,  media  or
telecommunications  industries.  Our initial business combination must be with a
target  business or businesses  whose fair market value is at least equal to 80%
of net assets at the time of such acquisition. 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.

      On August  31,  2005,  we  consummated  our  initial  public  offering  of
9,000,000  units.  Each  unit  consists  of one  share of  common  stock and two
warrants.  Each warrant entitles the holder to purchase from us one share of our
common  stock at an  exercise  price of $5.00.  Our  common  stock and  warrants
started trading separately as of October 10, 2005.

      The net  proceeds  from the sale of our  units,  after  deducting  certain
offering  expenses of approximately  $650,000,  and an underwriting  discount of
approximately  $2,160,000,  were  approximately  $51,190,000.  Of  this  amount,
$50,380,000  was placed into a trust  account  and the  remaining  proceeds  are
available to be used by us to provide for  business,  legal and  accounting  due
diligence on  prospective  acquisitions  and to pay for  continuing  general and
administrative  expenses.  As of September 30, 2005, we had $785,055 of proceeds
available for such uses.

      We expect to use substantially all of the net proceeds of this offering to
acquire a target  business,  including  identifying  and evaluating  prospective
acquisition   candidates,   selecting  the  target  business  and   structuring,
negotiating and  consummating the business  combination.  To the extent that our
capital stock is used in whole or in part as  consideration to effect a business
combination,  the  proceeds  held in the trust  account as well as any other net
proceeds  not  expended  will be used to finance  the  operations  of the target
business.  We believe we will have  sufficient  available  funds  outside of the
trust  account to operate  through  August 31,  2007,  assuming  that a business
combination is not consummated during that time. From September 30, 2005 through
August 31, 2007, we anticipate the following expenses:

      o     approximately  $175,000 of expenses for legal,  accounting and other
            expenses attendant to the due diligence investigations,  structuring
            and negotiating of a business combination;

      o     $145,000 for expenses for the due diligence and  investigation  of a
            target business

      o     $140,000 of expenses in legal and  accounting  fees  relating to our
            SEC reporting obligations; and


                                       3
<PAGE>

      o     $325,055  for general  working  capital that will be used for office
            space, miscellaneous expenses and reserves,  including approximately
            $150,000 for director and officer liability insurance premiums.

      We do not believe we will need to raise  additional funds in order to meet
the expenditures  required for operating our business.  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  connection  with the  initial  public  offering,  we agreed to pay the
underwriters  additional  underwriting  fees and expenses of $1,620,000 upon the
consummation of our initial business  combination.  We expect that such fees and
expenses will be paid out of the proceeds in the trust account. Of such fees and
expenses,  $1,080,000  constitute  additional  underwriting  fees  and  $540,000
constitutes an additional non-accountable expense allowance.

      Following the  consummation of the initial public  offering,  we cancelled
the office service agreement with Innovation  Interactive,  LLC, an affiliate of
Howard S. Balter, our chairman of the board and chief executive officer, Ilan M.
Slasky, our president,  secretary and director,  and Will Margiloff,  one of our
directors.  In October,  we  relocated  our office and entered  into an informal
agreement  with an unrelated  third party whereby we pay $2,058 per month,  on a
month-to-month  basis,  in exchange for office space and certain  administrative
services.

      As of September 30, 2005,  the proceeds in the trust account were invested
in a Smith Barney  Municipal  Money Market Fund,  Class Y. The average rating in
the portfolio is MIG 1.

      We  currently  have no  operating  business  and have not  identified  any
potential target businesses. If we are unable to find a suitable target business
by February  28, 2007 (or August 31,  2007 if a letter of intent,  agreement  in
principle or a definitive  agreement  has been executed by February 28, 2007 and
the business  combination  relating thereto has not yet been consummated by such
date),  we will be forced to  liquidate.  If we are  forced  to  liquidate,  the
per-share  liquidation  may be less than the price at which public  stockholders
purchased  their shares  because of the expenses  related to our initial  public
offering,  our general and administrative  expenses and the anticipated costs of
seeking a business  combination.  Additionally,  if third  parties  make  claims
against us, the offering  proceeds held in the trust account could be subject to
those  claims,  resulting in a further  reduction to the  per-share  liquidation
price. Under Delaware law, our stockholders who have received distributions from
us may be held liable for claims by third  parties to the extent such claims are
not been paid by us.  Furthermore,  our  warrants  will expire  worthless  if we
liquidate before the completion of a business combination.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

      Market risk is the  sensitivity  of income to changes in  interest  rates,
foreign exchanges, commodity prices, equity prices and other market-driven rates
or prices. We are not presently engaged in and, if a suitable business target is
not  identified  by us prior to the  prescribed  liquidation  date of the  trust
account, we may not engage in, any substantive commercial business. Accordingly,
we are not and, until such time as we consummate a business combination, we will
not be,  exposed to risks  associated  with foreign  exchange  rates,  commodity
prices,  equity prices or other  market-driven rates or prices. The net proceeds
of our initial public offering held in the trust account have been invested only
in money market funds meeting  conditions of the Investment Company Act of 1940.
Given our limited risk in our exposure to money market funds, we do not view the
interest rate risk to be significant.

Item 4. Controls and Procedures.

      Our management  carried out an evaluation,  with the  participation of our
chief  executive  officer  (principal   executive  officer)  and  our  president
(principal  financial  and  accounting  officer),  of the  effectiveness  of our
disclosure  controls and  procedures as of September  30, 2005.  Based upon that
evaluation,  our  chief  executive  officer  and  president  concluded  that our
disclosure  controls and procedures  were  effective to ensure that  information
required  to be  disclosed  by us in  reports  that we file or submit  under the
Securities Exchange Act of 1934 is recorded, processed, summarized, and reported
within the time periods  specified in the rules and forms of the  Securities and
Exchange Commission.


                                       4
<PAGE>

      There  has not been any  change in our  internal  control  over  financial
reporting in connection with the evaluation required by Rule 13a-15(d) under the
Exchange Act that occurred during the quarter ended September 30, 2005, that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.


                                       5
<PAGE>

                           PART II - OTHER INFORMATION

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

      On August  31,  2005,  we  consummated  our  initial  public  offering  of
9,000,000  units.  Each  unit  consists  of one  share of  common  stock and two
warrants.  Each warrant entitles the holder to purchase from us one share of our
common stock at an exercise  price of $5.00.  The units were sold at an offering
price of $6.00 per unit, generating total gross proceeds of $54,000,000. Wedbush
Morgan  Securities  Inc. acted as lead  underwriter.  The securities sold in the
offering were  registered  under the  Securities  Act of 1933 on a  registration
statement on Form S-1 (No.  333-124141).  The Securities and Exchange Commission
declared the registration statement effective on August 25, 2005.

      We paid a total of $2,160,000 in underwriting  discounts and  commissions,
and  approximately  $650,000 has been paid for costs and expenses related to the
offering.  In connection with the initial public offering,  we agreed to pay the
underwriters  additional  underwriting  fees and expenses of $1,620,000 upon the
consummation of our initial business  combination.  We expect that such fees and
expenses will be paid out of the proceeds in the trust account. Of such fees and
expenses,  $1,080,000  constitute  additional  underwriting  fees  and  $540,000
constitutes an additional non-accountable expense allowance.

      After deducting the underwriting  discounts and the offering expenses, the
total net proceeds to us from the offering were  approximately  $51,190,000,  of
which $50,380,000 was deposited into a trust fund (or $5.60 per unit sold in the
offering)  and the  remaining  proceeds are  available to be used to provide for
business,   legal  and  accounting   due  diligence  on   prospective   business
combinations and continuing general and administrative expenses.

Item 6. Exhibits.

31.1  Section 302 Certification of Chief Executive Officer

31.2  Section 302 Certification of Chief Financial Officer

32.1  Section 906 Certification


                                       6
<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 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.

                                        AD.VENTURE PARTNERS, INC.


Date: November 14, 2005                 By:       /s/ Howard S. Balter
                                           -------------------------------------
                                                    Howard S. Balter
                                           Chairman and Chief Executive Officer
                                             (Principal Executive Officer)


                                        By:       /s/ Ilan M. Slasky
                                           -------------------------------------
                                                     Ilan M. Slasky
                                                President and Secretary
                                               (Principal Financial and
                                                  Accounting Officer)


                                       7
<PAGE>

                            AD.VENTURE PARTNERS, INC.
                    (a corporation in the development stage)

                                  BALANCE SHEET
                               September 30, 2005


                                     ASSETS

Current assets
Cash and cash equivalents                                          $    785,055
Cash held in trust account                                           50,380,000
Prepaid expenses                                                        109,838
                                                                   ------------
Total assets                                                       $ 51,274,893
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accrued expenses                                                   $      1,000
Accrued interest payable                                                     --
Accrued offering costs                                                 145,0000
Notes payable to stockholders                                                --
                                                                   ------------
Total current liabilities                                               146,000
                                                                   ------------

Common stock, subject to possible redemption,
  1,799,100 shares at $5.60 per share                                10,074,960

Stockholders' equity
Preferred stock, $.0001 par value, authorized
  1,000,000 shares; none issued and outstanding                              --
Common stock, $.0001 par value, authorized
  50,000,000 shares; issued and outstanding
  11,249,997 shares (which includes 1,799,100
  shares subject to possible redemption)                                  1,125
Additional paid-in capital                                           41,073,933
Deficit accumulated during the development stage                        (21,125)
                                                                   ------------
Total stockholders' equity                                           41,053,933
                                                                   ------------
Total liabilities and stockholders' equity                         $ 51,274,893
                                                                   ============

                 See accompanying notes to financial statements.


                                      F-1
<PAGE>

                            AD.VENTURE PARTNERS, INC.
                    (a corporation in the development stage)

                             STATEMENT OF OPERATIONS


                                                                For the Period
                                                                 April 7, 2005
                                                                (inception) to
                                                              September 30, 2005
--------------------------------------------------------------------------------

Organization and operating costs                                  $   (21,199)
                                                                  -----------
Loss from operations                                                  (21,199)
Interest income, net of interest expense of $2,300                         74
                                                                  -----------
Net loss                                                          $   (21,125)
                                                                  ===========
Net loss per share                                                      (0.01)
                                                                  ===========
Weighted average shares outstanding - basic and diluted             3,890,176
                                                                  ===========

                 See accompanying notes to financial statements.


                                      F-2
<PAGE>

                            AD.VENTURE PARTNERS, INC.
                    (a corporation in the development stage)

                             STATEMENT OF CASH FLOWS
         For period from April 7, 2005 (inception) to September 30, 2005


Cash flows from operating activities
   Net loss                                                        $    (21,125)
   Adjustments to reconcile net loss to net cash
     from operations
        Changes in operating assets and liabilities                          --
                                                                   ------------
        Prepaid expenses                                               (109,838)
                                                                   ------------
        Accrued expenses                                                  1,000
                                                                   ------------

Net cash used in operating activities                                  (129,963)
                                                                   ------------

Investing Activities
Cash held in Trust Account                                          (50,380,000)
                                                                   ------------
Net cash used in investing activities                               (50,380,000)

Financing activities
   Issuance of stock                                                 51,293,918
   Proceeds from sale of common stock to founders                         1,000
   Proceeds from issuance of representative's option                        100
   Proceeds from notes payable to stockholders                          150,000
   Repayment of notes payable to stockholders                          (150,000)
                                                                   ------------

Net cash provided by financing activities                            51,295,018
                                                                   ------------

Net increase in cash                                                    785,055

Cash, beginning of period                                                    --

Cash, end of period                                                $    785,055
                                                                   ============

Supplemental schedule of non-cash financing activities:
   Accrued offering costs                                          $    145,000
                                                                   ============

                 See accompanying notes to financial statements.


                                      F-3
<PAGE>

                         NOTES TO FINANCIAL STATEMENTS

NOTE A -- ORGANIZATION, BUSINESS OPERATIONS AND SUBSEQUENT EVENTS

      Ad.Venture Partners,  Inc. (the "Company") was incorporated in Delaware on
April 7, 2005. The Company was formed to serve as a vehicle for the  acquisition
through a merger,  capital stock exchange,  asset acquisition,  or other similar
business  combination   ("Business   Combination")  of  one  or  more  operating
businesses  in the  technology,  media  or  telecommunications  industries.  The
Company has neither engaged in any operations nor generated revenue. The Company
is  considered  to be in the  development  stage  and is  subject  to the  risks
associated  with  activities of  development  stage  companies.  The Company has
selected March 31 as its fiscal year end.

      The financial  information in this report has not been audited, but in the
opinion of management,  all  adjustments  (consisting  only of normal  recurring
adjustments)  considered  necessary to present fairly such information have been
included.   Operating  results  for  the  interim  period  are  not  necessarily
indicative of the results to be expected for the full year.

      The registration  statement for the Company's initial public offering (the
"Offering") (as described in Note C) was declared  effective on August 25, 2005.
The  Company  consummated  the  Offering  on August 31,  2005 and  received  net
proceeds  of  approximately  $51,190,000.  The  Company's  management  has broad
discretion  with respect to the specific  application of the net proceeds of the
Offering,  although  substantially  all of the net  proceeds of the Offering are
intended to be generally  applied  toward a Business  Combination.  Furthermore,
there is no  assurance  that the Company will be able to  successfully  effect a
Business Combination. Of the net proceeds,  $50,380,000 is being held in a trust
account ("Trust Account") and invested in money market funds meeting  conditions
of the Investment Company Act of 1984 or securities issued and guaranteed by the
United States until the earlier of (i) the  consummation  of the first  Business
Combination or (ii) the  distribution  of the Trust Account as described  below.
The remaining proceeds 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 holders of 20% or more of the shares  issued in the Offering vote
against  the  Business  Combination,   the  Business  Combination  will  not  be
consummated.  However,  the persons who were stockholders  prior to the Offering
(the "Initial  Stockholders")  will participate in any liquidation  distribution
only with respect to any shares of the common stock acquired in connection  with
or following the Offering.

      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  (the  "Acquisition  Period"),  the proceeds held in the Trust Account
will be distributed to the Company's public stockholders,  excluding the Initial
Stockholders to the extent of their initial stock holdings. In the event of such
distribution,  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  (assuming
no value is  attributed  to the Warrants  contained in the Units in the Offering
discussed in Note C).

NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

[1]   Cash and cash equivalents:

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

[2]   Loss per common share:

      Loss per share is  computed  by  dividing  net loss  applicable  to common
stockholders by the weighted average number of common shares outstanding for the
period.


                                      F-4
<PAGE>

[3]   Use of estimates:

      The  preparation  of financial  statements in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the  financial  statements  and the reported  amounts of revenue and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

[4]   Income taxes:

      Deferred income taxes are provided for the  differences  between the bases
of assets and  liabilities  for financial  reporting and income tax purposes.  A
valuation  allowance is established when necessary to reduce deferred tax assets
to the amount expected to be realized.

      The  Company  recorded a  deferred  income tax asset for the tax effect of
start-up costs and temporary differences,  aggregating  approximately $4,395. In
recognition  of the  uncertainty  regarding  the  ultimate  amount of income tax
benefits to be derived,  the Company has recorded a full valuation  allowance at
September 30, 2005.

      The effective  tax rate differs from the statutory  rate of 34% due to the
increase in the valuation allowance.

NOTE C -- INITIAL PUBLIC OFFERING

      On August 31, 2005, the Company  consummated an initial public offering of
9,000,000  units  ("Units").  Each Unit  consists of one share of the  Company's
common  stock,  $.0001 par value,  and two warrants  ("Warrants").  Each Warrant
entitles the holder to purchase from the Company one share of common stock at an
exercise  price of $5.00.  Each warrant is  exercisable  on the later of (a) the
completion  of a Business  Combination  or (b) August  25,  2006 and  expires on
August 25, 2010.  The Warrants  are  redeemable  at a price of $0.01 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.

      In connection  with the  Offering,  the Company paid the  underwriters  an
underwriting  discount of 4% of the gross proceeds of the Offering. In addition,
the Company  agreed to pay the  underwriters  additional  underwriting  fees and
expenses  of  $1,620,000  upon  the   consummation   of  our  initial   business
combination.  The Company expects that such additional fees and expenses will be
paid out of the  proceeds  in the trust  account.  Of such  additional  fees and
expenses,  $1,080,000  constitute  additional  underwriting  fees  and  $540,000
constitutes an additional non-accountable expense allowance.

      The Company  also sold to the  representative  of the  underwriters  for a
purchase price of $100 an option to purchase up to a total of 450,000 units at a
price of $7.50 per unit. The units issuable upon the exercise of this option are
identical to those offered in the prospectus,  except that the exercise price of
the warrants underlying the underwriters'  purchase option is $6.65. This option
is  exercisable  commencing  on the  later  of the  consummation  of a  business
combination and one year from the date of the prospectus and expiring five years
from the date of the  prospectus and may be exercised on a cashless  basis.  The
option may not be sold,  transferred,  assigned,  pledged or hypothecated  for a
one-year period following the date of the prospectus. However, the option may be
transferred to any underwriter and selected dealer participating in the offering
and their bona fide officers or partners.

      The holders of the option have demand and piggy-back  registration  rights
under the Securities Act for periods of five and seven years, respectively, from
the date of the  prospectus  with  respect  to  registration  of the  securities
directly and indirectly issuable upon exercise of the option. The exercise price
and number of units  issuable  upon  exercise  of the option may be  adjusted in
certain   circumstances,   including   in  the   event  of  a  stock   dividend,
recapitalization,  reorganization,  merger or consolidation. However, the option
will not be adjusted for issuances at a price below its exercise price.


                                      F-5
<PAGE>

      The Company has estimated, based upon a Black Scholes model, that the fair
value of the purchase  option on the date of sale is  approximately  $1,906,382,
using an expected life of five years,  volatility of 94.4%, and a risk-free rate
of  4.12%.  However,  because  the  Company  has not  consummated  the  Business
Combination,  management  derived the  volatility  estimate based on the average
five-year historical stock prices for a representative  sample of 20 technology,
media and  telecommunications  companies with market  capitalization  below $500
million,  which  management  believes  is  a  reasonable  benchmark  to  use  in
estimating  the expected  volatility  of the units after the  consummation  of a
Business  Combination.  Although an expected life of five years was used in this
calculation,  if the Company does not consummate a Business  Combination  within
the prescribed time period and liquidates, the option will become worthless.

      The Company and the managing underwriters agreed that, within the first 45
calendar days after  separate  trading of the warrants  commenced,  the managing
underwriters or certain of their principals, affiliates or designees would place
bids for and,  if their bids are  accepted,  spend up to  $400,000  to  purchase
warrants in the public  marketplace  at prices not to exceed  $0.70 per warrant.
The managing  underwriters  agreed that any warrants  purchased by them or their
affiliates or designees would not be sold or transferred  until  completion of a
business combination by the Company.

      Additionally,  the chief executive  officer and the president  agreed with
the  representative of the underwriters,  that within the first 45 calendar days
after the separate  trading of the warrants  has  commenced,  they or certain of
their  affiliates or designees would  collectively  place bids for, and if their
bids are accepted,  spend up to  $1,600,000  to purchase  warrants in the public
marketplace  at prices  not to exceed  $0.70 per  warrant.  The chief  executive
officer and president have further agreed that any warrants purchased by them or
their  affiliates  or  designees  will  not be sold  or  transferred  until  the
completion of a Business Combination.

NOTE D -- NOTES PAYABLE TO STOCKHOLDERS

      The Company issued an aggregate of $150,000 in promissory notes to Messrs.
Balter and Slasky in April  2005.  The notes bear  interest  at a rate of 4% per
year.  The notes  were  paid  upon  consummation  of the  Offering  from the net
proceeds of the Offering.

NOTE E -- RELATED PARTY TRANSACTION

      Following the  consummation  of its initial public  offering,  the Company
cancelled its office  service  agreement  with  Innovation  Interactive,  LLC, a
company where certain of the Initial Stockholders serve in executive capacities,
under which the Company agreed to pay an administrative  fee of $7,500 per month
for office space and general  administrative  services.  In October, the Company
relocated  its office and entered into an informal  agreement  with an unrelated
third  party  whereby  the  Company  has agreed to pay  $2,058  per month,  on a
month-to-month  basis,  in exchange for office space and certain  administrative
services.


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